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AAMES CAPITAL CORPORATION
as Seller and Servicer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
as Trustee
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1997
Aames Mortgage Trust 1997-B
Mortgage Pass-Through Certificates,
Series 1997-B
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TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions........................................................................................1
Section 1.02. Interest Calculations.............................................................................39
ARTICLE TWO
CONVEYANCE OF THE TRUST;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of the Trust...........................................................................39
Section 2.02. Conveyance of the Subsequent Mortgage Loans; Fixed Price Contract.................................42
Section 2.03. Acceptance by the Trustee; Repurchase or Substitution of Mortgage Loans...........................45
Section 2.04. Representations and Warranties Regarding the Servicer and the Seller..............................47
Section 2.05. Representations and Warranties of the Seller Regarding the Mortgage Loans.........................49
Section 2.06. Execution and Authentication of Certificates......................................................59
Section 2.07. [Reserved]........................................................................................59
Section 2.08. Indemnification of the Trust......................................................................59
ARTICLE THREE
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS;
CERTIFICATE ACCOUNT
Section 3.01. The Servicer and the Sub-Servicers................................................................59
Section 3.02. Collection of Certain Mortgage Loan Payments; Collection Account and
Certificate Account............................................................................61
Section 3.03. Additional Servicing Responsibilities for the
Adjustable Rate Mortgage Loans.................................................................64
Section 3.04. Hazard Insurance Policies.........................................................................64
Section 3.05. Enforcement of Due-on-Sale Clauses; Assumption
and Modification Agreements....................................................................65
Section 3.06. Realization upon Liquidated Mortgage Loans........................................................65
Section 3.07. Trustee to Cooperate; Release of Mortgage Files...................................................67
Section 3.08. Servicing Compensation; Payment of Certain Expenses by the Servicer...............................67
Section 3.09. Annual Statement as to Compliance.................................................................68
Section 3.10. Annual Independent Public Accountants' Servicing Report...........................................68
Section 3.11. Access to Certain Documentation and Information
Regarding the Mortgage Loans...................................................................68
Section 3.12. Maintenance of Fidelity Bond and Errors and Omission Policy.......................................69
Section 3.13. Notices to the Rating Agencies and the Trustee....................................................69
Section 3.14. Reports of Foreclosures and Abandonment of Mortgaged Properties...................................69
Section 3.15. Sub-Servicers and Sub-Servicing Agreements........................................................69
Section 3.16. Purchase Account..................................................................................70
Section 3.17. Capitalized Interest Account......................................................................71
Section 3.18. [Reserved]........................................................................................72
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Section 3.19. [Reserved]........................................................................................72
Section 3.20. Trust and Accounts Held for Benefit of the Certificateholders.....................................72
ARTICLE FOUR
REMITTANCE REPORT
Section 4.01. Servicer Remittance Report........................................................................72
Section 4.02. Trustee Distribution Date Statement...............................................................72
ARTICLE FIVE
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS
Section 5.01. Distributions.....................................................................................74
Section 5.02. Monthly Advances; Servicing Advances..............................................................77
Section 5.03. Statements to Certificateholders..................................................................78
Section 5.04. Applied Realized Loss Amount......................................................................80
ARTICLE SIX
THE CERTIFICATES
Section 6.01. The Certificates..................................................................................80
Section 6.02. Registration of Transfer and Exchange of Certificates.............................................81
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.................................................86
Section 6.04. Persons Deemed Owners.............................................................................87
Section 6.05. Actions of Certificateholders.....................................................................87
ARTICLE SEVEN
THE SERVICER AND THE SELLER
Section 7.01. Liability of the Servicer.........................................................................87
Section 7.02. Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer...............................................................87
Section 7.03. Limitation on Liability of the Servicer and Others................................................88
Section 7.04. Servicer Not to Resign............................................................................88
Section 7.05. Merger or Consolidation of the Seller.............................................................88
Section 7.06. [Reserved].........................................................................................89
ARTICLE EIGHT
DEFAULT
Section 8.01. Events of Default.................................................................................89
Section 8.02. Trustee to Act; Appointment of Successor..........................................................90
Section 8.03. Notifications to Certificateholders...............................................................91
Section 8.04. Assumption or Termination of Sub-Servicing Agreements by the
Trustee or any Successor Servicer..............................................................91
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ARTICLE NINE
THE TRUSTEE
Section 9.01. Duties of the Trustee.............................................................................92
Section 9.02. Certain Matters Affecting the Trustee.............................................................93
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans.............................................94
Section 9.04. Trustee May Own Certificates......................................................................94
Section 9.05. Payment of the Trustee's Fees and Expenses........................................................95
Section 9.06. Eligibility Requirements for the Trustee..........................................................95
Section 9.07. Resignation or Removal of the Trustee.............................................................96
Section 9.08. Successor Trustee.................................................................................96
Section 9.09. Merger or Consolidation of the Trustee............................................................97
Section 9.10. Appointment of Co-Trustee or Separate Trustee.....................................................97
Section 9.11. Compliance with REMIC Provisions..................................................................98
Section 9.12. Trustee May Enforce Claims Without Possession of Certificates.....................................99
Section 9.13. Exercise of Trustee Powers by Certificateholders..................................................99
Section 9.14. Tax Returns.......................................................................................99
Section 9.15. Taxpayer Identification Number...................................................................100
Section 9.16 Miscellaneous REMIC Provisions...................................................................100
ARTICLE TEN
TERMINATION
Section 10.01. Termination Upon Purchase or Liquidation of Mortgage Loans......................................106
Section 10.02. Additional Termination Requirements.............................................................108
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.......................................................................................108
Section 11.02. Recordation of Agreement........................................................................110
Section 11.03. Limitation on Rights of Certificateholders......................................................110
Section 11.04. Governing Law...................................................................................111
Section 11.05. Notices.........................................................................................111
Section 11.06. Severability of Provisions......................................................................111
Section 11.07. Assignment......................................................................................111
Section 11.08. Certificates Nonassessable and Fully Paid.......................................................112
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SCHEDULES AND EXHIBITS
Schedule I List of Sub-Servicers
Schedule II Representations and Warranties of the Seller Regarding
Subsequent Mortgage Loans
Schedule III Schedule of Restricted Mortgage Loans
Exhibit A Forms of Certificates
Exhibit B Form of Subsequent Transfer Agreement
Exhibit C Mortgage Loan Schedule
Exhibit D Form of Annual Statement as to Compliance
Exhibit E Form of Transfer Affidavit
Exhibit F Form of Payoff Notice
Exhibit G Form of Liquidation Report
Exhibit H Form of Officer's Certificate as to Charge-offs
Exhibit I Form of Transferor Affidavit
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THIS POOLING AND SERVICING AGREEMENT (this "Agreement"), dated as of
June 1, 1997, between Aames Capital Corporation, as seller (in such capacity,
the "Seller") and as servicer (in such capacity, together with permitted
successors hereunder, the "Servicer"), and Bankers Trust Company of California,
N.A., as trustee (the "Trustee"),
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article.
Accrued Certificate Interest: With respect to any Class and
Distribution Date, means the amount of interest due for any Class of Offered
Certificates in respect of any Interest Period at the applicable Pass-Through
Rate, less the related pro rata share of Interest Shortfalls plus, in the case
of the Adjustable Rate Group Certificates, any related Capped Interest
Reallocation Amount. All calculations of interest on the Fixed Rate Group
Certificates will be made on the basis of a 360-day year assumed to consist of
twelve 30-day months, and all calculations of interest on the Adjustable Rate
Group Certificates will be made on the basis of the actual number days elapsed
in the related Interest Period and a year of 360 days.
Addition Notice: With respect to the transfer of Subsequent Mortgage
Loans to the Trust pursuant to Section 2.02 of this Agreement, notice of the
Seller's designation of Subsequent Mortgage Loans to be sold to the Trust
separated by Mortgage Loan Group and the aggregate Subsequent Cut-off Date
Principal Balance of such Subsequent Mortgage Loans in each Mortgage Loan Group,
which notice shall be given to the Trustee not later than one Business Day prior
to the related Subsequent Transfer Date.
Adjustable Rate Group: The Mortgage Loan Group comprised of all Initial
Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned
to the Adjustable Rate Group and any Subsequent Mortgage Loans identified in
Subsequent Transfer Agreement as having been assigned to the Adjustable Rate
Group, including any Qualified Replacement Mortgage Loans delivered in
replacement thereof.
Adjustable Rate Group Available Funds Cap: With respect to any
Distribution Date, the per annum rate expressed as the percentage obtained by
dividing (x) the amount of interest that accrued on the Mortgage Loans in the
Adjustable Rate Group in respect of the related Collection Period at the
weighted average of the related Mortgage Loan Rates applicable to Monthly
Mortgage Payments due on such Mortgage Loans during such Collection Period,
reduced by the sum of (i) the related Monthly Servicing Fee for the related
Collection Period, and (ii) an amount equal to 1/12 of 50 basis
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points multiplied by the aggregate Principal Balance of the Mortgage Loans in
the Adjustable Rate Group as of the first day of such Collection Period, by (y)
the product of (i) the Adjustable Rate Group Certificate Principal Balance as of
the first day of the related Interest Period and (ii) the actual number of days
elapsed during such Interest Period divided by 360.
Adjustable Rate Group Balance: With respect to any Distribution Date
the sum of the aggregate of the Principal Balances of the Mortgage Loans in the
Adjustable Rate Group as of the end of the related Collection Period plus in the
case of any Distribution Date relating to a Collection Period that includes any
part of the Commitment Period, any portion of the Adjustable Rate Group Purchase
Account Deposit remaining on deposit in the Purchase Account or Certificate
Account as of the related Determination Date.
Adjustable Rate Group Capitalized Interest Account Deposit: The amount
deposited in the Capitalized Interest Account for the benefit of the Adjustable
Rate Group Certificateholders, which amount is $117,553.13 or $117,553.13 if the
Subsequent Mortgage Loans are purchased on the Closing Date.
Adjustable Rate Group Principal Distribution Amount: With respect to
any Distribution Date, generally means the sum, without duplication, of (i) the
principal actually collected by the Servicer during the related Collection
Period with respect to Mortgage Loans in the Adjustable Rate Group as described
in the definition of Principal Distribution Amount, (ii) any related Purchase
Account Release and (iii) under certain circumstances described in Section
5.01(c) any related Extra Principal Distribution Amount.
Adjustable Rate Group Purchase Account Deposit: The amount deposited in
the Purchase Account that is allocated for the purchase of Subsequent Mortgage
Loans having adjustable Mortgage Loan Rates to be included in the Adjustable
Rate Group, which amount is $35,328,058.74 or $2,684.18 if the Subsequent
Mortgage Loans are purchased on the Closing Date.
Adjustable Rate Group Subsequent Purchase Price: With respect to any
Subsequent Mortgage Loan to be included in the Adjustable Rate Group, an amount
equal to 100% of the Principal Balance of such Subsequent Mortgage Loan.
Adjustable Rate Mortgage Loan: Any Mortgage Loan with a Mortgage Loan
Rate that is adjustable at regular periodic intervals, based on the Index plus
the related Gross Margin subject to any Minimum Rate, Maximum Rate and any
periodic limitations on adjustment from time to time, all as set forth in the
Mortgage Loan Schedule. All Adjustable Rate Mortgage Loans will be included in
the Adjustable Rate Group.
Adjustment Date: With respect to any Adjustable Rate Mortgage Loan, the
date on which a change to the Mortgage Loan Rate on a Mortgage Loan becomes
effective.
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Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings corresponding to the foregoing.
Aggregate Certificate Principal Balance: With respect to any
Distribution Date means the sum of the Certificate Principal Balances of all
Classes of the Offered Certificates. The Aggregate Certificate Principal Balance
for a particular Mortgage Loan Group is the sum of the Certificate Principal
Balances of all Classes of the Offered Certificates relating to such Group.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Annual Statement of Compliance: The annual statement to be prepared and
delivered by the Servicer in accordance with Section 3.09.
Applied Realized Loss Amount: With respect to either Mortgage Loan
Group and any Distribution Date, means the excess of the related Realized Losses
over the amount, if any by which the Overcollateralization Amount exceeds zero
after taking into account the application of the Fixed Rate Group Principal
Distribution Amount or Adjustable Rate Group Principal Distribution Amount, as
appropriate, on such Distribution Date and the application of any Monthly Excess
Cashflow Amount available from the other Mortgage Loan Group to cover such
Realized Losses as set forth in Section 5.01(c).
Appraised Value: The appraised value of any Mortgaged Property based
upon the appraisal made at the time of origination of the related Mortgage Loan
or, in the case of a Mortgage Loan that is a purchase money mortgage loan, the
sales price of the related Mortgaged Property if such sales price is less than
such appraised value.
Available Capped Interest: With respect to any Distribution Date, means
the positive difference, if any, between (x) the sum of the amount of interest
accrued at the Adjustable Rate Group Available Funds Cap on each Class of
Adjustable Rate Group Certificates and (y) the sum of the amount of interest
accrued at the Pass-Through Rates on each Class of Adjustable Rate Group
Certificates.
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository). As of the Closing Date, only the Offered Certificates
constitute Book-Entry Certificates.
Book-Entry Nominee: As defined in Section 6.02(c).
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Business Day: Any day other than (a) a Saturday or a Sunday or (b) a
day on which banking institutions in the State of California or the State of New
York are required or authorized by law, executive order or governmental decree
to be closed.
Capitalized Interest Account: The segregated account, which, if
utilized, shall be an Eligible Account, established and maintained pursuant to
Section 3.17 and entitled "Bankers Trust Company of California, N.A., as Trustee
for Aames Mortgage Trust 1997-B Mortgage Pass-Through Certificates, Series
1997-B, Capitalized Interest Account".
Capitalized Interest Account Deposit: $250,361.15, or if all of the
Subsequent Mortgage Loans are purchased by the Trust on the Closing Date,
$250,361.15.
Capped Interest Reallocation Amount: With respect to any Distribution
Date and any Class of Adjustable Rate Group Certificates whose Pass-Through Rate
for the related Interest Period is the Adjustable Rate Group Available Funds
Cap, means the lesser of (x) the Capped Interest Shortfall Amount for such Class
and such period, and (y) the remaining Available Capped Interest allocated
pro-rata among the Classes of Adjustable Rate Group Certificates whose
Pass-Through Rate for the related Interest Period is the Adjustable Rate Group
Available Funds Cap. To the extent there is any Available Capped Interest
remaining after applications pursuant to this definition, such remaining
Available Capped Interest shall be reallocated pursuant to this definition until
the Capped Interest Reallocation Amount for each Class of Adjustable Rate Group
Certificates equals the Capped Interest Shortfall Amount for each such Class.
Capped Interest Shortfall Amount: With respect to any Distribution Date
and any Class of Adjustable Rate Group Certificates whose Pass-Through Rate for
the related Interest Period is the Adjustable Rate Group Available Funds Cap,
means the amount of interest that would have accrued during the related Interest
Period on such Class if the applicable Pass-Through Rate had instead been the
related Formula Pass-Through Rate, minus the amount of Accrued Certificate
Interest therefor (excluding any Capped Interest Reallocation Amount) on such
Class Distribution Date, otherwise, zero.
Certificate: Any Class A, Subordinate or Retained Certificate.
Certificate Account: The segregated account, which shall be an Eligible
Account, established and maintained pursuant to Section 3.02(e) and entitled
"Bankers Trust Company of California, N.A., as Trustee for Aames Mortgage Trust
1997-B Mortgage Pass-Through Certificates, Series 1997-B, Certificate Account".
Certificate Owner: With respect to any Book-Entry Certificate, the
Person who is the beneficial owner thereof.
Certificate Principal Balance: With respect to the Class A-1
Certificates, the Class A-1 Certificate Principal Balance; with respect to the
Class A-2 Certificates, the Class A-2 Certificate Principal Balance; with
respect to the Class A-3 Certificates, the Class A-3 Certificate Principal
Balance; with respect to the Class A-4 Certificates, the Class A-4 Certificate
Principal Balance; with
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respect to the Class A-5 Certificates, the Class A-5 Certificate Principal
Balance; with respect to the Class A-6 Certificates, the Class A-6 Certificate
Principal Balance; with respect to the Class M-1F Certificates, the Class M-1F
Certificate Principal Balance; with respect to the Class M-2F Certificates, the
Class M-2F Certificate Principal Balance; with respect to the Class B-1F
Certificates, the Class B-1F Certificate Principal Balance; with respect to the
Class A-1A Certificates, the Class A-1A Certificate Principal Balance; with
respect to the Class M-1A Certificates, the Class M-1A Certificate Principal
Balance; with respect to the Class M-2A Certificates, the Class M-2A Certificate
Principal Balance; and with respect to the Class B-1A Certificates, the Class
B-1A Certificate Principal Balance. The Class A-IO Certificates do not have
Certificate Principal Balances but bear interest based on the Class A-IO
Notional Amount. The Class C Certificates and the Class R Certificates do not
have a Certificate Principal Balance. With respect to any other designation
(e.g. the Fixed Rate Group Certificate Principal Balance), the sum of the
Certificate Principal Balances of each Class contemplated by such designation.
Certificate Register: The register maintained pursuant to Section 6.02.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
taking any action under Article Eight or giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Seller or the Servicer
or any Person actually known to a Responsible Officer of the Trustee to be an
Affiliate of the Seller or the Servicer shall be deemed not to be outstanding
and the Percentage Interest evidenced thereby shall not be taken into account in
determining whether Holders of the requisite Percentage Interests necessary to
take any such action or effect any such consent have acted or consented unless
the Seller, the Servicer or any such Person is an owner of record of all of the
Certificates of any Class.
Class: All of the Class A-1 Certificates, Class A-2 Certificates, Class
A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates, Class A-6
Certificates, Class A-IO Certificates, M-1F Certificates, Class M-2F
Certificates, Class B-1F Certificates, Class A-1A Certificates, the Class M-1A
Certificates, Class M-2A Certificates, Class B-1A Certificates, Class C
Certificates or the Class R Certificate, as the case may be, taken as a whole.
Class A Certificates: All of the Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates, Class A-IO Certificates and Class A-1A
Certificates, taken as a whole.
Class A Certificate Principal Balance: With respect to any Distribution
Date and any Class of the Class A Certificates means the Initial Certificate
Principal Balance of such Class as reduced by the sum of all Principal
Distribution Amounts and Extra Principal Distribution Amounts actually
distributed to the related Class A Certificateholders on all prior Distribution
Dates.
Class A Principal Distribution Amount: With respect to each Mortgage
Loan Group and Distribution Date means on or after the related Stepdown Date,
the excess of (x) the related Class A Certificate Principal Balance immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
the lesser of (1) the related Stepped Up Enhancement Percentage and (2)
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68.50% in the case of the Fixed Rate Group, and 56.00% minus the applicable
Targeted Stepdown Percentage in the case of the Adjustable Rate Group, and (ii)
the aggregate of the outstanding Principal Balances of the Mortgage Loans in
such Mortgage Loan Group as of the related Determination Date, and (B) the
excess of such aggregate Mortgage Loan balance over $950,000 in the case of the
Fixed Rate Group and $1,550,000 in the case of the Adjustable Rate Group.
Class A-1 Certificate: Any one of the Class A-1 Certificates executed
by the Trustee on behalf of the Trust, not in its individual capacity, but
solely as Trustee, authenticated by the Trustee and in substantially the form
set forth with respect thereto in Exhibit A.
Class A-1 Certificate Principal Balance: As to any Distribution Date,
the Class A-1 Initial Certificate Principal Balance less the sum of all
Principal Distribution Amounts and Extra Principal Distribution Amounts actually
distributed to Holders of Class A-1 Certificates on previous Distribution Dates.
Class A-1 Pass-Through Rate: With respect to any Interest Period, 6.41%
per annum.
Class A-2 Certificate: Any one of the Class A-2 Certificates executed
by the Trustee on behalf of the Trust, not in its individual capacity, but
solely as Trustee, authenticated by the Trustee and in substantially the form
set forth with respect thereto in Exhibit A.
Class A-2 Certificate Principal Balance: As to any Distribution Date,
the Class A-2 Initial Certificate Principal Balance less the sum of all
Principal Distribution Amounts and Extra Principal Distribution Amounts actually
distributed to Holders of Class A-2 Certificates on previous Distribution Dates.
Class A-2 Pass-Through Rate: With respect to any Interest Period, 6.52%
per annum.
Class A-3 Certificate: Any one of the Class A-3 Certificates executed
by the Trustee on behalf of the Trust, not in its individual capacity, but
solely as Trustee, authenticated by the Trustee and in substantially the form
set forth with respect thereto in Exhibit A.
Class A-3 Certificate Principal Balance: As to any Distribution Date,
the Class A-3 Initial Certificate Principal Balance less the sum of all
Principal Distribution Amounts and Extra Principal Distribution Amounts actually
distributed to Holders of Class A-3 Certificates on previous Distribution Dates.
Class A-3 Pass-Through Rate: With respect to any Interest Period, 6.68%
per annum.
Class A-4 Certificate: Any one of the Class A-4 Certificates executed
by the Trustee on behalf of the Trust, not in its individual capacity, but
solely as Trustee, authenticated by the Trustee and in substantially the form
set forth with respect thereto in Exhibit A.
Class A-4 Certificate Principal Balance: As to any Distribution Date,
the Class A-4 Initial Certificate Principal Balance less the sum of all
Principal Distribution Amounts and Extra Principal
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Distribution Amounts actually distributed to Holders of Class A-4 Certificates
on previous Distribution Dates.
Class A-4 Pass-Through Rate: With respect to any Interest Period, 6.95%
per annum.
Class A-5 Certificate: Any one of the Class A-5 Certificates executed
by the Trustee on behalf of the Trust, not in its individual capacity, but
solely as Trustee, authenticated by the Trustee and in substantially the form
set forth with respect thereto in Exhibit A.
Class A-5 Certificate Principal Balance: As to any Distribution Date,
the Class A-5 Initial Certificate Principal Balance less the sum of all
Principal Distribution Amounts and Extra Principal Distribution Amounts actually
distributed to Holders of Class A-5 Certificates on previous Distribution Dates.
Class A-5 Pass-Through Rate: With respect to any Interest Period, the
lesser of 7.27% per annum and the Fixed Rate Net WAC.
Class A-6 Certificate: Any one of the Class A-6 Certificates executed
by the Trustee on behalf of the Trust, not in its individual capacity, but
solely as Trustee, authenticated by the Trustee and in substantially the form
set forth with respect thereto in Exhibit A.
Class A-6 Certificate Principal Balance: As to any Distribution Date,
the Class A-6 Initial Certificate Principal Balance less the sum of all
Principal Distribution Amounts and Extra Principal Distribution Amounts actually
distributed to Holders of Class A-6 Certificates on previous Distribution Dates.
Class A-6 Pass-Through Rate: With respect to any Interest Period, the
lesser of 6.92% per annum and the Fixed Rate Net WAC.
Class A-IO Certificate: Any one of the Class A-IO Certificates executed
by the Trustee on behalf of the Trust, not in its individual capacity, but
solely as Trustee, authenticated by the Trustee and in substantially the form
set forth with respect thereto in Exhibit A.
Class A-IO Notional Amount or Notional Amount : The notional principal
amount equal to the outstanding Certificate Principal Balance of the Class A-6
Certificates immediately prior to the related Distribution Date.
Class A-IO Pass-Through Rate: With respect to any Interest Period
ending prior to June 1, 2000, 5.50% per annum, and with respect to any
subsequent Interest Period, 0.00% per annum.
Class A-1A Certificate: Any one of the Class A-1A Certificates executed
by the Trustee on behalf of the Trust, not in its individual capacity, but
solely as Trustee, authenticated by the Trustee and in substantially the form
set forth with respect thereto in Exhibit A.
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Class A-1A Certificate Principal Balance: As to any Distribution Date,
the Class A-1A Initial Certificate Principal Balance less the sum of all
Principal Distribution Amounts and Extra Principal Distribution Amounts actually
distributed to Holders of Class A-1A Certificates on previous Distribution
Dates.
Class A-1A Pass-Through Rate: With respect to the Interest Period
relating to the July 1997 Distribution Date, 5.9075% per annum; with respect to
each Interest Period thereafter that ends on or prior to the Clean-Up Call Date,
a per annum rate equal to the lesser of (a) LIBOR plus 0.22% and (b) the
Adjustable Rate Group Available Funds Cap; and with respect to each Interest
Period thereafter that ends after the Clean-Up Call Date, a per annum rate equal
to the lesser of (a) LIBOR plus 0.44% and (b) the Adjustable Rate Group
Available Funds Cap.
Class A-6 Lockout Distribution Amount: With respect to any Distribution
Date means the product of (i) the applicable Class A-6 Lockout Percentage for
such Distribution Date and (ii) the Class A-6 Lockout Pro Rata Distribution
Amount for such Distribution Date, not to exceed the related Class A Principal
Distribution Amount.
Class A-6 Lockout Percentage: With respect to each Distribution Date
occurring during the indicated periods means the indicated percentage:
Class A-6
Period Lockout Percentage
------ ------------------
July 1997 - June 2000 0%
July 2000 - June 2002 45%
July 2002 - June 2003 80%
July 2003 - June 2004 100%
July 2004 and thereafter 300%
Class A-6 Lockout Pro Rata Distribution Amount: With respect to any
Distribution Date means an amount equal to the product of (x) a fraction, the
numerator of which is the Certificate Principal Balance of the Class A-6
Certificates immediately prior to such Distribution Date and the denominator of
which is the Aggregate Certificate Principal Balance of the Fixed Rate Class A
Certificates immediately prior to such Distribution Date, and (y) the related
Class A Principal Distribution Amount for such Distribution Date.
Class B Applied Realized Loss Amount: With respect to any Distribution
Date and either Class of the Class B Certificates means, the lesser of (x) the
related Class B Certificate Principal Balance (after taking into account the
distribution of the sum of the related Principal Distribution Amount and Extra
Principal Distribution Amount on such Distribution Date, but prior to the
application of the related Class B Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the related Applied Realized Loss Amount as of such
Distribution Date.
Class B Certificates: Collectively, the Class B-1F and Class B-1A
Certificates.
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Class B Certificate Principal Balance: With respect to any Distribution
Date as to either Class of the Class B Certificates means the Initial Class B
Certificate Principal Balance of such Class as reduced by the sum of (x) the sum
of all Principal Distribution Amounts and Extra Principal Distribution Amounts
actually distributed to the related Class B Certificateholders on all prior
Distribution Dates and (y) the aggregate cumulative amount of related Class B
Applied Realized Loss Amounts on all prior Distribution Dates, as indicated by
the context.
Class B Principal Distribution Amount: With respect to each Mortgage
Loan Group and any Distribution Date on or after the related Stepdown Date,
means the excess of (x) the sum of (i) the Aggregate Certificate Principal
Balance of the related Class A Certificates (after application of the related
Class A Principal Distribution Amount on such Distribution Date), (ii) the
related Class M-1 Certificate Principal Balance (after application of the
related Class M-1 Principal Distribution Amount on such Distribution Date),
(iii) the related Class M-2 Certificate Principal Balance (after application of
the related Class M-2 Principal Distribution Amount on such Distribution Date)
and (iv) the related Class B-1 Certificate Principal Balance immediately prior
to such Distribution Date, over (y) the lesser of (i) 96.50% in the case of the
Fixed Rate Group, and 100% minus the applicable Targeted Stepdown Percentage in
the case of the Adjustable Rate Group, of the aggregate of the outstanding
Principal Balances of the Mortgage Loans in such Mortgage Loan Group as of the
related Determination Date and (ii) the excess of such aggregate Mortgage Loan
balance over $950,000 in the case of the Fixed Rate Group and $1,550,000 in the
case of the Adjustable Rate Group.
Class B Realized Loss Amortization Amount With respect to either Class
of the Class B Certificates and as of any Distribution Date means, the lesser of
(x) the related Class B Unpaid Realized Loss Amount as of such Distribution Date
and (y) the related Monthly Excess Cashflow Amount remaining after distribution
of the related Extra Principal Distribution Amount, the related Class M-1F or
Class M-1A Realized Loss Amortization Amount, the related Class M-2F or Class
M-2A Realized Loss Amortization Amount, the related Class M-1F or Class M-1A
Interest Carry Forward Amount, the related Class M-2F or Class M-2A Interest
Carry Forward Amount and the related Class B Interest Carry Forward Amount, in
each case for such Distribution Date.
Class B-1A Certificate: Any one of the Class B-1A Certificates executed
by the Trustee on behalf of the Trust, not in its individual capacity, but
solely as Trustee, authenticated by the Trustee and in substantially the form
set forth with respect thereto in Exhibit A.
Class B-1A Pass Though Rate: With respect to the Interest Period
relating to the July 1997 Distribution Date, 6.6775% per annum; with respect to
each Interest Period thereafter that ends on or prior to the Clean-Up Call Date,
a per annum rate equal to the lesser of (a) LIBOR plus 0.99% and (b) the
Adjustable Rate Group Available Funds Cap; and with respect to each Interest
Period thereafter that ends after the Clean-Up Call Date, a per annum rate equal
to the lesser of (a) LIBOR plus 1.485% and (b) the Adjustable Rate Group
Available Funds Cap.
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Class B-1F Certificates: Any one of the Class B-1F Certificates
executed by the Trustee on behalf of the Trust, not in its individual capacity,
but solely as Trustee, authenticated by the Trustee and in substantially the
form set forth with respect thereto in Exhibit A.
Class B-1F Pass Though Rate: With respect to any Interest Period, the
lesser of 7.68% per annum and the Fixed Rate Net WAC.
Class C Certificates: Any one of the Class C Certificates executed by
the Trustee on behalf of the Trust, not in its individual capacity, but solely
as Trustee, authenticated by the Trustee and in substantially the form set forth
with respect thereto in Exhibit A.
Class C Distribution Amount: With respect to any Distribution Date,
means the sum of:
(a) the excess, if any, of (i) the amount of interest that would have
accrued on the Class A-1 Certificate Principal Balance at the Fixed Rate Net WAC
for the related Interest Period over (ii) the related Accrued Certificate
Interest;
(b) the excess, if any, of (i) the amount of interest that would have
accrued on the Class A-2 Certificate Principal Balance at the Fixed Rate Net WAC
for the related Interest Period over (ii) the related Accrued Certificate
Interest;
(c) the excess, if any, of (i) the amount of interest that would have
accrued on the Class A-3 Certificate Principal Balance at the Fixed Rate Net WAC
for the related Interest Period over (ii) the related Accrued Certificate
Interest;
(d) the excess, if any, of (i) the amount of interest that would have
accrued on the Class A-4 Certificate Principal Balance at the Fixed Rate Net WAC
for the related Interest Period over (ii) the related Accrued Certificate
Interest;
(e) the excess, if any, of (i) the amount of interest that would have
accrued on the Class A-5 Certificate Principal Balance at the Fixed Rate Net WAC
for the related Interest Period over (ii) the related Accrued Certificate
Interest;
(f) the excess, if any, of (i) the amount of interest that would have
accrued on the Class A-6 Certificate Principal Balance at the Fixed Rate Net WAC
for the related Interest Period over (ii) the related Accrued Certificate
Interest;
(g) the excess, if any, of (i) the amount of interest that would have
accrued on the Class M-1F Certificate Principal Balance at the Fixed Rate Net
WAC for the related Interest Period over (ii) the related Accrued Certificate
Interest;
(h) the excess, if any, of (i) the amount of interest that would have
accrued on the Class M-2F Certificate Principal Balance at the Fixed Rate Net
WAC for the related Interest Period over (ii) the related Accrued Certificate
Interest;
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(i) the excess, if any, of (i) the amount of interest that would have
accrued on the Class B-1F Certificate Principal Balance at the Fixed Rate Net
WAC for the related Interest Period over (ii) the related Accrued Certificate
Interest; and
(j) the excess, if any, of (i) the aggregate amount of interest that
would have accrued on the Class A-1A, Class M-1A, Class M-2A and Class B-1A
Certificate Principal Balances at the Adjustable Rate Group Available Funds Cap
for the related Interest Period over (ii) the related Accrued Certificate
Interest amounts for such Classes.
Class M Certificates: Collectively, the Class M-1F, Class M-2F, Class
M-1A and Class M-2A Certificates.
Class M-1 Certificates: Collectively, the Class M-1F and Class M-1A
Certificates.
Class M-1 Certificate Principal Balance: Means either the Class M-1F
Certificate Principal Balance or the Class M-1A Certificate Principal Balance,
as indicated by the context.
Class M-1 Principal Distribution Amount: With respect to each Mortgage
Loan Group and any Distribution Date on or after the related Stepdown Date, the
excess of (x) the sum of (i) the Aggregate Certificate Principal Balance of the
related Class A Certificates (after application of the related Class A Principal
Distribution Amount on such Distribution Date and (ii) the related Class M-1
Certificate Principal Balance immediately prior to such Distribution Date over
(y) the lesser of (i) 77.50% in the cash of the Fixed Rate Group and 72.50%
minus the applicable Targeted Stepdown Percentage in the case of the Adjustable
Rate Group, of the aggregate of the outstanding Principal Balances of the
Mortgage Loans in such Mortgage Loan Group as of the related Determination Date
and (ii) the excess of such aggregate Mortgage Loan balance over $950,000 in the
case of the Fixed Rate Group and $1,550,000 in the case of the Adjustable Rate
Group.
Class M-1 Realized Loss Amortization Amount: With respect to any
Distribution Date means either the Class M-1A Realized Loss Amortization Amount
or the Class M-1F Realized Loss Amortization amount, as appropriate.
Class M-1A Applied Realized Loss Amount: With respect to any
Distribution Date, means the lesser of (x) the related Class M-1A Certificate
Principal Balance (after taking into account the distribution of the related
Principal Distribution Amount on such Distribution Date, but prior to the
application of the related Class M-1A Applied Realized Loss Amount, if any, on
such Distribution Date), and (y) the excess of (i) the related Applied Realized
Loss Amount over (ii) the sum of the related Class M-2A Applied Realized Loss
Amount and the related Class B-1A Applied Realized Loss Amount, in each case as
of such Distribution Date.
Class M-1A Certificates: Any one of the Class M-1A Certificates
executed by the Trustee on behalf of the Trust, not in its individual capacity,
but solely as Trustee, authenticated by the Trustee and in substantially the
form set forth with respect thereto in Exhibit A.
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Class M-1A Certificate Principal Balance: With respect to any date of
determination, means the Initial Class M-1A Certificate Principal Balance as
reduced by the sum of (x) the sum of all Principal Distribution Amounts and
Extra Principal Distribution Amounts actually distributed to the Class M-1A
Certificateholders on all prior Distribution Dates and (y) the aggregate
cumulative amount of related Class M-1A Applied Realized Loss Amounts on all
prior Distribution Dates.
Class M-1A Pass Through Rate: With respect to the Interest Period
relating to the July 1997 Distribution Date, 6.0475% per annum; with respect to
each Interest Period thereafter that ends on or prior to the Clean-Up Call Date,
a per annum rate equal to the lesser of (a) LIBOR plus 0.36% and (b) the
Adjustable Rate Group Available Funds Cap; and with respect to each Interest
Period thereafter that ends after the Clean-Up Call Date, a per annum rate equal
to the lesser of (a) LIBOR plus 0.54% and (b) the Adjustable Rate Group
Available Funds Cap.
Class M-1A Realized Loss Amortization Amount: With respect to any
Distribution Date means the lesser of (x) the related Class M-1A Unpaid Realized
Loss Amount and (y) the related Monthly Excess Cashflow Amount remaining after
distribution of the Extra Principal Distribution Amount and the related Class
M-1A Interest Carry Forward Amount.
Class M-1F Applied Realized Loss Amount: With respect to any
Distribution Date, means the lesser of (x) the related Class M-1F Certificate
Principal Balance (after taking into account the distribution of the related
Principal Distribution Amount on such Distribution Date, but prior to the
application of the related Class M-1F Applied Realized Loss Amount, if any, on
such Distribution Date), and (y) the excess of (i) the related Applied Realized
Loss Amount over (ii) the sum of the related Class M-2F Applied Realized Loss
Amount and the Related Class B-1F Applied Realized Loss Amount, in each case as
of such Distribution Date.
Class M-1F Certificates: Any one of the Class M-1F Certificates
executed by the Trustee on behalf of the Trust, not in its individual capacity,
but solely as Trustee, authenticated by the Trustee and in substantially the
form set forth with respect thereto in Exhibit A.
Class M-1F Certificate Principal Balance: With respect to any date of
determination, means the Initial Class M-1F Certificate Principal Balance as
reduced by the sum of (x) the sum of all Principal Distribution Amounts and
Extra Principal Distribution Amounts actually distributed to the Class M-1F
Certificateholders on all prior Distribution Dates and (y) the aggregate
cumulative amount of related Class M-1F Applied Realized Loss Amounts on all
prior Distribution Dates.
Class M-1F Pass-Through Rate: With respect to any Interest Period, the
lesser of 7.13% per annum and the Fixed Rate Net WAC.
Class M-1F Realized Loss Amortization Amount: With respect to any
Distribution Date means the lesser of (x) the related Class M-1F Unpaid Realized
Loss Amount and (y) the related Monthly Excess Cashflow Amount remaining after
distribution of the related Extra Principal Distribution Amount and the related
Class M-1F Interest Carry Forward Amount.
Class M-2 Certificates: Collectively, the Class M-2F and Class M-2A
Certificates.
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Class M-2 Certificate Principal Balance: Means either the Class M-2F
Certificate Principal Balance or the Class M-2A Certificate Principal Balance,
as indicated by the context.
Class M-2 Principal Distribution Amount: With respect to each Mortgage
Loan Group and any Distribution Date on or after the related Stepdown Date means
the excess of (x) the sum of (i) the Aggregate Certificate Principal Balance of
the related Class A Certificates (after application of the related Class A
Principal Distribution Amount on such Distribution Date), (ii) the related Class
M-1 Certificate Principal Balance (after application of the related Class M-1
Principal Distribution Amount on such Distribution Date) and (iii) the related
Class M-2 Certificate Principal Balance immediately prior to such Distribution
Date over (y) the lesser of (i) 89.50% in the case of the Fixed Rate Group, and
89.00% minus the applicable Targeted Stepdown Percentage in the case of the
Adjustable Rate Group, of the aggregate of the outstanding Principal Balances of
the Mortgage Loans in such Mortgage Loan Group as of the related Determination
Date and (ii) the excess of such aggregate Mortgage Loan balance over $950,000
in the case of the Fixed Rate Group and $1,550,000 in the case of the Adjustable
Rate Group.
Class M-2 Realized Loss Amortization Amount: With respect to any
Distribution Date means either the Class M-2F Realized Loss Amortization Amount
or the Class M-2A Realized Loss Amortization Amount, as appropriate.
Class M-2A Applied Realized Loss Amount: With respect to any
Distribution Date means the lesser of (x) the related Class M-2A Certificate
Principal Balance (after taking into account the distribution of the related
Principal Distribution Amount, but prior to the application of the related Class
M-2A Applied Realized Loss Amount, if any on such Distribution Date) and (y) the
excess of (i) the related Applied Realized Loss Amount over (ii) the Class B-1A
Applied Realized Loss Amount as of such Distribution Date.
Class M-2A Certificates: Any one of the Class M-2A Certificates
executed by the Trustee on behalf of the Trust, not in its individual capacity,
but solely as Trustee, authenticated by the Trustee and in substantially the
form set forth with respect thereto in Exhibit A.
Class M-2A Certificate Principal Balance: With respect to any date of
determination means, the Initial Class M-2A Certificate Principal Balance as
reduced by the sum of (x) the sum of all Principal Distribution Amounts and
Extra Principal Distribution Amounts actually distributed to the Class M-2A
Certificateholders on all prior Distribution Dates and (y) the aggregate,
cumulative amount of related Class M-2A Applied Realized Loss Amounts on all
prior Distribution Dates.
Class M-2A Pass-Through Rate: With respect to the Interest Period
relating to the July 1997 Distribution Date, 6.2475% per annum; with respect to
each Interest Period thereafter that ends on or prior to the Clean-Up Call Date,
a per annum rate equal to the lesser of (a) LIBOR plus 0.56% and (b) the
Adjustable Rate Group Available Funds Cap; and with respect to each Interest
Period thereafter that ends after the Clean-Up Call Date, a per annum rate equal
to the lesser of (a) LIBOR plus 0.84% and (b) the Adjustable Rate Group
Available Funds Cap.
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Class M-2A Realized Loss Amortization Amount: With respect to any
Distribution Date, means the lesser of (x) the related Class M-2A Unpaid
Realized Loss Amount and (y) the related Monthly Excess Cashflow Amount
remaining after distribution of the related Extra Principal Distribution Amount,
the related Class M-1A Realized Loss Amortization Amount, the related Class M-1A
Interest Carry Forward Amount and the related Class M-2A Interest Carry Forward
Amount.
Class M-2F Applied Realized Loss Amount: With respect to any
Distribution Date means the lesser of (x) the related Class M-2F Certificate
Principal Balance (after taking into account the distribution of the related
Principal Distribution Amount, but prior to the application of the related Class
M-2F Applied Realized Loss Amount, if any, on such Distribution Date) and (y)
the excess of (i) the related Applied Realized Loss Amount over (ii) the Class
B-1F Applied Realized Loss Amount as of such Distribution Date.
Class M-2F Certificates: Any one of the Class M-2F Certificates
executed by the Trustee on behalf of the Trust, not in its individual capacity,
but solely as Trustee, authenticated by the Trustee and in substantially the
form set forth with respect thereto in Exhibit A.
Class M-2F Certificate Principal Balance: With respect to any date of
determination means, the Initial Class M-2F Certificate Principal Balance as
reduced by the sum of (x) the sum of all Principal Distribution Amounts and
Extra Principal Distribution Amounts actually distributed to the Class M-2F
Certificateholders on all prior Distribution Dates and (y) the aggregate,
cumulative amount of related Class M-2F Applied Realized Loss Amounts on all
prior Distribution Dates.
Class M-2F Pass-Through Rate: With respect to any Interest Period, the
lesser of 7.38% per annum and the Fixed Rate Net WAC.
Class M-2F Realized Loss Amortization Amount: With respect to any
Distribution Date, means the lesser of (x) the related Class M-2F Unpaid
Realized Loss Amount and (y) the related Monthly Excess Cashflow Amount
remaining after distribution of the related Extra Principal Distribution Amount,
the related Class M-1F Realized Loss Amortization Amount, the related Class M-1F
Interest Carry Forward Amount and the related Class M-2F Interest Carry Forward
Amount.
Class R Certificate: Any one of the Class R-IA, Class R-IF, Class R-II
or Class R-III Certificates.
Class R-IA Certificates: That certificate representing certain residual
rights to distribution from the REMIC IA in substantially the form set forth as
Exhibit A hereto.
Class R-IF Certificates: That certificate representing certain residual
rights to distribution from the REMIC IF in substantially the form set forth as
Exhibit A hereto.
Class R-II Certificates: That certificate representing certain residual
rights to distribution from the REMIC II in substantially the form set forth as
Exhibit A hereto.
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Class R-III Certificates: That certificate representing certain
residual rights to distribution from the REMIC III in substantially the form set
forth as Exhibit A hereto.
Clean-up Call Date: With respect to each Mortgage Loan Group, the first
Distribution Date on which the aggregate of the Principal Balances of the
related Mortgage Loans is less than 10% of the sum of the aggregate of such
Principal Balances as of the close of business on the Closing Date plus the
portion of the Purchase Account Deposit allocable to such Mortgage Loan Group
deposited in the Purchase Account or Certificate Account on the Closing Date.
Closing Date: June 25, 1997.
Closing Date Deposit: The aggregate amount deposited by the Seller in
the Collection Account on or prior to the Closing Date pursuant to Section 2.01,
which amount is equal to the sum of 30 days of interest on the principal balance
of each Mortgage Loan that is transferred to the Trust as of the Cut-off Date
and does not have a Monthly Mortgage Payment due in the Collection Period
relating to the July 1997 Distribution Date (or transferred to the Trust on the
Closing Date that does not have a Monthly Mortgage Payment due in either of the
Collection Periods relating to the July or August 1997 Distribution Dates) (or
transferred to the Trust on the Closing Date that does not have a Monthly
Mortgage Payment due in either of the Collection Periods relating to the July or
August 1997 Distribution Dates), at a per annum rate equal to the Mortgage Loan
Rate for each such Mortgage Loan, net of the applicable Servicing Fee Rate.
Code: The Internal Revenue Code of 1986, as amended.
Collection Account: The segregated account, which shall at all times be
an Eligible Account, established and maintained pursuant to Section 3.02(a) and
entitled "[Servicer], in trust for the benefit of Holders of Aames Mortgage
Trust 1997-B Mortgage Pass-Through Certificates, Series 1997-B, Collection
Account". References herein to the Collection Account shall include any
Sub-Servicing Account as the context requires.
Collection Period: As to any Distribution Date, the period beginning on
the first day of the calendar month immediately preceding the month in which
such Distribution Date occurs and ending on the last day of such calendar month.
Combined Loan-to-Value Ratio: With respect to a Mortgage Loan, the
ratio (expressed as a percentage) of (i) the sum of the Original Principal
Amount of such related Mortgage Loan plus the outstanding principal balance (at
the time of origination of such Mortgage Loan) of each mortgage loan secured by
the related Mortgaged Property that is senior to such Mortgage Loan to (ii) the
Appraised Value of the related Mortgaged Property determined by the Seller at
the time of origination of such Mortgage Loan.
Commitment Period: The period beginning on the Closing Date and ending
on the earlier of (a) the date on which the amount on deposit in the Purchase
Account is zero and (b) the close of business on July 14, 1997.
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Company: Aames Capital Corporation, a California corporation.
Compensating Interest: As to any Distribution Date and each Mortgage
Loan Group, an amount equal to the lesser of (a) the related Monthly Servicing
Fee for the related Collection Period and (b) the difference between (i) 30
days' interest (at the related Mortgage Loan Rates, net of the Servicing Fee
Rate) on the Principal Balance of each Mortgage Loan in such Mortgage Loan Group
as to which a Principal Prepayment was received and that became a Liquidated
Mortgage Loan or that was otherwise charged-off (before giving effect to any
related reduction in the Principal Balance of such Mortgage Loan) by the
Servicer during the related Collection Period and (ii) the amount of interest
actually collected by the Servicer for such Mortgage Loans in such Mortgage Loan
Group during such Collection Period.
Corporate Trust Office: The principal office of the Trustee at which at
any particular time its corporate trust business with respect to this Agreement
shall be principally administered, which office at the date of the execution of
this Agreement is located at ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention:
Aames Mortgage Loan Pass-Through Certificates, Series 1997-B.
Cumulative Loss Event: With respect to the Adjustable Rate Group and
any Distribution Date during the indicated periods means the Loss Percentage
equals or exceeds the indicated Loss Percentage:
Period Loss Percentage
------ ---------------
Through June 1999 0.90%
July 1999 - June 2000 1.88%
July 2000 - June 2001 3.23%
July 2001 - June 2002 4.30%
July 2002 - June 2003 5.11%
July 2003 and thereafter 5.38%
Cut-off Date: June 1, 1997.
Cut-off Date Pool Balance: The aggregate of the Cut-off Date Principal
Balances of the Mortgage Loans.
Cut-off Date Principal Balance: As to any Mortgage Loan, its Principal
Balance as of the open of business on the Cut-off Date.
Defective Mortgage Loan: Any Mortgage Loan that is required to be
repurchased or substituted by the Seller pursuant to Section 2.03 or 2.05.
Definitive Certificates: As defined in Section 6.02(e).
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Replacement Mortgage Loan.
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Delinquency Percentage: As to any Distribution Date and either Mortgage
Loan Group, the percentage equivalent of the fraction obtained by dividing (i)
the aggregate of the Principal Balances of all Mortgage Loans in such Mortgage
Loan Group, as the case may be, that were then 60 days contractually delinquent
as of the end of the related Collection Period or were either foreclosed upon or
transferred pursuant to Section 3.06 during such Collection Period, by (ii) the
Principal Balance of the Mortgage Loans included in such Mortgage Loan Group as
of the last day of such Collection Period.
Deposit Date: As to any Distribution Date, the third Business Day prior
to such Distribution Date.
Depository: The initial depository shall be The Depository Trust
Company, the nominee of which is Cede & Co. The Depository shall at all times be
a "clearing corporation" as defined in Section 8102(3) of the Uniform Commercial
Code of the State of California, as amended, or any successor provisions
thereto.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for which, from time to time, the Depository effects
book-entry transfers and pledges of securities deposited with such Depository.
Determination Date: As to any Distribution Date, the last day of the
calendar month immediately preceding the calendar month in which such
Distribution Date occurs.
Disqualified Organization: Any Person that is (i) the United States,
any state or any political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality that is a corporation if all of its activities are subject to
tax and a majority of its board of directors is not selected by any such
governmental unit), (ii) a foreign government, international organization or any
agency or instrumentality of either of the foregoing (other than an
instrumentality that is a corporation if all of its activities are subject to
tax and a majority of its board of directors is not selected by any such
governmental unit), (iii) an organization (except certain farmers' cooperatives
described in Code Section 521) exempt from tax imposed by Chapter 1 of the Code
(including the tax imposed by Code Section 511 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), and (v) any other Person
so designated by the Trustee based upon an Opinion of Counsel that the holding
of an ownership interest in a Class R Certificate by such Person may cause any
REMIC Pool or any Person having an ownership interest in any Class R
Certificate, other than such Person, to incur a liability for any tax imposed
under the Code that would not otherwise be imposed but for the transfer of an
ownership interest in a Class R Certificate to such Person. The terms "United
States", "state" and "international organization" shall have the meanings set
forth in Code Section 7701 or successor provisions.
Distribution Date: The 15th day of each month or, if such day is not a
Business Day, the Business Day immediately following such 15th day, beginning
July 15, 1997.
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Eligible Account: Either (A) a segregated account or accounts
maintained with an institution the deposits of which are insured by the Bank
Insurance Fund or the Savings Association Insurance Fund of the FDIC, the
unsecured and uncollateralized debt obligations of which shall be rated "A" or
better by Standard & Poor's and "A2" or better by Moody's and in the highest
short term rating category by Standard & Poor's and Moody's, and that is either
(i) a federal savings and loan association duly organized, validly existing and
in good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws and (iv) a
principal subsidiary of a bank holding company, or (B) a trust account (which
shall be a "special deposit account") maintained with the trust department of a
federal or state chartered depository institution or trust company, having
capital and surplus of not less than $50,000,000, acting in its fiduciary
capacity, the unsecured and uncollateralized debt obligations of which shall be
rated "Baa3" or better by Moody's. Any Eligible Accounts maintained with the
Trustee shall conform to the preceding clause (B).
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Plan: Any Person that is an employee benefit plan within the
meaning of Section 3(3) of ERISA or any Person that is an individual retirement
account or employee benefit plan, trust or account subject to Section 4975 of
the Code.
ERISA Prohibited Holder: As defined in Section 6.02(c).
Event of Default: As defined in Section 8.01.
Extra Principal Distribution Amount: With respect to a Mortgage Loan
Group and any Distribution Date, means the lesser of (x) the amount, if any, of
Monthly Interest remaining in the Certificate Account with respect to such
Mortgage Loan Group after application with respect to the priorities set forth
in Section 5.01(a), clause First through Fourth and (y) the related
Overcollateralization Deficiency.
FDIC: The Federal Deposit Insurance Corporation and its successors in
interest.
FEMA: The Federal Emergency Management Agency and its successors in
interest.
FHLMC: The Federal Home Loan Mortgage Corporation and its successors in
interest.
FNMA: The Federal National Mortgage Association and its successors in
interest.
Final Scheduled Distribution Date: with respect to each Class of
Offered Certificates shall mean:
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Class Final Scheduled Distribution Date
----- ---------------------------------
Class A-1 Certificates May 15, 2013
Class A-2 Certificates August 15, 2016
Class A-3 Certificates August 15, 2024
Class A-4 Certificates November 15, 2025
Class A-5 Certificates June 15, 2027
Class A-6 Certificates June 15, 2027
Class A-IO Certificates July 15, 2000
Class M-1F Certificates June 15, 2027
Class M-2F Certificates June 15, 2027
Class B-1F Certificates June 15, 2027
Class A-1A Certificates June 15, 2027
Class M-1A Certificates June 15, 2027
Class M-2A Certificates June 15, 2027
Class B-1A Certificates June 15, 2027
Fitch: Fitch Investors Service, Inc.
Fixed Rate Class A Certificates: Any or all of the Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class A-6 Certificates, or Class A-IO
Certificates as the case may be.
Fixed Rate Group: The group of Mortgage Loans comprised of fixed rate
mortgage loans identified in the Mortgage Loan Schedule as having been assigned
to the Fixed Rate Group and any Subsequent Mortgage Loans identified in a
Subsequent Transfer Agreement as having been assigned to the Fixed Rate Group,
including any Qualified Replacement Mortgage Loans delivered in replacement
thereof.
Fixed Rate Group Balance: As to any Distribution Date, the sum of the
aggregate of the Principal Balances of the Mortgage Loans in the Fixed Rate
Group as of the end of the related Collection Period plus in the case of any
Distribution Date relating to a Collection Period that includes any part of the
Commitment Period, any portion of the Fixed Rate Group Purchase Account Deposit
remaining on deposit in the Purchase Account or Certificate Account as of the
last day of such Collection Period.
Fixed Rate Group Capitalized Interest Account Deposit: The amount
deposited in the Capitalized Interest Account for the benefit of the Fixed Rate
Class A Certificateholders, which amount is $132,808.02 or $132,808.02 if the
Subsequent Mortgage Loans are purchased on the Closing Date.
Fixed Rate Group Certificates: Collectively, the Fixed Rate Class A
Certificates, the Class M-1F Certificates, the Class M-2F Certificates and the
Class B-1F Certificates.
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Fixed Rate Group Principal Distribution Amount: With respect to any
Distribution Date, generally means the sum, without duplication, of (i) the
principal actually collected by the Servicer during the Collection Period, with
respect to Mortgage Loans in the Fixed Rate Group as described in the definition
of Principal Distribution Amount, (ii) any related Purchase Account Release and
(iii) under certain circumstances described in Section 5.01(c) any related Extra
Principal Distribution Amount.
Fixed Rate Group Purchase Account Deposit: The amount deposited in the
Purchase Account that is allocated for the purchase of Subsequent Mortgage Loans
having fixed Mortgage Loan Rates to be included in the Fixed Rate Group, which
amount is $21,835,847.17 or $430.48 if the Subsequent Mortgage Loans are
purchased on the Closing Date.
Fixed Rate Group Subsequent Purchase Price: With respect to any
Subsequent Mortgage Loan to be included in the Fixed Rate Group, means an amount
equal to 100% of the Principal Balance of such Subsequent Mortgage Loan.
Fixed Rate Net WAC: With respect to any Distribution Date, means the
weighted average Mortgage Loan Rate of the Mortgage Loans in the Fixed Rate
Group as of the first day of the related Collection Period less (i) 0.50% per
annum and (ii) for the first 36 Distribution Dates, the product of (a) 5.50% and
(b) the Class A-IO Notional Amount divided by the aggregate Principal Balance of
such Mortgage Loans as of such first day of such Collection Period.
Foreign Person: A Person that is not a citizen or resident of the
United States, a corporation, partnership, or other entity created or organized
in or under the laws of the United States or any political subdivision thereof,
an estate that is subject to United States federal income tax regardless of the
source of its income or a trust if (a) a court within the United States is able
to exercise primary supervision of the Administration thereof and (b) one or
more United States fiduciaries have the authority to control all substantial
decisions of the trust.
Formula Pass-Through Rate: With respect to any Class of Adjustable Rate
Group Certificates, the Pass-Through Rate in effect for such Class if the
Adjustable Rate Group Available Funds Cap is disregarded.
Gross Margin: With respect to an Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note, which amount is
added to the Index in accordance with the terms of the related Mortgage Note to
determine the Mortgage Loan Rate.
Group Factor: As to any Distribution Date and each Mortgage Loan Group,
the percentage (carried to eight places, rounded down) obtained by dividing the
aggregate Principal Balances of the Mortgage Loans in the related Mortgage Loan
Group (after giving effect to any distribution of principal on the related
Certificates on such Distribution Date) by the sum of the aggregate Principal
Balances of the Mortgage Loans in the related Mortgage Loan Group as of the
Cut-off Date plus the Fixed Rate Group Purchase Account Deposit or the
Adjustable Rate Group Purchase Account Deposit, as applicable.
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Index: With respect to any Adjustable Rate Mortgage Loan, the
applicable index for computing the Mortgage Loan Rate as specified in the
Mortgage Note.
Initial Certificate Principal Balance: With respect to each Class of
Certificates that has a Certificate Principal Balance, means:
Initial Certificate
Class Principal Balance
----- -----------------
Class A-1 Certificates $ 71,000,000.00
Class A-2 Certificates $ 10,500,000.00
Class A-3 Certificates $ 39,250,000.00
Class A-4 Certificates $ 9,750,000.00
Class A-5 Certificates $ 13,900,000.00
Class A-6 Certificates $ 19,000,000.00
Class M-1F Certificates $ 8,550,000.00
Class M-2F Certificates $ 11,400,000.00
Class B-1F Certificates $ 6,650,000.00
Class A-1A Certificates $ 241,800,000.00
Class M-1A Certificates $ 25,575,000.00
Class M-2A Certificates $ 25,575,000.00
Class B-1A Certificates $ 17,050,000.00
Initial Mortgage Loan: Means any Mortgage Loan in either Mortgage Loan
Group included in the assets of the Trust as of the Closing Date that is
indicated as such on the Mortgage Loan Schedule.
Insurance Proceeds: With respect to any Distribution Date, proceeds
paid by any insurer and received by the Servicer during the related Collection
Period pursuant to any insurance policy covering a Mortgage Loan or the related
Mortgaged Property, including any deductible payable by the Servicer with
respect to a blanket insurance policy pursuant to Section 3.04 and the proceeds
from any fidelity bond or errors and omission policy pursuant to Section 3.12
(to the extent such payments compensate for losses that would otherwise be
payable to Certificateholders pursuant to this Agreement), net of any component
thereof covering any expenses incurred by or on behalf of the Servicer and
specifically reimbursable under this Agreement.
Interest Carry Forward Amount: With respect to any Class of Offered
Certificates on any Distribution Date, means the amount, if any, by which (i)
the Accrued Certificate Interest on such Class as of such Distribution Date plus
any outstanding Interest Carry Forward Amount with respect to such Class from
the preceding Distribution Date (together with interest on such outstanding
Interest Carry Forward Amount at the related Pass-Through Rate for the related
Interest Period to the extent lawful) exceeds (ii) the amount of Monthly
Interest actually distributed to the holders of such Certificates on such
Distribution Date.
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Interest Period: With respect to any Fixed Rate Group Certificate, the
calendar month preceding the month in which such Distribution Date occurs (and
with respect to the Distribution Date occurring in July 1997, from the Closing
Date to June 30, 1997); with respect to any Adjustable Rate Group Certificate
and the first Interest Period, the period beginning on the Closing Date and
ending on the day preceding the Distribution Date in July 1997, and as to any
subsequent Distribution Date, the period beginning on the immediately preceding
Distribution Date and ending on the day prior to the related Distribution Date.
Interest Shortfall: As to any Distribution Date, the amount of any
Prepayment Interest Shortfall and Relief Act Shortfall for the related Mortgage
Loan Group.
Investment Company Act: The Investment Company Act of 1940, as amended.
Junior Mortgage Loan: Any Mortgage Loan secured by a Mortgage with a
lien of other than first priority.
LIBOR: With respect to the July 1997 Distribution Date, 5.6875% per
annum. With respect to any subsequent Distribution Date, the per annum rate
determined by the Trustee on the related LIBOR Determination Date on the basis
of the offered rates of the Reference Banks for one-month U.S. dollar deposits
as such rates appear on the Dow ▇▇▇▇▇ Telerate Service Page 3750 (or any
replacement page on that service for the purpose of displaying London interbank
offered rates of major banks) as of 11:00 a.m. (London time) on such LIBOR
Determination Date. On each LIBOR Determination Date, LIBOR will be established
by the Trustee as follows:
(i) if on such LIBOR Determination Date two or more Reference
Banks provide such offered quotations, LIBOR shall be the
arithmetic mean (rounded upwards if necessary to the nearest
whole multiple of 0.0625%) of such offered quotations.
(ii) if on such LIBOR Determination Date, fewer than two Reference
Banks provide such offered quotations, LIBOR shall be the
greater of (x) LIBOR as determined on the previous LIBOR
Determination Date and (y) the Reserve Interest Rate.
LIBOR Determination Date: With respect to any Interest Period after the
first Interest Period, the second London Business Day immediately preceding the
first day of such Interest Period.
Liquidated Mortgage Loan: As to any Distribution Date, any Mortgage
Loan as to which the Servicer has determined, in accordance with the servicing
procedures specified herein, during the related Collection Period that all
Liquidation Proceeds that it expects to recover from or on account of such
Mortgage Loan have been recovered.
Liquidation Expenses: Expenses that are incurred by the Servicer in
connection with the liquidation of any Mortgage Loan and not recovered under any
insurance policy or from any Mortgagor. Such expenses shall include, without
limitation, legal fees and expenses, real estate brokerage commissions, any
unreimbursed amount expended by the Servicer pursuant to Section 3.06 respecting
the related Mortgage Loan (including, without limitation, amounts voluntarily
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advanced to correct defaults on each mortgage loan that is senior to such
Mortgage Loan), any other related and previously unreimbursed Servicing Advances
and any related and previously unreimbursed Property Protection Expenses.
Liquidation Proceeds: Cash (other than Insurance Proceeds) received in
connection with the liquidation of any Mortgaged Property, whether through
trustee's sale, foreclosure sale, condemnation, taking by eminent domain or
otherwise received in respect of any Mortgage Loan foreclosed upon as described
in Section 3.06 (including, without limitation, proceeds from the rental of the
related Mortgaged Property).
Liquidation Report: A liquidation report in the form of Exhibit G
attached hereto.
Loan-to-Value Ratio: The Original Principal Amount of a Mortgage Loan
as a percentage of the Appraised Value of the related Mortgaged Property
determined by the Seller at the time of origination of such Mortgage Loan.
London Business Day: A day on which banks are open for dealing in
foreign currency and exchange in London and New York City.
Loss Percentage: As to any Distribution Date and either Mortgage Loan
Group, the percentage equivalent of the fraction obtained by dividing (i) the
principal amount of cumulative Realized Losses on Mortgage Loans in such
Mortgage Loan Group from the Cut-off Date through the end of the related
Collection Period by (ii) the sum of the aggregate of the Principal Balances of
the Mortgage Loans in such Mortgage Loan Group as of the Cut-off Date and the
amount deposited in the Purchase Account with respect to such Mortgage Loan
Group on the Closing Date.
Maximum Rate: With respect to an Adjustable Rate Mortgage Loan, any
absolute maximum Mortgage Loan Rate set by provisions in the related Mortgage
Note.
Minimum Rate: With respect to an Adjustable Rate Mortgage Loan, any
absolute minimum Mortgage Loan Rate, set by provisions in the related Mortgage
Note, subject to the initial Mortgage Loan Rate first adjusting to a level in
excess of such minimum Mortgage Loan Rate in accordance with the terms of the
Mortgage Note.
Monthly Advance: As defined in Section 5.02(a).
Monthly Excess Cashflow Amount: With respect to either Mortgage Loan
Group and any Distribution Date means the sum of (x) the amount, if any, of
Monthly Interest remaining in the Certificate Account with respect to such
Mortgage Loan Group after application with respect to the priorities set forth
in Section 5.01(a), clause First through Fourth, plus (y) the amount of any
Overcollateralization Release Amount with respect to such Mortgage Loan Group
for such Distribution Date.
Monthly Excess Interest Amount: With respect to either Mortgage Loan
Group and any Distribution Date means the excess, if any, of the interest
accrued on the related Mortgage Loans at
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weighted average net Mortgage Loan Rate for the Mortgage Loans in such Mortgage
Loan Group over the Accrued Certificate Interest for the related Offered
Certificates during the related Interest Period.
Monthly Interest: With respect to either Mortgage Loan Group and any
Distribution Date, means the aggregate of the following amounts in respect of
interest and such Mortgage Loan Group:
(i) all payments in respect of or allocable to interest received
or deemed to have been received during the related Collection
Period, net of amounts representing interest accrued in
respect of any period prior to the Cut-off Date or Subsequent
Cut-off Date, as applicable;
(ii) all Trust Insurance Proceeds received during the related
Collection Period;
(iii) all Net Liquidation Proceeds received during the related
Collection Period (excluding any amount distributed to the
Holders of the Class C Certificates pursuant to Section 3.06)
(iv) the aggregate of the amounts deposited in the Certificate
Account on the related Deposit Date by the Seller or the
Servicer, as applicable, in connection with any purchase,
repurchase, shortage or substitution pursuant to Section 2.03,
2.05, 3.01, 3.03 or 3.06;
(v) the aggregate of the amounts deposited in the Certificate
Account by the Servicer in connection with a purchase pursuant
to Section 10.01;
(vi) the amount of Monthly Advances made by the Servicer in respect
of such Distribution Date pursuant to Section 5.02(a);
(vii) the amount of any Compensating Interest paid by the Servicer
in respect of such Distribution Date; and
(viii) in the case of the Distribution Date occurring in July 1997,
the amount deposited in the Certificate Account by the Trustee
from the Capitalized Interest Account or otherwise in respect
of the Capitalized Interest Account Deposit pursuant to
Section 3.17 and the Closing Date Deposit, and in the case of
the Distribution Date occurring in August 1997, the aggregate
amount of Subsequent Transfer Deposits;
reduced by the sum of:
(X) the Monthly Servicing Fee and any other compensation payable
to the Servicer pursuant to Section 3.08 for the related
Collection Period (without regard to any Compensating Interest
payable therefrom) to the extent not previously paid to the
Servicer;
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(Y) the aggregate amount of Monthly Advances and Servicing
Advances (other than those included in the Liquidation
Expenses for any Liquidated Mortgage Loan and reimbursed from
the related Liquidation Proceeds) reimbursable to the Servicer
on such Distribution Date pursuant to the provisions of this
Agreement; and
(Z) the aggregate amounts (i) deposited into the Collection
Account or Certificate Account that may not be withdrawn
therefrom pursuant to a final and nonappealable order of a
United States bankruptcy court of competent jurisdiction
imposing a stay pursuant to ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Bankruptcy Code and that would otherwise have been included in
Monthly Interest on such Distribution Date and (ii) received
by the Trustee that are recoverable and sought to be recovered
from the Trustee 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 of
competent jurisdiction.
Monthly Mortgage Payment: With respect to any Mortgage Note, the amount
of each monthly payment (other than any final balloon payment) payable under
such Mortgage Note in accordance with its terms, including one month's accrued
interest on the related Principal Balance at then applicable Mortgage Loan Rate
but net of any portion of such monthly payment that represents late payment
charges, prepayment or extension fees or collections allocable to payments to be
made by Mortgagors for payment of insurance premiums or similar items.
Monthly Servicing Fee: With respect to any Collection Period and the
Fixed Rate Group, 1/12 of the product of the Servicing Fee Rate and the
aggregate Principal Balances of the Mortgage Loans in the Fixed Rate Group as of
the close of business on the Determination Date occurring in the preceding month
(or, in the case of the first Collection Period, the Initial Principal Balance
of the Mortgage Loans in the Fixed Rate Group). With respect to any Collection
Period and the Adjustable Rate Group, 1/12 of the product of the Servicing Fee
Rate and the aggregate Principal Balance of the Mortgage Loans in the Adjustable
Rate Group as of the close of business on the Determination Date occurring in
the preceding month (or, in the case of the first Collection Period, the Initial
Principal Balance of the Mortgage Loans in the Adjustable Rate Group). The
Monthly Servicing Fee shall be payable on the following Deposit Date to the
Servicer as servicing compensation hereunder pursuant to Section 3.08.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. and its successors in
interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first, second or third lien on an estate in fee simple in real property securing
a Mortgage Loan.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such Mortgage File pursuant to this Agreement.
Mortgage Loan: Each of the Mortgage Loans transferred and assigned to
the Trustee pursuant to Section 2.01 or 2.02 that from time to time comprise
part of the Trust, the Mortgage
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Loans originally so held being identified in the Mortgage Loan Schedule attached
hereto as Exhibit C.
Mortgage Loan Group: Either the Fixed Rate Group or the Adjustable Rate
Group. References herein to any Class or Classes of Certificates being related
to a Mortgage Loan Group, shall mean (A) in the case of the Fixed Rate Group,
the Fixed Rate Class A Certificates, the Class M-1F, Class M-2F or Class B-1F
Certificates and the related Class R Certificates and (B) in the case of the
Adjustable Rate Group, the Class A-1A, Class M-1A, Class M-2A and Class B-1A
Certificates and the related Class R Certificates.
Mortgage Loan Rate: With respect to any Adjustable Rate Mortgage Loan,
the per annum rate of interest computed in accordance with the provisions of the
related Mortgage Note as the sum of the Index and the Gross Margin, subject to
any Minimum Rate, the Maximum Rate or periodic limitation on adjustments to such
rate applicable from time to time to the calculation of interest thereon. As to
any other Mortgage Loan, the fixed per annum rate of interest applicable to the
calculation of interest thereon specified in the related Mortgage Note.
Mortgage Loan Schedule: As of any date, the schedule of Mortgage Loans
separated by Mortgage Loan Group. The initial schedule of Mortgage Loans as of
the Cut-off Date is attached hereto as Exhibit C and sets forth as to each such
Mortgage Loan, among other things, (a) its identifying number and the name of
the related Mortgagor; (b) the street address of the related Mortgaged Property
including the state, county and zip code; (c) its date of origination; (d) the
original number of months to stated maturity; (e) its original stated maturity;
(f) its Original Principal Amount; (g) its Cut-off Date Principal Balance; (h)
the related Mortgage Loan Rate as of the Cut-off Date and, with respect to any
Adjustable Rate Mortgage Loan, the related Index, Gross Margin, Minimum Rate,
Maximum Rate and any periodic limitations on adjustment; (i) the scheduled
Monthly Mortgage Payment; (j) the date in each month on which the related
Monthly Mortgage Payments are due; (k) its Combined Loan-to-Value Ratio or the
ratio, expressed as a percentage, of the Original Principal Amount of such
Mortgage Loan to the Appraised Value of the related Mortgaged Property, as
applicable; (l) the lien status of the related Mortgage and, with respect to any
Junior Mortgage Loan, the principal amount (as of the date of origination) of
all related Senior Liens; (m) whether the related Mortgaged Property is
owner-occupied or non-owner-occupied; (n) whether the related Mortgaged Property
is a single-family residence, a two- to four-family residence or a unit in a
condominium or planned unit development; (o) whether the Mortgage Loan has been
originated by an Affiliate of the Company; and (p) whether the Mortgage Loan is
being serviced by a Sub-Servicer and, if so, the identity of such Sub-Servicer.
The Mortgage Loan Schedule shall be amended on each Subsequent Transfer Date to
reflect the addition of the related Subsequent Mortgage Loans to the Trust.
Mortgage Note: The note or other instrument evidencing the indebtedness
of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligor under a Mortgage Note.
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Net Liquidation Proceeds: As to any Mortgage Loan, Liquidation Proceeds
net of Liquidation Expenses. For all purposes of this Agreement, Net Liquidation
Proceeds shall be allocated first to accrued and unpaid interest on the related
Mortgage Loan and then to the Principal Balance thereof.
Non-permitted Foreign Holder: As defined in Section 6.02(c).
Nonrecoverable Advance: Any Servicing Advance that, in the Servicer's
reasonable judgment, would not be ultimately recoverable by the Servicer from
late collections, Insurance Proceeds or Liquidation Proceeds on the related
Mortgage Loan or otherwise, as evidenced by an Officer's Certificate delivered
to the Trustee no later than the Business Day following the Servicer's
determination thereof.
Offered Certificates: The Class A Certificates and the Subordinate
Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President of the
Seller or the Servicer, as the case may be, and delivered to the Trustee or each
Rating Agency, as the case may be.
Opinion of Counsel: A written opinion of counsel reasonably acceptable
to the Trustee reasonably acceptable to it, who may be in-house counsel for the
Seller or the Servicer (except with respect to any opinion with respect to or
concerning the REMIC status of any REMIC Pool). Any expense related to obtaining
an Opinion of Counsel for an action requested by a party shall be borne by the
party required to obtain such opinion or seeking to effect the action that
requires the delivery of such Opinion of Counsel.
Original Pool Balance: $442,836,094.09
Original Principal Amount: With respect to any Mortgage Loan, the
original principal amount due under the related Mortgage Note as of its date of
origination.
Overcollateralization Amount: With respect to a Mortgage Loan Group and
as of any Distribution Date means the excess of (x) the aggregate of the
outstanding principal balances of the Mortgage Loans in such Mortgage Loan Group
as of the last day of the immediately preceding Collection Period plus the
portion of the Purchase Account Deposit allocable to such Mortgage Loan Group
not yet released from the Purchase Account over (y) the Aggregate Certificate
Principal Balance of the related Offered Certificates (after taking into account
all distributions of principal collections on such Distribution Date).
Overcollateralization Deficiency: With respect to either Mortgage Loan
Group and any Distribution Date, means the excess, if any, of (x) the related
Targeted Overcollateralization Amount over (y) the related Overcollateralization
Amount, calculated for this purpose after taking into account the reduction on
such Distribution Date of the Certificate Principal Balances of all related
Classes of Offered Certificates resulting from principal distributions (other
than reductions resulting
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from the distribution of any related Extra Principal Distribution Amount), but
before taking into account any related Applied Realized Loss Amount for such
Distribution Date.
Overcollateralization Release Amount: With respect to either Mortgage
Loan Group and any Distribution Date, means, the lesser of (x) the related Fixed
Rate Group or Adjustable Rate Group Principal Distribution Amount (other than
any related Extra Principal Distribution Amount) and (y) the excess of (i) the
related Overcollateralization Amount, assuming that 100% of such related
Principal Distribution Amount (excluding the application of any Extra Principal
Distribution Amount) is applied to the payment of principal on the related
Offered Certificates on such Distribution Date over (ii) the related Targeted
Overcollateralization Amount.
Payment Ahead: Any payment of one or more Monthly Mortgage Payments
remitted by a Mortgagor with respect to a Mortgage Note in excess of the Monthly
Mortgage Payment due during such Collection Period with respect to such Mortgage
Note, which sums the related Mortgagor has instructed the Servicer to apply to
Monthly Mortgage Payments due in one or more subsequent Collection Periods. A
Monthly Mortgage Payment that was a Payment Ahead shall, for purposes of
computing certain amounts under this Agreement, be deemed to have been received
by the Servicer on the date in the related Collection Period on which such
Monthly Mortgage Payment would have been due if such Monthly Mortgage Payment
was not a Payment Ahead.
Payoff Notice: The certification delivered by the Servicer in
connection with any payment in full of the outstanding principal balance of a
Mortgage Loan pursuant to Section 3.07, to be substantially in the form of
Exhibit F.
Percentage Interest: With respect to any Certificate, the undivided
percentage interest (carried to eight places, rounded down) obtained by dividing
the original principal balance of such Certificate by the Initial Certificate
Principal Balance or Notional Amount of the related Class, as applicable, and
multiplying the result by 100; provided that with respect to a Class C
Certificate or Class R Certificate, Percentage Interest means the undivided
percentage interest set forth on the face of such Class R Certificate, which in
the aggregate shall not exceed 100%.
Permitted Investments: One or more of the following obligations,
instruments and securities:
(a) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and interest
by, the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United States;
(b) Federal Housing Administration debentures, FHLMC senior debt
obligations and 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 or that are not rated in one of the two highest
long-term rating categories by each Rating Agency;
(c) federal funds, certificates of deposit, time and demand deposits
and banker's acceptances (in each case having original maturities of not more
than 365 days) of any bank
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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
Standard & Poor's and Prime-1 by Moody's;
(d) deposits of any bank or savings and loan association that has
combined capital, surplus and undivided profits of at least $100,000,000 which
deposits are held up to the applicable limits insured by the Bank Insurance Fund
or the Savings Association Insurance Fund of the FDIC;
(e) commercial paper (having original maturities of not more than 180
days) that has the highest short term rating of each of Standard & Poor's and
Moody's;
(f) investments in money market funds rated "AAAm" or "AAAm-G" by
Standard & Poor's and Aaa by Moody's; and
(g) investments approved in writing by each of the Rating Agencies;
provided that no investment described hereunder shall evidence either the right
to receive (i) only interest with respect to obligations underlying such
instrument or (ii) both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity of the underlying obligations; and provided, further, that no
instrument described hereunder may be purchased at a price greater than par if
such instrument may be prepaid or called at a price less than its purchase price
prior to stated maturity. Permitted Investments shall mature not later than the
Business Day prior to the date on which such monies will be needed to make
payments, or in the case of Permitted Investments held in the Purchase Account,
shall be available on the Business Day next succeeding the date the Trustee
receives the Addition Notice that such monies will be needed. Notwithstanding
the foregoing, with respect to investment of amounts in any account, any of the
foregoing obligations, instruments or securities will not be Permitted
Investments to the extent that an investment therein will cause then outstanding
principal amount thereof in which such funds are then invested to exceed
$25,000,000 (such investments being valued at par).
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool Balance: As to any Distribution Date, the sum of the Fixed Rate
Group Balance and the Adjustable Rate Group Balance.
Prepayment Interest Shortfall: As to any Distribution Date and the
Fixed Rate Group Mortgage Loans, the amount, if any, by which the amount
described in clause (b) of the first sentence of the definition of Compensating
Interest for such Distribution Date exceeds the Monthly Servicing Fee for the
Fixed Rate Group Mortgage Loans in the related Collection Period. As to any
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Distribution Date and the Adjustable Rate Group Mortgage Loans, the amount, if
any, by which the amount described in clause (b) of the second sentence of the
definition of Compensating Interest for such Distribution Date exceeds the
Monthly Servicing Fee for the Adjustable Rate Group Mortgage Loans in the
related Collection Period.
Principal Balance: As to any Mortgage Loan and any Determination Date,
the actual outstanding principal amount thereof as of the close of business on
the Determination Date in the preceding month (or, in the case of the first
Determination Date, as of the Cut-off Date) less (i) any Principal Payments
received in respect of such Mortgage Loan during the related Collection Period,
(ii) Net Liquidation Proceeds and Trust Insurance Proceeds allocable to
principal recovered or collected in respect of such Mortgage Loan during the
related Collection Period, (iii) the portion of the Purchase Price allocable to
principal to be remitted by the Seller or the Servicer to the Trustee on the
next succeeding Deposit Date in connection with a purchase or repurchase of such
Mortgage Loan pursuant to Section 2.03, 2.05, 3.01, 3.06 or 10.01, to the extent
such amount is actually received by the Trustee on such Deposit Date, (iv) the
amount to be remitted by the Seller to the Trustee on the next succeeding
Deposit Date in connection with a substitution of a Qualified Replacement
Mortgage Loan for such Mortgage Loan pursuant to Section 2.03 or 2.05, to the
extent such amount is actually received by the Trustee on such Deposit Date and
(v) the amount to be remitted to the Trustee on the next succeeding Deposit Date
in connection with a purchase of such Mortgage Loan pursuant to Section 10.01;
provided, however that a Mortgage Loan that has become a Liquidated Mortgage
Loan since the preceding Determination Date (or, in the case of the first
Determination Date, since the Cut-off Date) will be deemed to have a Principal
Balance of zero on the current Determination Date.
Principal Distribution Amount: With respect to either Mortgage Loan
Group and any Distribution Date, means the aggregate of the following amounts in
respect of principal and such Mortgage Loan Group:
(i) Principal Payments received or deemed to have been received
during the related Collection Period;
(ii) all Trust Insurance Proceeds received during the related
Collection Period;
(iii) all Net Liquidation Proceeds received during the related
Collection Period (excluding any amount distributed to the
Holders of the Class C Certificates pursuant to Section 3.06)
(iv) the aggregate of the amounts deposited in the Certificate
Account on the related Deposit Date by the Seller or the
Servicer, as applicable, in connection with any purchase,
repurchase, shortage or substitution pursuant to Section 2.03,
2.05, 3.01, 3.03 or 3.06;
(v) the aggregate of the amounts deposited in the Certificate
Account by the Servicer in connection with a purchase pursuant
to Section 10.01;
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(vi) the amount of Monthly Advances made by the Servicer in respect
of such Distribution Date pursuant to Section 5.02(a);
(vii) in the case of the Distribution Date occurring in July 1997,
the amount deposited in the Certificate Account by the Trustee
from the Purchase Account or otherwise in respect of the
Purchase Account Deposit pursuant to Section 3.16;
reduced by the sum of:
(X) the aggregate amount of Monthly Advances and Servicing
Advances (other than those included in the Liquidation
Expenses for any Liquidated Mortgage Loan and reimbursed from
the related Liquidation Proceeds) reimbursable to the Servicer
on such Distribution Date pursuant to the provisions of this
Agreement; and
(Y) the aggregate amounts (i) deposited into the Collection
Account or Certificate Account that may not be withdrawn
therefrom pursuant to a final and nonappealable order of a
United States bankruptcy court of competent jurisdiction
imposing a stay pursuant to ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Bankruptcy Code and that would otherwise have been included in
Monthly Interest on such Distribution Date and (ii) received
by the Trustee that are recoverable and sought to be recovered
from the Trustee 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 of
competent jurisdiction.
Principal Payment: As to any Mortgage Loan and Collection Period, all
amounts received or, in the case of the principal portion of any Payment Ahead,
deemed to have been received by the Servicer from or on behalf of the related
Mortgagor during such Collection Period (including Principal Prepayments) that,
at the time of receipt or, in the case of any Payment Ahead, at the time such
Payment Ahead is deemed to have been received, were applied or were required to
be applied by the Servicer in reduction of the Principal Balance of such
Mortgage Loan.
Principal Prepayment: As to any Mortgage Loan and Collection Period,
any payment by a Mortgagor or other recovery in respect of principal on a
Mortgage Loan (including Net Liquidation Proceeds) that, in the case of a
payment by a Mortgagor, is received in advance of its scheduled due date and is
not a Payment Ahead.
Property Protection Expenses: Expenses (exclusive of overhead expenses)
reasonably paid or incurred by or for the account of the Servicer in connection
with the preservation or protection of a Mortgaged Property or the security of a
Mortgaged Property, including (a) hazard insurance policy premiums, (b) real
estate taxes and property repair, replacement, protection and preservation
expenses, (c) amounts expended to cure or prevent any default with respect to
any mortgage loan senior to the related Mortgage Loan and (d) similar expenses
reasonably paid or incurred to preserve or protect the value of such Mortgaged
Property or security (including but not limited to reasonable legal fees and
expenses).
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Purchase Account: The segregated account, which, if utilized shall be
an Eligible Account, established and maintained pursuant to Section 3.16 and
entitled "Bankers Trust Company of California, N.A., as Trustee for Aames
Mortgage Trust 1997-B Mortgage Pass-Through Certificates, Series 1997-B,
Purchase Account".
Purchase Account Deposit: $57,163,905.91 or, if all of the Subsequent
Mortgage Loans are purchased by the Trust on the Closing Date, $3,114.66.
Purchase Account Release: Means the amount to be released from the
Purchase Account (or, if the Subsequent Mortgage Loans are purchased by the
Trust on the Closing Date, from the Certificate Account) on the Distribution
Date in July 1997, equal to the portion of the Purchase Account Deposit not used
to purchase Subsequent Mortgage Loans on the Closing Date or during the
Commitment Period.
Purchase Price: With respect to (a) any Defective Mortgage Loan or (b)
any Mortgage Loan to be purchased by the Servicer pursuant to Section 3.01, an
amount equal to (i) the sum of (A) the Principal Balance of such Mortgage Loan
or Defective Mortgage Loan, as the case may be, as of the beginning of the
Collection Period next preceding the Deposit Date on which such repurchase or
purchase is required to occur, (B) interest computed at the applicable Mortgage
Loan Rate on such Principal Balance from the date to which interest was last
paid by the Mortgagor to the last day of the Collection Period immediately
preceding the Deposit Date on which such repurchase or purchase occurs and (C)
any previously unreimbursed Servicing Advances made on or in respect of such
Defective Mortgage Loan or Mortgage Loan, as the case may be, less (ii) any
payments of principal and interest in respect of such Defective Mortgage Loan or
Mortgage Loan, as the case may be, made by or on behalf of the related Mortgagor
during such Collection Period.
Qualified Replacement Mortgage Loan: A Mortgage Loan that is
substituted for a Deleted Mortgage Loan pursuant to Section 2.03 or Section 2.05
that must, at the end of the Collection Period preceding the date of such
substitution, (i) have an outstanding principal balance (when taken together
with any other Qualified Replacement Mortgage Loan being substituted for such
Deleted Mortgage Loan), not in excess of and not substantially less than the
unpaid principal balance of the Deleted Mortgage Loan at the end of the
Collection Period preceding the date of substitution, (ii) if the Deleted
Mortgage Loan is an Adjustable Rate Mortgage Loan, have the Mortgage Loan Rate
computed on substantially the same basis as the Mortgage Loan Rate on the
related Mortgage Loan, utilizing the same Index and having a Gross Margin or
Minimum Rate not less than (and not more than one percentage point in excess of)
the Gross Margin and Minimum Rate applicable to the Deleted Mortgage Loan and if
the Deleted Mortgage Loan is not an Adjustable Rate Mortgage Loan, have a
Mortgage Loan Rate not less than (and not more than one percentage point in
excess of) the Mortgage Loan Rate of the Deleted Mortgage Loan, (iii) have a
remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan, (iv) have a Combined Loan-to-Value
Ratio equal to or lower than the Combined Loan-to-Value Ratio of the Deleted
Mortgage Loan, (v) satisfy the criteria set forth from time to time in the
definition "qualified replacement mortgage" at Section 860G(a)(4) of the Code,
(vi) have the same or a superior lien priority as the Deleted Mortgage Loan,
(vii) comply as of the date of substitution with each representation and
warranty set forth in Section 2.05, (viii) have the same or better property type
as
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the Deleted Mortgage Loan and (ix) have the same or better occupancy status. In
the event that one or more mortgage loans are proposed to be substituted for one
or more Deleted Mortgage Loans, the foregoing tests may be met on a weighted
average basis or other aggregate basis except that the requirements of clauses
(v), (vi), (vii), (viii) and (ix) hereof must be satisfied as to each Qualified
Replacement Mortgage Loan.
Rating Agencies: Standard & Poor's, Fitch and ▇▇▇▇▇'▇ (each, a "Rating
Agency"). If either such agency or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical credit rating
agency, or other comparable Person, designated by the Servicer, notice of which
designation shall be given to the Trustee.
Realized Loss: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the Principal Balance of such Mortgage Loan and accrued
and unpaid interest thereon (determined as of the Determination Date immediately
prior to such Mortgage Loan becoming a Liquidated Mortgage Loan) exceeds the Net
Liquidation Proceeds, if any, in respect of such Mortgage Loan, which amount
shall in no event exceed the Principal Balance of such Mortgage Loan (determined
as of the Determination Date immediately prior to such Mortgage Loan becoming a
Liquidated Mortgage Loan).
Record Date: As to any Distribution Date, the close of business, if
applicable, on the last Business Day of the calendar month immediately preceding
such Distribution Date.
Reference Banks: Bankers Trust Company, ▇▇▇▇▇▇▇'▇ Bank PLC and National
Westminster Bank PLC; provided that, if any of the foregoing banks are deemed by
the Servicer (as indicated in writing to the Trustee) not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market (i)
with an established place of business in London, (ii) whose quotations appear on
the Dow ▇▇▇▇▇ Telerate Service Page 3750 on the LIBOR Determination Date in
question, (iii) that have been designated as such by the Trustee and (iv) not
controlling, controlled by, or under common control with the Company or any
originator.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Shortfall: As to any Distribution Date and either Mortgage
Loan Group, the amount of any reduction of interest collectible on any Mortgage
Loan in either Mortgage Loan Group for the related Collection Period due to the
application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" as defined in Code
Section 860D, and in particular, any of the REMIC IF, REMIC IA, REMIC II and
REMIC III as indicated by the context.
REMIC Pool: With respect to the REMIC IF, the REMIC IF Pool which shall
be the assets of the Trust attributable to the Fixed Rate Group, other than the
Purchase Account, the Capitalized Interest Account, the REMIC IF Regular
Interests, the REMIC IA Regular Interests and the REMIC II Regular Interests;
with respect to the REMIC IA, the REMIC IA Pool which shall be the assets
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of the Trust attributable to the Adjustable Rate Group other than the Purchase
Account, the Capitalized Interest Account, the REMIC IF Regular Interests, the
REMIC IA Regular Interests and the REMIC II Regular Interests; with respect to
the REMIC II, the REMIC II Pool which shall be the REMIC IF Regular Interests
and the REMIC IA Regular Interests; and with respect to REMIC III, the REMIC III
Pool which shall be the REMIC II Regular Interests.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs that appear at Sections 860A through 860G of Part IV of Subchapter M of
Chapter 1 of Subtitle A of the Code, and related provisions, and U.S. Department
of the Treasury proposed, temporary or final regulations and rulings promulgated
thereunder, as the foregoing may be in effect from time to time.
REO Property: As defined in Section 5.02(a).
Reserve Interest Rate: With respect to any LIBOR Determination Date,
the rate per annum that the Trustee determines to be either (i) the arithmetic
mean (rounded upwards if necessary to the nearest whole multiple of 0.0625%) of
the one-month U.S. dollar lending rates that New York City banks selected by the
Trustee are quoting on the relevant LIBOR Determination Date to the principal
London offices of leading banks in the London interbank market or (ii) in the
event that the Trustee can determine no such arithmetic mean, the lowest
one-month U.S. dollar lending rate that New York City banks selected by the
Trustee are quoting on such LIBOR Determination Dates to leading European banks.
Responsible Officer: When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters, any
Vice President, the Secretary, any Assistant Secretary, the Treasurer, any
Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or
Assistant Trust Officer, the Controller and any Assistant Controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject.
Retained Certificates: Collectively, each of the Class C Certificates
and Class R Certificates.
Rolling Delinquency Percentage: For any Distribution Date and either
Mortgage Loan Group, the average of the Delinquency Percentages for such
Mortgage Loan Group as of the last day of each of the three (or one or two in
the case of the first three Distribution Dates, as applicable) most recently
ended Collection Periods.
Securities Act: The Securities Act of 1933, as amended.
Seller: The Company.
Senior Enhancement Percentage: With respect to a Mortgage Loan Group
and any Distribution Date means the percentage obtained by dividing (x) the sum
of (i) the Aggregate
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Certificate Principal Balance of the related Subordinate Certificates and (ii)
the related Overcollateralization Amount, in each case after taking into account
distributions in respect of the Fixed Rate Group Principal Distribution Amount
or Adjustable Rate Group Principal Distribution Amount, as appropriate, to the
related Offered Certificateholders on such Distribution Date by (y) the
aggregate of the outstanding Principal Balances of the Mortgage Loans in such
Mortgage Loan Group as of the related Determination Date.
Senior Lien: With respect to any Junior Mortgage Loan, any liens on the
related Mortgaged Property of higher priority.
Servicer: The Company or any successor servicer appointed as provided
pursuant to this Agreement.
Servicer Remittance Report: The monthly report prepared by the Servicer
and delivered to the Trustee pursuant to Section 4.01.
Servicing Advances: All reasonable and customary "out-of-pocket" costs
and expenses incurred in the performance by the Servicer of its servicing
obligation, including, but not limited to, the cost of (i) the preservation,
restoration and protection of the Mortgaged Property, including without
limitation advances in respect of real estate taxes and assessments and
insurance premiums on fire, hazard and, if applicable, flood insurance policies,
(ii) any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property, (iv) compliance with the
obligations under Section 3.04 and (v) expenditures relating to the correction
of a default on any Senior Lien pursuant to Section 3.06 in connection with the
liquidation of a Mortgage Loan.
Servicing Fee Rate: With respect to each Mortgage Loan Group and each
Collection Period, 0.50%.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers annexed to an
Officer's Certificate furnished to the Trustee by the Servicer, as such list may
from time to time be amended.
Specified Senior Enhancement Percentage: With respect to any date of
determination, means 31.50% with respect to the Fixed Rate Group and 44.00% plus
the applicable Targeted Stepdown Percentage with respect to the Adjustable Rate
Group.
Standard & Poor's: Standard & Poor's Ratings Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors in interest.
Startup Day: As defined in Section 2.07.
Statement to Certificateholders: As defined in Section 5.03.
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Stepdown Date: With respect to either Mortgage Loan Group, the later to
occur of (x) the Distribution Date in July 2000 or (y) the first Distribution
Date on which the related Senior Enhancement Percentage (after taking into
account distributions on such Distribution Date in respect of principal
collections) is greater than or equal to the related Specified Senior
Enhancement Percentage.
Stepped Up Enhancement Percentage: With respect to each Mortgage Loan
Group on any Distribution Date, means a percentage equal to (x) 100% minus (y)
in the case of the Fixed Rate Group, 2.0 times and in the case of the Adjustable
Rate Group, 2.5 times, the Rolling Delinquency Percentage.
Subordinate Certificates: With respect to the Fixed Rate Group
Certificates, the Class M-1F, Class M-2F and Class B-1F Certificates and with
respect to the Adjustable Rate Group Certificates, the Class M-1A, Class M-2A
and Class B-1A Certificates.
Sub-Servicer: Any Person, including an Affiliate of the Servicer, with
whom the Servicer has entered into a Sub-Servicing Agreement and who satisfies
the requirements set forth in Section 3.15 hereof in respect of the
qualification of a Sub-Servicer. The Sub-Servicers with respect to any of the
Mortgage Loans as of the Cut-off Date are listed on Schedule I attached to this
Agreement.
Sub-Servicing Account: Any segregated account, which shall at all times
be an Eligible Account, established and maintained pursuant to Section 3.02(b)
and entitled "[Sub-Servicer], in trust for the benefit of Holders of Aames
Mortgage Trust 1997-B Mortgage Pass-Through Certificates, Series 1997-B,
Collection Account". References herein to the Collection Account shall include
any Sub-Servicing Account as the context requires.
Sub-Servicing Agreement: A written contract between the Servicer and
any Sub-Servicer relating to the servicing and/or administration of certain
Mortgage Loans.
Subsequent Cut-off Date: With respect to any Subsequent Mortgage Loan,
the date specified as such in the related Subsequent Mortgage Loan Schedule.
Subsequent Cut-off Date Principal Balance: As to any Subsequent
Mortgage Loan, the actual outstanding principal balance due thereunder from the
Mortgagor in the related Addition Notice.
Subsequent Mortgage Loan: A Mortgage Loan sold to the Trust pursuant to
Section 2.02 of this Agreement, which shall be listed on the Subsequent Mortgage
Loan Schedule attached to a Subsequent Transfer Agreement.
Subsequent Mortgage Loan Schedule: As of any Subsequent Transfer Date,
the schedule of Subsequent Mortgage Loans separated by Mortgage Loan Group as of
the related Subsequent Cutoff Date being transferred to the Trust on such
Subsequent Transfer Date pursuant to a Subsequent Transfer Agreement. Each
Subsequent Mortgage Loan Schedule shall contain information regarding the
related Subsequent Mortgage Loans of the type included in, and shall be
substantially in the form of, the Mortgage Loan Schedule attached hereto as
Exhibit C.
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Subsequent Purchase Price: As of any Subsequent Transfer Date, with
respect to the Subsequent Mortgage Loans to be included in either Mortgage Loan
Group, an amount equal to the aggregate of the Principal Balances thereof as of
the Subsequent Cut-off Date of such Subsequent Mortgage Loans as listed in the
related Subsequent Transfer Agreement.
Subsequent Transfer Agreement: With respect to any Subsequent Mortgage
Loan, the agreement pursuant to which such Subsequent Mortgage Loan is
transferred to the Trust, in substantially the form attached hereto as Exhibit
B.
Subsequent Transfer Date: The date specified in each Subsequent
Transfer Agreement, but no later than July 14, 1997.
Subsequent Transfer Deposit: The amount deposited by the Seller in the
Collection Account in connection with each conveyance of Subsequent Mortgage
Loans pursuant to Section 2.02, which amount is equal to one month's interest on
the principal balance of each Subsequent Mortgage Loan that does not have a
Monthly Mortgage Payment due in the Collection Period relating to the August
1997 Distribution Date at a per annum rate equal to the Mortgage Loan Rate for
each such Mortgage Loan, net of the applicable Servicing Fee Rate. Each
Subsequent Transfer Deposit shall be allocated to the Fixed Rate Group or the
Adjustable Rate Group, as appropriate.
Targeted Overcollateralization Amount: With respect to (x) the Fixed
Rate Group means (i) prior to the related Stepdown Date, for the first 36
months, 2.25%, and thereafter, 1.75%, of the Initial Certificate Principal
Balance of the related Offered Certificates, or (ii) on and after the related
Stepdown Date, the greater of (A) 3.50% of the aggregate of the outstanding
Principal Balances of the Mortgage Loans in such Mortgage Loan Group as of the
related Determination Date and (B) $950,000 and (y) the Adjustable Rate Group
means (i) prior to the related Stepdown Date, 3.00%, or upon the occurrence and
continuance of a related Cumulative Loss Event, 5.10%, of the Initial
Certificate Principal Balance of the related Offered Certificates and (ii) on
and after the related Stepdown Date, the greater of (A) the applicable Targeted
Stepdown Percentage of the aggregate of the outstanding Principal Balances of
the Mortgage Loans in such Mortgage Loan Group as of the related Determination
Date and (B) $1,550,000; provided, however, that if a Trigger Event has occurred
and is continuing for either Mortgage Loan Group, the applicable Targeted
Overcollateralization Amount for such Mortgage Loan Group will remain equal to
the applicable Targeted Overcollateralization Amount in effect on the
Distribution Date preceding the occurrence of such Trigger Event.
Targeted Overcollateralization Loss Event: With respect to any
Distribution Date during the indicated period and the Fixed Rate Group, means
that the related Loss Percentage equals or exceeds the indicated Loss
Percentage.
Period Loss Percentage
------ ---------------
Through June 2001 2.50%
July 2001 - June 2002 3.00%
July 2002 - June 2003 3.50%
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July 2003 - June 2004 3.75%
July 2004 and thereafter 4.00%
Targeted Stepdown Percentage: With respect to the Adjustable Rate Group
and any Distribution Date prior to the occurrence of a Cumulative Loss Event
means 6.00% and upon the occurrence and continuance of a Cumulative Loss Event
means 10.20%.
Transfer Affidavit: The affidavit to be delivered by any transferee of
an interest in a Class R Certificate pursuant to Section 6.02(b), to be
substantially in the form attached hereto as Exhibit E.
Transferor Affidavit: The affidavit to be delivered by any transferor
of an interest in a Class R Certificate pursuant to Section 6.02(c), to be
substantially in the form attached hereto as Exhibit I.
Trigger Event: With respect to either Mortgage Loan Group and any
Distribution Date means (a) on such Distribution Date the Rolling Delinquency
Percentage equals or exceeds 50% of the Senior Enhancement Percentage in the
case of the Fixed Rate Group, or 40% of the Senior Enhancement Percentage for
the Adjustable Rate Group or (b) the occurrence and continuance of a Targeted
Overcollateralization Loss Event with respect to the Fixed Rate Group;
notwithstanding the foregoing, with respect to clause (a) a Trigger Event will
not be in effect on any Distribution Date as to which the related Class A
Certificates (stated as a percentage of the outstanding Principal Balances of
such Mortgage Loan Group) is less than or equal to the related Stepped Up
Enhancement Percentage after all distributions thereon in respect of principal.
Trust: The trust created by this Agreement and the corpus thereof,
which consists of, to the extent described herein, the Mortgage Loans, such
assets as shall from time to time be identified or shall be required by this
Agreement to be deposited in the Collection Account, the Certificate Account,
the Purchase Account or the Capitalized Interest Account or invested in
Permitted Investments in accordance with this Agreement, all rights under any
insurance policy covering a Mortgage Loan or the related Mortgaged Property and
property and any proceeds thereof that secured a Mortgage Loan and that has been
acquired by foreclosure, deed in lieu of foreclosure or by a comparable
conversion.
Trust Insurance Proceeds: Insurance Proceeds that (a) are applied by
the Servicer to reduce the Principal Balance of the related Mortgage Loan and
(b) not applied to the restoration or repair of the related Mortgaged Property
or released to the related Mortgagor in accordance with the Servicer's normal
servicing procedures or the terms of the related Mortgage Loan.
Trust Parties: As defined in Section 5.04.
Trustee: Bankers Trust Company of California, N.A., a national banking
association, and its successors in interest or any successor trustee appointed
as provided pursuant to this Agreement.
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Trustee Fee: The annual fee of the Trustee, which shall be $5,000, and
any annual file access fees, such fees being payable by the Servicer pursuant to
Section 9.05.
Unpaid Realized Loss Amount: With respect to any Class of the
Subordinate Certificates and as to any Distribution Date means, the excess of
(x) the aggregate cumulative amount of related Applied Realized Loss Amounts
with respect to such Class for all prior Distribution Dates over (y) the
aggregate cumulative amount of related Realized Loss Amortization Amounts with
respect to such Class for all prior Distribution Dates.
Vice President: Any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president".
Voting Interest: With respect to any provisions hereof providing for
the action, consent or approval of the Holders of all Certificates evidencing
specified Voting Interests in the Trust, the Holders of the Offered Certificates
will collectively be entitled to 100% of the aggregate Voting Interests
represented by all Certificates. Voting Interests will be allocated to the
Certificateholders of each Class pro rata, based on the respective Certificate
Principal Balances thereof. Each Certificateholder of a Class will have a Voting
Interest equal to the product of the Voting Interest to which such Class is
collectively entitled and the Percentage Interest in such Class represented by
such Holder's Certificates. With respect to any provision hereof providing for
action, consent or approval of each Class of Certificates or specified Classes
of Certificates, each Certificateholder of a Class will have a Voting Interest
in such Class equal to such Holder's Percentage Interest in such Class.
Section 1.02. Interest Calculations. All calculations of interest at
the Mortgage Loan Rate that are made in respect of the Principal Balance of a
Mortgage Loan, shall be made on a daily basis using a 360-day year of twelve
30-day months. All calculations of interest on the Fixed Rate Group Certificates
will be computed on the basis of a 360-day year of twelve 30-day months. All
calculations of interest on the Adjustable Rate Group Certificates will be
computed on the basis of the actual number of days elapsed in the related
Interest Period and a year of 360 days.
ARTICLE TWO
CONVEYANCE OF THE TRUST;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of the Trust. The Seller, concurrently with
the execution and delivery of this Agreement, does hereby irrevocably sell,
transfer, assign, set over and otherwise convey to the Trustee, in trust for the
benefit of the Certificateholders, without recourse (except as otherwise
explicitly provided for herein), all of its right, title and interest in and to
the Trust, including specifically, without limitation, the Mortgage Loans, the
Mortgages, the Mortgage Files and the Mortgage Notes, including all interest and
principal (whether in the form of payments by Mortgagors or other proceeds)
received or deemed to be received by the Seller on or with respect to the
Mortgage Loans on or after the Cut-off Date net of amounts in respect of
interest accrued on the Mortgage Loans in periods prior to the Cut-off Date
(whether in the nature of amounts held by the
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Seller for application on behalf of the related Mortgagor as a Monthly Mortgage
Payment that is due on any date on or after the Cut-off Date or otherwise),
together with all of its right, title and interest in and to the proceeds
received on or after the Cut-off Date of any related insurance policies. In
addition, on or prior to the Closing Date the Seller shall deposit the Closing
Date Deposit in the Collection Account.
In the event that, notwithstanding the intent of the parties hereto to
effect a sale and assignment of the Trust by the Seller to the Trustee, such
sale and assignment is deemed to constitute a pledge of security for a loan, it
is the intent of this Agreement that the Seller shall be deemed to have granted
to the Trustee for the benefit of the Certificateholders a first priority
perfected security interest in all of the Seller's right, title and interest in
and to the Mortgage Loans, the Mortgages, the Mortgage Files and the Mortgage
Notes, all payments of principal or interest on the Mortgage Loans received on
or after the Cut-off Date net of amounts in respect of interest accrued on the
Mortgage Loans in periods prior to the Cut-off Date, all other payments
(exclusive of assumption fees, late payment charges, charges for checks returned
for insufficient funds, prepayment fees, if any, and extension and other
administrative charges) made in respect of such Mortgage Loans on or after the
Cut-off Date and all proceeds of any thereof, including all amounts on deposit
in the Certificate Account, the Collection Account, the Purchase Account and the
Capitalized Interest Account and amounts invested in Permitted Investments, and
that this Agreement shall constitute a security agreement under applicable law.
The Company confirms to the Trustee that it has caused its computer
records relating to the Mortgage Loans to indicate by a code that the Mortgage
Loans have been sold to the Trustee on behalf of the Trust and constitute part
of the Trust in accordance with the terms of the Trust and that the Company will
treat the transaction contemplated by such sale and assignment as a sale in
accordance with generally accepted accounting principles and will reflect such
sale on its primary accounting records.
In connection with such sale and assignment, the Company, in its
capacity as Seller hereunder, does hereby deliver to, and deposit with, the
Trustee the originals of the following documents or instruments with respect to
each Mortgage Loan so assigned:
(a) The original Mortgage Note, with all intervening endorsements
sufficient to show a complete chain of endorsement to the Seller, endorsed
(which endorsement may be by manual or facsimile signature) by the Seller
without recourse to the order of the Trustee in the following form: "Pay to the
order of Bankers Trust Company of California, N.A., in trust for the benefit of
holders of Aames Mortgage Trust 1997-B Mortgage Pass-Through Certificates,
Series 1997-B, without recourse";
(b) The original Mortgage with evidence of recording indicated thereon;
(c) The original executed assignment of the Mortgage in recordable
form;
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(d) Originals of all assumption, modification and substitution
agreements in those instances where the terms or provisions of a Mortgage or
Mortgage Note have been modified or such Mortgage or Mortgage Note has been
assumed;
(e) Originals of all intervening mortgage assignments with evidence of
recording indicated thereon sufficient to show a complete chain of assignment
from the originator of the Mortgage Loan to the Seller or one of its Affiliates;
and
(f) Original lender's title insurance policy issued on the date of the
origination of such Mortgage Loan.
As promptly as practicable subsequent to the Closing Date, and in any
event, within 30 days thereafter, the Company, in its capacity as Servicer shall
(i) affix the Trustee's name to each assignment of Mortgage, as the assignee
thereof, (ii) cause such assignment to be in proper form for recording in the
appropriate public office for real property records, and (iii) cause to be
delivered for recording in the appropriate public office for real property
records the assignments of the Mortgages to the Trustee, except that, with
respect to any assignments of Mortgage as to which the Servicer has not received
the information required to prepare such assignment in recordable form, the
Servicer shall be obligated to prepare and to deliver such assignment for such
recording as soon as practicable after receipt of such information and in any
event within 30 days after receipt thereof (and in no event more than one year
after the Closing Date) and that the Servicer need not cause to be recorded any
assignment that relates to a Mortgage Loan in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel delivered by the Seller (at the
Seller's expense) to the Trustee, the recordation of such assignment is not
necessary to protect the Trustee's and the Certificateholders' interest in the
related Mortgage Loan.
If the Company cannot deliver the original Mortgage or any intervening
mortgage assignment to the benefit of the Seller or one of its affiliates with
evidence of recording thereon concurrently with the execution and delivery of
this Agreement solely because of a delay caused by the public recording office
where such original Mortgage or mortgage assignment has been delivered for
recordation, the Company shall deliver to the Trustee an Officer's Certificate,
with a photocopy of such Mortgage or mortgage assignment, as the case may be,
attached thereto, stating that such original Mortgage or mortgage assignment has
been delivered to the appropriate public recording official for recordation. The
Company shall promptly deliver to the Trustee any such original Mortgage or
intervening mortgage assignment with evidence of recording indicated thereon
upon receipt thereof from the public recording official. If the Company within
six months from the Closing Date shall not have received such original Mortgage
or intervening mortgage assignment from the public recording official, it shall
obtain, and deliver to the Trustee within eight months from the Closing Date, a
copy of such original Mortgage or mortgage assignment certified by such public
recording official to be a true and complete copy of such original Mortgage or
mortgage assignment as recorded by such public recording office.
The costs relating to the delivery of the documents specified in this
Section shall be borne by the Seller.
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Section 2.02. Conveyance of the Subsequent Mortgage Loans; Fixed Price
Contract. Subject to the conditions set forth in the paragraphs below, in
consideration of the Trustee's delivery on the Closing Date or related
Subsequent Transfer Dates to or upon the order of the Seller of the Subsequent
Purchase Price of the related Subsequent Mortgage Loans from amounts on deposit
in the Purchase Account (or other amounts payable to the Company if such
purchases of all Subsequent Mortgage Loans on the Closing Date) with respect to
the related Mortgage Loan Group, the Seller shall, from time to time, 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 Seller in
and to each Subsequent Mortgage Loan identified on the Subsequent Mortgage Loan
Schedule attached to the related Subsequent Transfer Agreement delivered by the
Seller on the Closing Date or such Subsequent Transfer Date, including all of
its right, title and interest in and to principal and interest (whether in the
form of payments by Mortgagors or other proceeds) received or deemed to be
received by the Seller on each such Subsequent Mortgage Loan on and after the
related Subsequent Cut-off Date, net of amounts in respect of interest accrued
on such Subsequent Mortgage Loans in periods prior to the related Subsequent
Cut-off Date (whether in the nature of amounts held by the Seller for
application on behalf of the related Mortgagor as a Monthly Mortgage Payment
that is due on any date on or after the related Subsequent Cut-off Date or
otherwise), plus any Subsequent Transfer Deposit relating to such Subsequent
Mortgage Loan and all items with respect to such Subsequent Mortgage Loan to be
delivered pursuant to Section 2.01 and other items in the related Mortgage File;
provided, however, that the Seller reserves and retains all of its right, title
and interest in and to principal (including prepayments) and interest collected
on each such Subsequent Mortgage Loan prior to the related Subsequent Cut-off
Date (except for amounts held by the Seller for application on or after the
related Subsequent Cut-off Date). The transfer by the Seller of the Subsequent
Mortgage Loans set forth on the Subsequent Mortgage Loan Schedule to the Trustee
shall be absolute and shall be intended by the parties hereto to be treated as a
sale by the Seller. On or before the last day of the Commitment Period, the
Seller shall convey to the Trustee pursuant to this Section 2.02 the lesser of:
(i) all Mortgage Loans then in its possession that satisfy the requirements of
this Section 2.02 or (ii) the maximum principal balance of Mortgage Loans as
determined by Seller that satisfy the requirements of this Section 2.02 whose
aggregate Subsequent Purchase Price does not exceed the Purchase Account
Deposit. Subsequent Mortgage Loans to be conveyed on a given Subsequent Transfer
Date must have an aggregate Subsequent Cut-off Date Principal Balance of not
less than $500,000; provided, however, that the Subsequent Mortgage Loans to be
conveyed on the final Subsequent Transfer Date may have an aggregate Subsequent
Cutoff Date Principal Balance of less than $500,000. In connection with each
conveyance of Subsequent Mortgage Loans, the Seller shall deposit any applicable
Subsequent Transfer Deposit in the Collection Account on the related Subsequent
Transfer Date.
In the event that, notwithstanding the intent of the parties hereto to
effect a sale and assignment of the Subsequent Mortgage Loans on the related
Subsequent Transfer Date by the Seller to the Trustee, such sale and assignment
will be deemed to constitute a pledge of security for a loan, it is the intent
of this Agreement that the Seller shall be deemed to have granted to the Trustee
for the benefit of the Certificateholders a first priority perfected security
interest in all of the Seller's right, title and interest in and to the
Subsequent Mortgage Loans, the Mortgages, the Mortgage Files and the Mortgage
Notes, all payments of principal and interest on the Subsequent Mortgage Loans
received on or after their respective Subsequent Cut-off Dates, net of amounts
in respect of interest
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accrued on such Subsequent Mortgage Loans in periods prior to the related
Subsequent Cut-off Date, all other payments (exclusive of assumption fees, late
payment charges, charges for checks returned for insufficient funds, prepayment
fees, if any, and extension and other administrative charges) made in respect of
such Subsequent Mortgage Loans on or after the related Subsequent Cut-off Date,
plus any Subsequent Transfer Deposit relating to such Subsequent Mortgage Loan
and all proceeds of any thereof, and that this Agreement and the related
Subsequent Transfer Agreement shall each constitute a security agreement with
respect to the related Subsequent Mortgage Loans under applicable law.
The amount released to the Seller from the Purchase Account on any
Subsequent Transfer Date (or from other amounts payable to the Company on the
Closing Date) in connection with any conveyance of Subsequent Mortgage Loans to
be included in the Fixed Rate Group shall be equal to the aggregate of the
Subsequent Purchase Prices for such Subsequent Mortgage Loans, which amounts, in
the aggregate, shall not exceed the Fixed Rate Group Purchase Account Deposit;
provided, however, that any Additional Subsequent Purchase Price in respect of
such Subsequent Mortgage Loans shall be paid only on the last day of the
Commitment Period. The amount released to the Seller from the Purchase Account
on any Subsequent Transfer Date (or from other amounts payable to the Company on
the Closing Date) in connection with any conveyance of Subsequent Mortgage Loans
to be included in the Adjustable Rate Group shall be equal to the aggregate of
the Subsequent Purchase Prices for such Subsequent Mortgage Loans, which
amounts, in the aggregate, shall not exceed the Adjustable Rate Group Purchase
Account Deposit. The amounts so released to the Seller in connection with any
conveyance of Subsequent Mortgage Loans shall, for federal income tax purposes,
be considered cash contributed to the related REMIC IF Pool or REMIC IA Pool, as
applicable by the Seller and used by the Trustee to acquire the related
Subsequent Mortgage Loans pursuant to a fixed price contract established
pursuant to this Section 2.02.
On the Closing Date or other related Subsequent Transfer Date, the
Seller shall transfer to the Trustee the Subsequent Mortgage Loans and the other
property and rights related thereto described in the first paragraph in this
section only upon the satisfaction of each of the following conditions on or
prior to the related Subsequent Transfer Date:
(a) the Seller shall provide the Trustee with an Addition
Notice and shall provide any information reasonably requested by the
Trustee with respect to the Subsequent Mortgage Loans;
(b) the Seller shall deliver to the Trustee and the Rating
Agencies a duly executed Subsequent Transfer Agreement and any other
related documentation in the forms of the exhibits listed thereon;
(c) the Seller shall deposit in the Collection Account all
collections in respect of the Subsequent Mortgage Loans received or
deemed received by the Seller on or after the related Subsequent
Cut-off Date (whether in the nature of amounts held by the Seller for
later application on behalf of the related Mortgagor in respect of a
Monthly Payment due after the related Subsequent Cut-off Date or
otherwise);
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(d) the Seller shall certify that, as of such date, the Seller
was not insolvent, was not made insolvent by such transfer and is not
aware of any pending insolvency;
(e) the Seller shall certify that such addition of Subsequent
Mortgage Loans will not result in a material adverse tax consequence to
the Trust or the Certificateholders;
(f) the Commitment Period shall not have expired;
(g) the Seller shall make the representations and warranties
set forth in Section (A) of Schedule II to this Agreement with respect
to such Subsequent Mortgage Loans; and
(h) on such date, the Seller shall deposit any applicable
Subsequent Transfer Deposit in the Collection Account.
In addition, the Seller will provide the Trustee with data regarding
all Subsequent Mortgage Loans to be transferred to the Trust on any Subsequent
Transfer Date at least 10 Business Days prior to the end of the Commitment
Period. No later than the end of the Commitment Period, the following conditions
shall have been satisfied with respect to all Subsequent Mortgage Loans to be
transferred to the Trust on any Subsequent Transfer Date:
(a) the Seller shall have delivered to the Trustee an
Officer's Certificate confirming the satisfaction of each condition
precedent specified in this Section 2.02 and in the related Subsequent
Transfer Agreements;
(b) the Seller shall have delivered to the Trustee Opinions of
Counsel with respect to the transfer of all of the Subsequent Mortgage
Loans to the Trust on any Subsequent Transfer Date substantially in the
form of the Opinions of Counsel delivered to the Trustee on the Closing
Date regarding bankruptcy, corporate and tax matters;
(c) the Trustee shall deliver to the Rating Agencies and the
Seller an Opinion of Counsel with respect to each of the Subsequent
Transfer Agreements substantially in the form of the Opinion of Counsel
delivered to the Seller on the Closing Date; and
(d) the Seller shall make the representations and warranties
set forth in Section B of Schedule II to this Agreement.
The Seller shall certify that the Subsequent Mortgage Loans will be
transferred to the Trust in accordance with the foregoing and that all mortgage
loans identified in both the original schedule and secondary schedule of
mortgage loans described above satisfy the requirements of Subsequent Mortgage
Loans as set forth in this Section 2.02 as of the Closing Date. On or before the
last day of the Commitment Period, the Seller will also cause to be delivered to
the Trustee (with copies to each Rating Agency) a letter from independent
accountants confirming certain characteristics of the Subsequent Mortgage Loans.
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If all of the Subsequent Mortgage Loans are transferred to the Trust on
the Closing Date, then the remaining portion of each of the Fixed Rate Group
Purchase Account Deposit and the Adjustable Rate Group Purchase Account Deposit
will be deposited into the Certificate Account and held there, without
investment thereof, until the first Distribution Date. On such first
Distribution Date, such amounts will be deemed to comprise a portion of the
Fixed Rate Group Principal Distribution Amount or Adjustable Rate Group
Principal Distribution Amount, as appropriate, and will be distributable to the
Certificateholders.
Section 2.03. Acceptance by the Trustee; Repurchase or Substitution of
Mortgage Loans. The Trustee acknowledges the sale and assignment to the Trust
and receipt by it of the original Mortgage Notes, Assignments and Mortgages
pursuant to this Agreement and the delivery to it, subject to (i) the provisions
of the penultimate paragraph of Section 2.01, (ii) the review provided for in
this Section of the documents referred to in clauses (a) through (f) of Section
2.01 and (iii) delivery of the Officer's Certificates pursuant to Section 2.01,
declares that it will hold the Trust in trust upon the terms herein set forth
for the use and benefit of all present and future Certificateholders. The
Trustee agrees, for the benefit of Certificateholders, to review each Mortgage
File within 45 days after the Closing Date (or, 45 days after the Subsequent
Transfer Date, with respect to the Subsequent Mortgage Loans) to determine
whether the documents described in Section 2.01(a)-(c), (e) and (f) have been
executed and received, and whether such documents relate to the Mortgage Loans
identified in the Mortgage Loan Schedule, or the Subsequent Mortgage Loan
Schedule, as applicable, and in so doing the Trustee may rely on the purported
due execution and genuineness of any such document and on the purported
genuineness of any signature thereon. If within such 45-day period the Trustee
finds any document constituting a part of a Mortgage File not to have been
executed or received or to be unrelated to the Mortgage Loans identified in the
Mortgage Loan Schedule, the Trustee shall promptly notify the Seller of such
findings. The Seller shall have a period of 60 days from the date of such notice
to correct or cure any such defect. Notwithstanding the second paragraph of
Section 9.01, 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 have actually been recorded or that they are
other than what they purport to be on their face.
If the Trustee has notified the Seller of a defect in a Mortgage File
that materially and adversely affects the interests of the Certificateholders in
the related Mortgage Loan, and such defect remains uncured after such 60-day
period, the Seller shall, (i) in the case of a defect consisting solely of the
failure of the Company to deliver the original Mortgage or any intervening
mortgage assignment with evidence of recording thereon for reasons set forth in
Section 2.01, on the first Deposit Date occurring after the expiration of eight
months from the Closing Date, and (ii) in the case of all other defects, on the
Deposit Date occurring not later than 60 days after receipt of notice of such
defect from the Trustee, as the case may be, either (I) repurchase the related
Mortgage Loan (including any property acquired in respect thereof and any
insurance policy or current or future insurance proceeds with respect thereto)
from the Trust at a price equal to the Purchase Price, which shall be
accomplished by deposit of monies by the Seller in the Certificate Account on
such Deposit Date, or (II) substitute one or more Qualified Replacement Mortgage
Loan for the related Mortgage Loan.
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Upon receipt by the Trustee of an Officer's Certificate of the Servicer
to the effect that the Purchase Price for a Defective Mortgage Loan (other than
a Defective Mortgage Loan that is a Deleted Mortgage Loan) has been deposited in
the Certificate Account, and upon confirmation by the Trustee that such Purchase
Price has been received by it, the Trustee shall execute and deliver such
instrument of transfer or assignment presented to it by the Seller, in each case
without recourse, as shall be necessary to vest in the Seller legal and
beneficial ownership of such repurchased Defective Mortgage Loan (including any
property acquired in respect thereof or insurance policy or current or future
insurance proceeds with respect thereto).
Payments received with respect to Qualified Replacement Mortgage Loans
in the Collection Period prior to the Deposit Date on which such substitution
occurs will not be part of the Trust and will be retained by the Seller. For the
Distribution Date following the Deposit Date on which such substitution occurs,
distributions to Certificateholders will reflect the payments received on such
Deleted Mortgage Loan in the related Collection Period representing amounts due
or accrued thereon prior to such Deposit Date, and the Seller shall thereafter
be entitled to retain all amounts subsequently received in respect of such
Deleted Mortgage Loan. In the case of a Qualified Replacement Mortgage Loan, the
Mortgage File relating thereto shall be delivered to the Trustee and the amount,
if any, by which the Principal Balance of the related Deleted Mortgage Loan as
of the related Deposit Date exceeds the Principal Balance of the Qualified
Replacement Mortgage Loan as of the first day of the related Collection Period
shall be remitted by the Seller to the Trustee for deposit in the Certificate
Account on the Deposit Date on which the substitution occurs. For purposes of
this Agreement, any such amount so deposited in the Certificate Account shall be
deemed a prepayment of the related Deleted Mortgage Loan received by the
Servicer as of the prior Determination Date. Upon receipt by the Trustee of an
Officer's Certificate certifying that the Qualified Replacement Mortgage Loan
conforms to the requirements of this Agreement and (a) written notification of
such deposit signed by a Servicing Officer and (b) the new Mortgage File
(containing all of the documents referred to in clauses (a), (b), (c), (d), (e)
and (f) of Section 2.01), the Trustee shall release or cause to be released to
the Seller the Mortgage File related to the Deleted Mortgage Loan or property
and shall execute and deliver or cause to be executed and delivered such
instrument of transfer or assignment presented to it by the Seller, without
recourse, as shall be necessary to vest in the Seller all of the legal and
beneficial ownership of such Deleted Mortgage Loan or property and the Trustee
shall have no further responsibility with respect to said Mortgage File. It is
understood and agreed that the obligation of the Seller to substitute a
Qualified Replacement Mortgage Loan for or repurchase any Defective Mortgage
Loan (or any property acquired in respect thereof or insurance policy or current
or future insurance proceeds with respect thereto) shall constitute the sole
remedy against it respecting such defect available to the Certificateholders or
the Trustee, and such obligation on the part of the Seller shall survive any
resignation or termination of the Company as Servicer under this Agreement.
Notwithstanding the foregoing, a substitution by the Seller for a defect in a
constituent document will not be made unless the Trustee receives an Officer's
Certificate certifying that the Qualified Replacement Mortgage Loan conforms to
the requirements of this Agreement and an Opinion of Counsel that such
substitution will not be a "prohibited transaction" as defined in Section
860F(a)(2) of the Code. Any substitution must be effected not later than two
years after the Closing Date, or within such longer period of time as may be
permitted under the REMIC Provisions for substitution of mortgage loans.
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On or prior to September 30, 1997 (October 31, 1997 with respect to the
Subsequent Mortgage Loans), the Trustee shall certify to the Servicer that it
has received all of the documents referred to in clauses (a) (b), (c), (e) and
(f) of Section 2.01 and that all corrections or curative actions required to be
taken by the Seller within the 60-day period referred to in the first paragraph
of this Section have been completed or effected, or the related Mortgage Loans
have been repurchased or substituted, in accordance with the provisions of this
Section or, if any deficiencies in the Mortgage Files or other omissions of the
Seller with respect to the Mortgage Files are known to the Trustee at the time
of such certification, the Trustee shall make such certification only with
respect to those Mortgage Loans as to which no such defects or omissions are
known, and shall qualify such certification with respect to the remaining
Mortgage Loans, identifying the related defects or omissions. Thereafter, the
Trustee shall provide the Seller and the Servicer with monthly exception reports
indicating the status of any exceptions until all such exceptions have been
eliminated. Such monthly exception reports shall be distributed by the Trustee
on the related Distribution Date with the Statement to Certificateholders.
Section 2.04. Representations and Warranties Regarding the Servicer and
the Seller. The Company, as Seller and Servicer hereby represents and warrants
to the Trustee and the Certificateholders that, as of the Closing Date:
(i) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of California. The Company is
in compliance with the laws of each state in which it is acting as Servicer with
respect to a Mortgage Loan to the extent necessary to perform all servicing
obligations with respect to the related Mortgaged Property hereunder. Each
Sub-Servicer is in compliance with the laws of each state where the Mortgaged
Properties under the applicable Sub-Servicing Agreement are located to the
extent necessary to perform the servicing obligations hereunder; the Company has
the power and authority to execute and deliver this Agreement and to perform its
obligations in accordance herewith; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Company and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action; this Agreement evidences the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
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; and the consummation of the transactions contemplated hereby will not
result in the breach of any terms or provisions of the articles of incorporation
or by-laws of the Company 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 Company or its property is
subject, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Company or its property is subject. Each
Sub-Servicer has all requisite corporate power and authority to conduct its
business and perform the obligations under the Sub-Servicing Agreement to which
such Sub-Servicer is a party;
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(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, that are necessary in
connection with the execution and delivery by the Company of this Agreement,
have been duly taken, given or obtained, as the case may be, are in full force
and effect, 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 on
the part of the Company and the performance by the Company of its obligations as
Servicer under this Agreement;
(iii) There is no action, suit, proceeding or investigation pending
or, to the best of the Company's knowledge, threatened against the Company that,
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 Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted, or in any
material liability on the part of the Company or that would draw into question
the validity of this Agreement or the Mortgage Loans or of any action taken or
to be taken in connection with the obligations of the Company, in its capacity
as Servicer, contemplated herein, or that would be likely to impair the ability
of the Company to perform under the terms of this Agreement;
(iv) The Company 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 Company or its properties or might have consequences that
would adversely affect its performance as Servicer hereunder;
(v) The transfer, assignment and conveyance of the Mortgage Loans
by the Company, as Seller, pursuant to this Agreement are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction;
(vi) The collection practices used by the Company and any
Sub-Servicer are in all material respects legal, proper, prudent and customary
in the home equity mortgage loan servicing business; and
(vii) Each Sub-Servicer engaged by the Servicer has obtained all
licenses and approvals required under state or federal law to service the
Mortgage Loans specified in the Sub-Servicing Agreement to which the
Sub-Servicer is a party.
The representations and warranties set forth in this Section shall survive the
sale and assignment of the Mortgage Loans to the Trust and the issuance, sale
and delivery of the Certificates. Upon discovery of a breach of any of the
foregoing representations and warranties that materially and adversely affects
the interests of the Certificateholders, the party discovering such breach shall
give
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prompt written notice to the other parties. Within 60 days of its discovery or
its receipt of notice of breach, the Company shall cure such breach in all
material respects.
Section 2.05. Representations and Warranties of the Seller Regarding
the Mortgage Loans. The Seller represents and warrants to the Trustee and the
Certificateholders as of the Closing Date and, with respect to any Subsequent
Mortgage Loan, as of the Subsequent Transfer Date (in either case except as
otherwise expressly stated) that, as to each Mortgage Loan conveyed to the Trust
by it:
(i) The information with respect to each Mortgage Loan set forth in
the Mortgage Loan Schedule is true and correct as of the Cut-off Date;
(ii) All of the original or certified documentation set forth in
Section 2.01 or Section 2.02, as applicable (including all material documents
related thereto), with respect to each Mortgage Loan has been or will be
delivered to the Trustee on the Closing Date or as otherwise provided in Section
2.01 or Section 2.02, as applicable;
(iii) The related Mortgaged Property is improved by a one- to
four-family residential dwelling owned by the related Mortgagor in fee simple,
which may include condominiums, townhouses and manufactured housing or modular
homes that are permanently affixed to the land and constitute real property
under the laws of the state in which the Mortgaged Property is located but shall
not include co-operatives or mobile homes;
(iv) As of the Cut-off Date or Subsequent Cut-off Date, as
applicable, no Mortgage Loan included in the Fixed Rate Group has a Combined
Loan-to-Value Ratio in excess of 90% and no Mortgage Loan included in the
Adjustable Rate Group has a Loan-to-Value Ratio in excess of 90%, except that
one Mortgage Loan representing not more than 0.06% of the initial Fixed Rate
Group Balance has a Combined Loan-to-Value Ratio of up to 95% and nine Mortgage
Loans representing not more than 0.46% of the initial Adjustable Rate Group
Balance have Combined Loan-to-Value Ratios of up to 95%;
(v) Each Mortgage Loan was originated by an Affiliate of the
Company or by an originator not affiliated with the Company authorized to
originate such Mortgage Loan and is being serviced by the Company;
(vi) Each Mortgage Loan included in the Fixed Rate Group as of the
Cut-off Date bears a fixed Mortgage Loan Rate of at least 7.00% per annum and
each Mortgage Loan included in the Adjustable Rate Group as of the Cut-off Date
is an Adjustable Rate Mortgage Loan that has a Minimum Rate of not less than
3.50% per annum and a Mortgage Loan Rate as of the Cut-off Date of not less than
5.00% per annum; each Subsequent Mortgage Loan included in the Fixed Rate Group
will bear a fixed Mortgage Loan Rate of not less than 8.18% and each Subsequent
Mortgage Loan included in the Adjustable Rate Group will have a Minimum Rate of
not less than 5.50%; the terms of each Mortgage Loan or Subsequent Mortgage Loan
included in the Adjustable Rate Group require that adjustments in the related
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Mortgage Loan Rate be made employing the related Index measured as of a date not
more than three months prior to the related adjustment date;
(vii) Each Mortgage Note provides for a schedule of substantially
level and equal Monthly Mortgage Payments (subject, in the case of an Adjustable
Rate Mortgage Loan, to periodic adjustments relating to changes in the Mortgage
Loan Rate) that are sufficient to amortize fully the principal balance of such
Mortgage Note on or before its maturity date, except that, Mortgage Notes with
respect to Mortgage Loans in the Fixed Rate Group representing not more than
4.34% of the initial Fixed Rate Group Balance and Mortgage Notes with respect to
Mortgage Loans in the Adjustable Rate Group representing not more than 0.10% of
the initial Adjustable Rate Group Balance, provide for level and equal Monthly
Mortgage Payments that are sufficient to amortize fully the principal balances
of such Notes over a period not exceeding 30 years, with "balloon" payments at
stated maturity that are substantially in excess of the Monthly Mortgage
Payments;
(viii) Each Mortgage is a valid and subsisting lien of record on the
Mortgaged Property having the priority indicated on the Mortgage Loan Schedule,
subject, in the case of any Junior Mortgage Loan, only to any Senior Lien or
Senior Liens on such Mortgaged Property and subject in all cases to the
exceptions to title set forth in the title insurance policy with respect to the
related Mortgage Loan, which exceptions are generally acceptable to home equity
mortgage lending institutions, and such other exceptions to which similar
properties are commonly subject and that do not individually, or in the
aggregate, materially and adversely affect the benefits of the security intended
to be provided by such Mortgage;
(ix) Immediately prior to the sale, transfer and assignment herein
contemplated, the Company held good and indefeasible title to, and was the sole
owner of, each Mortgage Loan conveyed by the Company subject to no liens,
charges, mortgages, encumbrances or rights of others, except with respect to
liens that 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;
(x) The Mortgage Loan Rate for each Adjustable Rate Mortgage Loan
will be adjustable on each related Adjustment Date and will equal the sum,
rounded upward to the nearest three decimal places, of the Index plus the
related Gross Margin, subject to any related Minimum Rates, Maximum Rates or any
limitations or periodic adjustments, in each case as specified in the related
Mortgage Loan Schedule. No Adjustable Rate Mortgage Loan is subject to negative
amortization. The Mortgage Notes relating to not more than 60% of the Mortgage
Loans in the Adjustable Rate Group, by initial Adjustable Rate Group Balance or
by the Adjustable Rate Group Balance as of the Closing Date, provide for initial
Adjustment Dates that are more than one year and less than three years from the
Cut-off Date;
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(xi) With respect to any Adjustable Rate Mortgage Loan, no mortgage
document in the Mortgage File contains any provision permitting or requiring
conversion of the Mortgage Loan to a fixed interest rate nor is the Mortgage
Loan Rate conditioned upon Mortgagor maintaining accounts with Seller;
(xii) As of the Cut-off Date (a) no Mortgage Loan had two or more
Monthly Payments past due and not more than 6.20% of the Mortgage Loans (by
Cut-off Date Principal Balance) had one or more Monthly Payments past due, (b)
no Mortgage Loan has been 60 or more days contractually delinquent more than
once during the 12-month period immediately preceding the Cut-off Date and (c)
no Mortgage Loan has been 90 or more days delinquent in the 12 months preceding
the Cut-off Date; as of the related Subsequent Cut-off Date, (a) no Subsequent
Mortgage Loan will be more than 59 days contractually delinquent, (b) no
Subsequent Mortgage Loan will have been 30 or more days contractually delinquent
more than once during the preceding 12-month period and (c) no Subsequent
Mortgage Loan will have been 90 or more days contractually delinquent during the
preceding 12 month period;
(xiii) As of the Cut-off Date, there is no delinquent tax or
assessment lien on any Mortgaged Property, and, to the best knowledge of the
Company, each Mortgaged Property is free of substantial damage and is in good
repair and is not affected by hazardous or toxic wastes or substances;
(xiv) There is no offset, right of rescission, counterclaim or
defense, including the defense of usury, with respect to any Mortgage Note or
Mortgage, 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
to 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;
(xv) As of the Cut-off Date or Subsequent Cut-off Date, as
applicable, there is no mechanic's lien or claim for work, labor or material
affecting any Mortgaged Property that is or may be a lien prior to, or equal to
or on a parity with, the lien of the related Mortgage except those that are
insured against by any title insurance policy referred to in paragraph (xvii)
below;
(xvi) To the best of the Seller's knowledge, each Mortgage Loan at
the time it was made complied in all material respects with applicable local,
state and federal laws and regulations, including, without limitation, the
federal Truth-in-Lending Act and other consumer protection laws, real estate
settlement procedure, usury, equal credit opportunity, disclosure and recording
laws;
(xvii) With respect to each Mortgage Loan, a lender's title insurance
policy (issued in standard form by a title insurance company authorized to
transact business in the state where the related Mortgaged Property is located),
in an amount at least equal to the Original
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Principal Amount of such Mortgage Loan insuring the mortgagee's interest under
the related Mortgage Loan as the holder of a valid lien of record on the real
property described in the related Mortgage (subject only to exceptions of the
character referred to in paragraph (viii) above), was effective on the date of
the origination of such Mortgage Loan, and, as of the Closing Date or related
Subsequent Transfer Date, as applicable, such policy is in full force and effect
and thereafter such policy shall continue in full force and effect and shall
inure to the benefit of the Certificateholders upon consummation of the
transactions contemplated by this Agreement;
(xviii) As of the Cut-off Date or Subsequent Cut-off Date, as
applicable, either (a) the improvements upon each Mortgaged Property are covered
by a valid and existing hazard insurance policy (which may be a blanket policy)
with a generally acceptable carrier that provides for fire and extended coverage
representing coverage not less than the least of (a) the outstanding principal
balance of the related Mortgage Loan (together, in the case of a Junior Mortgage
Loan, with the outstanding principal balance of the Senior Lien), (b) the
minimum amount required to compensate for damage or loss on a replacement cost
basis or (c) the full insurable value of the Mortgaged Property or (b) in the
case of a Junior Mortgage Loan, a policy has been issued by a generally
acceptable carrier that will cover the full Principal Balance of such Junior
Mortgage Loan in the event of a loss covered by a hazard typically insured
against by the type of policy referred to in clause (xviii)(a);
(xix) If any Mortgaged Property is in an area identified in the
Federal Register by FEMA as having special flood hazards, a flood insurance
policy in a form meeting the requirements of the current guidelines of the
Federal Insurance Administration, if obtainable with respect to such Mortgaged
Property, is in effect with respect to such Mortgaged Property with a generally
acceptable carrier in an amount representing coverage not less than the least of
(A) the outstanding principal balance of the related Mortgage Loan (together, in
the case of a Junior Mortgage Loan, with the outstanding principal balance of
the Senior Lien), (B) the minimum amount required to compensate for damage or
loss on a replacement cost basis or (C) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973;
(xx) 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), and all parties to
each Mortgage Loan had full legal capacity to execute all documents relating to
such Mortgage Loan and convey the estate therein purported to be conveyed; with
respect to each Mortgage Loan, only one original Mortgage Note exists;
(xxi) The Seller has caused and will cause to be performed any and
all acts required to be performed to preserve the rights and remedies of the
Trustee in any insurance policies applicable to each Mortgage Loan, including
any necessary notifications of insurers,
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assignments of policies or interests therein, and establishment of co-insured,
joint loss payee and mortgagee rights in favor of the Trustee;
(xxii) As of the Cut-off Date no more than 0.52% of the initial Fixed
Rate Group Balance is secured by Mortgaged Properties located within any single
zip code area and no more than 0.45% of the initial Adjustable Rate Group
Balance is secured by Mortgaged Properties located within any single zip code
area;
(xxiii) Each original Mortgage has been recorded or is in the process
of being recorded, and all subsequent assignments of the original Mortgage
(other than the assignment from the Seller to the Trustee and any assignment to
the Seller or an affiliate thereof) have been recorded in the appropriate
jurisdictions as to which no Opinion of Counsel was delivered pursuant to
Section 2.01 or 2.02, as applicable, or such Mortgages and assignments are in
the process of being recorded);
(xxiv) The terms of each Mortgage Note and each Mortgage have not been
impaired, altered or modified in any respect, except by a written instrument
that has been recorded, if necessary, to protect the interest of the
Certificateholders and that 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;
(xxv) The proceeds of each Mortgage Loan have been fully disbursed,
and there is no obligation on the part of the mortgagee to make future advances
thereunder. Any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have been
complied with. All costs, fees and expenses incurred in making or closing or
recording such Mortgage Loans were paid;
(xxvi) No Mortgage Note is or has been secured by any collateral,
pledged account or other security other than the lien of the corresponding
Mortgage;
(xxvii) No Mortgage Loan was originated under a buydown plan;
(xxviii) No Mortgage Loan has a shared appreciation feature or other
contingent interest feature;
(xxix) Each Mortgaged Property consists of one or more contiguous
parcels of real property with a residential dwelling erected thereon;
(xxx) Each Mortgage Loan contains a provision for the acceleration of
the payment of the unpaid principal balance of such Mortgage Loan in the event
the related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;
(xxxi) Any advances made to the Mortgagor after the date of
origination of a Mortgage Loan but prior to the Cut-off Date or related
Subsequent Cut-off Date, as applicable, have been consolidated with the
outstanding principal amount secured by the
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related Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the Mortgage Loan
Schedule. The consolidated principal amount as of the Cut-off Date or related
Subsequent Cut-off Date, as applicable, does not exceed the original principal
amount of the related Mortgage Loan and is reflected as the current principal
amount of such Mortgage Loan on the Mortgage Loan Schedule;
(xxxii) To the best knowledge of the Seller, there is no proceeding
pending or threatened for the total or partial condemnation of any Mortgaged
Property, nor is such a proceeding currently occurring;
(xxxiii) To the best knowledge of the Seller, all of the improvements
that were included for the purposes of determining the Appraised Value of any
Mortgaged Property lie wholly within the boundaries and building restriction
lines of such Mortgaged Property, and no improvements on adjoining properties
encroach upon such Mortgaged Property except those that are identified in the
related title insurance policy and affirmatively insured;
(xxxiv) To the best knowledge of the Seller, no improvement located on
or being part of any 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 each 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 such Mortgaged
Property is lawfully occupied under applicable law;
(xxxv) With respect to each Mortgage that is 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 or the Trust to
any trustee under any deed of trust, except in connection with a trustee's sale
after default by the related Mortgagor;
(xxxvi) With respect to each Junior Mortgage Loan, either (A) no
consent for such Mortgage Loan was required by the holder of the related Senior
Lien prior to the making of such Mortgage Loan or (B) such consent has been
obtained and is contained in the related Mortgage File;
(xxxvii) Each Mortgage contains customary and enforceable provisions
that render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of the
security, including by trustee's sale and by judicial foreclosure and there is
no homestead or other exemption available to the related Mortgagor that would
materially interfere with the right to sell the related Mortgaged Property at a
trustee's sale or the right to foreclose upon the related Mortgaged Property;
(xxxviii) There is no default, breach, violation or event of acceleration
existing under any Mortgage or the related Note and no event that, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation
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or event of acceleration; and the Seller has not waived any default, breach
violation or event of acceleration;
(xil) No instrument of release or waiver has been executed in
connection with any Mortgage Loan, and no Mortgagor has been released, in whole
or in part, except in connection with an assumption agreement that has been
approved by the primary mortgage guaranty insurer, if any, and that has been
delivered to the Trustee;
(xl) The maturity date of each Junior Mortgage Loan is at least 12
months prior to the maturity date of the related Senior Lien if such Senior Lien
provides for a balloon payment;
(xli) At least 94.19% of the Mortgage Loans in the Fixed Rate Group
(by initial Fixed Rate Group Balance) and at least 95.93% of the Mortgage Loans
in the Adjustable Rate Group (by initial Adjustable Rate Group Balance) are
secured by Mortgaged Properties that are maintained by the related Mortgagors as
primary residences;
(xlii) There are no defaults (other than delinquencies) 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 that 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
that remains unpaid; the Company 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,
other than interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is greater, to the date that
precedes by one month the due date of the first installment of principal and
interest;
(xliii) To the best of the Seller's knowledge, all parties that have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise during the period in which they held and disposed of such interest,
were and either are now or, in the case of subclause (1) of this clause (xliii),
will be within 30 days of the Closing Date, (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 so as to require qualification or licensing;
(xliv) No Mortgage Loan was selected by the Seller for inclusion in the
Trust on any basis intended to adversely affect the Trust;
(xlv) A full appraisal of each Mortgaged Property was performed in
connection with the origination of the related Mortgage Loan, and such appraisal
is the appraisal referred to in determining the Appraised Value of such
Mortgaged Property;
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(xlvi) With respect to each Junior Mortgage Loan, the related Senior
Lien requires equal monthly payments or, if such Senior Lien bears an adjustable
interest rate, the monthly payments for such Senior Lien may be adjusted no more
frequently than monthly;
(xlvii) With respect to any Junior Mortgage Loan with a related Senior
Lien that provides for negative amortization or an open-end feature that permits
additional borrowings, the balance of such Senior Lien reflected on the Mortgage
Loan Schedule and used to calculate the Combined Loan-to-Value Ratio for such
Junior Mortgage Loan is based on the maximum amount of negative amortization,
deferred interest or maximum amount of borrowings permitted under such Senior
Lien;
(xlviii) The Seller has not required the Mortgagor to sign a letter in
connection with the origination of any Mortgage Loan in which such Mortgagor
indicates its inability to repay such Mortgage Loan in accordance with the terms
of the related Mortgage Note;
(xlix) Each Adjustable Rate Mortgage Loan was underwritten or
re-underwritten as though such Mortgage Loan would initially have borne interest
at a rate equal to the lesser of (a) the Index plus the related Gross Margin and
(b) for loans that have not reached their first Adjustment Date, the rate
currently in effect plus 1.0%, in each case determined at the time such
underwriting or reunderwriting was conducted;
(l) As of the Cut-off Date and any Subsequent Cut-off Date, no
Mortgage Loan in the Fixed Rate Group or the Adjustable Rate Group was secured
by more than one Mortgaged Property;
(li) With respect to each Adjustable Rate Mortgage Loan, all of the
terms of the Mortgage 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 adjustments have been properly calculated, recorded, reported and
applied in accordance with the Mortgage and applicable law;
(lii) All insurance policies are the valid and binding obligation of
the insurer and contain a standard mortgagee clause naming the originator, its
successors and assigns, as mortgagee. Such insurance policies require prior
notice to the insured of termination or cancellation and no such notice has been
received, each Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense, and upon the Mortgagor's failure
to do so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement therefor
from the Mortgagor;
(liii) None of the Mortgage Loans is subject to a plan of bankruptcy
and no Mortgagor has sought protection or relief under any state or federal
bankruptcy or insolvency law during the term of the related Mortgage;
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(liv) Each Initial Mortgage Loan has a Monthly Mortgage Payment due
during the first Collection Period commencing after the calendar month during
which such Mortgage Loan is included in the Trust and each Subsequent Mortgage
Loan has a Monthly Payment due during the first or second Collection Period
commencing after the calendar month during which such Mortgage Loan is included
in the Trust;
(lv) All Mortgage Loans were underwritten or re-underwritten in
accordance with the underwriting guidelines of the Seller;
(lvi) As of the Cut-off Date no Mortgage Loan and as of the related
Subsequent Cut-off Date no more than 0.10% of the Mortgage Loans by Pool Balance
as of such Subsequent Cut-off Date, is secured by a Mortgaged Property upon
which is affixed manufactured housing or a modular home; as of the Cut-off Date
or related Subsequent Cutoff Date, as applicable, each manufactured home that
constitutes a portion of any Mortgaged Property includes a minimum of 400 square
feet of living space, a minimum width in excess of 102 inches and is of a kind
customarily used at a fixed location;
(lvii) As of the end of the Commitment Period, with respect to all of
the Subsequent Mortgage Loans purchased by the Trust on any Subsequent Transfer
Date, all of the conditions set forth in Section 2.02 with respect to the sale
and transfer of the Subsequent Mortgage Loans to the Trust have been satisfied;
and
(lviii) Mortgage Loans (including Subsequent Mortgage Loans) in the
Fixed Rate Group representing not less than 16.64% of the aggregate Principal
Balance thereof were assigned a credit grade of "A-" by the Seller at the time
such Mortgage Loans were originated or acquired, as applicable, by the Seller;
Mortgage Loans (including Subsequent Mortgage Loans) in the Fixed Rate Group
representing not less than 9.03% of the aggregate Principal Balance hereof were
assigned a credit grade of "B" by the Seller at the time such Mortgage Loans
were originated or acquired, as applicable, by the Seller; Mortgage Loans
(including Subsequent Mortgage Loans) in the Fixed Rate Group representing not
less than 3.68% of the aggregate Principal Balance thereof were assigned a
credit grade of "C" by the Seller at the time such Mortgage Loans were
originated or acquired, as applicable, by the Seller; Mortgage Loans (including
Subsequent Mortgage Loans) in the Fixed Rate Group representing not more than
0.97% of the aggregate Principal Balance thereof were assigned a credit grade
of "C-" by the Seller at the time such Mortgage Loans were originated or
acquired, as applicable, by the Seller; and Mortgage Loans (including
Subsequent Mortgage Loans) in the Fixed Rate Group representing not more than
1.82% of the aggregate Principal Balance thereof were assigned a credit grade
of "D" by the Seller at the time such Mortgage Loans were originated or
acquired, as applicable, by the Seller. Mortgage Loans (including Subsequent
Mortgage Loans) in the Adjusted Rate Group representing not less than 29.69% of
the aggregate Principal Balance thereof were assigned a credit grade of "A-" by
the Seller at the time such Mortgage Loans were originated or acquired, as
applicable, by the Seller; Mortgage Loans (including Subsequent Mortgage Loans)
in the Adjustable Rate Group representing not less than 17.48% of the aggregate
Principal Balance thereof were assigned a credit grade of "B" by the Seller at
the time such Mortgage Loans were originated or acquired, as applicable, by the
Seller; Mortgage Loans (including Subsequent Mortgage Loans) in the Adjustable
Rate Group representing not less than 6.74% of the aggregate Principal Balance
thereof were assigned a credit grade of "C" by the Seller at the time such
Mortgage Loans were originated or acquired, as applicable, by the Seller;
Mortgage Loans (including Subsequent Mortgage Loans) in the Adjusted Rate Group
representing not more than 1.98% of the aggregate Principal Balance thereof
were assigned a credit grade of "C-" by the Seller at the time such Mortgage
Loans were originated or acquired, as applicable, by the Seller; and Mortgage
Loans (including Subsequent Mortgage Loans) in the Adjustable Rate Group
representing not more than 5.71% of the aggregate Principal Balance thereof
were assigned a credit grade of "D" by the Seller at the time such Mortgage
Loans were originated or acquired, as applicable, by the Seller. Each credit
grade so assigned to any Mortgage Loan has been determined in accordance with
the Seller's internal credit grading system and not pursuant to any other scale
or objective standard.
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It is understood and agreed that the representations and warranties set
forth in this Section shall survive the sale and assignment of the Mortgage
Loans to the Trust and the issuance, sale and delivery of the Certificates. Upon
discovery by the Seller, the Servicer or a Responsible Officer of the Trustee of
a breach of any of the foregoing representations and warranties, without regard
to any limitation set forth in such representation or warranty concerning the
knowledge of the Seller as to the facts stated therein, which breach materially
and adversely affects the interests of the Certificateholders in the related
Mortgage Loan or Mortgage Loans, the party discovering such breach shall give
prompt written notice to the other parties hereto and to each of the Rating
Agencies.
Within 60 days of its discovery or its receipt of notice of such
breach, the Seller shall use all reasonable efforts to cure such breach in all
material respects. Unless, prior to the expiration of such 60-day period, such
breach has been cured in all material respects or otherwise does not exist or
continue to exist, the Seller shall, not later than the Deposit Date in the
month following the related Collection Period in which any such cure period
expired, but in all events within 90 days of the earlier of its discovery or
receipt of notice of breach (or at the election of the Seller, an earlier
Collection Period), either (I) repurchase such Mortgage Loan (or, in the case of
any representation and warranty stated above in terms of minimum or maximum
aggregate percentage amounts, repurchase Mortgage Loans such that, after giving
effect to such repurchase, the related representation and warranty would be
complied with) (including any property acquired in respect thereof and any
insurance policy or insurance proceeds with respect thereto) from the Trust in
the same manner and subject to the same conditions as set forth in Section 2.03
or (II) remove such Mortgage Loan and substitute in its place a Qualified
Replacement Mortgage Loan (or, in the case of any representation and warranty
stated above in terms of minimum or maximum aggregate percentage amounts, remove
such Mortgage Loans and substitute in their place Qualified Replacement Mortgage
Loans such that, after giving effect to such substitution, the related
representation and warranty would be complied with) in the same manner and
subject to the same conditions as set forth in Section 2.03. Upon making any
such repurchase or substitution, the Seller shall be entitled to receive an
instrument of assignment or transfer from the Trustee, without recourse to the
Trustee, to the same extent as set forth in Section 2.03 with respect to the
repurchase of or substitution for Defective Mortgage Loans under that Section.
It is understood and agreed that the obligation of the Seller to repurchase or
substitute any such Defective Mortgage Loan (or property acquired in respect
thereof or insurance policy or current or future insurance proceeds with respect
thereto) shall constitute the sole remedy against it respecting such breach of
the foregoing representations or warranties available to the Certificateholders
or the Trustee, as the case may be,
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and such obligation shall survive any resignation or termination of the Company
as Servicer under this Agreement.
Notwithstanding the foregoing, a substitution of a Mortgage Loan by the
Seller for a breach will not be made unless the Trustee receives an Officer's
Certificate certifying that the Qualified Replacement Mortgage Loan conforms to
the requirements of this Agreement and an Opinion of Counsel that such
substitution will not be a "prohibited transaction" as defined in Section
860F(a)(2) of the Code. Any substitution must be effected not later than two
years after the Closing Date, or within such longer period of time as may be
permitted under the REMIC Provisions for substitution of mortgage loans.
Section 2.06. Execution and Authentication of Certificates. The Trustee
shall deliver to or upon the order of the Seller, in exchange for the Mortgage
Loans and the other assets comprising the Trust, simultaneously with the sale,
assignment and transfer to the Trustee of the Mortgage Loans, Certificates duly
executed by the Trustee, on behalf of the Trust, not in its individual capacity
but solely as Trustee, and authenticated by the Trustee, pursuant to Section
6.01, in authorized denominations, equaling, 100% of the Percentage Interests in
each Class, and collectively evidencing the entire ownership of the Trust.
Section 2.07. [Reserved].
Section 2.08. Indemnification of the Trust. The Seller shall indemnify
the Trust for any liability incurred thereby as a result of a breach of the
representation and warranty set forth in clause (xvi) of Section 2.05. This
indemnity obligation shall be in addition to any other obligation the Seller may
have in connection with any such breach.
ARTICLE THREE
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS;
CERTIFICATE ACCOUNT
Section 3.01. The Servicer and the Sub-Servicers. (a) Acting directly
or through one or more Sub-Servicers as provided in Section 3.15, the Servicer,
as servicer, shall administer the Mortgage Loans with reasonable care, using
that degree of skill and attention that the Servicer exercises with respect to
all comparable home equity mortgage loans that it services for itself or others.
The duties of the Servicer shall include collecting and posting of all payments,
responding to inquiries of Mortgagors or by federal, state or local government
authorities with respect to the Mortgage Loans, investigating delinquencies,
reporting tax information to Mortgagors in accordance with its customary
practices and accounting for collections and furnishing monthly and annual
statements to the Trustee with respect to distributions and making Monthly
Advances and Servicing Advances pursuant to Section 5.02. The Servicer shall
follow its customary standards, policies and procedures in performing its duties
as Servicer, to the extent not in conflict with the provisions of this
Agreement. Notwithstanding the appointment of any Sub-Servicer, the Servicer
shall remain liable for the performance of all of the servicing obligations and
responsibilities under this Agreement. The Servicer shall maintain all licenses
and qualifications necessary to perform the servicing obligations hereunder in
the jurisdictions in which it services Mortgage Loans. If the
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Servicer commences directly to service a material number or principal amount of
Mortgage Loans with related Mortgaged Properties located in any other state, the
Servicer will use its reasonable efforts promptly to obtain, and thereafter to
maintain, all licenses and qualifications necessary to perform its servicing
obligations hereunder in each such state. Each Sub-Servicer shall maintain all
licenses and qualifications necessary to perform its servicing obligations in
the states where the Mortgaged Properties to which the applicable Sub-Servicing
Agreement relates are located. The Servicer shall cooperate with the Trustee and
furnish to the Trustee such information in its possession as may be necessary or
appropriate to enable the Trustee to perform its tax reporting duties hereunder.
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 hereunder.
Without limiting the generality of the foregoing, the Servicer (i)
shall continue, and is hereby authorized and empowered by the Trustee, to
execute and deliver, on behalf of itself, the Certificateholders and the Trustee
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the related Mortgaged
Properties (ii) may consent to any modification of the terms of any Mortgage
Note not expressly prohibited hereby if the effect of any such modification will
not be to materially and adversely affect the security afforded by the related
Mortgaged Property or to decrease or slow (other than as permitted by Section
3.02(a)(ii)) the timing of receipt of any payments required thereunder and (iii)
shall not consent to the placing of a lien senior to or on parity with that of
the Mortgage on the related Mortgaged Property. In the event that
notwithstanding the provisions of clause (iii) above the Servicer shall consent
to the placing of a lien senior to or on a parity with that of the Mortgage on a
Mortgaged Property, the Servicer shall purchase on the next Deposit Date such
Mortgage Loan (including any property acquired in respect thereof and any
insurance policy or insurance proceeds with respect thereto) from the Trust at a
price equal to the Purchase Price and deposit such amount in the Certificate
Account on such Deposit Date pursuant to Section 3.02. For purposes of this
Agreement, any such purchase shall be deemed to be a prepayment of such Mortgage
Loan. It is understood and agreed that the obligation of the Servicer to
purchase any Mortgage Loan (or property acquired in respect thereof or insurance
policy or insurance proceeds with respect thereto) pursuant to the second
immediately preceding sentence shall constitute the sole remedy against it
respecting such breach available to the Certificateholders or the Trustee and
such obligation shall survive any resignation or termination of the consenting
Servicer under this Agreement.
The Servicer may ▇▇▇ to enforce or collect on any of the Mortgage Loans
or any insurance policy covering a Mortgage Loan, in its own name if possible,
or on behalf of the Trust. If the Servicer commences a legal proceeding to
enforce a Mortgage Loan or any such insurance policy, the Trustee shall
thereupon be deemed to have automatically assigned the Mortgage Loan or the
rights under such insurance policy to the Servicer for purposes of collection
only. If, however, in any suit or legal proceeding for enforcement, it is held
that the Servicer may not enforce or collect on a Mortgage Loan or any insurance
policy covering a Mortgage Loan on the ground that it is not a real party in
interest or a holder entitled to enforce such Mortgage Loan or such insurance
policy, as the case may be, then the Trustee shall, upon the written request of
a Servicing Officer, furnish
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the Servicer with such powers of attorney and other documents as are necessary
or appropriate to enable the Servicer to enforce such Mortgage Loan or insurance
policy, as the case may be.
The relationship of the Servicer to the Trustee under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or agent.
(b) The parties intend that each REMIC Pool shall constitute a REMIC,
and that the affairs of each REMIC Pool shall be conducted so as to qualify it
as a REMIC. 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 each REMIC Pool, and that in such capacity it shall: (a) use
its best efforts to conduct the affairs of such REMIC Pool at all times that any
Certificates are outstanding so as to maintain the status thereof as a REMIC
under the REMIC Provisions; (b) not knowingly or intentionally take any action
or omit to take any action that would cause the termination of the REMIC status
of any REMIC Pool or that would subject such REMIC Pool to tax, including the
modification of a qualified mortgage that would subject such REMIC Pool to tax;
(c) exercise reasonable care not to allow such REMIC Pool to receive income from
the performance of services or from assets not permitted under the REMIC
Provisions to be held by a REMIC; (d) pay the amount of any federal income tax,
including, without limitation, prohibited transaction taxes, taxes on net income
from foreclosure property, and taxes on certain contributions to a REMIC after
the Startup Day, imposed on any REMIC Pool 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 or depositing payment of such
tax, if permitted by law, pending the outcome of such proceedings); and (e) pay
the amount of any and all taxes imposed on any REMIC Pool pursuant to Section
24874 of the California Revenue and Taxation Code. The Servicer shall not be
entitled to reimbursement for any taxes paid pursuant to this Section.
Section 3.02. Collection of Certain Mortgage Loan Payments; Collection
Account and Certificate Account. (a) The Servicer shall, to the extent such
procedures shall be consistent with this Agreement, follow such collection
procedures as it follows from time to time with respect to home equity mortgage
loans in its servicing portfolio that are comparable to the Mortgage Loans;
provided that the Servicer shall always at least follow collection procedures
that are consistent with or better than standard industry practices. Consistent
with the foregoing, the Servicer may in its discretion (i) waive any assumption
fees, late payment charges, charges for checks returned for insufficient funds,
prepayment fees, if any, or other fees that may be collected in the ordinary
course of servicing the Mortgage Loans, (ii) if a Mortgagor is in default or
about to be in default because of a Mortgagor's financial condition, arrange
with the Mortgagor a schedule for the payment of delinquent payments due on the
related Mortgage Loan, or (iii) modify payments of monthly principal and
interest on any Mortgage Loan becoming subject to the terms of the Relief Act in
accordance with the Servicer's general policies for comparable home equity
mortgage loans subject to such Act.
(b) The Servicer shall establish and maintain, or cause to be
established and maintained, one or more Eligible Accounts that in the aggregate
are the Collection Account. All amounts held in the Collection Account shall be
invested by the depository institution or trust company then maintaining
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the account at the written direction of the Servicer in Permitted Investments
that mature not later than the Deposit Date next succeeding the date of
investment. No Permitted Investment shall be sold or disposed of at a gain prior
to maturity unless the Servicer has obtained an Opinion of Counsel that such
sale or disposition will not cause any REMIC Pool to be subject to the tax on
income from prohibited transactions imposed by Code Section 860F(a)(1), or
otherwise subject any REMIC Pool to tax or cause any REMIC Pool to fail to
qualify as a REMIC. The Servicer shall not retain any cash or investment in the
Collection Account for a period in excess of 12 months and cash therein shall be
considered transferred to Certificate Account on a first-in, first-out basis.
All net income and gain realized from any such investment shall be for the
benefit of the Servicer as additional servicing compensation and shall be
subject to its withdrawal or order from time to time. Any losses realized in
connection with any such investment shall be for the account of the Servicer and
the Servicer shall deposit or cause to be deposited the amount of such loss (to
the extent not offset by income from other investments) in the Collection
Account immediately upon the realization of such loss.
(c) Subject to Section 3.02(d), the Servicer shall deposit in the
Collection Account each of the following payments on and collections in respect
of the Mortgage Loans as soon as practicable, but in no event later than the
close of business on the second Business Day after its receipt thereof:
(i) all payments in respect of or allocable to interest on the Mortgage
Loans (including any net income from REO Properties);
(ii) all Principal Payments;
(iii) all Payments Ahead;
(iv) all Net Liquidation Proceeds; and
(v) all Trust Insurance Proceeds (including, for this purpose, any
amounts required to be credited by the Servicer pursuant to the last sentence of
Section 3.04).
The Servicer shall replace all amounts previously withdrawn from the
Collection Account and applied by the Servicer towards the payment of a Monthly
Advance pursuant to Section 5.02(a) or towards the payment of a Servicing
Advance pursuant to Section 5.02(b) by depositing into the Collection Account on
or prior to the Deposit Date immediately following such withdrawal an amount
equal to the total of all such amounts so applied since the immediately
preceding Deposit Date.
The foregoing requirements respecting deposits to the Collection
Account are exclusive, it being understood that, without limiting the generality
of the foregoing, the Servicer need not deposit in the Collection Account
amounts representing fees, late payment charges, charges for checks returned for
insufficient funds, prepayment fees, if any, or extension or other
administrative charges paid by Mortgagors or amounts received by the Servicer
for the account of Mortgagors for application towards the payment of taxes,
insurance premiums, assessments and similar items. The amounts deposited in the
Collection Account are subject to withdrawal, from time to time, to make
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deposits into the Certificate Account pursuant to Section 3.02(e), to pay itself
the Monthly Servicing Fee pursuant to Section 3.08 and to make Servicing
Advances or to reimburse itself for Servicing Advances, as applicable, in either
case in accordance with Section 5.02(b), to make Monthly Advances in accordance
with Section 5.02(a) or to reimburse itself for payments of Monthly Advances to
the extent of recoveries of interest relating to the Mortgage Loans that were
the subject of such Monthly Advances. In addition, if the Servicer deposits in
the Collection Account any amount not required to be so deposited or any amount
in respect of payments by Mortgagors made by checks subsequently returned for
insufficient funds or other reason for non-payment, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(d) Upon such terms as the Rating Agencies may approve, the Servicer
may make the deposits to the Collection Account referred to in Section 3.02(c)
on a later day than the second Business Day after receipt of the amounts
required to be so deposited, which terms and later day shall be specified by the
Rating Agencies and confirmed to the Trustee and the Servicer in writing.
(e) The Trustee shall establish and maintain the Certificate Account.
The Certificate Account shall constitute a trust account segregated on the books
of the Trustee and held by the Trustee in trust, and the Certificate Account and
the amounts deposited therein shall not be subject to any claim, liens or
encumbrances of any creditors or depositors of the Trustee or the Company
(whether made directly or indirectly through a liquidator, receiver or trustee
in bankruptcy of the Trustee or the Company). At or before 11:00 a.m. Los
Angeles time on each Deposit Date, the Servicer shall withdraw from the
Collection Account all amounts on deposit therein that constitute any portion of
Available Funds for a Mortgage Loan Group and the related Distribution Date
(including any amounts therein that are being held for distribution on a
subsequent Distribution Date and are applied toward the Monthly Advance for the
related Distribution Date pursuant to Section 5.02(a)) and remit such amounts to
the Trustee for deposit in the Certificate Account. In addition, any
Compensating Interest and Monthly Advances required to be made by the Servicer
for the related Mortgage Loan Group in respect of the related Distribution Date
and any amounts required to be deposited into the Certificate Account in
connection with a purchase or repurchase of any Mortgage Loans or any shortage
on Mortgage Loans in such Mortgage Loan Group by the Seller or the Servicer
pursuant to Section 2.03, 2.05, 3.01, 3.03, 3.06 or 10.01 or a substitution of a
Qualified Replacement Mortgage Loan pursuant to Section 2.03 or 2.05, shall be
remitted to the Trustee for deposit in the Certificate Account on the applicable
Deposit Date. Any amounts held in the Certificate Account may be invested at the
written direction of the Servicer in Permitted Investments upon the same terms
and conditions as those specified in clause (b) above with respect to the
Collection Account except that such investments shall mature not later than the
Distribution Date next succeeding the date of investment, and in the absence of
such direction the Trustee shall invest in Permitted Investments described in
clause (e) of the definition of Permitted Investments. All net income and gain
realized from any such investment shall be for the benefit of the Servicer as
additional servicing compensation and shall be subject to its withdrawal or
order from time to time. Any losses realized in connection with any such
investment shall be for the account of the Servicer and the Servicer shall
deposit or cause to be deposited the amount of such loss (to the extent not
offset by income from other investments) in the Certificate Account immediately
upon the realization of such loss.
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Section 3.03. Additional Servicing Responsibilities for the Adjustable
Rate Mortgage Loans. The Servicer shall enforce each Adjustable Rate Mortgage
Loan and shall timely calculate, record, report and apply all Mortgage Loan Rate
adjustments in accordance with the related Mortgage Note. The Servicer's record
shall, at all times, reflect then-current Mortgage Loan Rate and Monthly
Mortgage Payment and the Servicer shall timely notify the Mortgagor of any
changes to the Mortgage Loan Rate and the Monthly Mortgage Payment. If the
Servicer fails to adjust the Mortgage Loan Rate or the Monthly Mortgage Payment
in accordance with the terms of the Mortgage Note for the related Adjustable
Rate Mortgage Loan, or if the Servicer fails to notify the related Mortgagor of
any such adjustment as required under the terms of such Mortgage Note, or if any
liability, claim or defense arises with respect to any Adjustable Rate Mortgage
Loan solely as a result of any such failure, the Servicer shall pay, from its
own funds and without right of reimbursement therefor, any shortage in amounts
collected or collectible on the related Adjustable Rate Mortgage Loan that
results. The Servicer shall deposit any amounts in respect of such shortage in
the Certificate Account on the Deposit Date with respect to the related
Collection Period.
Section 3.04. Hazard Insurance Policies. The Servicer shall cause to be
maintained for each Mortgage Loan (including Mortgage Loans as to which the
related Mortgaged Property has been acquired by the Trust upon foreclosure, by
deed in lieu of foreclosure or comparable conversion), hazard insurance
(including flood insurance coverage, if obtainable, to the extent such property
is located in a federally designated flood area in such amount as is required
under applicable FEMA guidelines) with extended coverage in an amount that is
not less than the least of (i) the maximum insurable value from time to time of
the improvements that are a part of such property, or (ii) the combined
principal balance of such Mortgage Loan and the principal balance of each
mortgage loan senior to such Mortgage Loan at the time of such foreclosure plus
accrued interest and the good-faith estimate of the Servicer of related
Liquidation Expenses to be incurred in connection therewith; provided, further
that such hazard insurance shall be in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. Each such hazard insurance policy shall contain
a standard mortgagee clause naming the originator, its successors and assigns,
as mortgagee and shall require prior notice to the insured of termination or
cancellation. The Servicer shall be under no obligation to require that any
Mortgagor maintain earthquake or other additional insurance and shall be under
no obligation itself to maintain any such additional insurance on property
acquired in respect of a Mortgage Loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance. Amounts collected by the Servicer under any such policies
shall be deposited in the Collection Account or Certificate Account, as the case
may be, in accordance with Section 3.02 to the extent that they constitute Net
Liquidation Proceeds or Trust Insurance Proceeds. If the Servicer shall obtain
and maintain a blanket policy, issued by an insurer acceptable to each Rating
Agency, insuring against such hazard losses, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first sentence of this
Section, it being understood and agreed that such policy may contain a
deductible clause that is in form and substance consistent with standard
industry practice, 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 the first sentence of this Section, and there shall have been a
loss that would have been covered by such policy, deposit in the Collection
Account in accordance with Section 3.02 the amount not otherwise payable under
the blanket policy because of such deductible clause.
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Section 3.05. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements. In any case in which property subject to a Mortgage is
conveyed by the Mortgagor, the Servicer shall enforce any due-on-sale clause
contained in the related Mortgage Note or Mortgage, to the extent permitted by
such Mortgage Note or Mortgage, applicable law and governmental regulations, but
only to the extent that such enforcement will not adversely affect or jeopardize
coverage under any related insurance policy or result in legal action by the
Mortgagor the Servicer may take or enter into an assumption and modification
agreement from or with the Person to whom such Mortgaged Property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
related Mortgage Note and the Mortgagor remains liable thereon or, if the Person
to whom such Mortgaged Property has been or is about to be conveyed satisfies
the Servicer's then-current underwriting standards for home equity mortgage
loans similar to the Mortgage Loans, and the Servicer in its reasonable judgment
finds it appropriate, is released from liability thereon. If the Trustee is
holding the Mortgage Files, the Servicer shall notify the Trustee that any
assumption and modification agreement has been completed by delivering to the
Trustee an Officer's Certificate certifying that such agreement is in compliance
with this Section and the Servicer shall forward to the Trustee the original of
such assumption and modification agreement. Such assumption and modification
agreement shall, for all purposes, be considered a part of the related Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. In connection with any such agreement, the Mortgage Loan Rate
shall not be reduced (but may be increased), the Principal Balance of such
Mortgage Loan shall not be changed and the term of such Mortgage Loan will not
be extended beyond the existing term of such Mortgage Loan. Any fee collected by
the Servicer for entering into any such agreement shall be retained by the
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph of this Section 3.05 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 reasons
of any assumption of a Mortgage Loan, or transfer of any Mortgaged Property
without the assumption thereof, by operation of law or any assumption or
transfer that the Servicer reasonably believes it may be restricted by law from
preventing, for any reason whatsoever.
Section 3.06. Realization upon Liquidated Mortgage Loans. The Servicer,
on behalf of the Trust, shall foreclose upon or otherwise comparably convert to
ownership Mortgaged Properties securing such of the Mortgage Loans as come into
and continue in default and as to which no satisfactory arrangements can be made
for collection of delinquent payments pursuant to Section 3.02(a); provided that
if the Servicer has actual knowledge or reasonably believes that any Mortgaged
Property is affected by hazardous or toxic wastes or substances, then the
Servicer shall not cause the Trust to acquire title to such Mortgaged Property
in a foreclosure or similar proceeding. In connection with such foreclosure or
other conversion, the Servicer shall follow such practices (including, in the
case of any default on a related Senior Lien, the advancing of funds to correct
such default) and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general first, second and third lien one- to
four-family mortgage loan servicing activities (including the procurement of a
drive-by appraisal of the related Mortgaged Property prior to foreclosure or
other conversion). The foregoing is subject to the proviso that neither the
Servicer nor the Trustee shall be required to expend its own funds in connection
with any foreclosure or towards
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the correction of any default on a related Senior Lien or restoration of any
Mortgaged Property unless, in the reasonable judgment of the Servicer, such
foreclosure, correction or restoration will increase Net Liquidation Proceeds
(taking into account any unreimbursed Monthly Advances made or expected to be
made with respect to such Mortgage Loan).
To the extent the Net Liquidation Proceeds derived from any such
foreclosure or conversion exceed the unpaid principal balance of the related
Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate
through the related due date during the Collection Period in which such
foreclosure or conversion occurs (net of any related Monthly Advances or
Servicing Advances that were unreimbursed prior to the receipt of such Net
Liquidation Proceeds), such excess shall be paid to the Holders of the Class C
Certificates.
Notwithstanding the foregoing, the Servicer, at its sole option, may
purchase from the Trust on any Deposit Date any Mortgage Loan as to which the
related Mortgagor has failed to make full Monthly Mortgage Payments as required
under the related Mortgage Note for three consecutive months at any time
following the Cut-off Date and prior to such Deposit Date at a price equal to
the Purchase Price by depositing such amount in the Certificate Account on such
Deposit Date pursuant to Section 3.02; provided, however, that the aggregate
Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to
the exercise of the option granted in this sentence shall not exceed 5% of the
sum of the Original Pool Balance plus the amount of the Purchase Account
Deposit. In addition, the Servicer, at its sole option, may purchase from the
Trust on any Deposit Date occurring during the 90-day period following the
Closing Date any Mortgage Loan as to which a Monthly Mortgage Payment becomes 60
or more days contractually delinquent at any time following the Cut-off Date and
prior to such Deposit Date at a price equal to the Purchase Price by depositing
such amount in the Certificate Account on such Deposit Date pursuant to Section
3.02; provided, however, that the aggregate Principal Balances of the Mortgage
Loans purchased by the Servicer pursuant to the exercise of the option granted
in this sentence shall not exceed 5% of the sum of the Original Pool Balance
plus the amount of the Purchase Account Deposit. For purposes of this Agreement,
any purchase effected in accordance with this paragraph shall be deemed to be a
prepayment of each Mortgage Loan so purchased.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee, on behalf of the
Certificateholders, and the Servicer shall manage, conserve, protect and operate
each such Mortgaged Property for the Certificateholders solely for the purpose
of its prompt disposition and sale. The Servicer shall use its best efforts to
dispose of each such Mortgaged Property as expeditiously as possible consistent
with the goal of maximizing Net Liquidation Proceeds (taking into account any
unreimbursed Monthly Advances made or expected to be made with respect to such
Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the
Trust, shall provide financing from the Trust to any purchaser of any such
Mortgaged Property.
In the event that the Trust acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, such Mortgaged Property shall be disposed of by the Servicer on
behalf of the Trust within two years after its acquisition by the Trust unless
(i) the Servicer on behalf of the related REMIC Pool has applied for and
received an
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extension of such two-year period pursuant to Code Sections 856(e)(3) and
860G(a)(8)(A), in which case the Servicer shall sell such Mortgaged Property
within the applicable extension period or (ii) the Trustee shall have received
an Opinion of Counsel to the effect that the holding by the Trust of such
Mortgaged Property subsequent to two years after its acquisition will not result
in a tax on prohibited transactions imposed by Code Section 860F(a)(1), or
otherwise subject a REMIC Pool to tax or cause a REMIC Pool to fail to qualify
as a REMIC at any time that any Certificates are outstanding. The Servicer shall
further ensure that the Mortgaged Property is administered so that it
constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8)
at all times, that the sale of such property does not result in the receipt by a
REMIC Pool of any income from non-permitted assets as described in Code Section
860F(a)(2)(B), and that a REMIC Pool derives any "net income from foreclosure
property" within the meaning of Code Section 860G(c)(2) with respect to such
property.
Section 3.07. Trustee to Cooperate; Release of Mortgage Files. Upon the
payment in full of the principal balance of any Mortgage Loan, if the Trustee is
holding the Mortgage Files, the Servicer shall notify the Trustee by a
certification in the form of Exhibit F hereto (which certification shall include
a statement to the effect that all amounts received in connection with such
payment which are required to be deposited to the Collection Account pursuant to
Section 3.02 have been so deposited) of a Servicing Officer. Such notification
shall be made each month at the time that the Servicer delivers its Servicer
Remittance Report to the Trustee pursuant to Section 4.01. Upon any such payment
in full, the Servicer is authorized to procure from such trustee under the
Mortgage that secured the related Mortgage Note a deed of full reconveyance
covering the related Mortgaged Property encumbered by such Mortgage, which deed,
except as otherwise provided in Section 2941(c) of the California Civil Code or
other applicable law, shall be recorded by such trustee in the office of the
County Recorder in which the Mortgage is recorded, or, as the case may be, to
procure from such trustee an instrument of satisfaction or, if the related
Mortgagor so requests, an assignment without recourse, in each case prepared by
the Servicer at its expense and executed by the Trustee, which deed of
reconveyance, instrument of satisfaction or assignment shall be delivered by the
Servicer to the Person entitled thereto, it being understood and agreed that no
expenses incurred in connection with such deed of reconveyance, assignment or
instrument of satisfaction shall be reimbursed from amounts at the time on
deposit in the Collection or Certificate Account. From time to time and as
appropriate for the servicing or foreclosure of any Mortgage Loan, the Trustee
shall, upon written request of the Servicer and delivery to the Trustee of a
trust receipt signed by a Servicing Officer, release the related Mortgage File
to the Servicer and shall execute such documents prepared by the Servicer as
shall be necessary to the prosecution of any such proceedings. Such trust
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
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that herein above specified, the trust receipt shall be
released by the Trustee to the Servicer.
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
the Servicer. On each Deposit Date, the Servicer shall be entitled to receive,
by withdrawal by the Servicer from the Collection Account, out of collections of
interest on the Mortgage Loans in the related Mortgage Loan Group for the
related Collection Period, as servicing compensation for such Collection Period,
the Monthly Servicing Fee for such Mortgage Loan Group. Additional servicing
compensation shall
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be assumption fees, late payment charges, charges for checks returned for
insufficient funds, prepayment fees, if any, or extension and other
administrative charges received by the Servicer and any earnings on investment
by the Servicer of amounts held in escrow accounts established thereby on behalf
of Mortgagors (any such investment to be made in compliance with applicable
law). The Servicer is obligated to pay Compensating Interest for the related
Mortgage Loan Group out of the related Monthly Servicing Fee on each Deposit
Date, to the extent of the amount of the Monthly Servicing Fee, and shall not be
entitled to reimbursement therefor. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder (including
payment of the fees and expenses relating to the Annual Independent Public
Accountant's Servicing Report described in Section 3.10, and all other fees and
expenses not otherwise expressly stated hereunder for the account of the
Certificateholders) and shall not be entitled to reimbursement therefor except
as specifically provided herein.
Section 3.09. Annual Statement as to Compliance. (a) The Servicer will
deliver to the Trustee and each Rating Agency, on or before September 30 of each
year, beginning with September 30, 1998, an Officer's Certificate of the
Servicer substantially in the form set forth in Exhibit D hereto stating that
(a) a review of the activities of the Servicer during the preceding calendar
year (or since the Closing Date in the case of the first such statement) and of
its performance under this Agreement has been made under such officer's
supervision and (b) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its material obligations under this
Agreement throughout such year (or since the Closing Date in the case of the
first such statement), or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof.
(b) The Servicer shall deliver to the Trustee, with a copy to each
Rating Agency, promptly after having obtained knowledge thereof, but in no event
later than five Business Days thereafter, written notice by means of an
Officer's Certificate of any event that with the giving of notice or the lapse
of time, or both, would become an Event of Default.
Section 3.10. Annual Independent Public Accountants' Servicing Report.
On or before September 30 of each year, beginning with September 30, 1998, the
Servicer at its expense shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer) to
furnish a report to the Trustee and each Rating Agency to the effect that such
firm has examined certain documents and records (including the Servicer
Remittance Reports delivered by the Servicer during the period covered by such
reports) relating to the servicing activities of the Servicer (which would
include servicing of Mortgage Loans under this Agreement) for the period covered
by such report, and that such examination (which will have been conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers to the extent that the procedures in such audit guide are
applicable to the servicing obligations set forth in this Agreement), has
disclosed no exceptions or errors in records relating to the servicing
activities of the Servicer, including servicing of Mortgage Loans subject to
this Agreement, that, in the opinion of such firm, are material, except for such
exceptions as shall be set forth in such report.
Section 3.11. Access to Certain Documentation and Information Regarding
the Mortgage Loans. (a) The Servicer shall provide to Certificateholders that
are federally insured savings
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associations and the FDIC and its supervisory agents and examiners access to the
documentation regarding the Mortgage Loans required by applicable regulations of
the Office of Thrift Supervision, and to the Trustee all documentation relating
to the Mortgage Loans that is in the possession of the Servicer, such access
being afforded without charge but only upon reasonable request and during normal
business hours at the offices of the Servicer. Nothing in this Section shall
derogate from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
(b) The Servicer shall supply information to the Trustee in such form
as the Trustee shall reasonably request, by the start of the third Business Day
preceding each Distribution Date, as is required in the Trustee's reasonable
judgment to enable the Trustee to make required distributions and to furnish the
certificates, statements and reports to Certificateholders required pursuant to
this Agreement.
Section 3.12. Maintenance of Fidelity Bond and Errors and Omission
Policy. The Servicer shall during the term of its service as Servicer maintain
in force a (a) policy or policies of insurance covering errors and omissions in
the performance of its obligations as Servicer hereunder and (b) fidelity bond
in respect of its officers, employees and agents, in each case having coverage
amounts deemed by the Servicer to be adequate to its operations.
Section 3.13. Notices to the Rating Agencies and the Trustee. In
addition to the other notices required to be given to the Rating Agencies and
the Trustee by the provisions of this Agreement, the Servicer shall give notice
to each Rating Agency and the Trustee of (a) any amendment to this Agreement,
(b) the final distribution on the Offered Certificates, (c) the occurrence of an
Event of Default and (d) the repurchase, purchase or substitution, as
applicable, of any Mortgage Loan pursuant to Section 2.03, 2.05, 3.01 or 3.06 by
the Seller or Servicer, as the case may be.
Section 3.14. Reports of Foreclosures and Abandonment of Mortgaged
Properties. Each year beginning in 1998 the Servicer shall make the reports of
foreclosures and abandonments of any Mortgaged Property required by Code Section
6050J. In order to facilitate this reporting process, the Servicer, on or before
February 28th of each year, shall provide to the Internal Revenue Service and
the Trustee reports relating to each instance occurring during the previous
calendar year in which the Servicer (i) on behalf of the Trustee acquired an
interest in a Mortgaged Property through foreclosure or other comparable
conversion in full or partial satisfaction of a 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 meet the
reporting requirements imposed by such Section 6050J.
Section 3.15. Sub-Servicers and Sub-Servicing Agreements. (a) The
Servicer may enter into Sub-Servicing Agreements for any servicing and
administration of Mortgage Loans with any institution that is in compliance with
the laws of each state necessary to enable it to perform its obligations under
such Sub-Servicing Agreement. The Servicer shall not enter into any
Sub-Servicing Agreement that does not provide for the servicing of the Mortgage
Loans specified therein
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on a basis consistent with the terms of this Agreement or that otherwise
violates the provisions of this Agreement. The Servicer may enter into, and make
amendments to, any Sub-Servicing Agreement or enter into different forms of
Sub-Servicing Agreements; provided, however, that any such amendments or forms
shall be consistent with and not violate the provisions of this Agreement.
(b) For purposes of this Agreement the Servicer shall be deemed to have
received payments on Mortgage Loans when any Sub-Servicer has received such
payments. With respect to the Servicer's obligations under Section 3.01 to make
deposits in the Collection Account, the Servicer shall be deemed to have made
such deposits when any Sub-Servicer has made such deposits into a Sub-Servicing
Account if permitted by the related Sub-Servicing Agreement.
(c) Any Sub-Servicing Agreement and any other transactions or services
relating to the Mortgage Loans involving a Sub-Servicer shall be deemed to be
between the Sub-Servicer and the Servicer alone and the Trustee shall not be
deemed party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to any Sub-Servicer, except that the Trustee shall have
such claims or rights that arise as a result of any funds held by a Sub-Servicer
in trust for or on behalf of the Trust. Notwithstanding the execution of any
Sub-Servicing Agreement, the Servicer shall not be relieved of any liability
hereunder and shall remain obligated and liable for the servicing and
administration of the Mortgage Loans.
Section 3.16. Purchase Account. (a) The Trustee will establish and
maintain the Purchase Account. No later than the Closing Date, the Trustee will
deposit in the Purchase Account: (i) the Fixed Rate Group Purchase Account
Deposit from the proceeds of the sale of the Fixed Rate Group Certificates and
(ii) the Adjustable Rate Group Purchase Account Deposit from the proceeds of the
sale of the Adjustable Rate Group Certificates. Upon the conveyance of
Subsequent Mortgage Loans to the Trust on any Subsequent Transfer Date, the
Seller shall instruct the Trustee to withdraw from the Purchase Account (i) an
amount equal to the Fixed Rate Group Subsequent Purchase Price for the
Subsequent Mortgage Loans bearing fixed Mortgage Loan Rates to be included in
the Fixed Rate Group and make a corresponding reduction in the amount of the
Fixed Rate Group Purchase Account Deposit and (ii) an amount equal to the
Adjustable Rate Group Subsequent Purchase Price for the Subsequent Mortgage
Loans bearing adjustable Mortgage Loan Rates to be included in the Adjustable
Rate Group and make a corresponding reduction in the amount of the Adjustable
Rate Group Purchase Account Deposit, and to pay such amount to or upon the order
of the Seller upon satisfaction of the conditions set forth in Section 2.02 of
this Agreement with respect to such transfer.
(b) The Purchase Account will be part of the Trust but not part of any
REMIC Pool. Amounts held in the Purchase Account shall be invested in Permitted
Investments of the type specified in clause (f) of the definition of Permitted
Investments. The Trustee shall not be liable for any losses on amounts invested
in accordance with the provisions hereof. Any losses realized in connection with
any such investment shall be for the account of the Seller and the Seller shall
deposit the amount of such loss (to the extent not offset by income from other
investments) in the Purchase Account immediately upon the realization of such
loss. All interest and any other investment earnings on amounts held in the
Purchase Account shall be taxed to the Seller and for federal and state income
tax purposes the Seller shall be deemed to be the owner of the Purchase
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Account. All interest and any other investment earnings on amounts held in the
Purchase Account shall be paid by the Trustee to the Seller on the July 1997
Distribution Date.
(c) On the Distribution Date in July 1997, any amounts remaining in the
Purchase Account (i) in respect of the Fixed Rate Group Purchase Account Deposit
at such time (net of reinvestment earnings payable to the Seller) shall be
deposited at such time into the Certificate Account for distribution as part of
the Fixed Rate Group Principal Distribution Amount on the July 1997 Distribution
Date and (ii) in respect of the Adjustable Rate Group Purchase Account Deposit
at such time (net of reinvestment earnings payable to the Seller) shall be
deposited at such time into the Certificate Account for distribution as part of
the Adjustable Rate Group Principal Distribution Amount on the July 1997
Distribution Date.
Section 3.17. Capitalized Interest Account. (a) Unless all Subsequent
Mortgage Loans are purchased by the Trust on the Closing Date, the Trustee shall
establish and maintain the Capitalized Interest Account. On the Closing Date,
the Trustee will deposit the Capitalized Interest Account Deposit in the
Capitalized Interest Account or, if all Subsequent Mortgage Loans are purchased
on the Closing Date, in the Certificate Account. The Trustee shall hold the
Fixed Rate Group Capitalized Interest Account Deposit for the benefit of the
Fixed Rate Group Certificateholders and the Adjustable Rate Group Capitalized
Interest Account Deposit for the benefit of the Adjustable Rate Group
Certificateholders. If none or less than all of the Subsequent Mortgage Loans
are transferred to the Trust on the Closing Date, then on the July 1997 Deposit
Date, amounts equal to (i) the Fixed Rate Group Capitalized Interest Account
Deposit and (ii) the Adjustable Rate Group Capitalized Interest Account Deposit
shall be withdrawn from the Capitalized Interest Account and deposited into the
Certificate Account in respect of the related Monthly Interest for the Fixed
Rate Group and the Adjustable Rate Group, respectively, for such Distribution
Date. If all of the Subsequent Mortgage Loans are transferred to the Trust on
the Closing Date, then the sum of the Fixed Rate Group Capitalized Interest
Account Deposit and the Adjustable Rate Group Capitalized Interest Account
Deposit will be deposited into the Certificate Account on the Closing Date and
held there until the Distribution Date in July 1997. On such first Distribution
Date, such amounts will be deemed to be available in respect of Monthly Interest
for the Fixed Rate Group or Adjustable Rate Group, as appropriate, and will be
distributable to the Certificateholders. Any amounts so deposited in the
Certificate Account shall not be invested in Permitted Investments or otherwise.
(b) The Capitalized Interest Account will be part of the Trust but not
part of any REMIC Pool. Amounts held in the Capitalized Interest Account prior
to the first Deposit Date shall be invested in Permitted Investments of the type
specified in clause (e) of the definition of Permitted Investments, which
Permitted Investments shall mature no later than the Deposit Date in July 1997.
The Trustee shall not be liable for any losses on amounts invested in accordance
with the provisions hereof. All interest and other investment earnings on
amounts held in the Capitalized Interest Account (and any other amounts
remaining on deposit therein in excess of the amounts to be so withdrawn and
deposited into the Certificate Account) shall be paid or released by the Trustee
to the Seller on the July 1997 Distribution Date and for federal and state
income tax purposes the Seller shall be deemed to be the owner of the
Capitalized Interest Account. Any losses realized in connection with any such
investment shall be for the account of the Seller and the Seller shall deposit
the amount of such loss (to the extent not offset by income from other
investments) in the
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Capitalized Interest Account immediately upon the realization of such loss. All
amounts earned on deposit in the Capitalized Interest Account shall be taxed to
the Seller.
Section 3.18. [Reserved]
Section 3.19. [Reserved]
Section 3.20. Trust and Accounts Held for Benefit of the
Certificateholders. The Trustee shall hold the Trust and the Mortgage Files for
the benefit of the Certificateholders. The Servicer hereby acknowledges and
agrees that it shall service and administer the Mortgage Loans and any REO
Properties, and shall maintain the Collection Account for the benefit of the
Certificateholders.
ARTICLE FOUR
REMITTANCE REPORT
Section 4.01. Servicer Remittance Report. With respect to each
Distribution Date, not later than the fifth Business Day prior to the related
Deposit Date the Servicer shall deliver to the Trustee a computer-readable
magnetic tape containing the Servicer Remittance Report relating to the Fixed
Rate Group and the Servicer Remittance Report relating to the Adjustable Rate
Group detailing the payments and collections received in respect of the Mortgage
Loans in the related Mortgage Loan Group during the immediately preceding
Collection Period. The computer-readable magnetic tape shall include
loan-by-loan information that specifies account number, borrower name,
outstanding principal balance and activity since the last Distribution Date.
Such tape shall be in the form and have the specifications as may be agreed to
between the Servicer and the Trustee from time to time.
In addition to the foregoing, the Servicer shall provide the Trustee at
the time the tape is delivered to the Trustee a Liquidation Report for the Fixed
Rate Group, with respect to each Mortgage Loan in the Fixed Rate Group that
became a Liquidated Mortgage Loan during the related Collection Period and a
Liquidation Report for the Adjustable Rate Group, with respect to each Mortgage
Loan in the Adjustable Rate Group that became a Liquidated Mortgage Loan during
the related Collection Period, in either case substantially in the form of
Exhibit G hereto.
Section 4.02. Trustee Distribution Date Statement. The Trustee shall,
not later than the Business Day prior to each Deposit Date, furnish by telecopy
to the Servicer and each Rating Agency a statement derived from information on
the Servicer Remittance Report for each Mortgage Loan Group and the related
Offered Certificates, relating to the next succeeding Distribution Date:
(a) the total amount of payments in respect of or allocable to interest
on the Mortgage Loans received or deemed to have been received from the related
Mortgagors by the Servicer during such Collection Period (including any net
income from REO Properties received during the related Collection Period);
(b) the aggregate amount of all Principal Prepayments received from the
related Mortgagors by the Servicer during such Collection Period;
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(c) the aggregate amount of all Principal Payments received or deemed
to have been received from the related Mortgagors by the Servicer during such
Collection Period;
(d) the total amount of Payments Ahead received during the related
Collection Period;
(e) the aggregate of any Trust Insurance Proceeds received by the
Servicer during such Collection Period;
(f) the aggregate of any Net Liquidation Proceeds received by the
Servicer during such Collection Period;
(g) the total amount of Compensating Interest payments to be paid by
the Servicer pursuant to Section 3.08;
(h) the aggregate Purchase Prices for (i) any Defective Mortgage Loans
that the Seller is required to repurchase on the related Deposit Date pursuant
to Section 2.03 or 2.05 and (ii) any Mortgage Loan that the Servicer is required
to purchase on the related Deposit Date pursuant to Section 3.01 or 3.06;
(i) any amounts required to be deposited by the Seller on the related
Deposit Date in connection with the substitution of a Qualified Replacement
Mortgage Loan pursuant to Section 2.03 or 2.05;
(j) the amount of Monthly Advances to be made by the Servicer pursuant
to Section 5.02(a);
(k) the related Monthly Servicing Fee attributable to the Mortgage
Loans in the related Mortgage Loan Group;
(l) the amount of Monthly Advances reimbursable to the Servicer in such
Collection Period pursuant to Section 5.02(a) and not previously reimbursed;
(m) the amount of any Servicing Advance made by the Servicer pursuant
to Section 5.02(b) and not previously reimbursed;
(n) the amount of any Interest Shortfall for the related Distribution
Date; and
(o) the number and Principal Balance of Mortgage Loans in each Mortgage
Loan Group that, as of the related Determination Date were (i) 30 or more days
contractually delinquent, (ii) 60 or more days contractually delinquent, (iii)
90 or more days contractually delinquent, (iv) in foreclosure or (v) as to which
the relate Mortgaged Property was REO.
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ARTICLE FIVE
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS
Section 5.01. Distributions. On each Distribution Date, the Trustee
shall distribute to each Certificateholder of record on the related Record Date
(other than as provided in Section 10.01 respecting the final distribution to
Certificateholders if the termination of the Trust is in connection with a
purchase of the assets of the Trust by the Servicer pursuant to Section 10.01)
by check or money order mailed to such Certificateholder at the address
appearing in the Certificate Register, or upon written request by a Holder of a
Certificate, by wire transfer (in the event such Certificateholder owns of
record one or more Certificates that have principal denominations aggregating at
least $5,000,000 and has given the Trustee, at least five Business Days prior to
the related Record Date, written instruction for making such wire transfer to a
bank account maintained in the United States), or by such other means of payment
as such Certificateholder and the Trustee shall agree, such Certificateholder's
Percentage Interest of the following amounts (to the extent applicable to the
Class of such Holder's Certificate) and in the following orders of priority with
respect to each Mortgage Loan Group. Notwithstanding such priorities, the
aggregate of amounts distributed on all Distribution Dates in reduction of the
Certificate Principal Balance of any Class shall not exceed the Certificate
Principal Balance of such Class as of the Closing Date.
(a) On each Distribution Date interest distributions will be made in
the following order of priority:
First, to the Class A Certificateholders, Monthly Interest with respect
to the related Mortgage Loan Group on a pro rata basis based on the aggregate
amount of Accrued Certificate Interest to the holders of the Certificate of each
such Class within the Fixed Rate Group Certificates or Adjustable Rate Group
Certificates, as the case may be, up to the amount of Accrued Certificate
Interest with respect to such Class plus any outstanding Interest Carry Forward
Amount with respect to such Class;
Second, to the Class M-1F and Class M-1A Certificateholders, Monthly
Interest with respect to the related Mortgage Loan Group then remaining, up to
the amount of Accrued Certificate Interest with respect to such Class;
Third, to the Class M-2F and Class M-2A Certificateholders, Monthly
Interest with respect to the related Mortgage Loan Group then remaining, up to
the amount of Accrued Certificate Interest with respect to such Class;
Fourth, to the Class B-1F and Class B-1A Certificateholders, Monthly
Interest with respect to the related Mortgage Loan Group the remaining, up to
the amount of Accrued Certificate Interest with respect to such Class; and
Fifth, any Monthly Excess Cash Flow Amount will be applied as set forth
in Section 5.01(c).
(b) With respect to each Mortgage Loan Group and Distribution Date
before the related Stepdown Date, the related Certificateholders will be
entitled to receive payment of the sum of 100%
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of the Principal Distribution Amount and Extra Principal Distribution Amounts
with respect to such Mortgage Loan Group for such Distribution Date as follows:
in the case of the Fixed Rate Group Certificates, first, to the Class A-6
Certificateholders, the Class A-6 Lockout Distribution Amount, and then to all
Fixed Rate Group Certificateholders, by Class in sequential order until the
Certificate Principal Balance of each such Class has been reduced to zero, and
in the case of the Adjustable Rate Group Certificates, to the Adjustable Rate
Group Certificateholders by Class, in sequential order until the Certificate
Principal Balance of each such Class has been reduced to zero.
With respect to each Mortgage Loan Group and each Distribution Date on
or after the related Stepdown Date, Certificateholders will be entitled to
receive payments of principal in the order of priority and amounts set forth
below up to the related Principal Distribution Amount and Extra Principal
Distribution Amount:
With respect to the Fixed Rate Group Certificates:
First, the Fixed Rate Group Principal Distribution Amount, not to
exceed the related Class A Principal Distribution Amount, shall be distributed
to the Class A-6 Certificateholders up to the Class A-6 Lockout Distribution
Amount, and any remaining amount thereof shall be distributed to the Fixed Rate
Class A Certificateholders, in sequential order by Class, until the Certificate
Principal Balance of each such Class has been reduced to zero;
Second, any remaining Fixed Rate Group Principal Distribution Amount,
not to exceed the related Class M-1 Principal Distribution Amount, shall be
distributed to the Class M-1F Certificateholders, until the Certificate
Principal Balance thereof has been reduced to zero;
Third, any remaining Fixed Rate Group Principal Distribution Amount,
not to exceed the related Class M-2 Principal Distribution Amount, shall be
distributed to the Class M-2F Certificateholders, until the Certificate
Principal Balance thereof has been reduced to zero;
Fourth, any remaining Fixed Rate Group Principal Distribution Amount,
not to exceed the related Class B Principal Distribution Amount, shall be
distributed to the Class B-1F Certificateholders, until the Certificate
Principal Balance thereof has been reduced to zero; and
Fifth, any remaining Fixed Rate Group Principal Distribution Amount
shall be distributed as part of the Monthly Excess Cashflow Amount with respect
to such Mortgage Loan Group as set forth in Section 5.01(c).
With respect to Adjustable Rate Group Certificates:
First, the Adjustable Rate Group Principal Distribution Amount, not to
exceed the related Class A Principal Distribution Amount, shall be distributed
to the Class A-1A Certificateholders until the Certificate Principal Balance
thereof has been reduced to zero;
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Second, any remaining Adjustable Rate Group Principal Distribution
Amount, not to exceed the related Class M-1 Principal Distribution Amount, shall
be distributed to the Class M-1A Certificateholders, until the Certificate
Principal Balance thereof has been reduced to zero;
Third, any remaining Adjustable Rate Group Principal Distribution
Amount, not to exceed the related Class M-2 Principal Distribution Amount, shall
be distributed to the Class M-2A Certificateholders, until the Certificate
Principal Balance thereof has been reduced to zero;
Fourth, any remaining Adjustable Rate Group Principal Distribution
Amount, not to exceed the related Class B Principal Distribution Amount, shall
be distributed to the Class B-1A Certificateholders, until the Certificate
Principal Balance thereof has been reduced to zero; and
Fifth, any remaining Adjustable Rate Group Principal Distribution
Amount shall be distributed as part of the Monthly Excess Cashflow Amount with
respect to such Mortgage Loan Group as set forth in Section 5.01(c).
On any Distribution Date on which the sum of the Certificate Principal
Balances of the Subordinate Certificates that are Fixed Rate Group Certificates
and the related Overcollateralization Amount is zero, any amounts of principal
payable to the Fixed Rate Class A Certificateholders on such Distribution Date
shall instead be distributed pro rata based on the outstanding Certificate
Principal Balances of each such Class.
(c) The Monthly Excess Cashflow Amount from the related Mortgage Loan
Group shall be applied in the following order of priority on any Distribution
Date:
(1) to fund any Interest Carry Forward Amount for the related
Class A Certificates;
(2) to fund the related Extra Principal Distribution Amount
for such Distribution Date;
(3) to fund any Interest Carry Forward Amount for the related
Class M-1 Certificates;
(4) to fund any Class M-1 Realized Loss Amortization Amount;
(5) to fund any Interest Carry Forward Amount for the related
Class M-2 Certificates;
(6) to fund any Class M-2 Realized Loss Amortization Amount;
(7) to fund any Interest Carry Forward Amount for the related
Class B Certificates;
(8) to fund any Class B Realized Loss Amortization Amount;
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(9) to the Servicer to the extent of any unreimbursed Monthly
Advances or Servicing Advances;
(10) to fund any Realized Loss Amortization Amounts with
respect to the other Mortgage Loan Group and the Offered Certificates
related thereto to the extent that such amounts have not been funded in
full through the application of the Monthly Excess Cashflow Amount with
respect to such other Mortgage Loan Group on such Distribution Date;
(11) to fund a distribution to Class C Certificateholders of
the Class C Distribution Amount; and
(12) to fund a distribution to Class R-IF Certificateholders
if applicable to the Fixed Rate Group and to fund a distribution to the
Class R-IA Certificateholders if attributable to the Adjustable Rate
Group.
Section 5.02. Monthly Advances; Servicing Advances. (a) On or before
each Deposit Date, the Servicer will deposit in the Certificate Account in
respect of the Fixed Rate Group and the Adjustable Rate Group, in same day
funds, an amount, if any (a "Monthly Advance"), equal to the sum of (i) with
respect to all Mortgage Loans that are delinquent as of the close of business on
the related Determination Date, the aggregate of the interest portions of each
Monthly Mortgage Payment in respect of the related Mortgage Loan Group due
during the related Collection Period (net of the aggregate of the Monthly
Servicing Fees for each Mortgage Loan Group attributable to such Mortgage
Loans), inclusive of those amounts representing the interest portions of Monthly
Mortgage Payments due during the first Collection Period, plus (ii) with respect
to all Mortgage Loans that are not delinquent Mortgage Loans as of the close of
business on the last day of such Collection Period, an amount equal to the
amount of interest that would accrue on each such Mortgage Loan at the related
Mortgage Loan Rate (net of the aggregate of the Monthly Servicing Fees for each
Mortgage Loan Group attributable to such Mortgage Loans) in a period of 30 days
minus the number of days from the first day of such Collection Period to the
related due date for such Mortgage Loan during such Collection Period, plus
(iii) with respect to each Mortgaged Property that was acquired in foreclosure
or similar action (each, an "REO Property") during or prior to the related
Collection Period and as to which a final sale did not occur during the related
Collection Period, an amount equal to the excess, if any, of interest on the
Principal Balance of such REO Property at the related Mortgage Interest Rate
(net of the Monthly Servicing Fee attributable to such REO Property) over the
net income from such REO Property transferred to the Collection Account or the
Certificate Account, as the case may be, for such Distribution Date; provided,
however, that in no case will the Servicer be required to make advances with
respect to any period or portion of any Collection Period following the final
due date with respect to any Mortgage Loan. All or a portion of any Monthly
Advance required to be made on a Deposit Date may be paid out of amounts on
deposit in the Collection Account in respect of the related Mortgage Loan Group
that are not required to be deposited on such Deposit Date in the Certificate
Account as any portion of Monthly Interest for such Mortgage Loan Group and the
related Distribution Date; provided, however, that the Servicer shall be
required to replace any such amounts by deposit to the Collection Account on or
before the next Deposit Date and the amount of such deposit shall thereafter be
considered a Monthly Advance
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for purposes of reimbursement under this Agreement. The Servicer may recover
Monthly Advances, if not theretofore recovered from the Mortgagor on whose
behalf such Monthly Advance was made, from collections on the related Mortgage
Loan, including Liquidation Proceeds, Insurance Proceeds and such other amounts
as may be collected by the Servicer from the Mortgagor or otherwise relating to
the Mortgage Loan or, as provided in clause (10) of Section 5.01(c), from
amounts in re spect of the related Mortgage Loan Group that would otherwise be
distributed to the Class C Certi ficateholder on such Distribution Date.
(b) The Servicer shall from time to time during the term of this
Agreement make such Servicing Advances as the Servicer shall deem appropriate or
advisable under the circumstances and are required pursuant to the terms of this
Agreement. Servicing Advances may be paid by the Servicer out of amounts on
deposit in the Collection Account in respect of the related Mortgage Loan Group
from time to time; provided, however, that the Servicer shall be required to
replace any such amounts by deposit to the Collection Account in respect of the
related Mortgage Loan Group on or before the first Deposit Date occurring after
the payment of a Servicing Advance with such amounts, and the amount of such
deposit shall thereafter be considered a Servicing Advance for purposes of
reimbursement under this Agreement. All Servicing Advances made by the Servicer
shall be reimbursable from collections or recoveries relating to the Mortgage
Loans in respect of which such Servicing Advances have been made or, as provided
in clause (10) of Section 5.01(c) with respect to the Adjustable Rate Group
Mortgage Loans, from amounts that would otherwise be distributed to the Class R
Certificateholder on a Distribution Date. Notwithstanding anything herein to the
contrary, no Servicing Advances need by made hereunder if such Servicing Advance
would, if made, constitute a Nonrecoverable Advance.
Section 5.03. Statements to Certificateholders. Concurrently with each
distribution charged to the Certificate Account on a Distribution Date the
Trustee shall forward to each Rating Agency and shall mail to each Holder of a
Certificate, a written statement setting forth the following information with
respect to the applicable Class of Offered Certificates to which such statement
(a "Statement to Certificateholders") relates:
(a) the amount of the distribution with respect to each Class of
Certificates;
(b) the amount of such distributions allocable to principal on the
related Mortgage Loans in each Mortgage Loan Group, separately identifying the
aggregate amount of any Prepayments or other recoveries of principal included
therein;
(c) the amount of such distributions allocable to interest;
(d) the Interest Carry Forward Amount for each Class;
(e) the outstanding Certificate Principal Balance (or Notional Amount)
of each Class of Offered Certificates which will be outstanding after giving
effect to any payment of principal on such Distribution Date;
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(f) the aggregate of the Principal Balances of all Mortgage Loans after
giving effect to any payments of principal on such Distribution Date by Mortgage
Loan Group and for the entire Trust, and each Group Factor;
(g) based upon information furnished by the Sponsor, such information
as may be required by Section 6049(d)(7)(C) of the Code and the regulations
promulgated thereunder to assist the Certificateholders in computing their
market discount;
(h) the total of all amounts paid by the Sponsor and the Servicer
during the related Collection Period in connection with purchases or repurchases
from the Trust of Mortgage Loans and substitutions for Mortgage Loans of
Qualified Replacement Mortgage Loans with respect to each Mortgage Loan Group
and by reason for such purchase;
(i) the weighted average Mortgage Loan Rate of the Mortgage Loans with
respect to each Mortgage Loan Group;
(j) whether a Trigger Event has occurred;
(k) the Senior Enhancement Percentage for each Mortgage Loan Group;
(l) the amount of any Extra Principal Distribution Amount included in
such distribution;
(m) the related Overcollateralization Amount and Targeted
Overcollateralization Amount for each Mortgage Loan Group;
(n) The Rolling Delinquency Percentage and the Loss Percentage for each
Mortgage Loan Group; and
(o) the amount of any Applied Realized Loss Amount, Realized Loss
Amortization Amount and Unpaid Realized Loss Amount for each Class as of the
close of such Distribution Date.
In the case of information furnished pursuant to subclauses (a), (b)
and (c) above, the amounts shall be expressed as a dollar amount per Certificate
with a $1,000 principal denomination.
Within 90 days after the end of each calendar year, the Trustee shall
mail such report to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇, (which report shall
include, in addition to the information contained in reports to others
hereunder, the total amount of interest on the Mortgage Loans for the period
covered by such report), and to each Person who at any time during the calendar
year was an Offered Certificateholder, a statement for each Certificateholder
containing the information set forth in subclauses (a) through (c) above,
aggregated for such calendar year or, in the case of each Person who was an
Offered Certificateholder for a
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portion of such calendar year, setting forth such information for each month
thereof for the portion of the year during which such Person was a
Certificateholder. The Servicer shall provide any other information necessary in
order to report income in respect of the Certificateholders for federal income
tax purposes.
Section 5.04. Applied Realized Loss Amount. On each Distribution Date,
based on the information furnished by the Servicer, the Trustee shall determine
the total of the Applied Realized Loss Amounts for each Mortgage Loan Group for
such Distribution Date. The Applied Realized Loss Amount for each Mortgage Loan
Group for any Distribution Date shall be applied by reducing the Certificate
Principal Balance of each Class of Subordinate Certificates beginning with the
related Class B Certificates, and then the related Class M Certificates then
outstanding with the highest numerical Class designation, in each case until the
respective Certificate Principal Balance thereof is reduced to zero. Any Applied
Realized Loss Amount allocated to a Class of Certificates shall be allocated
among the Certificates of such Class in proportion to their respective
Percentage Interests.
ARTICLE SIX
THE CERTIFICATES
Section 6.01. The Certificates. (a) The Certificates of each Class
shall be substantially in the forms set forth with respect thereto in Exhibit A
hereto, respectively, and shall, on original issue, be executed and delivered by
the Trustee on behalf of the Trust, not individually but solely as Trustee to or
upon the order of the Seller concurrently with the sale and assignment to the
Trustee of the Trust.
(b) The Book-Entry Certificates will be evidenced by one or more
certificates, beneficial ownership of which will be held (i) in the case of the
Class A Certificates, in minimum dollar denominations of $1,000 and integral
multiples of $1 in excess thereof; and (ii) in the case of the Subordinate
Certificates, in minimum dollar denominations of $25,000 and integral multiples
of $1 in excess thereof. Each of the Class R Certificates shall be issuable
solely as a single Class R Certificates evidencing the entire Percentage
Interest of such Class R Certificates.
(c) The Certificates shall be executed by manual or facsimile signature
by the Trustee on behalf of the Trust (not in its individual capacity but solely
as Trustee) by an authorized officer of the Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trust, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the countersigning and delivery of such Certificates
or did not hold such offices at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless such Certificate shall have been manually authenticated by the
Trustee substantially in the form provided for herein, and such signature upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
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Section 6.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Trustee maintained for such purpose pursuant to the
foregoing paragraph and upon satisfaction of the conditions set forth in Section
6.02(b) and (c), the Trustee shall execute, authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of a like aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of the same Class and of a
like aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute, authenticate and deliver the
Certificates that the Certificateholder making the exchange is entitled to
receive.
Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Company or the Trustee) be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made to a Certificateholder for any transfer
or exchange of Certificates, but the Trustee 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 or exchange shall be canceled
by the Trustee in accordance with its standard procedures.
(b) No transfer of a Class R Certificate shall be made unless, as
evidenced by an Opinion of Counsel and Transfer Affidavit delivered to the
Trustee, each in form and substance satisfactory to the Trustee, such transfer
is not subject to registration under the Securities Act or any applicable state
securities laws. Any such Opinion of Counsel and Transfer Affidavit shall not be
obtained at the expense of the Trustee, the Trust, the Seller or the Servicer.
The Holder of a Class R Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee, the Seller and the Servicer against
any liability that may result if the transfer is not so exempt or is not made in
accordance with the Securities Act and such state laws. Neither the Seller, the
Servicer nor the Trustee or the Trust is under an obligation to register the
Class R Certificates under the Securities Act or any state securities law.
The Class R Certificates, this Agreement and related documents may be
amended or supplemented from time to time to modify restrictions on and
procedures for resale and other
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transfer of such Class R Certificate to reflect any change in applicable law or
regulation (or the interpretation thereof) or practices relating to the resale
or transfers of restricted securities generally.
(c) No transfer of a Class R Certificate shall be made unless, as
evidenced by an Opinion of Counsel and Transfer Affidavit delivered to the
Trustee, each in form and substance satisfactory to the Trustee, such transfer
is not subject to registration under the Securities Act or any applicable state
securities laws. Any such Opinion of Counsel and Transfer Affidavit shall not be
obtained at the expense of the Trustee, the Trust, the Seller or the Servicer.
The Holder of a Class R Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee, the Seller and the Servicer against
any liability that may result if the transfer is not so exempt or is not made in
accordance with the Securities Act and such state laws. Neither the Seller, the
Servicer nor the Trustee or the Trust is under an obligation to register the
Class R Certificates under the Securities Act or any state securities law.
The Class R Certificates, this Agreement and related documents may be
amended or supplemented from time to time to modify restrictions on and
procedures for resale and other transfer of such Class R Certificate to reflect
any change in applicable law or regulation (or the interpretation thereof) or
practices relating to the resale or transfers of restricted securities
generally.
No legal or beneficial interest in all or any of the Class R
Certificates may be transferred directly or indirectly to: (i) a Disqualified
Organization or an agent of a Disqualified Organization (including a broker,
nominee or middleman), (ii) to an entity that holds REMIC residual securities as
nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations (a
"Book-Entry Nominee"), (iii) an individual, corporation, partnership or other
Person unless such transferee (A) is not a Foreign Person or (B) is a Foreign
Person that will hold such Class R Certificate in connection with the conduct of
a trade or business within the United States and has furnished the transferor
and the Trustee with an effective Internal Revenue Service Form 4224 or (C) is a
Foreign Person that has delivered (at the expense of the Transferee) to both the
transferor and the Trustee an opinion of a nationally recognized tax counsel to
the effect that the transfer of the Class R Certificate to it is in accordance
with the requirements of the Code and the regulations promulgated thereunder and
that such transfer of the Class R Certificate will not be disregarded for
federal income tax purposes (any such Person who is not covered by clause (A),
(B) or (C) above being referred to herein as a "Non-permitted Foreign Holder")
or (iv) to an ERISA Plan or an entity, including an insurance company separate
account or general account, whose underlying assets include ERISA Plan assets by
reason of an ERISA Plan's investment in the entity or a Person investing the
assets of an ERISA Plan or such an entity, whether as nominee, trustee, agent or
otherwise (such plan, entity or Person, an "ERISA Prohibited Holder"), and any
such purported transfer shall be void and have no effect.
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The Trustee shall not execute, and shall not authenticate and deliver,
a new Class R Certificate in connection with any registration of transfer to a
Person known to a Responsible Officer of the Trustee to be a Disqualified
Organization or agent thereof (including a broker, nominee or middleman), to a
Book-Entry Nominee, a Non-permitted Foreign Holder or an ERISA Prohibited
Holder, and the Trustee shall not accept a surrender for the registration of
transfer or register the transfer of, any Class R Certificate, unless the
transferor shall have provided to the Trustee a Transfer Affidavit substantially
in the form attached as Exhibit E hereto, signed by the transferee, to the
effect that the transferee is not a Disqualified Organization and is not a
nominee for a beneficial owner of the Class R Certificate from which the
transferee has not received a substantially similar affidavit, a Book-Entry
Nominee, a Non-permitted Foreign Holder or an ERISA Prohibited Holder. Such
Transferor Affidavit shall contain (i) the consent of the transferee to any such
amendments of this Agreement as may be required to further effectuate the
foregoing restrictions on transfer of the Class R Certificates to Disqualified
Organizations, Book-Entry Nominees, Non-permitted Foreign Holders or ERISA
Prohibited Holders and (ii) a representation from the transferee that such
transferee does not have the intent or purpose to impede the assessment or
collection of any federal, state or local income taxes legally required to be
paid with respect to the Class R Certificates. Such Transferor Affidavit, if not
executed in connection with the initial issuance of the Class R Certificates,
also shall be accompanied by a Transferor Affidavit, substantially in the form
attached hereto as Exhibit I, signed by the transferor to the effect that as of
the time of the transfer, the transferor has no actual knowledge that such
affidavit is false and that the transferor does not have the intent or purpose
to impede the assessment or collection of any federal, state or local income
taxes legally required to be paid with respect to the Class R Certificate.
Each Class R Certificate shall bear a legend referring to the foregoing
restrictions. Any Person acquiring the Class R Certificate, or beneficial
ownership thereof, agrees to give the Servicer written notice that it is a
"pass-through interest holder" within the meaning of Treasury Regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring the Class R Certificate, or
beneficial ownership thereof, if it is, or is acquiring the Class R Certificate
on behalf of, a "pass-through interest holder."
Upon notice to the Servicer that any legal or beneficial interest in
any Class R Certificate has been transferred, directly or indirectly, to a
Disqualified Organization in contravention of the foregoing restrictions or to a
pass-through entity as defined in the REMIC Provisions an interest of which is
held by a Disqualified Organization, the Servicer agrees to furnish to any
transferor of the Class R Certificate or such agent or such pass-through entity
such as may be required to be delivered thereto by the Code as necessary to the
application of Code Section 860E(e) including, but not limited to, the present
value of the total anticipated excess inclusions with respect to the Class R
Certificate (or portion thereof) for periods after such transfer. At the
election of the Servicer, the cost to the Servicer of computing and furnishing
such information may be charged to the transferor or such agent referred to
above; provided, however, that the Servicer shall in no event be excused from
furnishing such information.
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The Class R Certificates, this Agreement and related documents may be
amended or supplemented from time to time to modify restrictions on and
procedures for resale and other transfer of the Class R Certificates to reflect
any change in applicable law or regulation (or the interpretation thereof) or
practices relating to the resale or transfer of restricted securities generally
(d) No transfer of a Subordinate Certificate or Class C Certificate, or
beneficial interest therein, shall be made unless the Trustee shall have
received a representation from the transferee thereof to the effect that:
(i) such transferee (A) is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code (a "Plan"), nor a person acting on behalf of a
Plan nor using the assets of a Plan to effect such transfer, and (B) is
not an insurance company purchasing a Class B Certificate or Class C
Certificate with funds contained in an "insurance company general
account" (as defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) as to which there is a Plan with
respect to which the amount of such general account's reserves and
liabilities for the contracts held by or on behalf of such Plan and all
other Plans maintained by the same employer (or affiliate thereof as
defined in Section V(a)(1) of PTCE 95-60) or by the same employee
organization exceed 10% of the total of all reserves and liabilities of
such general account (as such amounts are determined under Section I(a)
of PTCE 95-60) at the date of acquisition; or
(ii) such transferee is a Plan or a person acting on behalf of
a Plan or using the assets of a Plan to effect such transfer, or is an
insurance company purchasing such Certificate with funds contained in
an insurance company general account, having attached thereto an
opinion of counsel satisfactory to the Trustee, which opinion shall not
be an expense of either the Trustee or the Trust, addressed to the
Trustee, the Seller and the Servicer, to the effect that the purchase
or holding of such Certificate will not result in the assets of the
Trust being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the
Trustee, the Seller or the Servicer to any obligation in addition to
those expressly undertaken in this Agreement or to any liability.
For purposes of the preceding sentence, with respect to a Subordinate
Certificate that is a Book-Entry Certificate, the representations contained in
clause (i) above shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquiror's) acceptance of such Certificate.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Subordinate Certificate or Class C Certificate, or a beneficial interest
therein, to or on behalf of an employee benefit plan subject to ERISA or to the
Code or a person acting on behalf of a Plan or using the assets of a Plan to
effect such transfer or to an insurance company purchasing with funds from a
general account not exempt pursuant to PTCE 95-60 without the delivery to the
Trustee of an opinion of counsel described in clause (ii) above shall be void
and of no effect.
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To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any Subordinate Certificate or Class C
Certificate that is in fact not permitted by Section 6.02(d) 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 the Pooling and
Servicing Agreement so long as the transfer was registered by the Trustee in
accordance with the foregoing requirements.
The Subordinate Certificates and Class C Certificates, this Agreement
and related documents may be amended or supplemented from time to time to modify
restrictions on and procedures for resale and other transfer of such Subordinate
Certificates and Class C Certificates to reflect any change in applicable law or
regulation (or the interpretation thereof) or practices relating to the resale
or transfers of restricted securities generally.
(e) The Book-Entry Certificates shall, subject to Section 6.02(e), at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration thereof may not be transferred by the Trustee except
to another Depository; (ii) the Depository shall maintain book-entry records
with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
the Certificates issued in book-entry form on the books of the Depository shall
be governed by applicable rules established by the Depository and the rights of
Certificate Owners with respect to Book-Entry Certificates shall be governed by
applicable law and agreements between such Certificate Owners and the
Depository, Depository Participants, and indirect participating firms; (iv) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants; (v) the Trustee shall deal with the Depository as
the authorized representative of the Certificate Owners of the Book-Entry
Certificates for all purposes including the making of payments due on the
Book-Entry Certificates and exercising the rights of Holders of Book-Entry
Certificates under this Agreement; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository; (vii)
Certificate Owners shall not be entitled to certificates for the Book-Entry
Certificates and (viii) the Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by holders of
Book-Entry Certificates and give notice to the Depository of such record date.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
(f) If (x)(i) the Company or the Depository advises the Trustee in
writing that the Depository is no longer willing, qualified or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee or the
Company is unable to locate a qualified successor, (y) the Company at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository or (z) after the occurrence of an Event of Default,
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Certificate Owners representing not less than 51% of the aggregate Class A
Certificate Principal Balance of the Book-Entry Certificates together advise the
Trustee and the Depository in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the
Certificate Owners, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
definitive, fully registered Certificates ("Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall issue the Definitive
Certificates and the expense of any such issuance shall be reimbursed by the
Trust pursuant to Section 9.05. Neither the Company nor the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Certificates all references herein to obligations imposed upon or
to be performed by the Depository shall be deemed applicable with respect to
such Definitive Certificates and the Certificates as Certificateholders
hereunder.
(g) On or prior to the Closing Date, there shall be delivered to the
Depository one certificate for each Class of Book-Entry Certificates registered
in the name of the Depository's nominee, Cede & Co. The face amount of each such
Certificate shall be equal to the Principal Balance thereof. Each Certificate
issued in book-entry form shall bear the following legend:
"Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Trustee or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee, the Servicer and the
Seller such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class and Percentage Interest. Upon the issuance of any new Certificate under
this Section, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership of the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
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Section 6.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Servicer, the Seller, the Trustee
and any of their respective agents may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 5.01 and for all other purposes
whatsoever, and neither the Servicer, the Seller, the Trustee nor any of their
respective agents shall be affected by notice to the contrary.
Section 6.05. Actions of Certificateholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by agent duly appointed in writing; and
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
when required, to the Seller or the Servicer. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee, the Seller and
the Servicer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner that the
Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done,
by the Trustee, the Seller or the Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
ARTICLE SEVEN
THE SERVICER AND THE SELLER
Section 7.01. Liability of the Servicer. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Servicer herein.
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. Any corporation or other entity (i) into which the
Servicer may be merged or consolidated, (ii) that may result from any merger,
conversion or consolidation to which the Servicer shall be a party, or (iii)
that may succeed to all or substantially all of the business of the Servicer,
which corporation or other entity shall, in any case where an assumption shall
not be effected by operation of law, execute an agreement of assumption to
perform every obligation of the Servicer under this Agreement, shall be the
successor to the Servicer under this Agreement without the execution or filing
of any document or any further act by any of the parties to this Agreement;
except that if the Servicer is not the surviving entity,
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then the surviving entity shall execute and deliver to the Trustee an agreement
of assumption to perform every obligation of the Servicer hereunder.
Section 7.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of its directors, officers, employees or agents
shall be under any liability to the Trustee, the Trust or the Certificateholders
for any action taken or for refraining from the taking of any action by the
Servicer pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such person
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of the duties of the
Servicer or by reason of reckless disregard of the obligations and duties of the
Servicer hereunder. The Servicer and any director, officer, employee or agent of
the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement, and that in its
opinion may involve it in any expense or liability.
Section 7.04. Servicer Not to Resign. Subject to the provisions of
Section 7.02 regarding the merger or consolidation of the Servicer into or with
another entity, the Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that the performance of its
duties or obligations hereunder is no longer permissible under applicable law or
regulation or are in material conflict by reason of applicable law or regulation
with any other activities carried on by it at the date of this Agreement. Any
such determination permitting the resignation of the Servicer pursuant to this
Section shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee. No resignation pursuant to this Section 7.04 (a) shall become
effective until the Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 8.02
or (b) shall relieve the Servicer of responsibility for any obligations pursuant
to this Agreement that specifically survive the resignation or termination of
the Servicer. Each of the Rating Agencies shall be given written notice of a
resignation of the Servicer pursuant to this Section.
Section 7.05. Merger or Consolidation of the Seller. Any corporation or
other entity (i) into which the Seller may be merged or consolidated, (ii) that
may result from any merger, conversion or consolidation to which the Seller
shall be a party, or (iii) that may succeed to all or substantially all of the
business of the Seller, which corporation or other entity shall, in any case
where an assumption shall not be effected by operation of law, execute an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller hereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement, except that if the Seller in any of the foregoing cases is not the
surviving entity, then the surviving entity shall execute and deliver to the
Trustee an agreement of assumption to perform every obligation of the Seller
hereunder.
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Section 7.06. [Reserved].
ARTICLE EIGHT
DEFAULT
Section 8.01. Events of Default. If any one of the following events
(each an "Event of Default") shall occur and be continuing:
(a) Any failure by the Servicer to (i) make a Monthly Advance on any
Deposit Date or (ii) deposit in the Collection Account or the Certificate
Account any other amount required to be deposited therein under this Agreement
or failure to pay the Trustee Fee, which failure, in the case of only clause
(ii) hereof, continues unremedied for a period of five Business Days after the
date upon which written notice of such failure shall have been given to the
Servicer by the Trustee or to the Servicer and the Trustee by Holders of
Certificates evidencing Voting Interests represented by all Certificates
aggregating not less than 51%;
(b) Failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set forth
in the Certificates or in this Agreement, which failure (i) materially and
adversely affects the Certificateholders and (ii) continues unremedied for a
period of 30 days after the date on which written notice of such failure (which
notice shall refer specifically to this Section), requiring the same to be
remedied, shall have been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by the Holders of Certificates evidencing Voting
Interests represented by all Certificates aggregating not less than 51%;
(c) The entry against the Servicer of a decree or order by a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, 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, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days;
(d) The consent by the Servicer to the appointment of a trustee,
conservator or receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to substantially
all of its property; or the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable bankruptcy, insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its
obligations;
(e) For so long as the Company is the Servicer, failure on the part of
the Seller duly to observe or perform in any material respect any covenants or
agreements of the Seller set forth in the Certificates or in this Agreement,
which failure (i) materially and adversely affects the Certificateholders and
(ii) continues unremedied for a period of 30 days after the
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date on which written notice of such failure (which notice shall refer
specifically to this Section), requiring the same to be remedied, shall have
been given to the Servicer by the Trustee, or to the Servicer and the Trustee by
the Holders of Certificates evidencing Voting Interests represented by all
Certificates aggregating not less than 51%; or
(f) The occurrence of a material default of the Servicer under this
Agreement; or
(g) On any Distribution Date, the Loss Percentage exceeds 4.00%, with
respect to the Fixed Rate Group, or 7.75%, with respect to the Adjustable Rate
Group.
then, and in each and every such case, so long as such Event of Default shall
not have been remedied by the Servicer, either the Trustee or the Holders of
Certificates evidencing Voting Interests represented by all Certificates
aggregating not less than 51%, (provided that, in the case of the Event of
Default described in clause (g) holders of 51% of the Certificates in the
Related Mortgage Loan Group shall have this right, but not the Trustee) by
notice then given in writing to the Servicer with a copy to the Trustee, may
terminate all of the rights, responsibilities and obligations of the Servicer as
servicer under this Agreement (or, in the case of the Event of Default described
in clause (g), all such rights, responsibilities and obligations with respect to
the related Mortgage Loan Group). On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Agreement (or, in the case of the Event of Default described in clause (g), all
such rights, responsibilities and obligations with respect to the related
Mortgage Loan Group), whether with respect to the affected Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section and, without limitation, 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
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Mortgage Loans and related documents, or otherwise. The
Servicer agrees to cooperate with the Trustee in effecting the termination of
its responsibilities and rights as Servicer hereunder with respect to either or
both Mortgage Loan Groups, including, without limitation, the transfer to the
Trustee for the administration by it of all cash amounts that shall at the time
be held by the Servicer that have been deposited by the Servicer in the
Collection Account or the Certificate Account with respect thereto or thereafter
received by the Servicer with respect to the affected Mortgage Loans.
All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Mortgage Files to a successor Servicer,
amending this Agreement to reflect the appointment of a successor as Servicer
pursuant to this Section 8.01 or otherwise in connection with the assumption by
a successor Servicer of the duties of the predecessor Servicer hereunder shall
be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses.
Section 8.02. Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of full or partial termination pursuant
to Section 8.01, the Trustee shall be the successor in all respects to the
Servicer in its capacity as servicer under this Agreement with respect to the
whole Trust or the affected Mortgage Loan Group, as appropriate and the
transactions set forth
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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, including without limitation, the obligation to make Monthly
Advances and to pay Compensating Interest. As compensation therefor, the Trustee
shall be entitled to such compensation as the Servicer would have been entitled
to hereunder if no such notice of termination had been given. Notwithstanding
the foregoing, the Trustee may, if it shall be unwilling so to act, or shall, if
it is legally unable so to act, promptly appoint, or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution or any institution that regularly services home equity loans that is
then servicing a home equity loan portfolio and having all licenses, permits and
approvals required by applicable law, and having a net worth of not less than
$10,000,000 as the successor to the Servicer hereunder with respect to the whole
Trust or the affected Mortgage Loan Group, as appropriate, in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
hereunder; provided that the appointment of any such successor Servicer will not
result in the qualification, reduction or withdrawal of the rating assigned to
any Class of related Offered Certificates by any Rating Agency. Pending
appointment of a successor to the Servicer hereunder, unless the Trustee is
prohibited by law from so acting, 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 hereunder. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The appointment of a successor Servicer shall not affect any
liability of the predecessor Servicer that may have arisen under this Agreement
prior to its termination as Servicer (including without limitation, any amount
for a deductible amount pursuant to the last sentence of Section 3.04), nor
shall any successor Servicer be liable for any acts or omissions of the
predecessor Servicer or for any breach by such Servicer or the Seller of any of
its representations or warranties contained herein or in any related document or
agreement. Each of the Rating Agencies shall be given written notice of the
appointment of a successor Servicer pursuant to this Section.
Section 8.03. Notifications to Certificateholders. Upon any termination
or appointment of a successor to the Servicer pursuant to this Article Eight,
the Trustee shall give prompt written notice thereof to Certificateholders at
their respective addresses appearing in the Certificate Register and to each
Rating Agency.
Within 60 days of obtaining actual knowledge of the occurrence of any
Event of Default that remains uncured, the Trustee shall transmit by mail to all
Certificateholders notice of such Event of Default.
Section 8.04. Assumption or Termination of Sub-Servicing Agreements by
the Trustee or any Successor Servicer. Upon the termination of the Servicer as
servicer under this Agreement, the Trustee as successor to the Servicer
hereunder or any other successor to the Servicer hereunder may, subject to the
terms of any related Sub-Servicing Agreement, in its sole and absolute
discretion elect to assume or terminate any Sub-Servicing Agreement then in
force and effect between the Servicer and the Sub-Servicer. Notwithstanding the
foregoing, any termination fee due to a Sub-Servicer because of its termination
by the Trustee hereunder shall be the responsibility of the terminated
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Servicer and not the Trustee. Upon the assumption of any Sub-Servicing
Agreement, the Servicer agrees to deliver to the assuming party any and all
documents and records relating to the applicable Sub-Servicing Agreement and an
accounting of amounts collected and held by it and otherwise use its best
reasonable efforts to effectuate the orderly transfer of the Sub-Servicing
Agreement.
ARTICLE NINE
THE TRUSTEE
Section 9.01. Duties of the Trustee. The Trustee, prior to the
occurrence of an Event of Default and after the curing of all Events of Default
that 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 of which
a Responsible Officer of the Trustee shall have actual knowledge shall have
occurred (which has not been cured) and subject to the provisions of Section
9.13, the Trustee shall exercise such of the rights and powers vested in it by
this Agreement, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they substantially
conform to the requirements of this Agreement. If any such document or
instrument is found not to conform to the requirements of this Agreement in a
material manner, the Trustee shall, subject to the provisions of Section 9.13,
take such action as it deems appropriate to have the document or instrument
corrected, and if it is not corrected to the Trustee's reasonable 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 misconduct; provided, however, that:
(a) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that 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, filings or opinions furnished to the Trustee and conforming to
the requirements of this Agreement;
(b) the Trustee shall not be personally liable for an error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent facts;
(c) 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
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Holders of Certificates evidencing Voting Interests represented by all
Certificates (or all affected Certificates, as appropriate) aggregating not
less than 51% 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; and
(d) the Trustee shall not be charged with knowledge of any failure by
the Servicer to comply with the obligations of the Servicer referred to in
clauses (a) and (b) of Section 8.01 unless a Responsible Officer obtains
actual knowledge of such failure or the Trustee receives written notice of
such failure from the Servicer, the Holders of Certificates evidencing Voting
Interests represented by all Certificates aggregating not less than 51%, as
the case may be.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in 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, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
Section 9.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 9.01:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) The Trustee may consult with counsel and any advice obtained from
counsel or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation hereunder or in relation hereto, at the request, order
or direction of any of the Certificateholders, pursuant to the provisions of
this Agreement, unless the Person so requesting, ordering or directing same
shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities that may be incurred therein or thereby;
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 any such act; nothing contained herein shall, however, relieve
the Trustee of the obligations, upon the occurrence of an Event of Default
known to a
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Responsible Officer of the Trustee (which has not been cured), to exercise
such of the rights and powers vested in it by this Agreement, subject to the
provisions of Section 9.13, and to use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs;
(d) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith in accordance with the direction of
Holders of Certificates evidencing Voting Interests representing all
Certificates (or all affected Certificates, as appropriate) aggregating not
less than 51%;
(e) Prior to the occurrence of an Event of Default and after the curing
of all Events of Default that 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 documents, unless
requested in writing to do so by Holders of Certificates evidencing Voting
Interests represented by all Certificates (or all affected Certificates, as
appropriate) aggregating not less than 51%; 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 cost, expense or liability as a
condition to such proceeding; the reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee, shall
be reimbursed by the Servicer upon demand; and nothing in this clause (e)
shall derogate from the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Mortgagors; and
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian. The Trustee shall not be liable or responsible for
the misconduct of the custodian of the Mortgage Files appointed with due care
by the Trustee hereunder.
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the signature
and authentication of the Trustee on the Certificates) shall be taken as the
statements of the Servicer, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates and the
signature of the Trustee on this Agreement) or of any Mortgage, 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
Collection Account by the Servicer.
Section 9.04. 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 as it would have if it were not Trustee.
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Section 9.05. Payment of the Trustee's Fees and Expenses. (a) On or
before each Distribution Date occurring in July, beginning with the July 1997
Distribution Date, the Servicer shall pay to the Trustee without any right of
reimbursement from the Trust or otherwise, an amount equal to the Trustee Fee,
any reasonable expenses as agreed to by the Servicer and Trustee (including any
fees and expenses of a co-trustee or separate trustee appointed under Section
9.10) and, with respect to the July 1997 Distribution Date, all loan file review
fees, as compensation for all services rendered by the Trustee (and any such
co-trustee or separate trustee) 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 any such co-trustee or separate trustee). The Trustee Fee and
such expenses and loan file review fees (including any fees and expenses of a
co-trustee or separate trustee appointed under Section 9.10) are an obligation
solely of the Servicer and neither the Trustee nor any co-trustee or separate
trustee appointed hereunder has or will have any lien on the Trust for payment
of any such fees or expenses. It is anticipated that the Servicer will utilize a
portion of the Monthly Servicing Fee for payment of such fees and expenses.
(b) The Trust shall 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 or that is
otherwise reimbursable to the Trustee by the Servicer pursuant to Section
9.05(a) above; provided, however, that the Trustee shall not refuse to perform
any of its duties hereunder solely as a result of the failure of the Trust to
pay or reimburse such expenses, disbursements or advances. The right of the
Trustee to recover such amounts from the Trust shall be subordinate to the
rights of the Holders of the Offered Certificates under this Agreement
including, without limitation, to the prior payment in full of all amounts
payable as of any Distribution Date.
(c) The Servicer agrees to indemnify the Trustee from, and hold it
harmless against, any and all losses and liabilities, damages, claims or
expenses (including reasonable attorneys' fees) arising in respect of its acts
or omissions in connection with this Agreement or the Certificates except to the
extent the negligence, bad faith or intentional misconduct of the Trustee
contributes to the loss, liability, damage, claim or expense.
(d) This Section 9.05 shall survive the termination of this Agreement
or the resignation or removal of the Trustee as regards rights accrued prior to
such resignation or removal.
Section 9.06. Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a bank or other depository institution doing
business under the laws of the United States or any state thereof, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $100,000,000 and subject to supervision or examination
by federal or state authority and rated at least BBB by Standard & Poor's and
Baa2 by ▇▇▇▇▇'▇. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the
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Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 9.07.
Section 9.07. Resignation or 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 and each Rating Agency. Upon receiving
such notice of resignation, the Servicer shall promptly appoint a successor
trustee satisfying the criteria set forth in Section 9.06 by written instrument,
in triplicate, one copy of which instrument shall be delivered to the resigning
Trustee, one copy to the successor trustee and one copy to the Servicer. If no
successor trustee shall have been so appointed and having accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 and shall fail to resign after written
request therefor by the Servicer, or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a 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, or the Trustee shall
fail to perform its obligations under this Agreement, then the Servicer shall
remove the Trustee and appoint a successor trustee satisfying the criteria set
forth in Section 9.06 by written instrument, in triplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 9.08. The provisions of Section 9.05 shall survive any such
resignation or removal.
Section 9.08. Successor Trustee. Any successor trustee appointed as
provided in Section 9.07 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 like effect as if originally
named as Trustee. The Seller, the Servicer and the predecessor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for 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 it shall be eligible under the
provisions of Section 9.06.
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 and to each Rating Agency. 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.
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Section 9.09. Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee or substantially all of the Trustee's
trust business, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible under the provisions of Section 9.06, 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 9.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Mortgaged Property 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
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, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights, indemnities 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
the 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 9.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 9.08. Each of the Rating Agencies shall be given written notice of the
appointment of a co-trustee or a separate trustee pursuant to this Section.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to the
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 or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the
Trustee;
(b) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(c) The Servicer and the Trustee acting jointly may at any time accept
the resignation of or remove any separate trustee or co-trustee, except that
following the occurrence of an
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Event of Default that has not been cured, the Trustee, acting alone may accept
the resignation of or remove any separate or co-trustor.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of 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. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and copies thereof given to the
Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
No appointment of any separate trustee or co-trustee shall absolve the
Trustee of its duties and obligations under this Agreement.
Section 9.11. Compliance with REMIC Provisions. The Trustee shall at
all times act in such a manner in the performance of its duties hereunder as
shall be necessary to prevent any REMIC Pool from failing to qualify as a REMIC
and to prevent the imposition of a tax on the REMIC Pool. The Trustee shall: (a)
prepare and file, or cause to be prepared and filed, such federal, state and
local income tax and information returns or reports using the calendar year as
the taxable year for the REMIC Pool when and as required by the REMIC Provisions
and other applicable federal, state and local income tax laws, which returns or
reports shall be signed by the Trustee or such other person as may be required
thereby; (b) make an election, on behalf of each REMIC Pool, to be treated as a
REMIC and make the appropriate designations, if applicable, in accordance with
Section 9.16 on the federal income tax return of each REMIC Pool for its first
taxable year, in accordance with the REMIC Provisions; (c) prepare and forward,
or cause to be prepared and forwarded, to the Certificateholders all information
reports, or furnish or cause to be furnished by telephone, mail, publication or
other appropriate method such information, as and when required to be provided
to them in accordance with the Code; (d) exercise reasonable care not to allow
the creation of any "interests" in any REMIC Pool within the meaning of Code
Section 860D(a)(2) other than the interests represented by the REMIC III
Certificates in the case of the REMIC III Pool, the REMIC II Interests in the
case of the REMIC II Pool, the REMIC IF Interests in the case of the REMIC IF
Pool, the REMIC IA Interests in the case of the REMIC IA Pool; and (e) within 30
days of the Startup Day, furnish or cause to be furnished to the Internal
Revenue Service, on Form 8811 or as may otherwise be required by the Code, the
name, title, address, and telephone number of the person that Certificateholders
may contact for tax information relating to their Certificates (and the Trustee
shall act as the representative of each REMIC Pool for this purpose), together
with such additional
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information as may be required by such Form, and shall update such information
at the time and in the manner required by the Code. Each Class R
Certificateholder shall designate the Servicer, if permitted by the Code and
applicable law, to act as "tax matters person" for the related REMIC Pool within
the meaning of Treasury regulations Section 1.860F-4(d), and the Servicer is
hereby designated as agent of each Class R Certificateholder for such purpose
(or if the Servicer is not so permitted, the Holder of the related Class R
Certificate shall be the tax matters person in accordance with the REMIC
Provisions).
Section 9.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceedings relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered in accordance with the terms of this Agreement.
Section 9.13. Exercise of Trustee Powers by Certificateholders. The
Holders of Certificates evidencing Voting Interests represented by all
Certificates (or by the affected Certificates in the case of an Event of Default
described in clause (h) of Section 8.01 aggregating not less than 51% may direct
the time, method and place of conducting any proceeding relating to the Trust 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 of the Trust 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 that is not inconsistent with such direction; provided,
however, that the Trustee need not take any action that it determines
might involve it in liability or may be unjustly prejudicial to the
Holders not so directing.
Section 9.14. Tax Returns. The Trustee shall maintain all information
in its possession as may be required in connection with the preparation of all
federal and, if applicable, state and local income tax and information returns
of each REMIC Pool (including, but not limited to, tax reporting under the REMIC
Provisions for each REMIC Pool, exclusive of the Purchase Account and the
Capitalized Interest Account), and pursuant to Section 24874 of the California
Revenue and Taxation Code and its successors, and shall prepare, execute and
file as required all such returns. The Trustee shall include in the first
federal income tax return the information required to be included therein under
the REMIC Provisions, including, but not limited to, Treas. Reg.
Section 1.860D-I(d)2) and Treas. Reg. Section 1.860F-4(b)(2). The Servicer shall
report all required tax information to Mortgagors in accordance with applicable
law.
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The Prepayment Assumption (as such term is defined in the Prospectus,
dated as of March 18, 1997) for the Offered Certificates shall be 100% of the
"Standard Prepayment Assumption" assumption, with respect to the Fixed Rate
Group Certificates and 25% of the "Constant Prepayment Rate" assumption, with
respect to the Adjustable Rate Group Certificates, as described in the
Prospectus Supplement dated June 18, 1997 relating to the Offered Certificates.
Section 9.15. Taxpayer Identification Number. The Trustee shall prepare
and file with the Internal Revenue Service, on behalf of each REMIC Pool within
the time period prescribed therefor, an application on IRS Form SS-4 for such
REMIC Pool. The Trustee, upon receipt from the Internal Revenue Service of the
Notice of Taxpayer Identification Number assigned to each REMIC Pool, shall
promptly forward a copy of such notice to the Servicer.
Section 9.16 Miscellaneous REMIC Provisions.
(i) The Trustee shall elect that the REMIC IF, REMIC IA, REMIC
II, and the REMIC III shall be treated as REMICs under Section 860D of
the Code, as described in Section 9.11. Any inconsistencies or
ambiguities in this Agreement or in the administration of the Trust
shall be resolved in a manner that preserves the validity of such REMIC
elections.
(ii) The REMIC IF will be evidenced by (x) the Class IF-A and
Class IF-B Certificates (the "REMIC IF Regular Interests"), which will
be uncertificated and non-transferable and are hereby designated as the
"regular interests" in the REMIC IF and (y) the Class R-IF Certificate,
which is hereby designated as the single "residual interest" in the
REMIC IF (the REMIC IF Regular Interests, together with the Class R-IF
Certificate, the "REMIC IF Interests"). The REMIC IF Regular Interests
shall be recorded on the records of the REMIC IF as being issued to and
held by the Trustee on behalf of the REMIC II.
(iii) The REMIC IA will be evidenced by (x) the Class IA
Certificates (the "REMIC IA Regular Interests"), which will be
uncertificated and non-transferable and are hereby designated as the
"regular interests" in the REMIC IA and (y) the Class R-IA Certificate,
which is hereby designated as the single "residual interest" in the
REMIC IA (the REMIC IA Regular Interests, together with the Class R-IA
Certificate, the "REMIC IA Interests"). The REMIC IA Regular Interests
shall be recorded on the records of the REMIC IA as being issued to and
held by the Trustee on behalf of the REMIC II.
(iv) The REMIC II will be evidenced by (x) the Class II-AF,
Class II-1F, Class II-2F, Class II-3F, Class II-4F, Class II-5F, Class
II-6F, Class II-7F, Class II-8F, Class II-9F, Class II-MF, Class II-IO,
Class II-AA, Class II-1A, Class II-2A, Class II-3A, Class II-4A and
Class II-MA Certificates (the "REMIC II Regular Interests"), which will
be uncertificated and non-transferable and are hereby designated as the
"regular interests" in the REMIC II and (y) the Class R-II Certificate,
which is hereby designated as the single "residual interest" in the
REMIC II (the REMIC II Regular Interests, together with the Class R-II
Certificate, the "REMIC II Interests"). The REMIC II Regular Interests
shall be recorded on the records of the REMIC II as being issued to and
held by the Trustee on behalf of the REMIC III.
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(v) The Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class A-5,
Class ▇- ▇, Class A-IO, Class M-1F, Class M-2F, Class B-1F, Class A-1A,
Class M-1A, Class M-2A, Class B-1A, and Class C Certificates,
consisting of two components (the Class C-F Component and the Class C-A
Component as defined in footnote 5 below), are hereby designated as
"regular interests" with respect to the REMIC III and the Class R-III
Certificate is hereby designated as the single "residual interest" with
respect to the REMIC III.
(vi) The Class IF-A Certificates shall have an initial
principal balance equal to the initial principal balance of the Class
A-6 Certificates. The Class IF-B Certificates shall have an initial
principal balance equal to the aggregate initial principal balances of
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class M-1F,
Class M-2F and Class B-1F Certificates. On each Distribution Date
principal collections on the Fixed Rate Group shall be allocated as
follows: an amount equal to the principal payable on the Class A-6
Certificates shall be payable on the Class IF-A Certificates and the
remaining principal collections shall be allocated to the Class IF-B
Certificates. On each Distribution Date to the extent that Monthly
Excess Interest Amount is paid to the Class A-6 Certificates any amount
of interest otherwise payable on the Class IF-B Certificates shall
instead be paid as principal on the Class IF-A Certificates (and will
be accrued and added to principal on the Class IF-B Certificates.)
Realized Losses on the Fixed Rate Group shall be allocated as follows:
an amount equal to the Realized Losses allocable to the Class A-6
Certificates shall be allocable to the Class IF-A Certificates and the
remaining Realized Losses shall be allocable to the Class IF-B
Certificates. The Class IF-A and Class IF-B Certificates shall each
have Pass-Through Rates equal to the weighted net average Mortgage Loan
Rate of the Fixed Rate Group; provided, however, that the Pass-Through
Rates thereon, with respect to interest due thereon on the July 1997
Distribution Date shall be a rate equal to 9.732552% per annum. The
Class R-IF Certificates shall have no principal balance and no
pass-through rate and shall be entitled to only those distributable
assets, if any, remaining in the REMIC IF on each Distribution Date
after all amounts required to be distributed to the Class IF-A and
Class IF-B Certificates and applicable Trust expenses have been paid.
(vii) The Class IA Certificates shall have an initial
principal balance equal to the initial principal balance of the Class
A-1A, Class M-1A, Class M-2A and Class B-1A Certificates. On each
Distribution Date principal collections on the Adjustable Rate Group
shall be allocated to the Class IA Certificates. Realized Losses on the
Adjustable Rate Group shall be allocated to the Class IA Certificates.
The Class IA Certificates shall each have Pass-Through Rates equal to
the weighted net average Mortgage Loan Rate of the Adjustable Rate
Group; provided, however, that the Pass-Through Rates thereon, with
respect to interest due thereon on the July 1997 Distribution Date
shall be a rate equal to 8.825953% per annum. The Class R-IA
Certificates shall have no principal balance and no pass-through rate
and shall be entitled to only those distributable assets, if any,
remaining in the REMIC IA on each Distribution Date after all amounts
required to be distributed to the Class IA Certificates and applicable
Trust expenses have been paid.
(viii) For purposes of this Section 9.16, the "Fixed Rate
Turbo Amount" means with respect to any Distribution Date the amount of
any Extra Principal Distribution Amount
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for the Fixed Rate Group for such Distribution Date. Any Fixed Rate
Turbo Amount that is attributable to interest on the Fixed Rate Group
will not be paid to the REMIC II Regular Interests, but a portion of
the interest payable with respect to the Class II-MF Certificate which
equals 1% of the Fixed Rate Turbo Amount will be payable as a reduction
of the principal balances of the Class II-1F, Class II-2F, Class II-3F,
Class II-4F, Class II-5F, Class II-6F, Class II-7F, Class II-8 and
Class II-9 Certificates in the same manner in which the Fixed Rate
Turbo Amount is allocated among the Class A-1, Class A-2, Class A-3,
Class A- 4, Class A-5, Class ▇- ▇, Class M-1F, Class M-2F, Class B-1F
Certificates, respectively (and will be accrued and added to principal
on the Class II-MF Certificate). Principal payments on the Fixed Rate
Group shall be allocated 98% to the Class II-AF Certificate, 1% to the
Class II-MF Certificate and 1% to the Class II-1F, Class II-2F, Class
II-3F, Class II- 4F, Class II-5F, Class II-6F, Class II-7F, Class II-8F
and Class II-9F Certificates until paid in full. The aggregate amount
of principal allocated to the Class II-1F, Class II-2F, Class II- 3F,
Class II-4F, Class II-6F, Class II-7F, Class II-8F and Class II-9F
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 M-1F, Class M-2F,
Class B-1F Certificates, respectively. Notwithstanding the foregoing,
98% and 2% of any principal on the Fixed Rate Group that are
attributable to a Overcollateralization Release Amount attributable to
the Fixed Rate Group shall be allocated to the Class II-AF and Class
II-MF Certificates, respectively, until paid in full. Realized Losses
on the Fixed Rate Group shall be applied such that after all
distributions have been made on such Distributable Date the following
REMIC II Regular Interests have the following principal balances: Class
II-AF-98% of the principal balances of the Fixed Rate Group, Class
II-1F- 1% of the principal balance of the Class A-1 Certificates, Class
II-2F-1% of the principal balance of the Class A-2 Certificates, Class
II-3F-1% of the principal balance of the Class A-3 Certificates, Class
II-4F-1% of the principal balance of the Class A-4 Certificates, Class
II-5F-1% of the principal balance of the Class A-5 Certificates, Class
II-6F-1% of the principal balance of the Class A-6 Certificates, Class
II-7F-1% of the principal balance of the Class M-1F Certificates, Class
II-8F-1% of the principal balance of the Class M-2F Certificates, Class
II-9F-1% of the principal balance of the Class B-1F Certificates and
Class II-MF the principal balance of the Fixed Rate Group less an
amount equal to the sum of the principal balances of the Class II-AF,
Class II-1F, Class II-2F, Class II-3F, Class II-4F, Class II-5F, Class
II-6F, Class II-7F, Class II-8F and Class II-9F Certificates.
Similarly, for purposes of this Section 9.16, the "Adjustable
Rate Turbo Amount" means with respect to any Distribution Date the amount of any
Extra Principal Distribution Amount for the Adjustable Rate Group for such
Distribution Date. Any Adjustable Rate Turbo Amount that is attributable to
interest on the Adjustable Rate Group will not be paid to the REMIC II Regular
Interests, but a portion of the interest payable with respect to the Class II-MA
Certificate which equals 1% of the Adjustable Rate Turbo Amount will be payable
as a reduction of the principal balances of the Class II-1A, Class II-2A, Class
II-3A and Class II-4A Certificates in the same manner in which the Adjustable
Rate Turbo Amount is allocated among the Class A-1A, Class M-1A, Class M-2A, and
Class B-1A, respectively (and will be accrued and added to principal on the
Class II-MA Certificate). Principal payments on the Adjustable Rate Group shall
be allocated 98% to the Class II-AA Certificates, 1% to the Class II-MA
Certificates, and 1% to the Class II-1A,
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Class II-2A, Class II-3A and Class II-4A Certificates until paid in full. The
aggregate amount of principal allocated to the Class II-1A, Class II-2A, Class
II-3A, and Class II-4A Certificates shall be apportioned among such Classes in
the same manner in which principal is payable with respect to the Class A-1A,
Class M-1A, Class M-2A and Class B-1A Certificates, respectively.
Notwithstanding the foregoing, 98% and 2% of any principal payments on the
Adjustable Rate Group that are attributable to an Adjustable Rate Subordination
Reduction Amount shall be allocated to the Class II-AA and Class II-MA
Certificates, respectively, until paid in full. Realized Losses on the
Adjustable Rate Group shall be applied such that after all distributions have
been made on such Distributable Date the following REMIC II Regular Interests
have the following principal balances: Class II-AA-98% of the principal balances
of the Adjustable Rate Group, Class II-1A-1% of the principal balance of the
Class A-1A Certificates, Class II-2A-1% of the principal balance of the Class
M-1A Certificates, Class II-3A-1% of the principal balance of the Class M-2A
Certificates, Class II-4A-1% of the principal balance of the Class B-1A
Certificates and Class II-MA-2% of the principal balance of the Adjustable Rate
Group less an amount equal to the sums of the principal balances of the Class
II-AA, Class II-AI, Class II-2A, Class II-3A and Class II-4A Certificates.
The REMIC II Interests will have the following designations
and pass-through rates, and distributions of principal and interest thereon
shall be allocated to the Certificates in the following manner:
REMIC II INITIAL PASS-THROUGH ALLOCATION ALLOCATION
INTERESTS BALANCE RATE OF PRINCIPAL OF INTEREST
--------- ------- ---- ------------ -----------
II-AF $186,200,000.00 (1) (3) (4), (5a)
II-1F $710,000.00 (1) (3) (4), (5a)
II-2F $105,000.00 (1) (3) (4), (5a)
II-3F $392,500.00 (1) (3) (4), (5a)
II-4F $97,500.00 (1) (3) (4), (5a)
II-5F $139,000.00 (1) (3) (4), (5a)
II-6F $190,000.00 (1) (3) (4), (5a)
II-7F $85,500.00 (1) (3) (4), (5a)
II-8F $114,000.00 (1) (3) (4), (5a)
II-9F $66,500.00 (1) (3) (4), (5a)
II-MF $1,900,000.00 (1) (3) (4), (5a)
II-AA $303,800,000.00 (2) (3) (4), (5b)
II-1A $2,418,000.00 (2) (3) (4), (5b)
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REMIC II INITIAL PASS-THROUGH ALLOCATION ALLOCATION
INTERESTS BALANCE RATE OF PRINCIPAL OF INTEREST
--------- ------- ---- ------------ -----------
II-2A $255,750.00 (2) (3) (4), (5b)
II-3A $255,750.00 (2) (3) (4), (5b)
II-4A $170,500.00 (2) (3) (4), (5b)
II-MA $3,100,000.00 (2) (3) (4), (5b)
II-IO $0.00 (1) N/A Class A-IO
Class R-II Certificate $0.00 N/A N/A N/A (6)
-------------
(1) The pass-through rate ("Pass-Through Rate") on these REMIC II Regular
Interests shall at any time of determination equal the weighted average
of the Class IF-B Pass-Through Rate and the excess of the Class IF-A
Pass-Through Rate over (a) 5.5% for the first 36 Distribution Dates and
(b) 0.0% thereafter. Interest on the Class II-IO will equal 5.5% per
annum of the principal balance of the Class IF-A Certificate for the
first 36 Distribution Dates and 0.0% thereafter. If there are any
prepayment interest shortfalls with respect to a Fixed Rate Group not
covered by Compensating Interest for the Fixed Rate Group, such
shortfall will proportionally reduce the interest accrued on the Class
II-AF, Class II-1F, Class II-2F, Class II-3F, Class II-4F, Class II-5F,
Class II-6F, Class II-7F, Class II-8F, Class II-9F, Class II-MF, Class
II-IO Certificates.
(2) The pass-through rate ("Pass-Through Rate") on these REMIC II Regular
Interests shall at any time of determination equal the weighted net
average Mortgage Loan Rate in the Adjustable Rate Group. If there are
any prepayment interest shortfalls with respect to the Adjustable Rate
Group not covered by Compensating Interest for the Adjustable Rate
Group, such shortfall will proportionally reduce the interest accrued
on the Class II-AA, Class II-1A, Class II-2A, Class II-3A, Class II-4A
and Class II-MA Certificates.
(3) Principal attributable to the Fixed Rate Group 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 M-1F, Class M-2F, Class B-1F Certificates in the
same proportion as principal is payable with respect to such
Certificates pursuant to Section 5.01, except that a portion of such
principal in an amount equal to the Fixed Rate Overcollateralization
Release Amount shall be allocated to the Class C Certificates until the
balance thereof is zero and all principal will be allocated to the
Class C Certificates after the Certificate Principal Balance of the
Fixed Rate Certificates has been reduced to zero.
Similarly, principal attributable to the Adjustable Rate Group will be
allocated to the Class A-1A, Class M-1A, Class M-2A and Class B-1A
Certificates in the same amount as principal is payable with respect to
such Certificates pursuant to Section 5.01, except that a portion of
such principal in an amount equal to the Adjustable Rate
Overcollateralization Release Amount shall be allocated to the Class C
Certificates until the balance thereof is zero and all principal will
be allocated to the Class C Certificates after the Certificate
Principal Balance of the Adjustable Rate Certificates has been reduced
to zero.
(4) Except as provided in Note 5, interest on the Class II-AF, Class II-1F,
Class II-2F, Class II-3F, Class II-4F, Class II-5F, Class II-6F, Class
II-7F, Class II-8F, Class II-9F and Class II-M Certificates will be
allocated
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among the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class A-5, Class
▇- ▇, Class M-1F, Class M-2F, Class B-1F Certificates in the same
proportion as interest is payable on such Certificates pursuant to
Section 5.01(a).
Similarly, except as provided in Note 5, interest on the Class II-AA
Certificates, Class II-1A, Class II-2A, Class II-3A, Class II-4A and
Class II-MA Certificates will be allocated to the Class A-1A, Class
M-1A, Class M-2A and Class B-1A Certificates in the same proportion as
interest is payable on such Certificates pursuant to Section 5.01(a).
(5) (a) Any interest with respect to this REMIC II Interest in excess
of the product of (i) two times the weighted average coupon of
the Class II-1F, Class II-2F, Class II-3F, Class II-4, Class
II-5F, Class II-6F, Class II-7F, Class II-8F, Class II-9F and
Class II-MF Certificates, where each of such Classes, other
than the Class II-MF Certificate, is first subject to a cap
and floor equal to the Class ▇- ▇, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class M-1F, Class M-2F, Class B-1F
Pass-Through Rates, respectively, and the Class II-MF
Certificate is subject to a cap equal to 0%, and (ii) the
principal balance of this REMIC II Interest, shall not be
allocated to the Fixed Rate Certificates but will be allocated
to the Class C Certificates as a separate component (the
"Class C-F Component").
(b) Any interest with respect to this REMIC II Interest in excess
of the product of (i) two times the weighted average coupon of
the Class II-1A, Class II-2A, Class II-3A, Class II-4A and
Class II-MA Certificates, where the Class II-1A, Class II-2A,
Class II-3A and Class II-4A is first subject to a cap and
floor equal to the Class A-1A, Class M-1A, Class M-2A and
Class B-1A Pass-Through Rate, and the Class II-MA Certificate
is subject to a cap equal to 0%, and (ii) the principal
balance of this REMIC II Interest, shall not be allocated to
the Adjustable Rate Certificates but will be allocated to the
Class C Certificates as a separate component (the "Class C-A
Component").
(6) On each Distribution Date, available funds, if any, remaining in the
REMIC II after payments of interest and principal, as designated above,
will be distributed to the Class R-II Certificate. On each Distribution
Date, available funds, if any, remaining in the REMIC III after
payments of interest and principal on the Certificate (other than the
Class R-III Certificates) will be distributed to the Class R-III
Certificates
(7) On each Distribution Date with respect to a Mortgage Loan Group, to the
extent that any related Monthly Excess Interest Amount is applied to
cover Carry Forward Shortfalls on the related Class A Certificates and
the interest allocable to the related Class C Component is not
otherwise reduced for such amount due to an allocation of Realized
Losses, the related Class C Component shall be reduced.
(ix) The Startup Day is hereby designated as the "startup day"
of each of REMIC IF, REMIC IA, REMIC II, REMIC III within the meaning
of Section 860G(a)(9) of the Code. The "latest possible maturity date"
for purposes of Treasury Regulation Section 1.860G-1(a)(4)(iii) for the
regular interests are as follows: for the Class A-1 Certificates, the
Payment Date in May, 2013; for the Class A-2 Certificates, the Payment
Date in August, 2016; for the Class A-3 Certificates, the Payment Date
in August 2024; for the Class A-4 Certificates, the Payment Date in
November, 2025; for the Class A-5 Certificates, the Payment Date in
June, 2027; for the Class A-6 Certificates, the Payment Date in June,
2027; for the Class A-IO Certificates, the Payment Date in July, 2000;
for the Class M-1F Certificates, the Payment Date in June, 2027; for
the Class M-2F Certificates, the Payment Date in June, 2027; for the
Class B-1F Certificates, the Payment Date in June, 2027; for the Class
A-1A Certificates, the Payment Date in June, 2027; for the Class M-1A
Certificates, the Payment Date in June, 2027; for the Class M-2A
Certificates, the Payment Date in June 2027; for the Class B-1A
Certificates, the Payment Date in June, 2027 and for the
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REMIC IF Regular Interests, REMIC 1A Regular Interests and REMIC II
Regular Interests, the Payment Date in June, 2027.
ARTICLE TEN
TERMINATION
Section 10.01. Termination Upon Purchase or Liquidation of Mortgage
Loans. Subject to Section 10.02, the respective obligations and responsibilities
hereunder of the Servicer, the Seller and the Trustee (other than the obligation
of the Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Seller to send certain notices as
hereinafter set forth) and the Trust created hereby shall terminate with respect
to all Certificates or either the Fixed Rate Group Certificates or Adjustable
Rate Group Certificates, respectively, upon the last action required to be taken
by the Trustee on the final Distribution Date pursuant to this Article following
the earlier of (a) the purchase by the Servicer of all Mortgage Loans or all
Mortgage Loans in the Fixed Rate Group or the Adjustable Rate Group, and all
property acquired in respect of any such Mortgage Loan remaining in the Trust at
a price equal to the sum of (x) 100% of the Principal Balance of each such
Mortgage Loan (other than any Mortgage Loan as to which title to the underlying
Mortgaged Property has been acquired and whose fair market value is included
pursuant to clause (y) below) as of the final Distribution Date, and (y) the
fair market value of such acquired Mortgaged Property (determined as described
below), plus accrued and unpaid interest at the applicable Mortgage Loan Rate on
the Principal Balance of each such Mortgage Loan (including any Mortgage Loan as
to which title to the underlying Mortgaged Property has been acquired) through
the end of the Collection Period preceding the date of repurchase and the
aggregate amount of unreimbursed Servicing Advances made in respect of any such
Mortgage Loan, less any payments of principal and interest received during such
Collection Period in respect of each such Mortgage Loan, or (b) the final
payment or other liquidation of the Principal Balance of the last Mortgage Loan
remaining in the Trust or either Mortgage Loan Group or the disposition of all
property remaining in the Trust or either Mortgage Loan Group acquired upon
foreclosure or deed in lieu of foreclosure of any such Mortgage Loan; provided,
however, that in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St.
▇▇▇▇▇, who are living on the Closing Date. The fair market value of Mortgaged
Properties pursuant to the foregoing clause (y) shall be determined by the
Servicer as of the close of business on the third Business Day next preceding
the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the third paragraph of this Section 10.01.
The right of the Servicer to purchase all outstanding Mortgage Loans or
all Mortgage Loans in the Fixed Rate Group or the Adjustable Rate Group,
pursuant to clause (a) above is exercisable only on or after the related
Clean-up Call Date. If such right is exercised, the Servicer shall remit the
purchase price specified in this Section to the Trustee for deposit in the
Certificate Account pursuant to Section 3.02 (e) on or before the related
Deposit Date and the Trustee, if it has received the Mortgage Files pursuant to
Section 2.01, shall, promptly following remittance of such purchase price,
release to the Servicer the Mortgage Files pertaining to the Mortgage Loans
being purchased
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and all other documents furnished by the Servicer as are necessary to transfer
the Trustee's interest in the Mortgage Loans to the Servicer.
Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
related Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation shall be given promptly by
the Trustee (upon receipt of written directions from the Servicer, if the
Servicer is exercising its right to purchase such assets of the Trust as
provided above, given not later than the 15th day of the month preceding the
month of such final distribution) by letter to the Certificateholders mailed not
earlier than the first day and not later than the 10th day of the month of such
final distribution specifying (a) the Distribution Date upon which final
distribution of the related Certificates will be made upon presentation and
surrender of such Certificates at the office or agency of the Trustee therein
designated, (b) the amount of any such final distribution and (c) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of such
Certificates at the office or agency of the Trustee therein specified. In the
event written directions are delivered by the Servicer to the Trustee as
described in the preceding sentence, the Servicer shall deposit in the
Certificate Account on or before the related Deposit Date for such final
distribution in immediately available funds an amount equal to the purchase
price for such assets of the Trust computed as above provided. Any such deposit
by the Servicer shall be in lieu of the deposit otherwise required to be made in
respect of such Distribution Date pursuant to Section 3.02 and the related
distribution thereof to the Certificateholders.
If the termination of the Trust or repurchase of either Mortgage Loan
Group is in connection with a purchase of the assets of the Trust by the
Servicer pursuant to clause (a) of the first paragraph in this Section, the
Trustee shall cause to be distributed to related Certificateholders on the final
Distribution Date an amount equal to (i) as to the Fixed Rate Group
Certificates, and upon presentation and surrender of the related Certificates,
in proportion to their respective Percentage Interests the related Aggregate
Certificate Principal Balance, and the Monthly Interest, (ii) as to the
Adjustable Rate Group Certificates, and upon presentation and surrender of the
related Certificates, in proportion to their respective Percentage Interests,
the related Aggregate Certificate Principal Balance and Monthly Interest, (iii)
as to the Servicer, any additional servicing compensation with respect to such
Distribution Date (other than amounts retained to meet claims) after application
pursuant to the clauses (i) and (ii) above and payment to the Servicer of any
amounts to which it is entitled as reimbursement hereunder and (iv) as to the
Class C Certificateholders and upon presentation and surrender of the Class C
Certificate, any amounts remaining after application pursuant to the preceding
clauses (i) through (iii); provided, however, that if the fair market value of
any acquired property referred to in, or covered by, clause (a)(y) of the first
paragraph of this Section is less than the Principal Balance of the related
Mortgage Loan, then the excess of such Principal Balance over such fair market
value shall be allocated in reduction of the amounts otherwise distributable on
the final Distribution Date in the following order of priority: first, to the
Holders of the Class R Certificates, second to the Holders of the Class C
Certificate and third to the Holders of the related Offered Certificates, pro
rata based on the Certificate Principal Balances thereof on such Distribution
Date. The distribution on the final Distribution Date in connection with the
purchase by the Servicer of the assets in the Trust shall be in lieu of the
distribution otherwise
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required to be made on such Distribution Date in respect of each Class of
Certificates. The Servicer shall provide in writing to the Trustee the
information with respect to the amounts so to be paid.
In the event that all of the Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before the fifth day
following such final Distribution Date, the Trustee shall on such date cause all
funds in the Certificate Account not distributed in the final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by holding such funds uninvested in a separate escrow account
for the benefit of such Certificateholders and the Servicer (if the Servicer
exercised its right to purchase the assets of the Trust as provided above) or
the Trustee (in any other case) shall give a second written notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice all the Certificates shall not have been surrendered for
cancellation, any funds deposited in such escrow account and remaining unclaimed
shall be paid by the Trustee to the Servicer and thereafter Certificateholders
shall look only to the Servicer with respect to any claims in respect of such
funds.
Section 10.02. Additional Termination Requirements. In the event the
Servicer exercises its purchase option as provided in Section 10.01, each REMIC
Pool shall be terminated in accordance with the following additional
requirements, and the Trustee shall receive an Opinion of Counsel to the effect
that the termination of such REMIC Pool (i) will constitute a "qualified
liquidation" of each REMIC Pool within the meaning of Code Section
860F(a)(4)(A), and (ii) will not subject such REMIC Pool to tax or cause such
REMIC Pool to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
(i) Within 90 days prior to the final Distribution Date set forth
in the notice of intention to purchase the Mortgage Loans of a Mortgage Loan
given by the Servicer under Section 10.01, the Trustee, at the direction of the
Servicer, shall adopt a plan of complete liquidation of each REMIC Pool being
liquidated on behalf of the related REMIC within the meaning of Code Section
860F(a)(4)(A)(8), which shall be evidenced by such notice; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Trustee shall
sell all of the assets of each REMIC Pool being liquidated to the Servicer for
cash at the purchase price specified in Section 10.01 and shall distribute such
cash in the manner specified in Section 10.01.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment. This Agreement may be amended from time to
time by the Servicer, the Seller and the Trustee, without the consent of any of
the Certificateholders, (a) to cure any error or any ambiguity or to correct or
supplement any provisions herein which may be inconsistent with any other
provisions herein; (b) to add to the duties or obligations of the Servicer
hereunder; (c) to maintain or improve any rating then assigned by any Rating
Agency to any of the Certificates; or (d) to add any other provisions with
respect to matters or questions arising under this Agreement, as the case may be
(including specifically amendments or supplements pursuant to the
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second paragraph of Section 6.02(b)); (e) to modify, eliminate or add to any of
its provisions to such extent as shall be necessary to maintain the
qualification of any REMIC Pool as a REMIC at all times that any Certificates
are outstanding or to avoid or minimize the risk of the imposition of any tax on
any REMIC Pool pursuant to the Code that would be a claim against such REMIC
Pool, provided that in the case of this clause (e) the Trustee has received an
Opinion of Counsel to the effect that such action is necessary or desirable to
maintain such qualification or to avoid or minimize the risk of the imposition
of any such tax; or (f) to modify, eliminate or add to the provisions of Section
6.02(c) or any other provisions hereof restricting transfer of Class R
Certificates; provided that in all such cases the Trustee has obtained written
confirmation from each Rating Agency that any such modifications to this
Agreement will not result in a qualification, reduction or withdrawal of the
rating assigned to any Class of Offered Certificates by such Rating Agency and
has received an Opinion of Counsel to the effect that any such modifications to
this Agreement do not give rise to a risk that any REMIC Pool or any of the
Certificateholders will be subject to a tax caused by a transfer to a
Disqualified Organization; provided, further, that in all such cases such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder.
This Agreement may also be amended from time to time by the Servicer,
the Seller and the Trustee, with the consent of the Holders of Certificates
evidencing Voting Interests of each Class affected thereby aggregating not less
than 51%, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Holders of Certificates of such Class; provided,
however, that no such amendment shall (a) reduce in any manner the amount of, or
delay the timing of, collections of payments on Mortgage Loans or distributions
which are required to be made on any Certificate without the consent of the
Holder of such Certificate or (b) reduce the aforesaid percentage of each Class
the Holders of which are required to consent to any such amendment, without the
consent of the Holders of all Certificates of such Class then outstanding.
Promptly after the execution of any such amendment or consent pursuant
to the next preceding paragraph, the Trustee shall furnish written notification
of the substance of such amendment to each affected Certificateholder and each
Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement and the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment that affects the Trustee's own rights, duties or immunities under this
Agreement.
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Section 11.02. Recordation of Agreement. This Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected by the Servicer, at its
expense but only upon, determination of the Servicer accompanied by an Opinion
of Counsel to the effect that such recordation is legally required to protect
the Trustee's interest in the Mortgage Loans.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement, the Trust or any REMIC established pursuant to Section 3.01, nor
entitle such Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court for a
partition or winding up of the Trust or any REMIC established pursuant to
Section 3.01, nor otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
Except as otherwise expressly provided herein, no Certificateholder,
solely by virtue of its status as a Certificateholder, shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust or any REMIC established pursuant to Section 3.01, or the obligations of
the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
No Certificateholder, solely by virtue of its status as a
Certificateholder, shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates evidencing Voting Interests represented by all
Certificates (or all affected Certificates, as appropriate) aggregating not less
than 51% shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Certificateholder with every other Certificateholder and the Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provision of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common
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benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 11.04. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of California (without regard to conflict
of laws principles and the application of the laws of any other jurisdiction),
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
Section 11.05. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to (a) in the case of the Seller and the Servicer, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇; (b) in
the case of the Trustee, at the Corporate Trust Office at ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Aames Capital Corporation, Series
1997-B; (c) in the case of Standard & Poor's, to Standard & Poor's Ratings
Group, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage
Surveillance Group; (d) in the case of Fitch, to Fitch Investors Service, Inc.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage
Surveillance Group; and (e) in the case of Moody's, to ▇▇▇▇▇'▇ Investors Service
Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential
Mortgage Pass-Through Monitoring, or, as to each party, at such other address as
shall be designated by such party in a written notice to each other party. Any
notice required or permitted to be mailed to a Certificateholder shall be given
by first class mail, postage prepaid, at its address shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice. Any notice or other document required to
be delivered or mailed by the Trustee to any Rating Agency shall be given on a
best efforts basis and only as a matter of courtesy and accommodation and the
Trustee shall have no liability for failure to deliver such notice or document
to any such Rating Agency.
Section 11.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 11.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 7.02, 7.04 and 7.05, this
Agreement may not be assigned by the Seller or the Servicer without the prior
written consent of the Holders of Certificates evidencing not less than 66% of
the Voting Interests of all Certificates.
111
117
Section 11.08. Certificates Nonassessable and Fully Paid. The parties
agree that the Certificateholders shall not be personally liable for obligations
of the Trust, that the beneficial ownership interests represented by the
Certificates shall be nonassessable for any losses or expenses of the Trust or
for any reason whatsoever, and that Certificates upon execution, authentication
and delivery thereof by the Trustee pursuant to Section 2.06 are and shall be
deemed fully paid.
[Signatures follow.]
112
118
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers, all as of the day and year first
above written.
AAMES CAPITAL CORPORATION,
as Seller and Servicer
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee and not in its
individual capacity
By: /s/▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
113
119
State of California )
) ss.:
County of Los Angeles )
On the 25th day of June 1997, before me, a notary public in and for of
the State of California, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in the capacity or capacities indicated in the within
instrument, and that by his signature on the instrument the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------
Notary Public
[Notary Seal]
114
120
State of California )
) ss.:
County of Los Angeles )
On the 25th day of June 1997, before me, a notary public in and for of
the State of California, personally appeared ▇▇▇▇ ▇▇▇▇▇▇, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that she
executed the same in the capacity or capacities indicated in the within
instrument, and that by her signature on the instrument the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------
Notary Public
[Notary Seal]
115
121
Schedule I
List of Sub-Servicers
Advanta Mortgage Corp. USA
Wendover Funding, Inc.
Schedule I
122
Schedule II
Representations and Warranties of the Seller
Regarding Subsequent Mortgage Loans
A. The Seller represents and warrants to the Trustee and the
Certificateholders as of any Subsequent Transfer Date (except as
otherwise expressly stated) that as to each Subsequent Mortgage Loan
conveyed to the Trust by it:
(i) no Subsequent Mortgage Loan provides for negative
amortization;
(ii) with respect to the Adjustable Rate Group each Subsequent
Mortgage Loan that has an Index based on 6-month LIBOR (a) if
such Mortgage Loan has an initial Adjustment Date not more
than six months from the date of origination, then the related
Mortgage Note provides for a rate cap of 1% to 1.5% every six
months, (b) if such Mortgage Loan has an initial Adjustment
Date of five months, six months, one year or two years from
the date of origination, then the related Mortgage Note
provides for a rate cap as to its first Adjustment Date of
from 1.0% to 3.0% and a rate cap as to each subsequent
Adjustment Date of from 1.0% to 1.5%; any subsequent Mortgage
Loan that has an Index based on the one year CMT index
provides for a 2.0% annual rate cap;
(iii) no Subsequent Mortgage Loan has a Gross Margin less than
2.501%;
(iv) each Subsequent Mortgage Loan will have been serviced by the
Servicer or a Sub-Servicer since origination or purchase by
the Servicer;
(v) no Subsequent Mortgage Loan has been originated for the
purpose of facilitating the purchase of real estate owned by
the originator; and
(vi) no Subsequent Mortgage Loan will have a Cut-off Date of later
than July 1, 1997.
B. The Seller represents and warrants to the Trustee and the
Certificateholders, that following the purchase of all Subsequent
Mortgage Loans by the Trust and the assignment of such Subsequent
Mortgage Loans to the appropriate Mortgage Loan Group, as of the end of
the Commitment Period:
(i) the Mortgage Loans in the Fixed Rate Group (including the
Subsequent Mortgage Loans):
(a) will have a weighted average Mortgage Loan Rate of at
least 10.00%;
Schedule II-1
123
(b) will have a weighted average original term to stated
maturity of not more than 297 months;
(c) will have a weighted average Combined Loan-to-Value
Ratio of not more than 70% and a weighted average
second loan-to-value ratio of not more than 66%;
(d) will have no Mortgage Loan with a Principal Balance
less than $10,000 or greater than $500,000;
(e) will not have in excess of 10% by Aggregate Principal
Balance of Mortgage Loans secured by non-owner
occupied Mortgaged Properties;
(f) will not have a concentration in a single ZIP code in
excess of 0.75% by Aggregate Principal Balance;
(g) will not have an aggregate concentration in excess of
0.60% by Aggregate Principal Balance in ZIP codes
beginning with the following three digits: 900-919,
922-925, 930-931 and 935;
(h) will not have a concentration in a single State,
other than California, Florida, Washington, Colorado
or Oregon in excess of 5% by Aggregate Principal
Balance;
(i) will not have a concentration in California in excess
of 23.00%, in Florida in excess of 11.00%, in
Washington in excess of 8.00%, in Colorado in excess
of 6.00% or in Oregon in excess of 6.00% by Aggregate
Principal Balance;
(j) will not have in excess of 8.00% or 4.00% by
Aggregate Principal Balance of Mortgage Loans secured
by Mortgaged Properties that are two family
properties or condominiums (less than four stories),
three and four family properties or condominiums
(greater than four stories), respectively, and will
have none secured by mobile homes treated as real
estate under applicable state law;
(k) will have at least 89.87% by Aggregate Principal
Balance of Mortgage Loans secured by fee simple
interests in detached single family dwelling units
(including units in de minimis planned unit
developments);
(l) will have no more than 0.10% by Aggregate Principal
Balance Mortgage Loans that are based on a 360-month
amortization schedule with balloon payments prior to
month 60;
Schedule II-2
124
(m) will have no more than 0.10% by Aggregate Principal
Balance of Mortgage Loans that are based on a
360-month amortization schedule and have a balloon
payment between months 121-150;
(n) will have no more than 4.00% by Aggregate Principal
Balance of Mortgage Loans that are based on a
360-month amortization schedule and have a balloon
payment between month 151-180; and
(o) will have no more than 1.00% by Aggregate Principal
Balance of Mortgage Loans that are based on a
360-month amortization schedule and have a balloon
payment between month 181-240;
(p) will have no less than 95.50% by Aggregate Principal
Balance of Mortgage Loans that provide for the
payment of principal and interest on a level basis to
fully amortize such Mortgage Loan over its stated
maturity; and
(q) will have a weighted average term since origination
not in excess of three months.
(ii) the Mortgage Loans in the Adjustable Rate Group (including the
Subsequent Mortgage Loans):
(a) will have a weighted average Mortgage Loan Rate of at
least 9.45%;
(b) will have a weighted average original term to stated
maturity of not more than 359 months;
(c) will have a weighted average Loan-to-Value Ratio of
not more than 75.00%;
(d) will have no Mortgage Loan with a Principal Balance
less than $10,000 or more than $600,000;
(e) will have not in excess of 10% by Aggregate Principal
Balance of Mortgage Loans secured by non-owner
occupied Mortgage Properties;
(f) will not have a concentration in a single ZIP code in
excess of 0.75% by Aggregate Principal Balance;
(g) will not have an aggregate concentration in excess of
0.50% in ZIP codes beginning with the following three
digits: 900-919, 922-925, 930, 931, 935;
Schedule II-3
125
(h) will not have a concentration in a single State,
other than California, Utah, Washington, Florida,
Colorado or Georgia in excess of 5% by Aggregate
Principal Balance;
(i) will not have a concentration in California in excess
of 21.00%, in Utah in excess of 7.00%, in Washington
in excess of 6.50%, in Florida in excess of 6.00%, in
Colorado in excess of 6.00% or in Georgia in excess
of 5.50% by Aggregate Principal Balance;
(j) will not have in excess of 9.00% or 6.50% by
Aggregate Principal Balance Mortgage Loans secured by
Mortgaged Properties that are two family properties
or condominiums (less than four stories) and three
and four family properties or condominiums (greater
than four stories), respectively, and none will be
secured by mobile homes or manufactured housing
treated as real estate under applicable state law;
(k) will have at least 90.50% by Aggregate Principal
Balance Mortgage Loans secured by fee simple
interests in detached single family dwelling units
(including units in de minimis planned unit
development);
(l) will have a weighted average margin of at least
6.00%;
(m) will have no more than 0.20% by Aggregate Principal
Balance Mortgage Loans that are not based on a
360-month amortization schedule of level payments;
(n) will have a weighted average term since origination
not in excess of three months.
For purposes of this Schedule II, "Aggregate Principal Balance" means
the aggregate of the Principal Balances of the Mortgage Loans (determined as of
the Cut-off Date for the Initial Mortgage Loans and as of the Subsequent Cut-off
Date for the Subsequent Mortgage Loans) in the related Mortgage Loan Group.
Schedule II-4
126
Schedule III
Schedule of Restricted Mortgage Loans
Schedule III-1
127
EXHIBIT A
FORMS OF CERTIFICATES
A-1
128
CLASS A-1 CERTIFICATE
Date of Pooling and Servicing Initial Class A-1 Certificate
Agreement and Cut-off Date: Balance: $71,000,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CN 5
July 15, 1997
Denomination: $71,000,000 Certificate No.: 1
Class A-1 Pass-Through Rate: 6.41%
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS A-1
evidencing a percentage interest in the distributions allocable
to the Class A-1 Certificates with respect to a Trust consisting
primarily of a pool of conventional, closed-end, fixed and
adjustable rate, residential mortgage loans, sold and serviced
by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-1
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate
A-1
129
represents an interest in the group of fixed rate Mortgage Loans. The Trust was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") between the Seller and Servicer and Bankers Trust Company of
California, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class A-1 Accrued
Certificate Interest and any amounts distributed to Class A-1 Certificateholders
in respect of principal as more specifically set forth in the Agreement.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class A-1" (herein called the "Class A-1 Certificates") and representing
a beneficial ownership interest, in each case subject to the limitations set
forth in the Agreement in, among other things, the Mortgage Loans, such assets
as shall from time to time be identified or shall be required by the Agreement
to be identified as deposited in the Collection and/or Certificate Account or
invested in Permitted Investments in accordance with the Agreement, all rights
under any insurance policy covering a Mortgage Loan or the related Mortgaged
Property and property and any proceeds thereof which secured a Mortgage Loan and
which has been acquired by foreclosure, deed in lieu of foreclosure or by a
comparable conversion.
The Class A-1 Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Fixed Rate Group and, in certain limited
circumstances, the Adjustable Rate Group allocable to Class A-1
Certificateholders and that the Trustee in its
A-2
130
individual capacity is not personally liable to the Certificateholders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan
A-3
131
remaining in the Trust or the disposition of all property acquired upon
foreclosure or by deed in lieu of foreclosure of any Mortgage Loan. The exercise
of the right of the Servicer to purchase all the Mortgage Loans and property in
respect of all Mortgage Loans in the related Mortgage Loan Group or all Mortgage
Loans in the Trust will result in early retirement of the Certificates. The
right of the Servicer to purchase the Mortgage Loans in either Mortgage Loan
Group is subject to the Principal Balances of such Mortgage Loans at the time of
purchase being less than 10% of the sum of the Principal Balances of such
Mortgage Loans at the Cut-off Date plus the portion of the Purchase Account
Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-4
132
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class A-1
Certificates referred to in
the within named Agreement
By:______________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-5
133
CLASS A-2 CERTIFICATE
Date of Pooling and Servicing Initial Class A-2 Certificate
Agreement and Cut-off Date: Balance: $10,500,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CP 0
July 15, 1997
Denomination: $10,500,000 Certificate No.: 1
Class A-2 Pass-Through Rate: 6.52%
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS A-2
evidencing a percentage interest in the distributions allocable
to the Class A-2 Certificates with respect to a Trust consisting
primarily of a pool of conventional, closed-end, fixed and
adjustable rate, residential mortgage loans, sold and serviced
by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-2
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer
A-6
134
under the Agreement referred to below). The Percentage Interest evidenced by
this Certificate represents an interest in the group of fixed rate Mortgage
Loans. The Trust was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") between the Seller and Servicer and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class A-2 Accrued
Certificate Interest and principal distributable thereon, as more specifically
set forth in the Agreement.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class A-2" (herein called the "Class A-2 Certificates") and representing
a beneficial ownership interest, in each case subject to the limitations set
forth in the Agreement in, among other things, the Mortgage Loans, such assets
as shall from time to time be identified or shall be required by the Agreement
to be identified as deposited in the Collection and/or Certificate Account or
invested in Permitted Investments in accordance with the Agreement, all rights
under any insurance policy covering a Mortgage Loan or the related Mortgaged
Property and property and any proceeds thereof which secured a Mortgage Loan and
which has been acquired by foreclosure, deed in lieu of foreclosure or by a
comparable conversion.
The Class A-2 Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Fixed Rate Group and, in certain limited
circumstances, the Adjustable Rate Group allocable to Class A-2
Certificateholders and that the Trustee in its individual
A-7
135
capacity is not personally liable to the Certificateholders for any amount
payable under this Certificate or the Agreement or, except as expressly provided
in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan
A-8
136
remaining in the Trust or the disposition of all property acquired upon
foreclosure or by deed in lieu of foreclosure of any Mortgage Loan. The exercise
of the right of the Servicer to purchase all the Mortgage Loans and property in
respect of all Mortgage Loans in the related Mortgage Loan Group or all Mortgage
Loans in the Trust will result in early retirement of the Certificates. The
right of the Servicer to purchase the Mortgage Loans in either Mortgage Loan
Group is subject to the Principal Balances of such Mortgage Loans at the time of
purchase being less than 10% of the sum of the Principal Balances of such
Mortgage Loans at the Cut-off Date plus the portion of the Purchase Account
Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
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137
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class A-2
Certificates referred to in
the within named Agreement
By:_____________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-10
138
CLASS A-3 CERTIFICATE
Date of Pooling and Servicing Initial Class A-3 Certificate
Agreement and Cut-off Date: Balance: $39,250,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CQ 8
July 15, 1997
Denomination: $39,250,000 Certificate No.: 1
Class A-3 Pass-Through Rate: 6.68%
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS A-3
evidencing a percentage interest in the distributions allocable
to the Class A-3 Certificates with respect to a Trust consisting
primarily of a pool of conventional, closed-end, fixed and
adjustable rate, residential mortgage loans, sold and serviced
by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-3
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer
A-11
139
under the Agreement referred to below). The Percentage Interest evidenced by
this Certificate represents an interest in the group of fixed rate Mortgage
Loans. The Trust was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") between the Seller and Servicer and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class A-3 Accrued
Certificate Interest and principal distributable thereon, as more specifically
set forth in the Agreement.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class A-3" (herein called the "Class A-3 Certificates") and representing
a beneficial ownership interest, in each case subject to the limitations set
forth in the Agreement in, among other things, the Mortgage Loans, such assets
as shall from time to time be identified or shall be required by the Agreement
to be identified as deposited in the Collection and/or Certificate Account or
invested in Permitted Investments in accordance with the Agreement, all rights
under any insurance policy covering a Mortgage Loan or the related Mortgaged
Property and property and any proceeds thereof which secured a Mortgage Loan and
which has been acquired by foreclosure, deed in lieu of foreclosure or by a
comparable conversion.
The Class A-3 Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Fixed Rate Group and, in certain limited
circumstances, the Adjustable Rate Group allocable to Class A-3
Certificateholders and that the Trustee in its individual
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140
capacity is not personally liable to the Certificateholders for any amount
payable under this Certificate or the Agreement or, except as expressly provided
in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan
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141
remaining in the Trust or the disposition of all property acquired upon
foreclosure or by deed in lieu of foreclosure of any Mortgage Loan. The exercise
of the right of the Servicer to purchase all the Mortgage Loans and property in
respect of all Mortgage Loans in the related Mortgage Loan Group or all Mortgage
Loans in the Trust will result in early retirement of the Certificates. The
right of the Servicer to purchase the Mortgage Loans in either Mortgage Loan
Group is subject to the Principal Balances of such Mortgage Loans at the time of
purchase being less than 10% of the sum of the Principal Balances of such
Mortgage Loans at the Cut-off Date plus the portion of the Purchase Account
Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
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142
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class A-3
Certificates referred to in
the within named Agreement
By:____________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-15
143
CLASS A-4 CERTIFICATE
Date of Pooling and Servicing Initial Class A-4 Certificate
Agreement and Cut-off Date: Balance: $9,750,000
June 1, 1997
First Distribution Date: CUSIP ▇▇. ▇▇▇▇▇▇ ▇▇ ▇
▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇: $9,750,000 Certificate No.: 1
Class A-4 Pass-Through Rate: 6.95%
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS A-4
evidencing a percentage interest in the distributions allocable
to the Class A-4 Certificates with respect to a Trust consisting
primarily of a pool of conventional, closed-end, fixed and
adjustable rate, residential mortgage loans, sold and serviced
by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-4
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer
A-16
144
under the Agreement referred to below). The Percentage Interest evidenced by
this Certificate represents an interest in the group of fixed rate Mortgage
Loans. The Trust was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") between the Seller and Servicer and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class A-4 Accrued
Certificate Interest and principal distributable thereon, as more specifically
set forth in the Agreement.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class A-4" (herein called the "Class A-4 Certificates") and representing
a beneficial ownership interest, in each case subject to the limitations set
forth in the Agreement in, among other things, the Mortgage Loans, such assets
as shall from time to time be identified or shall be required by the Agreement
to be identified as deposited in the Collection and/or Certificate Account or
invested in Permitted Investments in accordance with the Agreement, all rights
under any insurance policy covering a Mortgage Loan or the related Mortgaged
Property and property and any proceeds thereof which secured a Mortgage Loan and
which has been acquired by foreclosure, deed in lieu of foreclosure or by a
comparable conversion.
The Class A-4 Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Fixed Rate Group and, in certain limited
circumstances, the Adjustable Rate Group allocable to Class A-4
Certificateholders and that the Trustee in its
A-17
145
individual capacity is not personally liable to the Certificateholders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of and
the Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu
A-18
146
of foreclosure of any Mortgage Loan. The exercise of the right of the Servicer
to purchase all the Mortgage Loans and property in respect of all Mortgage Loans
in the related Mortgage Loan Group or all Mortgage Loans in the Trust will
result in early retirement of the Certificates. The right of the Servicer to
purchase the Mortgage Loans in either Mortgage Loan Group is subject to the
Principal Balances of such Mortgage Loans at the time of purchase being less
than 10% of the sum of the Principal Balances of such Mortgage Loans at the
Cut-off Date plus the portion of the Purchase Account Deposit allocable to such
Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-19
147
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class A-4
Certificates referred to in
the within named Agreement
By:___________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
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148
CLASS A-5 CERTIFICATE
Date of Pooling and Servicing Initial Class A-5 Certificate
Agreement and Cut-off Date: Balance: $13,900,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CS 4
July 15, 1997
Denomination: $13,900,000 Certificate No.: 1
Class A-5 Pass-Through Rate: 7.27%*
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS A-5
evidencing a percentage interest in the distributions allocable to the Class A-5
Certificates with respect to a Trust consisting primarily of a pool of
conventional, closed-end, fixed and adjustable rate, residential mortgage loans,
sold and serviced by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-5
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a
--------
* The interest rate for the Class A-5 Certificates will be the lesser
of 7.27% or the Fixed Rate Net WAC (as defined in the Agreement).
A-21
149
pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of fixed rate Mortgage Loans.
The Trust was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") between the Seller and Servicer and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class A-5 Accrued
Certificate Interest and principal distributable thereon, as more specifically
set forth in the Agreement.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class A-5" (herein called the "Class A-5 Certificates") and representing
a beneficial ownership interest, in each case subject to the limitations set
forth in the Agreement in, among other things, the Mortgage Loans, such assets
as shall from time to time be identified or shall be required by the Agreement
to be identified as deposited in the Collection and/or Certificate Account or
invested in Permitted Investments in accordance with the Agreement, all rights
under any insurance policy covering a Mortgage Loan or the related Mortgaged
Property and property and any proceeds thereof which secured a Mortgage Loan and
which has been acquired by foreclosure, deed in lieu of foreclosure or by a
comparable conversion.
The Class A-5 Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by
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150
its acceptance of this Certificate, agrees that it will look solely to the funds
on deposit in the Certificate Account in respect of the Fixed Rate Group and, in
certain limited circumstances, the Adjustable Rate Group allocable to Class A-5
Certificateholders and that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the
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151
Agreement upon (a) the purchase by the Servicer of all Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining in the Trust at a
price determined as provided in the Agreement, or (b) the later of the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust or
the disposition of all property acquired upon foreclosure or by deed in lieu of
foreclosure of any Mortgage Loan. The exercise of the right of the Servicer to
purchase all the Mortgage Loans and property in respect of all Mortgage Loans in
the related Mortgage Loan Group or all Mortgage Loans in the Trust will result
in early retirement of the Certificates. The right of the Servicer to purchase
the Mortgage Loans in either Mortgage Loan Group is subject to the Principal
Balances of such Mortgage Loans at the time of purchase being less than 10% of
the sum of the Principal Balances of such Mortgage Loans at the Cut-off Date
plus the portion of the Purchase Account Deposit allocable to such Mortgage Loan
Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
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152
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class A-5
Certificates referred to in
the within named Agreement
By:______________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-25
153
CLASS A-6 CERTIFICATE
Date of Pooling and Servicing Initial Class A-6 Certificate
Agreement and Cut-off Date: Balance: $19,000,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CT 2
July 15, 1997
Denomination: $19,000,000 Certificate No.: 1
Class A-6 Pass-Through Rate: 6.92%*
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS A-6
evidencing a percentage interest in the distributions allocable to the Class A-6
Certificates with respect to a Trust consisting primarily of a pool of
conventional, closed-end, fixed and adjustable rate, residential mortgage loans,
sold and serviced by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-6
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a
--------
* The interest rate for the Class A-6 Certificates be the lesser of
6.92% or the Fixed Rate Net WAC (as defined in the Agreement).
A-26
154
pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of fixed rate Mortgage Loans.
The Trust was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") between the Seller and Servicer and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class A-6 Accrued
Certificate Interest and principal distributable thereon, as more specifically
set forth in the Agreement.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class A-6" (herein called the "Class A-6 Certificates") and representing
a beneficial ownership interest, in each case subject to the limitations set
forth in the Agreement in, among other things, the Mortgage Loans, such assets
as shall from time to time be identified or shall be required by the Agreement
to be identified as deposited in the Collection and/or Certificate Account or
invested in Permitted Investments in accordance with the Agreement, all rights
under any insurance policy covering a Mortgage Loan or the related Mortgaged
Property and property and any proceeds thereof which secured a Mortgage Loan and
which has been acquired by foreclosure, deed in lieu of foreclosure or by a
comparable conversion.
The Class A-6 Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by
A-27
155
its acceptance of this Certificate, agrees that it will look solely to the funds
on deposit in the Certificate Account in respect of the Fixed Rate Group and, in
certain limited circumstances, the Adjustable Rate Group allocable to Class A-6
Certificateholders and that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the
A-28
156
Agreement upon (a) the purchase by the Servicer of all Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining in the Trust at a
price determined as provided in the Agreement, or (b) the later of the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust or
the disposition of all property acquired upon foreclosure or by deed in lieu of
foreclosure of any Mortgage Loan. The exercise of the right of the Servicer to
purchase all the Mortgage Loans and property in respect of all Mortgage Loans in
the related Mortgage Loan Group or all Mortgage Loans in the Trust will result
in early retirement of the Certificates. The right of the Servicer to purchase
the Mortgage Loans in either Mortgage Loan Group is subject to the Principal
Balances of such Mortgage Loans at the time of purchase being less than 10% of
the sum of the Principal Balances of such Mortgage Loans at the Cut-off Date
plus the portion of the Purchase Account Deposit allocable to such Mortgage Loan
Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-29
157
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class A-6
Certificates referred to in
the within named Agreement
By:_________________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-30
158
CLASS M-1F CERTIFICATE
Date of Pooling and Servicing Initial Class M-1F Certificate
Agreement and Cut-off Date: Balance: $8,550,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CV 7
July 15, 1997
Denomination: $8,550,000 Certificate No.: 1
Class M-1F Pass-Through Rate: 7.13%*
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS M-1F
evidencing a percentage interest in the distributions allocable to the Class
M-1F Certificates with respect to a Trust consisting primarily of a pool of
conventional, closed-end, fixed and adjustable rate, residential mortgage loans,
sold and serviced by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANS FERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE SELLER AND THE TRUSTEE THAT (1) SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR A PERSON ACTING ON BEHALF OF A PLAN OR
USING THE ASSETS OF A PLAN TO EFFECT SUCH PURCHASE AND IS NOT AN INSURANCE
COMPANY PURCHASING SUCH CERTIFICATE OR INTEREST FROM FUNDS IN A GENERAL ACCOUNT
OR SEPARATE ACCOUNT (WITH CERTAIN LIMITATIONS) OR (2) DELIVERS AN OPINION OF
COUNSEL, IN EACH CASE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.03 OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS
--------
* The interest rate for the Class M-1F Certificates will be the lesser
of 7.13% or the Fixed Rate Net WAC (as defined in the Agreement).
A-31
159
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO
THE CODE OR A PERSON ACTING ON BEHALF OF A PLAN OR USING THE ASSETS OF A PLAN TO
EFFECT SUCH PURCHASE OR TO AN INSURANCE COMPANY FOR AMOUNTS IN A NON-EXEMPT
INSURANCE COMPANY GENERAL ACCOUNT OR SEPARATE ACCOUNT WITHOUT DELIVERING THE
OPINION OF COUNSEL DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class M-1F
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of fixed rate Mortgage Loans.
The Trust was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") between the Seller and Servicer and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class M-1F Accrued
Certificate Interest and principal distributable thereon as more specifically
set forth in the Agreement.
THE CLASS M-1F CERTIFICATES ARE SUBORDINATE IN RIGHT OF
DISTRIBUTION TO THE FIXED RATE CLASS A CERTIFICATES, AS DESCRIBED IN THE
AGREEMENT.
A-32
160
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class M-1F" (herein called the "Class M-1F Certificates") and
representing a beneficial ownership interest, in each case subject to the
limitations set forth in the Agreement in, among other things, the Mortgage
Loans, such assets as shall from time to time be identified or shall be required
by the Agreement to be identified as deposited in the Collection and/or
Certificate Account or invested in Permitted Investments in accordance with the
Agreement, all rights under any insurance policy covering a Mortgage Loan or the
related Mortgaged Property and property and any proceeds thereof which secured a
Mortgage Loan and which has been acquired by foreclosure, deed in lieu of
foreclosure or by a comparable conversion.
The Class M-1F Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Fixed Rate Group and, in certain limited
circumstances, the Adjustable Rate Group allocable to Class M-1F
Certificateholders and that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
A-33
161
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
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162
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class M-1F
Certificates referred to in
the within named Agreement
By:____________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
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163
CLASS M-2F CERTIFICATE
Date of Pooling and Servicing Initial Class M-2F Certificate
Agreement and Cut-off Date: Balance: $11,400,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CW 5
July 15, 1997
Denomination: $11,400,000 Certificate No.: 1
Class M-2F Pass-Through Rate: 7.38%*
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS M-2F
evidencing a percentage interest in the distributions allocable to the Class
M-2F Certificates with respect to a Trust consisting primarily of a pool of
conventional, closed-end, fixed and adjustable rate, residential mortgage loans,
sold and serviced by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANS FERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE SELLER AND THE TRUSTEE THAT (1) SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR A PERSON ACTING ON BEHALF OF A PLAN OR
USING THE ASSETS OF A PLAN TO EFFECT SUCH PURCHASE AND IS NOT AN INSURANCE
COMPANY PURCHASING SUCH CERTIFICATE OR INTEREST FROM FUNDS IN A GENERAL ACCOUNT
OR SEPARATE ACCOUNT (WITH CERTAIN LIMITATIONS) OR (2) DELIVERS AN OPINION OF
COUNSEL, IN EACH CASE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.03 OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS
--------
* The interest rate for the Class M-2F Certificates will be the lesser
of 7.38% or the Fixed Rate Net WAC (as defined in the Agreement).
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164
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO
THE CODE OR A PERSON ACTING ON BEHALF OF A PLAN OR USING THE ASSETS OF A PLAN TO
EFFECT SUCH PURCHASE OR TO AN INSURANCE COMPANY FOR AMOUNTS IN A NON-EXEMPT
INSURANCE COMPANY GENERAL ACCOUNT OR SEPARATE ACCOUNT WITHOUT DELIVERING THE
OPINION OF COUNSEL DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class M-2F
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of fixed rate Mortgage Loans.
The Trust was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") between the Seller and Servicer and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class M-2F Accrued
Certificate Interest and principal distributable thereon as more specifically
set forth in the Agreement.
THE CLASS M-2F CERTIFICATES ARE SUBORDINATE IN RIGHT OF
DISTRIBUTION TO THE FIXED RATE CLASS A CERTIFICATES AND THE CLASS M-1F
CERTIFICATES, AS DESCRIBED IN THE AGREEMENT.
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165
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class M-2F" (herein called the "Class M-2F Certificates") and
representing a beneficial ownership interest, in each case subject to the
limitations set forth in the Agreement in, among other things, the Mortgage
Loans, such assets as shall from time to time be identified or shall be required
by the Agreement to be identified as deposited in the Collection and/or
Certificate Account or invested in Permitted Investments in accordance with the
Agreement, all rights under any insurance policy covering a Mortgage Loan or the
related Mortgaged Property and property and any proceeds thereof which secured a
Mortgage Loan and which has been acquired by foreclosure, deed in lieu of
foreclosure or by a comparable conversion.
The Class M-2F Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Fixed Rate Group and, in certain limited
circumstances, the Adjustable Rate Group allocable to Class M-2F
Certificateholders and that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
A-38
166
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
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167
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class M-2F
Certificates referred to in
the within named Agreement
By:________________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-40
168
CLASS B-1F CERTIFICATE
Date of Pooling and Servicing Initial Class B-1F Certificate
Agreement and Cut-off Date: Balance: $6,650,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CX 3
July 15, 1997
Denomination: $6,650,000 Certificate No.: 1
Class B-1F Pass-Through Rate: 7.68%*
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS B-1F
evidencing a percentage interest in the distributions allocable to
the Class B-1F Certificates with respect to a Trust consisting
primarily of a pool of conventional, closed-end, fixed and adjustable
rate, residential mortgage loans, sold and serviced by Aames Capital
Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANS FERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE SELLER AND THE TRUSTEE THAT (1) SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR A PERSON ACTING ON BEHALF OF A PLAN OR
USING THE ASSETS OF A PLAN TO EFFECT SUCH PURCHASE AND IS NOT AN INSURANCE
COMPANY PURCHASING SUCH CERTIFICATE OR INTEREST FROM FUNDS IN A GENERAL ACCOUNT
OR SEPARATE ACCOUNT (WITH CERTAIN LIMITATIONS) OR (2) DELIVERS AN OPINION OF
COUNSEL, IN EACH CASE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.03 OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS
--------
* The interest rate for the Class B-1F Certificates will be the lesser
of 7.68% or the Fixed Rate Net WAC (as defined in the Agreement).
A-41
169
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO
THE CODE OR A PERSON ACTING ON BEHALF OF A PLAN OR USING THE ASSETS OF A PLAN TO
EFFECT SUCH PURCHASE OR TO AN INSURANCE COMPANY FOR AMOUNTS IN A NON-EXEMPT
INSURANCE COMPANY GENERAL ACCOUNT OR SEPARATE ACCOUNT WITHOUT DELIVERING THE
OPINION OF COUNSEL DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class B-1F
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of fixed rate Mortgage Loans.
The Trust was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") between the Seller and Servicer and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class B-1F Accrued
Certificate Interest and principal distributable thereon as more specifically
set forth in the Agreement.
THE CLASS B-1F CERTIFICATES ARE SUBORDINATE IN RIGHT OF DISTRIBUTION TO
THE FIXED RATE CLASS A CERTIFICATES, THE CLASS M-1F CERTIFICATES AND THE CLASS
M-2F CERTIFICATES, AS DESCRIBED IN THE AGREEMENT.
A-42
170
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class B-1F" (herein called the "Class B-1F Certificates") and
representing a beneficial ownership interest, in each case subject to the
limitations set forth in the Agreement in, among other things, the Mortgage
Loans, such assets as shall from time to time be identified or shall be required
by the Agreement to be identified as deposited in the Collection and/or
Certificate Account or invested in Permitted Investments in accordance with the
Agreement, all rights under any insurance policy covering a Mortgage Loan or the
related Mortgaged Property and property and any proceeds thereof which secured a
Mortgage Loan and which has been acquired by foreclosure, deed in lieu of
foreclosure or by a comparable conversion.
The Class B-1F Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Fixed Rate Group and, in certain limited
circumstances, the Adjustable Rate Group allocable to Class B-1F
Certificateholders and that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
A-43
171
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-44
172
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class B-1F
Certificates referred to in
the within named Agreement
By:____________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-45
173
CLASS A-IO CERTIFICATE
Date of Pooling and Servicing Initial Class A-IO Certificate
Agreement and Cut-off Date: Balance: $19,000,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CU 9
July 15, 1997
Denomination: $19,000,000 Certificate No.: 1
Class A-IO Pass-Through Rate: 5.50%*
AAMES MORTGAGE TRUST 1997-B
PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS A-IO
evidencing a percentage interest in the distributions allocable to the
Class A-IO Certificates with respect to a Trust consisting primarily of
a pool of conventional, closed-end, fixed and adjustable rate,
residential mortgage loans, sold and serviced by Aames Capital
Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANS FERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE SELLER AND THE TRUSTEE THAT (1) SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR A PERSON ACTING ON BEHALF OF A PLAN OR
USING THE ASSETS OF A PLAN TO EFFECT SUCH PURCHASE AND IS NOT AN INSURANCE
COMPANY PURCHASING SUCH CERTIFICATE OR INTEREST FROM FUNDS IN A GENERAL ACCOUNT
OR SEPARATE ACCOUNT (WITH CERTAIN LIMITATIONS) OR (2) DELIVERS AN OPINION OF
COUNSEL, IN EACH CASE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.03 OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS
--------
* The Pass-Through Rate with respect to the Class A-IO Certificates on
any Distribution Date (as defined herein) before July, 2000 will be 5.50% and on
any Distribution Date in or thereafter will be 0.00%, as described in the
Agreement.
A-46
174
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO
THE CODE OR A PERSON ACTING ON BEHALF OF A PLAN OR USING THE ASSETS OF A PLAN TO
EFFECT SUCH PURCHASE OR TO AN INSURANCE COMPANY FOR AMOUNTS IN A NON-EXEMPT
INSURANCE COMPANY GENERAL ACCOUNT OR SEPARATE ACCOUNT WITHOUT DELIVERING THE
OPINION OF COUNSEL DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-IO
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of fixed rate Mortgage Loans.
The Trust was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") between the Seller and Servicer and Bankers
Trust Company of California, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class A-IO Accrued
Certificate Interest.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final
A-47
175
distribution on this Certificate will be made in the applicable manner described
above, after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class A-IO" (herein called the "Class A-IO Certificates") and
representing a beneficial ownership interest, in each case subject to the
limitations set forth in the Agreement in, among other things, the Mortgage
Loans, such assets as shall from time to time be identified or shall be required
by the Agreement to be identified as deposited in the Collection and/or
Certificate Account or invested in Permitted Investments in accordance with the
Agreement, all rights under any insurance policy covering a Mortgage Loan or the
related Mortgaged Property and property and any proceeds thereof which secured a
Mortgage Loan and which has been acquired by foreclosure, deed in lieu of
foreclosure or by a comparable conversion.
The Class A-IO Certificates are limited in right of payment to certain
payments on and collections in respect of the Fixed Rate Group and in certain
limited circumstances, the Adjustable Rate Group, all as more specifically set
forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Fixed Rate Group and, in certain limited
circumstances, the Adjustable Rate Group allocable to Class A-IO
Certificateholders and that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon
A-48
176
one or more new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-49
177
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class A-IO
Certificates referred to in
the within named Agreement
By:_______________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-50
178
CLASS A-1A CERTIFICATE
Date of Pooling and Servicing Initial Class A-1A Certificate
Agreement and Cut-off Date: Balance: $241,800,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CY 1
July 15, 1997
Denomination: $200,000,000 Certificate No.: 1
Class A-1A Adjustable Rate Certificate*
AAMES MORTGAGE TRUST 1997-B
MORTGAGE LOAN PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS A-1A
evidencing a percentage interest in the distributions allocable to the
Class A-1A Certificates with respect to a Trust consisting primarily of
a pool of conventional, closed-end, fixed and adjustable rate,
residential mortgage loans, sold and serviced by Aames Capital
Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO
--------
* The Pass-Through Rate for the Class A-1A Certificates with respect to
the Interest Period relating to the July 1997 Distribution Date, 5.6897% per
annum; with respect to each Interest Period thereafter that ends prior to the
Clean-Up Call Date, a per annum rate equal to the lesser of (a) LIBOR plus 0.22%
and (b) the Adjustable Rate Group Available Funds Cap; and with respect to each
Interest Period thereafter that ends after the Clean-Up Call Date, a per annum
rate equal to the lesser of (a) LIBOR plus 0.44% and (b) the Adjustable Rate
Group Available Funds Cap, as described in the Agreement.
A-51
179
ANY PERSON IS WRONGFUL in as much as the requested owner hereof, Cede & Co. has
an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-1A
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of adjustable rate Mortgage
Loans. The Trust was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") between the Seller and Servicer and
Banker's Trust Company of California, N.A., as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class A-1A Accrued
Certificate Interest and principal distributable thereon as more specifically
set forth in the Agreement.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class A-1A" (herein called the "Class A-1A Certificates") and
representing a beneficial ownership interest, in each case subject to the
limitations set forth in the Agreement in, among other things, the Mortgage
Loans, such assets as shall from time to time be identified or shall be required
by the Agreement to be identified as deposited in the Collection and/or
Certificate Account or invested in Permitted Investments in accordance with the
Agreement, all rights under any insurance policy covering a Mortgage Loan or the
related Mortgaged Property and property and any proceeds thereof which secured a
Mortgage
A-52
180
Loan and which has been acquired by foreclosure, deed in lieu of foreclosure or
by a comparable conversion.
The Class A-1A Certificates are limited in right of payment to certain
payments on and collections in respect of the Adjustable Rate Group and in
certain limited circumstances, the Fixed Rate Group, all as more specifically
set forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Adjustable Rate Group and, in certain
limited circumstances, the Fixed Rate Group and that the Trustee in its
individual capacity is not personally liable to the Certificateholders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
A-53
181
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-54
182
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class A-1A
Certificates referred to in
the within named Agreement
By:_____________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-55
183
CLASS A-1A CERTIFICATE
Date of Pooling and Servicing Initial Class A-1A Certificate
Agreement and Cut-off Date: Balance: $241,800,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CY 1
July 15, 1997
Denomination: $41,800,000 Certificate No.: 2
Class A-1A Adjustable Rate Certificate*
AAMES MORTGAGE TRUST 1997-B
MORTGAGE LOAN PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS A-1A
evidencing a percentage interest in the distributions allocable to the
Class A-1A Certificates with respect to a Trust consisting primarily of
a pool of conventional, closed-end, fixed and adjustable rate,
residential mortgage loans, sold and serviced by Aames Capital
Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO
--------
* The Pass-Through Rate for the Class A-1A Certificates with respect to
the Interest Period relating to the July 1997 Distribution Date, 5.6897% per
annum; with respect to each Interest Period thereafter that ends prior to the
Clean-Up Call Date, a per annum rate equal to the lesser of (a) LIBOR plus 0.22%
and (b) the Adjustable Rate Group Available Funds Cap; and with respect to each
Interest Period thereafter that ends after the Clean-Up Call Date, a per annum
rate equal to the lesser of (a) LIBOR plus 0.44% and (b) the Adjustable Rate
Group Available Funds Cap, as described in the Agreement.
A-56
184
ANY PERSON IS WRONGFUL in as much as the requested owner hereof, Cede & Co. has
an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-1A
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of adjustable rate Mortgage
Loans. The Trust was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") between the Seller and Servicer and
Banker's Trust Company of California, N.A., as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class A-1A Accrued
Certificate Interest and principal distributable thereon as more specifically
set forth in the Agreement.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class A-1A" (herein called the "Class A-1A Certificates") and
representing a beneficial ownership interest, in each case subject to the
limitations set forth in the Agreement in, among other things, the Mortgage
Loans, such assets as shall from time to time be identified or shall be required
by the Agreement to be identified as deposited in the Collection and/or
Certificate Account or invested in Permitted Investments in accordance with the
Agreement, all rights under any insurance policy covering a Mortgage Loan or the
related Mortgaged Property and property and any proceeds thereof which secured a
Mortgage
A-57
185
Loan and which has been acquired by foreclosure, deed in lieu of foreclosure or
by a comparable conversion.
The Class A-1A Certificates are limited in right of payment to certain
payments on and collections in respect of the Adjustable Rate Group and in
certain limited circumstances, the Fixed Rate Group, all as more specifically
set forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Adjustable Rate Group and, in certain
limited circumstances, the Fixed Rate Group and that the Trustee in its
individual capacity is not personally liable to the Certificateholders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
A-58
186
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-59
187
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class A-1A
Certificates referred to in
the within named Agreement
By:___________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-60
188
CLASS M-1A CERTIFICATE
Date of Pooling and Servicing Initial Class M-1A Certificate
Agreement and Cut-off Date: Balance: $25,575,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C CZ 8
July 15, 1997
Denomination: $25,575,000 Certificate No.: 1
Class M-1A Adjustable Rate Certificate*
AAMES MORTGAGE TRUST 1997-B
MORTGAGE LOAN PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS M-1A
evidencing a percentage interest in the distributions allocable to the
Class M-1A Certificates with respect to a Trust consisting primarily of
a pool of conventional, closed-end, fixed and adjustable rate,
residential mortgage loans, sold and serviced by Aames Capital
Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANS FERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE SELLER AND THE TRUSTEE THAT (1) SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR A PERSON ACTING ON BEHALF OF A PLAN OR
USING THE ASSETS OF A
--------
* The Pass-Through Rate for the Class M-1A Certificates with respect to
the Interest Period relating to the July 1997 Distribution Date, 5.6911% per
annum; with respect to each Interest Period thereafter that ends prior to the
Clean-Up Call Date, a per annum rate equal to the lesser of (a) LIBOR plus 0.36%
and (b) the Adjustable Rate Group Available Funds Cap; and with respect to each
Interest Period thereafter that ends after the Clean-Up Call Date, a per annum
rate equal to the lesser of (a) LIBOR plus 0.54% and (b) the Adjustable Rate
Group Available Funds Cap, as described in the Agreement.
A-61
189
PLAN TO EFFECT SUCH PURCHASE AND IS NOT AN INSURANCE COMPANY PURCHASING SUCH
CERTIFICATE OR INTEREST FROM FUNDS IN A GENERAL ACCOUNT OR SEPARATE ACCOUNT
(WITH CERTAIN LIMITATIONS) OR (2) DELIVERS AN OPINION OF COUNSEL, IN EACH CASE
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.03 OF THE AGREEMENT REFERRED TO
HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED
TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO ERISA OR TO THE CODE OR A PERSON ACTING ON BEHALF OF A PLAN OR USING THE
ASSETS OF A PLAN TO EFFECT SUCH PURCHASE OR TO AN INSURANCE COMPANY FOR AMOUNTS
IN A NON-EXEMPT INSURANCE COMPANY GENERAL ACCOUNT OR SEPARATE ACCOUNT WITHOUT
DELIVERING THE OPINION OF COUNSEL DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class M-1A
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of adjustable rate Mortgage
Loans. The Trust was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") between the Seller and Servicer and
Banker's Trust Company of California, N.A., as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class M-1A Accrued
Certificate Interest and principal distributable thereon, as more specifically
set forth in the Agreement.
A-62
190
THE CLASS M-1A CERTIFICATES ARE SUBORDINATE IN RIGHT OF DISTRIBUTION TO
THE CLASS A-1A CERTIFICATES, AS DESCRIBED IN THE AGREEMENT.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class M-1A" (herein called the "Class M-1A Certificates") and
representing a beneficial ownership interest, in each case subject to the
limitations set forth in the Agreement in, among other things, the Mortgage
Loans, such assets as shall from time to time be identified or shall be required
by the Agreement to be identified as deposited in the Collection and/or
Certificate Account or invested in Permitted Investments in accordance with the
Agreement, all rights under any insurance policy covering a Mortgage Loan or the
related Mortgaged Property and property and any proceeds thereof which secured a
Mortgage Loan and which has been acquired by foreclosure, deed in lieu of
foreclosure or by a comparable conversion.
The Class M-1A Certificates are limited in right of payment to certain
payments on and collections in respect of the Adjustable Rate Group and in
certain limited circumstances, the Fixed Rate Group, all as more specifically
set forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Adjustable Rate Group and, in certain
limited circumstances, the Fixed Rate Group and that the Trustee in its
individual capacity is not personally liable to the Certificateholders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued
A-63
191
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
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192
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-65
193
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class M-1A
Certificates referred to in
the within named Agreement
By:___________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
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194
CLASS M-2A CERTIFICATE
Date of Pooling and Servicing Initial Class M-2A Certificate
Agreement and Cut-off Date: Balance: $25,575,000
June 1, 1997
First Distribution Date: CUSIP ▇▇. ▇▇▇▇▇▇ ▇▇ ▇
▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇: $25,575,000 Certificate No.: 1
Class M-2A Adjustable Rate Certificate*
AAMES MORTGAGE TRUST 1997-B
MORTGAGE LOAN PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS M-2A
evidencing a percentage interest in the distributions allocable to the
Class M-2A Certificates with respect to a Trust consisting primarily of
a pool of conventional, closed-end, fixed and adjustable rate,
residential mortgage loans, sold and serviced by Aames Capital
Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANS FERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE SELLER AND THE TRUSTEE THAT (1) SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR A PERSON ACTING ON BEHALF OF A PLAN OR
USING THE ASSETS OF A PLAN TO EFFECT SUCH PURCHASE AND IS NOT AN INSURANCE
COMPANY
--------
* The Pass-Through Rate for the Class M-2A Certificates with respect to
the Interest Period relating to the July 1997 Distribution Date, 5.6931% per
annum; with respect to each Interest Period thereafter that ends prior to the
Clean-Up Call Date, a per annum rate equal to the lesser of (a) LIBOR plus 0.56%
and (b) the Adjustable Rate Group Available Funds Cap; and with respect to each
Interest Period thereafter that ends after the Clean-Up Call Date, a per annum
rate equal to the lesser of (a) LIBOR plus 0.84% and (b) the Adjustable Rate
Group Available Funds Cap, as described in the Agreement.
▇-▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇ SUCH CERTIFICATE OR INTEREST FROM FUNDS IN A GENERAL ACCOUNT OR
SEPARATE ACCOUNT (WITH CERTAIN LIMITATIONS) OR (2) DELIVERS AN OPINION OF
COUNSEL, IN EACH CASE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.03 OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE OR A PERSON ACTING ON
BEHALF OF A PLAN OR USING THE ASSETS OF A PLAN TO EFFECT SUCH PURCHASE OR TO AN
INSURANCE COMPANY FOR AMOUNTS IN A NON-EXEMPT INSURANCE COMPANY GENERAL ACCOUNT
OR SEPARATE ACCOUNT WITHOUT DELIVERING THE OPINION OF COUNSEL DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class M-2A
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of adjustable rate Mortgage
Loans. The Trust was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") between the Seller and Servicer and
Banker's Trust Company of California, N.A., as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class M-2A Accrued
Certificate Interest and principal distributable thereon, as more specifically
set forth in the Agreement.
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196
THE CLASS M-2A CERTIFICATES ARE SUBORDINATE IN RIGHT OF DISTRIBUTION TO
THE CLASS A-1A CERTIFICATES AND THE CLASS M-1A CERTIFICATES, AS DESCRIBED IN THE
AGREEMENT.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class M-2A" (herein called the "Class M-2A Certificates") and
representing a beneficial ownership interest, in each case subject to the
limitations set forth in the Agreement in, among other things, the Mortgage
Loans, such assets as shall from time to time be identified or shall be required
by the Agreement to be identified as deposited in the Collection and/or
Certificate Account or invested in Permitted Investments in accordance with the
Agreement, all rights under any insurance policy covering a Mortgage Loan or the
related Mortgaged Property and property and any proceeds thereof which secured a
Mortgage Loan and which has been acquired by foreclosure, deed in lieu of
foreclosure or by a comparable conversion.
The Class M-2A Certificates are limited in right of payment to certain
payments on and collections in respect of the Adjustable Rate Group and in
certain limited circumstances, the Fixed Rate Group, all as more specifically
set forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Adjustable Rate Group and, in certain
limited circumstances, the Fixed Rate Group and that the Trustee in its
individual capacity is not personally liable to the Certificateholders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
A-69
197
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
A-70
198
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-71
199
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class M-2A
Certificates referred to in
the within named Agreement
By:______________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-72
200
CLASS B-1A CERTIFICATE
Date of Pooling and Servicing Initial Class B-1A Certificate
Agreement and Cut-off Date: Balance: $17,050,000
June 1, 1997
First Distribution Date: CUSIP No. 00253C DB 0
July 15, 1997
Denomination: $17,050,000 Certificate No.: 1
Class B-1A Adjustable Rate Certificate*
AAMES MORTGAGE TRUST 1997-B
MORTGAGE LOAN PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS B-1A
evidencing a percentage interest in the distributions allocable to the
Class B-1A Certificates with respect to a Trust consisting primarily of
a pool of conventional, closed-end, fixed and adjustable rate,
residential mortgage loans, sold and serviced by Aames Capital
Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANS FERRED
UNLESS THE TRANSFEREE REPRESENTS TO THE SELLER AND THE TRUSTEE THAT (1) SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR A PERSON ACTING ON BEHALF OF A PLAN OR
USING THE ASSETS OF A PLAN TO EFFECT SUCH PURCHASE AND IS NOT AN INSURANCE
COMPANY
--------
* The Pass-Through Rate for the Class B-1A Certificates with respect to
the Interest Period relating to the July 1997 Distribution Date, 5.6974% per
annum; with respect to each Interest Period thereafter that ends prior to the
Clean-Up Call Date, a per annum rate equal to the lesser of (a) LIBOR plus 0.99%
and (b) the Adjustable Rate Group Available Funds Cap; and with respect to each
Interest Period thereafter that ends after the Clean-Up Call Date, a per annum
rate equal to the lesser of (a) LIBOR plus 1.485% and (b) the Adjustable Rate
Group Available Funds Cap, as described in the Agreement.
▇-▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇ SUCH CERTIFICATE OR INTEREST FROM FUNDS IN A GENERAL ACCOUNT OR
SEPARATE ACCOUNT (WITH CERTAIN LIMITATIONS) OR (2) DELIVERS AN OPINION OF
COUNSEL, IN EACH CASE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.03 OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE OR A PERSON ACTING ON
BEHALF OF A PLAN OR USING THE ASSETS OF A PLAN TO EFFECT SUCH PURCHASE OR TO AN
INSURANCE COMPANY FOR AMOUNTS IN A NON-EXEMPT INSURANCE COMPANY GENERAL ACCOUNT
OR SEPARATE ACCOUNT WITHOUT DELIVERING THE OPINION OF COUNSEL DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the requested owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate shown above by the Initial Class A-1A
Certificate Principal Balance) in a trust, the assets of which consist primarily
of a pool of conventional, closed-end, fixed and adjustable rate, residential
mortgage loans (the "Mortgage Loans"), sold and serviced by Aames Capital
Corporation (in its capacity as seller, the "Seller" and in its capacity as
servicer, the "Servicer", which term includes any successor Servicer under the
Agreement referred to below). The Percentage Interest evidenced by this
Certificate represents an interest in the group of adjustable rate Mortgage
Loans. The Trust was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") between the Seller and Servicer and
Banker's Trust Company of California, N.A., as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month (or if any such day is not a Business Day, on the
Business Day immediately following such 15th day) (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date, in an amount equal to the product of (a) the Percentage
Interest evidenced by this Certificate and (b) the sum of the Class B-1A Accrued
Certificate Interest and principal distributable thereon, as more specifically
set forth in the Agreement.
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THE CLASS B-1A CERTIFICATES ARE SUBORDINATE IN RIGHT OF DISTRIBUTION TO
THE CLASS A-1A CERTIFICATES, THE CLASS M-1A CERTIFICATES AND THE CLASS M-2A
CERTIFICATES, AS DESCRIBED IN THE AGREEMENT.
Except as otherwise provided in the Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Person entitled thereto at the address appearing in the Certificate Register, or
upon written request by the Certificateholder, by wire transfer to a bank
account maintained in the United States (in the case of any Holder of
Certificates entitled to such form of payment as provided in the Agreement) or
by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose and as specified in such notice.
This Certificate is one of a duly authorized issue of Certificates
designated as "Aames Mortgage Trust Mortgage Pass-Through Certificates, Series
1997-B, Class B-1A" (herein called the "Class B-1A Certificates") and
representing a beneficial ownership interest, in each case subject to the
limitations set forth in the Agreement in, among other things, the Mortgage
Loans, such assets as shall from time to time be identified or shall be required
by the Agreement to be identified as deposited in the Collection and/or
Certificate Account or invested in Permitted Investments in accordance with the
Agreement, all rights under any insurance policy covering a Mortgage Loan or the
related Mortgaged Property and property and any proceeds thereof which secured a
Mortgage Loan and which has been acquired by foreclosure, deed in lieu of
foreclosure or by a comparable conversion.
The Class B-1A Certificates are limited in right of payment to certain
payments on and collections in respect of the Adjustable Rate Group and in
certain limited circumstances, the Fixed Rate Group, all as more specifically
set forth in the Agreement. The Holder of this Certificate, by its acceptance of
this Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account in respect of the Adjustable Rate Group and, in certain
limited circumstances, the Fixed Rate Group and that the Trustee in its
individual capacity is not personally liable to the Certificateholders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing Voting Interests of each Class affected
thereby aggregating not less than 51%. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
A-75
203
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate constitutes a "regular interest" in a "real estate
mortgage investment conduit" as those terms are defined in Section 860G(a)(1)
and Section 860D, respectively, of the Internal Revenue Code of 1986, as
amended.
A-76
204
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-77
205
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is one of the Class B-1A
Certificates referred to in
the within named Agreement
By:______________________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-78
206
CLASS R CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE EXTENT SET
FORTH IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02(b) OF THE AGREEMENT REFERRED TO
HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G(A)(2) AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"). A TRANSFEREE OF THIS CERTIFICATE, BY
ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED THIS CERTIFICATE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN SECTION 6.02(c) OF THE
POOLING AND SERVICING AGREEMENT, AND SHALL BE REQUIRED TO FURNISH AN AFFIDAVIT
TO THE TRANSFEROR AND THE TRUSTEE TO THE EFFECT THAT (I) IT IS NOT (i) A
DISQUALIFIED ORGANIZATION, AS SUCH TERM IS DEFINED IN CODE SECTION 860E(e)(5),
OR AN AGENT (INCLUDING A BROKER, NOMINEE OR OTHER MIDDLEMAN) FOR SUCH
DISQUALIFIED ORGANIZATION, (ii) AN ENTITY THAT HOLDS REMIC RESIDUAL SECURITIES
AS NOMINEE TO FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH SECURITIES THROUGH
BOOK-ENTRY CHANGES IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS (A "BOOK-ENTRY
NOMINEE"), (iii) AN INDIVIDUAL, CORPORATION, PARTNERSHIP OR OTHER PERSON UNLESS
SUCH TRANSFEREE (A) IS NOT A FOREIGN PERSON OR (B) IS A FOREIGN PERSON THAT WILL
HOLD SUCH CLASS R CERTIFICATE IN CONNECTION WITH THE CONDUCT OF A TRADE OR
BUSINESS WITHIN THE UNITED STATES AND HAS FURNISHED THE TRANSFEROR AND THE
TRUSTEE WITH AN EFFECTIVE INTERNAL REVENUE SERVICE FORM 4224 OR (C) IS A FOREIGN
PERSON THAT HAS DELIVERED TO BOTH THE TRANSFEROR AND THE TRUSTEE AN OPINION OF A
NATIONALLY RECOGNIZED TAX COUNSEL TO THE EFFECT THAT THE TRANSFER OF THE CLASS R
CERTIFICATE TO IT IS IN ACCORDANCE WITH THE REQUIREMENTS OF THE CODE AND THE
REGULATIONS PROMULGATED THEREUNDER AND THAT SUCH TRANSFER OF THE CLASS R
CERTIFICATE WILL NOT BE DISREGARDED FOR FEDERAL INCOME TAX PURPOSES (ANY SUCH
PERSON WHO IS NOT COVERED BY CLAUSE (A), (B) OR (C) ABOVE BEING REFERRED TO
HEREIN AS A "NON-PERMITTED FOREIGN HOLDER") OR (iv) ANY PERSON WHICH IS AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR ANY PERSON WHICH IS AN
INDIVIDUAL RETIREMENT ACCOUNT OR EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT
TO SECTION 4975 OF THE
A-79
207
CODE (AN "ERISA PLAN") OR AN ENTITY, INCLUDING AN INSURANCE COMPANY SEPARATE
ACCOUNT OR GENERAL ACCOUNT, WHOSE UNDERLYING ASSETS INCLUDE ERISA PLAN ASSETS BY
REASON OF AN ERISA PLAN'S INVESTMENT IN THE ENTITY, OR ANY PERSON INVESTING THE
ASSETS OF AN ERISA PLAN OR SUCH AN ENTITY, WHETHER AS NOMINEE, TRUSTEE, AGENT OR
OTHERWISE, (II) IT HAS NO INTENT OR PURPOSE TO IMPEDE THE ASSESSMENT OR
COLLECTION OF ANY FEDERAL, STATE OR LOCAL INCOME TAXES LEGALLY REQUIRED TO BE
PAID WITH RESPECT TO THE CLASS R CERTIFICATE, AND (III) IT HAS AGREED TO SUCH
AMENDMENTS TO FURTHER EFFECTUATE THE RESTRICTIONS ON TRANSFERS TO DISQUALIFIED
ORGANIZATIONS, AGENTS THEREOF, BOOK-ENTRY NOMINEES, NON-PERMITTED FOREIGN
HOLDERS OR ERISA PLANS. THE TERM "FOREIGN PERSON" MEANS A PERSON WHO IS NOT ONE
OF THE FOLLOWING: A CITIZEN OR RESIDENT OF THE UNITED STATES, A CORPORATION,
PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN OR UNDER THE LAWS OF THE
UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, OR AN ESTATE OR TRUST THAT
IS SUBJECT TO U.S. FEDERAL INCOME TAX REGARDLESS OF THE SOURCE OF ITS INCOME.
THE HOLDER OF THIS CLASS R CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED
TO HAVE AGREED TO THE DESIGNATION OF THE SERVICER AS ITS AGENT TO ACT AS "TAX
MATTERS PERSON" TO PERFORM THE FUNCTIONS OF A "TAX MATTERS PARTNER" FOR PURPOSES
OF SUBCHAPTER C OF CHAPTER 63 OF SUBTITLE F OF THE CODE, OR, IF SO REQUESTED BY
THE SERVICER, TO ACT AS TAX MATTERS PERSON.
A-80
208
Date of Pooling and Servicing Percentage Interest: 100%
Agreement and Cut-off Date:
June 1, 1997 Certificate No.: R-1
First Distribution Date:
July 15, 1997
AAMES MORTGAGE TRUST 1997-B
MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS R
evidencing a percentage interest in the distributions
allocable to the Class R Certificate with respect to a
Trust consisting primarily of a pool of conventional,
closed-end, fixed and adjustable rate residential mortgage
loans sold and serviced by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
This certifies that Aames Capital Corporation is the registered owner
of the Percentage Interest specified on the face of this Class R Certificate.
This Class R Certificate is one series of Certificates issued by a trust, the
assets of which consist primarily of a pool of conventional, closed-end, fixed
and adjustable rate, residential mortgage loans (the "Mortgage Loans"), sold and
serviced by Aames Capital Corporation (in its capacity as seller, the "Seller"
and in its capacity as servicer, the "Servicer", which term includes any
successor Servicer under the Agreement referred to below). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") between the Seller and Servicer and Bankers Trust Company of
California, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned to such
terms in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
No transfer of a Class R Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), and any applicable state securities laws or is made in
accordance with such Act and laws. In the event that such a transfer is desired
to be made by the holder hereof, (i) the transferee will be required to execute
an investment letter in the form described by the Agreement and (ii) if such
transfer is to be made, the Trustee shall require the Holder to deliver an
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Seller that such transfer is exempt (describing the applicable
exemption and the basis therefor) from or is being made pursuant to the
registration
A-81
209
requirements of the Act and of any applicable state securities laws. The Holder
hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Seller and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws. In connection with any such transfer, the Trustee
will also require an affidavit, in the form as described in the Agreement,
stating the matters set forth on the legend of this Class R Certificate.
The Holder of the Class R Certificate, by acceptance hereof, is deemed
to have designated the Servicer, if permitted by the Code and applicable law, to
act as the "tax matters person", to perform the functions of a "tax matters
partner" for purposes of Subchapter C of Chapter 63 of Subtitle F of the Code
and if not so permitted, the Holder of the Class R Certificate, is deemed to
have agreed to act as such "tax matters person".
The Class R Certificate is not entitled to any payments on and
collections in respect of the Mortgage Loans on any Distribution Date until all
other distributions for such Distribution Date have been made in accordance with
the Agreement. The Holder of this Certificate, by its acceptance of this
Certificate, agrees that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Seller , the Servicer, and the Trustee with the
consent of the Holders of Certificates evidencing Voting Interests of each Class
affected thereby aggregating not less than 51%. The Class R Certificate will
have no Voting Interests. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of the
Certificates.
This Certificate is issuable only as a registered Certificate without
coupons in the Percentage Interest specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, the
Certificate is exchangeable for a new Certificate evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Servicer, the Trustee, and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing together with
an affidavit in the form as described in the Agreement, and thereupon a new
Certificate evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
▇-▇▇
▇▇▇
▇▇ service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-83
211
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is the Class R Certificate
referred to in the within named
Agreement
By:______________________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-84
212
Date of Pooling and Servicing Percentage Interest: 100%
Agreement and Cut-off Date:
June 1, 1997 Certificate No.: R-2
First Distribution Date:
July 15, 1997
AAMES MORTGAGE TRUST 1997-B
MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS R
evidencing a percentage interest in the distributions
allocable to the Class R Certificate with respect to a
Trust consisting primarily of a pool of conventional,
closed-end, fixed and adjustable rate residential mortgage
loans sold and serviced by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
This certifies that Aames Capital Corporation is the registered owner
of the Percentage Interest specified on the face of this Class R Certificate.
This Class R Certificate is one series of Certificates issued by a trust, the
assets of which consist primarily of a pool of conventional, closed-end, fixed
and adjustable rate, residential mortgage loans (the "Mortgage Loans"), sold and
serviced by Aames Capital Corporation (in its capacity as seller, the "Seller"
and in its capacity as servicer, the "Servicer", which term includes any
successor Servicer under the Agreement referred to below). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") between the Seller and Servicer and Bankers Trust Company of
California, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned to such
terms in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
No transfer of a Class R Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), and any applicable state securities laws or is made in
accordance with such Act and laws. In the event that such a transfer is desired
to be made by the holder hereof, (i) the transferee will be required to execute
an investment letter in the form described by the Agreement and (ii) if such
transfer is to be made, the Trustee shall require the Holder to deliver an
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Seller that such transfer is exempt (describing the applicable
exemption and the basis therefor) from or is being made pursuant to the
registration
A-85
213
requirements of the Act and of any applicable state securities laws. The Holder
hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Seller and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws. In connection with any such transfer, the Trustee
will also require an affidavit, in the form as described in the Agreement,
stating the matters set forth on the legend of this Class R Certificate.
The Holder of the Class R Certificate, by acceptance hereof, is deemed
to have designated the Servicer, if permitted by the Code and applicable law, to
act as the "tax matters person", to perform the functions of a "tax matters
partner" for purposes of Subchapter C of Chapter 63 of Subtitle F of the Code
and if not so permitted, the Holder of the Class R Certificate, is deemed to
have agreed to act as such "tax matters person".
The Class R Certificate is not entitled to any payments on and
collections in respect of the Mortgage Loans on any Distribution Date until all
other distributions for such Distribution Date have been made in accordance with
the Agreement. The Holder of this Certificate, by its acceptance of this
Certificate, agrees that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Seller , the Servicer, and the Trustee with the
consent of the Holders of Certificates evidencing Voting Interests of each Class
affected thereby aggregating not less than 51%. The Class R Certificate will
have no Voting Interests. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of the
Certificates.
This Certificate is issuable only as a registered Certificate without
coupons in the Percentage Interest specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, the
Certificate is exchangeable for a new Certificate evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Servicer, the Trustee, and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing together with
an affidavit in the form as described in the Agreement, and thereupon a new
Certificate evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
▇-▇▇
▇▇▇
▇▇ service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-87
215
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is the Class R Certificate
referred to in the within named
Agreement
By:______________________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-88
216
Date of Pooling and Servicing Percentage Interest: 100%
Agreement and Cut-off Date:
June 1, 1997 Certificate No.: R-3
First Distribution Date:
July 15, 1997
AAMES MORTGAGE TRUST 1997-B
MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS R
evidencing a percentage interest in the distributions allocable to the
Class R Certificate with respect to a Trust consisting primarily of a
pool of conventional, closed-end, fixed and adjustable rate residential
mortgage loans sold and serviced by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
This certifies that Aames Capital Corporation is the registered owner
of the Percentage Interest specified on the face of this Class R Certificate.
This Class R Certificate is one series of Certificates issued by a trust, the
assets of which consist primarily of a pool of conventional, closed-end, fixed
and adjustable rate, residential mortgage loans (the "Mortgage Loans"), sold and
serviced by Aames Capital Corporation (in its capacity as seller, the "Seller"
and in its capacity as servicer, the "Servicer", which term includes any
successor Servicer under the Agreement referred to below). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") between the Seller and Servicer and Bankers Trust Company of
California, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned to such
terms in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
No transfer of a Class R Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), and any applicable state securities laws or is made in
accordance with such Act and laws. In the event that such a transfer is desired
to be made by the holder hereof, (i) the transferee will be required to execute
an investment letter in the form described by the Agreement and (ii) if such
transfer is to be made, the Trustee shall require the Holder to deliver an
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Seller that such transfer is exempt (describing the applicable
exemption and the basis therefor) from or is being made pursuant to the
registration
A-89
217
requirements of the Act and of any applicable state securities laws. The Holder
hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Seller and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws. In connection with any such transfer, the Trustee
will also require an affidavit, in the form as described in the Agreement,
stating the matters set forth on the legend of this Class R Certificate.
The Holder of the Class R Certificate, by acceptance hereof, is deemed
to have designated the Servicer, if permitted by the Code and applicable law, to
act as the "tax matters person", to perform the functions of a "tax matters
partner" for purposes of Subchapter C of Chapter 63 of Subtitle F of the Code
and if not so permitted, the Holder of the Class R Certificate, is deemed to
have agreed to act as such "tax matters person".
The Class R Certificate is not entitled to any payments on and
collections in respect of the Mortgage Loans on any Distribution Date until all
other distributions for such Distribution Date have been made in accordance with
the Agreement. The Holder of this Certificate, by its acceptance of this
Certificate, agrees that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Seller , the Servicer, and the Trustee with the
consent of the Holders of Certificates evidencing Voting Interests of each Class
affected thereby aggregating not less than 51%. The Class R Certificate will
have no Voting Interests. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of the
Certificates.
This Certificate is issuable only as a registered Certificate without
coupons in the Percentage Interest specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, the
Certificate is exchangeable for a new Certificate evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Servicer, the Trustee, and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing together with
an affidavit in the form as described in the Agreement, and thereupon a new
Certificate evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
▇-▇▇
▇▇▇
▇▇ service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
A-91
219
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is the Class R Certificate
referred to in the within named
Agreement
By:______________________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
A-92
220
Date of Pooling and Servicing Percentage Interest: 100%
Agreement and Cut-off Date:
June 1, 1997 Certificate No.: R-4
First Distribution Date:
July 15, 1997
AAMES MORTGAGE TRUST 1997-B
MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS R
evidencing a percentage interest in the distributions allocable to the
Class R Certificate with respect to a Trust consisting primarily of a
pool of conventional, closed-end, fixed and adjustable rate residential
mortgage loans sold and serviced by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
This certifies that Aames Capital Corporation is the registered owner
of the Percentage Interest specified on the face of this Class R Certificate.
This Class R Certificate is one series of Certificates issued by a trust, the
assets of which consist primarily of a pool of conventional, closed-end, fixed
and adjustable rate, residential mortgage loans (the "Mortgage Loans"), sold and
serviced by Aames Capital Corporation (in its capacity as seller, the "Seller"
and in its capacity as servicer, the "Servicer", which term includes any
successor Servicer under the Agreement referred to below). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") between the Seller and Servicer and Bankers Trust Company of
California, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned to such
terms in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
No transfer of a Class R Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), and any applicable state securities laws or is made in
accordance with such Act and laws. In the event that such a transfer is desired
to be made by the holder hereof, (i) the transferee will be required to execute
an investment letter in the form described by the Agreement and (ii) if such
transfer is to be made, the Trustee shall require the Holder to deliver an
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Seller that such transfer is exempt (describing the applicable
exemption and the basis therefor) from or is being made pursuant to the
registration
A-93
221
requirements of the Act and of any applicable state securities laws. The Holder
hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Seller and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws. In connection with any such transfer, the Trustee
will also require an affidavit, in the form as described in the Agreement,
stating the matters set forth on the legend of this Class R Certificate.
The Holder of the Class R Certificate, by acceptance hereof, is deemed
to have designated the Servicer, if permitted by the Code and applicable law, to
act as the "tax matters person", to perform the functions of a "tax matters
partner" for purposes of Subchapter C of Chapter 63 of Subtitle F of the Code
and if not so permitted, the Holder of the Class R Certificate, is deemed to
have agreed to act as such "tax matters person".
The Class R Certificate is not entitled to any payments on and
collections in respect of the Mortgage Loans on any Distribution Date until all
other distributions for such Distribution Date have been made in accordance with
the Agreement. The Holder of this Certificate, by its acceptance of this
Certificate, agrees that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Seller , the Servicer, and the Trustee with the
consent of the Holders of Certificates evidencing Voting Interests of each Class
affected thereby aggregating not less than 51%. The Class R Certificate will
have no Voting Interests. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of the
Certificates.
This Certificate is issuable only as a registered Certificate without
coupons in the Percentage Interest specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, the
Certificate is exchangeable for a new Certificate evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Servicer, the Trustee, and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing together with
an affidavit in the form as described in the Agreement, and thereupon a new
Certificate evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
▇-▇▇
▇▇▇
▇▇ service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is the Class R Certificate
referred to in the within named
Agreement
By:______________________________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
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CLASS C CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE EXTENT SET
FORTH IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02(b) OF THE AGREEMENT REFERRED TO
HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G(A)(2) AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"). A TRANSFEREE OF THIS CERTIFICATE, BY
ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED THIS CERTIFICATE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN SECTION 6.02(c) OF THE
POOLING AND SERVICING AGREEMENT, AND SHALL BE REQUIRED TO FURNISH AN AFFIDAVIT
TO THE TRANSFEROR AND THE TRUSTEE TO THE EFFECT THAT (I) IT IS NOT (i) A
DISQUALIFIED ORGANIZATION, AS SUCH TERM IS DEFINED IN CODE SECTION 860E(e)(5),
OR AN AGENT (INCLUDING A BROKER, NOMINEE OR OTHER MIDDLEMAN) FOR SUCH
DISQUALIFIED ORGANIZATION, (ii) AN ENTITY THAT HOLDS REMIC RESIDUAL SECURITIES
AS NOMINEE TO FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH SECURITIES THROUGH
BOOK-ENTRY CHANGES IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS (A "BOOK-ENTRY
NOMINEE"), (iii) AN INDIVIDUAL, CORPORATION, PARTNERSHIP OR OTHER PERSON UNLESS
SUCH TRANSFEREE (A) IS NOT A FOREIGN PERSON OR (B) IS A FOREIGN PERSON THAT WILL
HOLD SUCH CLASS C CERTIFICATE IN CONNECTION WITH THE CONDUCT OF A TRADE OR
BUSINESS WITHIN THE UNITED STATES AND HAS FURNISHED THE TRANSFEROR AND THE
TRUSTEE WITH AN EFFECTIVE INTERNAL REVENUE SERVICE FORM 4224 OR (C) IS A FOREIGN
PERSON THAT HAS DELIVERED TO BOTH THE TRANSFEROR AND THE TRUSTEE AN OPINION OF A
NATIONALLY RECOGNIZED TAX COUNSEL TO THE EFFECT THAT THE TRANSFER OF THE CLASS C
CERTIFICATE TO IT IS IN ACCORDANCE WITH THE REQUIREMENTS OF THE CODE AND THE
REGULATIONS PROMULGATED THEREUNDER AND THAT SUCH TRANSFER OF THE CLASS C
CERTIFICATE WILL NOT BE DISREGARDED FOR FEDERAL INCOME TAX PURPOSES (ANY SUCH
PERSON WHO IS NOT COVERED BY CLAUSE (A), (B) OR (C) ABOVE BEING REFERRED TO
HEREIN AS A "NON-PERMITTED FOREIGN HOLDER") OR (iv) ANY PERSON WHICH IS AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR ANY PERSON WHICH IS AN
INDIVIDUAL RETIREMENT ACCOUNT OR EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT
TO SECTION 4975 OF THE
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CODE (AN "ERISA PLAN") OR AN ENTITY, INCLUDING AN INSURANCE COMPANY SEPARATE
ACCOUNT OR GENERAL ACCOUNT, WHOSE UNDERLYING ASSETS INCLUDE ERISA PLAN ASSETS BY
REASON OF AN ERISA PLAN'S INVESTMENT IN THE ENTITY, OR ANY PERSON INVESTING THE
ASSETS OF AN ERISA PLAN OR SUCH AN ENTITY, WHETHER AS NOMINEE, TRUSTEE, AGENT OR
OTHERWISE, (II) IT HAS NO INTENT OR PURPOSE TO IMPEDE THE ASSESSMENT OR
COLLECTION OF ANY FEDERAL, STATE OR LOCAL INCOME TAXES LEGALLY REQUIRED TO BE
PAID WITH RESPECT TO THE CLASS C CERTIFICATE, AND (III) IT HAS AGREED TO SUCH
AMENDMENTS TO FURTHER EFFECTUATE THE RESTRICTIONS ON TRANSFERS TO DISQUALIFIED
ORGANIZATIONS, AGENTS THEREOF, BOOK-ENTRY NOMINEES, NON-PERMITTED FOREIGN
HOLDERS OR ERISA PLANS. THE TERM "FOREIGN PERSON" MEANS A PERSON WHO IS NOT ONE
OF THE FOLLOWING: A CITIZEN OR RESIDENT OF THE UNITED STATES, A CORPORATION,
PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN OR UNDER THE LAWS OF THE
UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, OR AN ESTATE OR TRUST THAT
IS SUBJECT TO U.S. FEDERAL INCOME TAX REGARDLESS OF THE SOURCE OF ITS INCOME.
THE HOLDER OF THIS CLASS C CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED
TO HAVE AGREED TO THE DESIGNATION OF THE SERVICER AS ITS AGENT TO ACT AS "TAX
MATTERS PERSON" TO PERFORM THE FUNCTIONS OF A "TAX MATTERS PARTNER" FOR PURPOSES
OF SUBCHAPTER C OF CHAPTER 63 OF SUBTITLE F OF THE CODE, OR, IF SO REQUESTED BY
THE SERVICER, TO ACT AS TAX MATTERS PERSON.
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Date of Pooling and Servicing Percentage Interest: 100%
Agreement and Cut-off Date:
June 1, 1997 Certificate No.: C-1
First Distribution Date:
July 15, 1997
AAMES MORTGAGE TRUST 1997-B
MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-B, CLASS C
evidencing a percentage interest in the distributions allocable to the
Class C Certificate with respect to a Trust consisting primarily of a
pool of conventional, closed-end, fixed and adjustable rate residential
mortgage loans sold and serviced by Aames Capital Corporation.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AAMES CAPITAL CORPORATION OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
This certifies that Aames Capital Corporation is the registered owner
of the Percentage Interest specified on the face of this Class C Certificate.
This Class C Certificate is one series of Certificates issued by a trust, the
assets of which consist primarily of a pool of conventional, closed-end, fixed
and adjustable rate, residential mortgage loans (the "Mortgage Loans"), sold and
serviced by Aames Capital Corporation (in its capacity as seller, the "Seller"
and in its capacity as servicer, the "Servicer", which term includes any
successor Servicer under the Agreement referred to below). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") between the Seller and Servicer and Bankers Trust Company of
California, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned to such
terms in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
No transfer of a Class C Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), and any applicable state securities laws or is made in
accordance with such Act and laws. In the event that such a transfer is desired
to be made by the holder hereof, (i) the transferee will be required to execute
an investment letter in the form described by the Agreement and (ii) if such
transfer is to be made, the Trustee shall require the Holder to deliver an
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Seller that such transfer is exempt (describing the applicable
exemption and the basis therefor) from or is being made pursuant to the
registration
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requirements of the Act and of any applicable state securities laws. The Holder
hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Seller and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws. In connection with any such transfer, the Trustee
will also require an affidavit, in the form as described in the Agreement,
stating the matters set forth on the legend of this Class C Certificate.
The Holder of the Class C Certificate, by acceptance hereof, is deemed
to have designated the Servicer, if permitted by the Code and applicable law, to
act as the "tax matters person", to perform the functions of a "tax matters
partner" for purposes of Subchapter C of Chapter 63 of Subtitle F of the Code
and if not so permitted, the Holder of the Class C Certificate, is deemed to
have agreed to act as such "tax matters person".
The Class C Certificate is not entitled to any payments on and
collections in respect of the Mortgage Loans on any Distribution Date until all
other distributions for such Distribution Date have been made in accordance with
the Agreement. The Holder of this Certificate, by its acceptance of this
Certificate, agrees that the Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer, and the rights of the Certificateholders under the
Agreement at any time by the Seller, the Servicer, and the Trustee with the
consent of the Holders of Certificates evidencing Voting Interests of each Class
affected thereby aggregating not less than 51%. The Class C Certificate will
have no Voting Interests. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of the
Certificates.
This Certificate is issuable only as a registered Certificate without
coupons in the Percentage Interest specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, the
Certificate is exchangeable for a new Certificate evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Servicer, the Trustee, and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing together with
an affidavit in the form as described in the Agreement, and thereupon a new
Certificate evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
A-100
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No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Seller and the Trustee and any of their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Seller, the Trustee nor any of their respective
agents shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon (a) the purchase by
the Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust at a price determined as provided in the
Agreement, or (b) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust or the disposition of all property
acquired upon foreclosure or by deed in lieu of foreclosure of any Mortgage
Loan. The exercise of the right of the Servicer to purchase all the Mortgage
Loans and property in respect of all Mortgage Loans in the related Mortgage Loan
Group or all Mortgage Loans in the Trust will result in early retirement of the
Certificates. The right of the Servicer to purchase the Mortgage Loans in either
Mortgage Loan Group is subject to the Principal Balances of such Mortgage Loans
at the time of purchase being less than 10% of the sum of the Principal Balances
of such Mortgage Loans at the Cut-off Date plus the portion of the Purchase
Account Deposit allocable to such Mortgage Loan Group.
This Certificate will not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned for
authenticating purposes only by any authorized officer of the Trustee.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 25, 1997
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION:
This is the Class C Certificate
referred to in the within named
Agreement
By:_______________________________
Authorized Officer of Bankers Trust Company
of California, N.A., as Trustee
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EXHIBIT B
FORM OF SUBSEQUENT TRANSFER AGREEMENT
Pursuant to this Subsequent Transfer Agreement, dated as of [ ,
1997] by and between Aames Capital Corporation (the "Seller") and Bankers Trust
Company of California, N.A., in its capacity as trustee for Aames Mortgage Trust
1997-B (the "Trustee"), and pursuant to that certain Pooling and Servicing
Agreement, dated as of June 1, 1997 (the "Pooling and Servicing Agreement"), by
and between the Seller, as seller and servicer, and the Trustee, as trustee, the
Seller and the Trustee agree to the sale by the Seller and the purchase by the
Trustee of additional mortgage loans (the "Subsequent Mortgage Loans") to be
included in the Fixed Rate Group or the Adjustable Rate Group as listed on the
Mortgage Loan Schedule attached hereto as Schedule A.
Capitalized terms used and not defined herein shall have their
respective meanings as set forth in the Pooling and Servicing Agreement.
Section 1. Purchase and Conveyance of Subsequent Mortgage Loans.
(a) The Seller does hereby sell, transfer, assign, set over and
convey to the Trustee:
(i) all right, title and interest of such Seller in and
to the Subsequent Mortgage Loans owned by it and
listed on Schedule A hereto, including without
limitation, the related Mortgages, Mortgage Files and
Mortgage Notes, and all payments on, and proceeds
with respect to, such Subsequent Mortgage Loans
received on and after the Subsequent Cut-off Date
except such payments and proceeds as the Servicer is
entitled to retain pursuant to the express provisions
of the Pooling and Servicing Agreement;
(ii) all right, title and interest of such Seller in the
Mortgages on the properties securing the Subsequent
Mortgage Loans, including any related Mortgaged
Property acquired by or on behalf of the Trust by
foreclosure or deed in lieu of foreclosure or
otherwise;
(iii) all right, title and interest of such Seller in and
to any rights in or proceeds from any insurance
policies (including title insurance policies)
covering the Subsequent Mortgage Loans, the related
Mortgaged Properties or Mortgagors and any amounts
recovered from third parties in respect of any
Subsequent Mortgage Loans that became Liquidated
Mortgage Loans; and
(iv) the proceeds of all of the foregoing.
(b) With respect to each Subsequent Mortgage Loan, the Seller,
contemporaneously with the delivery of this Agreement, has delivered or caused
to be delivered to the Trustee, each item set forth in Section 2.01 of the
Pooling and Servicing Agreement. The transfer to the Trustee by the Seller of
the Subsequent Mortgage Loans identified on the Schedule A hereto shall be
absolute and
B-1
231
is intended by the Seller, the Servicer, the Trustee and the Certificateholders
to constitute and to be treated as a sale by the Seller.
(c) The expenses and costs relating to the delivery of the Subsequent
Mortgage Loans, this Agreement and the Pooling and Servicing Agreement shall be
borne by the Seller.
(d) Additional terms of the sale, including the purchase price, are set
forth on Attachments A and B hereto separated by Mortgage Loan Group.
Section 2. Representations and Warranties; Conditions Precedent.
(a) The Seller hereby affirms the representations and warranties set
forth in Section 2.05 of the Pooling and Servicing Agreement that relate to the
Subsequent Mortgage Loans as of the date hereof. The Seller hereby confirms that
each of the conditions set forth in Section 2.02 of the Pooling and Servicing
Agreement (except such conditions that are required to be satisfied as of the
end of the Commitment Period) are satisfied as of the date hereof.
(b) All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified and confirmed; provided however, that in the event of any
conflict the provisions of this Agreement shall control over the conflicting
provisions of the Pooling and Servicing Agreement.
Section 3. Recordation of Agreement.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Servicer and at its expense in the event such recordation
materially and beneficially affects the interests of Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 4. Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of California (without regard to conflict of laws principles and the
application of the laws of any other jurisdiction), and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
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232
Section 5. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
Seller and the Purchaser and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers, all as of the day and year first
above written.
AAMES CAPITAL CORPORATION,
as Seller
By:__________________________________
Name:
Title:
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
for Aames Mortgage Trust 1997-B
By:__________________________________
Name:
Title:
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233
SCHEDULE A
SUBSEQUENT MORTGAGE LOAN SCHEDULE
B-4
234
ATTACHMENT A
Subsequent Transfer Date:
Subsequent Cut-off Date:
Aggregate of the Principal Balances of
the Fixed Rate Group Subsequent Mortgage Loans:
Aggregate of the Purchase Prices of The Fixed Rate Group
Subsequent Mortgage Loans:
Number of Subsequent Mortgage Loans
in the Fixed Rate Group:
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235
ATTACHMENT B
Subsequent Transfer Date:
Subsequent Cut-off Date:
Aggregate of the Principal Balances of
The Adjustable Rate Group Subsequent Mortgage Loans:
Aggregate of the Purchase Prices of The Adjustable Rate Group
Subsequent Mortgage Loans:
Number of Subsequent Mortgage Loans
in the Adjustable Rate Group:
B-6
236
EXHIBIT C
MORTGAGE LOAN SCHEDULE
C-1
237
EXHIBIT D
FORM OF ANNUAL STATEMENT AS TO COMPLIANCE
The undersigned, , of Aames Capital
Corporation (the "Servicer"), in its capacity as Servicer under that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") between Aames Capital Corporation, as Seller and Servicer,
and Bankers Trust Company of California, N.A., as Trustee, does hereby certify
pursuant to Section 3.09 of the Pooling and Servicing Agreement that as of the
___ day of ____________, 199_:
(a) a review of the activities of the Servicer for the year ended December
31, 199_ and of its performance under the Pooling and Servicing
Agreement has been made under my supervision, and
(b) to the best of my knowledge, based on such review, the Servicer has
fulfilled all of its material obligations under the Pooling and
Servicing Agreement throughout such year.
IN WITNESS WHEREOF, I have hereunto signed my name as of this ____day
of ___________, 199_.
_________________________________________
Name:
Title:
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238
EXHIBIT E
FORM OF AFFIDAVIT PURSUANT TO SECTION 860E(e)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of ] [the United States], on behalf of
which he makes this affidavit. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Agreement as defined in
the Class R Certificate.
2. That the Investor's Taxpayer Identification Number is [ ].
3. That the Investor is not a "Disqualified Organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), or an agent of a Disqualified Organization (including a broker,
nominee or middleman) and will not be a "Disqualified Organization" as of [date
of transfer], and that the Investor is not acquiring a Class R Certificate of
the Aames Mortgage Trust 1997-B Mortgage Loan Pass-Through Certificates, (the
"Class R Certificate") for the account of, or as an agent (including a broker,
nominee or middleman) of any entity as to which the Investor has not received an
affidavit substantially in the form of this affidavit. For these purposes, a
"Disqualified Organization" means the United States, any state or political
subdivision thereof, any foreign government, any international organization, any
agency or instrumentality of any of the foregoing (other than an instrumentality
if all of its activities are subject to tax and a majority of its board of
directors is not selected by such governmental entity), any cooperative
organization furnishing electrical energy or providing telephone service to
persons in rural areas as described in Code Section 1381(a)(2)(c), or any
organization (other than a farmers' cooperative described in Code Section 521)
that is exempt from federal income tax unless such organization is subject to
the tax on unrelated business income imposed by Code Section 511.
4. That the Investor is not (i) an entity that holds Class R
Certificates as nominee to facilitate the clearance and settlement of such Class
R Certificates through electronic book-entry changes in accounts of
participating organizations (a "Book-Entry Nominee"), (ii) an individual,
corporation, partnership or other person unless such transferee (A) is not a
Foreign Person or (B) is a Foreign Person that will hold such Class R
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor and the Trustee with an effective
Internal Revenue Service Form 4224 or (C) is a Foreign Person that has delivered
to both the transferor and the Trustee an opinion of a nationally recognized tax
counsel to the effect that the transfer of a Class
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239
R Certificate to it is in accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of a Class R
Certificate will not be disregarded for federal income tax purposes (any such
person who is not covered by clause (A), (B) or (C) above being referred to
herein as a "Non-permitted Foreign Holder") or (iii) a Person that is an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, or any Person that is an
individual retirement account or employee benefit plan, trust or account subject
to Section 4975 of the Code (an "ERISA Plan") or an entity, including an
insurance company separate account or general account, whose underlying assets
include ERISA Plan assets by reason of an ERISA Plan's investment in the entity
or a Person investing the assets of an ERISA Plan or such an entity, whether as
nominee, trustee, agent or otherwise (an "ERISA Prohibited Holder").
5. That the Investor agrees to any such amendments of the Pooling and
Servicing Agreement as may be required to further effectuate the restrictions on
transfer of the Class R Certificate to such a Disqualified Organization or a
Book-Entry Nominee or a Non-permitted Foreign Holder or an ERISA Prohibited
Holder.
6. That the Investor has no intent or purpose to impede the assessment
or collection of any federal, state or local income taxes legally required to be
paid with respect to the Class R Certificate and will not transfer the Class R
Certificate to any Person that it has reason to believe has the intention to
impede the assessment or collection of such taxes.
7. The Investor has been advised of, understands and acknowledges that
under the Code, a substantial tax would be imposed on a "pass-through entity"
holding a Class R Certificate if at any time during the taxable year of the
pass-through entity a Person that is a Disqualified Organization is the record
holder of an interest in such entity. (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). A pass-through entity
shall be relieved of liability for the tax if it had received from such Person
an affidavit (in substantially the same form as this affidavit) that such Person
is not a Disqualified Organization and the entity had no actual knowledge that
the affidavit was false. The Investor will advise the Trustee and the Servicer
if it becomes a pass-through entity or if it is a pass-through entity, if any of
the interest holders are or become Disqualified Persons.
8. The Investor has reviewed the provisions of Section 6.02 of the
Agreement and understands the legal consequences of the acquisition of a Class R
Certificate including, without limitation, the restrictions on subsequent
transfers. The Investor expressly agrees to be bound by and to abide by the
provisions of Section 6.02 of the Agreement, as such Section may be amended from
time to time.
9. The Investor agrees to require an affidavit substantially similar to
this affidavit from any Person to whom the Investor attempts to transfer its
Class R Certificate including any Person with respect to which the Investor is
then acting as nominee, trustee or agent, and in connection with any transfer by
a Person for whom the Investor is acting as nominee, trustee or agent, and the
Investor
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240
will not transfer its Class R Certificate to be transferred to any Person that
the Investor knows is a Disqualified Organization.
10. The Investor is acquiring the Class R 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. If clause (ii) of the preceding sentence is applicable, such
Person is not a Disqualified Organization and the Investor has no knowledge that
any such affidavit from such Person is false.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] and its corporate seal to be hereunto attached, attested by
its [Assistant] Secretary, this ____ day of _________, 199_.
[NAME OF INVESTOR]
By:_______________________
Name:
Title:
Personally appears before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this _____day of ___________, 199_.
__________________________
NOTARY PUBLIC
COUNTY OF_________________
STATE OF__________________
My Commission expires the ________day of______, 19___.
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EXHIBIT F
FORM OF NOTICE REGARDING PAYMENT IN FULL
OF PRINCIPAL BALANCE OF MORTGAGE LOAN
Bankers Trust Company of California, N.A.,
as Trustee
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: Mortgage Loan Pass-Through Certificates, Series 1997-B
Ladies and Gentlemen:
Reference is made to Section 3.07 of the Pooling and Servicing
Agreement dated as of June 1, 1997 (the "Pooling and Servicing Agreement")
between Aames Capital Corporation, as Seller and Servicer, and Bankers Trust
Company of California, N.A., as Trustee. All capitalized terms used but not
defined herein shall have the meanings given to such terms in the Pooling and
Servicing Agreement.
The undersigned hereby certifies that the Principal Balance of the
Mortgage Loan(s) listed on Schedule A annexed hereto has been paid in full and
that all amounts received in connection with the payment of such Mortgage
Loan(s) that were required to be deposited or credited in the Certificate
Account pursuant to Section 3.02 of the Pooling and Servicing Agreement have
been so deposited or credited.
The undersigned further certifies that he is a Servicing Officer of the
Servicer holding the office set forth beneath his signature and that he is duly
authorized to execute this certificate on behalf of the Servicer.
AAMES CAPITAL CORPORATION
Date:__________________ By:__________________________
Name:
Title:
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242
EXHIBIT G
FORM OF LIQUIDATION REPORT
1. Type of Liquidation (REO disposition/charge-off/short pay-off)
- Date Last Paid
- Date of Foreclosure
- Date of REO
- Date of REO Disposition
- Property Sale Price; Estimated Market Value at
Disposition
2. Liquidation Proceeds
- Principal Prepayment $-
---------
- Property Sale Proceeds
---------
- Insurance Proceeds
---------
- Other (itemize)
---------
TOTAL $-
=========
3. Liquidation Expenses
- Servicing Advances $-
---------
- Monthly Advances
---------
- Contingency Fees
---------
- Servicing Fees
---------
- Annual Expense Escrow Amount
---------
- Supplemental Fee (if any)
---------
- Additional Interest (if any)
---------
- Monthly Sponsor Fee (if any)
---------
TOTAL $
=========
4. Net Liquidation Proceeds* $
(Total of Item 2 minus total of Item 3) ---------
5. Accrued and Unpaid Interest on Mortgage Loan $
---------
6. Principal Balance of Mortgage Loan $
---------
7. Realized Loss on Mortgage Loan $
(Item 5 plus Item 6 minus Item 4, with ---------
a Realized Loss resulting only if the total
of this calculation is a positive number)
*Applied first to Item 5 and then to Item 6.
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243
EXHIBIT H
OFFICER'S CERTIFICATE
I, _____________________, hereby certify that I am the duly elected
_____________________ of Aames Capital Corporation (the "Company") acting as
servicer pursuant to a Pooling and Servicing Agreement dated as of June 1, 1997
by and among the Company and Bankers Trust Company of California, N.A., as
Trustee, and further certify, to the best of my knowledge and after due inquiry
that the following is a summary of the facts and circumstances surrounding the
"charge-off" of any Mortgage Loans during the Collection Period from _____ 1
through _____ 30/31, 199_;
[Insert the following information for each "charged-off" Mortgage Loan]
Loan #
Borrower Name
Property Address
Date of "charge-off"
Original Principal Balance
Outstanding Principal Balance
Mortgage Loan Rate
Accrued Interest at time of "charge off"
Unreimbursed Servicing Advances at time of "charge off" Unreimbursed
Delinquency Advances at time of "charge off" # of days in default at
time of "charge off" Original Appraised Value Current appraised value
based upon "drive by" Amount of outstanding first lien Estimate of
Foreclosure Costs
Broker Fees
Legal Fees
Repair and Miscellaneous Expenses
Projected Marketing Period
Estimate of Loss on Foreclosure and Liquidation
Capitalized terms not otherwise defined herein have the meanings set forth in
the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed by name and affixed the seal
of the Servicer.
Dated:_________________ ___________________________
Name:
Title:
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244
EXHIBIT I
FORM OF TRANSFEROR AFFIDAVIT
[LETTERHEAD OF TRANSFEROR]
________________, 199_
Bankers Trust Company of California, N.A.,
as Trustee
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: Aames Mortgage Trust 1997-B
Mortgage Pass-Through Certificates, Series 1997-B
Ladies and Gentlemen:
We have reviewed the attached affidavit of [NAME OF TRANSFEREE] and
have no actual knowledge that such affidavit is not true and has no reason to
believe that the requirements set forth in paragraph 3, paragraph 4(i) or
paragraph 4(ii) are not satisfied and have no reason to believe that the
transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to a
Class R Certificate. In addition, we have conducted a reasonable investigation
at the time of the transfer and found that the transferee had historically paid
its debts as they came due and found no significant evidence to indicate that
the transferee will not continue to pay its debts as they become due.
Very truly yours,
__________________________________________
By:_______________________________________
Name:
Title:
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