SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) DECEMBER 30, 1996
The Money Store Trust 1996-D and the Originators as listed below
under a Pooling and Servicing Agreement dated as of November 30,
1996 providing for the issuance of The Money Store Asset Backed
Certificates, Series 1996-D.
TMS Mortgage Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
The Money Store/Minnesota Inc.
(Exact name of registrant as specified in its charter)
* 33-98734 *
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
2840 MORRIS AVENUE, UNION, NEW JERSEY 07083
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (908) 686-2000
N/A
(Former name or former address, if changed since last report)
* See Schedule A attached hereto.
<PAGE>
Item 5. OTHER EVENTS
The Originators listed on Schedule A attached hereto, registered issuances
of up to $6,500,000,000 principal amount of TMS Asset Backed Certificates on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Act"), by a Registration Statement on Form S-3
(Registration File No. 33-98734) (as amended, the "Registration Statement").
Pursuant to the Registration Statement, the Originators caused the issuance of
$1,035,000,000 principal amount of The Money Store Asset Backed Certificates,
Series 1996- D (the "Certificates") by The Money Store Trust 1996-D (the
"Trust"), on December 30, 1996 (the "Closing Date"). This Current Report on Form
8-K is being filed to file a detailed description of the Initial Mortgage Loans
contributed to the Trust, a copy of the Pooling and Servicing Agreement referred
to below and the Underwriting Agreement entered into among The Money Store Inc.,
as representative (the "Representative"), the Originators and Lehman Brothers
Inc., as representative of the underwriters named therein.
The Certificates were issued pursuant to a pooling and servicing agreement
(the "Pooling and Servicing Agreement"), dated as of November 30, 1996 (the
"Cut-Off Date"), among the Representative, the Originators and The Bank of New
York, as trustee (the "Trustee"), and consist of Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class
A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15 and Class A-16
Certificates (collectively, the "Class A Certificates"), Class X Certificates
and Class R Certificates (the "Class R Certificates"). As of the Closing Date,
the initial principal amount of the (i) Class A-1 Certificates was $66,305,000,
(ii) Class A-2 Certificates was $86,383,000, (iii) Class A-3 Certificates was
$96,468,000, (iv) Class A-4 Certificates was $53,850,000, (v) Class A-5
Certificates was $47,916,000, (vi) Class A-6 Certificates was $36,443,000, (vii)
Class A-7 Certificates was $44,807,000, (viii) Class A-8 Certificates was
$27,828,000, (ix) Class A-9 Certificates was $40,000,000, (x) Class A-10
Certificates was $350,000,000, (xi) Class A-11 Certificates was $77,391,000,
(xii) Class A-12 Certificates was $34,590,000, (xiii) Class A-13 Certificates
was $27,684,000, (xiv) Class A-14 was $15,909,000, (xv) Class A-15 was
$19,426,000 and (xvi) Class A-16 was $10,000,000.
Capitalized terms not defined herein have the meanings assigned in the
Pooling and Servicing Agreement.
<PAGE>
CERTAIN CHARACTERISTICS OF POOL I
Set forth below is a description of certain characteristics of Pool I and
the Initial Pool I Mortgage Loans. Certain of the percentage columns may not sum
to 100.00% due to rounding.
LEHMAN BROTHERS
CLOSING FILE FOR 8K
<TABLE>
<CAPTION>
Number EOM
ORIGINAL BAL of Loans Balance %
<S> <C> <C> <C>
0.01- 10,000.00 421 3,314,056.09 0.88
10,000.01- 20,000.00 1,941 30,034,815.53 8.00
20,000.01- 30,000.00 1,804 45,448,723.23 12.11
30,000.01- 40,000.00 1,315 46,294.854.38 12.34
40,000.01- 50,000.00 948 42,898,320.63 11.43
50,000.00- 60,000.00 701 38,661,281.37 10.30
60,000.01- 70,000.00 474 30,796,878.63 8.21
70,000.01- 80,000.00 330 24,836,659.06 6.62
80,000.01- 90,000.00 223 19,074,045.27 5.08
90,000.01- 100,000.00 201 19,171,481.62 5.11
100,000.01- 110,000.00 142 14,911,777.67 3.97
110,000.01- 120,000.00 92 10,504,786.49 2.80
120,000.01- 130,000.00 82 10,278,880.54 2.74
130,000.01- 140,000.00 58 7,845,164.17 2.09
140,000.01- 150,000.00 28 4,092,392.44 1.09
150,000.01- 160,000.00 27 4,189,794.79 1.12
160,000.01- 170,000.00 22 3,631,071.67 0.97
170,000.01- 180,000.00 20 3,527,266.37 0.94
180,000.01- 190,000.00 8 1,484,638.94 0.40
190,000.01- 200,000.00 15 2,942,566.94 0.78
200,000.01- 210,000.00 8 1,650,908.58 0.44
210,000.01- 220,000.00 8 1,722,313.91 0.46
220,000.01- 230,000.00 4 901,500.00 0.24
230,000.01- 240,000.00 4 937,257.15 0.25
240,000.01- 250,000.00 6 1,478.586.45 0.39
250,000.01- 260,000.00 3 771,994.43 0.21
260,000.01- 270,000.00 1 259,944.05 0.07
270,000.01- 280,000.00 1 277,000.00 0.07
280,000.01- 290,000.00 2 573,848.66 0.15
290,000.01- 300,000.00 2 595,565.70 0.16
300,000.01+ 6 2,144,653.41 0.57
Total: 8,897 375,253,028.17 100.00
Min: 5,000.00 Max: 445,000.00 Avg: 42,243
</TABLE>
<TABLE>
<CAPTION>
Number EOM
EOM Balance of Loans Balance %
<S> <C> <C> <C>
0.01- 10,000.00 423 3,326,669.73 0.89
10,000.00- 20,000.00 1,944 30,099,233.01 8.02
20,000.01- 30,000.00 1,804 45,478,495.85 12.12
30,000.01- 40,000.00 1,313 46,266,541.99 12.33
40,000.01- 50,000.00 953 43,155,027.12 11.50
50,000.01- 60,000.00 697 38,476,984.95 10.25
60,000.01- 70,000.00 471 30,649,690.85 8.17
70,000.01- 80,000.00 330 24,836,659.06 6.62
80,000.01- 90,000.00 225 19,252,699.81 5.13
90,000.01-100,000.00 200 19,089,798.49 5.09
100,000.01-110,000.00 141 14,814,806.26 3.95
110,000.01-120,000.00 93 10,738,539.94 2.86
120,000.01-130,000.00 81 10,171,356.38 2.71
130,000.01-140,000.00 57 7,715,221.24 2.06
140,000.01-150,000.00 28 4,092,392.44 1.09
150,000.01-160,000.00 27 4,189,794.79 1.12
160,000.01-170,000.00 22 3,631,071.67 0.97
170,000.01-180,000.00 20 3,527,266.37 0.94
180,000.01-190,000.00 8 1,484,638.94 0.40
190,000.01-200,000.00 15 2,942,566.94 0.78
200,000.01-210,000.00 8 1,650,908.58 0.44
210,000.01-220,000.00 8 1,722,313.91 0.46
220,000.01-230,000/00 4 901,500.00 0.24
230,000.01-240,000.00 4 937,257.15 0.25
240,000.01-250,000.00 6 1,478,586.45 0.39
250,000.01-260,000.00 4 1,031,938.48 0.27
270,000.01-280,000.00 1 277,000.00 0.07
280,000.01-290,000.00 2 573,848.66 0.15
290,000.01-300,000.00 2 595,565.70 0.16
300,000.01+ 6 2,144,653.41 0.57
Total: 8,897 375,253,028.17 100.00
Min: 3,713.64 Max: 445,000.00 Avg: 42,177
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Coupon of Loans Balance %
<S> <C> <C> <C>
8.001- 8.500 2 99,774.03 0.03
8.501- 9.000 27 1,448,020.03 0.39
9.001- 9.500 29 2,473,907.83 0.66
9.501- 10.000 214 17,928,247.92 4.78
10.001- 10.500 418 26,580,718.73 7.08
10.501- 11.000 1,215 69,597,916.05 18.55
11.001- 11.500 896 45,118,773.45 12.02
11.501- 12.000 1,570 63,852,688.40 17.02
12.001- 12.500 1,228 45,440,813.40 12.11
12.501- 13.000 1,142 37,782,605.92 10.07
13.001- 13.500 846 25,647,119.95 6.83
13.501- 14.000 669 20,291,113.32 5.41
14.001- 14.500 309 8,494,660.50 2.26
14.501- 15.000 235 7,324,398.28 1.95
15.001+ 97 3,172,270.36 0.85
Total: 8,897 375,253,028.17 100.00
Min: 8.240 Max: 17.250 NZWA: 11.89
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Stated Remaining Term of Loans Balance %
<S> <C> <C> <C>
25- 36 7 60,796.72 0.02
37- 48 9 92,160.26 0.02
49- 60 339 4,035,463.95 1.08
61- 72 38 546,052.87 0.15
73- 84 109 1,905,410.78 0.51
85- 96 28 573,513.02 0.15
97- 108 1 172,053.14 0.05
109- 120 1,326 26,463,904.76 7.05
121- 132 5 165,568.95 0.04
133- 144 19 743,579.98 0.20
145- 156 2 48,758.42 0.01
157- 168 7 532,615.69 0.14
169- 180 3,785 148,740,059.53 39.64
181- 192 3 110,000.00 0.03
193- 204 5 211,977.83 0.06
217- 228 1 100,000.00 0.03
229- 240 553 23,912,997.29 6.37
289- 300 433 18,234,840.42 4.86
349- 360 2,227 148,603,274.56 39.60
Total: 8,897 375,253,028.17 100.00
NZMIN: 34 Max: 360 NZWA: 253
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Seasoning of Loans Balance %
<S> <C> <C> <C>
- 0 2,923 123,172,753.00 32.82
1- 12 5,970 251,681,672.29 67.07
13- 24 4 398,602.88 0.11
Total: 8,897 375,253,028.17 100.00
NZMIN: 1 Max: 23 WA: 1
</TABLE>
<TABLE>
<CAPTION>
Number EOM
CombinedLTV(SrBal+OrBal)divided by of Loans Balance %
<S> <C> <C> <C>
0.01- 5.00 1 5,136.75 0.00
5.01- 10.00 22 334,190.36 0.09
10.01- 15.00 64 1,011,217.24 0.27
15.01- 20.00 95 1,911,245.42 0.51
20.01- 25.00 134 3,100,218.06 0.83
25.01- 30.00 140 3,359,738.22 0.90
30.01- 35.00 166 3,955,248.54 1.05
35.01- 40.00 183 5,682,366.69 1.51
40.01- 45.00 224 7,809,742.00 2.08
45.01- 50.00 291 11,072,582.34 2.95
50.01- 55.00 315 11,253,896.46 3.00
55.01- 60.00 430 17,587,512.96 4.69
60.01- 65.00 628 28,219,909.19 7.52
65.01- 70.00 935 39,398,473.62 10.50
70.01- 75.00 1,030 45,891,072.37 12.23
75.01- 80.00 2,591 117,532,099.86 31.32
80.01- 85.00 721 31,504,764.46 8.40
85.01- 90.00 803 40,618,430.03 10.82
90.01- 95.00 107 3,888,428.86 1.04
95.01- 100.00 17 1,116,754.74 0.30
Total: 8,897 375,253,028.17 100.00
NZMIN: 4.52 Max: 100.00 NZWA: 71.6
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Original Term of Loans Balance %
<S> <C> <C> <C>
25- 36 7 60,796.72 0.02
37- 48 8 81,593.03 0.02
49- 60 340 4,046,031.18 1.08
61- 72 38 546,052.87 0.15
73- 84 109 1,905,410.78 0.51
85- 96 28 573,513.02 0.15
97-108 1 172,053.14 0.05
109-120 1,326 26,463,904.76 7.05
121-132 4 143,061.39 0.04
133-144 20 766,087.54 0.20
145-156 2 48,758.42 0.01
157-168 2 44,701,82 0.01
169-180 3,790 149,227,973.40 39.77
181-192 3 110,000.00 0.03
193-204 5 211,977.83 0.06
217-228 1 100,000.00 0.03
229-240 553 23,912,997.29 6.37
289-300 433 18,234,840.42 4.86
349-360 2,227 148,603,274.56 39.60
Total: 8,897 375,253,028.17 100.00
NZMIN: 36 Max: 360 NZWA: 254
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Property Type of Loans Balance %
<S> <C> <C> <C>
2-4 FAMILY 418 23,485,519.33 6.26
CONDO 90 2,728,643.43 0.73
MANUFACTURED HOUSING 203 8,178,899.91 2.18
MULTI FAMILY 71 6,104,317.83 1.63
PUD 53 3,117,694.25 0.83
SINGLE FAMILY 7,983 328,883,449.32 87.64
TOWN HOUSE 79 2,754,504.10 0.73
Total: 8,897 375,253,028.17 100.00
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Lien Position of Loans Balance %
<S> <C> <C> <C>
1 5,428 287,511,455.66 76.62
2 3,469 87,741,572.51 23.38
Total: 8,897 375,253,028.17 100.00
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Loan Purpose of Loans Balance %
<S> <C> <C> <C>
Cash Out 1,864 47,757,763.06 12.73
Debt Consolidation 2,821 79,802,161.61 21.27
HOME IMPRVMNT 27 530,891.60 0.14
Purchase 336 28,510,397.41 7.60
Refinance 3,849 218,651,814.49 58.27
Total: 8,897 375,253,028.17 100.00
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Occupancy Status of Loans Balance %
<S> <C> <C> <C>
Investment 447 20,473,629.33 5.46
Primary Home 8,392 351,996,324.51 93.80
Second Home 58 2,783,074.33 0.74
Total: 8,897 375,253,028.17 100.00
</TABLE>
<TABLE>
<CAPTION>
Number EOM
State of Loans Balance %
<S> <C> <C> <C>
AR 2 187,462.07 0.05
AZ 149 5,895,341.23 1.57
CA 546 27,108,197.60 7.22
CO 202 7,541,550.29 2.01
CT 90 4,196,514.15 1.12
DC 40 2,114,585.09 0.56
DE 57 2,375,112.64 0.63
FL 340 13,817,485.84 3.68
GA 311 14,308,503.70 3.81
IA 60 1,726,372.01 0.46
ID 159 5,879,870.06 1.57
IL 561 24,425,703.00 6.51
IN 391 14,246,898.40 3.80
KS 144 5,367,219.35 1.43
KY 128 5,872,901.33 1.57
MA 138 6,186,642.09 1.65
MD 212 8,391,466.43 2.24
ME 120 3,903,249.73 1.04
MI 322 10,331,431.51 2.75
MN 142 4,711,213.55 1.26
MO 352 12,499,164.87 3.33
MS 48 1,830,923.39 0.49
MT 1 15,000.00 0.00
NC 289 15,484,882.77 4.13
ND 13 506,075.63 0.13
NE 37 1,049,539.29 0.28
NH 47 2,066,368.77 0.55
NJ 371 21,386,178.36 5.70
NM 132 6,117,887.76 1.63
NV 111 4,979,298.98 1.33
NY 581 29,582,929.29 7.88
OH 453 17,496,574.30 4.66
OK 81 2,685,417.26 0.72
OR 138 5,062,566.62 1.35
PA 639 24,135,322.06 6.43
RI 41 1,499,746.66 0.40
SC 205 9,474,341.40 2.52
SD 7 192,909.30 0.05
TN 155 5,257,326.50 1.40
TX 118 4,876,618.93 1.30
UT 143 5,616,563.45 1.50
VA 106 4,510,243.15 1.20
VT 19 753,372.88 0.20
WA 524 23,479,863.71 6.26
WI 145 4,912,870.06 1.31
WV 8 403,847.89 0.11
WY 19 789,474.82 0.21
Total: 8,897 375,253,028.17 100.00
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Due Date of Loans Balance %
<S> <C> <C> <C>
1996-10 4 207,532.83 0.06
1996-11 113 5,748,600.51 1.53
1996-12 1,175 54,150,364.78 14.43
1997-01 6,986 289,925,696.92 77.26
1997-02 590 24,049,702.23 6.41
1997-03 29 1,171,130.90 0.31
Total: 8,897 375,253,028.17 100.00
</TABLE>
<PAGE>
CERTAIN CHARACTERISTICS OF POOL II
Set forth below is a description of certain characteristics of Pool II and
the Initial Pool II Mortgage Loans. Certain of the percentage columns may not
sum to 100.00% due to rounding.
LEHMAN BROTHERS
Closing file for 8K
Records: 3,360 Page 1 of 5
Balance: 272,990,012.99 Report: AAA/8K-ARM
Selection: TYPE in "ARM" FRI, JAN 10, 1997 2:14 PM
Prepared by : ATHYAGAR
p:\ANAND\TM96D\FILE8KA
<TABLE>
<CAPTION>
Number EOM
ORIGINAL BAL of Loans Balance %
<S> <C> <C> <C>
0.01 - 10,000.00 1 10,000.00 0.00
10,000.01 - 20,000.00 19 321,634.05 0.12
20,000.01 - 30,000.00 176 4,651,784.94 1.70
30,000.01 - 40,000.00 321 11,498,060.02 4.21
40,000.01 - 50,000.00 396 18,039,305.30 6.61
50,000.01 - 60,000.00 435 24,033,655.02 8.80
60,000.01 - 70,000.00 396 25,865,861.81 9.48
70,000.01 - 80,000.00 345 25,931,880.77 9.50
80,000.01 - 90,000.00 256 21,850,511.40 8.00
90,000.01 - 100,000.00 227 21,686,235.97 7.94
100,000.01 - 110,000.00 156 16,376,710.40 6.00
110,000.01 - 120,000.00 142 16,368,525.32 6.00
120,000.01 - 130,000.00 93 11,630,455.09 4.26
130,000.01 - 140,000.00 82 11,130,311.69 4.08
140,000.01 - 150,000.00 54 7,789,740.31 2.85
150,000.01 - 160,000.01 42 6,515,534.53 2.39
160,000.01 - 170,000.00 29 4,804,387.74 1.76
170,000.01 - 180,000.00 41 7,194,754.14 2.64
180,000.01 - 190,000.00 22 4,106,472.25 1.50
190,000.01 - 200,000.00 17 3,341,297.28 1.22
200,000.01 - 210,000.00 18 3,711,841.76 1.36
210,000.01 - 220,000.00 7 1,508,987.51 0.55
220,000.01 - 230,000.00 10 2,256,738.75 0.83
230,000.01 - 240,000.00 10 2,366,570.77 0.87
240,000.01 - 250,000.00 8 1,970,847.00 0.72
250,000.01 - 260,000.00 9 2,291,114.56 0.84
260,000.01 - 270,000.00 6 1,598,409.60 0.59
270,000.01 - 280,000.00 2 549,891.11 0.20
280,000.01 - 290,000.00 5 1,431,873.91 0.52
290,000.01 - 300,000.00 7 2,078,925.71 0.76
300,00.01 + 28 10,077,694.28 3.69
Total: 3,360 272,990,012.99 100.00
Min: 10,000.00 Max: 480,000.00 Avg: 81,315
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
EOM Balance of Loans Balance %
<S> <C> <C> <C>
0.01 - 10,000.00 1 10,000.00 0.00
10,000.01 - 20,000.00 20 341,576.81 0.13
20,000.01 - 30,000.00 176 4,660,727.96 1.71
30,000.01 - 40,000.00 320 11,469,174.24 4.20
40,000.01 - 50,000.00 398 18,128,565.93 6.64
50,000.01 - 60,000.00 434 24,002,409.13 8.79
60,000.01 - 70,000.00 396 25,874,863.35 9.48
70,000.01 - 80,000.00 345 25,942,884.40 9.50
80,000.01 - 90,000.00 255 21,772,491.49 7.98
90,000.01 - 100,000.00 228 21,781,036.90 7.98
100,000.01 - 110,000.00 155 16,281,909.47 5.96
110,000.01 - 120,000.00 142 16,368,525.32 6.00
120,000.01 - 130,000.00 93 11,630,455.09 4.26
130,000.00 - 140,000.00 82 11,130,311.69 4.08
140,000.01 - 150,000.00 54 7,789,740.31 2.85
150,000.01 - 160,000.00 42 6,515,534.53 2.39
160,000.01 - 170,000.00 29 4,804,387.74 1.76
170,000.01 - 180,000.00 41 7,194,754.14 2.64
180,000.01 - 190,000.00 22 4,106,472.25 1.50
190,000.01 - 200,000.00 17 3,341,297.28 1.22
200,000.01 - 210,000.00 18 3,711,841.76 1.36
210,000.01 - 220,000.00 7 1,508,987.51 0.55
220,000.01 - 230,000.00 10 2,256,738.75 0.83
230,000.01 - 240,000.00 10 2,366,570.77 0.87
240,000.01 - 250,000.00 8 1,970,847.00 0.72
250,000.01 - 260,000.00 9 2,291,114.56 0.84
260,000.01 - 270,000.00 6 1,598,409.60 0.59
270,000.01 - 280,000.00 2 549,891.11 0.20
280,000.01 - 290,000.00 5 1,431,873.91 0.52
290,000.01 - 300,000.00 7 2,078,925.71 0.76
300,000.01 + 28 10,077,694.28 3.69
Total: 3,360 272,990,012.99 100.00
Min: 10,000.00 Max: 479,809.25 Avg: 81,247
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Coupon of Loans Balance %
<S> <C> <C> <C>
4.501 - 5.000 1 355,923.01 0.13
7.001 - 7.500 2 557,640.00 0.20
7.501 - 8.000 34 4,151,661.30 1.52
8.001 - 8.500 229 21,907,938.18 8.03
8.501 - 9.000 596 51,807,371.91 18.98
9.001 - 9.500 613 49,115,107.97 17.99
9.501 -10.000 583 46,573,390.13 17.06
10,001 -10.500 458 35,463,229.26 12.99
10.501 -11.000 325 25,458,185.83 9.33
11.001 -11.500 189 15,271,723.02 5.59
11.501 -12.000 146 10,791,837.51 3.95
12.001 -12.500 93 5,982,272.20 2.19
12.501 -13.000 57 3,882,179.03 1.42
12.001 -13.500 14 629,693.74 0.23
13.501 -14.000 10 624,040.44 0.23
14.001 -14.500 3 174,080.28 0.06
14.501 -15.000 2 111,142.86 0.04
15.001 + 5 132,596.32 0.05
Total: 3,360 272,990,012.99 100.00
Min: 4.875 max: 15.490 NZWA: 9.85
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Stated Remaining Term of Loans Balance %
<S> <C> <C> <C>
73 - 84 1 32,009.66 0.01
157 - 168 2 407,777.51 0.15
169 - 180 2 122,400.00 0.04
229 - 240 1 87,901.00 0.03
337 - 348 17 1,173,010.05 0.43
349 - 360 3,337 271,166,914.77 99.33
Total: 3,360 272,990,012.99 100.00
NZMIN: 81 Max: 360 NZWA: 358
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Original Term of Loans Balance %
<S> <C> <C> <C>
73 - 84 1 32,009.66 0.01
169 - 180 3 478,323.01 0.18
229 - 240 1 87,901.00 0.03
349 - 360 3,355 272,391,779.32 99.78
Total: 3,360 272,990,012.99 100.00
NZMIN: 84 Max: 360 NZWA: 360
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Seasoning of Loans Balance %
<S> <C> <C> <C>
Less than 0 1,221 93,403,661.90 34.22
1 - 12 2,122 178,149,573.34 65.26
13 - 24 16 1,384,923.25 0.51
121+ 1 51,854.50 0.02
Total: 3,360 272,990,012.99 100.00
NZMIN: 1 Max: 194 WA: 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Combined LTV(SrBal+OrBal)divided by of Loans Balance %
<S> <C> <C> <C>
5.01 - 10.00 1 24,157.63 0.01
10.01 - 15.00 2 47,057.57 0.02
15.01 - 20.00 10 411,171.96 0.15
20.01 - 25.00 7 295,746.58 0.11
25.01 - 30.00 20 946,639.77 0.35
30.01 - 35.00 39 1,484,166.12 0.54
35.01 - 40.00 48 2,554,355.67 0.94
40.01 - 45.00 56 2,860,612.27 1.05
45.01 - 50.00 79 4,792,042.15 1.76
50.01 - 55.00 89 6,481,273.83 2.37
55.01 - 60.00 149 9,901,953.40 3.63
60.01 - 65.00 302 20,650,264.63 7.56
65.01 - 70.00 413 31,993,943.29 11.72
70.01 - 75.00 516 46,023,973.57 16.86
75.01 - 80.00 1,308 117,056,377.81 42.88
80.01 - 85.00 300 24,859,127.36 9.11
85.01 - 90.00 17 2,024,975,37 0.74
90.01 - 95.00 3 457,229.30 0.17
95.01 - 100.00 1 124,944.71 0.05
Total: 3,360 272,990,012.99 100.00
NZMIN: 6.55 Max: 96.15 NZWA: 73.0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Amortization Type of Loans Balance %
<S> <C> <C> <C>
Regular 3,360 272,990,012.99 100.00
Total: 3,360 272,990,012.99 100.00
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Property Type of Loans Balance %
<S> <C> <C> <C>
2-4 FAMILY 213 19,133,750.63 7.01
CONDO 47 3,171,619.78 1.16
MANUFACTURED HOUSING 85 5,702,083.79 2.09
PUD 14 1,852,674.99 0.68
SINGLE FAMILY 2,974 241,126,220.79 88.33
TOWN HOUSE 27 2,003,663.01 0.73
Total: 3,360 272,990,012.99 100.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Lien Position of Loans Balance %
<S> <C> <C> <C>
1 3,360 272,990,012.99 100.00
Total: 3,360 272,990,012.99 100.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Loan Purpose of Loans Balance %
<S> <C> <C> <C>
Cash Out 244 13,131,079.38 4.81
Debt Consolidation 210 11,325,408.29 4.15
HOME IMPRVMNT 1 54,967.52 0.02
Purchase 174 19,382,036.96 7.10
Refinance 2,730 229,060,775.51 83.91
Other 1 35,734.33 0.01
Total: 3,360 272,990,012.99 100.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Occupancy Status of Loans Balance %
<S> <C> <C> <C>
Investment 136 8,776,950.46 3.22
Primary Home 3,200 262,068,846.34 96.00
Second Home 24 2,144,216.19 0.79
Total: 3,360 272,990,012.99 100.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
State of Loans Balance %
<S> <C> <C> <C>
AK 1 79,876.52 0.03
AZ 50 3,828,636.88 1.40
CA 248 28,027,163.55 10.27
CO 82 7,146,794.73 2.62
CT 38 4,085,808.38 1.50
DC 16 1,803,325,54 0.66
DE 12 960,349.37 0.35
FL 78 5,218,698.87 1.91
GA 70 4,969,147,31 1.82
IA 7 472,389.70 0.17
ID 55 4,246,573.41 1.56
IL 315 29,710,556.73 10.88
IN 86 5,321,763.00 1.95
KS 30 1,484,165.34 0.54
KY 51 3,307,529.05 1.21
MA 128 12,573,464.69 4.61
MD 58 6,532,962.15 2.39
ME 59 3,662,631.65 1.34
MI 245 15,768,861.38 5.78
MN 48 3,505,246.01 1.28
MO 99 6,230,075.51 2.28
MS 1 125,000.00 0.05
MT 1 90,000.00 0.03
NC 103 7,976,640.24 2.92
ND 2 114,050.00 0.04
NE 8 492,128.69 0.18
NH 25 2,051,478.48 0.75
NJ 123 12,203,214.39 4.47
NM 24 2,127,815.08 0.78
NV 45 4,960,997.20 1.82
NY 140 11,295,801.53 4.14
OH 273 18,027,862.71 6.60
OK 13 642,078.75 0.24
OR 80 6,231,800.31 2.28
PA 258 17,616,084.69 6.45
RI 13 856,050.19 0.31
SC 40 2,712,809.21 0.99
SD 5 327,904.51 0.12
TN 19 1,223,122.57 0.45
TX 15 1,301,056.09 0.48
UT 75 6,268,619.97 2.30
VA 35 3,048,000.35 1.12
VT 10 1,158,557.54 0.42
WA 184 16,756,492.33 6.14
WI 92 6,446,428.39 2.36
Total: 3,360 272,990,012.99 100.00
</TABLE>
<TABLE>
<CAPTION>
Number EOM
Lifecap of Loans Balance %
<S> <C> <C> <C>
8.501 - 9.000 1 355,923.01 0.13
10.001 - 10.500 1 94,400.00 0.03
11.001 - 11.500 1 61,800.00 0.02
13.001 - 13.500 2 557,640.00 0.20
13.501 - 14.000 28 3,469,824.54 1.27
14.001 - 14.500 214 20,213,320.79 7.40
14.501 - 15.000 587 50,314,992.32 18.43
15.001 - 15.500 609 48,980,662.42 17.94
15.501 - 16.000 576 46,818,681.10 17.15
16.001 - 16.500 453 35,411,204.04 12.97
16.501 - 17.000 330 25,231,151.21 9.24
17.001 - 17.500 205 16,946,950.79 6.21
17.501 - 18.000 154 11,919,547.31 4.37
18.001 - 18.500 93 5,933,307.58 2.17
18.501 - 19.000 63 4,549,746.13 1.67
19.000 - 19.500 19 941,633.81 0.34
19.501 - 20.000 12 684,925.82 0.25
20.001 - 20.500 4 221,070.13 0.08
20.501 - 21.000 2 88,235.67 0.03
21.001 - 21.500 5 132,596.32 0.05
21.501 - 22.000 1 62,400.00 0.02
Total: 3,360 272,990,012.99 100.00
NZMIN: 8.875 MAX: 21,750 NZWA: 15.89
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number EOM
Floor of Loans Balance %
<S> <C> <C> <C>
Less Than 0.000 115 10,586,654.38 3.88
0.501 - 1.000 1 355,923.01 0.13
6.501 - 7.000 1 47,185.14 0.02
7.001 - 7.500 2 455,000.00 0.17
7.501 - 8.000 37 4,527,450.97 1.66
8.001 - 8.500 229 21,611,497.36 7.92
8.501 - 9.000 598 51,366,717.06 18.82
9.001 - 9.500 602 47,849,389.08 17.53
9.501 - 10.000 568 44,698,458.05 16.37
10.001 - 10.500 436 33,746,507.59 12.36
10.501 - 11.000 305 23,673,949.35 8.67
11.001 - 11.500 178 14,508,763,86 5.31
11.501 - 12.000 130 10,003,195.58 3.66
12.001 - 12.500 75 4,666,105.62 1.71
12.501 - 13.000 50 3,316.209.60 1.21
13.001 - 13.500 12 563,961.07 0.21
13.501 - 14.000 11 595,225.81 0.22
14.001 - 14.500 3 174,080.28 0.06
14.501 - 15.000 2 111,142.86 0.04
15.001 - 15.500 5 132,596.32 0.05
Total: 3,360 272,990,012.99 100.00
MIN: 0.000 MAX: 15.490 NZWA: 9.80
</TABLE>
<TABLE>
<CAPTION>
Margin Number of Loans EOM Balance %
<S> <C> <C> <C>
0.501- 1.000 1 355,923.01 0.13
3.001- 3.500 3 459,984.51 0.17
3.501- 4.000 2 285,250.00 0.10
4.001- 4.500 8 1,142,412.35 0.42
4.501- 5.000 329 29,540,593.20 10.82
5.001- 5.500 1,709 138,103,087.27 50.59
5.501- 6.000 764 57,967,965.53 21.23
6.001- 6.500 207 19,155,144.86 7.02
6.501- 7.000 118 10,095,607.43 3.70
7.001- 7.500 80 6,287,123.59 2.30
7.501- 8.000 65 4,798,455.33 1.76
8.001- 8.500 31 2,144,009.43 0.79
8.501- 9.000 19 1,359,230.40 0.50
9.001- 9.500 11 540,856.27 0.20
9.501-10,000 8 538,948.66 0.20
10.001-10.500 4 186,0024.95 0.07
10.501-11.000 1 29,396.20 0.01
Total: 3,360 272,990,012.99 100.00
</TABLE>
MIN: 1.000 MAX: 10.540 NZWA: 5.65
<TABLE>
<CAPTION>
Periodic Rate Cap Number of Loans EOM Balance %
<S> <C> <C> <C>
1.000 3,157 252,701,679.44 92.57
1.500 66 6,929,956.24 2.54
2.000 132 12,507,595.36 4.58
3.000 5 850,781.95 0.31
Total: 3,360 272,990,012.99 100.00
</TABLE>
MIN: 1.000 MAX: 3.000 NZWA: 1.06
<TABLE>
<CAPTION>
Due Date Number of Loans EOM Balance %
<S> <C> <C> <C>
1996-10 3 240,088.02 0.09
1996-11 54 4,713,127.30 1.73
1996-12 327 29,402,899.58 10.77
1997-01 2,610 213,222,616.93 78.11
1997-02 357 24,847,553.35 9.10
1997-03 8 508,977.81 0.19
1997-11 1 54,750.00 0.02
Total: 3,360 272,990,012.99 100.00
</TABLE>
<TABLE>
<CAPTION>
Next Rate
Adj Date Number of Loans EOM Balance %
<S> <C> <C> <C>
1997-01 63 5,705,272.36 2.09
1997-02 69 5,918,197.72 2.17
1997-03 110 9,486,230.60 3.47
1997-04 617 51,087,933.77 18.71
1997-05 935 75,522,868.39 27.67
1997-06 684 52,034,818.73 19.06
1997-07 187 13,974,793.33 5.12
1997-08 2 293,937.88 0.11
1998-09 8 984,505.20 0.36
1997-10 7 1,369,551.66 0.50
1997-11 11 1,051,758.32 0.39
1997-12 10 943,357.33 0.35
1998-04 1 83,977.25 0.03
1998-05 2 199,036.83 0.07
1998-07 1 53,411.42 0.02
1998-08 4 409,455.25 0.15
1998-09 35 3,280,541.38 1.20
1998-10 165 14,740,792.54 5.40
1998-11 208 16,138,030.64 5.91
1998-12 162 12,459,715.00 4.56
1999-01 32 2,281,500.00 0.84
1999-02 2 131,392.60 0.05
1999-03 2 198,430.67 0.07
1999-06 1 107,680.24 0.04
1999-07 2 297,321.60 0.11
1999-08 1 70,927.40 0.03
1999-09 3 194,874.57 0.07
1999-10 13 1,411,888.58 0.52
1999-11 23 2,557,811.73 0.94
Total: 3,360 272,990,012.99 100.00
</TABLE>
<TABLE>
<CAPTION>
ARM TYPE Number of Loans EOM Balance %
<S> <C> <C> <C>
1ML 14 992,026.26 0.36
1YL 52 5,263,525.82 1.93
1YT 26 2,740,472.86 1.00
2/28 609 49,562,483.06 18.16
3/27 1YL 5 700,900.00 0.26
3/27 1YT 3 217,349.71 0.08
3/27 6ML 39 4,052,077.68 1.48
3/3/1 1ML 34 2,776,576.90 1.02
6ML 2,578 206,684,600.70 75.71
Total: 3,360 272,990,012.99 100.00
</TABLE>
<PAGE>
CERTAIN CHARACTERISTICS OF POOL III
Set forth below is a description of certain characteristics of Pool III and
the Initial Pool III Mortgage Loans. Certain of the percentage columns may not
sum to 100.00% due to rounding.
LEHMAN BROTHERS
Closing File for 8K
<TABLE>
<CAPTION>
Original Balance Number of Loans EOM Balance %
<S> <C> <C> <C>
0.01- 10,000.00 2,189 15,667,824.18 13.05
10,000.01- 20,000.00 2,788 40,346,301.35 33.61
20,000.01- 30,000.00 1,436 35,000,633.54 29.15
30,000.01- 40,000.00 559 19,194,510.33 15.99
40,000.01- 50,000.00 199 8,969,725.77 7.47
50,000.01- 60,000.00 11 618,280.45 0.52
60,000.01- 70,000.00 4 255,150.92 0.21
Total: 7,186 120,052,426.54 100.00
</TABLE>
Min: 1,675,000 Max: 66,822.00 Avg: 16,784
<TABLE>
<CAPTION>
EOM Balance Number of Loans EOM Balance %
<S> <C> <C> <C>
0.01- 10,000.00 2,212 15,871,525.58 13.22
10,000.01- 20,000.00 2,778 40,384,386.52 33.64
20,000.01- 30,000.00 1,429 34,907,408.62 29.08
30,000.01- 40,000.00 556 19,165,484.37 15.96
40,000.01- 50,000.00 196 8,850,190.08 7.37
50,000.01- 60,000.00 12 677,814.80 0.56
60,000.01- 70,000.00 3 195,616.57 0.16
Total: 7,186 120,052,426.54 100.00
</TABLE>
Min: 1,012.00 Max: 66,710.30 Avg: 16,706
<TABLE>
<CAPTION>
Coupon Number of Loans EOM Balance %
<S> <C> <C> <C>
9.501- 10.000 730 14,798,956.84 12.33
10.001- 10.500 185 4,113,666.01 3.43
10.501- 11.000 342 6,840,410.11 5.70
11.001- 11.500 234 5,169,497.55 4.31
11.501- 12.000 958 15,077,997.59 12.56
12.001- 12.500 931 12,601,950.39 10.50
12.501- 13.000 1,652 27,103,692.40 22.58
13.001- 13.500 520 7,696,457.05 6.41
13.501- 14.000 945 14,217,165.87 11.84
14.001- 14.500 134 2,409,743.56 2.01
14.501- 15.000 411 6,308,405.27 5.25
15.001+ 144 3,714,483.90 3.09
Total: 7,186 120,052,426.54 100.00
</TABLE>
Min: 9.900 Max: 16.520 NZWA: 12.53
<TABLE>
<CAPTION>
Stated Remaining Time Number of Loans EOM Balance %
<S> <C> <C> <C>
1- 12 2 19,599.95 0.02
13- 24 5 20,046.44 0.02
25- 36 41 222,346.42 0.19
37- 48 44 229,670.55 0.19
49- 60 356 2,452,937.49 2.04
61- 72 73 510,135.55 0.42
73- 84 238 1,786,830.39 1.49
85- 96 131 1,183,501.53 0.99
97-108 61 580,167.46 0.48
109-120 1,440 14,942,064.76 12.45
121-132 3 26,045.45 0.02
133-144 75 869,871.26 0.72
145-156 2 36,105.82 0.03
157-168 12 170,431.17 0.14
169-180 2,022 30,649,275.35 25.53
181-192 1 7,615.13 0.01
217-228 5 114,668.09 0.10
229-240 1,703 37,560,704.57 31.29
289-300 972 28,670,409.16 23.88
Total 7,186 120,052,426.54 100.00
</TABLE>
NZMIN: 5 Max: 300 NZWA: 213
<TABLE>
<CAPTION>
Seasoning Number of Loans EOM Balance %
<S> <C> <C> <C>
- 0 2,875 48,887,854.83 40.72
1- 12 4,292 70,937,579.42 59.09
13- 24 15 184,042.34 0.15
61- 72 1 9,450.00 0.01
109-120 2 19,017.44 0.02
121+ 1 14,482.51 0.01
Total: 7,186 120,052,426.54 100.00
</TABLE>
NZMIN: 1 Max: 175 WA: 1
<TABLE>
<CAPTION>
Original Term Number of Loans EOM Balance %
<S> <C> <C> <C>
13- 24 5 20,046.44 0.02
25- 36 41 222,346.42 0.19
37- 48 42 220,062.78 0.18
49- 60 358 2,462,545.26 2.05
61- 72 71 490,521.98 0.41
73- 84 239 1,792,543.96 1.49
85- 96 131 1,183,501.53 0.99
97-108 54 518,997.81 0.43
109-120 1,447 14,998,901.85 12.49
121-132 2 19,949.98 0.02
133-144 76 875,966.73 0.73
145-156 2 36,105.82 0.03
157-168 2 18,836.05 0.02
169-180 2,035 30,838,702.98 25.69
181-192 1 7,615.13 0.01
229-240 1,708 37,675,372.66 31.38
289-300 972 28,670,409.16 23.88
Total: 7,186 120,052,426.54 100.00
</TABLE>
NZMIN: 24 Max: 300 NZWA: 214
<TABLE>
<CAPTION>
Amortization Type Number of Loans EOM Balance %
<S> <C> <C> <C>
Regular 7,186 120,052,426.54 100.00
Total: 7,186 120,052,426.54 100.00
</TABLE>
<TABLE>
<CAPTION>
Property Type Number of Loans EOM Balance %
<S> <C> <C> <C>
2-4 FAMILY 5 140,664.60 0.12
MULTI FAMILY 2 28,967.17 0.02
OTHER 4 46,526.11 0.04
SINGLE FAMILY 7,175 119,836,268.66 99.82
Total: 7,186 120,052,426.54 100.00
</TABLE>
<TABLE>
<CAPTION>
Lien Position Number of Loans EOM Balance %
<S> <C> <C> <C>
1 11 174,334.96 0.15
2 7,175 119,878,091.58 99.85
Total: 7,186 120,052,426.54 100.00
</TABLE>
<TABLE>
<CAPTION>
Occupancy Status Number of Loans EOM Balance %
<S> <C> <C> <C>
Primary Home 7,157 119,581,200.96 99.61
Second Home 29 471,225.58 0.39
Total: 7,186 120,052,426.54 100.00
</TABLE>
<TABLE>
<CAPTION>
State Number of Loans EOM Balance %
<S> <C> <C> <C>
AK 1 17,220.00 0.01
AL 1 25,000.00 0.02
AR 193 2,260,946.84 1.88
AZ 355 6,660,275.60 5.55
CA 1,505 31,976,299.80 26.64
CO 118 1,765,658.10 1.47
CT 34 464,989.99 0.39
DC 1 22,906.68 0.02
DE 11 165,849.19 0.14
FL 288 4,951,187.05 4.12
GA 393 6,757,372.38 5.63
IA 62 731,534.53 0.61
ID 68 1,097,328.46 0.91
IL 595 8,858,277.08 7.38
IN 64 1,003,446.54 0.84
KS 63 931,480.86 0.78
KY 11 149,343.27 0.12
LA 1 9,137.00 0.01
MA 16 260,424.03 0.22
MD 75 847,701.98 0.71
ME 8 122,888.09 0.10
MI 81 924,303.41 0.77
MN 80 1,077,933.82 0.90
MO 188 2,329,567.84 1.94
MS 140 1,833,219.20 1.53
MT 5 78,552.18 0.07
NC 69 1,079,807.51 0.90
ND 3 25,441.99 0.02
NE 8 80,779.23 0.07
NH 3 44,348.56 0.04
NJ 285 4,708,507.37 3.92
NM 56 932,116.48 0.78
NV 322 7,250,908.30 6.04
NY 263 5,475,914.03 4.56
OH 195 2,533,819.66 2.11
OK 109 1,044,920.01 0.87
OR 87 1,334,852.74 1.11
PA 266 3,417,611.84 2.85
RI 4 56,865.88 0.05
SC 76 1,105,988.55 0.92
SD 3 36,676.06 0.03
TN 152 2,304,719.30 1.92
TX 530 7,324,416.29 6.10
UT 55 807,027.25 0.67
VA 27 321,154.61 0.27
VT 1 20,129.21 0.02
WA 229 3,767,044.33 3.14
WI 49 679,079.70 0.57
WV 20 228,759.04 0.19
WY 17 148,694.68 0.12
Total: 7,186 120,052,426.54 100.00
</TABLE>
<TABLE>
<CAPTION>
Due Date Number of Loans EOM Balance %
<S> <C> <C> <C>
1996-10 19 349,945.05 0.29
1996-11 141 2,075,968.42 1.73
1996-12 1,524 25,134,074.73 20.94
1997-01 4,926 83,864,436.23 69.86
1997-02 501 7,410,811.83 6.17
1997-03 75 1,217,190.28 1.01
Total: 7,186 120,052,426.54 100.00
</TABLE>
<PAGE>
CERTAIN CHARACTERISTICS OF POOL IV
Set forth below is a description of certain characteristics of Pool IV and
the Initial Pool IV Mortgage Loans. Certain of the percentage columns may not
sum to 100.00% due to rounding.
<TABLE>
<CAPTION>
Original Balance Number of Loans EOM Balance %
<S> <C> <C> <C>
60,000.01- 70,000.00 3 185,962.46 1.86
70,000.01- 80,000.00 3 226,250.00 2.26
80,000.01- 90,000.00 2 179,770.96 1.80
100,000.01-110,000.00 4 416,437.65 4.17
110,000.01-120,000.00 2 233,327.23 2.33
120,000.01-130,000.00 2 247,613.09 2.48
130,000.01-140,000.00 2 270,697.14 2.71
140,000.01-150,000.00 2 297,936.96 2.98
150,000.01-160,000.00 2 312,832.45 3.13
160,000.01-170,000.00 1 169,000.00 1.69
180,000.01-190,000.00 3 550,798.96 5.51
190,000.01-200,000.00 1 199,875.00 2.00
200,000.01-210,000.00 1 210,000.00 2.10
210,000.01-220,000.00 2 433,491.36 4.34
240,000.01-250,000.00 1 243,750.00 2.44
270,000.01-280,000.00 2 547,250.00 5.48
280,000.01-290,000.00 2 570,783.83 5.71
290,000.01-300,000.00 1 292,500.00 2.93
300,000.01+ 9 4,406,923.16 44.09
Total: 45 9,995,200.25 100.00
</TABLE>
Min: 61,000.00 Max: 800,000.00 Avg: 222,386
<TABLE>
<CAPTION>
EOM Balance Number of Loans EOM Balance %
<S> <C> <C> <C>
60,000.01- 70,000.00 3 185,962.46 1.86
70,000.01- 80,000.00 3 226,250.00 2.26
80,000.01- 90,000.00 2 179,770.96 1.80
100,000.01-110,000.00 4 416,437.65 4.17
110,000.01-120,000.00 2 233,327.23 2.33
120,000.01-130,000.00 2 247,613.09 2.48
130,000.01-140,000.00 2 270,697.14 2.71
140,000.01-150,000.00 2 297,936.96 2.98
150,000.01-160,000.00 2 312,832.45 3.13
160,000.01-170,000.00 1 169,000.00 1.69
180,000.01-190,000.00 3 550,798.96 5.51
190,000.01-200,000.00 1 199,875.00 2.00
200,000.01-210,000.00 1 210,000.00 2.10
210,000.01-220,000.00 2 433,491.36 4.34
240,000.01-250,000.00 1 243,750.00 2.44
270,000.01-280,000.00 2 547,250.00 5.48
280,000.01-290,000.00 2 570,783.83 5.71
290,000.01-300,000.00 1 292,500.00 2.93
300,000.01+ 9 4,406,923.16 44.09
Total: 45 9,995,200.25 100.00
</TABLE>
Min: 61,000.00 Max: 800,000.00 Avg: 222,116
<TABLE>
<CAPTION>
Coupon Number of Loans EOM Balance %
<S> <C> <C> <C>
10.501-11.000 1 182,250.00 1.82
11.001-11.500 10 3,298,427.49 33.00
11.501-12.000 22 4,046,986.02 40.49
12.001-12.500 7 1,188,026.32 11.89
12.501-13.000 5 1,279,510.42 12.80
Total: 45 9,995,200.25 100.00
</TABLE>
Min: 10.550 Max: 12.990 NZWA: 11.82
<TABLE>
<CAPTION>
Stated Remaining Term Number of Loans EOM Balance %
<S> <C> <C> <C>
169-180 3 460,364.85 4.61
349-360 42 9,534,835.40 95.39
Total: 45 9,995,200.25 100.00
</TABLE>
NZMIN: 178 Max: 360 NZWA: 351
<TABLE>
<CAPTION>
Seasoning Number of Loans EOM Balance %
<S> <C> <C> <C>
0 28 5,438,983.42 54.42
1- 12 17 4,556,216.83 45.58
Total: 45 9,995,200.25 100.00
</TABLE>
NZMIN: 1 Max: 3 WA: 1
<TABLE>
<CAPTION>
Combined LTV
(Sr Bal + Or Bal)
Divided Into Number of Loans EOM Balance %
<S> <C> <C> <C>
30.01- 35.00 2 136,000.00 1.36
35.01- 40.00 1 76,500.00 0.77
45.01- 50.00 2 392,250.00 3.92
50.01- 55.00 3 299,098.19 2.99
55.01- 60.00 9 1,510,841.23 15.12
60.01- 65.00 27 6,780,510.83 67.84
65.01- 70.00 1 800,000.00 8.00
Total: 45 9,995,200.25 100.00
</TABLE>
NZMIN: 30.50 Max: 65.04 NZWA: 61.3
<TABLE>
<CAPTION>
Original Term Number of Loans EOM Balance %
<S> <C> <C> <C>
169-180 3 460,364.85 4.61
349-360 42 9,534,835.40 95.39
Total: 45 9,995,200.25 100.00
</TABLE>
NZMIN: 180 Max: 360 NZWA: 352
<TABLE>
<CAPTION>
Amortization Type Number of Loans EOM Balance %
<S> <C> <C> <C>
Regular 45 9,995,200.25 100.00
Total: 45 9,995,200.25 100.00
</TABLE>
<TABLE>
<CAPTION>
Property Type Number of Loans EOM Balance %
<S> <C> <C> <C>
MULTI FAMILY 45 9,995,200.25 100.00
Total: 45 9,995,200.25 100.00
</TABLE>
<TABLE>
<CAPTION>
Lien Position Number of Loans EOM Balance %
<S> <C> <C> <C>
1 45 9,995,200.25 100.00
Total: 45 9,995,200.25 100.00
</TABLE>
<TABLE>
<CAPTION>
Loan Purpose Number of Loans EOM Balance %
<S> <C> <C> <C>
Cash Out 1 450,000.00 4.50
Purchase 4 886,725.00 8.87
Refinance 40 8,658,475.25 86.63
Total: 45 9,995,200.25 100.00
</TABLE>
<TABLE>
<CAPTION>
Occupancy Status Number of Loans EOM Balance %
<S> <C> <C> <C>
Investment 43 9,434,166.42 94.39
Primary Home 2 561,033.83 5.61
Total: 45 9,995,200.25 100.00
</TABLE>
<TABLE>
<CAPTION>
State Number of Loans EOM Balance %
<S> <C> <C> <C>
CA 15 2,732,451.95 27.34
FL 6 1,445,316.22 14.46
GA 2 535,756.51 5.36
IL 2 274,625.00 2.75
MA 2 434,936.96 4.35
NJ 4 1,362,850.00 13.64
NV 1 389,410.42 3.90
NY 5 1,097,000.00 10.98
OH 3 351,769.49 3.52
RI 1 102,050.00 1.02
TX 4 1,269,033.70 12.70
Total: 45 9,995,200.25 100.00
</TABLE>
<TABLE>
<CAPTION>
Due Date Number of Loans EOM Balance %
<S> <C> <C> <C>
1997-01 43 9,773,823.02 97.79
1997-02 2 221,377.23 2.21
Total: 45 9,995,200.25 100.00
</TABLE>
<PAGE>
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) EXHIBITS
EXHIBIT NO.
1.1 Underwriting Agreement, dated December 13, 1996, among The
Money Store Inc., the Originators and Lehman Brothers Inc.,
as representative of the underwriters.
1.2 Pricing Agreement, dated December 13, 1996, between The
Money Store Inc. and Lehman Brothers Inc., as
representative of the underwriters.
4.1 Pooling and Servicing Agreement, dated as of November 30, 1996,
among The Money Store Inc., the Originators and The Bank of
New York, as Trustee.
<PAGE>
Schedule A
State of IRS Employer
Registrant Incorporation ID Number
TMS Mortgage Inc. New Jersey 22-3217781
The Money Store/D.C. Inc. D.C. 22-2133027
The Money Store/Kentucky Inc. Kentucky 22-2459832
The Money Store Home Equity
Corp. Kentucky 22-2522232
The Money Store/Minnesota
Inc. Minnesota 22-3003495
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TMS MORTGAGE INC.
THE MONEY STORE/D.C. INC.
THE MONEY STORE/KENTUCKY INC.
THE MONEY STORE HOME EQUITY CORP.
THE MONEY STORE/MINNESOTA INC.
By: /S/ MORTON DEAR
Name: Morton Dear
Title: Executive Vice President
Dated: January 14, 1997
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT
1.1 Underwriting Agreement, dated December 13, 1996, among
The Money Store Inc., the Originators and Lehman
Brothers Inc., as representative of the underwriters.
1.2 Pricing Agreement, dated December 13, 1996,
between The Money Store Inc. and Lehman Brothers
Inc., as representative of the underwriters.
4.1 Pooling and Servicing Agreement, dated as of November
30, 1996, among The Money Store Inc., the
Originators and The Bank of New York, as Trustee.
Exhibit 1.1
EXECUTION COPY
$1,035,000,000
THE MONEY STORE INC.
The Money Store Asset Backed Certificates
Series 1996-D
UNDERWRITING AGREEMENT
December 13, 1996
Lehman Brothers Inc.
as representative of the Underwriters
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Ladies and Gentlemen:
The Money Store Inc., a New Jersey corporation (the "Company"), and
each of the Originators listed on Annex A hereto (each an "Originator" and
collectively, the "Originators") hereby confirm their agreement with Lehman
Brothers Inc. ("Lehman" or the "Representative") on behalf of the several
Underwriters listed on Annex B hereto (the "Underwriters), with respect to the
delivery by the Company, on behalf of the Originators, of certificates entitled
"The Money Store Asset Backed Certificates, Series 1996-D, Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9,
Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15 and Class
A-16" (the "Class A Certificates") to be issued pursuant to a Pooling and
Servicing Agreement, to be dated as of November 30, 1996 (the "Pooling and
Servicing Agreement"), among the Company, as Representative, Servicer and Claims
Administrator, the Originators and The Bank of New York, as trustee ("Bank of
New York" or, in its capacity as trustee under the Pooling and Servicing
Agreement, the "Trustee"). The initial principal amount of each Class of Class A
Certificates will be as set forth on Annex B hereto. The Class A Certificates
represent the senior beneficial interests in a trust fund (the "Trust Fund")
that will consist at the Closing Time (as defined in Section 2 hereof) primarily
of four sub- trusts, consisting of one pool of fixed rate first and second lien
home equity mortgage loans (the "Pool I Home Equity Loans"), one pool of
adjustable rate first lien home equity mortgage loans (the "Pool II Home Equity
Loans"), one pool of home improvement mortgage loans (the "Pool III Home
Improvement Loans") and one pool of multifamily mortgage loans (the "Pool IV
Multifamily Loans"), amounts to be deposited in the Pre-Funding Account and
certain related properties. The Pool I Home Equity Loans, Pool II Home Equity
Loans, Pool III Home Improvement Loans and Pool IV Multifamily Loans are
referred to herein collectively as the "Loans". Simultaneously with the issuance
and delivery of the Class A Certificates as contemplated herein, the Company, on
behalf of the Originators, will cause to be issued under the Pooling and
Servicing Agreement certificates entitled "The Money Store Asset Backed
Certificates, Series 1996-D, Class R" (the "Class R Certificates,") and "The
Money Store Asset Backed Certificates, Series 1996-D, Class X" (the "Class X
Certificates" and, together with the Class A Certificates and Class R
Certificates, the "Certificates"). The Certificates will evidence fractional
interests in the Trust Fund. The Class R Certificates and Class X Certificates
will be retained by the Company and TMS Special Holdings, Inc. and are not being
delivered to the Underwriters hereunder.
On or prior to the date of issuance of the Certificates, the Company
will obtain from MBIA Insurance Corporation ("MBIA") certificate guaranty
insurance policies (the "MBIA Policies") on behalf of the Trustee for the
benefit of the holders of the Class A Certificates. An election will be made to
treat certain assets of the Trust Fund as a real estate mortgage investment
conduit ("REMIC") within the meaning of Section 860D of the Internal Revenue
Code of 1986, as amended (the "Code").
Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement.
Prior to the delivery of the Class A Certificates by the Company, on
behalf of the Originators, and the public offering thereof by the Underwriters,
the Company and the Representative, as representative of the Underwriters, shall
enter into an agreement substantially in the form of Exhibit A hereto (the
"Pricing Agreement"). The Pricing Agreement shall be between the Company and the
Representative, as representative of the Underwriters, and shall specify such
applicable information as is indicated in, and be in substantially the form of,
Exhibit A hereto. The offering of the Class A Certificates will be governed by
this Agreement, as supplemented by the Pricing Agreement. From and after the
date of the execution and delivery of the Pricing Agreement, this Agreement
shall be deemed to incorporate the Pricing Agreement.
The Company and the Originators understand that the Underwriters
propose to make a public offering of the Class A Certificates as soon as the
Underwriters deem advisable after the Pricing Agreement has been executed and
delivered.
Section 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
ORIGINATORS.
(a) The Company and the Originators represent and warrant to
each of the Underwriters as of the date hereof and, if the Pricing Agreement is
executed on a date other than the date hereof, as of the date of the Pricing
Agreement (such latter date being hereinafter referred to as the "Representation
Date") as follows:
(i) The Company, on behalf of the Originators, has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (No. 33-98734) including a
prospectus, and such amendments thereto as may have been required to
the date hereof, relating to the Class A Certificates and the offering
thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act"), and such
registration statement, as amended, has become effective. Such
registration statement, as amended, and the prospectus relating to the
sale of the Class A Certificates constituting a part thereof as from
time to time amended or supplemented (including any prospectus
supplement (the "Prospectus Supplement") filed with the Commission
pursuant to Rule 424 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations") and any information
incorporated therein by reference) are respectively referred to herein
as the "Registration Statement" and the "Prospectus." The conditions of
Rule 415 under the 1933 Act have been satisfied with respect to the
Company and the Registration Statement.
(ii) At the time the Registration Statement became
effective and at the Representation Date, the Registration Statement
complied and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Representative, as
representative of the Underwriters, by the Company for use in
connection with the offering of the Class A Certificates which differs
from the Prospectus on file at the Commission at the time the
Registration Statement became effective, in which case at the time it
is first provided to the Representative, as representative of the
Underwriters, for such use) and at Closing Time referred to in Section
2 hereof, will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through the Representative
expressly for use in the Registration Statement or Prospectus; and
provided further, that neither the Company nor the Originators make any
representations or warranties as to any information in any
Computational Materials (as defined in Section 11 below) provided by
any Underwriter to the Company pursuant to Section 11, except to the
extent of any errors in the Computational Materials that are caused by
errors in the pool information provided by the Company to the
applicable Underwriter. The conditions to the use by the Company of a
registration statement on Form S-3 under the 1933 Act, as set forth in
the General Instructions to Form S-3, have been satisfied with respect
to the Registration Statement and the Prospectus.
(iii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, the Originators and their
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, which would have a material adverse
effect on the ability of the Company and the Originators to perform
their obligations under the Basic Documents (as defined below) and, in
the case of the Company, the Indemnification Agreement (as defined
below) and (B) there have been no transactions entered into by the
Company or the Originators or any of their subsidiaries, other than
those in the ordinary course of business, which would have a material
adverse effect on the ability of the Company and the Originators to
perform their obligations under this Agreement, the Pricing Agreement,
the Pooling and Servicing Agreement and the Insurance Agreement dated
as of December 30, 1996 among the Company, the Originators, the Trustee
and MBIA (the "Insurance Agreement") (this Agreement, the Pricing
Agreement, the Pooling and Servicing Agreement, and the Insurance
Agreement being herein referred to, collectively, as the "Basic
Documents") and the Indemnification Agreement dated as of December 30,
1996 (the "Indemnification Agreement") among the Company, MBIA and the
Representative, as representative of the Underwriters.
(iv) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of New Jersey with all requisite power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Basic Documents and the Indemnification Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify would
not have a material adverse effect on, (A) the Company's ability to
perform its obligations under the Basic Documents and the
Indemnification Agreement, or (B) the business, properties, financial
position, operations or results of operations of the Company.
(v) Each Originator has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with all requisite power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Basic Documents; and each Originator is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
have a material adverse effect on, (A) the Originator's ability to
perform its obligations under the Basic Documents, or (B) the business,
properties, financial position, operations or results of operations of
the Originator.
(vi) Any person who signed this Agreement on behalf of the
Company or the Originators, was, as of the time of such signing and
delivery, and is now duly elected or appointed, qualified and acting,
and the Agreement, as so executed, is duly and validly authorized,
executed, and constitutes the valid, legal and binding agreement of the
Company and each Originator, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(vii) Any person who signs the Indemnification Agreement on
behalf of the Company, will be, as of the time of such signing and
delivery, duly elected or appointed, qualified and acting, and the
Indemnification Agreement, as so executed, will have been duly and
validly authorized, and, when executed, will constitute the valid,
legal and binding agreement of the Company, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general principles
of equity regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(viii) The Pooling and Servicing Agreement and the Insurance
Agreement have been duly and validly authorized by the Company and the
Originators and, when executed and delivered by the Company and the
Originators and duly and validly authorized, executed and delivered by
the other parties thereto, will constitute, the valid and binding
agreement of the Company and the Originators, enforceable in accordance
with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights in general and by general
principles of equity regardless of whether such enforcement is
considered in a proceeding in equity or at law; and the Pooling and
Servicing Agreement and the MBIA Policies conform in all material
respects to the statements relating thereto contained in the
Prospectus.
(ix) The Certificates have been duly and validly
authorized by the Company and, when executed and delivered by the
Company and authenticated by the Trustee as specified in the Pooling
and Servicing Agreement and, in the case of the Class A Certificates,
delivered to the Underwriters pursuant to this Agreement, the
Certificates will be duly and validly issued and outstanding and
entitled to the benefits of the Pooling and Servicing Agreement; and
the Certificates conform in all material respects to all statements
relating thereto contained in the Prospectus.
(x) Neither the issuance or delivery of the
Certificates, nor the consummation of any other of the transactions
herein contemplated or in any other Basic Document and, in the case of
the Company, the Indemnification Agreement, nor the execution and
delivery by the Company and the Originators of the Basic Documents and,
in the case of the Company, the Indemnification Agreement nor the
fulfillment of the terms of the Certificates or each Basic Document
and, in the case of the Company, the Indemnification Agreement will
result in the breach of any term or provision of the charter or by-laws
of the Company and the Originators, and the Company and the Originators
are not in breach or violation of or in default (nor has an event
occurred which with notice or lapse of time or both would constitute a
default) under the terms of (A) any material obligation, agreement,
covenant or condition contained in any material contract, indenture,
loan agreement, note, lease or other material instrument to which the
Company or the Originators are a party or by which it may be bound, or
to which any of the property or assets of the Company or the
Originators are subject, or (B) any law, decree, order, rule or
regulation applicable to the Company and the Originators of any court
or supervisory, regulatory, administrative or governmental agency, body
or authority, or arbitrator having jurisdiction over the Company or the
Originators or their properties, the default in or the breach or
violation of which would have a material adverse effect on the Company
or the Originators or the ability of the Company and the Originators to
perform their obligations under the Basic Documents and, in the case of
the Company, the Indemnification Agreement; and neither the issuance or
delivery of the Certificates, nor the consummation of any other of the
transactions herein contemplated, nor the fulfillment of the terms of
the Certificates or the Basic Documents and, in the case of the
Company, the Indemnification Agreement will result in such a breach,
violation or default which would have such a material adverse effect.
(xi) Except as described in the Prospectus, there is no
action, suit or proceeding against or investigation of the Company or
any Originator, now pending, or, to the knowledge of the Company and
the Originators, threatened against the Company or any Originator,
before any court, governmental agency or body (A) which is required to
be disclosed in the Prospectus (other than as disclosed therein) or (B)
(1) asserting the invalidity of any Basic Document, the Indemnification
Agreement or the Certificates, (2) seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by the Basic Documents, (3) which would materially and
adversely affect the performance by the Company or any Originator of
its obligations under the Basic Documents, or the validity or
enforceability of any Basic Document or the Certificates and, in the
case of the Company, the Indemnification Agreement or (4) seeking to
adversely affect the federal income tax attributes of the Class A
Certificates described in the Prospectus; all pending legal or
governmental proceedings to which the Company or any Originator is a
party or of which any of its property or assets is the subject which
are not described in the Prospectus, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material to the Company's or any Originator's ability to
perform its obligations under the Basic Documents and, in the case of
the Company, the Indemnification Agreement.
(xii) The Company and each of the Originators possess such
licenses, certificates, authorities or permits issued by the
appropriate state or federal regulatory agencies or governmental bodies
necessary to conduct the businesses now conducted by them (except where
the failure to possess any such license, certificate, authority or
permit would not materially and adversely affect the holders of the
Class A Certificates) and neither the Company nor any of the
Originators has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authority
or permit which, singly or in the aggregate, if the subject of any
unfavorable decision, ruling or finding, would materially and adversely
affect the ability of the Company to perform its obligations under the
Basic Documents and the Indemnification Agreement.
(xiii) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
issuance or sale of the Class A Certificates hereunder, except such as
have been obtained or will be obtained prior to the Closing Date and
except as may be required under state securities laws.
(xiv) At the time of execution and delivery of the Pooling
and Servicing Agreement by the Company, the Originators and the
Trustee, the Trustee (or, with respect to the
Pool III Home Improvement Loans, the Co-Trustee) will have
acquired good title on behalf of the Trust Fund to the related Loans,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, and, upon delivery to the Underwriters of
the Class A Certificates which they purchase, the Underwriters will
have good and marketable title to such Class A Certificates free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(xv) The transfer of the Loans to the Trust Fund at
Closing Time will be treated by the Company and the Originators for
financial accounting and reporting purposes as a sale of assets and not
as a pledge of assets to secure debt.
(xvi) Each assignment of Mortgage required to be prepared
pursuant to the Pooling and Servicing Agreement is based on forms
recently utilized by the applicable Originator with respect to
mortgaged properties located in the appropriate jurisdiction and used
in the regular course of the applicable Originator's business. Upon
execution each such assignment will be in recordable form, and it is
reasonable to believe that it will be sufficient to effect the
assignment of the Mortgage to which it relates as provided in the
Pooling and Servicing Agreement.
(xvii) Any taxes, fees and other governmental charges that
are assessed and due in connection with the execution, delivery and
issuance of the Basic Documents, the Indemnification Agreement and the
Class A Certificates which have become due or will become due on or
prior to Closing Time shall have been paid at or prior to Closing Time.
(xviii) The Trust Fund is not required to be registered as an
"investment company" under the Investment Company Act of 1940 (the
"1940 Act").
(b) Any certificate signed by any officer of the Company or
any Originator and delivered to the Representative, as representative of the
Underwriters, or counsel for the Underwriters shall be deemed a representation
and warranty by the Company and such Originator as to the matters covered
thereby.
Section 2. DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company,
on behalf of the Originators, agrees to sell to each Underwriter, severally and
not jointly, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company, the Class A Certificates set forth opposite its name
in Annex B hereto at the price per Class of Class A Certificate set forth below.
In the event that the pass-through rates for each Class of Class A Certificates
have not been agreed upon and the Pricing Agreement has not been executed and
delivered by all parties thereto by the close of business on the fourth business
day following the date of this Agreement, this Agreement shall terminate
forthwith, without liability of any party to any other party, unless otherwise
agreed upon by the Representative, as representative of the Underwriters, and
the Company.
(b) Delivery of the Class A Certificates shall be made at the offices
of Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York 10004, or at
such other place as shall be agreed upon by the Underwriter and the Company, at
11:00 A.M., New York City time, on December 30, 1996, or such other time not
later than ten business days after such date as shall be agreed upon by The
Representative, as representative of the Underwriters, and the Company (such
time and date of payment and delivery being herein called "Closing Time").
Each Class of Class A Certificates will initially be represented by
one certificate registered in the name of Cede & Co., the nominee of The
Depository Trust Company ("DTC") (the "DTC Certificates"). The interests of
beneficial owners of the DTC Certificates will be represented by book entries on
the records of DTC and participating members thereof. Definitive certificates
evidencing the Class A Certificates will be available only under the limited
circumstances specified in the Pooling and Servicing Agreement. The interest in
the DTC Certificates to be purchased by the applicable Underwriter will be
delivered by the Company to the applicable Underwriter (which delivery shall be
made through the facilities of DTC) against payment of the purchase price
therefor by a same day federal funds wire payable to the order of the Company,
equal to the sum of (i) 99.898240% of the aggregate principal amount of the
Class A-1 Certificates being purchased by such Underwriter, plus interest
accrued at the Class A-1 Pass-Through Rate, (ii) 99.874600% of the aggregate
principal amount of the Class A-2 Certificates being purchased by such
Underwriter, plus interest accrued at the Class A-2 Pass- Through Rate, (iii)
99.847660% of the aggregate principal amount of the Class A-3 Certificates being
purchased by such Underwriter, plus interest accrued at the Class A-3
Pass-Through Rate, (iv) 99.811290% of the aggregate principal amount of the
Class A-4 Certificates being purchased by such Underwriter, plus interest
accrued at the Class A-4 Pass-Through Rate, (v) 99.744760% of the aggregate
principal amount of the Class A-5 Certificates being purchased by such
Underwriter, plus interest accrued at the Class A-5 Pass-Through Rate, (vi)
99.657010% of the aggregate principal amount of the Class A-6 Certificates being
purchased by such Underwriter, plus interest accrued at the Class A-6
Pass-Through Rate, (vii) 99.578540% of the aggregate principal amount of the
Class A-7 Certificates being purchased by such Underwriter, plus interest
accrued at the Class A-7 Pass-Through Rate, (viii) 99.468590% of the aggregate
principal amount of the Class A-8 Certificates being purchased by such
Underwriter, plus interest accrued at the Class A-8 Pass-Through Rate, (ix)
99.527450% of the aggregate principal amount of the Class A- 9 Certificates
being purchased by such Underwriter, plus interest accrued at the Class A-9
Pass- Through Rate, (x) 99.775000% of the aggregate principal amount of the
Class A-10 Certificates being purchased by such Underwriter, plus interest
accrued at the Class A-10 Pass-Through Rate, (xi) 99.900000% of the aggregate
principal amount of the Class A-11 Certificates being purchased by such
Underwriter, plus interest accrued at the Class A-11 Pass-Through Rate, (xii)
99.844530% of the aggregate principal amount of the Class A-12 Certificates
being purchased by such Underwriter, plus interest accrued at the Class A-12
Pass-Through Rate, (xiii) 99.669040% of the aggregate principal amount of the
Class A-13 Certificates being purchased by such Underwriter, plus interest
accrued at the Class A-13 Pass-Through Rate, (xiv) 99.618690% of the aggregate
principal amount of the Class A-14 Certificates being purchased by such
Underwriter, plus interest accrued at the Class A-14 Pass-Through Rate, (xv)
99.570630% of the aggregate principal amount of the Class A-15 Certificates
being purchased by such Underwriter, plus interest accrued at the Class A-15
Pass-Through Rate, and (xvi) 99.679130% of the aggregate principal amount of the
Class A-16 Certificates being purchased by such Underwriter, plus interest
accrued at the Class A-16 Pass-Through Rate. With respect to the Class A-1
through Class A-9 Certificates, inclusive, and the Class A-12 through Class A-16
Certificates, inclusive, interest shall accrue at the applicable Pass-Through
Rate in each case from December 1, 1996 to, but not including, the Closing Time.
With respect to the Class A-10 and Class A-11 Certificates, interest shall
accrue at the applicable Pass-Through Rate from December 15, 1996 to, but not
including, the Closing Time. The purchase price set forth above reflects the
deduction of the underwriter's fee with respect to the principal amount of each
Class of Class A Certificates. The certificates evidencing the Class A
Certificates will be made available for examination and packaging by the
Representative, as representative of the Underwriters, not later than 10:00 A.M.
on the last business day prior to Closing Time.
Section 3. COVENANTS OF THE COMPANY AND THE ORIGINATORS. The Company
and the Originators covenant with each of the Underwriters as follows:
(a) The Company will promptly notify the
Representative, as representative of the Underwriters, and confirm the
notice in writing, (i) of any amendment to the Registration Statement;
(ii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus
or for additional information; (iii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or the initiation or threatening of any proceedings for that
purpose; and (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Class A
Certificates for sale in any jurisdiction or the initiation or
threatening of any proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company will give the Representative, as
representative of the Underwriters, notice of its intention to file or
prepare any amendment to the Registration Statement or any amendment or
supplement to the Prospectus (including any revised prospectus which
the Company proposes for use by the Underwriters in connection with the
offering of the Class A Certificates which differs from the prospectus
on file at the Commission at the time the Registration Statement
becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations, will
furnish the Representative, as representative of the Underwriters, with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and, unless
required by law to do so, will not file any such amendment or
supplement or use any such prospectus to which The Representative, as
representative of the Underwriters, or counsel for the Underwriters
shall reasonably object.
(c) The Company will deliver to the Representative,
as representative of the Underwriters, as many signed and as many
conformed copies of the Registration Statement as originally filed and
of each amendment thereto (in each case including exhibits filed
therewith) as the Representative may reasonably request.
(d) The Company will furnish to the Representative,
as representative of the Underwriters, from time to time during the
period when the Prospectus is required to be delivered under the 1933
Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), such number of copies of the Prospectus (as amended or
supplemented) as the Representative may reasonably request for the
purposes contemplated by the 1933 Act or the 1934 Act or the respective
applicable rules and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it
is necessary, in the reasonable opinion of counsel for the
Underwriters, to amend or supplement the Prospectus in order to make
the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company will
forthwith amend or supplement the Prospectus (in form and substance
satisfactory to counsel for the Underwriters) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances existing
at the time it is delivered to a purchaser, not misleading, and the
Company will furnish to the Representative, as representative of the
Underwriters, a reasonable number of copies of such amendment or
supplement.
(f) The Company and the Originators will
endeavor, in cooperation with the Representative, as
representative of the Underwriters, to qualify the Class A
Certificates for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States as the
Representative, as representative of the Underwriters, may designate;
provided, however, that neither the Company nor any Originator shall be
obligated to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified. In each jurisdiction in which the Class A
Certificates have been so qualified, the Company and the Originators
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period
of not less than one year from the date hereof.
(g) The Company and the Originators will file with
the Commission such reports on Form SR as may be required pursuant to
Rule 463 under the 1933 Act.
(h) So long as any Certificates shall be outstanding,
the Company and the Originators will deliver to the Representative, as
representative of the Underwriters, as promptly as practicable, such
information concerning the Company, the Originators or the
Certificates as the Representative may reasonably request from time to
time.
Section 4. PAYMENT OF EXPENSES. The Company and the Originators will
pay all expenses incident to the performance of their obligations under this
Agreement, including (i) the printing (or other reproducing) and filing of the
Registration Statement as originally filed and of each amendment thereto (other
than amendments relating to the filing of Computational Materials pursuant to
Section 11); (ii) the reproducing of the Basic Documents and the Indemnification
Agreement; (iii) the preparation, printing, issuance and delivery of the
certificates for the DTC Certificates to the Underwriters; (iv) the fees and
disbursements of (A) the Company's counsel, (B) the Underwriters' counsel, (C)
KPMG Peat Marwick, accountants for the Company and issuer of the comfort letter,
(D) the Trustee and the Co-Trustee and their respective counsel and (E) DTC in
connection with the book-entry registration of the DTC Certificates; (v) the
qualification of the Class A Certificates under state securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey; (vi)
the printing (or other reproducing) and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment thereto,
of each preliminary prospectus and of the Prospectus and any amendments or
supplements thereto; (vii) the fees charged by each of Moody's Investors
Service, Inc. ("Moody's") and Standard & Poor's Rating Services ("Standard &
Poor's") for rating the Class A Certificates; and (viii) the reproducing and
delivery to the Underwriters of copies of the Blue Sky Survey.
If this Agreement is terminated by the Representative, as
representative of the Underwriters, in accordance with the provisions of Section
5 or Section 9(a)(i) (unless, in the case of Section 9(a)(i), such termination
arises from a change or development involving a prospective change in or
affecting the business or properties of MBIA), the Company and the Originators
shall reimburse the Underwriters severally for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters hereunder are subject, in the Representative's
sole discretion, to the accuracy of the representations and warranties of the
Company and the Originators herein contained, to the performance by the Company
and the Originators of their respective obligations hereunder, and to the
following further conditions:
(a) The Registration Statement shall have
become effective and, at Closing Time, no stop order
suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission. As of the Closing Time, the
Prospectus shall have been filed with the Commission in accordance with
Rule 424 of the 1933 Act Regulations.
(b) At Closing Time, the Representative, as
representative of the Underwriters, shall have received:
(i) The favorable opinion, dated as of
Closing Time, of Stroock & Stroock & Lavan, counsel for the
Underwriters, to the effect that:
(A) To the best of their knowledge
and information, the Registration Statement is
effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the
Commission.
(B) At the time the Registration
Statement became effective and at the Representation
Date, the Registration Statement (other than the
financial, numerical, statistical and quantitative
information included or incorporated therein, as to
which no opinion need be rendered) complied as to
form in all material respects with the requirements
of the 1933 Act and the Rules and Regulations
thereunder.
(C) The information in the
Prospectus under "Description of the Certificates"
and "The Agreements" and the information in the
Prospectus Supplement under "Description of the
Agreement" and "Description of The Certificates,"
insofar as they constitute summaries of certain
provisions of the Certificates, the Pooling and
Servicing Agreement, the Insurance Agreement and the
MBIA Policies, summarizes fairly such provisions.
(D) The information in the
Prospectus under "Summary of Terms -- Federal Income
Tax Consequences," "Summary of Terms -- ERISA
Considerations," "Certain Legal Aspects of the
Mortgage Loans," "Federal Income Tax Consequences,"
"ERISA Considerations" and "Risk Factors -- The
Status of the Mortgage Loans in the Event of
Bankruptcy of The Representative or an Originator"
and in the Prospectus Supplement under "Summary of
Terms -- REMIC Election and Tax Status," "Summary of
Terms -- ERISA Considerations," "Federal Income Tax
Consequences," and "ERISA Considerations," to the
extent that they constitute matters of federal, New
York or California law, summaries of legal matters,
documents or proceedings or legal conclusions, has
been reviewed by them and is correct in all material
respects.
(E) TMS Special Holdings, Inc. has
been duly incorporated and is validly existing
and in good standing under the laws of the
State of Delaware. TMS Mortgage Inc. is
qualified to transact business as a foreign
corporation in, and is in good standing under
the laws of, the States of California, Florida
and New York.
(F) Assuming due authorization,
execution and delivery by the other parties thereto
(including but not limited to the Originators), the
Pooling and Servicing Agreement, the Certificates,
the Insurance Agreement, the Indemnification
Agreement, the Pricing Agreement and this Agreement
are legal, valid and binding agreements enforceable
in accordance with their respective terms against the
Company, subject (a) to the effect of bankruptcy,
insolvency, reorganization, moratorium and similar
laws relating to or affecting creditors' rights
generally and court decisions with respect thereto,
(b) to the understanding that no opinion is expressed
as to the application of equitable principles in any
proceeding, whether at law or in equity, and (c) to
limitations of public policy under applicable
securities laws as to rights of indemnity and
contribution thereunder.
(G) No consent, approval,
authorization or order of any court or governmental
agency or body is required for the execution,
delivery and performance by the Company of, or
compliance by the Company with, this Agreement, the
Pooling and Servicing Agreement, the Insurance
Agreement, the Pricing Agreement and the
Indemnification Agreement or the offer, issuance,
sale or delivery of the Certificates, or the
consummation of any other transactions by the Company
contemplated by this Agreement, the Insurance
Agreement, the Pooling and Servicing Agreement, the
Pricing Agreement and the Indemnification Agreement,
except as may be required under the blue sky laws of
any jurisdiction (as to which such counsel need not
opine) and such other approvals as have been
obtained.
(H) Neither the consummation of the
transactions contemplated by, nor the
fulfillment of the terms of, this Agreement, the
Pooling and Servicing Agreement, the Insurance
Agreement, the Pricing Agreement, the Indemnification
Agreement and the Certificates, conflicts or will
conflict with or results or will result in a breach
of or constitutes or will constitute a default under
(a) the terms of any material indenture or other
material agreement or instrument of which counsel has
knowledge to which the Company is a party or by which
it is bound or to which it is subject or (b) any
statute or order, rule, regulation, writ, injunction
or decree of which counsel has knowledge of any
court, governmental authority or regulatory body to
which the Company is subject or by which it is bound.
(I) The delivery of each Mortgage
Note and Mortgage by an Originator as and in the
manner contemplated by the Underwriting Agreement and
the Pooling and Servicing Agreement is sufficient
fully to transfer to the Trustee (or, with respect to
the Pool III Home Improvement Loans, the Co-Trustee)
for the benefit of the Certificateholders all right,
title and interest of the applicable Originator in
and to each such Loan including, without limitation,
the right to enforce each such Loan in accordance
with its terms to the extent enforceable by the
related Originator at the time of such delivery. With
respect to the transfer of the Loans by the
Originators, such counsel shall express no opinion as
to (i) whether the laws of the State of New York
would apply to the transfer of the related Mortgages
or (ii) the effectiveness of the transfer of the
Mortgages under the laws of the jurisdictions in
which such Originators are located (other than
Mortgages relating to Mortgaged Properties situated
in California, Florida or New York) or in which the
Mortgaged Properties are situated (other than
Mortgaged Properties situated in California, Florida
or New York) or the right of the Trustee and the
Co-Trustee to enforce such Mortgages.
(J) The Certificates, assuming due
execution by the Company, due authorization by the
Trustee and delivery and payment therefore pursuant
to the Underwriting Agreement, will be validly issued
and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement.
(K) Assuming compliance with all
provisions of the Pooling and Servicing Agreement,
for federal income tax purposes, the REMIC Trust Fund
will qualify as a REMIC and the Class A Certificates
and Class R Certificates offered with respect thereto
will be considered to evidence ownership of "regular
interests" or "residual interests," respectively, in
the REMIC Trust Fund within the meaning of the REMIC
Provisions. Assuming compliance with all provisions
of the Pooling and Servicing Agreement, for New York
State and City tax purposes, the REMIC Trust Fund
will be classified as a REMIC and not as a
corporation, partnership or trust, in conformity with
the federal income tax treatment of such assets.
Accordingly, the REMIC will be exempt from all New
York State and City taxation imposed upon its income,
franchise or capital stock. Additionally, the REMIC
will be exempt from all State of California taxation
imposed upon its income, franchise or capital stock,
other than the application of the annual minimum tax
under Section 23153 of the California Revenue and
Taxation Code.
(L) A Class A Certificate owned by a
"domestic building and loan association" within the
meaning of Section 7701(a)(19) of the Code will be
considered in its entirety to represent an interest
in qualified assets within the meaning of Section
7701(a)(19)(C)(xi) of the Code so long as at least
95% of the REMIC Trust Fund's assets consist of
assets described in Section 7701(a)(19)(C)(i) through
(x) of the Code. If less than 95% of the REMIC Trust
Fund's assets consist of such items, a Class A
Certificate will be considered qualified assets in
the same proportion as the REMIC Trust Fund's assets
which are such items. A Class A Certificate owned by
a real estate investment trust will be considered in
its entirety an interest in "real estate assets"
within the meaning of Section 856(c)(5)(A) of the
Code and interest thereon will be considered in its
entirety "interest on obligations secured by
mortgages on real property" within the meaning of
Section 856(c)(3)(B) of the Code in both cases so
long as at least 95% of the REMIC Trust Fund's assets
are "real estate assets" as defined in Section
856(c)(3)(B) of the Code. If less than 95% of the
REMIC Trust Fund's assets are "real estate assets," a
Class A Certificate will be considered "real estate
assets" and the interest thereon will be considered
"interest on obligations secured by mortgages on real
property" in the same proportion as the REMIC Trust
Fund's assets which are "real estate assets." A Class
A Certificate will not be considered "residential
loans" for purposes of the residential loan
requirement of Section 593(g)(4)(B) of the Code. A
Class A Certificate held by another REMIC will be a
"qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, assuming it is transferred to
the REMIC on its startup day in exchange for regular
or residual interests in such REMIC.
(M) The Pooling and Servicing
Agreement is not required to be qualified under the
Trust Indenture Act of 1939, as amended. The Trust
Fund created by the Pooling and Servicing Agreement
is not required to be registered under the Investment
Company Act of 1940, as amended.
In rendering such opinion, Stroock & Stroock
& Lavan may rely on certificates of responsible officers of
the Company, the Trustee, the Co-Trustee, and public officials
or, as to matters of law other than New York, Florida,
California or Federal law, on opinions of other counsel
(copies of which opinions shall be delivered to you and upon
which you may rely).
(ii) The favorable opinion, dated as of Closing
Time, of counsel for the Company and the Originators, in form
and substance satisfactory to counsel for the Underwriters, to
the effect that:
(A) The Company has been duly
organized and is validly existing and is in good
standing under the laws of the State of New Jersey.
Each Originator has been duly organized under the
laws of its jurisdiction of incorporation and is
qualified to transact business in the laws of the
states in which the Mortgaged Properties underlying
the Loans originated by each such Originator are
located or is otherwise exempt under applicable law
from such qualification. TMS Special Holdings, Inc.
has been duly organized and is validly existing and
in good standing under the laws of the State of
Delaware.
(B) The Company and each of the
Originators have the power to engage in the
transactions contemplated by this Agreement, the
Pooling and Servicing Agreement, the Insurance
Agreement and, in the case of the Company, the
Pricing Agreement, the Indemnification Agreement, the
Auction Agent Agreement and the Certificates, and
have all requisite power, authority and legal right
to execute and deliver this Agreement, the Pooling
and Servicing Agreement, the Insurance Agreement,
and, in the case of the Company, the Pricing
Agreement, the Indemnification Agreement, the Auction
Agent Agreement and the Certificates (and any other
documents delivered in connection therewith) and to
perform and observe the terms and conditions of such
instruments.
(C) This Agreement, the Pooling and
Servicing Agreement, the Insurance Agreement, the
Pricing Agreement, the Indemnification Agreement, and
the Certificates each have been duly authorized,
executed and delivered by the Company; this
Agreement, the Pooling and Servicing Agreement and
the Insurance Agreement each have been duly
authorized, executed and delivered by each Originator
and, assuming due authorization, execution and
delivery by the other parties thereto, are legal,
valid and binding agreements of the Company and each
Originator, as the case may be, and assuming such
agreements were governed by the laws of the State of
New Jersey, would be enforceable in
accordance with their respective terms against
the Company and each Originator, as the case
may be, subject (a) to the effect of bankruptcy,
insolvency, reorganization, moratorium and similar
laws relating to or affecting creditors' rights
generally and court decisions with respect thereto,
(b) to the understanding that no opinion is expressed
as to the application of equitable principles in any
proceeding, whether at law or in equity, and (c) to
limitations of public policy under applicable
securities laws as to rights of indemnity and
contribution thereunder.
(D) Neither the transfer of the
Loans to the Trust Fund, the consummation of the
transactions contemplated by, nor the fulfillment of
the terms of, this Agreement, the Pooling and
Servicing Agreement, the Insurance Agreement, or in
the case of the Company, the Pricing Agreement, the
Indemnification Agreement and the Certificates, (A)
conflicts or will conflict with or results or will
result in a breach of or constitutes or will
constitute a default under the Certificates of
Incorporation or Bylaws of the Company or any
Originator, or the terms of any material indenture or
other material agreement or instrument of which such
counsel has knowledge to which the Company or any
Originator are a party or by which it is bound or to
which it is subject, or (B) results in, or will
result in the creation or imposition of any lien or
encumbrance upon the Trust Fund or upon the related
Certificates, except as otherwise contemplated by the
Pooling and Servicing Agreement, or (C) any statute
or order, rule, regulations, writ, injunction or
decree of any court, governmental authority or
regulatory body to which the Company or any
Originator is subject or to which it is bound.
(E) Except as set forth in the
Prospectus Supplement, there is no action, suit,
proceeding or investigation pending or, to the best
of such counsel's knowledge, threatened against the
Company or any Originator which, in such counsel's
judgment, either in any one instance or in the
aggregate, may result in any material adverse change
in the business, operation, financial condition,
properties or assets of the Company or an Originator
or in any material impairment of the right or ability
of the Company or any Originator to carry on its
business substantially as now conducted or result in
any material liability on the part of the Company or
any Originator or which would draw into question the
validity of this Agreement, the Pricing Agreement,
the Certificates, the Insurance Agreement, the
Indemnification Agreement or the Pooling and
Servicing Agreement or of any action taken or to be
taken in connection with the transactions
contemplated thereby, or which would be likely to
impair materially the ability of the Company or any
Originator to perform under the terms of this
Agreement, the Insurance Agreement or the Pooling and
Servicing Agreement, or in the case of the Company,
the Pricing Agreement, the Indemnification Agreement
or the Certificates.
(F) No consent, approval,
authorization or order of any court or governmental
agency or body is required for the execution,
delivery and performance by the Company and each
Originator of, or compliance by the Company and each
Originator with, this Agreement, the Pooling and
Servicing Agreement, the Insurance Agreement or, in
the case of the Company, the Pricing Agreement, the
Indemnification Agreement or the Certificates, or the
consummation of the transactions contemplated
therein, except such as may be required under the
blue sky laws of any jurisdiction and such other
approvals as have been obtained.
(G) The delivery by TMS Mortgage
Inc. ("TMS") of each Mortgage Note and Mortgage
secured by real property located in New Jersey as and
in the manner contemplated by the Pooling and
Servicing Agreement is sufficient fully to transfer
to the Trustee (or, with respect to the Pool III Home
Improvement Loans, the Co-Trustee) for the benefit of
the Certificateholders all right, title and interest
of TMS in and to each such Loan including, without
limitation, the right to enforce each such Loan in
accordance with its terms to the extent enforceable
by TMS at the time of such delivery.
(iii) The favorable opinion, dated as of Closing
Time, of Kutak Rock, counsel for MBIA, in form and substance
satisfactory to counsel for the Underwriters, to the effect
that:
(A) MBIA is a stock insurance
corporation, duly incorporated and validly existing
under the laws of the State of New York. MBIA is
validly licensed and authorized to issue the MBIA
Policies and perform its obligations under the MBIA
Policies in accordance with the terms thereof, under
the laws of the State of New York.
(B) The execution and delivery by
MBIA of the MBIA Policies, the Insurance Agreement
and the Indemnification Agreement are within the
corporate power of MBIA and have been authorized by
all necessary corporate action on the part of MBIA;
the MBIA Policies have been duly executed and is the
valid and binding obligation of MBIA enforceable in
accordance with its terms except that the enforcement
of the MBIA Policies may be limited by laws relating
to bankruptcy, insolvency, reorganization,
moratorium, receivership and other similar laws
affecting creditors' rights generally and by general
principles of equity.
(C) MBIA is authorized to deliver
the Insurance Agreement and the Indemnification
Agreement, and the Insurance Agreement and the
Indemnification Agreement have been duly executed and
are the valid and binding obligations of MBIA
enforceable in accordance with their respective terms
except that the enforcement of the Insurance
Agreement and the Indemnification Agreement may be
limited by laws relating to bankruptcy, insolvency,
reorganization, moratorium, receivership and other
similar laws affecting creditors' rights generally
and by general principles of equity and by public
policy considerations relating to indemnification for
securities law violations.
(D) No consent, approval,
authorization or order of any state or federal court
or govern-mental agency or body is required on the
part of MBIA, the lack of which would adversely
affect the validity or enforceability of the MBIA
Policies; to the extent required by applicable legal
requirements that would adversely affect the validity
or enforceability of the MBIA Policies, the form of
the MBIA Policies has been filed with, and approved
by, all governmental authorities having jurisdiction
over MBIA in connection with such MBIA Policies.
(E) To the extent the MBIA Policies
constitute securities within the meaning of Section
2(l) of the Securities Act of 1933, as amended (the
"Act"), it is a security that is exempt from the
registration requirements of the Act.
(F) The information set forth under
the caption "MBIA Policies and MBIA" in the
Prospectus Supplement, relating to the offer and sale
of the Class A Certificates, to the Prospectus
forming a part of the Registration Statement on Form
S-3 (No. 33-98734) filed by the Company with the
Securities and Exchange Commission and declared
effective on March 19, 1996, insofar as such
statements constitute a description of the MBIA
Policies, accurately summarizes the MBIA Policies.
In rendering this opinion, such counsel may
rely, as to matters of fact, on certificates of responsible
officers of the Company, the Trustee, the Co- Trustee, MBIA
and public officials. Such opinion may assume the due
authorization, execution and delivery of the instruments and
documents referred to
therein by the parties thereto other than the MBIA.
(iv) The favorable opinion, dated as of Closing
Time, of Emmitt, Marvin & Marvin, counsel for the Trustee, in
form and substance satisfactory to counsel for the
Underwriters.
(v) The favorable opinion, dated as of Closing
Time, of Dorsey & Whitney, counsel for the Co-Trustee and the
Custodian, in form and substance satisfactory to counsel for
the Underwriters.
(vi) In giving its opinion required by subsection
(b)(i) of this Section, Stroock & Stroock & Lavan shall
additionally state that nothing has come to its attention that
has caused it to believe that the Registration Statement, at
the time it became effective, contained an untrue statement of
a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Representative, as
representative of the Underwriters, by the Company for use in
connection with the offering of the Class A Certificates which
differs from the Prospectus on file at the Commission at the
Representation Date, in which case at the time it is first
provided to the Representative, as representative of the
Underwriters, for such use) or at Closing Time, included an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading (other than the financial,
numerical, statistical and quantitative information contained
therein, the information under the heading "The MBIA Policies
and MBIA" therein, and the information in the Exhibits
thereto, as to which such counsel need express no view).
(c) At Closing Time, the Representative, as
representative of the Underwriters, shall have received from Stroock &
Stroock & Lavan, counsel for the Underwriters, a letter, dated as of
Closing Time, authorizing the Representative, as representative of the
Underwriters, to rely upon each opinion delivered by Stroock & Stroock
& Lavan to each of Moody's and Standard & Poor's in connection with the
issuance of the Certificates as though each such opinion was addressed
to the Representative, as representative of the Underwriters, and
attaching a copy of each such opinion.
(d) At Closing Time there shall not have been, since
the date hereof or since the respective dates as of which information
is given in the Registration Statement and the Prospectus, any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and the
Originators and their subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the
Underwriter shall have received a certificate signed by one or more
duly authorized officers of the Company and the Originators, dated as
of Closing Time, to the effect that (i) there has been no such material
adverse change; (ii) the representations and warranties in Section 1(a)
hereof are true and correct in all material respects with the same
force and effect as though expressly made at and as of Closing Time;
(iii) the Company and the Originators have complied with all agreements
and satisfied all conditions on its part to be performed or satisfied
at or prior to Closing Time; and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(e) At or before the time of printing of the
Prospectus Supplement, the Representative, as representative of the
Underwriters, shall have received from KPMG Peat Marwick a letter dated
as of Closing Time and in form and substance satisfactory to the
Representative, as representative of the Underwriters, to the effect
that they have carried out certain specified procedures, not
constituting an audit, with respect to (i) certain amounts, percentages
and financial information relating to the Company's servicing portfolio
which are included in the Prospectus and which are specified by the
Representative, as representative of the Underwriters, and have found
such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of the
Company and the Originators identified in such letter, (ii) the
information contained in the weighted average life tables contained in
the Prospectus under the caption "Maturity, Prepayment and Yield
Considerations" and have found such information to be in agreement with
the corresponding information as computed by KPMG Peat Marwick and
(iii) certain information regarding the Loans and the Files which are
specified by the Representative, as representative of the Underwriters,
and contained in the Current Report on Form 8-K described in Section
5(l) hereof and setting forth the results of such specified procedures.
Notwithstanding the foregoing, if the letter delivered by KPMG Peat
Marwick at Closing Time does not cover the information set forth in subclause
(iii), the Company shall cause KPMG Peat Marwick to deliver to the
Representative, as representative of the Underwriters, an additional letter
covering such information within 5 business days of the Closing Time.
(f) At Closing Time, the Representative, as
representative of the Underwriters, shall have received from each of
the Trustee and the Co-Trustee a certificate signed by one or more duly
authorized officers of the Trustee and the Co-Trustee, respectively,
dated as of Closing Time, as to the due acceptance of the Pooling and
Servicing Agreement by the Trustee and the Co-Trustee, respectively and
the due authentication of the Certificates by the Trustee and the
Co-Trustee, respectively and such other matters as the Representative,
as representative of the Underwriters, shall request.
(g) At Closing Time, the Representative, as
representative of the Underwriters, shall have received a certificate
signed by one or more duly authorized officers of MBIA, dated as of
Closing Time, to the effect that the information contained under the
caption "The MBIA Policies and MBIA" in the Prospectus and in the
Exhibits A and B to the Prospectus is true and accurate in all material
respects and such other matters as the Representative, as
representative of the Underwriters, shall request.
(h) At Closing Time, the Representative, as
representative of the Underwriters, shall have received a certificate
signed by one or more duly authorized officers of the Company and the
Originators, dated as of Closing Time to the effect that:
(i) the representations and warranties of the
Company and the Originators in the Pooling and Servicing
Agreement are true and correct in all material respects at and
on the Closing Date, with the same effect as if made on the
Closing Date;
(ii) the Company and the Originators have
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied in
connection with the sale and delivery of the Certificates;
(iii) all statements and information contained in
the Prospectus Supplement under the captions "The
Representative and the Originators" and "The Loans" and in the
Prospectus under the captions "The Representative and the
Originators" and "Lending Programs" are true and accurate in
all material respects and nothing has come to such officer's
attention that would lead him to believe that any of the
specified sections contains any untrue statement of a material
fact or omits to state any material fact necessary in order to
make the statements and information therein, in the light of
the circumstances under which they were made, not misleading;
(iv) the information set forth in the Schedule of
Loans required to be furnished pursuant to the Pooling and
Servicing Agreement is true and correct in all material
respects and the Loans actually being delivered to the Trustee
and the Co-Trustee at Closing Time conform in all material
respects to the Pool information set forth in the Prospectus
Supplement;
(v) the copies of the Charter and By-laws of the
Company and the Originators attached to such certificate are
true and correct and, are in full force and effect on the date
thereof;
(vi) except as may otherwise be disclosed in the
Prospectus, there are no actions, suits or proceedings pending
(nor, to the best knowledge of such officers, are any actions,
suits or proceedings threatened), against or affecting the
Company or any Originator which if adversely determined,
individually or in the aggregate, would adversely affect the
Company's or such Originator's obligations under the Pooling
and Servicing Agreement, the Indemnification Agreement, the
Insurance Agreement, the Pricing Agreement or this Agreement;
(vii) each person who, as an officer or
representative of the Company or of any Originator, signed (a)
this Agreement, (b) the Pooling and Servicing Agreement, (c)
the Certificates issued thereunder, (d) the Insurance
Agreement, (e) the Indemnification Agreement or (f) any other
document delivered prior hereto or on the date hereof in
connection with the purchase described in this Agreement and
the Pooling and Servicing Agreement, was, at the respective
times of such signing and delivery, and is now duly elected or
appointed, qualified and acting as such officer or
representative;
(viii) a certified true copy of the resolutions
of the board of directors of the Company and the Originators
with respect to the sale of the Class A Certificates subject
to this Agreement and the Pooling and Servicing Agreement,
which resolutions have not been amended and remain in full
force and effect;
(ix) all payments received with respect to the
Loans after the Cut-Off Date have been deposited in the
Principal and Interest Account, and are, as of the Closing
Date, in the Principal and Interest Account;
(x) the Company has complied, and has ensured
that the Originators have complied, with all the agreements
and satisfied, and has ensured that the Originators have
satisfied, all the conditions on its, and the Originators',
part to be performed or satisfied in connection with the
issuance, sale and delivery of the Loans and the Certificates;
(xi) all statements contained in the Prospectus
with respect to the Company and the Originators are true and
accurate in all material respects and nothing has come to such
officer's attention that would lead such officer to believe
that the Prospectus contains any untrue statement of a
material fact or omits to state any material fact;
(xii) each Mortgage assignment will be prepared
based on forms recently utilized by the Company with respect
to mortgaged properties located in the appropriate
jurisdiction and used in the regular course of the Company's
business. Based on the Company's experience with such matters,
the Company reasonably believes that upon execution each such
assignment will be in recordable form and will be sufficient
to effect the assignment of the Mortgage to which it relates
as provided in the Pooling and Servicing Agreement; and
(xiii) the weighted average lives of the Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class
A-12, Class A-13, Class A-14, Class A-15 and Class A-16
Certificates, in each case using the applicable pricing speed
and a weighted average coupon (or, in the case of the Pool II
Home Equity Loans, the weighted average margin) and weighted
average maturity based upon the Loans actually delivered to
the Trustee and the Co-Trustee, will not vary by more than
1/10th of one year from 0.5 years, 1.2 years, 2.1 years, 3.1
years, 4.1 years, 5.3 years, 7.4 years, 11.9 years, 7.0 years,
3.5 years, 1.1 years, 3.1 years, 5.1 years, 7.4 years, 11.9
and 6.9 years, respectively.
(i) At Closing Time, each Class of the Class A
Certificates shall have been rated "Aaa" by Moody's and "AAA" by
Standard & Poor's.
(j) At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and delivery of the Class A Certificates as herein
contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Class A Certificates as herein contemplated shall be
satisfactory in form and substance to the Representative, as
representative to the Underwriters, and counsel for the Underwriters.
(k) On or before the Closing Time the Company and the
Originators shall have delivered to the Trustee (or, with respect to
the Pool III Home Improvement Loans, the Co-Trustee), to hold in trust
for the benefit of the holders of the Certificates, Pool I and Pool II
Home Equity Loans, Pool III Home Improvement Loans and Pool IV
Multifamily Loans (as defined in the Prospectus) with aggregate
outstanding principal balances as of the Cut-Off Date of at least
$375,000,000, $273,000,000, $120,000,000 and $9,900,000, respectively.
The Company and the Originators shall, immediately following the sale
of the Class A Certificates, cause to be deposited with the Trustee,
for deposit in the Pre- Funding Account (as defined in the Prospectus
Supplement), cash in an amount equal to the sum of (A) the excess of
(i) the aggregate initial principal balance of the Class A-1, Class
A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8
and Class A- 9 Certificates (I.E., $500,000,000) over (ii) the
aggregate discounted outstanding principal balances as of the Cut-Off
Date of the Pool I Home Equity Loans actually delivered to the Trustee,
(B) the excess of (i) the aggregate initial principal balance of the
Class A-10 Certificates (I.E., $350,000,000) over (ii) the aggregate
outstanding principal balances as of the Cut-Off Date of the Pool II
Home Equity Loans actually delivered to the Trustee, (C) the excess of
(i) the aggregate initial principal balance of the Class A-11, Class
A-12, Class A-13, Class A-14 and Class A-15 Certificates (I.E.,
$175,000,000) over (ii) the aggregate discounted outstanding principal
balances as of the Cut-Off Date of the Pool III Home Improvement Loans
actually delivered to the Trustee and the Co-Trustee, and (D) the
excess of (i) the aggregate initial principal balance of the Class A-16
Certificates (I.E., $10,000,000) over (ii) the aggregate outstanding
principal balances as of the Cut-Off Date of the Pool IV Multifamily
Loans actually delivered to the Trustee.
(l) On or before the Closing Time the Company shall
have delivered to the Representative a Current Report on Form 8-K
containing a detailed description of the Loans actually being delivered
to the Trustee and the Co-Trustee at Closing Time, in form and
substance satisfactory to the Representative.
(m) On or before the Closing Time the Company shall
have delivered to the Representative confirmation from the Federal
Housing Administration (the "FHA") that the FHA insurance reserves
relating to the FHA Loans have been or will be transferred to the
Co-Trustee.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representative, as
representative to the Underwriters, by notice to the Company at any
time at or prior to Closing time, and such termination shall be without
liability of any party to any other party except as provided in Section
4 hereof.
Section 6. INDEMNIFICATION.
(a) The Company and the Originators jointly and severally
agree to indemnify and hold harmless each of the Underwriters and each person,
if any, who controls each of the Underwriters within the meaning of Section 15
of the 1933 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any untrue statement or omission
described in clause (i) above, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the reasonable fees and
disbursements of counsel chosen by such Underwriter), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any untrue statement or omission described in clause (i) above, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with the information referred to in clauses (x), (y) and
(z) of the immediately following paragraph; provided, further, such indemnity
with respect to the Prospectus or any preliminary prospectus shall not inure to
the benefit of any Underwriter (or person controlling such Underwriter) from
whom the person suffering any such loss, claim, damage or liability purchased
the Class A Certificates which are the subject thereof if such person did not
receive a copy of the Prospectus at or prior to the confirmation of the sale of
such Class A Certificates to such person in any case where such delivery is
required by the 1933 Act and the untrue statement or omission of a material fact
contained in any preliminary prospectus was corrected in the Prospectus.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company and the Originators, their directors, each of the Company's and
Originator's officers who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, contained in (x) the second sentence of the
third paragraph on the third page which is located on the inside cover
(discussing the risk of a lack of secondary trading) of the Prospectus, (y) the
second and third paragraphs under the heading "Underwriting" in the Prospectus
(or any amendment or supplement thereto) and (z) any Computational Materials
prepared by such Underwriter, except to the extent of any errors in the
Computational Materials that are caused by errors in the pool information
provided by the Company to the applicable Underwriter. The parties hereto agree
that no Underwriter shall be under any liability to the Company, the Originators
or any other person identified in this paragraph (b) for Computational Materials
prepared by any other Underwriter.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability that it may have to any
indemnified party except to the extent that it has been prejudiced in any
material respect by such failure or from any liability that it may have
otherwise than under this Section 6. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that, if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall have reasonably
concluded that there may be legal defenses available to it or them and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party for any legal or other expenses other than the reasonable
costs of investigation subsequently incurred in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence, (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party; and
except that, if clause (i) or (iii) is applicable, such liability shall be only
in respect of the counsel referred to in such clause (i) or (iii). After such
notice from the indemnifying party to such indemnified party, the indemnifying
party will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the consent of the
indemnifying party.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Originators jointly and severally, on the one hand, and the Underwriters, on the
other hand, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Originators jointly and severally, on the one
hand, and the Underwriters, on the other hand, as incurred, in such proportions
that each Underwriter is responsible for that portion represented by the
underwriting discount allocated to the principal amount of Class A Certificates
set forth next to each Underwriter's name on Annex B hereto (or, with respect to
Computational Materials furnished by an Underwriter (except to the extent of any
errors in the Computational Materials that are caused by errors in the pool
information provided by the Company to the applicable Underwriter), the excess
of the principal amount of Class A Certificates set forth next to such
Underwriter's name on Annex B hereto over the underwriting discount allocated to
such principal amount of Class A Certificates), and the Company and the
Originators shall be responsible for the balance; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Notwithstanding the provisions
of this Section 7, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Class A Certificates
set forth next to the name of such Underwriter on Annex B hereto were offered to
the public exceeds the amount of any damages such Underwriter has otherwise been
required to pay in respect of such losses, liabilities, claims, damages and
expenses. For purposes of this Section 7, each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as such Underwriter and each respective director of the
Company and the Originators, each officer of the Company and the Originators who
signed the Registration Statement, and each respective person, if any, who
controls the Company and the Originators within the meaning of Section 15 of the
1933 Act shall have the same rights to contribution as the Company and the
Originators.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers of
the Company and the Originators submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any of the Underwriters or any controlling person thereof, or by
or on behalf of the Company and the Originators, and shall survive delivery of
the Class A Certificates to the Underwriter.
Section 9. TERMINATION OF AGREEMENT.
(a) The Representative, as representative of the Underwriters, may
terminate this Agreement, by notice to the Company and the Originators, at any
time at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Registration Statement or Prospectus, any change, or
any development involving a prospective change, in or affecting particularly the
business or properties of the Company and the Originators considered as one
entity or MBIA which, in the reasonable judgment of the Representative, as
representative of the Underwriters, materially impairs the investment quality of
the Class A Certificates; (ii) if there has occurred any downgrading in the
rating of the debt securities of MBIA by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the 1933 Act)
which, in the reasonable judgment of the Representative, as representative of
the Underwriters, materially impairs the investment quality or marketability of
the Class A Certificates or if any debt security of MBIA has been put on the
"watch list" of any such rating organization with negative implications; (iii)
if there has occurred any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange or by any governmental authority; (iv) if any banking
moratorium has been declared by Federal or New York authorities; or (v) if there
has occurred any outbreak or escalation of major hostilities in which the United
States of America is involved, any declaration of war by Congress, or any other
substantial national or international calamity or emergency if, in the judgment
of the Representative, as representative of the Underwriter, the effects of any
such outbreak, escalation, declaration, calamity, or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Class A Certificates.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
Section 10. DEFAULT BY ONE OF THE UNDERWRITERS. If any of the
Underwriters shall fail at Closing Time to purchase the Class A Certificates
which it is obligated to purchase hereunder (the "Defaulted Certificates"), the
remaining Underwriters (the "Non-Defaulting Underwriters") shall have the right,
but not the obligation, within one (1) Business Day thereafter, to make
arrangements to purchase all, but not less than all, of the Defaulted
Certificates upon the terms herein set forth; if, however, the Non-Defaulting
Underwriters shall have not completed such arrangements within such one (1)
Business Day period, then this Agreement shall terminate without liability on
the part of the Non-Defaulting Underwriters.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Non-Defaulting Underwriters or the
Company shall have the right to postpone Closing Time for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements.
Section 11. COMPUTATIONAL MATERIALS. (a) It is understood that any
Underwriter may prepare and provide to prospective investors certain
Computational Materials (as defined below) in connection with the Company's
offering of the Class A Certificates, subject to the following conditions:
(i) Each Underwriter shall comply with all applicable laws and
regulations in connection with the use of Computational Materials including the
No-Action Letter of May 20, 1994 issued by the Commission to Kidder, Peabody
Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and Kidder
Structured Asset Corporation, as made applicable to other issuers and
underwriters by the Commission in response to the request of the Public
Securities Association dated May 24, 1994, and the No-Action Letter of February
17, 1995 issued by the Commission to the Public Securities Association
(collectively, the "Kidder/PSA Letters").
(ii) As used herein, "Computational Materials" and the term "ABS
Term Sheets" shall have the meanings given such terms in the Kidder/PSA Letters,
but shall include only those Computational Materials that have been prepared or
delivered to prospective investors by or at the direction of an Underwriter.
(iii) Each Underwriter shall provide the Company with representative
forms of all Computational Materials prior to their first use, to the extent
such forms have not previously been approved by the Company for use by such
Underwriter. The Underwriter shall provide to the Company, for filing on Form
8-K as provided in Section 11(b), copies of all Computational Materials that are
to be filed with the Commission pursuant to the Kidder/PSA Letters. The
Underwriter may provide copies of the foregoing in a consolidated or aggregated
form. All Computational Materials described in this subsection (a)(iii) must be
provided to the Company not later than 10:00 a.m. New York time one business day
before filing thereof is required pursuant to the terms of this Agreement.
(iv) If an Underwriter does not provide any Computational Materials
to the Company pursuant to subsection (a)(iii) above, such Underwriter shall be
deemed to have represented, as of the Closing Date, that it did not provide any
prospective investors with any information in written or electronic form in
connection with the offering of the Certificates that is required to be filed
with the Commission in accordance with the Kidder/PSA Letters.
(v) In the event of any delay in the delivery by any
Underwriter to the Company of all Computational Materials required to be
delivered in accordance with subsection (a)(iii)
above, the Company shall have the right to delay the release of the Prospectus
to investors or to any Underwriter, to delay the Closing Date and to take other
appropriate actions in each case as necessary in order to allow the Company to
comply with its agreement set forth in Section 11(b) to file the Computational
Materials by the time specified therein.
(b) The Company shall file the Computational Materials (if
any) provided to it by each Underwriter under Section 11(a)(iii) with the
Commission pursuant to a Current Report on Form 8-K no later than 10:00 a.m. on
the date required pursuant to the Kidder/PSA Letters.
Section 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Lehman Brothers, as representative of the
Underwriters, Three World Financial Center, New York, New York 10285- 1200,
Attention: Syndicate Department (Fax: 212-528-8822); and notices to the Company
or any Originator shall be directed to it at 2840 Morris Avenue, Union, New
Jersey 07083, Attention: Executive Vice President.
Section 13. PARTIES. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Underwriters, the Company,
the Originators and their respective successors. Nothing expressed or mentioned
in this Agreement or the Pricing Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters, the Company,
the Originators and their respective successors and the controlling persons and
officers and directors referred to in Section 6 and 7 hereof and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
with respect to this Agreement or the Pricing Agreement or any provision herein
or therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company, the Originators and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Class A Certificates from the
Underwriter shall be deemed to be a successor by reason merely of such purchase.
The Company and the Originators shall be jointly and severally liable for all
obligations incurred under this Agreement and the Pricing Agreement.
Section 14. GOVERNING LAW AND TIME. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Unless otherwise set forth herein, specified times of day refer to New
York time.
Section 15. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among each of the Underwriters and the Company in accordance with its terms.
Very truly yours,
THE MONEY STORE INC.
By:________________________________
Name: Morton Dear
Title: Executive Vice President
THE ORIGINATORS LISTED ON
ANNEX A HERETO
By:________________________________
Name: Morton Dear
Title: Executive Vice President
CONFIRMED AND ACCEPTED, as of the date first above written:
LEHMAN BROTHERS INC.
By:________________________
Name:
Title:
Acting on behalf of itself
and as the representative of
the Underwriters.
<PAGE>
ANNEX A
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
<PAGE>
ANNEX B
<TABLE>
<CAPTION>
Prudential Bear,
LEHMAN Securities Stearns SALOMON MERRILL Total
BROTHERS INCORPORATED & CO. INC. BROTHERS LYNCH & CO.
INC. INC.
<S> <C> <C> <C> <C> <C> <C>
Class A-1 25,198,000 17,902,000 9,945,000 9,945,000 3,315,000 66,305,000
Class A-2 32,827,000 23,323,000 12,957,000 12,957,000 4,319,000 86,383,000
Class A-3 36,659,000 26,046,000 14,470,000 14,470,000 4,823,000 96,468,000
Class A-4 20,465,000 14,539,000 8,077,000 8,077,000 2,692,000 53,850,000
Class A-5 18,210,000 12,937,000 7,187,000 7,187,000 2,395,000 47,916,000
Class A-6 13,850,000 9,839,000 5,466,000 5,466,000 1,822,000 36,443,000
Class A-7 17,028,000 12,097,000 6,721,000 6,721,000 2,240,000 44,807,000
Class A-8 10,576,000 7,513,000 4,174,000 4,174,000 1,391,000 27,828,000
Class A-9 15,200,000 10,800,000 6,000,000 6,000,000 2,000,000 40,000,000
Class A-10 133,000,000 94,500,000 52,500,000 52,500,000 17,500,000 350,000,000
Class A-11 29,411,000 20,895,000 11,608,000 11,608,000 3,869,000 77,391,000
Class A-12 13,146,000 9,339,000 5,188,000 5,188,000 1,729,000 34,590,000
Class A-13 10,522,000 7,474,000 4,152,000 4,152,000 1,384,000 27,684,000
Class A-14 6,047,000 4,295,000 2,386,000 2,386,000 795,000 15,909,000
Class A-15 7,384,000 5,245,000 2,913,000 2,913,000 971,000 19,426,000
Class A-16 3,800,000 2,700,000 1,500,000 1,500,000 500,000 10,000,000
====================================================================================================================
Total $ 393,323,000 $ 279,444,000 $155,244,000 $155,244,000 $51,745,000 1,035,000,000
====================================================================================================================
</TABLE>
<PAGE>
Exhibit 1.2
EXHIBIT A
$1,035,000,000
THE MONEY STORE INC.
The Money Store Asset Backed Certificates,
Series 1996-D
PRICING AGREEMENT
December 13, 1996
Lehman Brothers Inc.
as representative of the Underwriters
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated December 13, 1996
(the "Underwriting Agreement"), relating to $1,035,000,000 aggregate principal
amount of The Money Store Asset Backed Certificates, Series 1996-D, Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8,
Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class
A-15 and Class A-16 (collectively, the "Class A Certificates"). Pursuant to the
Underwriting Agreement, The Money Store Inc. (the "Company") agrees with Lehman
Brothers Inc., as representative of the Underwriters, that the Initial Class
Certificate Balance, the Pass-Through Rates, the price to public and the
Underwriter's discount shall be as follows:
<TABLE>
<CAPTION>
Initial Class Pass- Proceeds to
Certificate Through PRICE TO Underwriting Originators
CLASS BALANCE RATE PUBLIC (1) DISCOUNT (1)(2)
- ----- -------- ----- ------ --------- ------
<S> <C> <C> <C> <C> <C>
Class A-1 $ 66,305,000 6.260% 99.99824% 0.1000% 99.898240%
Class A-2 86,383,000 6.230% 99.99960% 0.1250% 99.874600%
Class A-3 96,468,000 6.295% 99.99766% 0.1500% 99.847660%
Class A-4 53,850,000 6.465% 99.98629% 0.1750% 99.811290%
Class A-5 47,916,000 6.670% 99.99476% 0.2500% 99.744760%
Class A-6 36,443,000 6.830% 99.98201% 0.3250% 99.657010%
Class A-7 44,807,000 7.110% 99.97854% 0.4000% 99.578540%
Class A-8 27,828,000 7.370% 99.98109% 0.5125% 99.468590%
Class A-9 40,000,000 7.000% 99.97745% 0.4500% 99.527450%
Class A-10 350,000,000 (3) 100.00000% 0.2250% 99.775000%
Class A-11 77,391,000 (3) 100.00000% 0.1000% 99.900000%
Class A-12 34,590,000 6.370% 99.99453% 0.1500% 99.844530%
Class A-13 27,684,000 6.635% 99.98154% 0.3125% 99.669040%
Class A-14 15,909,000 6.985% 99.99369% 0.3750% 99.618690%
Class A-15 19,426,000 7.250% 99.99563% 0.4250% 99.570630%
Class A-16 10,000,000 7.110% 99.97913% 0.3000% 99.679130%
Total 1,035,000,000 1,032,616,133.00 2,328,807.25
(1) Plus accrued interest from December 1, 1996 to, but not including, the
Closing Time (other than the Class A-10 and Class A-11 Certificates,
which shall accrue interest from December 15, 1996).
(2) Before deducting expenses payable by the Company.
(3) The Pass-Through Rate for the Class A-10 and Class A-11 Certificates
will equal LIBOR plus 0.21% and 0.08%, respectively, subject to the
applicable Net Funds Cap. In the case of the Class A-10 Certificates, in
no event shall the Pass-Through Rate exceed 14.5% per annum.
</TABLE>
The Class A Certificates will be offered by the Underwriters to the
public subject to the concessions and discounts set forth in the Prospectus.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
THE MONEY STORE INC.
By: _____________________________
Name: Morton Dear
Title: Executive Vice President
CONFIRMED AND ACCEPTED, as of the date first above written:
LEHMAN BROTHERS INC.
By: _______________________________
Name:
Title:
Acting on behalf of itself and as the representative of the Underwriters.
EXHIBIT 4.1
POOLING AND SERVICING AGREEMENT
Dated as of November 30, 1996
THE BANK OF NEW YORK
(Trustee)
and
THE MONEY STORE INC.
(Representative, Servicer and Claims Administrator)
and
THE ORIGINATORS LISTED HEREIN
The Money Store Asset Backed Certificates, Series 1996-D
Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8,
Class A-9, Class A-10, Class A-11, Class A-12,
Class A-13, Class A-14, Class A-15, Class A-16, Class X, Class
R-1 and Class R-2
<PAGE>
TABLE OF CONTENTS
--------------------
SECTION PAGE
ARTICLE I
DEFINITIONS............................................................I-1
ARTICLE II
SALE AND CONVEYANCE OF THE TRUST FUND
2.01 Sale and Conveyance of Trust Fund;
Priority and Subordination of Ownership
Interests...........................................II-1
2.02 Possession of Mortgage Files..........................II-2
2.03 Books and Records.....................................II-2
2.04 Delivery of Mortgage Loan Documents...................II-2
2.05 Acceptance by Trustee and Custodian of the
Trust Fund; Certain Substitutions;
Certification by Trustee and Custodian .............II-5
2.06 Designations under REMIC Provisions;
Designation of Startup Day..........................II-8
2.07 Authentication of Certificates........................II-8
2.08 Fees and Expenses of the Trustee and Co-Trustee.......II-9
2.09 Sale and Conveyance of the Subsequent
Mortgage Loans......................................II-9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations of Representative,
Servicer, Claims Administrator and Originators.....III-1
3.02 Individual Mortgage Loans............................III-9
3.03 Purchase and Substitution............................III-20
ARTICLE IV
THE CERTIFICATES
4.01 The Certificates....................................IV-1
4.02 Registration of Transfer and Exchange of
Certificates......................................IV-1
4.03 Mutilated, Destroyed, Lost or Stolen Certificates...IV-7
4.04 Persons Deemed Owners...............................IV-7
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
5.01 Duties of the Servicer..............................V-1
5.02 Liquidation of Mortgage Loans.......................V-6
5.03 Establishment of Principal and Interest
Accounts; Deposits in Principal and
Interest Accounts..............................V-6
5.04 Permitted Withdrawals From the Principal
and Interest Accounts.............................V-8
5.05 Payment of Taxes, Insurance and Other
Charges...........................................V-10
5.06 Transfer of Accounts................................V-11
5.07 Maintenance of Hazard Insurance.....................V-11
5.08 Maintenance of Mortgage Impairment
Insurance Policy..................................V-12
5.09 Fidelity Bond.......................................V-12
5.10 Title, Management and Disposition of REO
Property..........................................V-13
5.11 Certain Tax Information.............................V-14
5.12 Collection of Certain Mortgage
Loan Payments.....................................V-14
5.13 Access to Certain Documentation and
Information Regarding the
Mortgage Loans....................................V-15
5.14 Superior Liens......................................V-15
5.15 Duties of the Claims Administrator..................V-16
5.16 Co-Trustee Not to Hold Other FHA Insured
Title I Loans.....................................V-17
ARTICLE VI
PAYMENTS TO THE CERTIFICATEHOLDERS
6.01 Establishment of Certificate Accounts; Deposits in
Certificate Accounts; Permitted Withdrawals from
Certificate Accounts...............................VI-1
6.02 Establishment of Pre-Funding Account and
Capitalized Interest Account, Deposits in
Pre-Funding Account and Capitalized
Interest Account; Withdrawals from
Pre-Funding Account and Capitalized
Interest Account...................................VI-2
6.03 Establishment of Expense Accounts;
Deposits in Expense Accounts;
Permitted Withdrawals from Expense Accounts........VI-5
6.04 Establishment of Insurance Accounts;
Deposits in Insurance Accounts;
Permitted Withdrawals from
Insurance Accounts.................................VI-6
6.05 Establishment of Spread Account; Deposits
in Spread Account; Permitted Withdrawals
from Spread Account.... ...........................VI-8
6.06 Establishment of FHA Premium Account;
Deposits in FHA Premium Account;
Permitted Withdrawals from FHA
Premium Account....................................VI-10
6.07 Investment of Accounts...............................VI-12
6.08 Priority and Subordination of Distributions..........VI-12
6.09 Allocation of Realized Losses........................VI-19
6.10 Statements...........................................VI-20
6.11 Advances by the Servicer.............................VI-26
6.12 Compensating Interest................................VI-27
6.13 Reports of Foreclosure and Abandonment
of Mortgaged Property..............................VI-27
6.14 Allocation of Total Monthly Excess Cashflow..........VI-28
6.15 Establishment of Servicing Accounts;
Collection of Taxes, Assessments and
Similar Items......................................VI-30
ARTICLE VII
GENERAL SERVICING PROCEDURE
7.01 Assumption Agreements................................VII-1
7.02 Satisfaction of Mortgages and Release
of Mortgage Files..................................VII-2
7.03 Servicing Compensation and Contingency Fee...........VII-4
7.04 Annual Statement as to Compliance....................VII-4
7.05 Annual Independent Public Accountants'
Servicing Report...................................VII-5
7.06 Certificateholder's, Trustee's
and Certificate Insurer's
Right to Examine Servicer Records
and Audit Operations...............................VII-5
7.07 Reports to the Trustee and the Certificate
Insurer; Principal and Interest Account
Statements.........................................VII-5
ARTICLE VIII
REPORTS TO BE PROVIDED BY SERVICER
8.01 Financial Statements.................................VIII-1
ARTICLE IX
THE SERVICER
9.01 Indemnification; Third Party Claims...................IX-1
9.02 Merger or Consolidation of the
Representative, the Servicer and
the Claims Administrator............................IX-2
9.03 Limitation on Liability of the Servicer
and Others..........................................IX-2
9.04 Servicer and Claims Administrator
Not to Resign.......................................IX-3
9.05 Appointment of Assistant Claims
Administrator.......................................IX-3
9.06 Right of Certificate Insurer to Replace
Servicer and Claims Administrator. . . . . . .......IX-3
ARTICLE X
DEFAULT
10.01 Events of Default.....................................X-1
10.02 Trustee and Co-Trustee to Act;
Appointment of Successor............................X-3
10.03 Waiver of Defaults....................................X-5
10.04 Transfer of Tax Matters Person
Residual Interest...................................X-6
10.05 Control by Majority Certificateholders................X-6
ARTICLE XI
TERMINATION
11.01 Termination..........................................XI-1
11.02 Termination Upon Loss of REMIC Status................XI-3
11.03 Additional Termination Requirements..................XI-4
11.04 [Omitted]............................................XI-6
11.05 Accounting Upon Termination of Servicer
and Claims Administrator...........................XI-6
ARTICLE XII
THE TRUSTEE
12.01 Duties of Trustee....................................XII-1
12.02 Certain Matters Affecting the Trustee................XII-2
12.03 Trustee Not Liable for Certificates or
Mortgage Loans.....................................XII-4
12.04 Trustee May Own Certificates.........................XII-4
12.05 Servicer to Pay Trustee's Fees and Expenses..........XII-5
12.06 Eligibility Requirements for Trustee.................XII-5
12.07 Resignation and Removal of the Trustee...............XII-6
12.08 Successor Trustee....................................XII-7
12.09 Merger or Consolidation of Trustee...................XII-7
12.10 Appointment of Co-Trustee or Separate Trustee........XII-8
12.11 Authenticating Agent.................................XII-10
12.12 Tax Returns and Reports..............................XII-10
12.13 Appointment of Custodians............................XII-12
12.14 Protection of Trust Fund.............................XII-12
12.15 Calculation of LIBOR.................................XII-13
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01 Acts of Certificateholders...........................XIII-1
13.02 Amendment............................................XIII-1
13.03 Recordation of Agreement.............................XIII-2
13.04 Duration of Agreement................................XIII-2
13.05 Governing Law........................................XIII-2
13.06 Notices..............................................XIII-2
13.07 Severability of Provisions...........................XIII-3
13.08 No Partnership.......................................XIII-3
13.09 Counterparts.........................................XIII-3
13.10 Successors and Assigns...............................XIII-3
13.11 Headings.............................................XIII-3
13.12 The Certificate Insurer..............................XIII-3
13.13 Paying Agent.........................................XIII-4
13.14 Notification to Rating Agencies......................XIII-5
13.15 Third Party Rights...................................XIII-5
SCHEDULE I Description of Certain Litigation
EXHIBIT A Contents of Mortgage File
EXHIBIT B Forms of Certificates
EXHIBIT C Principal and Interest Account
Letter Agreement
EXHIBIT D Resale Certification
EXHIBIT E Assignment
EXHIBIT E(1) Wiring Instructions Form
EXHIBIT F Form of Trustee/Co-Trustee Initial Certification
EXHIBIT F-1 Form of Trustee/Co-Trustee Interim Certification
EXHIBIT G Form of Trustee/Co-Trustee Final Certification
EXHIBIT H Pool I Mortgage Loan Schedule
EXHIBIT H-1 Pool II Mortgage Loan Schedule
EXHIBIT H-2 Pool III Mortgage Loan Schedule
EXHIBIT H-3 Pool IV Mortgage Loan Schedule
EXHIBIT I List of Originators
EXHIBIT J Request for Release of Documents
EXHIBIT J-1 Request for Release Documents of 90 Day
Delinquent Pool III Loans
EXHIBIT K Transfer Affidavit
EXHIBIT L Form of Notice
EXHIBIT M Custodial Agreement
EXHIBIT M-1 Pool III Custodial Agreement
EXHIBIT N Form of Liquidation Report
EXHIBIT O Form of Delinquency Report
EXHIBIT P [Omitted]
EXHIBIT Q [Omitted]
EXHIBIT R Servicer's Monthly Computer Tape Format
EXHIBIT S Subservicing Agreement
EXHIBIT T Prices for Low Interest Mortgage Loans
<PAGE>
Agreement dated as of November 30, 1996, among The Bank of New York,
as trustee (the "Trustee"), the entities listed on Exhibit I hereto
(collectively, the "Originators") and The Money Store Inc., as Representative
(the "Representative"), Servicer (the "Servicer") and Claims Administrator (the
"Claims Administrator"):
PRELIMINARY STATEMENT
In order to facilitate the servicing of certain Mortgage Loans by the
Servicer, the Representative, the Servicer, the Originators and the Claims
Administrator are entering into this Agreement with the Trustee. The Originators
are selling the Mortgage Loans and amounts on deposit in the Pre-Funding Account
to the Trustee for the benefit of the Certificateholders, pursuant to which 19
classes of Certificates are being issued, denominated on the face thereof as The
Money Store Asset Backed Certificates, 1996-D, Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10,
Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class X,
Class R-1 and Class R-2, respectively, representing in the aggregate a 100%
undivided ownership interest in the Mortgage Loans and amounts on deposit in the
Pre-Funding Account. The Initial Pool I, Initial Pool II, Initial Pool III and
Initial Pool IV Mortgage Loans have an aggregate outstanding principal balance
of $375,015,823.36, $273,227,217.80, $120,052,426.54 and $9,995,200.25,
respectively (and an aggregate outstanding Principal Balance of $778,290,667.95,
which gives effect to the discounts on the Low Interest Mortgage Loans of $0),
as of November 30, 1996, except for those Initial Mortgage Loans originated
after November 30, 1996 and delivered to the Trustee on the Closing Date as to
which the aggregate outstanding principal balance shall be as of the date of the
related Mortgage Note (the "Cut-Off Date"), after application of payments
received by the Originators on or before such date, and the original Pre-Funded
Amount equals $256,709,332.05. Except for the Low Interest Mortgage Loans in the
related Pool, if any, each Initial Mortgage Loan in such Pool has, and each
Subsequent Mortgage Loan in such Pool will have, a Mortgage Interest Rate in
excess of the Class Adjusted Mortgage Loan Remittance Rate of each Class of
Certificates in the related Pool. The Class R Certificates are subordinated to
the Class X and Class A Certificates, in each case to the extent described
herein. As provided herein, two separate real estate mortgage investment conduit
("REMIC") elections will be made in connection with the assets constituting each
of REMIC I and REMIC II for federal income tax purposes. On the Startup Day, all
the Classes of REMIC II Regular Certificates will be designated "regular
interests" in REMIC II and the Class R-2 Certifi cates will be designated the
single class of "residual interests" in such REMIC for purposes of the REMIC
Provisions (as defined herein). On the Startup Day, all the Classes of
Certificates except for the Class R-1 and Class R-2 Certificates will be
designated "regular interests" in REMIC I and the Class R-1 Certificates will be
designated the single class of "residual interests" in such REMIC for purposes
of the REMIC Provisions.
The parties hereto agree as follows:
[Intentionally Left Blank]
<PAGE>
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings. This Agreement
relates to a Trust Fund evidenced by The Money Store Asset Backed Certificates,
Series 1996-D, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13,
Class A-14, Class A-15, Class A-16, Class X, Class R-1 and Class R-2. Unless
otherwise provided, all calculations of interest pursuant to this Agreement are
based on a 360-day year and twelve 30-day months.
ACCOUNT: The Certificate Accounts, Pre-Funding Account, Expense
Accounts, Capitalized Interest Account, Spread Account, Servicing Account or
Insurance Accounts (including any sub-accounts of any of the foregoing)
established and held in trust by the Trustee for the Certificateholders and the
FHA Premium Account established and held in trust by the Trustee for the benefit
of the Certificateholders of the Pool III Certificates to reimburse the Servicer
and the Certificate Insurer for payments with respect to FHA Insurance Premiums
or to make payments with respect to FHA Insurance Premiums. The obligation to
establish and maintain the Accounts is not delegable.
ADDITION NOTICE: With respect to the transfer of Subsequent Mortgage
Loans to the Trust Fund pursuant to Section 2.09 herein, notice, which shall be
given not later than five Business Days prior to the related Subsequent Transfer
Date, of the Representative's designation of Subsequent Mortgage Loans of the
related Pool to be sold to the Trust Fund and the aggregate Principal Balance of
such Subsequent Mortgage Loans.
ADJUSTABLE RATE CERTIFICATES: The Class A-10 and Class A-11
Certificates.
ADJUSTED MORTGAGE INTEREST RATE: With respect to each Mortgage Loan, a
percentage per annum, equal to the related Mortgage Interest Rate less the per
annum rate used in calculating (i) the Annual Expense Escrow Amount, (ii) the
premiums payable to the Certificate Insurer as set forth in the Insurance
Agreement, (iii) the FHA Insurance Premium in connection with FHA Loans for
which the related Mortgagor pays the FHA Insurance Premium as part of the
Mortgage Interest Rate, (iv) the Servicing Fee, and (v) the Contingency Fee.
AGGREGATE INITIAL SPREAD ACCOUNT DEPOSIT: With respect to any
Remittance Date, the sum of the Initial Pool Spread Account Deposits for each of
the Pools.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
ANNUAL EXPENSE ESCROW AMOUNT: An amount equal to the product of (i)
.02% per annum and (ii) the aggregate Class Principal Balances of the Class A
Certificates, which is computed and payable on a monthly basis and represents
the estimated annual Trustee's and Co-Trustee's fees and expenses of the Trust
Fund.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer or equivalent instrument sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage to the Trustee (or, with respect to Mortgages relating to Pool
III Mortgage Loans, the Co-Trustee) for the benefit of the Cer tificateholders.
AUTHENTICATING AGENT: Initially, The Bank of New York, and thereafter,
any successor appointed pursuant to Section 12.11.
BIF: The Bank Insurance Fund, or any successor thereto.
BUSINESS DAY: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking institutions in the States of New York, New Jersey,
Minnesota or Wisconsin are authorized or obligated by law or executive order to
be closed. When used with respect to an Interest Determination Date, "Business
Day" shall also mean a day on which banks are open for dealing in foreign
currency and exchange in London and New York City.
CAPITALIZED INTEREST ACCOUNT: The account established in accordance
with Section 6.02 hereof and maintained by the Trustee.
CAPITALIZED INTEREST REQUIREMENT: With respect to each Pool and the
Remittance Dates in January, February and March 1997, the excess, if any, of (i)
for Pool I, Pool III and Pool IV, 30 days' interest calculated at the weighted
average Class Remittance Rates of the Classes of Certificates of such Pool, and
for Pool II, interest calculated on the actual number of days since the last
Remittance Date (or with respect to the Remittance Date in January 1997, the
actual number of days from December 15, 1996 to but not including such
Remittance Date with respect to the Class A-10 Certificates) to but not
including the related Remittance Date at the weighted average Class Remittance
Rates of the Pool II Certificates, on the excess of (a) the Pool Principal
Balance of such Pool for such Remittance Date over (b) the aggregate Principal
Balances of the Mortgage Loans of such Pool for such Remittance Date over (ii)
any Pool Pre-Funding Earnings for such Pool to be transferred to the applicable
Certificate Account on such Remittance Date pursuant to Section 6.02(d). With
respect to the Special Remittance Date, 27 days' interest (or, in the case of
Pool II, 12 days' interest) calculated at the weighted average Class Remittance
Rates of the Classes of Certificates of such Pool on the amount to be
transferred on the Special Remittance Date from the Pre-Funding Account to the
Certificate Account relating to the Certificates of such Pool pursuant to
Section 6.02(c).
CERTIFICATE: Any Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class
A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class X, Class R-1 or
Class R-2 Certificate executed by the Servicer and authenticated by the Trustee
or the Authenticating Agent substantially in the form annexed hereto as Exhibit
B-1, B-2, B-3 or B-4.
CERTIFICATE ACCOUNTS: As described in Section 6.01.
CERTIFICATEHOLDER or HOLDER: Each Person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purposes
of giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Representative, the Servicer, the
Claims Administrator, any Subservicer or any Originator, or any affiliate of any
of them, shall be deemed not to be outstanding and the undivided Percentage
Interest evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Certificates necessary to effect any such
consent, waiver, request or demand has been obtained. When used with respect to
any Class or Pool of Certificates, a Certificateholder or Holder of such Class
or Pool of Certificates, as the case may be.
CERTIFICATEHOLDERS' INTEREST CARRYOVER: For any Remittance Date on
which the Class A-10 Remittance Rate is based upon the applicable Net Funds Cap
for Pool II, the excess of (i) the amount of interest the Class A-10
Certificates would be entitled to receive on such Remittance Date had interest
been calculated at a rate equal to LIBOR plus the applicable Margin (but in no
event exceeding 14.50% per annum), over (ii) the amount of interest such Class
will receive on such Remittance Date at the applicable Net Funds Cap for Pool
II, together with the unpaid portion of any such excess from prior Remittance
Dates (and interest thereon at the then applicable Class A-10 Remittance Rate,
without giving effect to the Net Funds Cap, but in no event exceeding 14.50% per
annum). No Certificateholders' Interest Carryover shall be paid on the Class
A-10 Certificates after the Class Principal Balance of such Class is reduced to
zero.
CERTIFICATE INSURANCE POLICIES: Collectively, the certificate guaranty
insurance policies relating to the Certificates of each Pool, each dated the
Closing Date, and each issued by the Certificate Insurer for the benefit of the
Holders of the Certificates of the related Pool, pursuant to which the
Certificate Insurer guarantees Insured Payments.
CERTIFICATE INSURER: MBIA Insurance Corporation, a New York stock
insurance corporation, or any successor thereof, as issuer of the Certificate
Insurance Policies.
CERTIFICATE REGISTER: As described in Section 4.02.
CERTIFICATE REGISTRAR: Initially, The Bank of New York, and
thereafter, any successor appointed pursuant to Section 4.02.
CHANGE DATE: The date on which the Mortgage Interest Rate of each Pool
II Mortgage Loan is subject to adjustment, which date is the Due Date set forth
in the related Mortgage Note and each first, third, sixth or twelfth Due Date
thereafter, as set forth in the related Mortgage Note.
CLAIM: An insurance claim submitted to the FHA by the Claims
Administrator with respect to a 90 Day Delinquent FHA Loan pursuant to the FHA
Regulations.
CLAIMS ADMINISTRATOR: The Servicer, acting in the capacity of Claims
Administrator appointed as herein provided.
CLASS: Collectively, Certificates having the same priority of payment
and bearing the same designation.
CLASS A CERTIFICATE: A Certificate denominated as a Class A-1, Class
A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class
A-9, Class A-10, Class A- 11, Class A-12, Class A-13, Class A-14, Class A-15 or
Class A-16 Certificate.
CLASS A CERTIFICATEHOLDER: A Holder of a Class A Certificate.
CLASS A PRINCIPAL BALANCE: The sum of the Class Principal Balances of
each Class of Class A Certificates.
CLASS ADJUSTED MORTGAGE LOAN REMITTANCE RATE: With respect to each
Mortgage Loan, a percentage per annum, being the sum of (i) (a) the Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8 or
then current Class A-9 Remittance Rate, as the case may be, with respect to a
Pool I Mortgage Loan, (b) the then current Class A-10 Remittance Rate with
respect to a Pool II Mortgage Loan, (c) the then current Class A- 11, Class
A-12, Class A-13, Class A-14 or Class A-15 Remittance Rate, as the case may be,
with respect to a Pool III Mortgage Loan or (d) the Class A-16 Remittance Rate
with respect to a Pool IV Mortgage Loan, (ii) .02% per annum, relating to the
Annual Expense Escrow Amount, (iii) the applicable per annum rate relating to
premiums payable to the Certificate Insurer as set forth in the Insurance
Agreement, and (iv) with respect to FHA Loans for which the FHA Insurance
Premium is paid by the related Mortgagor, the applicable Insurance Rate.
CLASS CURRENT INTEREST REQUIREMENT: For each Class of Class A
Certificates and with respect to each Remittance Date, the amount equal to 30
days interest (or, in the case of the Adjustable Rate Certificates, the actual
number of days since the last Remittance Date for such Classes to but not
including the related Remittance Date) at the related Class Remittance Rate on
the Class Principal Balance for such Class outstanding immediately prior to such
Remittance Date; provided, however, that with respect to the January 1997
Remittance Date, interest on the Adjustable Rate Certificates shall accrue at
the applicable Class Remittance Rate from and including December 15, 1996 to but
not including the January 1997 Remittance Date. If a principal prepayment is
made to a Class of Class A Certificates on the Special Remittance Date, the
Current Interest Requirement for each such Class for the April 1997 Remittance
Date will be based on 30 days' interest (or, in the case of the Adjustable Rate
Certificates, the actual number of days since the March 1997 Remittance Date) on
the Class Principal Balance for such Class on the Special Remittance Date, after
giving effect to such principal prepayment. The Current Interest Requirement for
the Class A-10 Certificates shall not include any Certificateholders' Interest
Carryover.
CLASS POOL FACTOR: With respect to a Class of Class A Certificates, as
of any date of determination, the then Class Principal Balance for such Class
divided by the Original Principal Balance for such Class.
CLASS PRINCIPAL BALANCE: With respect to each Class of Class A
Certificates, as of any date of determination, the Original Principal Balance of
such Class less (i) the sum of all amounts (including that portion of Insured
Payments, if any, made in respect of principal and, with respect to the Pool III
Certificates, any FHA Payments made in respect of principal) previously
distributed to the Certificateholders of such Class in respect of principal
pursuant to Section 6.08(d) and (ii) the amount, if any, of Realized Losses
previously allocated to such Class pursuant to Section 6.09 other than a loss
described in the last two sentences of the definition of Realized Loss. For
purposes of determining the Class Principal Balance of each Class of Class A
Certificates with respect to any Remittance Date, no effect shall be given to
any principal to be distributed, or Realized Losses to be allocated, to each
such Class on such Remittance Date.
CLASS REMITTANCE RATE: With respect to a Class of Class A
Certificates, the annual rate of interest payable to the Certificateholders of
such Class, which rate is set forth, or determined as provided, under the
definitions of the Class A-1 through Class A-16 Remittance Rates.
CLASS A-1 CERTIFICATE: A Certificate denominated as a Class A-1
Certificate.
CLASS A-1 REMITTANCE RATE: The annual rate of interest payable to the
Class A-1 Certificateholders, which shall be equal to 6.260%.
CLASS A-2 CERTIFICATE: A Certificate denominated as a Class A-2
Certificate.
CLASS A-2 REMITTANCE RATE: The annual rate of interest payable to the
Class A-2 Certificateholders, which shall be equal to 6.230%.
CLASS A-3 CERTIFICATE: A Certificate denominated as a Class A-3
Certificate.
CLASS A-3 REMITTANCE RATE: The annual rate of interest payable to the
Class A-3 Certificateholders, which shall be equal to 6.295%.
CLASS A-4 CERTIFICATE: A Certificate denominated as a Class A-4
Certificate.
CLASS A-4 REMITTANCE RATE: The annual rate of interest payable to the
Class A-4 Certificateholders, which shall be equal to 6.465%.
CLASS A-5 CERTIFICATE: A Certificate denominated as a Class A-5
Certificate.
CLASS A-5 REMITTANCE RATE: The annual rate of interest payable to the
Class A-5 Certificateholders, which shall be equal to 6.670%.
CLASS A-6 CERTIFICATE: A Certificate denominated as a Class A-6
Certificate.
CLASS A-6 REMITTANCE RATE: The annual rate of interest payable to the
Class A-6 Certificateholders, which shall be equal to 6.830%
CLASS A-7 CERTIFICATE: A Certificate denominated as a Class A-7
Certificate.
CLASS A-7 REMITTANCE RATE: The annual rate of interest payable to the
Class A-7 Certificateholders, which shall be equal to 7.110%.
CLASS A-8 CERTIFICATE: A Certificate denominated as a Class A-8
Certificate.
CLASS A-8 REMITTANCE RATE: The annual rate of interest payable to the
Class A-8 Certificateholders, which shall be equal to 7.370%.
CLASS A-9 CERTIFICATE: A Certificate denominated as a Class A-9
Certificate.
CLASS A-9 PRINCIPAL DISTRIBUTION AMOUNT: For any Remittance Date, the
product of (i) the applicable Class A-9 Principal Percentage for such Remittance
Date and (ii) the Class A-9 Pro Rata Principal Distribution Amount for such
Remittance Date; provided, however, that in no event will the Class A-9
Principal Distribution Amount on any Remittance Date be greater than the Pool
Principal Distribution Amount for Pool I for such Remittance Date or the Class
Principal Balance of the Class A-9 Certificates.
CLASS A-9 PRINCIPAL PERCENTAGE: For each Remittance Date, the Class
A-9 Principal Percentage shall be as follows:
Class A-9
Principal
Remittance Dates Percentage
January 1997 - December 1999 0%
January 2000 - December 2001 45%
January 2002 - December 2002 80%
January 2003 - December 2003 100%
January 2004 and thereafter 140%
CLASS A-9 PRO RATA PRINCIPAL DISTRIBUTION AMOUNT: For each Remittance
Date, an amount equal to the product of (x) a fraction, the numerator of which
is the Class Principal Balance of the Class A-9 Certificates immediately prior
to such Remittance Date and the denominator of which is the aggregate Class
Principal Balance of the Pool I Certificates immediately prior to such
Remittance Date and (y) the Pool Principal Distribution Amount for Pool I on
such Remittance Date.
CLASS A-9 REMITTANCE RATE: The annual rate of interest payable to the
Class A-9 Certificateholders, which shall be equal to 7.000%.
CLASS A-10 CERTIFICATE: A Certificate denominated as a Class A-10
Certificate.
CLASS A-10 REMITTANCE RATE: The annual rate of interest payable to the
Class A-10 Certificateholders, which shall be equal to 5.87406% for the first
Remittance Date. Thereafter, the Class A-10 Remittance Rate shall be equal to
the lesser of (i) LIBOR plus 0.21% (or plus 0.42% for each Remittance Date
occurring after the Optional Servicer Termination Date) and (ii) the Net Funds
Cap for Pool II (but in no event exceeding 14.5% per annum).
CLASS A-11 CERTIFICATE: A Certificate denominated as a Class A-11
Certificate.
CLASS A-11 REMITTANCE RATE: The annual rate of interest payable to the
Class A-11 Certificateholders, which shall be equal to 5.74406% for the first
Remittance Date. Thereafter, the Class A-11 Remittance Rate shall be equal to
the lesser of (i) LIBOR plus 0.08% and (ii) the Net Funds Cap for Pool III.
CLASS A-12 CERTIFICATE: A Certificate denominated as a Class A-12
Certificate.
CLASS A-12 REMITTANCE RATE: The annual rate of interest payable to the
Class A-12 Certificateholders, which shall be equal to 6.370%.
CLASS A-13 CERTIFICATE: A Certificate denominated as a Class A-13
Certificate.
CLASS A-13 REMITTANCE RATE: The annual rate of interest payable to the
Class A-13 Certificateholders, which shall be equal to 6.635%.
CLASS A-14 CERTIFICATE: A Certificate denominated as a Class A-14
Certificate.
CLASS A-14 REMITTANCE RATE: The annual rate of interest payable to the
Class A-14 Certificateholders, which shall be equal to 6.985%.
CLASS A-15 CERTIFICATE: A Certificate denominated as a Class A-15
Certificate.
CLASS A-15 REMITTANCE RATE: The annual rate of interest payable to the
Class A-15 Certificateholders, which shall be equal to 7.250%.
CLASS A-16 CERTIFICATE: A Certificate denominated as a Class A-16
Certificate.
CLASS A-16 REMITTANCE RATE: The annual rate of interest payable to the
Class A-16 Certificateholders, which shall be equal to 7.110%.
CLASS R-1 CERTIFICATE: A Certificate denominated as a Class R-1
Certificate.
CLASS R-2 CERTIFICATE: A Certificate denominated as a Class R-2
Certificate.
CLASS R CERTIFICATE: Collectively or singularly, the Class R-1 and/or
Class R- 2 Certificates, as applicable.
CLASS R CERTIFICATEHOLDER: A Holder of a Class R Certificate.
CLASS X CERTIFICATE: A Certificate denominated as a Class X
Certificate.
CLASS X REMITTANCE AMOUNT: As of any Remittance Date, an amount equal
to the sum of (i) the Pool Remaining Amount Available for each Pool, and (ii)
the Remainder Excess Spread Amount, net of reimbursements to the Servicer or the
Representative of Reimbursable Amounts pursuant to Section 5.04(f).
CLOSING DATE: December 30, 1996.
CODE: The Internal Revenue Code of 1986, as amended, or any successor
legislation thereto.
COMPENSATING INTEREST: As defined in Section 6.12.
CONTINGENCY FEE: As to each Mortgage Loan, the annual fee which is, in
addition to the Servicing Fee, payable to the Servicer pursuant to Section 7.03
of this Agreement. Such fee shall be calculated and payable monthly only from
the amounts received in respect of interest on such Mortgage Loan, shall accrue
at the rate of .25% per annum and shall be computed on the basis of the same
principal amount and for the period respecting which any related interest
payment on a Mortgage Loan is computed. The Contingency Fee is payable solely
from the interest portion of related (i) Monthly Payments, (ii) Liquidation
Proceeds or (iii) Released Mortgaged Property Proceeds collected by the
Servicer, or as otherwise provided in Section 5.04.
CONTRACT OF INSURANCE: A Contract of Insurance under Title I.
CONVENTIONAL HOME IMPROVEMENT LOANS: Pool III Mortgage Loans that are
not FHA Loans.
CORRESPONDING CLASS: (i) With respect to the Class II-A-I
Certificates, the "Corresponding Classes of Certificates" shall be each of the
Class A-1 through Class A-16 Certificates and (ii) with respect to the Single
Prime Classes and the Double Prime Classes, the "Corresponding Classes of
Certificates" shall be the Class of Class A Certificates set forth next to the
respective Single Prime Class or Double Prime Class, as the case may be, under
the heading "Corresponding Classes of Certificates" set forth on the chart
appearing in Section 4.01.
CO-TRUSTEE: First Bank (N.A.), a national banking association
headquartered in Milwaukee, Wisconsin.
CROSS-OVER DATE: The date on which the Maximum Subordinated Amount is
reduced to zero.
CUMULATIVE REALIZED LOSSES: As of any date of determination, the
aggregate amount of Realized Losses with respect to the applicable Pool of
Mortgage Loans since the Startup Day.
CURTAILMENT: With respect to a Mortgage Loan, any payment of principal
received during a Due Period as part of a payment that is in excess of five
times the amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the Mortgage Loan in full, nor is intended to cure a
delinquency.
CUSTODIAL AGREEMENT: Any agreement to be entered into pursuant to
Section 12.13 for the retention of each Trustee's Mortgage File, substantially
in the form attached as Exhibit M hereto.
CUSTODIAN: Any custodian appointed pursuant to Section 12.13 herein,
provided that such custodian shall be independent of the Servicer, the
Representative and the Claims Administrator, except in the event the Trustee or
the Co-Trustee shall be the Servicer or the Claims Administrator. The initial
Custodian for the Pool III Loans shall be First Trust National Association, a
national banking association headquartered in Minneapolis, Minnesota.
CUT-OFF DATE: November 30, 1996; provided, however, that for purposes
of determining characteristics of the Initial Mortgage Loans as of the Cut-Off
Date, the Cut-Off Date for those Initial Mortgage Loans originated after
November 30, 1996 shall be deemed to be the date of the applicable Mortgage
Note.
DEALER LOANS: Pool III Mortgage Loans in which a dealer-contractor
participates in the financing.
DEFICIENCY AMOUNT: means with respect to any Remittance Date and any
Pool of Certificates, (i) the excess, if any, of (a) the Pool Current Interest
Requirement for the related Pool over (b) the sum of the Pool Available
Remittance Amount for such Pool (minus amounts withdrawn to pay required
premiums to the Certificate Insurer), and the Monthly Excess Spread and the
Subordination Reduction Amount applicable to such Pool, plus (ii) the
Subordination Deficit, if any, for such Pool with respect to such Remittance
Date.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the United States Bankruptcy Code, as
amended from time to time (11 U.S.C.).
DELETED MORTGAGE LOAN: A Mortgage Loan replaced by a Qualified
Substitute Mortgage Loan.
DEPOSITORY: The Depository Trust Company, 7 Hanover Square, New York,
New York 10004 and any successor Depository hereafter named.
DESIGNATED DEPOSITORY INSTITUTION: With respect to each Principal and
Interest Account, an entity which is an institution whose deposits are insured
by either the BIF or SAIF administered by the FDIC, the unsecured and
uncollateralized long-term debt obligations of which shall be rated "A" or
better by S&P and A2 or better by Moody's, or one of the two highest short-term
ratings by S&P and the highest short term rating by Moody's, and which is either
(i) a federal savings association duly organized, validly existing and in good
standing under the federal banking laws, (ii) an institution duly organized,
validly existing and in good standing under the applicable banking laws of any
state, (iii) a national banking association duly organized, validly existing and
in good standing under the federal banking laws, or (iv) a principal subsidiary
of a bank holding company, in each case acting or designated by the Servicer as
the depository institution for a Principal and Interest Account.
DETERMINATION DATE: That day of each month which is the later of (i)
the third Business Day prior to the 15th day of such month and (ii) the seventh
Business Day of such month.
DIRECT PARTICIPANT: Any broker-dealer, bank or other financial
institution for which the Depository holds Class A Certificates from time to
time as a securities depository.
DOUBLE PRIME CLASSES: The Class A-1", Class A-2", Class A-3", Class
A-4", Class A-5", Class A-6", Class A-7", Class A-8", Class A-9", Class A-10",
Class A-11", Class A-12", Class A-13", Class A-14", Class A-15" and Class A-16"
Certificates, as set forth in Section 4.01(b).
DUE DATE: The day of the month on which the Monthly Payment is due
from the Mortgagor on a Mortgage Loan.
DUE PERIOD: With respect to each Remittance Date, the calendar month
preceding the month in which such Remittance Date occurs.
EVENT OF DEFAULT: As described in Section 10.01.
EVENT OF EXCESSIVE POOL LOSS: means, with respect to Pool I, Pool II
or Pool IV, (a) until the 36th Remittance Date, any event that causes Cumulative
Realized Losses with respect to such Pool to equal or exceed 1.25% of the Pool
Principal Balance of such Pool as of the Closing Date, (b) from the 36th until
the 42nd Remittance Dates, any event that causes Cumulative Realized Losses with
respect to such Pool to equal or exceed 1.75% of the Pool Principal Balance of
such Pool as of the Closing Date, (c) from the 42nd until the 48th Remittance
Dates, any event that causes Cumulative Realized Losses with respect to such
Pool to equal or exceed 2.25% of the Pool Principal Balance of such Pool as of
the Closing Date and (d) thereafter, any event that causes Cumulative Realized
Losses with respect to such Pool to equal or exceed 2.75% of the Pool Principal
Balance of such Pool as of the Closing Date. EVENT OF NONPAYMENT: An event of
nonpayment shall occur with respect to any Remittance Date if the amounts
remitted by the Servicer to the Trustee pursuant to Sections 5.04(a), 6.07(e),
6.11 and 6.12 for deposit in the Certificate Accounts (minus the amount to be
withdrawn from the applicable Certificate Account for deposit in (i) the FHA
Premium Account pursuant to Section 6.01(b)(ii) and (ii) the applicable
Insurance Account pursuant to Section 6.01(b)(i)), plus any amount transferred
from the Spread Account to the Certificate Account pursuant to Section
6.05(b)(ii) will not, taken together, be sufficient to pay all of the Pool
Remittance Amounts for each Pool (exclusive of any Certificateholders' Interest
Carryover and any Pool Carry-Forward Amounts representing amounts previously
paid to the Certificateholders of the applicable Pool as Insured Payments and
exclusive of any amount described in clause (X)(iv) of the definition of Pool
Principal Distribution Amounts which have not been paid by the Originators) in
respect of such Remittance Date.
EXCESS CLAIM AMOUNT: As defined in Section 6.05(c).
EXCESS PAYMENTS: With respect to a Due Period, any amounts received on
a Mortgage Loan in excess of the Monthly Payment due on the Due Date relating to
such Due Period which does not constitute either a Curtailment or a Principal
Prepayment or payment with respect to an overdue amount. Excess Payments are
payments of principal for purposes of this Agreement.
EXCESS PROCEEDS: As of any Remittance Date, with respect to any
Liquidated Mortgage Loan, the excess, if any, of (a) the total Net Liquidation
Proceeds, over (b) the Principal Balance of such Mortgage Loan as of the date
such Mortgage Loan became a Liquidated Mortgage Loan plus 30 days interest
thereon at the weighted average Class Adjusted Mortgage Loan Remittance Rates
for Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8 and Class A-9 with respect to a Pool I Mortgage Loan, the Class
Adjusted Mortgage Loan Remittance Rate for Class A-10 with respect to a Pool II
Mortgage Loan, the weighted average Class Adjusted Mortgage Loan Remittance
Rates for Class A-11, Class A-12, Class A-13, Class A-14 and Class A-15 with
respect to a Pool III Mortgage Loan or the Class Adjusted Mortgage Loan
Remittance Rate for Class A-16 with respect to a Pool IV Mortgage Loan;
provided, however, that such excess shall be reduced by the amount by which
interest accrued on the advance, if any, made by the Servicer pursuant to
Section 5.14 at the related Mortgage Interest Rate exceeds interest accrued on
such advance at the applicable Class Remittance Rates.
EXCESS SPREAD: With respect to any Remittance Date and Pool of
Mortgage Loans, an amount equal to the excess of (A) the product of (i) the
aggregate Principal Balances of the applicable Pool of Mortgage Loans as of the
first day of the immediately preceding Due Period and (ii) one-twelfth of the
weighted average Mortgage Interest Rate for the applicable Pool of Mortgage
Loans, as the case may be, as of the first day of the related Due Period over
(B) the sum of (i) the Pool Current Interest Requirement for the applicable Pool
of Certificates for such Remittance Date, (ii) amounts to be deposited into the
applicable Expense Account and Insurance Account on such Remittance Date
pursuant to Sections 6.03(a)(i) and 6.04(a)(i), respectively, (iii) the
Servicing Fee and Contingency Fee for the applicable Pool of Mortgage Loans with
respect to such Remittance Date, and (iv) with respect to those FHA Loans in
Pool III for which the FHA Insurance Premium is paid by the related Mortgagor as
part of the interest payment, the applicable FHA Insurance Premium. With respect
to the Remittance Dates in January, February and March 1997, the Excess Spread
for each Pool of Mortgage Loans also will include the sum of (i) all funds to be
transferred to the applicable Certificate Account from the Capitalized Interest
Account for such Remittance Date pursuant to Section 6.02(g) and (ii) the Pool
Pre-Funding Earnings for such Pool for the applicable Remittance Date.
EXCESS SUBORDINATED AMOUNT: With respect to any Pool of Mortgage Loans
and Remittance Date, the excess, if any, of (x) the Subordinated Amount that
would apply to such Pool on such Remittance Date after taking into account the
payment of the Pool Remittance Amount for such Pool on such Remittance Date
(except for any distributions of related Subordination Reduction Amounts on such
Remittance Date) over (y) the related Specified Subordinated Amount for such
Remittance Date.
EXPENSE ACCOUNTS: The expense accounts established and maintained by
the Trustee in accordance with Section 6.03 hereof.
FDIC: The Federal Deposit Insurance Corporation and any successor
thereto.
FHA: The Federal Housing Administration, and its successors in
interest.
FHA CUSTODIAL AGREEMENT: The Agreement dated as of November 30, 1996
by and between the Co-Trustee and the Custodian for the retention of each
Trustee's Mortgage Loan File in connection with the Pool III Loans,
substantially in the form attached as Exhibit M-1 hereto.
FHA INSURANCE PREMIUM: The premium charged by the FHA pursuant to 24
C.F.R. ' 201.31, or any successor regulation, as payment for Title I insurance
coverage for an FHA Loan, which premium shall be the responsibility of the
Servicer, who will be reimbursed from the FHA Premium Account in accordance with
Section 6.06(b)(i) hereof; provided that the Certificate Insurer shall have the
option to pay the FHA Insurance Premium with respect to any FHA Loan to the
extent funds are not otherwise available and to be reimbursed from the FHA
Premium Account in accordance with Section 6.06(b)(i) hereof.
FHA LOAN: A Mortgage Loan that is partially insured by the FHA under
Title I.
FHA PAYMENT: The amount received from the FHA for a Claim filed with
respect to a 90 Day Delinquent FHA Loan.
FHA PREMIUM ACCOUNT: The account established and maintained by the
Trustee in accordance with Section 6.06 hereof.
FHA PREMIUM AMOUNT: With respect to any FHA Loan for any Remittance
Date, (i) if the FHA Insurance Premium is paid by the related Mortgagor as part
of the Mortgage Interest Rate on an FHA Loan, an amount equal to 1/12 of the
product of the Insurance Rate times the Principal Balance as of the first day of
the immediately preceding Due Period and (ii) if the related Mortgagor pays the
FHA Insurance Premium as a separate amount in addition to Monthly Payments, any
such amount received by the Servicer during the related Due Period.
FHA REGULATIONS: The regulations of the FHA with respect to Title I
home improvement loans set forth in 24 C.F.R. ' 201, as the same may be amended
during the term of this Agreement.
FHA RESERVE ACCOUNT: The account of the Co-Trustee maintained by the
FHA with respect to the FHA Loans and certain other mortgage loans in accordance
with Section 5.16 hereof, registered in the name of the Co-Trustee and insured
by the FHA under Title I in accordance with the FHA Regulations.
FHLMC: The Federal Home Loan Mortgage Corporation and any successor
thereto.
FIDELITY BOND: As described in Section 5.09.
FNMA: The Federal National Mortgage Association and any successor
thereto.
FUNDING PERIOD: The period commencing on the Closing Date and ending
on the earliest to occur of (i) the date on which the amount on deposit in the
Pre-Funding Account is less than $200,000, (ii) the date on which an Event of
Default occurs and (iii) the close of business on March 27, 1997.
GROSS MARGIN: With respect to each Pool II Mortgage Loan, the number
of basis points set forth in the related Mortgage Note which is added to the
LIBOR Index or the Treasury Index, as the case may be, to determine the Mortgage
Interest Rate on the related Change Date, subject to the applicable Periodic
Rate Cap and the applicable Lifetime Cap and Lifetime Floor.
HIGH-RISE CONDOMINIUM: A multiple dwelling unit of five stories or
more in which individual fee title is held to the interior space only and all
other elements of the structure and land are held in undivided common ownership.
HUD: The United States Department of Housing and Urban Development,
and its successor in interest.
INDEX: Either the LIBOR Index or the Treasury Index, as the case may
be.
INDIRECT PARTICIPANT: Any financial institution for whom any Direct
Participant holds an interest in any Class A Certificate.
INITIAL MORTGAGE LOANS: The Initial Pool I, Initial Pool II, Initial
Pool III and Initial Pool IV Mortgage Loans.
INITIAL POOL SPREAD ACCOUNT DEPOSIT: As of any Remittance Date, (A)
with respect to Pool I, the amount deposited into the Spread Account and
allocated to Pool I pursuant to Section 6.05(a)(i) and (ii); (B) with respect to
Pool II, the amount deposited into the Spread Account and allocated to Pool II
pursuant to Section 6.05(a)(ii); (C) with respect to Pool III, the amount
deposited into the Spread Account and allocated to Pool III pursuant to Section
6.05(a)(i) and (ii), minus the aggregate Reallocated Pool III Spread Account
Portion for all Remittance Dates up to, but not including, such Remittance Date;
and (D) with respect to Pool IV, the amount deposited into the Spread Account
and allocated to Pool IV pursuant to Section 6.05(a)(i) and (ii).
INITIAL POOL I MORTGAGE LOANS: The Pool I Mortgage Loans listed on
Exhibit H delivered to the Trustee on the Closing Date.
INITIAL POOL II MORTGAGE LOANS: The Pool II Mortgage Loans listed on
Exhibit H-1 delivered to the Trustee on the Closing Date.
INITIAL POOL III MORTGAGE LOANS: The Pool III Mortgage Loans listed on
Exhibit H-2 delivered to the Co-Trustee on the Closing Date.
INITIAL POOL IV MORTGAGE LOANS: The Pool IV Mortgage Loans listed on
Exhibit H-3 delivered to the Trustee on the Closing Date.
INSURANCE ACCOUNTS: The insurance accounts established and maintained
by the Trustee in accordance with Section 6.04 hereof.
INSURANCE AGREEMENT: The agreement dated as of November 30, 1996 by
and among the Certificate Insurer, The Money Store Inc., the Originators listed
in Schedule I thereto and the Trustee, as amended from time to time by the
parties thereto.
INSURANCE PAYING AGENT: The Bank of New York or any successor as
appointed herein.
INSURANCE PROCEEDS: Proceeds (other than FHA Payments) paid (i) to the
Trustee or the Servicer by any insurer (other than the Certificate Insurer)
pursuant to any insurance policy covering a Mortgage Loan, Mortgaged Property,
or REO Property, including but not limited to title, hazard, life, health and/or
accident insurance policies, and/or (ii) by the Servicer pursuant to Section
5.08, in either case, net of any expenses which are incurred by the Servicer in
connection with the collection of such proceeds and not otherwise reimbursed to
the Servicer.
INSURANCE RATE: As to any FHA Loan with respect to which the FHA
Insurance Premium is paid by the related Mortgagor as part of the Mortgage
Interest Rate, the rate of 1.0% per annum, which is used to calculate the amount
to be applied to the payment of the related FHA Insurance Premium.
INSURED PAYMENT: means (i) as of any Remittance Date, any Deficiency
Amount and (ii) any Preference Amount.
INSURER REIMBURSABLE AMOUNTS: As described in Section 6.14(a)(iii).
INTEREST DETERMINATION DATE: With respect to the Adjustable Rate
Certificates, the second LIBOR Determination Date prior to any Remittance Date
while the Adjustable Rate Certificates are outstanding.
INTEREST PERIOD: With respect to the Adjustable Rate Certificates (i)
initially, the period commencing December 15, 1996 and ending on the day
immediately preceding the Remittance Date in January 1997 and (ii) thereafter,
the period commencing on a Remittance Date and ending on the day immediately
preceding the next Remittance Date.
LIBOR: The London Interbank Offered Rate for one-month U.S. dollar
deposits, determined on each Interest Determination Date as provided in Section
12.15 hereof.
LIBOR DETERMINATION DATE: A date which is both a Business Day and a
London Banking Day prior to the commencement of each related Interest Period.
LIBOR INDEX: The applicable London interbank offered rate for
one-month, six-month or one year U.S. dollar deposits, as specified in the
related Mortgage Note.
LIFETIME CAP: The provision in the Mortgage Note for each Pool II
Mortgage Loan which limits the maximum Mortgage Interest Rate over the life of
such Pool II Mortgage Loan to the rate set forth in the applicable Mortgage
Note.
LIFETIME FLOOR: The provision in the Mortgage Note for each Pool II
Mortgage Loan which limits the minimum Mortgage Interest Rate over the life of
such Pool II Mortgage Loan to the rate set forth in the applicable Mortgage
Note.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan or REO Property
as to which the Servicer has determined that all amounts which it reasonably and
in good faith expects to recover have been recovered from or on account of such
Mortgage Loan.
LIQUIDATION PROCEEDS: Cash, including Insurance Proceeds, proceeds of
any REO Disposition, amounts required to be deposited in the applicable
Principal and Interest Account pursuant to Section 5.10 hereof, and any other
amounts other than FHA Payments and Related Payments received in connection with
the liquidation of defaulted Mortgage Loans, whether through trustee's sale,
foreclosure sale or otherwise.
LOAN-TO-VALUE RATIO OR LTV: With respect to any Mortgage Loan, (i) the
sum of (a) the original principal balance of such Mortgage Loan plus (b) the
remaining balance of any Prior Lien, if any, at the time of origination of such
Mortgage Loan, less (c) that portion of the principal balance equal to the
amount of the premium for credit life insurance collected by the Originators,
divided by (ii) the value of the related Mortgaged Property, based upon the
appraisal (or, in the case of certain Mortgage Loans with original principal
balances of less than $15,000, such other method of valuation acceptable to the
related Originator) made at the time of origination of the Mortgage Loan.
LONDON BANKING DAY: Any Business Day on which dealings in deposits in
United States dollars are transacted in the London interbank market.
LOW INTEREST MORTGAGE LOAN: A Low Interest Pool I Mortgage Loan, a Low
Interest Pool III Mortgage Loan or a Low Interest Pool IV Mortgage Loan.
LOW INTEREST POOL I MORTGAGE LOAN: [RESERVED]
LOW INTEREST POOL III MORTGAGE LOAN: [RESERVED]
LOW INTEREST POOL IV MORTGAGE LOAN: [RESERVED]
LOW-RISE CONDOMINIUM: A multiple dwelling unit of four stories or less
in which individual fee title is held to the interior space only and all other
elements of the structure and land are held in undivided common ownership.
MAJORITY CERTIFICATEHOLDERS: The Holder or Holders of Class A
Certificates evidencing in excess of 50% of the aggregate Class Principal
Balances of the Class A Certificates; provided, however, that with respect to
any action or event affecting fewer than all Classes of Class A Certificates,
"Majority Certificateholders" shall mean the Holder or Holders of Certificates
evidencing in excess of 50% of the aggregate Class Principal Balances of such
Classes of Class A Certificates.
MARGIN: With respect to the Class A-10 and A-11 Certificates, the rate
per annum of 0.21% and 0.08%, respectively, that is added to LIBOR to determine
the Class A-10 and Class A- 11 Remittance Rates, respectively, for each
Remittance Date; provided, however, that the Margin with respect to the Class
A-10 Certificates for each Remittance Date occurring after the Optional Servicer
Termination Date shall be 0.42%.
MAXIMUM SUBORDINATED AMOUNT: The initial Maximum Subordinated Amount
shall be $124,200,000 which amount equals 12% of the sum of the original Pool
Principal Balances of each Pool. On any Remittance Date, the Maximum
Subordinated Amount shall equal the initial Maximum Subordinated Amount less
Cumulative Realized Losses through the last day of the month preceding such
Remittance Date. The Maximum Subordinated Amount on any date other than a
Remittance Date shall be equal to the Maximum Subordinated Amount as of the
immediately preceding Remittance Date (or, prior to the first Remittance Date,
the initial Maximum Subordinated Amount), provided, however, that the Maximum
Subordinated Amount shall never be less than zero.
MIXED USE BUILDING: A building containing both residential dwelling
units and commercial use units, E.G., retail stores or office space.
MONTHLY ADVANCE: An advance made by the Servicer pursuant to Section
6.11 hereof.
MONTHLY EXCESS SPREAD: As of any Remittance Date and for any Pool of
Mortgage Loans, an amount equal to the sum of (A) the product of (i) the amount
calculated pursuant to the first sentence of the definition of Excess Spread
with respect to such Remittance Date for such Pool of Mortgage Loans and (ii)
the then applicable Monthly Excess Spread Percentage and (B) with respect to the
Remittance Dates in January, February and March 1997, the amount calculated
pursuant to the second sentence of the definition of Excess Spread with respect
to such Remittance Date.
MONTHLY EXCESS SPREAD PERCENTAGE: As to any Remittance Date, 100%.
MONTHLY PAYMENT: The scheduled monthly payment of principal and/or
interest required to be made by a Mortgagor on the related Mortgage Loan, as set
forth in the related Mortgage Note.
MONTHLY PREMIUM: With respect to each Pool, the monthly premium
payable to the Certificate Insurer equal to the product of (i) the applicable
percentage set forth in the Insurance Agreement and (ii) the applicable then
outstanding Pool Principal Balance, rounded to the nearest thousand dollars.
MOODY'S: Moody's Investors Service, or any successor thereto.
MORTGAGE: The mortgage, deed of trust or other instrument creating a
lien on the Mortgaged Property.
MORTGAGE FILE: As described in Exhibit A.
MORTGAGE IMPAIRMENT INSURANCE POLICY: As described in Section 5.08.
MORTGAGE INTEREST RATE: The fixed or adjustable rate of interest borne
by a Mortgage Note, as shown on the applicable Mortgage Loan Schedule.
MORTGAGE LOAN: An individual mortgage loan which is transferred to the
Trustee (or, with respect to the Pool III Mortgage Loans, the Co-Trustee)
pursuant to this Agreement, including any Subsequent Mortgage Loan, together
with the rights and obligations of a holder thereof and payments thereon and
proceeds therefrom, the Mortgage Loans originally subject to this Agreement
being identified on the Pool I, Pool II, Pool III and Pool IV Mortgage Loan
Schedules delivered to the Trustee (or with respect to Pool III, the Co-Trustee)
as Exhibits H, H-1, H-2 and H-3, respectively. Any mortgage loan which, although
intended by the parties hereto to have been, and which purportedly was, sold to
the Trust Fund by the applicable Originator (as indicated by Exhibits H, H-1,
H-2 and H-3), in fact was not sold or otherwise transferred and assigned to the
Trust Fund for any reason whatsoever, including, without limitation, the
incorrectness of the statement set forth in Section 3.02(i) hereof with respect
to such mortgage loan, shall nevertheless be considered a "Mortgage Loan" for
all purposes of this Agreement.
MORTGAGE LOAN SCHEDULE: The separate schedules of Pool I, Pool II,
Pool III and Pool IV Mortgage Loans delivered to the Trustee (or with respect to
Pool III, the Co- Trustee) as Exhibits H, H-1, H-2 and H-3, respectively, such
schedules identifying each Mortgage Loan by address of the Mortgaged Property
and the name of the Mortgagor and setting forth as to each Mortgage Loan the
following information: (i) the Principal Balance as of the close of business on
the Cut-Off Date, (ii) the account number, (iii) the original principal amount,
(iv) except with respect to the Pool III Loans, the LTV as of the date of the
origination of the related Mortgage Loan, (v) the Due Date, (vi) the Mortgage
Interest Rate, (vii) the first Due Date, (viii) the Monthly Payment, (ix) the
maturity date of the Mortgage Note, (x) the remaining number of months to
maturity as of the Cut-Off Date and additionally, (xi) with respect to Exhibit
H-1, the Periodic Rate Cap, Lifetime Cap and Lifetime Floor. Also, the Mortgage
Loan Schedule for the Pool III Mortgage Loans will indicate, based upon loan
number, whether the related Pool III Mortgage Loan is an FHA Loan or a
Conventional Home Improvement Loan.
MORTGAGE NOTE: The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan,
consisting of a fee simple estate in a single contiguous parcel of land improved
by a Residential Dwelling.
MORTGAGED PROPERTY STATES: The States of Alabama, Alaska, Arizona,
Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii,
Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North
Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West
Virginia, Wisconsin, Wyoming and the District of Columbia, where the Mortgaged
Properties are located.
MORTGAGOR: The obligor on a Mortgage Note.
MULTIFAMILY LOANS: Mortgage Loans secured by Multifamily Properties.
MULTIFAMILY PROPERTY: A residential or mixed-use property, such as
rental apartment buildings or projects containing five or more units.
NET FUNDS CAP: With respect to Pool II and Pool III, as to any
Remittance Date, a percentage equal to the difference between (A) the weighted
average Mortgage Interest Rate on the Pool II or Pool III Mortgage Loans,
respectively, minus (B) the sum of (i) the percentages used in determining the
Servicing Fee, the Contingency Fee, the fee due the Trustee and the premium due
the Certificate Insurer, and (ii) with respect to Pool II, commencing with the
Remittance Date in January 1998, 0.50%.
NET FUNDS CAP SHORTFALL: With respect to the Class A-10 Certificates,
as to any Remittance Date, the excess, if any, of (i) the amount of interest
accrued on such Class of Certificates for such Remittance Date calculated at the
Class Remittance Rate for such Class, without giving effect to the applicable
Net Funds Cap (but in no event exceeding 14.5% per annum), over (ii) the amount
of interest accrued on such Class of Certificates for such Remittance Date
calculated at the Class Remittance Rate for such Class, after giving effect to,
and limited by, the applicable Net Funds Cap for such Remittance Date (but in no
event exceeding 14.5% per annum).
NET LIQUIDATION PROCEEDS: Liquidation Proceeds net of (i) any
reimbursements to the Servicer made therefrom pursuant to Section 5.04(b) and
(ii) amounts required to be released to the related Mortgagor pursuant to
applicable law.
NET MONTHLY EXCESS CASHFLOW: As defined in Section 6.14(b) hereof.
1933 ACT: The Securities Act of 1993, as amended.
90 DAY DELINQUENT FHA LOAN: A 90 Day Delinquent Pool III Loan that is
an FHA Loan.
90 DAY DELINQUENT POOL III LOAN: With respect to any Remittance Date,
a Pool III Mortgage Loan with respect to which four consecutive Monthly Payments
have not been received by the Servicer as of the last day of the related Due
Period unless, on or prior to the last day of the Due Period in which the fourth
Monthly Payment is due, the Servicer has received from the related Mortgagor an
amount at least equal to one unpaid Monthly Payment.
NON-ACKNOWLEDGED FHA LOANS: As defined in Section 3.02(lll) hereof.
OFFICER'S CERTIFICATE: A certificate delivered to the Trustee or
Co-Trustee, as the case may be, signed by the Chairman of the Board, the
President, a Vice President or Assistant Vice President, the Treasurer, the
Secretary, or one of the Assistant Secretaries of the Representative, an
Originator, the Servicer or the Claims Administrator, as required by this
Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be counsel for the Representative, the Servicer or the Claims
Administrator, reasonably acceptable to the Trustee and the Certificate Insurer
and experienced in matters relating thereto; except that any opinion of counsel
relating to (a) the qualification of the Trust Fund as a REMIC or (b) compliance
with the REMIC Provisions, must be an opinion of counsel who (i) is in fact
independent of the Representative, the Servicer or the Claims Administrator,
(ii) does not have any direct financial interest or any material indirect
financial interest in the Representative, the Servicer or the Claims
Administrator or in an affiliate thereof and (iii) is not connected with the
Representative, the Servicer or the Claims Administrator as an officer,
employee, director or person performing similar functions.
OPTIONAL SERVICER TERMINATION DATE: As defined in Section 11.01
hereof.
ORIGINAL CLASS A-1 PRINCIPAL BALANCE: $ 66,305,000.
ORIGINAL CLASS A-2 PRINCIPAL BALANCE: $ 86,383,000.
ORIGINAL CLASS A-3 PRINCIPAL BALANCE: $ 96,468,000.
ORIGINAL CLASS A-4 PRINCIPAL BALANCE: $ 53,850,000.
ORIGINAL CLASS A-5 PRINCIPAL BALANCE: $ 47,916,000.
ORIGINAL CLASS A-6 PRINCIPAL BALANCE: $ 36,443,000.
ORIGINAL CLASS A-7 PRINCIPAL BALANCE: $ 44,807,000.
ORIGINAL CLASS A-8 PRINCIPAL BALANCE: $ 27,828,000.
ORIGINAL CLASS A-9 PRINCIPAL BALANCE: $ 40,000,000.
ORIGINAL CLASS A-10 PRINCIPAL BALANCE: $ 350,000,000.
ORIGINAL CLASS A-11 PRINCIPAL BALANCE: $ 77,391,000.
ORIGINAL CLASS A-12 PRINCIPAL BALANCE: $ 34,590,000.
ORIGINAL CLASS A-13 PRINCIPAL BALANCE: $ 27,684,000.
ORIGINAL CLASS A-14 PRINCIPAL BALANCE: $ 15,909,000.
ORIGINAL CLASS A-15 PRINCIPAL BALANCE: $ 19,426,000.
ORIGINAL CLASS A-16 PRINCIPAL BALANCE: $ 10,000,000.
ORIGINAL PRE-FUNDED AMOUNT: $256,709,332.05, representing the amount
deposited in the Pre-Funding Account on the Closing Date, $124,984,176.64 of
which relates to Pool I, $76,772,782.20 of which relates to Pool II,
$54,947,573.46 of which relates to Pool III and $4,799.75 of which relates to
Pool IV.
ORIGINAL PRINCIPAL BALANCE: With respect to each Class of Class A
Certificates, the amount set forth for such Class under the definitions of
Original Class A-1 through Original Class A-16 Principal Balances.
ORIGINATOR: Any of the entities listed on Exhibit I hereto, each of
which is a direct or indirect wholly-owned subsidiary of the Representative, and
each of which is a Subservicer as of the date hereof.
OVERFUNDED INTEREST AMOUNT: With respect to each Subsequent Transfer
Date occurring in Janaury 1997, the sum, if any, of (w), with respect to Pool I,
the difference between (i) three-months' interest on the aggregate Principal
Balances of the Subsequent Pool I Mortgage Loans acquired by the Trust Fund on
such Subsequent Transfer Date, calculated at the weighted average Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8 and
Class A-9 Remittance Rates and (ii) three-months' interest on the aggregate
Principal Balances of the Subsequent Pool I Mortgage Loans acquired by the Trust
Fund on such Subsequent Transfer Date, calculated at the rate at which
Pre-Funding Account moneys are invested as of such Subsequent Transfer Date; (x)
with respect to Pool II, the difference between (i) three months' interest on
the aggregate Principal Balances of the Subsequent Pool II Mortgage Loans
acquired by the Trust Fund on such Subsequent Transfer Date, calculated at the
Class A-10 Remittance Rate and (ii) three-months' interest on the aggregate
Principal Balances of the Subsequent Pool II Mortgage Loans acquired by the
Trust Fund on such Subsequent Transfer Date, calculated at the rate at which
Pre-Funding Account moneys are invested as of such Subsequent Transfer Date;
(y), with respect to Pool III, the difference between (i) three-months' interest
on the aggregate Principal Balances of the Subsequent Pool III Mortgage Loans
acquired by the Trust Fund on such Subsequent Transfer Date, calculated at the
weighted average Class A-11, Class A-12, Class A-13, Class A-14 and Class A-15
Remittance Rates and (ii) three-months' interest on the aggregate Principal
Balances of the Subsequent Pool III Mortgage Loans acquired by the Trust Fund on
such Subsequent Transfer Date, calculated at the rate at which Pre-Funding
Account moneys are invested as of such Subsequent Transfer Date; and (z), with
respect to Pool IV, the difference between (i) three-months' interest on the
aggregate Principal Balances of the Subsequent Pool IV Mortgage Loans acquired
by the Trust Fund on such Subsequent Transfer Date, calculated at the Class A-16
Remittance Rate and (ii) three-months' interest on the aggregate Principal
Balances of the Subsequent Pool IV Mortgage Loans acquired by the Trust Fund on
such Subsequent Transfer Date, calculated at the rate at which Pre-Funding
Account moneys are invested as of such Subsequent Transfer Date.
With respect to each Subsequent Transfer Date occurring in February
1997, the sum, if any, of (w), with respect to Pool I, the difference between
(i) two-months' interest on the aggregate Principal Balances of the Subsequent
Pool I Mortgage Loans acquired by the Trust Fund on such Subsequent Transfer
Date, calculated at the weighted average Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class A-7, Class A-8 and Class A-9 Remittance Rates
and (ii) two-months' interest on the aggregate Principal Balances of the
Subsequent Pool I Mortgage Loans acquired by the Trust Fund on such Subsequent
Transfer Date, calculated at the rate at which Pre-Funding Account moneys are
invested as of such Subsequent Transfer Date; (x) with respect to Pool II, the
difference between (i) two-months' interest on the aggregate Principal Balances
of the Subsequent Pool II Mortgage Loans acquired by the Trust Fund on such
Subsequent Transfer Date, calculated at the Class A-10 Remittance Rate and (ii)
two-months' interest on the aggregate Principal Balances of the Subsequent Pool
II Mortgage Loans acquired by the Trust Fund on such Subsequent Transfer Date,
calculated at the rate at which Pre-Funding Account moneys are invested as of
such Subsequent Transfer Date; (y) with respect to Pool III, the difference
between (i) two- months' interest on the aggregate Principal Balances of the
Subsequent Pool III Loans acquired by the Trust Fund on such Subsequent Transfer
Date, calculated at the weighted average Class A-11, Class A-12, Class A-13,
Class A-14 and Class A-15 Remittance Rates and (ii) two-months' interest on the
aggregate Principal Balances of the Subsequent Pool III Loans acquired by the
Trust Fund on such Subsequent Transfer Date, calculated at the rate at which
Pre-Funding Account moneys are invested as of such Subsequent Transfer Date; and
(z) with respect to Pool IV, the difference between (i) two-months' interest on
the aggregate Principal Balances of the Subsequent Pool III Loans acquired by
the Trust Fund on such Subsequent Transfer Date, calculated at the Class A-16
Remittance Rate and (ii) two-months' interest on the aggregate Principal
Balances of the Subsequent Pool IV Loans acquired by the Trust Fund on such
Subsequent Transfer Date, calculated at the rate at which Pre-Funding Account
moneys are invested as of such Subsequent Transfer Date.
With respect to each Subsequent Transfer Date occurring in March 1997,
the sum, if any, of (w), with respect to Pool I, the difference between (i)
one-month's interest on the aggregate Principal Balances of the Subsequent Pool
I Loans acquired by the Trust Fund on such Subsequent Transfer Date, calculated
at the weighted average Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7, Class A-8 and Class A-9 Remittance Rates and (ii)
one-month's interest on the aggregate Principal Balances of the Subsequent Pool
I Loans acquired by the Trust Fund on such Subsequent Transfer Date, calculated
at the rate at which Pre-Funding Account moneys are invested as of such
Subsequent Transfer Date; (x) with respect to Pool II, the difference between
(i) one-month's interest on the aggregate Principal Balances of the Subsequent
Pool II Loans acquired by the Trust Fund on such Subsequent Transfer Date,
calculated at the Class A-10 Remittance Rate and (ii) one-month's interest on
the aggregate Principal Balances of the Subsequent Pool II Loans acquired by the
Trust Fund on such Subsequent Transfer Date, calculated at the rate at which
Pre- Funding Account moneys are invested as of such Subsequent Transfer Date;
(y), with respect to Pool III, the difference between (i) one-month's interest
on the aggregate Principal Balances of the Subsequent Pool III Loans acquired by
the Trust Fund on such Subsequent Transfer Date, calculated at the weighted
average Class A-11, Class A-12, Class A-13, Class A-14 and Class A-15 Remittance
Rates and (ii) one-month's interest on the aggregate Principal Balances of the
Subsequent Pool III Loans acquired by the Trust Fund on such Subsequent Transfer
Date, calculated at the rate at which Pre-Funding Account moneys are invested as
of such Subsequent Transfer Date; and (z), with respect to Pool IV, the
difference between (i) one-month's interest on the aggregate Principal Balances
of the Subsequent Pool IV Loans acquired by the Trust Fund on such Subsequent
Transfer Date, calculated at the Class A-16 Remittance Rate and (ii) one-month's
interest on the aggregate Principal Balances of the Subsequent Pool IV Loans
acquired by the Trust Fund on such Subsequent Transfer Date, calculated at the
rate at which Pre-Funding Account moneys are invested as of such Subsequent
Transfer Date.
OWNER-OCCUPIED MORTGAGED PROPERTY: A Residential Dwelling as to which
the related Mortgagor represented at the time of the origination of the Mortgage
Loan an intent to occupy as such Mortgagor's primary, secondary or vacation
residence.
PAYING AGENT: Initially, the Trustee or any other Person that meets
the eligibility standards for the Paying Agent specified in Section 13.14 hereof
and is authorized by the Trustee to make payments on the Certifi cates on behalf
of the Trustee.
PERCENTAGE INTEREST: With respect to a Class A Certificate, the
portion of the respective Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the denomination represented by such
Certificate and the denominator of which is the Original Principal Balance of
such Class. With respect to the Class X Certificates, the portion of the Class
evidenced thereby, expressed as a percentage, which shall equal 100%. With
respect to the Class R Certificates, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such Certificate, which
shall be either 99.99% or, but only with respect to the Class R Certificates
held by the Tax Matters Person, 0.01%. The Class A Certificates are issuable
only in the minimum Percentage Interest corresponding to a minimum denomination
of $1,000 and integral multiples of $1,000 in excess thereof, except that one
Class A Certificate of each Class may be issued in a different denomination.
PERIODIC RATE CAP: The provision in the Mortgage Note for each Pool II
Loan which limits increases or decreases in the Mortgage Interest Rate on each
Change Date to the rate set forth in the applicable Mortgage Note.
PERMITTED INSTRUMENTS: As used herein, Permitted Instruments shall
include the following:
(i) direct general obligations of, or obligations
fully and unconditionally guaranteed as to the timely payment
of principal and interest by, the United States or any agency
or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States, FHA
debentures, FHLMC senior debt obligations, Federal Home Loan
Bank consolidated senior debt obligations, and FNMA senior
debt obligations, but excluding any of such securities whose
terms do not provide for payment of a fixed dollar amount upon
maturity or call for redemption;
(ii) federal funds, certificates of deposit, time deposits
and banker's acceptances (having original maturities of not
more than 365 days) of any bank or trust company incorporated
under the laws of the United States or any state thereof,
provided that the short-term debt obligations of such bank or
trust company at the date of acquisition thereof have been
rated "A-1" or better by S&P and Prime-1 or better by Moody's;
(iii) deposits of any bank or savings and loan association
which has combined capital, surplus and undivided profits of
at least $3,000,000 which deposits are held only up to the
limits insured by the BIF or SAIF administered by the FDIC,
provided that the unsecured long-term debt obligations of such
bank or savings and loan association have been rated "BBB" or
better by S&P and Baa3 or better by Moody's;
(iv) commercial paper (having original maturities of not
more than 365 days) rated "A-1" or better by S&P and Prime-1
or better by Moody's;
(v) debt obligations rated "AAA" by S&P and Aaa by
Moody's (other than any such obligations that do not have a
fixed par value and/or whose terms do not promise a fixed
dollar amount at maturity or call date);
(vi) investments in money market funds rated "AAAm" or
better by S&P or "Aaa" or better by Moody's the assets of
which are invested solely in instruments described in clauses
(i)-(v) above;
(vii) guaranteed investment contracts or surety bonds
issued by or reasonably acceptable to the Certificate Insurer
providing for the investment of funds in an account or
insuring a minimum rate of return on investments of such
funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or
other corporation whose debt obligations or
insurance financial strength or claims
paying ability are rated "AAA" by S&P and
"Aaa" by Moody's; and
(b) provide that the Trustee may exercise all of
the rights of the Representative under such
contract or surety bond without the
necessity of the taking of any action
by the Representative;
(viii) A repurchase agreement that satisfies the following
criteria and is acceptable to the Certificate Insurer:
(a) Must be between the Trustee and a dealer bank
or securities firm described in 1. or 2.
below:
1. Primary dealers on the Federal Reserve
reporting dealer list which are rated
"A" or better by S&P and Moody's, or
2. Banks rated "A" or above by S&P and
Moody's
(b) The written repurchase agreement must include
the following:
1. Securities which are acceptable for the
transfer are:
A. Direct U.S. governments, or
B. Federal Agencies backed by the full
faith and credit of the U.S.
government(and FNMA & FHLMC)
2. the term of the repurchase agreement
may be up to 60 days
3. the collateral must be delivered to the
Trustee or third party custodian acting
as agent for the Trustee by appropriate
book entries and confirmation
statements, with a copy to the
Certificate Insurer, must have been
delivered before or simultaneous with
payment (perfection by possession of
certificated securities)
4. Valuation of collateral
A. The securities must be valued
weekly, marked-to-market at current
market price plus accrued interest
i. The value of the
collateral must be equal to
at least 104% of the amount
of cash transferred by the
Trustee or custodian for
the Trustee to the dealer
bank or security firm under
the repurchase agreement
plus accrued interest. If
the value of securities
held as collateral slips
below 104% of the value of
the cash transferred by the
Trustee plus accrued
interest, then additional
cash and/or acceptable
securities must be
transferred. If, however,
the securities used as
collateral are FNMA or
FHLMC, then the value of
collateral must equal at
least 105%.
(ix) any other investment acceptable to the Certificate
Insurer and the Rating Agencies, written confirmation of which
shall be furnished by the Certificate Insurer to the Trustee.
PERMITTED TRANSFEREE: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Code section 860E(c)(1)) with respect to any Class R
Certificate, (iv) rural electric and telephone cooperatives described in Code
Section 1381(a)(2)(C), (v) a Person other than a "United States Person" as
defined in Code Section 7701(a)(30), unless the Servicer consents in writing to
the Transfer to such Person and (vi) any other Person so designated by the
Servicer based upon an Opinion of Counsel that the transfer of a Percentage
Interest in a Class R Certificate to such Person may cause the Trust Fund to
fail to qualify as a REMIC at any time that the Class A Certificates are
outstanding. The terms "United States," "State" and "International Organization"
shall have the meanings set forth in Code Section 7701 or successor provisions.
A corporation will not be treated as an instrumentality of the United States or
of any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of FHLMC, a majority of
its board of directors is not selected by such governmental unit.
PERSON: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
POOL: With respect to the Class A Certificates, the Pool I, Pool II,
Pool III or Pool IV Certificates, as the case may be, and with respect to the
Mortgage Loans, the Pool I, Pool II, Pool III or Pool IV Mortgage Loans, as the
case may be.
POOL AMORTIZED SUBORDINATED AMOUNT REQUIREMENT: With respect to Pool
I, Pool II, Pool III and Pool IV and as of any date of determination, the
product of (x) 5.10%, 6.50%, 24.00% and 50.00%, respectively, and (y) the
aggregate Principal Balances of all Mortgage Loans in the related Pool as of the
close of business on the last day of the Due Period immediately preceding such
date; provided, however, that for any period during which an Event of Excessive
Loss relating to Pool I, Pool II, Pool III or Pool IV exists, the Pool Amortized
Subordinated Amount Requirement for such Pool shall equal the product of 5.10%,
6.50%, 24.00% or 50.00%, respectively, and the Pool Principal Balance of the
respective Pool as of the date such Event of Excessive Pool Loss for such Pool
first existed.
POOL AVAILABLE AMOUNT: With respect to any Pool and each Remittance
Date, an amount equal to the sum of (i) the Pool Available Remittance Amount for
such Pool (minus the amounts withdrawn from the applicable Certificate Account
pursuant to Section 6.01(b)(i) to deposit amounts related to required premiums
in the applicable Insurance Account and, for Pool III, Section 6.01(b)(ii) to
make deposits in the FHA Premium Account, (ii) any amount of Total Monthly
Excess Cashflow to be applied to the Certificates of such Pool on such
Remittance Date, and (iii) amounts transferred from the Spread Account, if any,
pursuant to Section 6.05(b)(ii) and Insured Payments, if any, made by the
Certificate Insurer with respect to such Pool.
POOL AVAILABLE REMITTANCE AMOUNT: With respect to any Pool and
Remittance Date, (i) the sum of all amounts relating to the Mortgage Loans of
such Pool described in clauses (i) through (viii), inclusive, of Section 5.03(b)
received by the Servicer or any Subservicer (including any amounts paid by the
Servicer and the Representative and excluding any Excess Spread and
Subordination Reduction Amounts relating to the Mortgage Loans of such Pool, any
amounts withdrawn by the Servicer with respect to the Mortgage Loans in such
Pool pursuant to Section 5.04(b), (c), (e) and (f)(i) as of the related
Determination Date and any amounts deposited into the Servicing Account with
respect to the Mortgage Loans in such Pool pursuant to Section 5.04(g) as of the
related Determination Date) during the related Due Period or, with respect to
Section 5.03(b)(vi), on the related Determination Date, and deposited into the
applicable Certificate Account as of the Determination Date, plus (ii) the
amount of any Monthly Advances and Compensating Interest payments relating to
the Mortgage Loans of such Pool, remitted by the Servicer for such Remittance
Date, plus (iii) amounts to be transferred to the applicable Certificate Account
from the Pre-Funding Account and the Capitalized Interest Account with respect
to the Remittance Dates in January, February and March 1997, less (iv) those
amounts withdrawable from the applicable Certificate Account pursuant to Section
6.01(b)(vi). The "Pool Available Remittance Amount" does not include (i) funds
in the applicable Principal and Interest Account and available to be withdrawn
pursuant to Section 5.04(d)(ii), (ii) funds in the applicable Certificate
Account and available to be withdrawn pursuant to Section 6.01(b)(v) and (iii)
funds in the applicable Certificate Account that cannot be distributed by the
Trustee on such Remittance Date as a result of a proceeding initiated under the
United States Bankruptcy Code, as amended from time to time (11 U.S.C.).
POOL AVAILABLE REMITTANCE AMOUNT SHORTFALL: With respect to any Pool
and Remittance Date, the excess, if any, of (i) the Pool Remittance Amount for
such Pool (net of amounts included in clauses (X) (vi) and (viii) and (Y) of the
definition of Pool Principal Distribution Amount) over (ii) the Pool Available
Remittance Amount for such Pool (net of the amount to be withdrawn from the
applicable Certificate Account pursuant to Section 6.01(b)(i) and one-twelfth of
the Annual Expense Escrow Amount with respect to such Pool and, with respect to
Pool II, the amount to be withdrawn from the applicable Certificate Account
pursuant to Section 6.01(b)(iii)).
POOL AVAILABLE REMITTANCE AMOUNT SURPLUS: With respect to any Pool and
Remittance Date, the excess, if any, of (i) the Pool Available Remittance Amount
for such Pool (net of the amount to be withdrawn from the applicable Certificate
Account pursuant to Section 6.01(b)(i) and one-twelfth of the Annual Expense
Escrow Amount with respect to such Pool and, with respect to Pool II, the amount
to be withdrawn from the applicable Certificate Account pursuant to Section
6.01(b)(iii)) over (ii) the Pool Remittance Amount for such Pool (net of amounts
included in clauses (X)(vi) and (viii) and (Y) of the definition of Pool
Principal Distribution Amount).
POOL CARRY-FORWARD AMOUNT: With respect to any Pool and Remittance
Date, the sum of (i) the amounts, if any, by which (x) the Pool Remittance
Amount for such Pool as of the immediately preceding Remittance Date exceeded
(y) the amount of the actual distribution to the Holders of the Certificates of
such Pool (including to the Certificate Insurer, as provided in Section 6.08),
pursuant to Section 6.08 on the immediately preceding Remittance Date, exclusive
of any Insured Payment to the Holders of the Certificates of such Pool made
pursuant to Section 6.08 hereof on such immediately preceding Remittance Date,
and (ii) interest on the amounts, if any, described in clause (i) above, at
one-twelfth of the weighted average Remittance Rates of the Certificates of such
Pool from such immediately preceding Remittance Date; provided, however, that
only the Certificate Insurer shall be entitled to interest on the principal
portion of the Pool Carry-Forward Amount.
POOL CURRENT INTEREST REQUIREMENT: For each Pool, the sum of the Class
Current Interest Requirements of the Certificates of such Pool.
POOL MAXIMUM COLLATERAL AMOUNT: For each Pool, the sum of (i) the
aggregate Principal Balances as of the Cut-Off Date of all Initial Mortgage
Loans in such Pool and (ii) the aggregate Principal Balances as of the related
Subsequent Cut-Off Dates of all Subsequent Mortgage Loans transferred to the
Trust Fund and assigned to such Pool.
POOL PRE-FUNDING EARNINGS: With respect to each Pool and the
Remittance Dates in January, February and March 1997, the actual investment
earnings earned during the period from the Closing Date through the Business Day
immediately preceding the Determination Date in January, February and March 1997
(inclusive) on that portion of the Pre-Funding Account allocated to such Pool
during such period as calculated by the Representative pursuant to Section
2.09(f) hereof.
POOL PRINCIPAL BALANCE: With respect to any Pool, the sum of the Class
Principal Balances of the Certificates of such Pool.
POOL PRINCIPAL DISTRIBUTION AMOUNT: For each Pool, on any Remittance
Date, the excess of:
(X) the sum, without duplication, of the following:
(i) each payment of principal received by the
Servicer or any Subservicer (exclusive of Curtailments,
Principal Prepayments and amounts described in clause (iii)
hereof) during the related Due Period with respect to the
Mortgage Loans of the related Pool,
(ii) all Curtailments and all Principal Prepayments
received by the Servicer or any Subservicer during the related
Due Period with respect to the Mortgage Loans of the related
Pool,
(iii) the principal portion of all Insurance Proceeds,
Released Mortgaged Property Proceeds and Net Liquidation
Proceeds received by the Servicer or any Subservicer during
the related Due Period with respect to the Mortgage Loans of
the related Pool (and, with respect to the Pool III Loans, the
principal portion of all FHA Payments received by the Claims
Administrator with respect to a 90 Day Delinquent FHA Loan
during the related Due Period),
(iv) that portion of the purchase price (as indicated in
Section 2.05(b)) for any repurchased Mortgage Loan from the
related Pool which represents principal and any Substitution
Adjustments deposited in the applicable Principal and Interest
Account with respect to such Mortgage Loans of the related
Pool and transferred to the applicable Certificate Account as
of the related Determination Date,
(v) any proceeds representing principal on the Mortgage
Loans of the related Pool received by the Trustee in
connection with the liquidation of the Mortgage Loans of the
related Pool or the termination of the Trust,
(vi) the amount of any Subordination Deficit with
respect to such Pool for such Remittance Date,
(vii) any moneys released from the Pre-Funding Account on
the January, February and March 1997 Remittance Date as a
prepayment of the Certificates of the related Pool for such
Remittance Date,
(viii) the amount of any Subordination Increase
Amount with respect to the related Pool for such
Remittance Date, OVER
(Y) the amount of any Subordination Reduction Amount with
respect to the related Pool for such Remittance Date.
POOL PROJECTED NET MONTHLY EXCESS CASHFLOW: As of any date of
calculation, with respect to Pool I and Pool IV, five times (or with respect to
Pool II, three times) Net Monthly Excess Cashflow relating to such Pool, as
calculated pursuant to Section 6.14(b) hereof on the Remittance Date immediately
preceding such date of calculation. Pool Projected Net Monthly Excess Cash Flow
shall not apply to Pool III.
POOL REMAINING AMOUNT AVAILABLE: With respect to any Pool and as of
any Remittance Date the greater of (x) zero dollars and (y)(i) the Pool
Available Amount for the related Pool minus (ii) payments made with respect
thereto pursuant to Sections 6.08(d)(i) through (iv).
POOL REMITTANCE AMOUNT: As to each Pool and any Remittance Date, the
amount required to be distributed on such Remittance Date to the Holders of the
Certificates of such Pool, such amount being equal to the sum of (i) the Pool
Current Interest Requirement for the related Pool, (ii) the Pool Principal
Distribution Amount for the related Pool, (iii) the Pool Carry- Forward Amount
for the related Pool and (iv) any amount received by the Trustee from the
Servicer or the Originator and paid to the Holders of the Certificates of the
related Pool that constitutes a Monthly Advance and that is recoverable and
sought to be recovered as a voidable preference by a trustee in bankruptcy
pursuant to the United States Bankruptcy Code, as amended from time to time (11
U.S.C.), in accordance with a final, nonappealable order of a court having
competent jurisdic tion.
In the event that any amounts referenced in subclause (iv) above
constitute Insured Payments or any portion thereof, payment of such amounts
shall be disbursed to the trustee in bankruptcy named in the final order of the
court exercising jurisdiction and not directly to any Certificateholder of the
Certificates of such Pool unless such Certificateholder has returned principal
or interest paid on the Certificates of such Pool to such trustee in bankruptcy,
in which case payment shall be disbursed to such Certificateholder.
POOL SUBORDINATED AMOUNT: For each Pool, as of any Remittance Date,
the excess, if any, of (x) the sum of (i) the aggregate Principal Balances of
the Mortgage Loans of the related Pool as of the close of business on the last
day of the Due Period relating to such Remittance Date, (ii) any amount on
deposit in the Pre-Funding Account at such time and allocated to the related
Pool and (iii) the Spread Account Portion for the related Pool, over (y) the
Pool Principal Balance of the related Pool as of such Remittance Date (after
taking into account the payment of the Pool Remittance Amount of the related
Pool on such Remittance Date, net of amounts included in clauses (X)(vi) and
(viii) and (Y) of the definition of Pool Principal Distribution Amount).
Notwithstanding the foregoing, for purposes of Section 6.14(b) hereof, the
calculation of the Pool Subordinated Amount for Pool III shall not include the
Pool III Spread Account Portion.
POOL I CERTIFICATE: A Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8 or Class A-9 Certificate.
POOL I INITIAL SPECIFIED SUBORDINATED AMOUNT: $12,750,000.
POOL I MORTGAGE LOAN: A Mortgage Loan listed on Exhibit H delivered to
the Trustee, as such Exhibit may be amended from time to time.
POOL I SPECIFIED SUBORDINATED AMOUNT: means (as such amount may be
changed in accordance with the provisions of Section 2.09(f) hereof) the greater
of (i) the Pool I Initial Specified Subordinated Amount or (ii) the difference
between (x) one-half of the aggregate Principal Balances of all Pool I Mortgage
Loans that are 90 or more days delinquent (including REO Properties) minus (y)
the Pool Projected Net Monthly Excess Cashflow for Pool I as of such date, until
the later of the date upon which principal in the amount of one-half of the Pool
Maximum Collateral Amount for Pool I has been received in respect of the Pool I
Mortgage Loans and the 30th Remittance Date following the Closing Date, and with
respect to each Remittance Date thereafter, the greatest of:
(a) the lesser of (i) the Pool I Initial Specified Subordinated
Amount, (ii) the Pool Amortized Subordinated Amount Requirement for Pool I or
(iii) two times the Pool I Initial Specified Subordinated Amount stated as a
percentage of the Pool Maximum Collateral Amount for Pool I times the then
current outstanding Pool Principal Balance for Pool I plus the then current
outstanding Principal Balance of the Pool I Mortgage Loans with an original term
to stated maturity of five years and a "balloon" payment due at such stated
maturity;
(b) the difference between (i) one-half of the aggregate Principal
Balances of all Pool I Mortgage Loans that are 90 or more days delinquent
(including REO Properties) minus (ii) the Pool Projected Net Monthly Excess
Cashflow for Pool I as of such date;
(c) an amount equal to 0.5% of the Pool Maximum Collateral Amount for
Pool I plus 15.0% of the then current outstanding Principal Balance of the Pool
I Mortgage Loans with an original term to stated maturity of 15 years and a
"balloon" payment due at such stated maturity; or
(d) $500,000 times a fraction, the numerator of which is the Pool
Principal Balance of Pool I for such Remittance Date and the denominator of
which is the sum of the aggregate Pool Principal Balances of each Pool for such
Remittance Date.
POOL II CERTIFICATE: A Class A-10 Certificate.
POOL II INITIAL SPECIFIED SUBORDINATED AMOUNT: $11,375,000.
POOL II MORTGAGE LOAN: A Mortgage Loan listed on Exhibit H-1 delivered
to the Trustee, as such Exhibit may be amended from time to time, which Mortgage
Loan has a Mortgage Interest Rate which adjusts on each Change Date by reference
to the LIBOR Index or the Treasury Index, as the case may be, subject to the
applicable Periodic Rate Cap and the applicable Lifetime Floor and Lifetime Cap.
POOL II SPECIFIED SUBORDINATED AMOUNT: means (as such amount may be
changed in accordance with the provisions of Section 2.09(f) hereof) the greater
of (i) the Pool II Initial Specified Subordinated Amount or (ii) two times the
difference between (x) one-half of the aggregate Principal Balances of all Pool
II Mortgage Loans that are 90 or more days delinquent (including REO Properties)
minus (y) the Pool Projected Net Monthly Excess Cashflow for Pool II as of such
date, until the later of the date upon which principal in the amount of one-half
of the Pool Maximum Collateral Amount for Pool II has been received in respect
of the Pool II Mortgage Loans and the 30th Remittance Date following the Closing
Date, and with respect to each Remittance Date thereafter, the greatest of:
(a) the lesser of (i) the Pool II Initial Specified Subordinated
Amount, (ii) the Pool Amortized Subordinated Amount Requirement for Pool II or
(iii) two times the Pool II Initial Specified Subordinated Amount stated as a
percentage of the Pool Maximum Collateral Amount for Pool II times the then
current outstanding Pool Principal Balance for Pool II plus the then current
outstanding Principal Balance of the Pool II Mortgage Loans with an original
term to stated maturity of five years and a "balloon" payment due at such stated
maturity;
(b) two times the difference between (i) one-half of the aggregate
Principal Balances of all Pool II Mortgage Loans that are 90 or more days
delinquent (including REO Properties) minus (ii) the Pool Projected Net Monthly
Excess Cashflow for Pool II as of such date;
(c) an amount equal to 0.5% of the Pool Maximum Collateral Amount for
Pool II plus 15.0% of the then current outstanding Principal Balance of the Pool
II Mortgage Loans with an original term to stated maturity of 15 years and a
"balloon" payment due at such stated maturity; or
(d) $500,000 times a fraction, the numerator of which is the Pool
Principal Balance of Pool II for such Remittance Date and the denominator of
which is the sum of the aggregate Pool Principal Balances of each Pool for such
Remittance Date.
POOL III CERTIFICATE: A Class A-11, Class A-12, Class A-13, Class A-14
or Class A-15 Certificate.
POOL III DELINQUENCY PERIOD: As defined in Section 6.14(b).
POOL III INITIAL SPECIFIED SUBORDINATED AMOUNT: $21,000,000.
POOL III MORTGAGE LOAN: A Mortgage Loan listed on Exhibit H-2
delivered to the Co-Trustee, as such Exhibit may be amended from time to time.
POOL III SPECIFIED SUBORDINATED AMOUNT: means (as such amount may be
changed in accordance with the provisions of Section 2.09(f) hereof) the Pool
III Initial Specified Subordinated Amount until the later of the date upon which
principal in the amount of one-half of the Pool Maximum Collateral Amount for
Pool III has been received in respect of the Pool III Mortgage Loans and the
30th Remittance Date following the Closing Date, and with respect to each
Remittance Date thereafter, the greatest of:
(a) the lesser of (i) the Pool III Initial Specified Subordinated
Amount and (ii) the Pool Amortized Subordinated Amount Requirement for Pool III;
and
(b) the lesser of (i) $300,000 and (ii) the aggregate Principal
Balances of all Pool III Mortgage Loans as of the close of business on the last
day of the Due Period immediately preceding such date.
Provided, however, that (notwithstanding the capture of Total Monthly
Excess Cashflow pursuant to Section 6.14(b) hereof) the Pool III Specified
Subordinated Amount shall equal the Pool III Initial Specified Subordinated
Amount during any Pool III Delinquency Period.
POOL IV CERTIFICATE: A Class A-16 Certificate.
POOL IV INITIAL SPECIFIED SUBORDINATED AMOUNT: $2,500,000.
POOL IV MORTGAGE LOAN: A Mortgage Loan listed on Exhibit H-3 delivered
to the Trustee, as such Exhibit may be amended from time to time.
POOL IV SPECIFIED SUBORDINATED AMOUNT: means (as such amount may be
reduced in accordance with the provisions of Section 2.09(f) hereof) the Pool IV
Initial Specified Subordinated Amount until the later of the date upon which
principal in the amount of one-half of the Pool Maximum Collateral Amount for
Pool IV has been received in respect of the Pool IV Mortgage Loans and the 30th
Remittance Date following the Closing Date, and with respect to each Remittance
Date thereafter, the greatest of:
(a) the lesser of (i) the Pool IV Initial Specified Subordinated
Amount, (ii) the Pool Amortized Subordinated Amount Requirement for Pool IV or
(iii) two times the Pool IV Initial Specified Subordinated Amount stated as a
percentage of the Pool Maximum Collateral Amount for Pool IV times the then
current outstanding Pool Principal Balance for Pool IV plus the then current
outstanding Principal Balance of the Pool IV Mortgage Loans with an original
term to stated maturity of five years and a "balloon" payment due at such stated
maturity;
(b) two times the difference between (i) one-half of the aggregate
Principal Balances of all Pool IV Mortgage Loans that are 90 or more days
delinquent (including REO Properties) minus (ii) the Pool Projected Net Monthly
Excess Cashflow for Pool IV as of such date;
(c) an amount equal to 0.5% of the Pool Maximum Collateral Amount for
Pool IV plus 15% of the then current outstanding Principal Balance of the Pool
IV Mortgage Loans with an original term to stated maturity of 15 years and a
"balloon" payment due at such stated maturity;
(d) $500,000 times a fraction, the numerator of which is the Pool
Principal Balance for Pool IV for such Remittance Date and the denominator of
which is the sum of the aggregate Pool Principal Balances of each Pool for such
Remittance Date; or
(e) the sum of the Principal Balances of the three largest Pool IV
Mortgage Loans.
PREFERENCE AMOUNT: means any amount previously distributed to a holder
of the Certificates (other than the Trust Fund) that is recoverable and sought
to be recovered as a voidable preference by a trustee in bankruptcy pursuant to
the United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in
accordance with a final nonappealable order of a court having competent
jurisdiction.
PRE-FUNDED AMOUNT: With respect to any date of determination, the
amount on deposit in the Pre-Funding Account.
PRE-FUNDING ACCOUNT: The Pre-Funding Account established in accordance
with Section 6.02 hereof and maintained by the Trustee.
PREMIUM DEPOSIT AMOUNT: As of any Remittance Date, an amount equal to
the Monthly Premium for such Remittance Date.
PRIME RATE: The lowest prime lending rate as published in THE WALL
STREET JOURNAL on any date of determination, or if such rate is not published in
THE WALL STREET JOURNAL on any date of determination, the lowest prime lending
rate as published in the most recently available edition of THE WALL STREET
JOURNAL preceding such date of determination.
PRINCIPAL AND INTEREST ACCOUNT: The principal and interest account
established by the Servicer pursuant to Section 5.03 hereof.
PRINCIPAL BALANCE: With respect to any Mortgage Loan or related REO
Property, at any date of determination, (i) the principal balance of the
Mortgage Loan (or, with respect to a Low Interest Pool I Mortgage Loan, the
product of such principal balance and the percentage set forth on Exhibit T
attached hereto) outstanding as of the Cut-Off Date or as of the applicable
Subsequent Cut-Off Date relative to Subsequent Mortgage Loans or as of the
applicable substitution date relative to Qualified Substitute Mortgage Loans,
after application of principal payments received on or before such date, minus
(ii) the sum of (a) the principal portion of the Monthly Payments received
during each Due Period ending prior to the most recent Remittance Date, which
were distributed pursuant to Section 6.08 on any previous Remittance Date, and
(b) all Principal Prepayments, Curtailments, Excess Payments, all Insurance
Proceeds, Released Mortgag ed Property Proceeds, Net Liquidation Proceeds and
net income from an REO Property (but not including the proceeds of any Insured
Payment) to the extent applied by the Servicer as recoveries of principal in
accordance with the provisions hereof, which were distributed pursuant to
Section 6.08 on any previous Remittance Date.
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Mortgage Loan equal to the outstanding principal balance thereof, received in
advance of the final scheduled Due Date which is intended to satisfy a Mortgage
Loan in full.
PRIOR LIEN: With respect to any Mortgage Loan which is not a first
priority lien, each mortgage loan relating to the corresponding Mortgaged
Property having a higher priority lien.
PROHIBITED TRANSACTION: "Prohibited Transaction" shall have the
meaning set forth from time to time in the definition thereof at Section
860F(a)(2) of the Code (or any successor statute thereto).
PROJECTED EXCESS SPREAD: As of any date of determination, the amount
calculated as such in accordance with the Insurance Agreement.
PUD AND DE MINIMIS PUD: A planned unit development in which individual
fee title is held to the interior and exterior of the units and underlying land
and common areas, recreational facilities and streets are held in undivided
common ownership.
QUALIFIED MORTGAGE: "Qualified mortgage" shall have the meaning set
forth from time to time in the definition thereof at Section 860G(a)(3) of the
Code (or any successor statute thereto).
QUALIFIED SUBSTITUTE MORTGAGE LOAN: A mortgage loan or mortgage loans
substituted for a Deleted Mortgage Loan pursuant to Section 2.05 or 3.03 hereof,
which (i) has or have a mortgage interest rate or rates (or, in the case of a
Pool II Mortgage Loan, a Gross Margin and Index) of not less than (and not more
than two percentage points more than) the Mortgage Interest Rate (or Gross
Margin and Index) for the Deleted Mortgage Loan, (ii) relates or relate to the
same type of Residential Dwelling or Multifamily Property, as the case may be,
as the Deleted Mortgage Loan, (iii) matures or mature no later than (and not
more than one year earlier than) the Deleted Mortgage Loan, (iv) has or have a
Loan-to-Value Ratio or Loan-to-Value Ratios at the time of such substitution no
higher than the Loan-to Value Ratio of the Deleted Mortgage Loan at such time,
(v) has or have a principal balance or principal balances (after application of
all payments received on or prior to the date of substitution) equal to or less
than the Principal Balance (prior to the occurrence of Realized Losses) of the
Deleted Mortgage Loan as of such date, (vi) with respect to each Deleted
Mortgage Loan that is a first mortgage loan, is a first mortgage loan, (vii)
satisfies or satisfy the criteria set forth from time to time in the definition
of a "qualified replacement mortgage" at Section 860G(a)(4) of the Code (or any
successor statute thereto), (viii) with respect to Pool III, is an FHA Loan if
the Deleted Mortgage Loan was an FHA Loan or a Conventional Home Improvement
Loan if the Deleted Mortgage Loan was a Conventional Home Improvement Loan and
(ix) complies or comply as of the date of substitution with each representation
and warranty set forth in Sections 3.01(b) and 3.02.
RATING AGENCIES: Moody's and S&P.
REALIZED LOSS: With respect to each Liquidated Mortgage Loan
(including a 90 Day Delinquent FHA Loan as to which no Claim is eligible to be
filed with the FHA), an amount (not less than zero or greater than the related
outstanding principal balance as of the date of the final liquidation) equal to
the outstanding principal balance of the Mortgage Loan as of the date of such
liquidation, minus the Net Liquidation Proceeds relating to such Liquidated
Mortgage Loan (such Net Liquidation Proceeds to be applied first to the
principal balance of the Liquidated Mortgage Loan and then to interest thereon).
With respect to each 90 Day Delinquent FHA Loan for which a Claim is eligible to
be filed with the FHA, the Realized Loss, if any, shall be determined as of the
Determination Date following the date the related FHA Payment is received by the
Co-Trustee, and shall be an amount (not less than zero or greater than the
related outstanding principal balance as of the date the Claim relating to such
FHA Loan is filed with the FHA) equal to the outstanding principal balance of
the FHA Loan as of the date of such filing, minus amounts paid from the
Certificate Account relating to such 90 Day Delinquent FHA Loan (such amounts to
be applied first to the principal balance of such FHA Loan and then to interest
thereon). With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the Realized Loss shall be calculated as the difference
between the principal balance of the Mortgage Loan immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation. With respect to any Mortgage Loan made to a Mortgagor
who has filed a petition in bankruptcy under the United States Bankruptcy Code,
as amended from time to time (11 U.S.C.), a Realized Loss shall be deemed to
have occurred whenever a withdrawal is made from the Principal and Interest
Account in respect of such Mortgage Loan pursuant to Section 5.04(c), and shall
be equal to the amount of such withdrawal.
REALLOCATED POOL III SPREAD ACCOUNT PORTION: For any Remittance Date,
the excess, if any, of the Pool III Subordinated Amount after giving effect to
all payments to be made on the Pool III Certificates on such Remittance Date
over the Pool III Specified Subordinated Amount for such Remittance Date.
RECORD DATE: With respect to any Remittance Date, the close of
business on the last day of the month immediately preceding the month of the
related Remittance Date. With respect to the Special Remittance Date, February
28, 1997.
REFERENCE BANKS: Leading banks selected by the Trustee and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market (i)
with an established place of business in London, (ii) which have been designated
by the Trustee to the Representative, the Servicer, the Claims Administrator and
the Certificate Insurer and (iii) which are not affiliates of the
Representative.
REGISTRATION STATEMENT: The registration statement (File No. 33-98734)
filed by the Representative with the Securities and Exchange Commission in
connection with the issuance and sale of the Class A Certificates, including the
Prospectus dated September 24, 1996 and the Prospectus Supplement dated December
26, 1996.
REIMBURSABLE AMOUNTS: As of any date of determination, an amount
payable to the Servicer and/or Representative with respect to (i) the payment of
any tax reimbursable pursuant to Section 5.01(h), (ii) the Monthly Advances and
Servicing Advances re imbursable pursuant to Section 5.04(b), (iii) any advances
reimbursable pursuant to Section 9.01 and not previously reimbursed pursuant to
Section 6.03(c)(i), and (iv) any other amounts reim bursable to the Servicer or
the Representative prior to a distribution to the Class R Certificateholders
pursuant to this Agreement.
RELATED PAYMENTS: As described in Section 5.15(c).
RELEASED MORTGAGED PROPERTY PROCEEDS: As to any Mortgage Loan,
proceeds received by the Servicer in connection with (a) a taking of an entire
Mortgaged Property by exercise of the power of eminent domain or condemnation or
(b) any release of part of the Mortgaged Property from the lien of the related
Mortgage, whether by partial condemnation, sale or otherwise, which are not
released to the Mortgagor in accordance with applicable law, the Servicer's
customary second mortgage servicing procedures and this Agreement.
REMAINDER EXCESS SPREAD AMOUNT: As of any Remittance Date, the amount
equal to the excess of the related Excess Spread over the related Monthly Excess
Spread.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC CHANGE OF LAW: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to the REMIC and the REMIC Provisions issued after the
Closing Date.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.
REMIC I: The assets constituting the Trust Fund consisting of the
REMIC II Regular Certificates.
REMIC II: The assets constituting the Trust Fund other than the
Pre-Funding Account and the Capitalized Interest Account. Expenses and fees of
the Trust Fund shall be paid by REMIC II.
REMIC II CERTIFICATES: The REMIC II Regular Certificates and the Class
R-2 Certificates.
REMIC II REGULAR CERTIFICATES: As designated in Section 4.1.
REMITTANCE DATE: The 15th day of any month or if such 15th day is not
a Business Day, the first Business Day immediately following, commencing January
1997; provided, however, that in no event shall the Remittance Date occur less
than three Business Days following the Determination Date.
REO DISPOSITION: The final sale by the Servicer of a Mortgaged
Property acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure. The proceeds of any REO Disposition constitute part of the
definition of Liquidation Proceeds.
REO PROPERTY: As described in Section 5.10.
REPRESENTATIVE: The Money Store Inc., a New Jersey corporation, and
its successors and assigns as Representative hereunder.
RESERVE AMOUNT: As of any date of determination, the maximum amount of
FHA insurance available with respect to all FHA Loans. The Reserve Amount
initially will equal at least 10% of the aggregate Principal Balance of the FHA
Loans as of the Cut-Off Date and will decline as set forth in 24 C.F.R. '
201.32(b).
RESIDENTIAL DWELLING: Any one or more of the following, (i) Single
Family Detached House, (ii) Row House, (iii) Two-Family House, (iv) Low-Rise
Condominium, (v) PUD and De minimis PUD, (vi) Three- or Four-Family House, (vii)
High-Rise Condominium, (viii) Mixed Use Building or (ix) manufactured home (as
defined in FNMA/FHLMC Seller-Servicers' Guide) to the extent that it constitutes
real property in the state in which it is located.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any
officer assigned to the Corporate Trust Department, and when used with respect
to the Co-Trustee, any officer assigned to the Corporate Trust Department, in
each case including any Vice President, Assistant Vice President, any Assistant
Secretary, any trust officer or any other officer of the Trustee or Co-Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject. When used with respect to the
Representative, an Originator or any other person, any Vice President, Assistant
Vice President, the Treasurer, or any Secretary or Assistant Secretary.
ROW HOUSE: A single family dwelling unit attached to another dwelling
unit by common walls.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
SCHEDULE OF MORTGAGE LOANS: The schedule of Mortgage Loans attached to
the related Subsequent Transfer Agreement.
SERIES: 1996-D.
SERVICER: The Money Store Inc., a New Jersey corporation, and its
successors and assigns as Servicer hereunder.
SERVICER'S CERTIFICATE: The certificate as defined in Section 6.10.
SERVICING ACCOUNT: The Servicing Account established and maintained by
the Servicer in accordance with Section 6.15 hereof. The Servicing Account, and
amounts deposited therein, shall not constitute part of the Trust Fund and
Certificateholders shall have no rights thereto.
SERVICING ADVANCES: All reasonable and customary "out of pocket" costs
and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property, (iv) compliance with the obligations under
clause (vi) of Section 5.01(a) and Sections 5.02, 5.05 and 5.07, which Servicing
Advances are reimbursable to the Servicer to the extent provided in Section
5.04(b), and (e) in connection with the liquidation of a Mortgage Loan,
expenditures relating to the purchase or maintenance of any Prior Lien pursuant
to Section 5.14, for all of which costs and expenses the Servicer is entitled to
reimbursement with interest thereon up to a maximum rate per annum equal to the
related Mortgage Interest Rate, except that any amount of such interest accrued
at a rate in excess of the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8 or Class A-9 Remittance Rate, as the case
may be, for a Pool I Mortgage Loan, the Class A-10 Remittance Rate for a Pool II
Mortgage Loan, the Class A-11, Class A-12, Class A-13, Class A-14 or Class A-15
Remittance Rate, as the case may be, for a Pool III Mortgage Loan or the Class
A-16 Remittance Rate for a Pool IV Mortgage Loan, with respect to the Remittance
Date on which the Net Liquidation Proceeds will be distributed shall be
reimbursable only from Excess Proceeds.
SERVICING DELINQUENCY TRIGGER: Will be deemed to have occurred on any
date of determination (i) on or prior to November 30, 2000, if the Total
Expected Losses (as defined below) of the Pool I, Pool II, Pool III and Pool IV
Mortgage Loans exceed 9.0% of the aggregate Principal Balances of the Pool I,
Pool II, Pool III and Pool IV Mortgage Loans as of the end of the first Due
Period immediately following the Funding Period and (ii) after November 30,
2000, but on or prior to November 30, 2005, if the Total Expected Losses of the
Pool I, Pool II, Pool III and Pool IV Mortgage Loans exceed 13.5% of the
aggregate Principal Balances of the Pool I, Pool II, Pool III and Pool IV
Mortgage Loans as of the end of the first Due Period immediately following the
Funding Period.
For purposes of the foregoing definition, the "Total Expected Losses"
of the Pool I, Pool II, Pool III and Pool IV Mortgage Loans on any date of
determination shall equal the sum of (i) the cumulative Realized Losses on the
Pool I, Pool II, Pool III and Pool IV Mortgage Loans from the Closing Date
through and including such date of determination and (ii) the Delinquency
Calculation (as defined below).
For purposes of the foregoing definition, the "Delinquency
Calculation" on any date of determination shall equal the sum of:
(i) the Principal Balance of all Mortgage Loans
30-59 days delinquent multiplied by 10.75%;
(ii) the Principal Balance of all Mortgage Loans
60-89 days delinquent multiplied by 21.50%; and
(iii) the Principal Balance of all Mortgage Loans 90 days
or more delinquent multiplied by 43.00%.
SERVICING FEE: As to each Mortgage Loan, the annual fee payable to the
Servicer. Such fee shall be calculated and payable monthly only from the amounts
received in respect of interest on such Mortgage Loan, shall accrue at the rate
of .25% per annum and shall be computed on the basis of the same principal
amount and for the period respecting which any related interest payment on a
Mortgage Loan is computed. The Servicing Fee is payable solely from the interest
portion of related (i) Monthly Payments, (ii) Liquidation Proceeds or (iii)
Released Mortgaged Property Proceeds collected by the Servicer, or as otherwise
provided in Section 5.04. The Servicing Fee includes any servicing fees owed or
payable to any Subservicer.
SERVICING OFFICER: Any officer of the Servicer or Claims Administrator
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and signature appears on a list of servicing officers
furnished to the Trustee or Co-Trustee by the Servicer or Claims Administrator,
as such list may from time to time be amended.
SINGLE FAMILY DETACHED HOUSE: A single family dwelling unit not
attached in any way to any other unit.
SINGLE FAMILY LOANS: Mortgage Loans secured by Mortgaged Property
consisting of one-to-four family units.
SINGLE PRIME CLASSES: The Class A-1', Class A-2', Class A-3', Class
A-4', Class A-5', Class A-6', Class A-7', Class A-8', Class A-9', Class A-10',
Class A-11', Class A-12', Class A-13', Class A-14', Class A-15' and Class A-16'
Certificates, as set forth in Section 4.01(b).
S&P: Standard & Poor's Rating Services, a division of The McGraw-Hill
Companies, or any successor thereto.
SPECIAL HOLDINGS: TMS Special Holdings Inc., a Delaware corporation.
SPECIAL REMITTANCE DATE: March 28, 1997.
SPECIFIED SUBORDINATED AMOUNT: As applicable, the Pool I Specified
Subordinated Amount, the Pool II Specified Subordinated Amount, the Pool III
Specified Subordinated Amount or the Pool IV Specified Subordinated Amount.
SPREAD ACCOUNT: The Spread Account that may be established and
maintained with the Trustee in accordance with Section 6.05 hereof.
SPREAD ACCOUNT PORTION: With respect to each Pool and any Remittance
Date, an amount equal to the product of (i) the amount on deposit in the Spread
Account immediately prior to such Remittance Date (other than amounts deposited
therein pursuant to Section 6.14(b)(iii)) and (ii) a fraction, the numerator of
which is the Initial Pool Spread Account Deposit for such Pool and the
denominator of which is the Aggregate Initial Spread Account Deposit.
STARTUP DAY: The day designated as such pursuant to Section 2.06
hereof.
SUBORDINATED AMOUNT: For each Pool, the Pool Subordinated Amount for
such Pool.
SUBORDINATED DEFICIENCY AMOUNT: With respect to any Pool and
Remittance Date, the difference, if any, between (i) the Specified Subordinated
Amount applicable to such Pool and Remittance Date and (ii) the Subordinated
Amount applicable to such Pool and Remittance Date prior to taking into account
the payment of any amounts calculated pursuant to clauses (X)(vi) and (viii) and
(Y) of the definition of Pool Principal Distribution Amount with respect to such
Remittance Date.
SUBORDINATION DEFICIT: With respect to any Pool and any Remittance
Date, the amount, if any, by which (x) the Pool Principal Balance with respect
to such Pool after taking into account the payment of the Pool Remittance Amount
for such Pool on such Remittance Date in the manner described herein (other than
amounts payable with respect to clause (X)(vi) of the definition of Pool
Principal Distribution Amount) exceeds (y) the sum of (i) the aggregate
Principal Balances of the Mortgage Loans of the related Pool as of the close of
business on the last day of the Due Period relating to such Remittance Date and
(ii) any Pre-Funding Account moneys allocable to the Mortgage Loans of such Pool
as of the close of business on the last day of the related Due Period.
SUBORDINATION INCREASE AMOUNT: With respect to any Pool and any
Remittance Date, the lesser of (i) the Subordinated Deficiency Amount as of such
Payment Date (after taking into account the payment of the Pool Remittance
Amount for such Pool on such Remittance Date (except for any Subordination
Increase Amount)) and (ii) the aggregate amount of Net Monthly Excess Cashflow
to be allocated to such Pool pursuant to Section 6.14(b)(i) on such Remittance
Date.
SUBORDINATION REDUCTION AMOUNT: With respect to any Pool and any
Remittance Date, an amount equal to the lesser of (x) the Excess Subordinated
Amount for such Pool and Remittance Date and (y) the sum of the amounts
calculated pursuant to clauses (X)(i) through (v), inclusive, and (vii) of the
definition of Pool Principal Distribution Amount with respect to such Pool and
Remittance Date.
SUBSEQUENT CUT-OFF DATE: The beginning of business on each date
specified in a Subsequent Transfer Agreement with respect to those Subsequent
Mortgage Loans which are transferred and assigned to the Trust Fund pursuant to
the related Subsequent Transfer Agreement.
SUBSEQUENT MORTGAGE LOANS: The Mortgage Loans sold to the Trust Fund
pursuant to Section 2.09, which shall be listed on the Schedule of Mortgage
Loans attached to the related Subsequent Transfer Agreement.
SUBSEQUENT POOL I MORTGAGE LOANS: Subsequent Mortgage Loans assigned
to Pool I.
SUBSEQUENT POOL II MORTGAGE LOANS: Subsequent Mortgage Loans assigned
to Pool II.
SUBSEQUENT POOL III MORTGAGE LOANS: Subsequent Mortgage Loans assigned
to Pool III.
SUBSEQUENT POOL IV MORTGAGE LOANS: Subsequent Mortgage Loans assigned
to Pool IV.
SUBSEQUENT TRANSFER AGREEMENT: Each Subsequent Transfer Agreement
dated as of a Subsequent Transfer Date executed by the Trustee (and, with
respect to Pool III Mortgage Loans, the Co-Trustee) and the Representative, by
which Subsequent Mortgage Loans are sold and assigned to the Trust Fund.
SUBSEQUENT TRANSFER DATE: The date specified as such in each
Subsequent Transfer Agreement.
SUBSERVICER: Any Person with whom the Servicer has entered into a
Subservicing Agreement and who satisfies any requirements set forth in Section
5.01(b) hereof in respect of the qualification of a Subservicer.
SUBSERVICING AGREEMENT: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of certain Mortgage
Loans as provided in Section 5.01(b), a copy of which shall be delivered, along
with any modifications thereto, to the Trustee and the Certificate Insurer.
SUBSTITUTION ADJUSTMENT: As to any date on which a substitution occurs
pursuant to Sections 2.05 or 3.03, the sum of (i) the amount (if any) by which
the aggregate principal balances (after application of principal payments
received on or before the date of substitution) of any Qualified Substitute
Mortgage Loans as of the date of substitution are less than the aggregate of the
Principal Balance, prior to the occurrence of Realized Losses, of the related
Deleted Mortgage Loans, and (ii) the interest portion of any unreimbursed
Insured Payments made by the Certificate Insurer related to such Mortgage Loan.
TAX MATTERS PERSON: The Person or Persons designated from time to time
to act as the "tax matters person" (within the meaning of the REMIC Provisions)
of the Trust Fund.
TAX MATTERS PERSON RESIDUAL INTEREST: The interest in each Class of
Class R Certificates acquired by the Tax Matters Person pursuant to Section
2.06(d) hereof.
TAX RETURN: The federal income tax return on Internal Revenue Service
Form 1066, "U.S. Real Estate Mortgage Investment Conduit Income Tax Return,"
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of the Trust Fund due to its classification as a REMIC under the REMIC
Provisions, together with any and all other information reports or returns that
may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provision of federal, state or local tax laws.
TELERATE PAGE 3750: The display page currently so designated on the
Dow Jones Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
TERMINATION PRICE: The price defined in Section 11.01 hereof.
THREE- OR FOUR-FAMILY HOUSE: Three or four dwelling units under one
roof.
TITLE I: Section 2 of Title I of the National Housing Act and the
rules and regulations promulgated thereunder.
TOTAL MONTHLY EXCESS CASHFLOW: As defined in Section 6.14(a) hereof.
TREASURY INDEX: The applicable One-Year Constant Maturity Treasury
Index as published by the Federal Reserve Board in the applicable Federal
Reserve Board Statistical Release No. H.15.
TRUST FUND: The segregated pool of assets subject hereto, constituting
the trust created hereby and to be administered hereunder, consisting of: (i)
such Mortgage Loans as from time to time are subject to this Agreement, together
with the Mortgage Files relating thereto and all proceeds thereof, (ii) such
assets (including any Permitted Instruments) as from time to time are identified
as REO Property relating to Mortgage Loans or are deposited in or constitute the
Certificate Accounts, Principal and Interest Account, Expense Account,
Pre-Funding Account, Capitalized Interest Account, Spread Account, FHA Premium
Account and Insurance Accounts, (iii) the Trustee's and Co-Trustee's rights
under all insurance policies with respect to the Mortgage Loans required to be
maintained pursuant to this Agreement and any related Insurance Proceeds, (iv)
the Certificate Insurance Policies, (v) Liquidation Proceeds and (vi) Released
Mortgaged Property Proceeds, including all earnings thereon and proceeds
thereof. The Mortgage Loans included from time to time in the Trust Fund shall
be divided into four separate sub-trusts, one for the Pool I Mortgage Loans, one
for the Pool II Mortgage Loans, one for the Pool III Mortgage Loans and one for
the Pool IV Mortgage Loans.
TRUSTEE: The Bank of New York, or its successor in interest, or any
successor trustee appointed as herein provided.
TRUSTEE'S MORTGAGE FILE: The documents delivered to the Trustee or the
Custodian pursuant to Section 2.04.
TWO FAMILY HOUSE: Two dwelling units under one roof.
ARTICLE II
SALE AND CONVEYANCE OF THE TRUST FUND
Section 2.01 SALE AND CONVEYANCE OF TRUST FUND; PRIORITY AND
SUBORDINATION OF OWNERSHIP INTERESTS.
(a) The Originators do hereby sell, transfer, assign, set over and
convey to the Trustee (or, with respect to the Pool III Mortgage Loans and the
Reserve Amount, the Co-Trustee) without recourse and for the benefit of the
Certificateholders of the related Pool, subject to the terms of this Agreement,
all of the right, title and interest of the Originators in and to the Initial
Pool I, Initial Pool II, Initial Pool III and Initial Pool IV Mortgage Loans,
all rights under the Reserve Amount relating to the Pool III Mortgage Loans and
all other assets included or to be included in the Trust Fund. The Mortgage
Loans that from time to time constitute part of the Trust Fund shall be divided
into four separate sub-trusts, one for the Pool I Mortgage Loans, one for the
Pool II Mortgage Loans, one for the Pool III Mortgage Loans and one for the Pool
IV Mortgage Loans.
(b) The rights of the Certificateholders to receive payments with
respect to the Mortgage Loans in respect of the Certificates, and all ownership
interests of the Certificateholders in such payments, shall be as set forth in
this Agreement. In this regard, all rights of the Class R Certificateholders to
receive payments in respect of the Class R Certificates and all ownership
interests of the Class R Certificateholders in and to such payments, are subject
and subordinate to the preferential rights of the Class A Certificateholders and
Class X Certificateholders, to receive payments in respect of the Class A
Certificates and Class X Certificates, repectively, and the ownership interests
of the Class A Certificateholders and Class X Certificateholders in such
payments, to the extent set forth herein. In accordance with the foregoing, the
ownership interest of the Class R Certificateholders in amounts deposited in the
Principal and Interest Account and any Account from time to time shall not vest
unless and until such amounts are distributed in respect of the Class R
Certificates in accordance with the terms of this Agreement.
Section 2.02 POSSESSION OF MORTGAGE FILES.
(a) Upon the issuance of the Certificates, the ownership of each
Mortgage Note, the Mortgage and the contents of the related Mortgage File
relating to the Initial Mortgage Loans is, and upon each Subsequent Transfer
Date the ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File relating to the applicable Subsequent Mortgage Loans will
be, vested in the Trustee (or, with respect to the Pool III Mortgage Loans, the
Co-Trustee) for the benefit of the Certificateholders of the related Pool.
(b) Pursuant to Section 2.04, the Originators have delivered or caused
to be delivered each Trustee's Mortgage File relating to the Initial Mortgage
Loans to the Trustee (or, with respect to the Pool III Mortgage Loans, the
Custodian) and on each Subsequent Transfer Date the Originators will deliver or
cause to be delivered each Trustee's Mortgage File relating to the related
Subsequent Mortgage Loans to the Trustee (or, with respect to the Pool III
Mortgage Loans, the Custodian).
Section 2.03 BOOKS AND RECORDS.
The sale of each Mortgage Loan shall be reflected on the Originator's
balance sheets and other financial statements as a sale of assets by each
Originator. Nothing in this Agreement, however, shall be deemed to create a
transfer of an FHA Loan in violation of Title I or the FHA Regulations. The
Originators shall be responsible for maintaining, and shall maintain, a complete
set of books and records for each Mortgage Loan which shall be clearly marked to
reflect the ownership of each Mortgage Loan by the Trustee for the benefit of
the Certificateholders.
Section 2.04 DELIVERY OF MORTGAGE LOAN DOCUMENTS.
Each Originator, (i) contemporaneously with the delivery of this
Agreement, has delivered or caused to be delivered to the Trustee (or, with
respect to the Pool III Mortgage Loans, the Custodian) the Certificate Insurance
Policies and each of the following documents for each Initial Mortgage Loan and
(ii) on each Subsequent Transfer Date, will deliver or cause to be delivered to
the Trustee (or, with respect to the Pool III Mortgage Loans, the Custodian)
each of the following documents for each Subsequent Mortgage Loan originated by
such Originator:
(a) The original Mortgage Note, endorsed "Pay to the order of holder"
or "Pay to the order of __________________" and signed, by facsimile or manual
signature, in the name of the Person delivering the note by a Responsible
Officer, with all prior and intervening endorsements showing a complete chain of
endorsement from the originator to such Person;
(b) Either: (i) the original Mortgage, with evidence of recording
thereon, (ii) a copy of the Mortgage certified as a true copy by a Responsible
Officer where the original has been transmitted for recording until such time as
the original is returned by the public recording office or (iii) a copy of the
Mortgage certified by the public recording office in those instances where the
original recorded Mortgage has been lost;
(c) Either: (i) the original Assignment of Mortgage from the Person
delivering such Assignment to "The Bank of New York, as Trustee under the
Pooling and Servicing Agreement dated as of November 30, 1996, 1996-D" (or, with
respect to the Pool III Mortgage Loans, to "First Bank (N.A.), as Co-Trustee
under the Pooling and Servicing Agreement dated as of November 30, 1996,
1996-D") with evidence of recording thereon (provided, however, that where
permitted under the laws of the jurisdiction wherein the Mortgaged Property is
located, the Assignment of Mortgage may be effected by one or more blanket
assignments for Mortgage Loans secured by Mortgaged Properties located in the
same county), or (ii) a copy of such Assignment of Mortgage certified as a true
copy by a Responsible Officer where the original has been transmitted for
recording (provided, however, that where the original Assignment of Mortgage is
not being delivered to the Trustee (or, with respect to the Pool III Mortgage
Loans, the Co-Trustee), each such Responsible Officer may complete one or more
blanket certificates attaching copies of one or more Assignments of Mortgage
relating to the Mortgages originated by the related Originator);
(d) (X) Except with respect to the FHA Loans (i) The original policy
of title insurance or, if such policy has not yet been delivered by the insurer,
the commitment or binder to issue same, or if the original principal balance of
the Mortgage Loan was less than or equal to $15,000 or the Mortgage Loan was not
originated by the Originators, other evidence of the status of title, which
shall consist of an attorney's opinion of title or certificate of title, a
preliminary title report, a property search, a title search, a lot book report,
a property information report or a report entitled "prelim" or "PIRT" (property
information report), and (ii) proof of hazard insurance in the form of a hazard
insurance policy or hazard insurance policy endorsement that names the related
Originator, its successors and assigns, as a mortgagee/loss payee, and, if such
endorsement does not show the amount insured by the related hazard insurance
policy, some evidence of such amount and (Y) with respect to the FHA Loans, the
written Mortgage Loan application, title report, credit reconciliation
worksheet, credit investigation receipts and approval sheet;
(e) Either: (i) originals of all intervening assignments, if any,
showing a complete chain of title from the originator to the Person delivering
such assignment, including warehousing assignments, with evidence of recording
thereon if such assignments were recorded, (ii) copies of any assignments
certified as true copies by a Responsible Officer where the originals have been
submitted for recording until such time as the originals are returned by the
public recording officer, or (iii) copies of any assignments certified by the
public recording office in any instances where the original recorded assignments
have been lost;
(f) Originals of all assumption and modification agreements, if any;
and
(g) Except with respect to the FHA Loans and certain Mortgage Loans
with original principal balances of less than $15,000, the appraisal made in
connection with the origination of the related Mortgage Loan with photographs of
the subject property and of comparable properties (if available), constituting
evidence sufficient to indicate that the Mortgaged Property relates to a
Residential Dwelling (or, with respect to Multifamily Loans, a Multifamily
Property) and identifying the type thereof.
The Originator shall, within five Business Days after the receipt
thereof, and in any event, within one year of the Closing Date (or with respect
to the Subsequent Mortgage Loans, within one year of the related Subsequent
Transfer Date), deliver or cause to be delivered to the Trustee (or, with
respect to the Pool III Mortgage Loans, the Custodian): (a) the original
recorded Mortgage in those instances where a copy thereof certified by a
Responsible Officer was delivered to the Trustee (or, with respect to the Pool
III Mortgage Loans, the Custodian); (b) the original recorded Assignment of
Mortgage to the Trustee (or, with respect to the Pool III Mortgage Loans, the
Co-Trustee), which, together with any intervening assignments of Mortgage,
evidences a complete chain of title from the originator to the Trustee (or, with
respect to the Pool III Mortgage Loans, the Co-Trustee) in those instances where
copies thereof certified by a Responsible Officer were delivered to the Trustee
(or, with respect to the Pool III Mortgage Loans, the Custodian); (c) any
intervening assignments of Mortgage in those instances where copies thereof
certified by a Responsible Officer were delivered to the Trustee (or, with
respect to the Pool III Mortgage Loans, the Custodian); and (d) except with
respect to the Pool III Mortgage Loans, the title insurance policy, or, where no
such policy is required to be provided, the other evidence of title and hazard
insurance required in clause (d) above. Notwithstanding anything to the contrary
contained in this Section 2.04, in those instances where the public recording
office retains the original Mortgage, Assignment of Mortgage or the intervening
assignments of the Mortgage after it has been recorded, the Originator shall be
deemed to have satisfied its obligations hereunder upon delivery to the Trustee
(or, with respect to the Pool III Mortgage Loans, the Custodian) of a copy of
such Mort gage, Assignment of Mortgage or assignments of Mortgage certified by
the public recording office to be a true copy of the recorded original thereof.
From time to time the Originator may forward or cause to be forwarded to the
Trustee (or, with respect to the Pool III Mortgage Loans, the Custodian)
additional original documents evidencing an assumption or modification of a
Mortgage Loan. All Mortgage Loan documents held by the Trustee (or, with respect
to the Pool III Mortgage Loans, the Custodian) as to each Mortgage Loan are
referred to herein as the "Trustee's Mortgage File."
All recording required pursuant to this Section 2.04 shall be
accomplished by and at the expense of the Servicer.
Section 2.05 ACCEPTANCE BY TRUSTEE AND CUSTODIAN OF THE TRUST FUND;
CERTAIN SUBSTITUTIONS; CERTIFICATION BY TRUSTEE AND CUSTODIAN.
(a) The Trustee (or, with respect to the Pool III Mortgage Loans, the
Custodian, as agent for the Co-Trustee) agrees to execute and deliver on the
Closing Date with respect to the Initial Mortgage Loans, and on each Subsequent
Transfer Date with respect to the related Subsequent Mortgage Loans, an
acknowledgment of receipt of, for each Mortgage Loan, an Assignment of Mortgage
or certified copy thereof, and a Mortgage Note, in the form attached as Exhibit
F hereto, and declares that it will hold such documents and any amendments,
replacements or supplements thereto, as well as any other assets included in the
definition of the Trust Fund and delivered to the Trustee, as Trustee in trust
upon (or, with respect to the Pool III Mortgage Loans, to the Custodian, as
agent for the Co-Trustee) and subject to the conditions set forth herein for the
benefit of the Certificateholders. The Trustee (or, with respect to the Pool III
Mortgage Loans, the Custodian) agrees, for the benefit of the
Certificateholders, to review each Trustee's Mortgage File relating to the
Initial Mortgage Loans delivered to it within 60 days after the Closing Date and
each Trustee's Mortgage File relating to the Subsequent Mortgage Loans delivered
to it within 60 days after the related Subsequent Transfer Date (or, with
respect to any Qualified Substitute Mortgage Loan, within 45 days after the
assignment thereof) and, on each such date, to deliver to the Representative,
the Servicer and the Certificate Insurer a certification in the form attached
hereto as Exhibit F-1 to the effect that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as not covered by
such certification), with such exceptions, if any, as identified therein (i) all
documents required to be delivered to it pursuant to this Agreement are in its
possession (other than items listed in Section 2.04(d)(ii)), (ii) such documents
(other than items listed in Section 2.04(d)(ii)) have been reviewed by it and
have not been mutilated, damaged, torn or otherwise physically altered and
relate to such Mortgage Loan, (iii) based on its examination and only as to the
foregoing documents, the information set forth on the Mortgage Loan Schedule
accurately reflects the information set forth in the Trustee's Mortgage File,
and (iv) each Mortgage Note has been endorsed as provided in Section 2.04 of
this Agreement. Further, for each Mortgage Loan (other than the Pool III
Mortgage Loans) with an original principal balance in excess of $15,000 for
which the documents in the possession of the Trustee indicate that the related
Originator conducted a drive-by appraisal pursuant to FHLMC Form 704 or
alternative FNMA Form in connection with originating such Mortgage Loan, the
Trustee shall verify whether the Trustee's Mortgage File shows that such
Mortgage Loan, (A) had an original principal balance not in excess of $35,000,
and (B) has a Loan-to Value Ratio less than 50% (based solely on the LTV
included on the Mortgage Loan Schedule) and/or an appraisal on FNMA/FHLMC Form
1004 was performed by the related Originator within one year prior to the
origination of such Mortgage Loan. The Trustee and the Custodian shall be under
no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they are other
than what they purport to be on their face. Within 375 days after the Closing
Date, the Trustee (or, with respect to the Pool III Mortgage Loans, the
Custodian) shall deliver to the Servicer, the Representative, the Certificate
Insurer and any Certificateholder who requests a copy from the Trustee (or, with
respect to the Pool III Mortgage Loans, the Custodian) a final certification in
the form attached hereto as Exhibit G evidencing, if such be the case, the
completeness of the Trustee's Mortgage Files (other than items listed in Section
2.04(d)(ii)).
(b) If the Certificate Insurer or the Trustee (or, with respect to the
Pool III Mortgage Loans, the Custodian) during the process of reviewing the
Trustee's Mortgage Files finds any document constituting a part of a Trustee's
Mortgage File which is not properly executed, has not been received, is
unrelated to a Mortgage Loan identified in the Mortgage Loan Schedule, or does
not conform in a material respect to the requirements of Section 2.04 or the
description thereof as set forth in the Mortgage Loan Schedule, the Certificate
Insurer or the Trustee (or, with respect to the Pool III Mortgage Loans, the
Custodian) shall promptly so notify the Servicer, the Representative and the
Trustee (or, with respect to the Pool III Mortgage Loans, the Custodian) or the
Certificate Insurer, respectively. In performing any such review, the Trustee
and the Custodian may conclusively rely on the related Originator as to the
purported genuineness of any such document and any signature thereon. It is
understood that the scope of the Trustee's (or, with respect to the Pool III
Mortgage Loans, the Custodian's) review of the Mortgage Files is limited solely
to confirming that the documents listed in Section 2.04 (other than the items
listed in Section 2.04(d)(ii)) appear on their face to have been executed and
received and to relate to the Mortgage Loans identified in the Mortgage Loan
Schedule, and to verify that each Mortgaged Property appears from the
information contained in the Trustee's Mortgage File to be a Residential
Dwelling (or, with respect to the Multifamily Loans, a Multifamily Property).
The Representative agrees to use reasonable efforts to remedy a material defect
in a document constituting part of a Mortgage File of which it is so notified by
the Certificate Insurer, the Trustee or the Custodian. If, however, within 60
days after the Trustee's or the Custodian's notice to it respecting such defect
the Representative has not remedied the defect and the defect materially and
adversely affects the interest of the Certificateholders in the related Mortgage
Loan or the interests of the Certificate Insurer, the Representative will (i)
substitute in lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan in
the manner and subject to the conditions set forth in Section 3.03 or (ii)
purchase such Mortgage Loan at a purchase price equal to the Principal Balance
of the Mortgage Loan as of the date of purchase, before the occurrence of
Realized Losses, if any, plus 30 days' interest (or, in the case of a Pool II
Mortgage Loan, the actual number of days during the related interest period for
the Pool II Certificates) on such Principal Balance, computed at the weighted
average Class Adjusted Mortgage Loan Remittance Rates for the Pool I
Certificates with respect to a Pool I Mortgage Loan, the weighted average Class
Adjusted Mortgage Loan Remittance Rates for the Pool II Certificates, with
respect to a Pool II Mortgage Loan, the weighted average Class Adjusted Mortgage
Loan Remittance Rates for the Pool III Certificates, with respect to a Pool III
Mortgage Loan or the Class Adjusted Mortgage Loan Remittance Rate for the Pool
IV Certificates with respect to a Pool IV Mortgage Loan, as the case may be, as
of the next succeeding Determination Date, plus any accrued unpaid Servicing
Fees, Contingency Fees, Monthly Advances and Servicing Advances reimbursable to
the Servicer, plus the interest portion of any unreimbursed Insured Payments
made by the Certificate Insurer related to such Mortgage Loan, which purchase
price shall be deposited in the applicable Principal and Interest Account on the
next succeeding Determination Date except for the amount described above
relating to unreimbursed Insured Payments, which shall be paid directly by the
Representative to the Certificate Insurer.
(c) Upon receipt by the Trustee (or, with respect to the Pool III
Mortgage Loans, the Custodian) of a certification of a Servicing Officer of the
Servicer of such substitution or purchase and the deposit of the amounts
described above in the applicable Principal and Interest Account (which
certification shall be in the form of Exhibit J hereto), the Trustee (or, with
respect to the Pool III Mortgage Loans, the Custodian) shall release to the
Servicer for release to the Representative the related Trustee's Mortgage File
and the Trustee (or, with respect to the Pool III Mortgage Loans, the
Co-Trustee) shall execute, without recourse, and deliver such instruments of
transfer necessary to transfer such Mortgage Loan to the Representative
including, without limitation, for each FHA Loan, an FHA Transfer of Note Report
to be filed with the FHA. All costs of any such transfer shall be borne by the
Servicer.
If requested by either the Representative, the Servicer or the
Certificate Insurer, on the Remittance Date in June of each year, commencing
1997, the Trustee (and, with respect to the Pool III Mortgage Loans, the
Custodian) shall deliver to the Representative, the Servicer and the Certificate
Insurer a certification detailing all transactions with respect to the Mortgage
Loans for which the Trustee or the Custodian holds a Trustee's Mortgage File
pursuant to this Agreement during the prior calendar year. Such certification
shall list all Trustee's Mortgage Files which were released by or returned to
the Trustee or the Custodian during the prior calendar year, the date of such
release or return, the reason for such release or return, and the person to whom
the Trustee's Mortgage File was released or the person who returned the
Trustee's Mortgage File.
Section 2.06 DESIGNATIONS UNDER REMIC PROVISIONS; DESIGNATION OF
STARTUP DAY.
(a) As of the Startup Day, all Classes of Certificates except for the
Class R-1 and Class R-2 Certificates are hereby designated as the "regular
interests" in REMIC I and the Class R-1 Certificates are designated the single
class of "residual interests" in REMIC I for the purposes of the REMIC
Provisions. As of the Startup Day, the REMIC II Regular Certificates are hereby
designated as the "regular interests" in REMIC II and the Class R-2 Certificates
are designated the single class of "residual interests" in REMIC II for the
purposes of the REMIC Provisions.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of Section 860G(a)(9) of the Code. The latest possible
maturity date of the REMIC II Regular Certificates is April 15, 2028.
(c) The latest possible maturity dates of the Class A Certificates are
as follows:
CLASS LATEST POSSIBLE MATURITY DATE
Class A-1 June 15, 2003
Class A-2 December 15, 2008
Class A-3 November 15, 2011
Class A-4 July 15, 2015
Class A-5 March 15, 2018
Class A-6 June 15, 2021
Class A-7 April 15, 2025
Class A-8 April 15, 2028
Class A-9 April 15, 2028
Class A-10 April 15, 2028
Class A-11 August 15, 2007
Class A-12 May 15, 2011
Class A-13 September 15, 2014
Class A-14 October 15, 2016
Class A-15 April 15, 2023
Class A-16 January 15, 2028
(d) The Servicer, at the direction of the Originators, shall acquire
and retain a .01% Percentage Interest in each Class of Class R Certificates so
long as it shall act as Tax Matters Person of the Trust Fund, except that, when
the Trustee is acting as successor Servicer, the Representative will hold the
Tax Matters Person Residual Interest until an entity is appointed to succeed the
Trustee as Servicer.
(e) Any inconsistencies or ambiguities in this Agreement or in the
administration of the Trust Fund shall be resolved in a manner that preserves
the validity of the election that each of REMIC I and REMIC II be treated as a
REMIC.
Section 2.07 AUTHENTICATION OF CERTIFICATES.
The Trustee acknowledges the assignment to it of the Mortgage Loans
(other than the Pool III Mortgage Loans) and the delivery to it of the Trustee's
Mortgage Files relating to the Initial Mortgage Loans (other than the Pool III
Mortgage Loans), the Co-Trustee acknowledges the assignment to it of the Pool
III Mortgage Loans and the delivery to the Custodian of the Trustee's Mortgage
Files relating to the Initial Pool III Mortgage Loans and, concurrently with
such delivery, the Trustee has authenticated or caused to be authenticated and
delivered to or upon the order of the Representative on behalf of the
Originators, in exchange for the Initial Mortgage Loans, the Certificate
Insurance Policies, the Trustee's Mortgage Files and the other assets included
in the definition of the Trust Fund, Certificates duly authenticated by the
Trustee in authorized denominations evidencing the entire ownership of the Trust
Fund.
Section 2.08 FEES AND EXPENSES OF THE TRUSTEE AND CO-TRUSTEE.
The fees and expenses of the Trustee and Co-Trustee including (i) the
annual fees of the Trustee and Co-Trustee, payable annually in advance, and
subject to rebate to the Servicer as additional servicing compensation hereunder
for any fraction of a year in which this Agreement terminates, (ii) any other
fees and expenses to which the Trustee or Co-Trustee is entitled, and (iii)
reimbursements to the Servicer for any advances made by the Servicer to the
applicable Expense Accounts pursuant to Section 6.03 hereof, shall be paid from
the Expense Accounts in the manner set forth in Section 6.03 hereof; PROVIDED,
HOWEVER, that the Representative shall be liable for any expenses of the Trust
Fund incurred prior to the Closing Date. The Servicer, the Trustee and the
Co-Trustee hereby covenant with the Certificateholders that every material
contract or other material agreement entered into by the Trustee, the Co-Trustee
or the Servicer, acting as attorney-in- fact for the Trustee or the Co-Trustee,
on behalf of the Trust Fund shall expressly state therein that no
Certificateholder shall be personally liable in its capacity as such in
connection with such contract or agreement.
Section 2.09 SALE AND CONVEYANCE OF THE SUBSEQUENT MORTGAGE LOANS.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Representative of all or a portion of the balance of
funds in the Pre-Funding Account, the Originators shall on any Subsequent
Transfer Date sell, transfer, assign, set over and otherwise convey without
recourse, to the Trustee (or, with respect to the Subsequent Pool III Mortgage
Loans, the Co-Trustee) all right, title and interest of the applicable
Originators in and to each Subsequent Mortgage Loan listed on the Mortgage Loan
Schedule delivered by the Representative on such Subsequent Transfer Date, all
their right, title and interest in and to principal collected and interest
accruing on each such Subsequent Mortgage Loan on and after the related
Subsequent Cut- Off Date and all their right, title and interest in and to all
Insurance Policies; PROVIDED, HOWEVER, that the Originators reserve and retain
all their right, title and interest in and to principal (including Principal
Prepayments) collected and interest accruing on each such Subsequent Mortgage
Loan prior to the related Subsequent Cut-Off Date. The transfer by the
Originators of the Subsequent Mortgage Loans set forth on the Mortgage Loan
Schedule to the Trustee (or, with respect to the Subsequent Pool III Mortgage
Loans, the Co-Trustee) shall be absolute and shall be intended by all parties
hereto to be treated as a sale by the Originators.
The amount released from the Pre-Funding Account shall be one-hundred
percent (100%) of the aggregate principal balances as of the related Subsequent
Cut-Off Dates of the Subsequent Mortgage Loans so transferred; provided,
however, that the amount released from the Pre-Funding Account for a Low
Interest Mortgage Loan shall be the percentage set forth on Exhibit T attached
hereto of the aggregate principal balance thereof as of the related Subsequent
Cut-Off Date.
(b) The Originators shall transfer to the Trustee (or, with respect to
the Subsequent Pool III Mortgage Loans, the Co-Trustee) the Subsequent Mortgage
Loans and the other property and rights related thereto described in paragraph
(a) above only upon the satisfaction of each of the following conditions on or
prior to the related Subsequent Transfer Date:
(i) Except with respect to the transfer of Subsequent
Mortgages Loans on a Subsequent Transfer Date occurring in
December 1996, the Representative shall have provided the
Trustee (or, with respect to the Subsequent Pool III Mortgage
Loans, the Trustee, the Co-Trustee and the Custodian) and the
Certificate Insurer with a timely Addition Notice and shall
have provided any information reasonably requested by any of
the foregoing with respect to the Subsequent Mortgage Loans;
(ii) the Originators shall have delivered to the Trustee
(or, with respect to the Subsequent Pool III Mortgage Loans,
the Co-Trustee and the Custodian) a duly
executed written assignment (including an acceptance by the
Trustee (or, with respect to the Subsequent Pool III Mortgage
Loans, the Co-Trustee and the Custodian)) that shall indicate
whether such Subsequent Mortgage Loan is a Subsequent Pool I
Mortgage Loan, a Subsequent Pool II Mortgage Loan, a
Subsequent Pool III or a Subsequent Pool IV Mortgage Loan and
which shall include Mortgage Loan Schedules, listing the
Subsequent Mortgage Loans and any other exhibits listed
thereon;
(iii) the Originators shall have deposited in the Principal
and Interest Account all collections in respect of the
Subsequent Mortgage Loans received on or after the related
Subsequent Cut-Off Date;
(iv) as of each Subsequent Transfer Date, none of the
related Originator, the Servicer or the Representative was
insolvent nor will any of them have been made insolvent by
such transfer nor is any of them aware of any pending
insolvency;
(v) such addition will not result in a material
adverse tax consequence to the Trust Fund or the
Holders of the Certificates;
(vi) the Pre-Funding Period shall not have
terminated;
(vii) the Representative shall have delivered to the
Trustee and, if Subsequent Pool III Mortgage Loans are being
transferred on such Subsequent Transfer Date, the Co- Trustee,
an Officer's Certificate confirming the satisfaction of each
condition precedent specified in this paragraph (b) and in the
related Subsequent Transfer Agreement;
(viii) the Representative shall have delivered to the
Certificate Insurer, the Rating Agencies and the Trustee and,
if Subsequent Pool III Mortgage Loans are being transferred on
such Subsequent Transfer Date, the Co-Trustee, Opinions of
Counsel with respect to the transfer of the Subsequent
Mortgage Loans substantially in the form of the Opinions of
Counsel delivered to the Certificate Insurer, the Trustee and
the Co-Trustee on the Startup Day (bankruptcy, corporate and
tax opinions); and
(ix) the Representative shall have deposited into the
Spread Account the amount, if any, required by the Certificate
Insurer.
(c) The obligation of the Trust Fund to purchase a Subsequent Pool I
Mortgage Loan, a Subsequent Pool II Mortgage Loan, a Subsequent Pool III
Mortgage Loan or a Subsequent Pool IV Mortgage Loan, as the case may be, on any
Subsequent Transfer Date is subject to the requirement, as evidenced by a
certificate from a Responsible Officer of the Representative, that such
Subsequent Pool I Mortgage Loan, Subsequent Pool II Mortgage Loan, Subsequent
Pool III Mortgage Loan or Subsequent Pool IV Mortgage Loan, as the case may be,
conforms in all material respects to the representations and warranties
concerning the individual Initial Pool I Mortgage Loans, Initial Pool II
Mortgage Loans, Initial Pool III Mortgage Loans or Initial Pool IV Mortgage
Loans, as the case may be (including, if such Subsequent Pool III Mortgage Loan
is an FHA Loan, the representations and warranties concerning the FHA Loans),
set forth in Sections 3.01 and 3.02 (except that any reference therein to the
Cut-Off Date shall be deemed a reference to the applicable Subsequent Cut-Off
Date) and that the inclusion of all Subsequent Pool I Mortgage Loans, Subsequent
Pool II Mortgage Loans, Subsequent Pool III Mortgage Loans or Subsequent Pool IV
Mortgage Loans, as the case may be, being transferred to the Trust Fund on such
Subsequent Transfer Date will not change, in any material respect, the
characteristics of the Initial Pool I Mortgage Loans, Initial Pool II Mortgage
Loans, Initial Pool III Mortgage Loans or Initial Pool IV Mortgage Loans, as the
case may be, in the aggregate, set forth in Sections 3.01 and 3.02 or in the
Prospectus Supplement dated December 26, 1996 forming a part of the Registration
Statement under the headings "Summary of Terms -- The Pools -- Pool I and Pool
II," "-- Pool III," "-- Pool IV" and "The Loan Pools -- Home Equity Loans," "--
Home Improvement Loans" and "-- Multifamily Loans."
(d) In connection with the transfer and assignment of the Subsequent
Mortgage Loans, the Representative agrees to satisfy the conditions set forth in
Sections 2.01, 2.02, 2.03, 2.04 and 2.05.
(e) In connection with each Subsequent Transfer Date, on the
Remittance Dates in January, February and March 1997 and the Special Remittance
Date, the Representative shall determine, and the Trustee shall cooperate with
the Representative in determining (i) the amount and correct dispositions of the
Capitalized Interest Requirement for each Pool, the Overfunded Interest Amounts
for each Pool, the Pool Pre-Funding Earnings for each Pool, the amounts of Pre-
Funding Account moneys allocated to each Pool and (ii) any other necessary
matters in connection with the administration of the Pre-Funding Account and of
the Capitalized Interest Account. If any amounts are incorrectly released to the
Holders of the Class R Certificates from the Pre-Funding Account or from the
Capitalized Interest Account, such Holders or the Representative shall
immediately repay such amounts to the Trustee.
(f) In connection with the transfer of any Subsequent Mortgage Loans
to the Trust Fund, the Representative, the Servicer and the Trustee may, with
the prior written consent of the Certificate Insurer, amend the definition of
"Specified Subordinated Amount" (or any component of the definition thereof)
with respect to the related Pool for the purpose of changing the related
Specified Subordinated Amount (or any component of the definition thereof).
Based upon the results of any additional due diligence procedures performed by
the Certificate Insurer after the Closing Date to determine compliance with the
Underwriting Guidelines dated August 10, 1995, the Certificate Insurer may
require the Representative, the Servicer and the Trustee to amend the definition
of "Specified Subordinated Amount" (or any component of the definition thereof)
with respect to the Pool for the purpose of changing the related Specified
Subordinated Amount (or any component of the definition thereof). Provided,
however, that any amendment of the definition of "Specified Subordinated Amount"
with respect to the related Pool, other than an amendment increasing the Pool I,
Pool II, Pool III or Pool IV Initial Specified Subordinated Amount (or any
component of the definition thereof), as the case may be, and accompanied by a
cash deposit into the Spread Account pursuant to Section 6.05, must comply with
the provisions of Section 13.02 hereof.
(g) Each Subsequent Mortgage Loan shall have been originated and
identified by the applicable Originator on or prior to the Closing Date;
PROVIDED, HOWEVER, that if a mortgage loan that was identified as a Subsequent
Mortgage Loan does not satisfy the representations and warranties referenced in
Subsection (c) above, the applicable Originator may substitute for such loan
another Loan that satisfies the representations and warranties referenced in
Subsection (c) above.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 REPRESENTATIONS OF REPRESENTATIVE, SERVICER, CLAIMS
ADMINISTRATOR AND ORIGINATORS.
(a) The Representative, the Servicer and the Claims Administrator (for
the purposes of this Section 3.01(a), "The Money Store Inc.") hereby represent
and warrant to the Trustee, the Co-Trustee and the Certificateholders as of the
Closing Date:
(i) The Money Store Inc. is a corporation duly
organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation and has all
licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in
each Mortgaged Property State if the laws of such state
require licensing or qualification in order to conduct
business of the type conducted by The Money Store Inc. and
perform its obligations hereunder; The Money Store Inc. has
corporate power and authority to execute and deliver this
Agreement and each Subservicing Agreement and to perform in
accordance herewith and therewith; the execution, delivery and
performance of this Agreement and each Subservicing Agreement
(including all instruments of transfer to be delivered
pursuant to this Agreement and each Subservicing Agreement) by
The Money Store Inc. and the consummation of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action; this Agreement
and each Subservicing Agreement evidences the valid, binding
and enforceable obligation of The Money Store Inc.; The Money
Store Inc. is a Permitted Transferee; and all requisite
corporate action has been taken by The Money Store Inc. to
make this Agreement and each Subservicing Agreement valid,
binding and enforceable upon The Money Store Inc. in
accordance with the respective terms of each, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors'
rights generally or the application of equitable principles in
any proceeding, whether at law or in equity, none of which
will affect the ownership of the Mortgage Loans by the
Trustee, as trustee;
(ii) All actions, approvals, consents, waivers,
exemptions, variances, franchises, orders, permits,
authorizations, rights and licenses required to be taken,
given or obtained, as the case may be, by or from any federal,
state or other governmental authority or agency (other than
any such actions, approvals, etc., under any state securities
laws, real estate syndication or "Blue Sky" statutes, as to
which The Money Store Inc. makes no such representation or
warranty), that are necessary or advisable in connection with
the purchase and sale of the Certificates and the execution
and delivery by The Money Store Inc. of the documents to which
it is a party, have been duly taken, given or obtained, as the
case may be, are in full force and effect on the date hereof,
are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time
within which any appeal therefrom may be taken or review
thereof may be obtained has expired or no review thereof may
be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by
this Agreement and each Subservicing Agreement and the other
documents on the part of The Money Store Inc. and the
performance by The Money Store Inc. of its obligations under
this Agreement and each Subservicing Agreement and such of the
other documents to which it is a party;
(iii) The consummation of the transactions contemplated by
this Agreement and each Subservicing Agreement will not result
in the breach of any terms or provisions of the certificate of
incorporation or by-laws of The Money Store Inc. or result in
the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of
any obligation under, any material agreement, indenture or
loan or credit agreement or other material instrument to which
The Money Store Inc. or its property is subject, or result in
the violation of any law, rule, regulation,
order, judgment or decree to which The Money Store Inc.
or its property is subject;
(iv) Neither this Agreement or any Subservicing Agreement
nor any statement, report or other document furnished or to be
furnished pursuant to this Agreement and each Subservicing
Agreement or in connection with the transactions contemplated
hereby and thereby contains any untrue statement of material
fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading;
(v) The Money Store Inc. does not believe, nor
does it have any reason or cause to believe, that it
cannot perform each and every covenant contained in this
Agreement;
(vi) Except as set forth on Schedule I, there is no
action, suit, proceeding or investigation pending or, to the
best of The Money Store Inc.'s knowledge, threatened against
The Money Store Inc. which, either in any one instance or in
the aggregate, may result in any material adverse change in
the business, operations, financial condition, properties or
assets of The Money Store Inc. or in any material impairment
of the right or ability of The Money Store Inc. to carry on
its business substantially as now conducted, or in any
material liability on the part of The Money Store Inc. or
which would draw into question the validity of this Agreement
and each Subservicing Agreement or the Mortgage Loans or of
any action taken or to be taken in connection with the
obligations of The Money Store Inc. contemplated herein, or
which would be likely to impair materially the ability of The
Money Store Inc. to perform under the terms of this Agreement
and each Subservicing Agreement;
(vii) The Trust Fund will not constitute an "investment
company" within the meaning of the Investment Company Act of
1940, as amended;
(viii) The Money Store Inc. is not in default with respect
to any order or decree of any court or any order, regulation
or demand of any federal, state, municipal or governmental
agency, which default might have consequences that would
materially and adversely affect the condition (financial or
other) or operations of The Money Store Inc. or its properties
or might have consequences that would materially and adversely
affect its performance hereunder or under any Subservicing
Agreement;
(ix) The statements contained in the Registration
Statement which describe The Money Store Inc. or matters or
activities for which The Money Store Inc. is responsible in
accordance with the Registration Statement, this Agreement and
all documents referred to therein or delivered in connection
therewith, or which are attributable to The Money Store Inc.
therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement
of a material fact with respect to The Money Store Inc. and
does not omit to state a material fact necessary to make the
statements contained therein with respect to The Money Store
Inc. not misleading. The Money Store Inc. is not aware that
the Registration Statement contains any untrue statement of a
material fact or omits to state any material fact necessary to
make the statements contained therein not misleading. There is
no fact peculiar to The Money Store Inc. or the Mortgage Loans
and known to The Money Store Inc. that materially adversely
affects or in the future may (so far as The Money Store Inc.
can now reasonably foresee) materially adversely affect The
Money Store Inc. or the Mortgage Loans or the ownership
interests therein represented by the Certificates that has not
been set forth in the Registration Statement;
(x) Each Originator received fair consideration and
reasonably equivalent value in exchange for the sale of the
interest in the Initial Mortgage Loans, and will receive fair
consideration and reasonably equivalent value in exchange for
the sale of the interest in the Subsequent Mortgage Loans,
evidenced by the Certificates;
(xi) No Originator sold any interest in any Initial
Mortgage Loan, and no Originator will sell any interest in any
Subsequent Mortgage Loan, evidenced by the Certificates, as
provided in the Agreements, with any intent to hinder, delay
or defraud any of its respective creditors;
(xii) The Originators are solvent and the
Originators will not be rendered insolvent as a result
of the sale of the Mortgage Loans to the Trust Fund or
the sale of the Certificates; and
(xiii) No Certificateholder is subject to state
licensing requirements solely by virtue of holding the
Certificates.
(b) Each Originator hereby represents and warrants to the
Certificateholders, the Trustee and the Co-Trustee as of the Closing Date:
(i) Such Originator is a corporation duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and, except as set forth
below, has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good
standing in each Mortgaged Property State if the laws of such
state require licensing or qualification in order to conduct
business of the type conducted by such Originator and perform
its obligations hereunder; such Originator has corporate power
and authority to execute and deliver this Agreement and the
Subservicing Agreement to which it is a party and to perform
in accordance herewith and therewith; the execution, delivery
and performance of this Agreement and the Subservicing
Agreement to which it is a party (including all instruments of
transfer to be delivered pursuant to this Agreement and the
Subservicing Agreement to which it is a party) by such
Originator and the consummation of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action; this Agreement
and the Subservicing Agreement to which it is a party
evidences the valid, binding and enforceable obligation of
such Originator; such Originator is a
Permitted Transferee; and all requisite corporate action has
been taken by such Originator to make this Agreement and the
Subservicing Agreement to which it is a party valid, binding
and enforceable upon such Originator in accordance with the
respective terms of each such agreement, subject to the effect
of bankruptcy, insol vency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally or the application of equitable principles in any
proceeding, whether at law or in equity, none of which will
affect the ownership of the Mortgage Loans by the Trustee, as
trustee, or the Co-Trustee, as the case may be.
(ii) No approval of the transactions contemplated by this
Agreement and the Subservicing Agreement to which it is a
party from any state or federal regulatory
authority having jurisdiction over such Originator is
required or, if required, such approval has been or will,
prior to the Closing Date, be obtained;
(iii) The consummation of the transactions contemplated by
this Agreement and the Subservicing Agreement to which it is a
party will not result in the breach of any terms or provisions
of the certificate of incorporation or by-laws of such
Originator or result in the breach of any term or provision
of, or conflict with or constitute a default under or result
in the acceleration of any obligation under, any material
agreement, indenture or loan or credit agreement or other
material instrument to which such Originator or its property
is subject, or result in the violation of any law, rule,
regulation, order, judgment or decree to which such Originator
or its property is subject;
(iv) Such Originator is not in default with respect to any
order or decree of any court or any order, regulation or
demand of any federal, state, municipal or
governmental agency, which default might have consequences
that would materially and adversely affect the condition
(financial or other) or operations of such Originator or its
properties or might have consequences that would materially
and adversely affect its performance hereunder or under the
Subservicing Agreement to which it is a party;
(v) Except as set forth on Schedule I, there is no
action, suit, proceeding or investigation pending or, to the
best of such Originator's knowledge, threatened against such
Originator which, either in any one instance or in the
aggregate, may result in any material adverse change in the
business, operations, condition (financial or other),
properties or assets of such Originator or in any material
impairment of the right or properties or assets of such
Originator to carry on its business substantially as now
conducted, or in any material liability on the part of such
Originator or which would draw into question the validity of
this Agreement or the Subservicing Agreement to which it is a
party or the Mortgage Loans or of any action taken or to be
taken in connection with the obligations of such Originator
contemplated herein, or which would be likely to impair
materially the ability of such Originator to perform under the
terms of this Agreement or the Subservicing Agreement to which
it is a party;
(vi) Neither this Agreement or the Subservicing Agreement
to which it is a party nor any statement, report or other
document furnished or to be furnished pursuant to this
Agreement or the Subservicing Agreement to which it is a party
or in connection with the transactions contemplated hereby or
thereby contains any untrue statement of a material fact or
omits to state any material fact necessary to make the
statements contained herein or therein not misleading;
(vii) The statements contained in the Registration
Statement which describe such Originator or matters or
activities for which such Originator is responsible in
accordance with the Registration Statement, this Agreement and
all documents referred to therein or delivered in connection
therewith, or which are attributable to such Originator
therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement
of a material fact with respect to such Originator or the
Mortgage Loans and does not omit to state a material fact
necessary to make the statements contained therein with
respect to such Originator or the Mortgage Loans not
misleading. Such Originator is not aware that the Registration
Statement contains any untrue statement of a material fact or
omits to state any material fact necessary to make the
statements contained therein not misleading. There is no fact
peculiar to such Originator or the Mortgage Loans and known to
such Originator that materially and adversely affects or in
the future may (so far as such Originator can now reasonably
foresee) materially and adversely affect such Originator or
the Mortgage Loans or the ownership interests therein
represented by the Certificates that has not been set forth in
the Registration Statement;
(viii) Upon the receipt of each Trustee's Mortgage File by
the Trustee (or, with respect to the Pool III Mortgage Loans,
the Custodian on behalf of the Co-Trustee) under this
Agreement, the Trustee (or, with respect to the Pool III
Mortgage Loans, the Co-Trustee) will have good and marketable
title on behalf of the related Trust Fund to each Mortgage
Loan and such other items comprising the corpus of the related
Trust Fund free and clear of any lien (other than liens which
will be simultaneously released);
(ix) All actions, approvals, consents, waivers,
exemptions, variances, franchises, orders, permits,
authorizations, rights and licenses required to be taken,
given or obtained, as the case may be, by or from any federal,
state or other governmental authority or agency (other than
any such actions, approvals, etc. under any state securities
laws, real estate syndication or "Blue Sky" statutes, as to
which such Originator makes no such representation or
warranty), that are necessary or advisable in connection with
the purchase and sale of the Certificates and the execution
and delivery by such Originator of the documents to which it
is a party, have been duly taken, given or obtained, as the
case may be, are in full force and effect on the date hereof,
are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time
within which any appeal therefrom may be taken or review
thereof may be obtained has expired or no review thereof may
be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by
this Agreement and the Subservicing Agreement to which it is a
party and the other documents on the part of such Originator
and the performance by such Originator of its obligations
under this Agreement and the Subservicing Agreement to which
it is a party and such of the other documents to which it is a
party;
(x) The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Originators pursuant
to this Agreement are not or, with respect to the Subsequent
Mortgage Loans, will not be, subject to the bulk transfer laws
or any similar statutory provisions in effect in any
applicable jurisdiction;
(xi) The origination and collection practices used by each
Originator and the primary servicer with respect to each
Mortgage Note and Mortgage relating to the Initial Mortgage
Loans have been, and the origination and collection practices
to be used by each Originator and the primary servicer with
respect to each Mortgage Note and Mortgage relating to the
Subsequent Mortgage Loans will be, in all material respects
legal, proper, prudent and customary in the mortgage
origination and servicing business;
(xii) Each Initial Mortgage Loan was selected, and each
Subsequent Mortgage Loan will be selected, from among the
existing Mortgage Loans in the respective Originator's
portfolio at the date hereof or, in the case of the Subsequent
Mortgage Loans, at the related Subsequent Cut-off Date, in a
manner not designed to adversely affect the
Certificateholders;
(xiii) Such Originator does not believe, nor does it have
any reason or cause to believe, that it cannot perform each
and every covenant contained in this Agreement and the
Subservicing Agreement to which it is a party;
(xiv) Such Originator received fair consideration and
reasonably equivalent value or, in the case of the Subsequent
Mortgage Loans, will receive fair consideration and reasonably
equivalent value, in exchange for the sale of the interest in
the Mortgage Loans evidenced by the Certificates;
(xv) Such Originator did not sell or, in the case of the
Subsequent Mortgage Loans, will not sell, any interest in any
Mortgage Loan evidenced by the Certificates with any intent to
hinder, delay or defraud any of its respective creditors;
(xvi) Such Originator is solvent, and such Originator will
not be rendered insolvent as a result of the sale of the
Mortgage Loans to the Trust Fund or the sale of the
Certificates;
(xvii) No Certificateholder is subject to state
licensing requirements solely by virtue of holding the
Certificates;
(xviii) The Subservicing Agreement to which the Originator is
a party conforms to the requirements for a Subservicing
Agreement contained in this Agreement;
(xix) Each FHA Loan was selected from among the existing
FHA-insured Title I loans in such Originator's portfolio at
the date hereof in a manner not designed to
adversely affect the Certificateholders; and
(xx) Each Originator of an FHA Loan is authorized and
approved by the FHA for participation in the FHA Title I loan
program and holds a valid Contract of Insurance from the FHA
for such purpose.
Section 3.02 INDIVIDUAL MORTGAGE LOANS.
Each Originator hereby represents and warrants to the Trustee, the
Co-Trustee and the Certificateholders, with respect to each Initial Mortgage
Loan, as of the Closing Date and, with respect to each Subsequent Mortgage Loan,
as of the related Subsequent Transfer Date:
(a) The information with respect to each Mortgage Loan set forth in
the Mortgage Loan Schedule is true and correct;
(b) All of the original or certified documentation set forth in
Section 2.04 (including all material documents related thereto) has been or will
be delivered to the Trustee or to the Custodian on the Closing Date or, with
respect to the Subsequent Mortgage Loans, on the related Subsequent Transfer
Date, or as otherwise provided in Section 2.04;
(c) Each Initial Mortgage Loan being transferred to the Trust Fund is,
and each Subsequent Mortgage Loan to be transferred will be, a Qualified
Mortgage;
(d) Each Mortgaged Property (other than the Multifamily Properties) is
improved by a Residential Dwelling, which, to the best of the Originator's
knowledge, does not include cooperatives or mobile homes attached to a
foundation or otherwise and does not constitute other than real property under
state law; provided, however, that up to $0 aggregate principal balance of
Mortgage Loans in each of Pool I and Pool II may be secured by Mortgaged
Properties that are cooperatives or manufactured homes.
(e) Each Initial Mortgage Loan has been, and each Subsequent Mortgage
Loan will be, originated and underwritten, or purchased and re-underwritten, by
an Originator in accordance with the Representative's underwriting criteria set
forth in the Registration Statement and the Underwriting Guidelines dated August
10, 1995 (which Underwriting Guidelines are consistent with the underwriting
criteria set forth in the Registration Statement) and is being, or with respect
to the Subsequent Mortgage Loans, will be, serviced by the Servicer or one or
more Subservicers and, with respect to each Initial Mortgage Loan originated by
an Originator, there is, and with respect to each Subsequent Mortgage Loan,
there will be, only one originally executed Mortgage Note not stamped as a
duplicate copy with respect to each such Mortgage Loan;
(f) The Mortgage Note with respect to each Initial Mortgage Loan
bears, and with respect to each Subsequent Mortgage Loan will bear, a fixed
Mortgage Interest Rate with respect to the Initial Pool I Mortgage Loans,
Initial Pool III Mortgage Loans and Initial Pool IV Mortgage Loans and an
adjustable rate with respect to the Initial Pool II Mortgage Loans, which rate
shall at least equal the sum of (i) the Class Adjusted Mortgage Loan Remittance
Rate for Class A-8 in the case of the Initial Pool I Mortgage Loans, the initial
Class Adjusted Mortgage Loan Remittance Rate for Class A-10 in the case of the
Initial Pool II Mortgage Loans, the Class Adjusted Mortgage Loan Remittance Rate
for Class A-15 in the case of the Initial Pool III Mortgage Loans, and the Class
Adjusted Mortgage Loan Remittance Rate for Class A-16 in the case of the Initial
Pool IV Mortgage Loans, (ii) the rate used in calculating the Servicing Fee and
(iii) the rate used in calculating the Contingency Fee; provided, however, that
(A) up to $0 aggregate principal amount of the Initial Pool I Mortgage Loans may
be Low Interest Pool I Mortgage Loans, (B) up to $0 aggregate principal amount
of the Initial Pool III Mortgage Loans may be Low Interest Pool III Mortgage
Loans, (C) up to $0 aggregate principal amount of the Initial Pool IV Mortgage
Loans may be Low Interest Pool IV Mortgage Loans and (D) in connection with FHA
Loans, if the related Mortgagor pays the FHA Insurance Premium as a separate
amount in addition to the Monthly Payment, such extra amount shall be sufficient
to pay the related FHA Insurance Premium;
(g) (i) Except with respect to 11.0% of the Initial Pool I Mortgage
Loans and approximately 11.0% of the Subsequent Pool I Mortgage Loans, each
Mortgage Note relating to the Pool I Mortgage Loans will provide for a schedule
of substantially level and equal Monthly Payments which are, if timely paid,
sufficient to fully amortize the principal balance of such Mortgage Note on or
before its maturity date, (ii) except with respect to 0% of the Initial Pool II
Mortgage Loans and approximately 0% of the Subsequent Pool II Mortgage Loans,
each Mortgage Note relating to the Pool II Mortgage Loans will provide for a
schedule of Monthly Payments which are, if timely paid as adjusted, sufficient
to fully amortize the principal balance of such Mortgage Note on or before its
maturity date, (iii) each Mortgage Note relating to the Pool III Mortgage Loans
will provide for a schedule of substantially level and equal Monthly Payments
which are, if timely paid, sufficient to fully amortize the principal balance of
such Mortgage Note on or before its maturity date and (iv) each Mortgage Note
relating to the Pool IV Mortgage Loans will provide for a schedule of
substantially level and equal Monthly Payments which are, if timely paid,
sufficient to fully amortize the principal balance of such Mortgage Note on or
before its maturity date.
(h) Each Mortgage is, with respect to the Initial Mortgage Loans, and
will be with respect to the Subsequent Mortgage Loans, a valid and subsisting
first or second lien of record on the Mortgaged Property (except that the
Mortgages relating to no more than approximately 1.0% of the Mortgage Loans in
Pool III measured by Pool Principal Balances as of the Cut-Off Date may be more
junior liens) subject, in the case of any second or more junior Mortgage Loan,
only to any applicable Prior Liens on such Mortgaged Property and subject in all
cases to the exceptions to title set forth in the title insurance policy or the
other evidence of title enumerated in Section 2.04(d), with respect to the
related Mortgage Loan, which exceptions are generally acceptable to banking
institutions in connection with their regular mortgage lending activities, and
such other exceptions to which similar properties are commonly subject and which
do not individually, or in the aggregate, materially and adversely affect the
benefits of the security intended to be provided by such Mortgage;
(i) Immediately prior to the transfer and assignment herein
contemplated, the Originator held good and indefeasible title to, and was the
sole owner of, each Mortgage Loan conveyed by the Originator subject to no
liens, charges, mortgages, encumbrances or rights of others except as set forth
in Section 3.02(h) or other liens which will be released simultaneously with
such transfer and assignment; and immediately upon the transfer and assignment
herein contemplated, the Trustee (or, with respect to the Pool III Mortgage
Loans, the Co-Trustee) will hold good and indefeasible title, to, and be the
sole owner of, each Mortgage Loan subject to no liens, charges, mortgages,
encumbrances or rights of others except as set forth in Section 3.02(h) or other
liens which will be released simultaneously with such transfer and assignment;
(j) As of the Cut-Off Date, no Initial Mortgage Loan is 59 days or
more delinquent in payment and, except as provided in the next sentence, no
Initial Mortgage Loan has been delinquent 59 days or more as measured at the end
of any month during the 12 months immediately preceding the Cut-Off Date.
Approximately 1.0% of the Mortgage Loans in Pool I or Pool II were 59 days or
more delinquent as measured at the end of any month during the 12 months
immediately preceding the Cut-Off Date. As of the related Subsequent Cut-Off
Date, no Subsequent Mortgage Loan shall be 59 or more days delinquent;
(k) To the best of the Originator's knowledge, there is no delinquent
tax or assessment lien on any Mortgaged Property, and each Mortgaged Property is
free of material damage and is in good repair;
(l) The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(m) Except with respect to the Pool III Loans as to which no
representation is made, there is no mechanics' lien or claim for work, labor or
material affecting any Mortgaged Property which is or may be a lien prior to, or
equal with, the lien of such Mortgage except those which are insured against by
the title insurance policy referred to in Section 3.02(o) below;
(n) Each Mortgage Loan at the time it was made complied in all
material respects with applicable state and federal laws and regulations,
including, without limitation, usury, equal credit opportunity, disclosure and
recording laws;
(o) With respect to each Mortgage Loan with an original principal
balance greater than $15,000 other than any Initial Mortgage Loan which was not
originated by an Originator and other than the Pool III Mortgage Loans, a
lender's title insurance policy, issued in standard American Land Title
Association, California Land Title Association, New York Board of Title
Underwriters form, or other form acceptable in a particular jurisdiction, by a
title insurance company authorized to transact business in the state in which
the related Mortgaged Property is situated, together with a condominium
endorsement, if applicable, in an amount at least equal to the original
principal balance of such Mortgage Loan insuring the mortgagee's interest under
the related Mortgage Loan as the holder of a valid first or second mortgage lien
of record on the real property described in the Mortgage, subject only to
exceptions of the character referred to in Section 3.02(h) above, or, with
respect to any Mortgage Loan with an original principal balance less than or
equal to $15,000 or any Mortgage Loan which was not originated by an Originator
(other than the FHA Loans), some other evidence of the status of title, or other
evidence of title as enumerated in Section 2.04(d), was effective on the date of
the origination of such Mortgage Loan, and, as of the Closing Date, such policy
will be valid and thereafter such policy shall continue in full force and
effect;
(p) The improvements upon each Mortgaged Property are covered by a
valid and existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage representing coverage described in
Sections 5.07 and 5.08;
(q) If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy is in effect with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing coverage
described in Sections 5.07 and 5.08;
(r) Each Mortgage and Mortgage Note is the legal, valid and binding
obligation of the maker thereof and is enforceable in accordance with its terms,
except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law), none of which will
prevent the ultimate realization of the security provided by the Mortgage, and
all parties to each Mortgage Loan had full legal capacity to execute all
Mortgage Loan documents and convey the estate therein purported to be conveyed;
(s) The Servicer, at the direction of the related Originator, has
caused and will cause to be performed any and all acts required to be performed
to preserve the rights and remedies of the Trustee and the Co-Trustee in any
insurance policies applicable to the Mortgage Loans including, without
limitation, any necessary notifications of insurers, assignments of policies or
interests therein, and establishments of co-insured, joint loss payee and
mortgagee rights in favor of the Trustee and the Co-Trustee, and the Originator
of any FHA Loan has the authority and power to transfer to the Co-Trustee the
FHA Reserve Amount relating to the Mortgage Loans;
(t) No more than approximately 0.5%, 0.5%, 1.0% and 8.0% of the
Principal Balances of the Initial Pool I, Pool II, Pool III or Pool IV Mortgage
Loans, respectively, are secured by Mortgaged Properties located within any
single zip code area;
(u) Each original Mortgage was recorded, and all subsequent
assignments of the original Mortgage have been recorded in the appropriate
jurisdictions wherein such recordation is necessary to perfect the lien thereof
as against creditors of the Originator (or, subject to Section 2.04 hereof, are
in the process of being recorded);
(v) Each Mortgage Loan conforms, and all such Mortgage Loans in the
aggregate conform, to the description thereof set forth in the Registration
Statement;
(w) [Reserved]
(x) Approximately 15.0% and 85.0% of the Initial Pool III Mortgage
Loans (measured by outstanding principal balance as of the Closing Date) were
FHA Loans and Conventional Home Improvement Loans, respectively;
(y) All of the Initial Pool I, Initial Pool II and Initial Pool III
Mortgage Loans are Single-Family Loans (provided, however, that no more than
approximately 5.0% and 3.0% of the Initial Pool I and Initial Pool III Mortgage
Loans, measured by Pool Principal Balances of the Cut- Off Date, may be
Multifamily Loans); and, when measured by outstanding principal balance as of
the Closing Date, no more than approximately 9.0%, 7.0% and 5.0% of the Initial
Pool I, Initial Pool II and Initial Pool III Mortgage Loans, respectively, are
secured by vacation homes, secondary residences, or investment properties, less
than approximately 4.0%, 4.0% and 3.0% of the Initial Pool I, Initial Pool II
and Initial Pool III Mortgage Loans, respectively, are secured by individual
units in Low-Rise Condominiums, no more than approximately 10.0%, 10.0% and 3.0%
of the Initial Pool I, Initial Pool II and Initial Pool III Mortgage Loans,
respectively, are secured by Two-, Three- or Four-Family Houses, and none of the
Initial Pool I, Initial Pool II and Initial Pool III Mortgage Loans are secured
by individual units of other types including High-Rise Condominiums. No Initial
Mortgage Loan is secured by a mobile home or co-op;
(z) Each Pool IV Mortgage Loan is a Multifamily Loan with respect to
which no less than approximately 90% of the related Mortgaged Property, measured
by square footage, number of units and projected rent, being allocated to
residential units;
(aa) The terms of the Mortgage Note and the Mortgage have not been
impaired, altered or modified in any respect, except by a written instrument
which has been recorded, if necessary, to protect the interest of the
Certificateholders and which has been delivered to the Trustee or, with respect
to the Pool III Mortgage Loans, the Custodian. The substance of any such
alteration or modification is reflected on the Mortgage Loan Schedule and has
been approved by the primary mortgage guaranty insurer, if any;
(bb) No instrument of release or waiver has been executed in
connection with the Mortgage Loan, and no Mortgagor has been released, in whole
or in part, except in connection with an assumption agreement which has been
approved by the primary mortgage guaranty insurer, if any, and which has been
delivered to the Trustee or, with respect to the Pool III Mortgage Loans, the
Custodian;
(cc) There are no defaults in complying with the terms of the
Mortgage, and all taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or an escrow of funds has been established
in an amount sufficient to pay for every such item which remains unpaid and
which has been assessed but is not yet due and payable. The Servicer has not
advanced funds, or induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly, for the payment of
any amount required by the Mortgage, except for interest accruing from the date
of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is greater, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(dd) There is no proceeding pending or threatened for the total or
partial condemnation of the Mortgaged Property, nor is such a proceeding
currently occurring, and such property is undamaged by waste, fire, earthquake
or earth movement, windstorm, flood, tornado or other casualty, so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;
(ee) Other than with respect to the Pool III Mortgage Loans, as to
which no representation is made, all of the improvements which were included for
the purpose of determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of such property,
and no improvements on adjoining properties encroach upon the Mortgaged Property
unless any such improvements are (except with respect to those Mortgage Loans
with original principal balances which were less than $15,000 or not originated
by a Originator) stated in the title insurance policy and affirmatively insured;
(ff) To the best of the Originator's knowledge there do not exist any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can be
reasonably expected to cause private institutional investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent or adversely affect the value or marketability of the Mortgage Loan;
(gg) Other than with respect to the Pool III Mortgage Loans, as to
which no representation is made, no improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation.
All inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities and the Mortgaged Property is lawfully occupied
under applicable law;
(hh) The proceeds of the Mortgage Loan have been fully disbursed, and
there is no obligation on the part of the mortgagee to make future advances
thereunder. Any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have been
complied with. All costs, fees and expenses incurred in making or closing or
recording the Mortgage Loans were paid;
(ii) The related Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(jj) No Initial Mortgage Loan was, and no Subsequent Mortgage Loan
will be, originated under a buydown plan;
(kk) Except for the related FHA Premium Account in connection with any
FHA Loan, there is no obligation on the part of the Originator or any other
party to make payments in addition to those made by the Mortgagor;
(ll) No statement, report or other document signed by the Originator
constituting a part of the Mortgage File contains any untrue statement of fact
or omits to state a fact necessary to make the statements contained therein not
misleading;
(mm) The origination and collection practices used by the Originator
with respect to the Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage lending and servicing business
and, in the case of FHA Loans, legal, proper, prudent and customary in the Title
I mortgage lending and servicing business;
(nn) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the Certificateholders to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(oo) No Initial Mortgage Loan has, and no Subsequent Mortgage Loan
will have, a shared appreciation feature, or other contingent interest feature;
(pp) With respect to each Mortgage Loan that is not a first mortgage
loan, the related Prior Lien requires equal monthly payments, or if it bears an
adjustable interest rate, the monthly payments for the related Prior Lien may be
adjusted no more frequently than monthly; at the time of the origination of the
Mortgage Loan, the related Prior Lien was not 30 or more days delinquent;
(qq) With respect to each Mortgage Loan that is not a first mortgage
loan, either (i) no consent for the Mortgage Loan is required by the holder of
the related Prior Lien or (ii) such consent has been obtained and is contained
in the Mortgage File;
(rr) Other than with respect to the Pool III Mortgage Loans, as to
which no representation is made, with respect to each Mortgage Loan that is not
a first mortgage loan, to the best of the Originator's knowledge, the related
Prior Lien does not provide for negative amortization;
(ss) With respect to each Mortgage Loan that is not a first mortgage
loan, the maturity date of the Mortgage Loan is prior to the maturity date of
the related Prior Lien if such Prior Lien provides for a balloon payment;
(tt) The Mortgaged Property is located in the State identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
Residential Dwelling erected thereon (or, with respect to any Multifamily Loans,
a Multifamily Property erected thereon);
(uu) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (1) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2)(A) organized under the laws of such
state, or (B) qualified to do business in such state, or (C) federal savings and
loan associations or national banks having principal offices in such state, or
(D) not doing business in such state;
(vv) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event the related Mortgaged Property is sold without the prior consent of
the mortgagee thereunder;
(ww) Any future advances made prior to the Cut-Off Date have been
consolidated with the outstanding principal amount secured by the Mortgage, and
the secured principal amount, as consolidated, bears a single interest rate and
single repayment term reflected on the Mortgage Loan Schedule. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan. The Mortgage Note does not permit or obligate the Servicer to make future
advances to the Mortgagor at the option of the Mortgagor;
(xx) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;
(yy) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration;
and neither the Servicer nor the Originator has waived any default, breach,
violation or event of acceleration;
(zz) All parties to the Mortgage Note and the Mortgage had legal
capacity to execute the Mortgage Note and the Mortgage and each Mortgage Note
and Mortgage have been duly and properly executed by such parties;
(aaa) The Initial Mortgage Loan was not, and the Subsequent Mortgage
Loan will not be, selected for inclusion under this Agreement from its portfolio
of comparable loans, including, in the case of FHA Loans, comparable Title I
loans, on any basis which would have a material adverse effect on a
Certificateholder;
(bbb) All amounts received after the Cut-Off Date with respect to the
Initial Mortgage Loans have been deposited and all amounts received after the
Subsequent Cut-off Date with respect to the Subsequent Mortgage Loans will be
deposited into the applicable Principal and Interest Account and are, as of the
Closing Date with respect to the Initial Mortgage Loans, in the applicable
Principal and Interest Account;
(ccc) With respect to each Mortgage Loan (other than the Pool III
Mortgage Loans) originated by an Originator with an original principal balance
in excess of $15,000 for which the Originator conducted a drive-by appraisal
pursuant to FHLMC Form 704 or alternative FNMA Form in connection with the
origination thereof, such deposited Mortgage Loan (i) had an original principal
balance not in excess of $35,000, and (ii) has a Loan-to-Value Ratio less than
50% and/or an appraisal on FNMA/FHLMC Form 1004 was performed by the related
Originator within one year prior to the origination of such Mortgage Loan; and
(ddd) At the applicable dates of origination of the Mortgage Loans,
(i) none of the Pool I, Pool II or Pool IV Mortgage Loans, had a Loan-to-Value
Ratio which exceeded 100.0%, 100.0% and 70.0%, respectively, and (ii) for each
Pool III Mortgage Loan, after giving effect to all improvements to be made on
the related Mortgaged Property with the proceeds of such Pool III Mortgage Loan,
and based upon representations of the related Mortgagor, the value of the
related Mortgaged Property will at least be equal to the amount of such Pool III
Mortgage Loan and the outstanding amount of all other loans secured by Prior
Liens on such Mortgaged Property;
(eee) No more than approximately 20.0% and 20.0% of the Initial Pool I
and Initial Pool II Mortgage Loans, respectively (measured by outstanding
principal balance as of the Closing Date), had a Debt-to-Income Ratio exceeding
44.0%. "Debt-to-Income Ratio" is that ratio, stated as a percentage, which
results from dividing a Mortgagor's monthly debt by his gross monthly income.
"Monthly debt" includes (i) the monthly payment under the Prior Liens (which
generally includes an escrow for real estate taxes), (ii) the related Mortgage
Loan Monthly Payment (which, with respect to the Initial Pool II Mortgage Loans,
is calculated with interest based on a rate equal to the Lifetime Cap), (iii)
other installment debt service payments, including, in respect of revolving
credit debt, the required monthly payment thereon, or, if no such payment is
specified, 5.0% of the balance as of the date of calculation. "Monthly debt"
does not include any of the debt (other than revolving credit debt) described
above that matures within less than 10 months from the date of the calculation.
No more than approximately 0.50% of the Initial Pool I Mortgage Loans were
originated without verifying the Mortgagor's income;
(fff) At the applicable dates of origination, each Mortgage Loan had
an original term to maturity of no greater than 30 years;
(ggg) Each Subsequent Mortgage Loan will comply with the
representations and warranties respecting Subsequent Mortgage Loans set forth in
Section 3.01(d) of the Insurance Agreement, which representations and warranties
are incorporated herein;
(hhh) Each Initial Pool I, Initial Pool III and Initial Pool IV
Mortgage Loan bears, and each Subsequent Pool I, Subsequent Pool III and
Subsequent Pool IV Mortgage Loan will bear, a fixed rate of interest and each
Initial Pool II Mortgage Loan bears, and each Subsequent Pool II Mortgage Loan
will bear, an adjustable rate of interest;
(iii) As of the Cut-off Date, for each Pool II Mortgage Loan, the
Lifetime Cap is not lower than approximately 9.00% per annum, the Lifetime Floor
is not lower than approximately 1.00% per annum, the Gross Margin is not less
than approximately 1.00%, the related Mortgage Note does not provide for
negative amortization, limits in the amount of monthly payments or a conversion
feature, the Mortgage Interest Rate is subject to adjustment on each Change Date
to equal the sum of the LIBOR Index, or Treasury Index, as the case may be, plus
the applicable Gross Margin, subject to rounding, the Periodic Rate Cap, the
applicable Lifetime Floor and the applicable Lifetime Cap on each Change Date,
the Mortgagor's new monthly payment will be adjusted to an amount equal to the
payment which, when paid in substantially equal installments during the then
remaining term of the Pool II Mortgage Loan, would amortize fully the unpaid
principal balance of such Pool II Mortgage Loan at the then applicable Mortgage
Interest Rate without extension of the original maturity date which maturity
date is not more than 360 months after the original Due Date therefor;
(jjj) With respect to each Initial Pool II Mortgage Loan, all of the
terms of the Mortgage and Mortgage Note pertaining to interest rate adjustments,
payment adjustments and adjustments of the outstanding principal balance are
enforceable, such adjustments will not affect the priority of the Mortgage lien,
and all of the interest rate calculations have been properly calculated,
recorded, reported and applied in accordance with the Mortgage and Mortgage
Note;
(kkk) Each Initial FHA Loan is, and each Subsequent FHA Loan will be,
an FHA Title I property improvement loan (as defined in the FHA Regulations)
underwritten in accordance with applicable FHA requirements and submitted to the
FHA for insurance;
(lll) Each Initial FHA Loan has been, and each Subsequent FHA Loan
will be, submitted to the FHA for insurance pursuant to the FHA Title I loan
program and, except for no more than 25% of the Initial FHA Loans (measured by
outstanding principal balance as of the Closing Date) (the "Non-Acknowledged FHA
Loans"), each Initial FHA Loan has been acknowledged by the FHA for the FHA
Title I loan program; each Non-Acknowledged FHA Loan will be acknowledged by the
FHA within 180 days of the Closing Date and each Subsequent FHA Loan will be
acknowledged by the FHA within 180 days after the Funding Period; within 165
days of the Closing Date or, with respect to the Subsequent FHA Loans, within
165 days after the Funding Period, the Originators will inform the Certificate
Insurer, in writing, which Non- Acknowledged FHA Loans have subsequently been
acknowledged by the FHA and which have not;
(mmm) The Reserve Amount with respect to each Initial FHA Loan will be
transferred to the Co-Trustee's FHA Reserve Account within 180 days after the
Closing Date, the Reserve Amount with respect to each Subsequent FHA Loan will
be transferred to the Co-Trustee's FHA Reserve Account within 180 days after the
Funding Period, and the Originators will give the Certificate Insurer, the
Trustee, the Co-Trustee and the Rating Agencies prompt notice of their receipt
of confirmation of such transfers;
(nnn) Assuming sufficient coverage remains available in the Reserve
Amount, each Claim filed by the Claims Administrator with respect to a 90 Day
Delinquent FHA Loan will be honored by the FHA in accordance with the FHA
Regulations;
(ooo) Substantially all the proceeds of each Pool III Mortgage Loan
(including each Subsequent Pool III Mortgage Loan) have been or will be used to
acquire or to improve or protect an interest in real property that, at the
origination date of such Pool III Mortgage Loan, was the only security for such
Pool III Mortgage Loan;
(ppp) Each Subsequent Mortgage Loan will have been identified,
originated and funded on or prior to the Closing Date;
(qqq) A portion of the Pool III Mortgage Loans are governed by the FTC
holder regulation provided in 16 C.F.R. Part 433;
(rrr) All obligations of the seller or subcontractor under each Pool
III Mortgage Loan have been completed in accordance with the terms of such Pool
III Mortgage Loans as of the Closing Date, and no additional goods or services
will be, or are required to be, provided by the seller or subcontractor under
the terms of such Pool III Mortgage Loans after the Closing Date. All
improvements and other goods and services provided under each Pool III Mortgage
Loan shall have been inspected by the Originator within the time period and in
accordance to the applicable Title I regulations and prior to the Closing Date,
and evidence of such inspection shall be included in the Mortgage File;
(sss) With respect to each Pool III Mortgage Loan that is a home
improvement loan or retail installment sales contract for goods or services, no
Mortgagor has or will have a claim, counterclaim, right of rescission, set-off
or defense under any express or implied warranty or otherwise with respect to
goods or services provided under such Pool III Mortgage Loan; and
(ttt) The Mortgage and the Mortgage Note contain the entire agreement
of the parties and all obligations of the seller or subcontractor under the
related Pool III Mortgage Loan, and no other agreement defines, modifies or
expands the obligations of the seller or subcontractor under the Pool III
Mortgage Loan.
Section 3.03 PURCHASE AND SUBSTITUTION.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive delivery of the Certificates
to the Certificateholders. Upon discovery by the Representative, the Servicer,
any Subservicer, any Custodian, the Trustee, the Co- Trustee or the Certificate
Insurer of a breach of any of such representations and warranties (or, in the
case of any Subsequent Mortgage Loan, any additional representation or warranty
set forth in Section 2.01(d) of the Insurance Agreement) which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Certificateholders, or which materially and adversely affects the interests of
the Certificate Insurer, or the Certificateholders in the related Mortgage Loan
in the case of a representation and warranty relating to a particular Mortgage
Loan (notwithstanding that such representation and warranty was made to the
Representative's or Originators' best knowledge), the party discovering such
breach shall give prompt written notice to the others. Within 60 days of the
earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Representative shall (a) promptly cure such
breach in all material respects, (b) purchase such Mortgage Loan by depositing
in the applicable Principal and Interest Account, on the next succeeding
Determination Date, an amount in the manner specified in Section 2.05(b), or (c)
remove such Mortgage Loan from the Trust Fund (in which case it shall become a
Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage
Loans, provided such substitution is effected not later than the date which is
two years after the Startup Day or at such later date, if the Trustee and the
Certificate Insurer receive an Opinion of Counsel that such substitution would
not constitute a Prohibited Transaction or cause the Trust Fund to fail to
qualify as a REMIC at any time any Certificates are outstanding.
As to any Deleted Mortgage Loan for which the Representative
substitutes a Qualified Substitute Mortgage Loan or Loans, the Servicer shall
effect such substitution by delivering to the Trustee (or, with respect to the
Pool III Mortgage Loans, the Co-Trustee) a certification in the form attached
hereto as Exhibit J, executed by a Servicing Officer and the documents
constituting the Trustee's Mortgage File for such Qualified Substitute Mortgage
Loan or Loans.
The Servicer shall deposit in the applicable Principal and Interest
Account all payments received in connection with such Qualified Substitute
Mortgage Loan or Loans after the date of such substitution. Monthly Payments
received with respect to Qualified Substitute Mortgage Loans on or before the
date of substitution will be retained by the Representative on behalf of the
related Originator. The Trust Fund will own all payments received on the Deleted
Mortgage Loan on or before the date of substitution, and the Representative on
behalf of the Originators shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. The Servicer
shall give written notice to the Trustee, the Representative and the Certificate
Insurer that such substitution has taken place and shall amend the applicable
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all respects,
including Sections 2.04 and 2.05, and the Representative and the Originator
shall be deemed to have made with respect to such Qualified Substitute Mortgage
Loan or Loans, as of the date of substitution, the covenants, representations
and warranties set forth in Sections 3.01 and 3.02. On the date of such
substitution, the Representative will remit to the Servicer, and the Servicer
will deposit into the applicable Principal and Interest Account an amount equal
to the Substitution Adjustment.
In addition to the cure, purchase and substitution obligation in
Section 2.05 and this Section 3.03, the Representative shall indemnify and hold
harmless the Trust Fund, the Trustee, the Co-Trustee, the Custodian, the
Certificateholders and the Certificate Insurer against any loss, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses resulting from any claim, demand, defense
or assertion based on or grounded upon, or resulting from, a breach of the
Representative's or any Originator's representations and warranties contained in
this Agreement. It is understood and agreed that the obligations of the
Representative or any Originator set forth in Sections 2.05 and 3.03 to cure,
purchase or substitute for a defective Mortgage Loan and to indemnify the
Certificateholders, the Trustee, the Co-Trustee, the Custodian, and the
Certificate Insurer as provided in Sections 2.05 and 3.03 constitute the sole
remedies of the Trustee, the Co-Trustee, the Custodian, the Certificate Insurer
and the Certificateholders respecting a breach of the foregoing representations
and warranties.
Any cause of action against any Originator, the Servicer or the
Representative relating to or arising out of the breach of any representations
and warranties made in Sections 2.05, 3.01 or 3.02 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by any party and notice thereof
to the Representative or notice thereof by the Representative to the Trustee
(and, with respect to the Pool III Mortgage Loans, the Co-Trustee), (ii) failure
by the Representative to cure such breach or purchase or substitute such
Mortgage Loan as specified above, and (iii) demand upon the Representative by
the Trustee (and, with respect to the Pool III Mortgage Loans, the Co- Trustee)
for all amounts payable in respect of such Mortgage Loan.
For as long as the Trust Fund shall exist, the Servicer, the Trustee
and the Co-Trustee shall act in accordance herewith to assure continuing
treatment of each of REMIC I and REMIC II as a REMIC. In particular, the Trustee
and the Co-Trustee shall not (a) sell or permit the sale of all or any portion
of the Mortgage Loans or of any Permitted Instrument unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this Agreement or the
Trustee (or, with respect to a Pool III Mortgage Loan, the Trustee and the
Co-Trustee) has received an Opinion of Counsel to the effect that such sale (i)
is in accordance with a qualified liquidation as defined in Section 860F(a)(4)
of the Code and as described in Section 11.01 hereof, or (ii) would not be
treated as a prohibited transaction within the meaning of Section 860F(a)(2) of
the Code; and (b) except for the cash deposits into the Spread Account pursuant
to Section 6.05, accept any contribution to the Trust Fund after the Startup Day
without an Opinion of Counsel that such contribution is included within the
exceptions provided in Section 860G(d)(2) of the Code and therefore will not be
subject to the tax imposed by Section 860G(d)(1) of the Code.
ARTICLE IV
THE CERTIFICATES
Section 4.01 THE CERTIFICATES.
(a) The Certificates shall be substantially in the forms annexed
hereto as Exhibits B- 1, B-2, B-3 and B-4 and shall, upon original issue, be
executed and delivered by the Servicer to the Trustee for authentication and
redelivery to or upon the order of the Representative, on behalf of the
Originators, upon receipt by the Trustee of the documents specified in Section
2.04. All Certificates shall be executed on behalf of the Servicer by its
President, one of its Executive Vice Presidents or Vice Presidents, or by its
Treasurer, in the denominations specified in the definition of Percentage
Interest, and shall be authenticated on behalf of the Trustee by one of its
authorized signatories. Certificates bearing the signatures of individuals who
were at the time of the execution or authentication of the Certificates the
proper officers of the Servicer or an authorized signatory of the Trustee, as
the case may be, shall bind the Servicer or the Trustee, as the case may be,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the delivery of such Certificates or did not hold such offices
at the date of such Certificates. All Certificates issued hereunder shall be
dated the date of their authentication.
(b) REMIC II will be evidenced by (x) the REMIC II Regular
Certificates, which will be uncertificated and non-transferable and are hereby
designated as the "regular interests" in REMIC II and (y) the Class R-2
Certificates, which are hereby designated as the single "residual interest" in
REMIC II. Except as discussed below, principal and interest shall be paid on the
REMIC II Regular Certificates in the same order and priority as payments are to
be made on the Corresponding Classes of Certificates (disregarding the Class X
Certificates). The REMIC II Regular Certificates and the Class R-2 Certificates
will have the following designations and pass- through rates, and distributions
of principal and interest thereon shall be allocated to the Corresponding Class
of Certificates in the following manner:
REMIC II will be evidenced by (x) the Class II-A-1, Class II-A-1',
Class II-A-1", Class II-A-2', Class II- A-2", Class II-A-3', Class II-A-3",
Class II-A-4', Class II-A-4", Class II-A-5', Class II-A-5", Class II-A-6', Class
II-A-6", Class II-A-7', Class II-A-7", Class II-A-8', Class II-A-8", Class
II-A-9', Class II-A-9", Class II-A-10', Class II-A-10", Class II-A-11', Class
II-A-11", Class II-A-12', Class II-A-12", Class II-A-13', Class II-A-13", Class
II-A-14', Class II-A-14", Class II-A-15', Class II-A-15", Class II-A-16' and
Class II- A-16" Certificates (the "REMIC II Regular Certificates"), which will
be uncertificated and non- transferable and are hereby designated as the
"regular interests" in REMIC II and (y) the Class R-2 Certificates, which are
hereby designated as the single "residual interest" in REMIC II. Except as
discussed below, principal and interest shall be paid on the REMIC II Regular
Certificates in the same order and priority as payments are to be made on the
Corresponding Classes of Certificates as set forth in the chart below
(disregarding the payments on the Class X Certificates). However, a payment of
Net Monthly Excess Cashflow that would otherwise be paid to a Single Prime Class
will be payable to a Double Prime Class in the same manner in which the Net
Monthly Excess Cashflow is paid to the Corresponding Class (and will be accrued
and added to principal on the corresponding Single Prime Class). Principal
payments in an amount equal to the principal payments to be made on the
Corresponding Class will be allocated between Class II-A-1 Certificates and any
Single Prime and Double Prime Classes corresponding to a Corresponding Class in
the ratio that 98% of the principal balance the Corresponding Class bears to the
aggregate principal balance of such Single Prime and Double Prime Classes.
Principal payments will be allocated between the Single Prime and Double Prime
Classes pro rata based on principal. The REMIC II Regular Certificates and the
Class R-2 Certificates will have the following designations and Remittance
Rates, and distributions of principal and interest thereon shall be allocated to
the Corresponding Class of Certificates in the following manner:
<TABLE>
<CAPTION>
Corresponding Classes
OF CERTIFICATES
Allocation Allocation Allocation Allocation
REMIC II Initial Remittance of of CERTIFICATES BALANCE
RATE
Balance Rate PRINCIPAL(1) INTEREST(1)
<S> <C> <C> <C> <C>
II-A-1 $1,014,300,000 (2) (3) A-1 (4)
II-A-1' $ 663,050 (2) A-1 A-1 (5)
II-A-1" $ 663,050 (2) A-1 A-1 (5)
II-A-2' $ 863,830 (2) A-2 A-2 (5)
II-A-2" $ 863,830 (2) A-2 A-2 (5)
II-A-3' $ 964,680 (2) A-3 A-3 (5)
II-A-3" $ 964,680 (2) A-3 A-3 (5)
II-A-4' $ 538,500 (2) A-4 A-4 (5)
II-A-4" $ 538,500 (2) A-4 A-4 (5)
II-A-5' $ 479,160 (2) A-5 A-5 (5)
II-A-5" $ 479,160 (2) A-5 A-5 (5)
II-A-6' $ 364,430 (2) A-6 A-6 (5)
II-A-6" $ 364,430 (2) A-6 A-6 (5)
II-A-7' $ 448,070 (2) A-7 A-7 (5)
II-A-7" $ 448,070 (2) A-7 A-7 (5)
II-A-8' $ 278,280 (2) A-8 A-8 (5)
II-A-8" $ 278,280 (2) A-8 A-8 (5)
II-A-9' $ 400,000 (2) A-9 A-9 (5)
II-A-9" $ 400,000 (2) A-9 A-9 (5)
II-A-10' $ 3,500,000 (2) A-10 A-10 (5)
II-A-10" $ 3,500,000 (2) A-10 A-10 (5)
II-A-11' $ 773,910 (2) A-11 A-11 (5)
II-A-11" $ 773,910 (2) A-11 A-11 (5)
II-A-12' $ 395,900 (2) A-12 A-12 (5)
II-A-12" $ 395,900 (2) A-12 A-12 (5)
II-A-13' $ 276,840 (2) A-13 A-13 (5)
II-A-13" $ 276,840 (2) A-13 A-13 (5)
II-A-14' $ 159,090 (2) A-14 A-14 (5)
II-A-14" $ 159,090 (2) A-14 A-14 (5)
II-A-15' $ 194,260 (2) A-15 A-15 (5)
II-A-15" $ 194,260 (2) A-15 A-15 (5)
II-A-16' $ 100,000 (2) A-16 A-16 (5)
II-A-16" $ 100,000 (2) A-16 A-16 (5)
R-2 $ 0 N/A N/A N/A (6)
- ------------------------
1) Except as otherwise indicated, the amount of principal and
interest allocable from a REMIC II Certificate to its
Corresponding Class of Certificates on any Remittance Date
shall be 100%.
(2) The Remittance Rate on these REMIC II Certificates for any Remittance
Date shall equal the weighted average Mortgage Interest Rate of the
Mortgage Loans, based upon the then current Principal Balances of the
Mortgage Loans.
(3) Payments received with respect to principal on the II-A-1 Certificates
will be allocated to the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10,
Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16
and Class X Certificates in the manner set forth in Section 6.08.
(4) Interest in excess of the weighted average coupon of the
Single Prime and Double Prime Classes, where each Double
Prime Class is first subject to a cap and floor equal to the
Class Remittance Rate of its Corresponding Class and each
Single Prime Class is subject to a cap equal to 0%,
multiplied by the principal balance of the II-A-I, will be
allocated to the Class X Certificates.
(5) Interest in excess of the Class Remittance Rate of the Corresponding
Class will be allocated to the Class X Certificates.
(6) On each Remittance Date, any funds remaining in REMIC II after payment
of interest and principal, as designated above, will be distributed to
the Class R-2 Certificate.
</TABLE>
Section 4.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall cause to be kept at its office, or at the office
of its designated agent, a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, it shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Certificate Register shall contain the name, remittance
instructions, Class and Percentage Interest of each Certificateholder. The Bank
of New York is initially appointed Certificate Registrar for the purpose of
registering Certificates and transfer and exchanges of Certificates as herein
provided (the "Certificate Registrar").
(b) It is intended that the Class A Certificates be registered so as
to participate in a global book-entry system with the Depository, as set forth
herein. Each Class of Class A Certificates shall initially be issued in the form
of a single fully registered Certificate of such Class. The Class A Certificates
shall have an aggregate denomination equal to the following:
CLASS DENOMINATION
----- ------------
Class A-1 $ 66,305,000
Class A-2 $ 86,383,000
Class A-3 $ 96,468,000
Class A-4 $ 53,850,000
Class A-5 $ 47,916,000
Class A-6 $ 36,443,000
Class A-7 $ 44,807,000
Class A-8 $ 27,828,000
Class A-9 $ 40,000,000
Class A-10 $ 350,000,000
Class A-11 $ 77,391,000
Class A-12 $ 34,590,000
Class A-13 $ 27,684,000
Class A-14 $ 15,909,000
Class A-15 $ 19,426,000
Class A-16 $ 10,000,000
Upon initial issuance, the ownership of such Class A Certificates shall be
registered in the Register in the name of Cede & Co., or any successor thereto,
as nominee for the Depository.
The Representative and the Trustee are hereby authorized to execute
and deliver the Representation Letter with the Depository.
(c) With respect to Class A Certificates registered in the Register in
the name of Cede & Co., as nominee of the Depository, the Representative and the
Trustee shall have no responsibility or obligation to Direct or Indirect
Participants or beneficial owners for which the Depository holds Class A
Certificates from time to time as a Depository. Without limiting the immediately
preceding sentence, the Representative and the Trustee shall have no
responsibility or obligation with respect to (a) the accuracy of the records of
the Depository, Cede & Co., or any Direct or Indirect Participant with respect
to the ownership interest in the Class A Certificates, (b) the delivery to any
Direct or Indirect Participant or any other Person, other than a registered
Holder of a Class A Certificate or (c) the payment to any Direct or Indirect
Participant or any other Person, other than a registered Holder of a Class A
Certificate as shown in the Register, of any amount with respect to any
distribution of principal or interest on the Class A Certificates. No Person
other than a registered Holder of a Class A Certificate as shown in the Register
shall receive a certificate evidencing such Class A Certificate.
(d) Upon delivery by the Depository to the Trustee of written notice
to the effect that the Depository has determined to substitute a new nominee in
place of Cede & Co., and subject to the provisions hereof with respect to the
payment of distributions by the mailing of checks or drafts to the registered
Holders of Class A Certificates appearing as registered Owners in the
Certificate Register on a Record Date, the name "Cede & Co." in this Agreement
shall refer to such new nominee of the Depository.
(e) In the event that (i) the Depository or the Representative advises
the Trustee in writing that the Depository is no longer willing or able to
discharge properly its responsibilities as nominee and depository with respect
to the Class A Certificates and the Representative is unable to locate a
qualified successor or (ii) the Representative at its sole option elects to
terminate the book-entry system through the Depository, the Class A Certificates
shall no longer be restricted to being registered in the Register in the name of
Cede & Co. (or a successor nominee) as nominee of the Depository. At that time,
the Representative may determine that the Class A Certificates shall be
registered in the name of and deposited with a successor depository operating a
global book-entry system, as may be acceptable to the Representative, or such
depository's agent or designee but, if the Representative does not select such
alternative global book-entry system, then the Class A Certificates may be
registered in whatever name or names registered Holders of Class A Certificates
transferring Class A Certificates shall designate, in accordance with the
provisions hereof.
(f) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Class A Certificates are registered in the name of Cede
& Co., as nominee of the Depository, all distributions of principal and interest
on such Class A Certificates and all notices with respect to such Class A
Certificates shall be made and given, respectively, in the manner provided in
the Representation Letter.
(g) The Class R Certificates and Class X Certificates have not been
registered or qualified under the 1933 Act, or any state securities law. No
transfer, sale, pledge or other disposition of any Class R or Class X
Certificate shall be made unless such disposition is made pursuant to an
effective registration statement under the 1933 Act and effective registration
or qualification under applicable state securities laws, or is made in a
transaction which does not require such registration or qualification. In the
event that a transfer is to be made in reliance upon an exemption from the 1933
Act, the Trustee or the Certificate Registrar may require, in order to assure
compliance with the 1933 Act, that the Class R or Class X Certificateholder
desiring to effect such disposition and such Class R or Class X
Certificateholder's prospective transferee each certify to the Trustee or the
Certificate Registrar in writing the facts surrounding such disposition. Unless
the Trustee requests otherwise, such certification shall be substantially in the
form of Exhibit D hereto. In the event that such certification of facts does not
on its face establish the availability of an exemption under Rule 144A of the
1933 Act or under Section 4(2) or a comparable provision of the 1933 Act, the
Trustee shall require an Opinion of Counsel satisfactory to it that such
transfer may be made pursuant to an exemption from the 1933 Act, which Opinion
of Counsel shall not be an expense of the Trustee or of the Trust Fund. The
Representative is not obligated under this Agreement to register the Class R
Certificates under the 1933 Act or any other securities law or to take any
action not otherwise required under this Agreement to permit the transfer of
Class R or Class X Certificates without such registration or qualification.
(h) Each Person who has or who acquires any Percentage Interest in a
Class R or Class X Certificate shall be deemed by the acceptance or acquisition
of such Percentage Interest to have agreed to be bound by the following
provisions and to have irrevocably appointed the Representative or its designee
as its attorney-in-fact to negotiate the terms of any mandatory sale under
clause (v) below and to execute all instruments of transfer and to do all other
things necessary in connection with any such sale, and the rights of each Person
acquiring any Percentage Interest in a Class R or Class X Certificate are
expressly subject to the following provisions:
(i) Each Person holding or acquiring any Percentage
Interest in a Class R or Class X Certificate shall be a
Permitted Transferee and shall promptly notify the
Representative of any change or impending change in its status
as a Permitted Transferee.
(ii) No Percentage Interest in a Class R or Class X
Certificate may be transferred (including the sale to the
initial holder) and the Trustee shall not register the
transfer of a Class R or Class X Certificate unless the
Trustee and the Representative shall have been furnished with
(A) an affidavit (a "Transfer Affidavit") of the proposed
transferee in the form attached as Exhibit K (and if required
by the Transfer Affidavit, the opinion of counsel, as therein
referenced) and (B) a certificate (a "Transfer Certificate")
of the transferor to the effect that such transferor has no
actual knowledge that the proposed transferee is not a
Permitted Transferee.
(iii) Each Person holding or acquiring any Percentage
Interest in a Class R or Class X Certificate shall agree (A)
to require a Transfer Affidavit from any other Person to whom
such Person attempts to transfer its Percentage Interest in a
Class R Certificate, (B) to require a Transfer Affidavit from
any Person for whom such Person is acting as nominee, trustee
or agent in connection with any transfer of a Class R or Class
X Certificate, (C) to deliver a Transfer Certificate to the
Trustee and the Representative in connection with any such
attempted transfer and (D) not to transfer its Percentage
Interest in a Class R or Class X Certificate or to cause the
transfer of a Percentage Interest in a Class R or Class X
Certificate to any other Person if it has actual knowledge
that such Person is not a Permitted Transferee.
(iv) Any attempted or purported transfer of any Percentage
Interest in a Class R or Class X Certificate in violation of
the provisions of this Section 4.02 shall be absolutely null
and void and shall vest no rights in the purported transferee.
If any purported transferee shall become a Holder of a Class R
or Class X Certificate in violation of the provisions of this
Section 4.02, then the last preceding Permitted Transferee
shall be restored to all rights as Holder thereof retroactive
to the date of registration of transfer of such Class R or
Class X Certificate. The Trustee shall notify the
Representative upon knowledge of a Responsible Officer that
the registration of transfer of a Class R or Class X
Certificate was not in fact permitted by this Section 4.02.
The Trustee shall be under no liability to any Person for any
registration of transfer of a Class R or Class X Certificate
that is in fact not permitted by this Section 4.02 or for
making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the transfer
was registered after receipt of the related Transfer Affidavit
and Transfer Certificate. The Trustee shall be entitled but
not obligated to recover from any Holder of a Class R or
Class X Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted
Transferee, all payments made on such Class R or Class X
Certificate at and after either such time. Any such payments
so recovered by the Trustee shall be paid and delivered by the
Trustee to the last preceding Holder of such Certificate.
(v) If any purported transferee shall become a Holder
of a Class R or Class X Certificate in violation of the
restrictions in this Section 4.02, then the Representative or
its designee shall, without notice to the Holder or any prior
Holder of such Class R or Class X Certificate, as the case may
be, sell such Class R or Class X Certificate to a purchaser
selected by the Representative or its designee on such
reasonable terms as the Representative or its designee may
choose. Such purchaser may be the Representative itself or any
affiliate of the Representative. The proceeds of such sale,
net of commissions, expenses and taxes due, if any, will be
remitted by the Representative to the last preceding purported
transferee of such Class R or Class X Certificate, except that
in the event that the Representative determines that the
Holder or any prior Holder of such Class R or Class X
Certificate may be liable for any amount due under this
Section 4.02 or any other provision of this Agreement, the
Representative may withhold a corresponding amount from such
remittance as security for such claim. The terms and
conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Representative or its
designee, and it shall not be liable to any Person having a
Percentage Interest in a Class R or Class X Certificate, as
applicable, as a result of its exercise of such discretion.
No Class R or Class X Certificate or Certificates or any interest
therein shall be acquired by or on behalf of a "benefit plan investor" described
in or subject to the plan asset regulations set forth at 29 C.F.R. 2510.3-101,
unless an Opinion of Counsel is provided to the Representative and the Trustee
which establishes to their satisfaction that the transfer and/or the holding of
such Class R or Class X Certificates, as applicable, will not result in the
assets of the Trust Fund being deemed to be "plan assets" within the meaning of
Department of Labor Regulations ' 2510.3-101; subject the Trustee, the
Representative or the underwriter of the Class A Certificates, or any of their
affiliates, to the prohibited transaction rules under ERISA or excise taxes
under Section 4975 of the Code; or cause the fiduciary investment standards of
ERISA to apply to the assets of the Trust Fund.
Subject to the preceding paragraphs, upon surrender for registration
of transfer of any Certificate at such office, the Representative shall execute
in the name of the designated transferee or transferees, a new Certificate of
the same Class and Percentage Interest and dated the date of authentication by
the Trustee. The Certificate Registrar shall notify the Representative and the
Trustee of any such transfer.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations of a like
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at such office. Whenever any Certificates are so surrendered for
exchange, the Servicer shall execute, and the Trustee shall authenticate, the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(i) No service charge shall be made for any transfer or exchange of
Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates. All Certificates
surrendered for transfer and exchange shall be marked canceled by the Trustee.
Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Servicer, the Trustee and the Certificate Registrar
such security or indemnity (which may include a letter of indemnity delivered by
an insurance company) as may be required by each of them to save each of them
harmless, then, in the absence of notice to the Servicer, the Trustee and the
Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Servicer shall execute and deliver, and the Trustee shall
authenticate, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest, but bearing a number not contem poraneously outstanding. Upon the
issuance of any new Certificate under this Section 4.03, the Servicer and the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. Any duplicate Certificate issued pursuant to this
Section 4.03 shall constitute complete and indefeasible evidence of ownership in
the applicable Trust Fund, as if originally issued, whether or not the
mutilated, destroyed, lost or stolen Certificate shall be found at any time.
Section 4.04 PERSONS DEEMED OWNERS.
Prior to due presentation of a Certificate for registration of
transfer, the Servicer, the Representative, the Trustee, the Certificate Insurer
and the Certificate Registrar may treat the Person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
remittances pursuant to Section 6.07 and for all other purposes whatsoever, and
the Representative, the Servicer, the Trustee, the Certificate Insurer and the
Certificate Registrar shall not be affected by notice to the contrary.
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01 DUTIES OF THE SERVICER.
(a) It is intended that each of REMIC I and REMIC II hereunder shall
constitute, and that the affairs of each of REMIC I and REMIC II shall be
conducted so as to qualify as a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Servicer covenants and agrees that it shall act as agent (and the
Servicer is hereby appointed to act as agent) on behalf of REMIC I and REMIC II
and as Tax Matters Person on behalf of REMIC I and REMIC II, and that in such
capacities it shall: (i) prepare and file, or cause to be prepared and filed, in
a timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax
Return (Form 1066) and any other Tax Return required to be filed by REMIC I and
REMIC II using a calendar year as the taxable year for each of REMIC I and REMIC
II and using the accrual method of accounting, including, without limitation,
information reports relating to "original issue discount," as defined in the
Code, based upon the Prepayment Assumption and calculated by using the issue
price of the Certificates; (ii) make, or cause to be made, an election, on
behalf of each of REMIC I and REMIC II, to be treated as a REMIC on the federal
tax return of each of REMIC I and REMIC II for their first taxable year; (iii)
prepare and forward, or cause to be prepared and forwarded, to the Trustee, the
Certificateholders and to the Internal Revenue Service and any other relevant
governmental taxing authority all information returns or reports as and when
required to be provided to them in accordance with the REMIC Provisions and any
other provision of federal, state or local income tax laws; (iv) to the extent
that the affairs of REMIC I or REMIC II are within its control, conduct such
affairs at all times that any Certificates are outstanding so as to maintain the
status of each of REMIC I and REMIC II as a REMIC under the REMIC Provisions and
any other applicable federal, state and local laws; (v) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of either REMIC I or REMIC II or that would
cause the imposition of a prohibited transaction tax or a tax on contributions
to REMIC I or REMIC II; (vi) pay the amount of any and all federal, state, and
local taxes, including, without limitation, prohibited transaction taxes as
defined in Section 860F of the Code imposed on each of REMIC I and REMIC II when
and as the same shall be due and payable (but such obligation shall not prevent
the Servicer or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Servicer from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (vii) ensure that any such returns or reports filed on behalf of
REMIC I and REMIC II are properly executed by the appropriate person; (viii)
represent REMIC I and REMIC II in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of REMIC I and REMIC
II, enter into settlement agreements with any governmental taxing agency, extend
any statute of limitations relating to any item of REMIC I or REMIC II and
otherwise act on behalf of REMIC I and REMIC II in relation to any tax matter
involving either REMIC I and REMIC II; (ix) as provided in Section 5.11 hereof,
make available information necessary for the computation of any tax imposed (1)
on transferors of residual interests to transferees that are not Permitted
Transferees or (2) on pass-through entities, any interest in which is held by an
entity which is not a Permitted Transferee; and (x) in connection with any FHA
Loan, timely pay to the FHA the FHA Insurance Premium required to be paid for
each FHA Loan. The Trustee will cooperate with the Servicer in the foregoing
matters and will sign, as Trustee, any and all Tax Returns required to be filed
by the REMIC I and REMIC II. Notwithstanding the foregoing, at such time as the
Trustee becomes the successor Servicer, the Representative shall serve as Tax
Matters Person and as such shall perform the duties described in this Section
5.01(a) until such time as an entity is appointed to succeed the Trustee as
Servicer. The Servicer shall indemnify the Trustee and REMIC I or REMIC II, as
applicable, for any liability it may incur in connection with this Section
5.01(a) including reimbursement to the Certificate Insurer for any Insured
Payments made by the Certificate Insurer in connection with such liability, if
any, which indemnification shall survive the termination of REMIC I and REMIC
II; provided, however, that the Servicer shall not indemnify the Trustee for its
negligence or wilful misconduct.
With respect to any Mortgage Note (other than a Mortgage Note relating
to a Pool III Mortgage Loan) released by the Trustee to the Servicer or to any
Subservicer in accordance with the terms of this Agreement, other than a release
or satisfaction pursuant to Section 7.02, prior to such release, the Trustee
shall (a) complete all endorsements in blank so that the endorsement reads "Pay
to the order of The Bank of New York, as Trustee under the Pooling and Servicing
Agreement dated as of November 30, 1996, 1996-D" and (b) complete a restrictive
endorsement that reads "The Bank of New York is the holder of the mortgage note
for the benefit of the Certificateholders under the Pooling and Servicing
Agreement dated as of November 30, 1996, 1996-D" with respect to those Mortgage
Notes (other than a Mortgage Note relating to a Pool III Mortgage Loan)
currently endorsed "Pay to the order of holder."
With respect to any Mortgage Note relating to a Pool III Mortgage Loan
released by the Co-Trustee to the Servicer or any Subservicer in accordance with
the terms of this Agreement, other than a release or satisfaction pursuant to
Section 7.02 or a release to the Claims Administrator pursuant to Section
5.15(b), prior to such release, the Co-Trustee shall (a) complete all
endorsements in blank so that the endorsement reads "Pay to the order of First
Bank (N.A.), as Co- Trustee under the Pooling and Servicing Agreement dated as
of November 30, 1996, 1996-D" and (b) complete a restrictive endorsement that
reads "First Bank (N.A.) is the holder of the mortgage note for the benefit of
the Certificateholders under the Pooling and Servicing Agreement dated as of
November 30, 1996, 1996-D" with respect to those Mortgage Notes relating to Pool
III Mortgage Loans currently endorsed "Pay to the order of Holder."
(b) The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans and shall have full power and authority, acting
alone, to do any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this Agreement. The Servicer may enter into Subservicing
Agreements for any servicing and administration of Mortgage Loans with any
institution which is in compliance with the laws of each state necessary to
enable it to perform its obligations under such Subservicing Agreement and (x)
has (i) been designated an approved Seller- Servicer by FHLMC or FNMA for first
and second mortgage loans and (ii) has a net worth of at least $5,000,000 or (y)
is an Originator or another affiliate of the Servicer. The Servicer shall give
notice to the Certificate Insurer of the appointment of any Subservicer. Any
such Subservicing Agreement shall be consistent with and not violate the
provisions of this Agreement. The Servicer shall be entitled to terminate any
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement and to either itself directly service the related
Mortgage Loans or enter into a Subservicing Agreement with a successor
subservicer which qualifies hereunder.
(c) Notwithstanding any Subservicing Agreement, any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and Subservicer or reference to actions taken through a Subservicer or
otherwise, the Servicer shall remain obligated and primarily liable to the
Trustee, the Certificateholders and the Certificate Insurer for the servicing
and administering of the Mortgage Loans in accordance with the provisions of
this Agreement without diminution of such obligation or liability by virtue of
such Subservicing Agreements or arrangements or by virtue of indemnification
from the Subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Mortgage Loans. For purposes of this Agreement, the Servicer shall be deemed to
have received payments on Mortgage Loans when any Subservicer has received such
payments. The Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Servicer by such Subservicer, and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
(d) Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Servicer alone, and the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 5.01(e).
(e) In the event the Servicer shall for any reason no longer be the
Servicer (including by reason of an Event of Default), the Trustee or its
designee shall, subject to Section 10.02 hereof, thereupon assume all of the
rights and obligations of the Servicer under each Subservicing Agreement that
the Servicer may have entered into, unless the Trustee is then permitted and
elects to terminate any Subservicing Agreement in accordance with its terms. The
Trustee, its designee or the successor servicer for the Trustee shall be deemed
to have assumed all of the Servicer's interest therein and to have replaced the
Servicer as a party to each Subservicing Agreement to the same extent as if the
Subservicing Agreements had been assigned to the assuming party, except that the
Servicer shall not thereby be relieved of any liability or obligations under the
Subservicing Agreements. The Servicer at its expense and without right of
reimbursement therefor, shall, upon request of the Trustee, deliver to the
assuming party all documents and records relating to each Subservicing Agreement
and the Mortgage Loans then being serviced and an accounting of amounts
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the Subservicing Agreements to the assuming
party.
(f) Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's determination such waiver,
modification, postponement or indulgence is not materially adverse to the
interests of the Class A Certificateholders or the Certificate Insurer,
provided, however, that (unless (x) the Mortgagor is in default with respect to
the Mortgage Loan, or such default is, in the judgment of the Servicer, imminent
and the Servicer obtains written consent of the Certificate Insurer and (y) the
Servicer determines that any modification would not be considered a new mortgage
loan for federal income tax purposes) the Servicer may not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, defer (subject to Section 5.12), or forgive the payment of any
principal or interest (unless in connection with the liquidation of the related
Mortgage Loan), or extend the final maturity date on such Mortgage Loan. No
costs incurred by the Servicer or any Subservicer in respect of Servicing
Advances shall for the purposes of distributions to Certificateholders be added
to the amount owing under the related Mortgage Loan. Without limiting the
generality of the foregoing, and subject to the consent of the Certificate
Insurer, the Servicer shall continue, and is hereby authorized and empowered, to
execute and deliver on behalf of the Trustee and each Certificateholder, all
instruments of satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Properties. If reasonably required by
the Servicer, the Trustee shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties under this Agreement.
The Servicer, in servicing and administering the Mortgage Loans, shall
employ or cause to be employed procedures (including collection, foreclosure and
REO Property management procedures) and exercise the same care that it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, in accordance with accepted second mortgage servicing
practices (or, in the case of FHA Loans, in accordance with accepted Title I
servicing practices or, in the case of Multifamily Loans, in accordance with
accepted multifamily loan servicing practices) of prudent lending institutions
and giving due consideration to the Certificate Insurer's and the
Certificateholders' reliance on the Servicer.
(g) On and after such time as the Trustee and the Co-Trustee receive
the resignation of, or notice of the removal of, the Servicer from its rights
and obligations under this Agreement, and with respect to resignation pursuant
to Section 9.04, after receipt of the Opinion of Counsel required pursuant to
Section 9.04, the Trustee or its designee (or, with respect to the Pool III
Mortgage Loans, the Co-Trustee or its designee) shall assume all of the rights
and obligations of the Servicer, subject to Section 10.02 hereof. The Servicer
shall, upon request of the Trustee but at the expense of the Servicer, deliver
to the Trustee (or, with respect to the Pool III Mortgage Loans, the Custodian)
all documents and records (including computer tapes and diskettes) relating to
the Mortgage Loans and an accounting of amounts collected and held by the
Servicer and otherwise use its best efforts to effect the orderly and efficient
transfer of servicing rights and obligations to the assuming party.
(h) In the event that any tax is imposed on REMIC I or REMIC II, such
tax shall be charged against amounts otherwise distributable to the Holders of
the Class R-1 or Class R-2 Certificates, respectively. Notwithstanding anything
to the contrary contained herein, the Servicer is hereby authorized to retain
from the Pool Remaining Amount Available for the respective Pool sufficient
funds to reimburse the Servicer for the payment of such tax (to the extent that
the Servicer has paid any such tax and has not been previously reimbursed or
indemnified therefor). The Servicer agrees to first seek indemnification for any
such tax payment from any indemnifying parties before reimbursing itself from
amounts otherwise distributable to the Holders of the Class R- 1 or Class R-2
Certificates.
(i) After the Closing Date, the Servicer shall confirm, or cause to be
confirmed, whether all on-site or off-site improvements on the Mortgaged
Properties relating to FHA Loans have been completed and, if such improvements
have not been completed, to submit the appropriate filings to the FHA.
Section 5.02 LIQUIDATION OF MORTGAGE LOANS.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 5.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Servicer shall take such action as it shall deem to
be in the best interests of the Certificate Insurer and the Certificateholders,
as the case may be. The Servicer shall foreclose upon or otherwise comparably
effect the ownership in the name of the Trustee for the benefit of the
Certificateholders, as the case may be, of Mortgaged Properties relating to
defaulted Mortgage Loans as to which no satisfactory arrangements can be made
for collection of delinquent payments in accordance with the provisions of
Section 5.10 and, in the case of FHA Loans, for which a Claim is not required to
be submitted to the FHA pursuant to Section 5.15. In connection with such
foreclosure or other conversion, the Servicer shall exercise collection and
foreclosure procedures with the same degree of care and skill in its exercise or
use as it would exercise or use under the circumstances in the conduct of its
own affairs. The Servicer shall take into account the existence of any hazardous
substances, hazardous wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability Act, the
Resource Conservation and Recovery Act of 1976, or other federal, state or local
environmental legislation, on a Mortgaged Property in determining whether to
foreclose upon or otherwise comparably convert the ownership of a Mortgaged
Property. Any amounts advanced in connection with such foreclosure or other
action shall constitute "Servicing Advances."
After a Mortgage Loan has become a Liquidated Mortgage Loan, the
Servicer shall promptly prepare and forward to the Trustee, the Certificate
Insurer and, upon request, any Certificateholder, a Liquidation Report, in the
form attached hereto as Exhibit N, detailing the Liquidation Proceeds received
from the Liquidated Mortgage Loan, expenses incurred with respect thereto, and
any Realized Loss incurred in connection therewith.
Section 5.03 ESTABLISHMENT OF PRINCIPAL AND INTEREST ACCOUNTS;
DEPOSITS IN PRINCIPAL AND INTEREST ACCOUNTS.
(a) The Servicer shall cause to be established and maintained one or
more Principal and Interest Accounts for the Trust Fund, in one or more
Designated Depository Institutions, in the form of time deposit or demand
accounts, which may be interest-bearing or such accounts may be trust accounts
wherein the moneys therein are invested in Permitted Instruments, titled "The
Money Store Inc., in trust for the registered holders of The Money Store Asset
Backed Certificates, 1996-D, Class A, Class X, Class R and various Mortgagors."
Each such Principal and Interest Account shall be insured by the BIF or SAIF
administered by the FDIC to the maximum extent provided by law. The creation of
any Principal and Interest Account shall be evidenced by a letter agreement in
the form of Exhibit C hereto.
A copy of such letter agreement shall be furnished to the Trustee, the
Certificate Insurer and, upon request, any Certificateholder.
(b) The Servicer and each Subservicer shall deposit without
duplication (within 24 hours of receipt thereof) in the applicable Principal and
Interest Account and retain therein:
(i) all payments received after the Cut-Off Date on account
of principal on the Pool I, Pool II, Pool III or Pool IV
Mortgage Loans, as the case may be, including all Excess
Payments, Principal Prepayments and Curtailments received
after the Cut-Off Date and all payments in respect of the
applicable FHA Insurance Premium;
(ii) all payments received after the Cut-Off Date on account
of interest on the Pool I, Pool II, Pool III or Pool IV
Mortgage Loans, as the case may be;
(iii) all Net Liquidation Proceeds received with respect to
the Pool I, Pool II, Pool III or Pool IV Mortgage Loans, as
the case may be;
(iv) all Insurance Proceeds received with respect to the
Pool I, Pool II, Pool III or Pool IV Mortgage Loans, as the
case may be (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property, or to
be released to the Mortgagor in accordance with customary
second mortgage servicing procedures);
(v) all Released Mortgaged Property Proceeds received with
respect to the Pool I, Pool II, Pool III or Pool IV Mortgage
Loans, as the case may be;
(vi) any amounts paid in connection with the purchase of any
Pool I, Pool II, Pool III or Pool IV Mortgage Loan, as the
case may be, and the amount of any Substitution Adjustment
received with respect to the Pool I, Pool II, Pool III or Pool
IV Mortgage Loans, as the case may be, paid pursuant to
Sections 2.05 and 3.03;
(vii) any amount required to be deposited in the applicable
Principal and Interest Account pursuant to Section 5.04, 5.08,
5.10 or 5.15(c); and
(viii) the amount of any credit life insurance premium refund
which is not due to the related Mortgagor.
Also, for each Mortgage Loan delivered to the Trustee or Co-Trustee on
the Closing Date that was originated on or after December 1, 1996, the Servicer
shall deposit in the applicable Principal and Interest Account 30 days' interest
on the original principal balance of each such Mortgage Loan calculated at the
applicable Mortgage Interest Rate.
(c) The foregoing requirements for deposit in the Principal and
Interest Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, the Servicing Fee and the
Contingency Fee with respect to each Mortgage Loan, and payments in the nature
of prepayment penalties or premiums, late payment charges and assumption fees,
to the extent received and permitted by Sections 7.01 and 7.03, together with
the difference between any Liquidation Proceeds and the related Net Liquidation
Proceeds, need not be deposited by the Servicer in the Principal and Interest
Account.
(d) Any interest earnings on funds held in the Principal and Interest
Account paid by a Designated Depository Institution shall be for the account of
the Servicer and may only be withdrawn from the applicable Principal and
Interest Account by the Servicer immediately following its monthly remittance of
the Pool Available Remittance Amounts for the related Pool to the Trustee. Any
reference herein to amounts on deposit in the Principal and Interest Account
shall refer to amounts net of such investment earnings.
Section 5.04 PERMITTED WITHDRAWALS FROM THE PRINCIPAL AND INTEREST
ACCOUNTS.
The Servicer shall withdraw funds from the Principal and Interest
Accounts for the following purposes:
(a) to effect the remittance to the Trustee on each Determination Date
as follows: the portion of the Excess Spread relating to the Mortgage Loans of
the related Pool and the portion of the Pool Available Remittance Amounts of the
related Pool, that are net of Compensating Interest and Monthly Advances for the
related Remittance Date to the Trustee for deposit in the Certificate Account.
For the purposes of this Section 5.04(a), the calculation of the Pool Available
Remittance Amounts shall be made without reference to the actual deposit of
funds in the respective Certificate Accounts;
(b) to reimburse itself for any accrued unpaid Servicing Fees, unpaid
Contingency Fees, unreimbursed Monthly Advances and for unreimbursed Servicing
Advances to the extent that funds relating to such amount have been deposited in
the applicable Principal and Interest Account (and not netted from Monthly
Payments received). The Servicer's right to reimbursement for unpaid Servicing
Fees, unpaid Contingency Fees and, except as provided in the following sentence,
Servicing Advances and Monthly Advances shall be limited to Liquidation
Proceeds, Released Mortgaged Property Proceeds, Insurance Proceeds and such
other amounts as may be collected by the Servicer from the Mortgagor or
otherwise relating to the Mortgage Loan in respect of which such unreimbursed
amounts are owed. The Servicer's right to reimbursement for Servicing Advances
and Monthly Advances in excess of such amounts shall be limited to any late
collections of interest received on the related Pool of Mortgage Loans,
generally, including Liquidation Proceeds, Released Mortgaged Property Proceeds
and Insurance Proceeds and any other amounts which would otherwise be
distributed to the Class X or Class R Certificateholders; PROVIDED, HOWEVER,
that the Servicer's right to such reimbursement pursuant hereto shall be
subordinate to the rights of the applicable Class A Certificateholders and the
right of the Certificate Insurer to receive the Pool Carry-Forward Amount of the
related Pool;
(c) to withdraw any amount received from a Mortgagor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;
(d) (i) to make investments in Permitted Instruments and (ii) to pay
to itself, as permitted by Section 5.03(d), interest paid in respect of
Permitted Instruments or by a Designated Depository Institution on funds
deposited in the applicable Principal and Interest Account;
(e) to withdraw any funds deposited in the applicable Principal and
Interest Account that were not required to be deposited therein or were
deposited therein in error;
(f) (i) to pay itself servicing compensation pursuant to Section 7.03
hereof or interest as permitted under the definition of Excess Proceeds or (ii)
to pay the Remainder Excess Spread Amount with respect to any Remittance Date to
itself and/or the Representative for any Reimbursable Amounts and the remainder
to the Trustee for remittance to the Class X Certificate holders, as the case
may be;
(g) to withdraw amounts required to be deposited into the Servicing
Account pursuant to Section 6.15(b).
(h) to clear and terminate each Principal and Interest Account upon
the termination of the related Trust Fund.
So long as no default or Event of Default shall have occurred and be
continuing, and consistent with any requirements of the Code, the Principal and
Interest Account shall either be maintained as an interest-bearing accounts
meeting the requirements set forth in Section 5.03(a), or the funds held therein
may be invested by the Servicer (to the extent practicable) in Permitted
Instruments. In either case, funds in the Principal and Interest Account must be
available for withdrawal without penalty, and any Permitted Instruments must
mature not later than the Business Day immediately preceding the Determination
Date next following the date of such investment (except that if such Permitted
Instrument is an obligation of the institution that maintains such account, then
such Permitted Instrument shall mature not later than such Determination Date)
and shall not be sold or disposed of prior to its maturity. All Permitted
Instruments must be held by or registered in the name of "The Money Store Inc.
in trust for the registered holders of The Money Store Asset Backed
Certificates, Series 1996-D." All interest or other earnings from funds on
deposit in the Principal and Interest Account (or any Permitted Instruments
thereof) shall be the exclusive property of the Servicer, and may be withdrawn
from either Principal and Interest Account pursuant to clause (d)(ii) above. The
amount of any losses incurred in connection with the investment of funds in the
applicable Principal and Interest Account in Permitted Instruments shall be
deposited in the applicable Principal and Interest Account by the Servicer from
its own funds immediately as realized without reimbursement therefor.
Section 5.05 PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES.
With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting fire and hazard insurance coverage.
With respect to each Mortgage Loan which is a first Mortgage Loan, or
as to which the Servicer has advanced the outstanding principal balance of any
Prior Lien pursuant to Section 5.14 or as to which the Servicer maintains escrow
accounts, the Servicer shall maintain accurate records reflecting the status of
ground rents, taxes, assessments, water rates and other charges which are or may
become a lien upon the Mortgaged Property and the status of primary mortgage
guaranty insurance premiums, if any, and fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in any escrow account which shall have been estimated and accumulated
by the Servicer in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage (provided, however, that to the extent the Servicer
advances its own funds, such advances shall constitute "Servicing Advances"). To
the extent that a Mortgage does not provide for escrow payments, the Servicer
shall determine that any such payments are made by the Mortgagor at the time
they first become due. Notwithstanding anything contained herein to the
contrary, the Servicer may choose not to make the payments described above on a
timely basis, provided that collections on the related Mortgage Loan that are
required to be remitted to the Trust Fund would not be reduced, as a result of
such failure to timely pay, from the amount that would otherwise be remitted to
the Trust Fund; provided further, however, that this provision shall not have
the effect of permitting the Servicer to take, or fail to take, any action in
respect of the payments described herein that would adversely affect the
interest of the Trust Fund in any Mortgaged Property.
Section 5.06 TRANSFER OF ACCOUNTS.
The Servicer may, upon written prior notice to the Trustee and the
Certificate Insurer, transfer the Principal and Interest Account to a different
Designated Depository Institution.
Section 5.07 MAINTENANCE OF HAZARD INSURANCE.
The Servicer shall cause to be maintained, subject to the provisions
of Section 5.08 hereof, fire and hazard insurance with extended coverage
customary in the area where the Mortgaged Property is located, in an amount
which is at least equal to the least of (a) the outstanding principal balance
owing on the Mortgage Loan and any Prior Lien, (b) the full insurable value of
the premises securing the Mortgage Loan and (c) the minimum amount required to
compensate for damage or loss on a replacement cost basis. If the Mortgaged
Property is in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available) the Servicer will cause to be purchased a flood insurance
policy with a generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (i) the outstanding principal balance of the
Mortgage Loan and any Prior Lien, (ii) the full insurable value of the Mortgaged
Property, or (iii) the maximum amount of insurance available under the National
Flood Insurance Act of 1968, as amended. The Servicer shall also maintain, to
the extent such insurance is available, on REO Property, fire and hazard
insurance in the amounts described above, liability insurance and, to the extent
required and available under the National Flood Insurance Act of 1968, as
amended, flood insurance in an amount equal to that required above. Any amounts
collected by the Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the Mortgaged Property, or to be
released to the Mortgagor in accordance with customary second mortgage servicing
procedures) shall be deposited in the applicable Principal and Interest Account,
subject to withdrawal pursuant to Section 5.04. It is understood and agreed that
no earthquake or other additional insurance need be required by the Servicer of
any Mortgagor or maintained on REO Property, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. All policies required hereunder shall be
endorsed with standard mortgagee clauses with losses payable to the Servicer.
Section 5.08 MAINTENANCE OF MORTGAGE IMPAIRMENT INSURANCE POLICY.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against fire and hazards of extended coverage on all of the
Mortgage Loans, then, to the extent such policy names the Trustee or the
Co-Trustee on behalf of the Certificateholders as loss payee and provides
coverage in an amount equal to the aggregate unpaid principal balance on the
Mortgage Loans without co-insurance, and otherwise complies with the
requirements of Section 5.07, the Servicer shall be deemed conclusively to have
satisfied its obligations with respect to fire and hazard insurance coverage
under Section 5.07, it being understood and agreed that such blanket policy may
contain a deductible clause, in which case the Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with Section 5.07, and there shall have been a loss which would have
been covered by such policy, deposit in the applicable Principal and Interest
Account from the Servicer's own funds the difference, if any, between the amount
that would have been payable under a policy complying with Section 5.07 and the
amount paid under such blanket policy. Upon the request of the Certificate
Insurer, the Trustee, the Co-Trustee or any Certificateholder, the Servicer
shall cause to be delivered to the Trustee, the Co-Trustee or such
Certificateholder, as the case may be, a certified true copy of such policy. The
current issuer of such policy is Lloyds of London.
Section 5.09 FIDELITY BOND.
The Servicer shall maintain with a responsible company, and at its own
expense, a blanket fidelity bond and an errors and omissions insurance policy,
in a minimum amount equal to $1,500,000, and a maximum deductible of $100,000,
if commercially available, with coverage on all employees acting in any capacity
requiring them to handle funds, money, documents or papers relating to the
Mortgage Loans ("Servicer Employees"). The fidelity bond shall insure the
Trustee, the Co-Trustee and their respective officers, and employees, against
losses resulting from forgery, theft, embezzlement or fraud, by such Servicer
Employees. The errors and omissions policy shall insure against losses resulting
from the errors, omissions and negligent acts of such Servicer Employees. No
provision of this Section 5.09 requiring such fidelity bond and errors and
omissions insurance shall relieve the Servicer from its duties as set forth in
this Agreement. Upon the request of the Trustee, the Co-Trustee, the Certificate
Insurer or any Certificateholder, the Servicer shall cause to be delivered to
the Trustee, the Co-Trustee, the Certificate Insurer or such Certificateholder a
certified true copy of such fidelity bond and insurance policy. The current
issuer of such fidelity bond and insurance policy is National Union Fire
Insurance Company of Pittsburgh, Pennsylvania.
Section 5.10 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure (an "REO Property"), the deed or
certificate of sale shall be taken in the name of the Trustee (or, with respect
to the Pool III Mortgage Loans, the Co-Trustee) for the benefit of the Class A
Certificateholders.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Certificate Insurer solely for the
purpose of its prudent and prompt disposition and sale. The Servicer shall,
either itself or through an agent selected by the Servicer, manage, conserve,
protect and operate the REO Property in the same manner that it manages,
conserves, protects and operates other foreclosed property for its own account,
and in the same manner that similar property in the same locality as the REO
Property is managed. The Servicer shall attempt to sell the same (and may
temporarily rent the same) on such terms and conditions as the Servicer deems to
be in the best interest of the Certificate Insurer and the Pool I, Pool II, Pool
III or Pool IV Certificateholders, as the case may be.
The Servicer shall cause to be deposited in the applicable Principal
and Interest Account, no later than five Business Days after the receipt
thereof, all revenues received with respect to the conservation and disposition
of the related REO Property net of funds necessary for the proper operation,
management and maintenance of the REO Property and the fees of any managing
agent acting on behalf of the Servicer.
The disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interest of the Pool I, Pool II, Pool III or Pool IV
Certificateholders, as the case may be and the Certificate Insurer. The proceeds
of sale of the REO Property shall be promptly deposited in the Principal and
Interest Account as received from time to time and, as soon as practicable
thereafter, the expenses of such sale shall be paid, the Servicer shall, subject
to Section 5.04, reimburse itself for any related unreimbursed Servicing
Advances, unpaid Servicing Fees, unpaid Contingency Fees and unreimbursed
Monthly Advances, and the Servicer shall deposit in the Principal and Interest
Account the net cash proceeds of such sale to be distributed to the Pool I, Pool
II, Pool III or Pool IV Certificateholders, as the case may be, in accordance
with Section 6.08 hereof.
In the event any Mortgaged Property is acquired as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property within two years after its
acquisition unless the Servicer shall have received an Opinion of Counsel also
addressed to the Certificate Insurer to the effect that the holding of such
Mortgaged Property subsequent to two years after its acquisition will not result
in the imposition of taxes on "prohibited transactions" as defined in section
860F of the Code or cause the Trust Fund to fail to qualify as a REMIC at any
time that any Class A Certificates are outstanding. Notwithstanding any other
provision of this Agreement, no Mortgaged Property acquired by the Servicer
pursuant to this Section shall be rented (or allowed to continue to be rented)
or otherwise used for the production of income by or on behalf of the Trust
Fund, and no construction shall take place on such Mortgaged Property, in such a
manner or pursuant to any terms that would cause such Mortgaged Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or result in the receipt by the Trust Fund of any "income from
non-permitted assets" which is subject to taxation within the meaning of
Sections 860G(c) and 857(b)(4)(B) of the Code. If a period greater than two
years is permitted under this Agreement and is necessary to sell any REO
Property, the Servicer shall give appropriate notice to the Trustee and the
Certificate Insurer (and, with respect to a Pool III Mortgage Loan, the Co-
Trustee) and shall report monthly to the Trustee (and, with respect to a Pool
III Mortgage Loan, the Co-Trustee) as to the progress being made in selling such
REO Property.
Section 5.11 CERTAIN TAX INFORMATION.
The Servicer shall furnish (a) any information which may be required
under the Code including the computation of the present value of the "excess
inclusions" (as defined in Section 860E of the Code) with respect to any
transfer of a Class R Certificate, and, upon request, shall provide such
information to any Holder of a Class R Certificate and to the Internal Revenue
Service within 60 days of such request for a reasonable fee and (b) the
information required to be furnished pursuant to Sections 1.860F-4 and 1.6049-7
of the Regulations.
Section 5.12 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement, comply with
the terms and provisions of any applicable hazard insurance policy. Consistent
with the foregoing, the Servicer may in its discretion waive or permit to be
waived any late payment charge, prepayment charge, assumption fee or any penalty
interest in connection with the prepayment of a Mortgage Loan or any other fee
or charge which the Servicer would be entitled to retain hereunder as servicing
compensation and extend the due date for payments due on a Mortgage Note for a
period (with respect to each payment as to which the due date is extended) not
greater than 125 days after the initially scheduled due date for such payment
provided that the Servicer determines such extension would not be considered a
new mortgage loan for federal income tax purposes. In the event the Servicer
shall consent to the deferment of the due dates for payments due on a Mortgage
Note, the Servicer shall nonetheless make payment of any required Monthly
Advance with respect to the payments so extended to the same extent as if such
installment were due, owing and delinquent and had not been deferred, and shall
be entitled to reimbursement therefor in accordance with Section 5.04(b) hereof.
Section 5.13 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE MORTGAGE LOANS.
The Servicer shall provide to the Trustee, the Co-Trustee, the
Certificateholders, the Certificate Insurer, the FDIC, the Office of Thrift
Supervision and the supervisory agents and examiners of each of the foregoing
access to the documentation regarding the Mortgage Loans required by applicable
local, state and federal regulations, such access being afforded without charge
but only upon reasonable request and during normal business hours at the offices
of the Servicer designated by it.
Section 5.14 SUPERIOR LIENS.
The Servicer shall file of record a request for notice of any action
by a superior lienholder under a Prior Lien for the protection of the Trustee's
interest (or, with respect to a Pool III Mortgage Loan, the Co-Trustee), where
permitted by local law and whenever applicable state law does not require that a
junior lienholder be named as a party defendant in foreclosure proceedings in
order to foreclose such junior lienholder's equity of redemption. The Servicer
must also notify any superior lienholder in writing of the existence of the
Mortgage Loan and request notification of any action (as described below) to be
taken against the Mortgagor or the Mortgaged Property by the superior
lienholder.
If the Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by any Prior Lien,
or has declared or intends to declare a default under the mortgage or the
promissory note secured thereby, or has filed or intends to file an election to
have the Mortgaged Property sold or foreclosed, the Servicer shall take, on
behalf of the Trust Fund, whatever actions are necessary to protect the
interests of the related Certificateholders and the Certificate Insurer, and/or
to preserve the security of the related Mortgage Loan, subject to the
application of the REMIC Provisions. The Servicer shall immediately notify the
Trustee and the Certificate Insurer (and, with respect to a Pool III Mortgage
Loan, the Co-Trustee) of any such action or circumstances. The Servicer will
advance the necessary funds to cure the default or reinstate the superior lien,
if such advance is in the best interests of the Certificate Insurer and the
related Certificateholders. The Servicer shall thereafter take such action as is
necessary to recover the amount so advanced.
Section 5.15 DUTIES OF THE CLAIMS ADMINISTRATOR.
(a) In connection with each FHA Loan, the Representative, the
Servicer, the Claims Administrator and the Originators will comply at all times
with the provisions of Title I and the rules and regulations promulgated
thereunder in servicing each FHA Loan and making claims for reimbursement with
respect to each FHA Loan, and will at all times hold a valid Contract of
Insurance from the FHA for such purposes (unless such Contract of Insurance is
terminated so as not to affect the obligation of FHA to provide insurance
coverage with respect to the FHA Loans).
(b) If any FHA Loan becomes a 90 Day Delinquent Pool III Loan, and if
sufficient coverage is available in the Reserve Amount to make an FHA Payment
with respect to such FHA Loan, the Claims Administrator may, in its sole
discretion, during any subsequent Due Period, determine to file a Claim with the
FHA with respect to such 90 Day Delinquent Pool III Loan. If the Claims
Administrator determines to file such a Claim, the Claims Administrator will
notify the Co-Trustee and the Custodian no later than the Determination Date
following such determination by an Officer's Certificate in the form of Exhibit
J-1 hereto and shall request delivery of the related Trustee's Mortgage File.
Upon receipt of such certification and request, the Custodian shall, no later
than the related Remittance Date, release to the Claims Administrator the
related Trustee's Mortgage File and the Co-Trustee and the Custodian shall
execute and deliver such instruments necessary to enable the Claims
Administrator to file a Claim with the FHA on behalf of the Co-Trustee. Within
120 days of its receipt of the related Trustee's Mortgage File, the Claims
Administrator shall, in its sole discretion, either file a Claim with the FHA
for an FHA Payment with respect to such 90 Day Delinquent Pool III Loan or, if
the Claims Administrator determines not to file such a Claim, return to the
Custodian on behalf of the Co-Trustee the related Trustee's Mortgage File.
(c) With respect to any 90 Day Delinquent Pool III Loan transferred to
the Claims Administrator pursuant to clause (b) above, the Claims Administrator
shall deposit (or, if the Claims Administrator is not also the Servicer, the
Claims Administrator shall instruct the Servicer to deposit) in the Principal
and Interest Account within 24 hours of receipt the following amounts (such
amounts to be net of any amounts that would be reimbursable to the Servicer
under Section 5.04(b) with respect to amounts in the Principal and Interest
Account): (i) any FHA Payments; (ii) the amount, if any, by which the FHA
Payment was reduced in accordance with FHA Regulations due to the Claims
Administrator enforcing a lien on the Mortgaged Property prior to the lien of
the related 90 Day Delinquent Pool III Loan; and (iii) any principal and
interest payments received with respect to a 90 Day Delinquent Pool III Loan
after the Due Period in which the FHA Loan is transferred to the Claims
Administrator and before either the related FHA Payment is paid or the related
Trustee's Mortgage File is returned to the Co-Trustee on behalf of the Trustee,
as the case may be (the amounts referred to in (ii) and (iii) above are
referenced to herein as "Related Payments").
(d) If an FHA Loan becomes a 90 Day Delinquent Pool III Loan when
there is insufficient coverage in the Reserve Amount, or if the Claims
Administrator determines not to file a Claim with the FHA with respect to such
90 Day Delinquent Pool III Loan, the Co-Trustee will not transfer such FHA Loan
to the Claims Administrator, no Claim will be made to the FHA and the Servicer
may take other action, including the commencement of foreclosure proceedings, on
the related Mortgaged Property.
(e) If a Claim is rejected by the FHA and if the Claims Administrator
is no longer The Money Store Inc., the Claims Administrator shall promptly
notify the Servicer and the Representative of such rejection. Further, if a
Claim is rejected by the FHA, other than as a result of depletion of the Reserve
Amount, the related Originator shall be deemed to have breached its
representation and warranty contained in Section 3.02 (nnn) and the
Representative shall be required to repurchase the related 90 Day Delinquent
Pool III Loan by depositing in the Principal and Interest Account, on the next
succeeding Determination Date, an amount and in the manner specified in Section
2.05(b).
Section 5.16 CO-TRUSTEE NOT TO HOLD OTHER FHA INSURED TITLE I LOANS.
For so long as any Certificates remain outstanding under this
Agreement, the Co- Trustee shall not own, whether as a result of its origination
or by purchase, in its own name or in any trust capacity, any other loans
insured by the FHA under the Title I program other than the FHA Loans; PROVIDED,
HOWEVER, that the Co-Trustee may own other loans insured by the FHA under the
Title I program if such loans (i) were originated or purchased by the
Originators or their affiliates, (ii) are part of a pool formed for the purpose
of issuing certificates and (iii) such certificates are insured by the
Certificate Insurer and receive from each Rating Agency the same rating assigned
to the Certificates.
ARTICLE VI
PAYMENTS TO THE CERTIFICATEHOLDERS
Section 6.01 ESTABLISHMENT OF CERTIFICATE ACCOUNTS; DEPOSITS IN
CERTIFICATE ACCOUNTS; PERMITTED WITHDRAWALS FROM CERTIFICATE ACCOUNTS.
(a) No later than the Closing Date, the Trustee will establish and
maintain with itself in its trust department four separate trust accounts, which
shall not be interest-bearing, titled "TMS Certificate Account 1996-D-I," "TMS
Certificate Account 1996-D-II," "TMS Certificate Account 1996-D-III" and "TMS
Certificate Account 1996-D-IV (each a "Certificate Account" and together, the
"Certificate Accounts"). The Trustee shall, promptly upon receipt, deposit in
the applicable Certificate Account and retain therein:
(i) the Pool Available Remittance Amount of the
related Pool (net of the amount of Monthly Advances and
Compensating Interest deposited pursuant to subclause (ii),
below, but including the Excess Spread and any Subordination
Reduction Amounts with respect to the Mortgage Loans of the
related Pool) remitted by the Servicer;
(ii) the Compensating Interest and the portion of the
Monthly Advance allocable to the Class Adjusted Mortgage Loan
Remittance Rates for Class A-1 through Class A-9, in the case
of Pool I, the Class Adjusted Mortgage Loan Remittance Rate
for Class A-10, in the case of Pool II, the Class Adjusted
Mortgage Loan Remittance Rates for Class A-11 through Class
A-15, in the case of Pool III, and the Class Adjusted Mortgage
Loan Remittance Rate for Class A-16, in the case of Pool IV,
remitted to the Trustee by the Servicer;
(iii) amounts transferred from the Spread Account pursuant
to Section 6.05(b)(ii) and Insured Payments received by the
Trustee after a claim pursuant to
Section 6.08(c);
(iv) amounts required to be paid by the Servicer pursuant
to Section 6.07(e) in connection with losses on investments of
amounts in the applicable Certificate Account; and
(v) amounts transferred from the Pre-Funding Account and
the Capitalized Interest Account on the Special Remittance
Date pursuant to Sections 6.02(c) and
(h), respectively.
(b) Amounts on deposit in each Certificate Account shall be withdrawn
on each Remittance Date by the following parties in the following order of
priority (provided that only amounts on deposit in the Certificate Account
relating to Pool III shall be withdrawn pursuant to subclause (ii) below):
(i) by the Trustee, to make deposits in the
applicable Insurance Account pursuant to Section
6.04(a)(i);
(ii) by the Trustee, to make deposits in the FHA
Premium Account pursuant to Section 6.06(a)(i);
(iii) by the Trustee, or the Paying Agent on its
behalf, to effect the applicable distributions
described in Section 6.08(d);
and also, in no particular order of priority:
(iv) by the Trustee, to invest amounts on deposit
in the applicable Certificate Account in Permitted
Instruments pursuant to Section 6.07;
(v) by the Trustee, to pay on a monthly basis to
the Servicer as additional servicing compensation
interest paid and earnings realized on Permitted
Instruments;
(vi) by the Trustee, to withdraw any amount not
required to be deposited in the applicable Certificate
Account or deposited therein in error; and
(vii) by the Trustee, to clear and terminate the applicable
Certificate Account upon the termination of the related Trust
Fund in accordance with the terms of Section 11.01 hereof.
Section 6.02 ESTABLISHMENT OF PRE-FUNDING ACCOUNT AND CAPITALIZED
INTEREST ACCOUNT; DEPOSITS IN PRE-FUNDING ACCOUNT AND CAPITALIZED INTEREST
ACCOUNT; PERMITTED WITHDRAWALS FROM PRE-FUNDING ACCOUNT AND CAPITALIZED INTEREST
ACCOUNT.
(a) No later than the Closing Date, the Representative shall establish
and maintain with the Trustee in its trust department a trust account, which
shall not be interest-bearing, titled "TMS Pre-Funding Account 1996-D" (the
"Pre-Funding Account"). The Pre-Funding Account shall constitute part of the
Trust Fund but not be asset of the REMIC I or REMIC II. It is an outside reserve
fund, the owners of which are the Class R-1 Certificateholders and for Federal
tax purposes, amounts, if any, transferred by REMIC I to the Pre-Funding Account
are treated as distributed by REMIC I to the Class R-1 Certificateholders. The
Trustee shall, promptly upon receipt, deposit into the Pre-Funding Account and
retain therein the Original Pre-Funded Amount in an amount equal to the sum of
(i) $124,984,176.64 from the proceeds of the sale of the Pool I Certificates,
(ii) $76,772,782.20 from the proceeds of the sale of the Pool II Certificates,
(iii) $54,947,573.46 from the proceeds of the sale of the Pool III Certificates
and (iv) $4,799.75 from the proceeds of the sale of the Pool IV Certificates.
(b) On each Subsequent Transfer Date, the Representative shall
instruct the Trustee to withdraw from the Pre-Funding Account an amount equal to
100% of the aggregate Principal Balances of the Subsequent Mortgage Loans (or,
with respect to the Low Interest Mortgage Loans, an amount equal to the product
of the percentage set forth on Exhibit T attached hereto determined by referring
to the columns entitled "Coupon" and "Remaining Term" and the aggregate
Principal Balances of such Subsequent Mortgage Loans) sold to the Trust Fund on
such Subsequent Transfer Date and pay such amount to or upon the order of the
Representative with respect to such transfer; in connection with such
instruction, the Representative shall additionally inform the Trustee whether
such Subsequent Mortgage Loans are being transferred in respect of Pool I, Pool
II, Pool III or Pool IV. In no event shall the Representative be permitted to
instruct the Trustee to release from the Pre-Funding Account with respect to
subsequent Mortgage Loans to be transferred to Pool I, Pool II, Pool III or Pool
IV an amount in excess of $124,984,176.64, $76,772,782.20, $54,947,573.46 and
$4,799.75, respectively.
(c) If at the end of the Funding Period amounts still remain in the
Pre-Funding Account, the Servicer shall instruct the Trustee to withdraw from
the Pre-Funding Account on the immediately following Remittance Date and deposit
in the appropriate Certificate Account any Pre- Funded Amount relating to the
Pool I, Pool II, Pool III and Pool IV Mortgage Loans, as the case may be, then
remaining in the Pre-Funding Account. However, if at the close of business on
March 27, 1997, amounts still remain in the Pre-Funding Account, the Servicer
shall instruct the Trustee to withdraw from the Pre-Funding Account on the
Special Remittance Date and deposit in the applicable Certificate Account any
Pre-Funded Amount then remaining in the Pre-Funding Account.
(d) On the Remittance Dates occurring in January, February and March
1997, the Trustee shall transfer from the Pre-Funding Account to the appropriate
Certificate Account the Pool Pre-Funding Earnings for the related Pool, if any,
applicable to each such Remittance Date.
(e) No later than the Closing Date, the Representative shall establish
and maintain with the Trustee in its trust department a trust account, which
shall not be interest-bearing, titled "TMS Capitalized Interest Account 1996-D"
(the "Capitalized Interest Account"). The Capitalized Interest Account shall
constitute part of the Trust Fund but not a part of REMIC I or REMIC II. It is
an outside reserve fund, the owners of which are the Class R-1
Certificateholders and for Federal tax purposes amounts, if any, transferred by
REMIC I to the Capitalized Interest Account are treated as distributed by REMIC
I to the Class R Certificateholders. The Trustee shall, promptly upon receipt,
deposit into the Capitalized Interest Account $2,285,069.45. If prior to the end
of the Funding Period the funds on deposit in the Pre-Funding Account are
invested in a guaranteed investment contract, repurchase agreement or other
arrangement acceptable to the Certificate Insurer, that constitutes a Permitted
Instrument, the Trustee shall, within one Business Day of its receipt of written
notification from the Certificate Insurer, withdraw from the Capitalized
Interest Account and pay to the Owners of the Class R-1 Certificates the amount
set forth in such written notification.
(f) On each Subsequent Transfer Date the Representative may instruct
the Trustee to withdraw from the Capitalized Interest Account and pay on such
Subsequent Transfer Date to the Owners of the Class R-1 Certificates the
Overfunded Interest Amount for such Subsequent Transfer Date, as calculated by
the Representative pursuant to Section 2.09(h) hereof.
(g) On the Remittance Dates occurring in January, February and March
1997, the Trustee shall transfer from the Capitalized Interest Account to the
appropriate Certificate Account the Pool Capitalized Interest Requirement for
the related Pool, if any, for such Remittance Dates.
(h) On the Special Remittance Date, the Trustee shall transfer from
the Capitalized Interest Account to the Certificate Account the Capitalized
Interest Requirement, if any, for such Special Remittance Date. Any amounts
remaining in the Capitalized Interest Account after taking into account such
transfer shall be paid on such Special Remittance Date to the Holders of the
Class R-1 Certificates, and the Capitalized Interest Account shall be closed.
Section 6.03 ESTABLISHMENT OF EXPENSE ACCOUNTS; DEPOSITS IN EXPENSE
ACCOUNTS; PERMITTED WITHDRAWALS FROM EXPENSE ACCOUNTS.
(a) No later than the Closing Date, the Trustee will establish with
itself in its trust department four separate trust accounts, which shall not be
interest-bearing, titled "TMS Expense Account 1996-D-I," "TMS Expense Account
1996-D-II," "TMS Expense Account 1996-D-III" and "TMS Expense Account 1996-D-IV"
(each, an "Expense Account" and together the "Expense Accounts"). The Trustee
shall deposit into the applicable Expense Account:
(i) on each Remittance Date from the amounts on
deposit in the applicable Certificate Account an amount equal
to one-twelfth of that portion of the Annual Expense Escrow
Amount relating to the Pool I, Pool II, Pool III or Pool IV
Mortgage Loans, as the case may be, subject to the provisions
of Section 6.08(d); and
(ii) upon receipt, amounts required to be paid by the
Servicer pursuant to Section 6.07(e) in connection with losses
on investments of amounts in the applicable Expense Account.
If, at any time the aggregate amount then on deposit in the Expense Accounts
shall be insufficient to pay in full the fees and expenses of the Trustee and
the Co-Trustee then due with respect to the Trust Fund, the Trustee shall make
demand on the Servicer to advance the amount of such insufficiency, and the
Servicer shall promptly advance such amount to the Trustee for deposit in the
Expense Accounts, pro rata in accordance with the amounts then on deposit in
each such Expense Account. Thereafter, the Servicer shall be entitled to
reimbursement from the applicable Expense Account for the amount of any such
advance from any excess funds available pursuant to subclause (c)(ii) below.
Without limiting the obligation of the Servicer to advance such insufficiency,
in the event the Servicer does not advance the full amount of such insufficiency
by the Business Day immediately preceding the Determination Date, the amount of
such insufficiency shall be deposited into the applicable Expense Account for
payment to the Trustee or the Co-Trustee, as the case may be, pursuant to
Section 6.08(d)(ii), to the extent of available funds in the applicable
Certificate Account.
(b) The Trustee may invest amounts on deposit in each Expense Account
in Permitted Instruments pursuant to Section 6.07 hereof, and the Trustee shall
withdraw amounts on deposit in the applicable Expense Account to:
(i) pay the Trustee's and Co-Trustee's fees and
expenses with respect to the Trust Fund as described in
Section 2.08 hereof (amounts shall be withdrawn from each
Expense Account pro rata in accordance with the then aggregate
Principal Balances of the Pool I, Pool II, Pool III and Pool
IV Mortgage Loans);
(ii) pay on a monthly basis to the Servicer as
additional servicing compensation interest paid and
earnings realized on Permitted Instruments;
(iii) to withdraw any amounts not required to be
deposited in the applicable Expense Account or
deposited therein in error; and
(iv) to clear and terminate the applicable Expense Account
upon the termination of the Trust Fund in accordance with
Section 11.01 hereof.
(c) On the twelfth Remittance Date following the Closing Date, and on
each twelfth Remittance Date thereafter, the Trustee shall determine that all
payments required to be made during the prior twelve month period pursuant to
subclauses (b)(i), (b)(ii) and (b)(iii) above, have been made, and, if all such
payments have been made, from the amounts remaining in the applicable Expense
Account, the Trustee shall (in the following order of priority):
(i) reimburse the Servicer and/or the
Representative, for reimbursable advances made pursuant to
Section 9.01;
(ii) reimburse the Servicer for advances made by it
pursuant to the last paragraph of subclause (a) above;
and
(iii) remit to the Servicer as additional servicing
compensation any amounts remaining in either Expense Account
after payments made pursuant to subclauses (b)(i), (b)(ii),
(b)(iii), (c)(i) and (c)(ii), above.
Section 6.04 ESTABLISHMENT OF INSURANCE ACCOUNTS; DEPOSITS IN
INSURANCE ACCOUNTS; PERMITTED WITHDRAWALS FROM INSURANCE ACCOUNTS.
(a) No later than the Closing Date, the Trustee will establish with
itself in its trust department four separate trust accounts for the benefit of
the Certificate Insurer, titled "TMS MBIA Insurance Account 1996-D-I," "TMS MBIA
Insurance Account 1996-D-II," "TMS MBIA Insurance Account 1996-D-III" and "TMS
MBIA Insurance Account 1996-D-IV" (each an "Insurance Account, and together, the
"Insurance Accounts"). The Trustee shall deposit into the applicable Insurance
Account:
(i) on each Remittance Date, prior to making the
remittances required pursuant to Section 6.08(d), from the
applicable Certificate Account an amount equal to the Premium
Deposit Amount relating to the Pool I, Pool II, Pool III or
Pool IV Certificates, as the case may be; and
(ii) upon receipt, amounts required to be paid by the
Servicer pursuant to Section 6.07(e) in connection with losses
on investments of amounts in the applicable Insurance Account.
If at any time that a Monthly Premium is due, the aggregate amount then on
deposit in the Insurance Accounts is insufficient to pay in full the Monthly
Premium then due with respect to the Pool I, Pool II, Pool III and Pool IV
Certificates pursuant to the terms of the Insurance Agreement, the Certificate
Insurer shall make demand on the Servicer to advance the amount of such
insufficiency, and the Servicer shall promptly advance such amount to the
Trustee for deposit in the Insurance Accounts, pro rata in accordance with the
amounts then on deposit in each such Insurance Account. Thereafter, the Servicer
shall be entitled to reimbursement from the applicable Insurance Account for the
amount of any such advance from moneys on deposit therein not related to the
Premium Deposit Amount necessary to make timely payment of the next Monthly
Premium.
(b) The Trustee may invest amounts on deposit in each Insurance
Account in Permitted Instruments pursuant to Section 6.07, and the Trustee shall
withdraw amounts on deposit in the applicable Insurance Account to:
(i) remit on a monthly basis sufficient funds to the
Insurance Paying Agent to pay the Certificate Insurer the
Monthly Premium with respect to the Pool I, Pool II, Pool III
or Pool IV Certificates, as the case may be, on each
Remittance Date commencing in January 1997 as required by the
Insurance Agreement;
(ii) pay on a monthly basis to the Servicer as
additional servicing compensation interest paid and
earnings realized on Permitted Instruments;
(iii) withdraw amounts not required to be deposited
in the applicable Insurance Account or deposited
therein in error; and
(iv) reimburse the Servicer for advances made by it
pursuant to the last paragraph of subclause (a) above to the
extent such funds are not needed to pay the Monthly Premium.
If sufficient funds are available in the Insurance Account to timely
pay the Monthly Premium, the Trustee has received from the Servicer any
information necessary to determine the amount of the Monthly Premium and the
Trustee and the Insurance Paying Agent (if the Insurance Paying Agent and the
Trustee are the same party) fail to timely remit the Monthly Premium to the
Certificate Insurer from funds on deposit in the Insurance Account in accordance
with subsections (a) and (b) above, the Trustee shall, contemporaneous with the
payment of the Monthly Premium, pay to the Certificate Insurer from its own
funds, for which reimbursement shall not be available, interest on the Monthly
Premium at the Prime Rate published in the most recent Wall Street Journal plus
3.0% for each day that the Monthly Premium is not paid to the Certificate
Insurer.
Section 6.05 ESTABLISHMENT OF SPREAD ACCOUNT; DEPOSITS IN SPREAD
ACCOUNT; PERMITTED WITHDRAWALS FROM SPREAD ACCOUNT.
(a) The Representative shall, no later than the Closing Date,
establish and maintain with the Trustee in its trust department a trust account,
which shall not be interest-bearing, titled "TMS Spread Account 1996-D" (the
"Spread Account"). If during or after the Funding Period the Certificate Insurer
determines to increase the Pool I, Pool II, Pool III or Pool IV Initial
Specified Subordinated Amount pursuant to the terms of the Insurance Agreement,
the Representative shall give the Trustee written notice thereof, which notice
shall include the new Pool I, Pool II, Pool III or Pool IV Initial Specified
Subordinated Amount for the related Pool. The Trustee shall, promptly upon
receipt, deposit into the Spread Account:
(i) on the Closing Date, an amount equal to
$14,600,000 ($0 of which will be allocated to Pool I,
$14,000,000 of which will be allocated to Pool III and
$600,000 of which will be allocated to Pool IV);
(ii) up to the difference, if any, between the revised
Pool I, Pool II, Pool III or Pool IV Initial Specified
Subordinated Amount and the original Pool I, Pool II, Pool III
or Pool IV Initial Specified Subordinated Amount, as the case
may be;
(iii) amounts, if any, received pursuant to the last
paragraph of Section 6.14(b) upon the occurrence of a
Pool III Delinquency Period;
(iv) amounts, if any, received pursuant to Section 6.05(d);
(v) amounts, if any, received pursuant to Section
2.09(b)(ix); and
(vi) amounts, if any, received pursuant to Section
6.14(b)(iii).
(b) The Trustee may invest amounts on deposit in the Spread Account in
Permitted Instruments pursuant to Section 6.07, and the Trustee shall withdraw
amounts on deposit in the Spread Account to:
(i) deposit in the FHA Premium Account the lesser of
(a) the amount on deposit in the Spread Account and (b) the
amount of any insufficiency in the FHA Premium Account which
the Servicer failed to advance pursuant to Section 6.06(a);
(ii) deposit in the applicable Certificate Account on any
Remittance Date an amount equal to (x) the amount of any
Insured Payment otherwise required with respect to such
Remittance Date and (y) the lesser of the Reallocated Pool III
Spread Account Portion for such Remittance Date and the
aggregate Subordinated Deficiency Amounts for Pool I, Pool II
and Pool IV for such Remittance Date (to be allocated pro rata
based upon such amounts);
(iii) on any Remittance Date for which the Pool
Subordinated Amount for each Pool exceeds its respective
Specified Subordinated Amount, including any increases thereto
during or after the Funding Period, and the amount deposited
into the Spread Account pursuant to Section 6.14(b)(iii)
equals the full amount required to be deposited pursuant
thereto, distribute the excess, if any, of the aggregate Pool
Subordinated Amounts for each Pool for such Remittance Date
over the aggregate Pool I, Pool II, Pool III and Pool IV
Specified Subordinated Amounts, including any increases
thereto after the Funding Period, for such Remittance Date, to
the Holders of the Class X Certificates, the remainder of such
excess (provided, however, that any such excess attributable
to a Pool II Mortgage Loan shall be applied first to the
payment of any Certificateholders' Interest Carryover, pro
rata based upon the amount of Certificateholders' Interest
Carryover allocable to each Class of Pool II Certificates);
(iv) distribute to the Holders of the Class X Certificates
such amounts then on deposit in the Spread Account as the
Certificate Insurer may consent to in writing;
(v) withdraw any amounts not required to be
deposited in the Spread Account or deposited therein in
error; and
(vi) subject to subsection (c) below, distribute to the
Holders of the Class X Certificates any amounts remaining in
the Spread Account upon the termination of this Agreement in
accordance with Section 11.01 hereof.
Notwithstanding the foregoing, during any Pool III Delinquency Period
amounts may be released from the Spread Account pursuant to clause (iii) above
only if, after giving effect to such release, the amount on deposit in the
Spread Account (less the amount deposited therein pursuant to Section 6.05(a)(i)
and (ii)), is at least equal to the then current Pool Principal Balance for Pool
III.
(c) If Claims filed by the Claims Administrator with respect to the
FHA Loans exceed 10% of the aggregate Principal Balances of the FHA Loans
measured as of the Cut-Off Date or related Subsequent Cut-Off Date, as the case
may be, at the termination of the Trust, the Trustee shall withdraw from the
Spread Account the lesser of (x) the Excess Claim Amount and (y) the amount
remaining in the Spread Account and deposit such amount on behalf of the Class X
Certificateholders as directed by the Certificate Insurer into the spread
account(s) for the remaining outstanding TMS Title I transactions which are
insured by the Certificate Insurer. The "Excess Claim Amount" will equal 90% of
the excess of (x) the total Claims filed with respect to the FHA Loans over (y)
10% of the aggregate Principal Balances of the FHA Loans measured as of the Cut-
Off Date or related Subsequent Cut-Off Date, as the case may be.
(d) At the direction of the Class X Certificateholders, the Trustee
shall immediately deposit into the Spread Account any Excess Claim Amounts
received from any other TMS Title I transaction which is insured by the
Certificate Insurer, provided that the Trustee receives an Opinion of Counsel at
the expense of the Class X Certificateholders that such deposit will not
adversely affect the REMIC status of REMIC I or REMIC II.
(e) The Class X Certificateholders hereby consent to funds being
withdrawn from or deposited in the Spread Account at the direction of the
Certificate Insurer pursuant to subsections (c) and (d) above.
(f) The Class X Certificateholders are deemed to have directed the
Trustee to withdraw funds from the Spread Account pursuant to subsection (c)
above and to deposit such funds into the Spread Account pursuant to subsection
(d) above.
Section 6.06 ESTABLISHMENT OF FHA PREMIUM ACCOUNT; DEPOSITS IN FHA
PREMIUM ACCOUNT; PERMITTED WITHDRAWALS FROM FHA PREMIUM ACCOUNT.
(a) No later than the Closing Date, the Trustee will establish with
itself in its trust department a trust account, which shall not be interest
bearing, titled "TMS FHA Premium Account 1996-D" (the "FHA Premium Account").
The FHA Premium Account shall not be available for payment of Certificates. The
Trustee shall deposit into the FHA Premium Account:
(i) on each Remittance Date, prior to making the
remittances required pursuant to Section 6.08(c), upon receipt
an amount equal to the FHA Premium Amount; and
(ii) upon receipt, amounts required to be paid by the
Servicer pursuant to Section 6.07(e) in connection with losses
on investments of amounts in the FHA Premium
Account.
If the Servicer fails to pay the FHA Insurance Premium with respect to an FHA
Loan in accordance with Section 5.01 hereof, the Trustee shall, upon written
instructions from the Servicer or the Certificate Insurer, withdraw an amount
from the FHA Premium Account sufficient to pay in full the FHA Insurance Premium
then due. If the amount on deposit in the FHA Premium Account is insufficient to
pay the FHA Insurance Premium then due, the Trustee shall transfer an amount
from the Spread Account to the FHA Premium Account sufficient to pay in full the
FHA Insurance Premium then due. In the event that there are insufficient funds
in the Spread Account, the Trustee shall immediately notify the Certificate
Insurer of the amount of the remaining insufficiency. The Certificate Insurer
shall have the option to advance such insufficiency to the Trustee for payment
of the FHA Insurance Premium then due.
(b) The Trustee may invest amounts on deposit in the FHA Premium
Account in Permitted Instruments pursuant to Section 6.07, and the Trustee shall
withdraw amounts on deposit in the FHA Premium Account to:
(i) remit, upon certification of payment made to the
FHA, funds requested by the Servicer (including any successor
to the Servicer appointed pursuant to Section 10.02) or the
Certificate Insurer as reimbursement for the FHA Insurance
Premiums paid by the Servicer or the Certificate Insurer, as
the case may be, or remit to the
FHA amounts payable in respect of FHA Insurance Premiums
pursuant to the last paragraph of subclause (a) above;
(ii) pay on a monthly basis to the Servicer as
additional servicing compensation interest paid and
earnings realized on Permitted Instruments;
(iii) withdraw amounts not required to be deposited
in the FHA Premium Account or deposited therein in
error;
(iv) deposit in the Spread Account for amounts
withdrawn from it pursuant to the last paragraph of
subclause (a) above; and
(v) clear and terminate the FHA Premium Account upon
the termination of this Agreement in accordance with the terms
of Section 11.01 hereof.
Section 6.07 INVESTMENT OF ACCOUNTS.
(a) So long as no default or Event of Default shall have occurred and
be continuing, and consistent with any requirements of the Code, all or a
portion of any Account held by the Trustee shall be invested and reinvested by
the Trustee as directed in writing by the Servicer, in one or more Permitted
Instruments bearing interest or sold at a discount. No such investment in the
Certificate Accounts shall mature later than the Business Day immediately
preceding the next Remittance Date and no such investment in the Insurance
Accounts, Expense Accounts, Pre- Funding Account, Capitalized Interest Account,
FHA Premium Account or Spread Account shall mature later than the Business Day
immediately preceding the date such funds will be needed to pay fees or premiums
or be transferred to the applicable Certificate Account, as the case may be;
PROVIDED, HOWEVER, the Trustee or any affiliate thereof may be the obligor on
any investment which otherwise qualifies as a Permitted Instrument and any
investment on which the Trustee is the obligor may mature on such Remittance
Date or date when needed, as the case may be.
(b) If any amounts are needed for disbursement from any Account held
by the Trustee and sufficient uninvested funds are not available to make such
disbursement, the Trustee shall cause to be sold or otherwise converted to cash
a sufficient amount of the investments in such Account. The Trustee shall not be
liable for any investment loss or other charge resulting there from.
(c) Subject to Section 12.01 hereof, the Trustee shall not in any way
be held liable by reason of any insufficiency in any Account held by the Trustee
resulting from any investment loss on any Permitted Instrument included therein
(except to the extent that the Trustee is the obligor thereon).
(d) The Trustee shall invest and reinvest funds in the Accounts held
by the Trustee to the fullest extent practicable, in such manner as the Servicer
shall from time to time direct in writing, but only in one or more Permitted
Instruments.
(e) All income or other gain from investments in any Account held by
the Trustee shall be deposited in such Account, immediately on receipt, and the
Trustee shall notify the Servicer of any loss resulting from such investments.
The Servicer shall remit the amount of any such loss from its own funds, without
reimbursement therefor, to the Trustee for deposit in the Account from which the
related funds were withdrawn for investment by the next Determination Date
following receipt by the Servicer of such notice.
Section 6.08 PRIORITY AND SUBORDINATION OF DISTRIBUTIONS.
(a) The rights of the Certificateholders to receive distributions from
the proceeds of the Trust Fund, and all ownership interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. In this regard, all rights of the Class X and Class R
Certificateholders to receive distributions in respect of the Class X and Class
R Certificates, respectively, and all ownership interests of the Class X and
Class R Certificateholders in and to such distributions, shall be subject and
subordinate to the preferential rights of the Class A Certificateholders, to
receive dis tributions in respect of the Class A Certificates, and the ownership
interests of the Class A Certificateholders in such distributions, as described
herein. In accordance with the foregoing, the ownership interests of the Class X
and Class R Certificateholders in amounts deposited in the applicable Principal
and Interest Account or in any Accounts from time to time shall not vest unless
and until such amounts are distributed in respect of the Class X and Class R
Certificates in accordance with the terms of this Agreement. Notwithstanding
anything contained in this Agreement to the contrary, the Class X and Class R
Certificateholders shall not be required to refund any amount properly
distributed on the Class X and Class R Certificates pursuant to Section
6.08(d)(v).
(b) [Reserved]
(c) As soon as possible, and in no event later than 10:00 a.m. New
York time on the Business Day immediately preceding each Remittance Date, the
Trustee shall furnish the Certificate Insurer and the Servicer with a completed
notice in the form set forth as Exhibit L (the "Notice") hereto, which will be
based upon the information set forth in the Servicer's Certificate, in the event
that an Event of Nonpayment will occur with respect to such Remittance Date. The
Notice shall specify the total amount of the Insured Payment to be paid on the
applicable Remittance Date, stated separately for each Class of Class A
Certificates, and shall constitute a claim for an Insured Payment pursuant to
the applicable Certificate Insurance Policy. The Certificate Insurer shall remit
or cause to be remitted to the Insurance Paying Agent the amount of the Insured
Payment. Upon receipt of such Insured Payment by the Insurance Paying Agent on
behalf of the Holders of the respective Class of Class A Certificates under the
applicable Certificate Insurance Policy, it shall remit such amounts to the
Trustee who shall deposit such Insured Payment in the applicable Certificate
Account and shall distribute such Insured Payment in accordance with Sections
6.08(d) and (e) hereof.
Notwithstanding the foregoing, if an Event of Nonpayment will occur
with respect to a Remittance Date and funds are on deposit in the Spread
Account, the amount of the Insured Payment shall be reduced up to the amount
then on deposit in the Spread Account. Pursuant to Section 6.05(b)(ii), the
Trustee shall, on such Remittance Date, transfer such amount to the applicable
Certificate Account from the Spread Account.
The Trustee shall serve as Insurance Paying Agent hereunder for so
long as a Certificate Insurance Policy shall remain in effect; PROVIDED,
HOWEVER, that the Insurance Paying Agent may be located in another jurisdiction
with the written consent of the Certificate Insurer. The Insurance Paying Agent
shall act as the agent of the Trustee and shall (i) pay amounts required by
Section 6.04(b)(i) hereof to the Certificate Insurer, (ii) pay Insured Payments
received from the Certificate Insurer as the Trustee shall direct and (iii) take
such other actions with respect to the Certificate Insurer and the Certificate
Insurance Policies as the Trustee shall direct. The Trustee shall act initially
as the Insurance Paying Agent.
The Trustee shall receive through the Insurance Paying Agent, as
attorney-in-fact of each Holder of Class A Certificates, any Insured Payment
from the Certificate Insurer and disburse the same to each Holder of Class A
Certificates in accordance with the provisions of this Section 6.08. Insured
Payments disbursed by the Trustee from proceeds of the Certificate Insurance
Policies shall not be considered payment by the Trust Fund nor shall such
payments discharge the obligation of the Trust Fund with respect to such Class A
Certificates, and the Certificate Insurer shall become the owner of such unpaid
amounts due from the Trust Fund in respect of Class A Certificates. The Trustee
hereby agrees on behalf of each Holder of Class A Certificates for the benefit
of the Certificate Insurer that it recognizes that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Insurance Paying Agent), to the Class A Certificateholders, the
Certificate Insurer will be subrogated to the rights of the Class A
Certificateholders with respect to such Insured Payment, shall be deemed to the
extent of the payments so made to be a registered Certificateholder of the
related Class, and shall receive the Pool Carry-Forward Amounts of the related
Pools in accordance with Sections 6.08(d) below until all such Insured Payments
by the Certificate Insurer have been fully reimbursed. To evidence such
subrogation, the Trustee shall, or shall cause the Certificate Registrar to,
note the Certificate Insurer's rights as subrogee on the registration books
maintained by the Trustee or the Certificate Registrar upon receipt from the
Certificate Insurer of proof of payment of any Insured Payment.
Each Class A Certificateholder shall promptly (i) notify the Trustee
in writing upon the receipt of a court order to the effect that any amounts
described in Clause (iv) of the definition of Pool Remittance Amount constitute
a voidable preference pursuant to the United States Bankruptcy Code and (ii)
shall enclose a certified copy of such order with such notice to the Trustee.
(d) On each Remittance Date, and after making the allocations set
forth in Section 6.14, the Trustee shall withdraw from the applicable
Certificate Account the sum of (i) the Pool Available Amount for each Pool and
(ii) the Remainder Excess Spread Amount for each Pool, net of reimbursements to
the Servicer or the Representative for Reimbursable Advances pursuant to Section
5.04(f), and make distributions thereof in the following order of priority:
(i) to the Certificateholders of each Pool, the
lesser of the Pool Available Amount for the related Pool and
the Pool Remittance Amount for the related Pool;
(ii) then to each Expense Account, an amount equal to
one-twelfth of the Annual Expense Escrow Amount with respect
to the Mortgage Loans of the related Pool, plus any amount
required to be paid to the Trustee or the Co-Trustee pursuant
to Section 6.03(a) resulting from insufficiencies in the
applicable Expense Account;
(iii) then to the Servicer and/or the Representative, an
amount, if any, equal to the Reimbursable Amounts with respect
to the applicable Pool to the extent the Servicer has not
previously netted such amounts from Monthly Payments;
(iv) then to the Pool II Certificateholders, any
Certificateholders' Interest Carryover (but only with respect
to distributions relating to Pool II Mortgage Loans),
allocated pro rata among each Class of Pool II Certificates
based upon the amount of Certificateholders' Interest
Carryover allocated to each such Class;
(v) then to the Class X Certificateholders, an
amount equal to the Class X Remittance Amount; and
(vi) then to the Class R Certificateholders, any
remainder.
On each Remittance Date, the amount to be distributed to the Pool I
Certificates pursuant to clause (i) above will be allocated in the following
order of priority:
(A) first, concurrently to the Certificateholders of each Class of
Pool I Certificates, the applicable Class Current Interest Requirements for such
Remittance Date, pro rata in accordance with such amounts;
(B) second, to the Class A-9 Certificateholders, an amount equal to
the Class A-9 Principal Distribution Amount for such Remittance Date; and
(C) third, to the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A- 6, Class A-7, Class A-8 and Class A-9 Certificateholders,
sequentially in that order, the excess, if any, of the amount to be distributed
to the Pool I Certificates on such Remittance Date over the amount distributed
pursuant to (A) and (B) above, until the Class Principal Balance of each such
Class (in ascending order of numerical designation) is reduced to zero and such
Certificateholders have received an amount equal to the amount described in
clause (iv) of the definition of Pool Remittance Amount that is recovered from
such Certificateholders.
On each Remittance Date, the amount to be distributed to the Pool II
Certificates pursuant to clause (i) above will be allocated in the following
order of priority:
(A) first, to the Class A-10 Certificateholders, the applicable Class
Current Interest Requirement for such Remittance Date; and
(B) second, to the Class A-10 Certificateholders, the excess, if any,
of the amount to be distributed to the Pool II Certificates on such Remittance
Date over the amount distributed pursuant to (A) above, until the Class
Principal Balance of such Class is reduced to zero and such Certificateholders
have recovered an amount equal to the amount described in clause (iv) of the
definition of Pool Remittance Amount that is recovered from such
Certificateholders.
On each Remittance Date, the amount to be distributed to the Pool III
Certificates pursuant to clause (i) above will be allocated in the following
order of priority:
(A) first, concurrently to the Certificateholders of each Class of
Pool III Certificates, the applicable Class Current Interest Requirement for
such Remittance Date; and
(B) second, to the Class A-11 through Class A-15 Certificateholders,
sequentially in that order, the excess, if any, of the amount to be distributed
to the Pool III Certificates on such Remittance Date over the amount distributed
pursuant to (A) above, until the Class Principal Balance of each such Class (in
ascending order of numerical designation) is reduced to zero and such
Certificateholders have received an amount equal to the amount described in
clause (iv) of the definition of Pool Remittance Amount that is recovered from
such Certificateholders.
On each Remittance Date, the amount to be distributed to the Pool IV
Certificates pursuant to clause (i) above will be allocated in the following
order of priority:
(A) first, to the Class A-16 Certificateholders, the applicable Class
Current Interest Requirement for such Remittance Date; and
(B) second, to the Class A-16 Certificateholders, the excess, if any,
of the amount to be distributed to the Pool IV Certificates on such Remittance
Date over the amount distributed pursuant to (A) above, until the Class
Principal Balance of such Class is reduced to zero and such Certificateholders
have received an amount equal to the amount described in clause (iv) of the
definition of Pool Remittance Amount that is recovered from such
Certificateholders.
Additionally, on the Special Remittance Date, the Trustee shall
withdraw from the Certificate Account the amount, if any, deposited therein
pursuant to Section 6.01(a)(v) and make distributions thereof as follows: (i)
from amounts transferred from the Pre-Funding Account, distributions of
principal to the Classes of Class A Certificates then entitled to receive
distributions of principal in the priority and proportions set forth in this
Section 6.08(d) and (ii) from amounts transferred from the Capitalized Interest
Account, distributions of interest to such Classes of Class A Certificates equal
to the applicable Capitalized Interest Requirement.
(e) All distributions made to the Certificateholders on each
Remittance Date and the Special Remittance Date will be made on a pro rata basis
among the Certificateholders of the respective Class of record on the next
preceding Record Date based on the Percentage Interest repre sented by their
respective Certificates, and shall, except for the final payment on such
Certificates, be made by wire transfer of immediately available funds to the
account of such Certificateholder as shall appear on the Certificate Register
without the presentation or surrender of the Certificate or the making of any
notation thereon, at a bank or other entity having appropriate facilities
therefor, at the expense of each such Certificateholder unless such
Certificateholder shall own of record Certificates which have original principal
amounts aggregating (i) at least $5,000,000 or (ii) one of the two highest
outstanding amounts less than $5,000,000.
Section 6.09 ALLOCATION OF REALIZED LOSSES.
Prior to each Determination Date, the Servicer shall determine the
total amount of Realized Losses, if any, that occurred in the related Due
Period. The amount of each Realized Loss shall be evidenced by an Officers'
Certificate, stated separately for each Pool of Mortgage Loans, and, to the
extent paid by the Certificate Insurer as an Insured Payment, shall constitute a
Pool Carry-Forward Amount for the related Pool. Any Realized Losses relating to
the Mortgage Loans of a Pool shall be allocated to each outstanding Class of
Certificates of such Pool pro rata in accordance with the respective Class
Principal Balances of each such Class, but only if and to the extent that the
Certificateholders of such Pool did not receive Insured Payments in connection
with the related Unrecovered Pool Portions on the Remittance Date on which a
Subordination Deficit occurs. Further, any allocation of Realized Losses among a
Class of Certificates shall be made on a pro rata basis among the
Certificateholders of record of such Class on the next preceding Record Date
based on the Percentage Interest represented by their respective Certificates by
reducing their respective Principal Balances by the amount so allocated, which
allocation shall be deemed to have occurred on the related Remittance Date.
Section 6.10 STATEMENTS.
Each month, not later than 12:00 noon New York time on the
Determination Date, the Servicer shall deliver to the Certificate Insurer and to
the Trustee, by telecopy, for distribution to the Certificateholders, the
receipt and legibility of which shall be confirmed telephonically, with hard
copy thereof and the Servicer's Monthly Computer Tape in the form attached
hereto as Ex hibit R (both in hard copy and in computer tape form) to be
delivered on the Business Day following the Determination Date, a certificate
signed by a Servicing Officer (a "Servicer's Certifi cate") stating the date
(day, month and year), the Series number of the Certificates, the date of this
Agreement, and the following:
(i) the Pool Available Remittance Amounts for each
Pool for the related Remittance Date;
(ii) the Class Principal Balances for each Class of Class
A Certificates as reported in the prior Servicer's Certificate
pursuant to subclause (xv) below, or, in the case of the first
Determination Date, the Original Principal Balance for each
Class of Class A Certificates;
(iii) the Pool Principal Distribution Amounts for each Pool
for the related Remittance Date, in the aggregate and listed
separately for the portions relating to each Class of Class A
Certificates;
(iv) the total amount of any Insured Payments included in
the Pool Available Remittance Amount for each Pool for the
related Remittance Date;
(v) the Subordinated Amount and Specified
Subordinated Amount for the related Remittance Date,
listed separately for each Pool;
(vi) the number and Principal Balances of all Loans in
each Pool which were the subject of Principal Prepayments
during the Due Period;
(vii) the amount of all Curtailments which were
received during the Due Period, stated separately for
each Pool;
(viii) the aggregate amount of all Excess Payments and the
amounts of Monthly Payments in respect of principal received
during the Due Period, stated separately for each Pool;
(ix) the amount of interest received on the
Mortgage Loans, stated separately for each Pool;
(x) the amount of the Monthly Advances to be made on
the Determination Date, the portion of the Monthly Advances to
be deposited in the Certificate Accounts pursuant to Section
6.01(a)(ii), and the Compensating Interest payment to be made
on the Determination Date, in each case stated separately for
each Pool;
(xi) the delinquency and foreclosure information
set forth in the form attached hereto as Exhibit O,
stated separately for each Pool;
(xii) the amount of any Realized Losses incurred
during the related Due Period, stated separately for
each Pool;
(xiii) the Pool Remittance Amounts for each Pool for the
Remittance Date, in the aggregate and by component and listed
separately for the portions relating to each Class of Class A
Certificates in the related Pool;
(xiv) the Reimbursable Amounts and the Class X
Remittance Amount payable pursuant to Section
6.08(d)(iii) and (v) with respect to the Remittance
Date;
(xv) the Class Principal Balance for each Class of Class A
Certificates and the Pool Principal Balance for each Pool
after giving effect to the distribution to be made on the
Remittance Date and after allocation of Realized Losses made
on such Remittance Date;
(xvi) the Monthly Excess Spread Percentage, the Excess
Spread, and the Remainder Excess Spread Amount allocable to
Reimbursable Amounts and Class R Certificateholders pursuant
to Section 5.04(f) (in each case, in the aggregate and stated
separately for each Pool);
(xvii) the Cumulative Realized Losses, stated
separately for each Pool, with respect to the
Remittance Date;
(xviii) the weighted average maturity and weighted
average Interest Rate, stated separately for each Pool;
(xix) the Servicing Fees, the Contingency Fees and amounts
to be deposited to the Expense Accounts, the Insurance
Accounts and the FHA Premium Account, in each case, as
applicable, stated separately for each Pool;
(xx) the amount of all payments and reimbursements
to the Servicer pursuant to Section 5.04(b), (c),
(d)(ii), (e) and (f)(i), stated separately with respect
to each Pool;
(xxi) the Class Pool Factor for each Class
determined using the balances in subclause (xv) above;
(xxii) the weighted average Mortgage Interest Rate and
Adjusted Mortgage Interest Rate of the Mortgage Loans for each
Pool and the weighted average Class Adjusted Loan Remittance
Rates for each Pool, in each case for the related Remittance
Date, and the weighted average Mortgage Interest Rate for the
prior three month period;
(xxiii) the Class A-10 and Class A-11 Remittance Rates with
respect to the Remittance Date and if either of the Class A-10
or Class A-11 Remittance Rates was based on the applicable Net
Funds Cap for the related Pool, what it would have been if
based on LIBOR plus the applicable Margin;
(xxiv) the rate of LIBOR with respect to the
Remittance Date;
(xxv) the Net Funds Cap for Pool II and Pool III
with respect to the Remittance Date;
(xxvi) if the Remittance Rate for a Class of Pool II
Certificates for such Remittance Date is based on the Net
Funds Cap, the amount of any Certificateholders' Interest
Carryover for such Class for such Remittance Date;
(xxvii) the amount of the distribution, if any, allocable to
Certificateholders' Interest Carryover and the amount of any
Certificateholders' Interest Carryover for all prior
Remittance Dates after giving effect to such distribution (in
each case, stated separately by Class and in the aggregate);
(xxviii) The amount to be deposited into the FHA Premium
Account on the related Remittance Date and the amount
reimbursable to the Servicer and/or the Certificate Insurer
from the FHA Premium Account pursuant to Section 6.06(b)(i);
(xxix) The amount of FHA Payments and Related
Payments received during the related Due Period;
(xxx) The Reserve Amount for the related Remittance
Date;
(xxxi) Claims filed during the Due Period;
(xxxii) Claims paid during the Due Period;
(xxxiii) Claims denied by the FHA during the Due Period;
(xxxiv) Claims pending payment by the FHA during the
Due Period; and
(xxxv) Such other information as the Certificate
Insurer and the Certificateholders may reasonably
require.
The Trustee shall forward such report to the Certificateholders and
the Certificate Insurer on the Remittance Date, together with a separate report
indicating the amount of funds deposited in each Certificate Account pursuant to
Section 6.01(a)(iv); and the amounts which are reimbursable to the Servicer or
the Representative, as appropriate, pursuant to Sections 6.03(c)(i),
6.03(c)(ii), 6.04(b)(iv) and 6.08(d)(iii) (all reports prepared by the Trustee
of such withdrawals and deposits will be based in whole or in part upon the
information provided to the Trustee by the Servicer or the Claims
Administrator).
To the extent that there are inconsistencies between the telecopy of
the Servicer's Certificate and the hard copy thereof, the Trustee shall be
entitled to rely upon the telecopy. In the case of information furnished
pursuant to subclauses (ii), (vi), (vii), (viii), (xiii), (xv) and (xxii),
above, the amounts shall be expressed in a separate section of the report as a
dollar amount for each Class per $1,000 original dollar amount as of the Cut-Off
Date.
Additionally, on the Special Remittance Date the Trustee shall, based
upon information received from the Servicer, forward to the Certificateholders,
the Certificate Insurer and the Rating Agencies, a report setting forth the
amount of principal and interest, if any, being paid to each Class of Class A
Certificates on the Special Remittance Date.
(a) Within a reasonable period of time after the end of each calendar
year, the Servicer shall furnish to the Trustee for distribution to each Person
who at any time during the calendar year was a Class A Certificateholder such
information as is reasonably necessary to provide to such Person a statement
containing the information set forth in subclauses (ix), (xiii), (xix) and
(xxxv), above, aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the
Servicer shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Servicer pursuant to any
requirements of the Code as from time to time are in force.
(b) On each Remittance Date and the Special Remittance Date, the
Trustee shall forward to the Class X and Class R Certificateholders a copy of
the report forwarded to the Certificateholders of each Pool in respect of such
Remittance Date or the Special Remittance Date, as the case may be, and a
statement setting forth the amounts actually distributed to the Class X and
Class R Certificateholders, on such Remittance Date together with such other
information as the Servicer provides and deems necessary or appropriate.
(c) Within a reasonable period of time after the end of each calendar
year, the Servicer shall furnish to the Trustee for distribution to each Person
who at any time during the calendar year was a Class X or Class R
Certificateholder such information as is reasonably necessary to provide to such
Person a statement containing the information provided pursuant to the previous
paragraph aggregated for such calendar year or applicable portion thereof during
which such Person was a Class X or R Certificateholder, as applicable. Such
obligation of the Servicer shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Servicer
pursuant to any requirements of the Code as from time to time in force.
(d) Upon reasonable advance notice in writing, the Servicer will
provide to each Class A Certificateholder which is a savings and loan
association, bank or insurance company certain reports and access to information
and documentation regarding the Mortgage Loans sufficient to permit such Class A
Certificateholder to comply with applicable regulations of the Office of Thrift
Supervision or other regulatory authorities with respect to investment in the
Class A Certificates.
(e) The Servicer shall furnish to each Certificateholder and the
Certificate Insurer, during the term of this Agreement, such periodic, special,
or other reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect to the Certificateholder or
the Certificate Insurer, or otherwise with respect to the purposes of this
Agreement, all such reports or information to be provided by and in accordance
with such applicable instructions and directions as the Certificateholder or the
Certificate Insurer may reasonably require; provided, that the Servicer shall be
entitled to be reimbursed by such Certificate holder or the Certificate Insurer
for the Servicer's actual expenses incurred in providing such reports if such
reports are not producible in the ordinary course of the Servicer's business.
Section 6.11 ADVANCES BY THE SERVICER.
Not later than the close of business on each Determination Date, the
Servicer shall remit to the Trustee for deposit in the applicable Certificate
Account an amount (as indicated in the Servicer's Certificate prepared pursuant
to Section 6.10), to be distributed on the related Remittance Date pursuant to
Section 6.08, equal to the amount, if any, by which (a) the sum of (i) the
amount equal to 30 days' interest (or, with respect to the Adjustable Rate
Certificates, the actual number of days since the last Remittance Date or, in
the case of the January 1997 Remittance Date, from December 15, 1996) at the
weighted average Class Adjusted Mortgage Loan Remittance Rates for the
applicable Pool on the related Pool Principal Balance immediately prior to the
related Remittance Date plus (ii) the Monthly Excess Spread relating to the
Mortgage Loans of the related Pool with respect to such Remittance Date exceeds
(b) the amount received by the Servicer as of the related Record Date in respect
of interest on the Mortgage Loans of the related Pool (and, with respect to the
Remittance Dates in January, February and March 1997, the sum of (i) all funds
to be transferred to the applicable Certificate Account from the Capitalized
Interest Account for such Remittance Date pursuant to Section 6.02(g) and (ii)
the related Pool Pre-Funding Earnings for the applicable Remittance Date). The
sum of such excess calculated for each Pool is defined herein as the "Monthly
Advance." The Servicer may reimburse itself for Monthly Advances made pursuant
to Section 5.04.
Section 6.12 COMPENSATING INTEREST.
The Certificateholders shall be entitled to a full month's interest
for each Mortgage Loan for any month during which a Principal Prepayment or
Curtailment is received on such Mortgage Loan. Not later than the close of
business on each Determination Date, with respect to each Mortgage Loan for
which a Principal Prepayment or Curtailment was received during the related Due
Period, the Servicer shall remit to the Trustee for deposit in the applicable
Certificate Account from amounts otherwise payable to it as servicing
compensation, an amount (such amount required to be delivered to the Trustee is
referred to herein as "Compensating Interest") (as indicated in the Servicer's
Certificate prepared pursuant to Section 6.10) equal to the difference between
(a) 30 days' interest (or, with respect to a Pool II Loan, the actual number of
days since the last Remittance Date to but not including the upcoming Remittance
Date or, with respect to the January 1997 Remittance Date, from December 15,
1996) at the then weighted average Class Adjusted Mortgage Loan Remittance Rates
for the applicable Pool on the Principal Balance of each such Mortgage Loan and
(b) the amount of interest actually received on each such Mortgage Loan for such
Due Period as of the beginning of the Due Period applicable to the Remittance
Date on which such amount will be distributed.
Section 6.13 REPORTS OF FORECLOSURE AND ABANDONMENT OF MORTGAGED
PROPERTY.
Each year the Trustee shall make the reports of foreclosures
and abandonments of any Mortgaged Property required by Section 6050J of the
Code. In order to facilitate this reporting process, the Servicer, on or before
January 15th of each year, shall provide to the Trustee and the Certificate
Insurer reports relating to each instance occurring during the previous calendar
year in which the Servicer (i) on behalf of the Trust Fund acquires an interest
in a Mortgaged Property through foreclosure or other comparable conversion in
full or partial satisfaction of the Mortgage Loan, or (ii) knows or has reason
to know that a Mortgaged Property has been abandoned. The reports from the
Servicer shall be in form and substance sufficient to enable the Trustee to meet
the reporting requirements imposed by such Section 6050J. The Servicer will
deliver to the Trustee an aggregate summary of all information needed by the
Trustee to prepare such Section 6050J reports.
Section 6.14. ALLOCATION OF TOTAL MONTHLY EXCESS CASHFLOW.
(a) On each Remittance Date, for each Pool of Mortgage Loans the
Trustee shall, based upon information provided in the related Servicer's
Certificate delivered pursuant to Section 6.10, allocate an amount equal to the
sum of (x) the Monthly Excess Spread with respect to each such Pool and
Remittance Date plus (y) any Subordination Reduction Amount with respect to each
such Pool and Remittance Date plus (z) any Pool Available Remittance Amount
Surplus with respect to each such Pool (such sum being the "Total Monthly Excess
Cashflow" with respect to such Pool and Remittance Date), in the following order
of priority:
(i) FIRST, to the related Pool in an amount up to
the Pool Available Remittance Amount Shortfall for such
Pool;
(ii) SECOND, to the other Pools, any Pool Available
Remittance Amount Shortfall remaining after the application
described in clause (i), allocated among Pools pro rata, based
upon the applicable Pool Available Remittance Amount Shortfall
remaining after the application described in clause (i) above;
(iii) THIRD, to the Certificate Insurer in respect of
amounts owed on account of any Insured Payments theretofore
made with respect to the related Pool of Mortgage Loans (any
such amount so owed to the Certificate Insurer and not
theretofore paid, together with accrued interest thereon, the
"Insurer Reimbursable Amount" with respect to the related Pool
of Mortgage Loans); and
(iv) FOURTH, to the Certificate Insurer in respect of any
Insurer Reimbursable Amount with respect to any other Pool,
allocated among Pools, pro rata, based upon the applicable
Insurer Reimbursable Amount remaining after the applications
described in clauses (i), (ii)
and (iii) above.
Total Monthly Excess Cashflow allocable pursuant to clauses (ii) and
(iv) above shall be allocated first from Pool I, Pool III and Pool IV, pro rata
based upon the Total Monthly Excess Cashflow available from each such Pool, and
second from Pool II.
(b) The amount, if any, of the Total Monthly Excess Cashflow with
respect to a Pool of Mortgage Loans on a Remittance Date remaining after the
allocations described in (a) above is the "Net Monthly Excess Cashflow" with
respect to such Pool for such Remittance Date; such amount is required to be
applied in the following order of priority:
(i) FIRST, to the related Pool, in an amount up to
the Subordinated Deficiency Amount for such Pool as of
such Remittance Date;
(ii) SECOND, to the other Pools, in an amount up to any
Subordinated Deficiency Amounts with respect to such other
Pool remaining after the allocation described in (i) above,
allocated among Pools, pro rata, based upon the applicable
Subordinated Deficiency Amount after giving effect to all
other distributions to be made on such Remittance Date;
(iii) THIRD, to the Spread Account until the sum of the
amount deposited therein pursuant to this Section 6.14(b)(iii)
equals $1,500,000, or such lesser amount as may be consented
to by the Certificate Insurer;
(iv) FOURTH, to the Servicer to the extent of any
unreimbursed Servicing Advances and accrued and unpaid
Servicing Fees;
(v) FIFTH, to the Pool II Certificateholders to the extent
of any Certificateholders' Interest Carryover owing for such
Remittance Date and all prior Remittance Dates (to the extent
such Net Monthly Excess Cashflow is attributable to Pool II
Mortgage Loans); and
(vi) SIXTH, any excess to the Holders of the
Class X Certificates.
Net Monthly Excess Cashflow allocable pursuant to clauses (ii), (iii)
and (iv) above shall be allocated first from Pool I, Pool III and Pool IV, pro
rata based upon the Net Monthly Excess Cashflow available from each such Pool,
and second from Pool II.
Notwithstanding the foregoing, for any period commencing on a
Remittance Date for which the sum of (i) the three-month moving average of 75%
of the Principal Balance of all 90 Day Delinquent Pool III Loans and (ii) the
amount of all Claims filed in the Due Period immediately preceding the then
current Remittance Date is greater than the current Excess Spread for the Pool
III Loans for such Remittance Date, and ending on the first Remittance Date
thereafter for which the six-month moving average of the sum of (a) 75% of the
Principal Balance of all 90 Day Delinquent Pool III Loans and (b) the amount of
all Claims filed in the Due Period immediately preceding the then current
Remittance Date is less than the Excess Spread for the Pool III Mortgage Loans
for three consecutive Remittance Dates (such period, the "Pool III Delinquency
Period"), all Total Monthly Excess Cashflow with respect to the Pool III
Mortgage Loans for each Remittance Date remaining after the application
described in clause (i) above shall be deposited into the Spread Account
pursuant to Section 6.05(a)(iii) until the amount on deposit in the Spread
Account (less the amounts deposited therein with respect to Pools I, II and IV
and Section 6.05(a)(vi)) equals the then current Pool Principal Balance for Pool
III.
Section 6.15 ESTABLISHMENT OF SERVICING ACCOUNTS; COLLECTION OF TAXES,
ASSESSMENTS AND SIMILAR ITEMS.
(a) The Servicer shall establish and maintain, or cause to be
established and maintained, one or more Servicing Accounts. The Servicer will
deposit and retain, or cause to be deposited and retained, therein all
collections from the Mortgagors for the payment of taxes, assessments, insurance
premiums, or comparable items as agent of the Mortgagors.
(b) The deposits in the Servicing Accounts shall be held in a
Designated Depository Institution in an account designated as a "Mortgage Loan
Servicing Account," held in trust by the Servicer or a Subservicer acting on its
own behalf and as agent for holders of various pass-through securities and other
interests in mortgage loans sold by it. The amount at any time credited to a
Servicing Account must be fully insured by FDIC, or, to the extent that such
deposits exceed the limits of such insurance, such excess must be (i)
transferred to another fully insured account in another Designated Depository
Institution or (ii) if permitted by applicable law, invested in Permitted
Investments held in trust by the Servicer or a Subservicer. Withdrawals of
amounts from the Servicing Accounts may be made only to effect timely payment of
taxes, assessments, insurance premiums, or comparable items, to reimburse the
related Servicer or Subservicer for any advances made with respect to such
items, to refund to any Mortgagors any sums as may be determined to be overages,
to pay interest, if required, to Mortgagors on balances in the Servicing
Accounts, to pay the related Servicer or Subservicer the remainder of any income
on balances in the Servicing Accounts or to clear and terminate the Servicing
Accounts at or any time after the termination of this Agreement.
ARTICLE VII
GENERAL SERVICING PROCEDURE
Section 7.01 ASSUMPTION AGREEMENTS.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or prospective conveyance, exercise its rights to accelerate the maturity of the
related Mortgage Loan under any "due-on-sale" clause contained in the related
Mortgage or Mortgage Note; provided, however, that the Servicer shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the Servicer, is not enforceable under applicable law or if such enforcement
would materially increase the risk of default or delinquency on, or materially
decrease the security for, such Mortgage Loan. In such event, the Servicer shall
enter into an assumption and modification agreement with the person to whom such
property has been or is about to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, unless prohibited by applicable law
or the Mortgage, the Mortgagor remains liable thereon. The Servicer is also
authorized with the prior approval of the Certificate Insurer to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
Mortgagor and becomes liable under the Mortgage Note. The Servicer shall notify
the Trustee (and, with respect to Pool III Mortgage Loans, the Co-Trustee and
the Custodian) and the Certificate Insurer that any such substitution or
assumption agreement has been completed by forwarding to the Trustee (and, with
respect to the Pool III Mortgage Loans, the Custodian) the original of such
substitution or assumption agreement and a duplicate thereof to the Certificate
Insurer, which original shall be added by the Trustee (and, with respect to the
Pool III Mortgage Loans, the Custodian) to the related Trustee's Mortgage File
and shall, for all purposes, be considered a part of such Trustee's Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. In connection with any assumption or substitution agreement
entered into pursuant to this Section 7.01, the Servicer shall not change the
Mortgage Interest Rate or the Monthly Payment, defer or forgive the payment of
principal or interest, reduce the outstanding principal amount or extend the
final maturity date on such Mortgage Loan. Any fee collected by the Servicer for
consenting to any such conveyance or entering into an assumption or substitution
agreement shall be retained by or paid to the Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, (i) the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever; and (ii) the
Servicer shall not take any action which would adversely affect the coverage of
an FHA Loan for insurance by the FHA under Title I.
Section 7.02 SATISFACTION OF MORTGAGES AND RELEASE OF MORTGAGE FILES.
The Servicer shall not grant a satisfaction or release of a Mortgage
without having obtained payment in full of the indebtedness secured by the
Mortgage or otherwise prejudice any right the Certificateholders may have under
the mortgage instruments, subject to Section 5.01 hereof. The Servicer shall
maintain the Fidelity Bond as provided for in Section 5.09 insuring the Servicer
against any loss it may sustain with respect to any Mortgage Loan not satisfied
in accordance with the procedures set forth herein.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Trustee
(and, with respect to the Pool III Mortgage Loans, the Custodian), by an
Officers' Certificate in the form of Exhibit J attached hereto (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the applicable Principal and Interest Account pursuant to Section
5.03 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Trustee's Mortgage File. Upon receipt of such
certification and request, the Trustee (and, with respect to the Pool III
Mortgage Loans, the Custodian) shall promptly release the related Trustee's
Mortgage File to the Servicer. Expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be payable only from
and to the extent of servicing compensation and shall not be chargeable to the
Principal and Interest Account or the Certificate Accounts.
From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any primary
mortgage guaranty insurance policy, the Trustee (and, with respect to the Pool
III Mortgage Loans, the Custodian) shall, upon request of the Servicer and
delivery to the Trustee (and, with respect to the Pool III Mortgage Loans, the
Custodian) of a certification in the form of Exhibit J attached hereto signed by
a Servicing Officer, release the related Trustee's Mortgage File to the
Servicer, and the Trustee (or, with respect to the Pool III Mortgage Loans, the
Custodian and the Co-Trustee) shall execute such documents as shall be necessary
to the prosecution of any such proceedings. Such servicing receipt shall
obligate the Servicer to return the Mortgage File to the Trustee (or, with
respect to the Pool III Mortgage Loans, the Custodian) when the need therefor by
the Servicer no longer exists, unless the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the applicable Principal and Interest Account and remitted to the Trustee for
deposit in the applicable Certificate Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Servicer has delivered to the Trustee
(and, with respect to the Pool III Mortgage Loans, the Custodian) a certificate
of a Servicing Officer certifying as to the name and address of the Person to
which such Mortgage File or such document was delivered and the purpose or
purposes of such delivery. Upon receipt of a certificate of a Servicing Officer
stating that such Mortgage Loan was liquidated, the servicing receipt shall be
released by the Trustee (or, with respect to the Pool III Mortgage Loans, the
Custodian) to the Servicer.
The Trustee (or, with respect to the Pool III Mortgage Loans, the
Co-Trustee) shall execute and deliver to the Servicer any court pleadings,
requests for trustee's sale or other documents necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Together with such documents or pleadings, the Servicer shall deliver to
the Trustee (or, with respect to the Pool III Mortgage Loans, the Co-Trustee) a
certificate of a Servicing Officer requesting that such pleadings or documents
be executed by the Trustee (or, with respect to the Pool III Mortgage Loans, the
Co- Trustee) and certifying as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee (or, with
respect to the Pool III Mortgage Loans, the Co-Trustee) will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale. The Trustee (or, with
respect to the Pool III Mortgage Loans, the Co-Trustee) shall, upon receipt of a
written request from a Servicing Officer, execute any document provided to the
Trustee (or, with respect to the Pool III Mortgage Loans, the Co-Trustee) by the
Servicer or take any other action requested in such request, that is, in the
opinion of the Servicer as evidenced by such request, required by any state or
other jurisdiction to discharge the lien of a Mortgage upon the satisfaction
thereof and the Trustee (or, with respect to the Pool III Mortgage Loans, the
Co-Trustee) will sign and post, but will not guarantee receipt of, any such
documents to the Servicer, or such other party as the Servicer may direct,
within five Business Days of the Trustee's (or, with respect to the Pool III
Mortgage Loans, the Co-Trustee's) receipt of such certificate or documents. Such
certificate or documents shall establish to the Trustee's (or, with respect to
the Pool III Mortgage Loans, the Co-Trustee's) satisfaction that the related
Mortgage Loan has been paid in full by or on behalf of the Mortgagor and that
such payment has been deposited in the applicable Principal and Interest
Account.
Section 7.03 SERVICING COMPENSATION AND CONTINGENCY FEE.
(a) As compensation for its services hereunder, the Servicer shall be
entitled to withdraw from the applicable Principal and Interest Account or to
retain from interest payments on the Mortgage Loans the Servicer's Servicing
Fee. Additional servicing compensation in the form of assumption and other
administrative fees, prepayment penalties and premiums, interest paid on funds
on deposit in the Principal and Interest Account, interest paid and earnings
realized on Permitted Instruments, amounts remitted pursuant to Sections
6.03(c)(iii) and 6.04(b)(ii) and late payment charges shall be retained by or
remitted to the Servicer to the extent not required to be remitted to the
Trustee for deposit in the applicable Certificate Account. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided for herein.
(b) The Servicer shall be entitled to withdraw from the applicable
Principal and Interest Account or to retain from interest payments on the
Mortgage Loans the Contingency Fee. In the event that The Money Store Inc. is
terminated as Servicer pursuant to this Agreement, any duly appointed successor
to the Servicer shall also be entitled to withdraw from the applicable Principal
and Interest Account or to retain from interest payments on the Mortgage Loans
the successor Servicer's Contingency Fee.
Section 7.04 ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer will deliver to the Certificate Insurer, the Trustee, the
Co-Trustee and each of the Rating Agencies, on or before March 31 of each year
beginning March 31, 1997, an Officers' Certificate stating that (i) the Servicer
has fully complied with the provisions of Articles V and VII and the Claims
Administrator has fully complied with Section 5.15, (ii) a review of the
activities of the Servicer and the Claim Administrator during the preceding
calendar year and of performance under this Agreement has been made under such
officers' supervision, and (iii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof and the action being taken by the
Servicer and the Claims Administrator, as applicable, to cure such default.
Section 7.05 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
On or before March 31 of each year beginning March 31, 1997, the
Servicer, at its expense, shall cause a firm of independent public accountants
reasonably acceptable to the Trustee and the Certificate Insurer to furnish a
letter or letters to the Certificate Insurer, the Trustee, the Co- Trustee and
the Rating Agencies to the effect that such firm has with respect to the
Servicer's overall servicing operations examined such operations in accordance
with the requirements of the Uniform Single Audit Program for Mortgage Bankers,
and stating such firm's conclusions relating thereto.
Section 7.06 TRUSTEE'S, CO-TRUSTEE'S AND CERTIFICATE INSURER'S RIGHT
TO EXAMINE SERVICER RECORDS AND AUDIT OPERATIONS.
The Trustee, the Co-Trustee and the Certificate Insurer shall have the
right upon reasonable prior notice, during normal business hours and as often as
reasonably required, to examine and audit any and all of the books, records or
other information of the Servicer and the Claims Administrator, whether held by
the Servicer or by another on behalf of the Servicer and the Claims
Administrator, which may be relevant to the performance or observance by the
Servicer and the Claims Administrator of the terms, covenants or conditions of
this Agreement. The Certificate Insurer shall have the right upon reasonable
prior notice, during normal business hours and as often as reasonably required
to perform ongoing diligence of the Servicer's operations through loans reviews,
re-appraisals or other reasonable review of Servicer operations. No amounts
payable in respect of the foregoing shall be paid from the Trust Fund.
Section 7.07 REPORTS TO THE TRUSTEE AND THE CERTIFICATE INSURER;
PRINCIPAL AND INTEREST ACCOUNT STATEMENTS.
Not later than 20 days after each Record Date, the Servicer shall
forward to the Trustee and the Certificate Insurer a statement, certified by a
Servicing Officer, setting forth the status of each Principal and Interest
Account as of the close of business on the preceding Record Date and showing,
for the period covered by such statement, the aggregate of deposits into each
Principal and Interest Account for each category of deposit specified in Section
5.03, the aggregate of withdrawals from each Principal and Interest Account for
each category of withdrawal specified in Section 5.04, the aggregate amount of
permitted withdrawals not made in the related Due Period, and the amount of any
Monthly Advances or payments of Compensating Interest, in each case, for the
related Due Period. In addition, the Servicer shall deliver to the Certificate
Insurer on a quarterly basis, beginning in April 1997, a computer diskette
containing a quarterly summary of the information provided in the statement
forwarded to the Trustee and the Certificate Insurer pursuant to the previous
sentence, and also containing information similar to the information provided in
the Mortgage Loan Schedule delivered to the Trustee or the Co-Trustee as
Exhibits H, H-1, H-2 and H- 3.
ARTICLE VIII
REPORTS TO BE PROVIDED BY SERVICER
Section 8.01 FINANCIAL STATEMENTS.
The Servicer understands that, in connection with the transfer of the
Certificates, Certificateholders may request that the Servicer make available to
prospective Certificateholders annual audited financial statements of the
Servicer for one or more of the most recently completed five fiscal years for
which such statements are available, which request shall not be unreasonably
denied.
ARTICLE IX
THE SERVICER
Section 9.01 INDEMNIFICATION; THIRD PARTY CLAIMS.
(a) The Servicer agrees to indemnify and hold the Trustee, the
Co-Trustee, the Certificate Insurer and each Certificateholder harmless against
any and all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Trustee, the Co-Trustee, the Certificate Insurer and any Certificateholder may
sustain in any way related to the failure of the Servicer and the Claims
Administrator to perform its duties and service the Mortgage Loans in compliance
with the terms of this Agreement. The Servicer shall immediately notify the
Trustee, the Co-Trustee, the Certificate Insurer and each Certificateholder if a
claim is made by a third party with respect to this Agreement, and the Servicer
shall assume (with the consent of the Trustee) the defense of any such claim and
pay all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Claims Administrator, the Trustee, the Certificate
Insurer and/or Certificateholder in respect of such claim. The Trustee may
reimburse the Servicer from the related Expense Account pursuant to Section
6.03(c)(i), and, if necessary, from amounts otherwise payable to the Holders of
the Class X Certificates from the Pool Remaining Amount Available with respect
to each Pool for all amounts advanced by it pursuant to the preceding sentence
with respect to the Trust Fund except when the Claim relates directly to the
failure of the Servicer or the Claims Administrator to service and administer
the Mortgages in compliance with the terms of this Agreement.
(b) The Representative agrees to indemnify and hold the Trustee, the
Co-Trustee, the Certificate Insurer and each Certificateholder harmless against
any and all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Trustee, the Co-Trustee, the Certificate Insurer and any Certificateholder may
sustain in any way related to the failure of the Servicer, if it is an affiliate
thereof, or the failure of the Representative to perform their respective duties
in compliance with the terms of this Agreement and in the best interests of the
Certificate Insurer and the Certificateholders. The Representative shall
immediately notify the Trustee, the Certificate Insurer and each
Certificateholder if a claim is made by a third party with respect to this
Agreement, and the Representative shall assume (with the consent of the Trustee)
the defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Servicer, the
Representative, the Trustee, the Co-Trustee, the Certificate Insurer and/or
Certificateholder in respect of such claim. The Trustee may reimburse the
Representative from the related Expense Account pursuant to Section 6.03(c)(i),
and, if necessary, from amounts otherwise payable to the Holders of the Class X
Certificates from the Pool Remaining Amount Available with respect to each Pool
for all amounts advanced by it pursuant to the preceding sentence with respect
to the Trust Fund except when the claim relates directly to the Representative's
indemnification pursuant to Section 2.05 and Section 3.03 or to the failure of
the Servicer, if it is an affiliate of the Representative to perform its
obligations to service and administer the Mortgages in compliance with the terms
of this Agreement, or the failure of the Representative to perform its duties in
compliance with the terms of this Agreement and in the best interests of the
Certificate Insurer and the Certificateholders.
Section 9.02 MERGER OR CONSOLIDATION OF THE REPRESENTATIVE, THE
SERVICER AND THE CLAIMS ADMINISTRATOR.
The Servicer, the Representative and the Claims Administrator will
each keep in full effect its existence, rights and franchises as a corporation,
and will obtain and preserve its qualification to do business as a foreign
corporation, in each jurisdiction necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any Person into which the Servicer, the Representative may be merged
or consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer, the Representative or the Claims
Administrator shall be a party, or any Person succeeding to the business of the
Servicer, the Representative or the Claims Administrator, shall be an
established mortgage loan servicing institution that has a net worth of at least
$15,000,000 and a valid Contract of Insurance and shall be the successor of the
Servicer, the Representative or the Claims Administrator, as applicable,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Servicer, the Representative or the Claims Administrator
shall send notice of any such merger or consolidation to the Trustee, the
Co-Trustee and the Certificate Insurer.
Section 9.03 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
The Servicer and the Claims Administrator and any director, officer,
employee or agent of the Servicer and the Claims Administrator may rely on any
document of any kind which it in good faith reasonably believes to be genuine
and to have been adopted or signed by the proper authorities respecting any
matters arising hereunder. Subject to the terms of Section 9.01 herein, the
Servicer and the Claims Administrator shall have no obligation to appear with
respect to, prosecute or defend any legal action which is not incidental to the
Servicer's duty to service the Mortgage Loans in accordance with this Agreement.
Section 9.04 SERVICER AND CLAIMS ADMINISTRATOR NOT TO RESIGN.
The Servicer and the Claims Administrator shall not assign this
Agreement nor resign from the obligations and duties hereby imposed on it except
by mutual consent of the Servicer, the Claims Administrator, the Certificate
Insurer, the Trustee and the Majority Certificateholders, or upon the
determination that the Servicer's or Claims Administrator's duties hereunder are
no longer permissible under applicable law and such incapacity cannot be cured
by the Servicer or the Claims Administrator. Any such determination permitting
the resignation of the Servicer and the Claims Administrator shall be evidenced
by a written Opinion of Counsel (who may be counsel for the Servicer and the
Claims Administrator) to such effect delivered to the Trustee, the Co-Trustee,
the Certificate Insurer and to each Certificateholder, which Opinion of Counsel
shall be in form and substance acceptable to the Trustee and the Certificate
Insurer. No such resignation shall become effective until a successor has
assumed the Servicer's or the Claims Administrator's responsibilities and
obligations hereunder in accordance with Section 10.02.
Section 9.05 APPOINTMENT OF ASSISTANT CLAIMS ADMINISTRATOR.
The Claims Administrator hereby appoints TMS Mortgage Inc., a New
Jersey corporation, as Assistant Claims Administrator and, in such capacity, the
Assistant Claims Administrator shall have all the rights, powers, obligations
and duties of the Claims Administrator in acting in such capacity.
Notwithstanding such appointment, the Claims Administrator shall remain
obligated to the Trustee, the Co-Trustee and the Certificateholders in
accordance with the provisions of this Agreement.
Section 9.06 RIGHT OF CERTIFICATE INSURER TO REPLACE SERVICER AND
CLAIMS ADMINISTRATOR.
From and after the occurrence of a Servicing Delinquency Trigger, the
Certificate Insurer may, upon written notice to the Trustee, the Co-Trustee and
the Rating Agencies, replace the Servicer and/or the Claims Administrator with a
successor. No such replacement shall become effective until a successor has
assumed the Servicer's and/or the Claims Administrator's responsibilities and
obligations hereunder in accordance with Section 10.02.
ARTICLE X
DEFAULT
Section 10.01 EVENTS OF DEFAULT.
(a) In case one or more of the following Events of Default shall occur
and be continuing, that is to say:
(i) (A) an Event of Nonpayment; (B) the failure by
the Servicer to make any required Servicing Advance, to the
extent such failure materially and adversely affects the
interests of the Certificate Insurer or the
Certificateholders; (C) the failure by the Servicer to make
any required Monthly Advance; (D) the failure by the Servicer
to remit any Compensating Interest; (E) the failure by the
Servicer to pay the FHA Insurance Premium relating to any FHA
Loan or (F) any failure by the Servicer or the Claims
Administrator to remit to Certificateholders, or to the
Trustee for the benefit of the Certificateholders, any payment
required to be made under the terms of this Agreement which,
except with respect to FHA Payments to which no grace period
shall apply, continues unremedied after the date upon which
written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee
or to the Servicer and the Trustee by any Certificateholder or
the Certificate Insurer; or
(ii) failure by the Servicer, the Claims Administrator or
the Representative duly to observe or perform, in any material
respect, any other covenants, obligations or agreements of the
Servicer, the Claims Administrator or the Representative as
set forth in this Agreement, which failure continues
unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer, the Claims
Administrator or the Representative, as the case may be, by
the Trustee or to the Servicer, the Claims Administrator or
the Representative, as the case may be, and the Trustee by any
Certificateholder or the Certificate Insurer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Servicer or
the Claims Administrator and such decree or order shall have
remained in force, undischarged or unstayed for a period of 60
days; or
(iv) the Servicer or the Claims Administrator shall
consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer or the Claims Administrator or
of or relating to all or substantially all of the Servicer's
or the Claims Administrator's property; or
(v) the Servicer or the Claims Administrator shall
admit in writing its inability to pay its debts as they become
due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment
of its obligations;
(b) then, and in each and every such case, so long as an Event of
Default shall not have been remedied, and in the case of clause (i) above
(except for clause (i)(C) or, with respect to FHA Payments, clause (i)(F)), if
such Event of Default shall not have been remedied within 30 days after the
Servicer or the Claims Administrator has received notice of such Event of
Default, (x) with respect solely to clause (i)(C) above, if such Monthly Advance
is not made earlier than 4:00 p.m. New York time on the Determination Date, the
Trustee shall give immediate telephonic notice of such failure to a Servicing
Officer of the Servicer or the Claims Administrator, as the case may be, and,
unless such failure is cured, either by receipt of payment or receipt of
evidence satisfactory to the Certificate Insurer (E.G., a wire reference number
communicated by the sending bank) that such funds have been sent, by 12:00 Noon
New York time on the following Business Day, the Trustee (or, with respect to
the Pool III Mortgage Loans, the Co-Trustee) shall immediately assume, pursuant
to Section 10.02 hereof, the duties of a successor Servicer and the Claims
Administrator; and (y) in the case of clauses (i)(A), (i)(B), (i)(D), (i)(E),
(i)(F), (ii), (iii), (iv) and (v), the Certificate Insurer or the Majority
Certificateholders, subject to the prior written consent of the Certificate
Insurer, which consent may not be unreasonably withheld, by notice in writing to
the Servicer and the Claims Administrator, may, in addition to whatever rights
such Certificateholders or the Certificate Insurer may have at law or equity
including damages, injunctive relief and specific performance, in each case
commence termination of all the rights and obligations of the Servicer and the
Claims Administrator under this Agreement and in and to the Mortgage Loans and
the proceeds thereof, as Servicer and the Claims Administrator. Upon receipt by
the Servicer and the Claims Administrator of a second written notice from the
Certificate Insurer or the Majority Certificateholders stating that they or it
intend to terminate the Servicer and the Claims Administrator as a result of
such Event of Default, all authority and power of the Servicer and the Claims
Administrator under this Agreement, whether with respect to the Mortgage Loans
or otherwise, shall, subject to Section 10.02, pass to and be vested in the
Trustee or its designee (or, with respect to the Pool III Mortgage Loans, the
Co-Trustee or its designee) and the Trustee (or, with respect to the Pool III
Mortgage Loans, the Co-Trustee) is hereby authorized and empowered to execute
and deliver, on behalf of the Servicer and the Claims Administrator, as
attorney-in-fact or otherwise, any and all documents and other instruments and
do or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, including, but not limited
to, the transfer and endorsement or assignment of the Mortgage Loans and related
documents. The Servicer and the Claims Administrator agree to cooperate with the
Trustee and the Co-Trustee in effecting the termination of the Servicer's and
the Claims Administrator's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee or its designee for
administration by it of all amounts which shall at the time be credited by the
Servicer to each Principal and Interest Account or thereafter received with
respect to the Mortgage Loans.
Section 10.02 TRUSTEE AND CO-TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer or the Claims Administrator
receives a notice of termination pursuant to Section 10.01 or the Trustee
receives the resignation of the Servicer and the Claims Administrator evidenced
by an Opinion of Counsel pursuant to Section 9.04 or the Servicer and the Claims
Administrator are removed as servicer and claims administrator pursuant to this
Article X, the Trustee (or, with respect to the Pool III Mortgage Loans, the
Co-Trustee) shall be the successor in all respects to the Servicer in its
capacity as servicer and the Claims Administrator in its capacity as claims
administrator under this Agreement and the transactions set forth or provided
for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer and the Claims Administrator
by the terms and provisions hereof, provided, however, that the Trustee and the
Co-Trustee shall not be liable for any actions of any servicer or claims
administrator prior to it, and that the Trustee and the Co-Trustee shall not be
obligated to make advances or payments pursuant to Sections 6.03, 6.04, 6.11,
6.12, 5.05, 5.10 or 5.14 but only to the extent the Trustee or the Co-Trustee,
as the case may be, determines reasonably and in good faith that such advances
would not be recoverable, such determination to be evidenced with respect to
each such advance by a certification of a Responsible Officer of the Trustee or
the Co-Trustee, as the case may be. As compensation therefor, the Trustee (or,
with respect to the Pool III Mortgage Loans, the Co-Trustee) shall be entitled
to all funds relating to the Mortgage Loans which the Servicer and Claims
Administrator would have been entitled to receive from the Principal and
Interest Account pursuant to Section 5.04 if the Servicer had continued to act
as servicer and claims administrator hereunder, together with other servicing
compensation in the form of assumption fees, late payment charges, the
Contingency Fee or otherwise as provided in Sections 7.01 and 7.03.
Notwithstanding the above, the Trustee or the Co-Trustee may, if it
shall be unwilling to so act, or shall, if it is unable to so act or if the
Majority Certificateholders or the Certificate Insurer so request in writing to
the Trustee or the Co-Trustee, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
acceptable to the Certificate Insurer, which acceptance shall not be
unreasonably withheld, that has a net worth of not less than $15,000,000 and
which is approved as a servicer by FNMA and FHLMC (and, in the case of FHA
Loans, is a Title I approved lender pursuant to FHA Regulations) as the
successor to the Servicer and the Claims Administrator hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer and the Claims Administrator hereunder. Any collections received by
the Servicer and the Claims Administrator after removal or resignation shall be
endorsed by it to the Trustee and remitted directly to the Trustee or, at the
direction of the Trustee, to the successor servicer. The compensation of any
successor servicer and claims administrator (including, without limitation, the
Trustee and Co-Trustee) so appointed shall be the aggregate Servicing Fees,
together with the Contingency Fee and other servicing compensation in the form
of assumption fees, late payment charges or otherwise. In the event the Trustee
or Co- Trustee is required to solicit bids as provided herein, the Trustee or
Co-Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor servicer and claims administrator shall be entitled to, with respect
to the Mortgage Loans each would be servicing, the full amount of the aggregate
Servicing Fees and Contingency Fee relating to such Mortgage Loans as servicing
compensation, together with the other servicing compensation in the form of
assumption fees, late payment charges or otherwise. Within thirty days after any
such public announcement, the Trustee or Co-Trustee shall negotiate and effect
the sale, transfer and assignment of the servicing rights and responsibilities
hereunder to the qualified party submitting the highest qualifying bid. The
Trustee or Co-Trustee shall deduct from any sum received by the Trustee or
Co-Trustee from the successor to the Servicer and Claims Administrator in
respect of such sale, transfer and assignment all costs and expenses of any
public announcement and of any sale, transfer and assignment of the servicing
rights and responsibilities hereunder and the amount of any unreimbursed
Servicing Advances and Monthly Advances. After such deductions, the remainder of
such sum shall be paid by the Trustee or Co-Trustee to the Servicer and Claims
Administrator at the time of such sale, transfer and assignment to the
Servicer's and Claims Administrator's successor. The Trustee or Co-Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. The Servicer and Claims
Administrator agree to cooperate with the Trustee or Co-Trustee and any
successor servicer and claims administrator in effecting the termination of the
Servicer's and Claims Administrator's servicing responsibilities and rights
hereunder and shall promptly provide the Trustee or Co-Trustee or such successor
servicer, as applicable, all documents and records reasonably requested by it to
enable it to assume the Servicer's and Claims Administrator's functions
hereunder and shall promptly also transfer to the Trustee or Co-Trustee or such
successor servicer and claims administrator, as applicable, all amounts which
then have been or should have been deposited in the Principal and Interest
Account or Spread Account by the Servicer and Claims Administrator or which are
thereafter received with respect to the Mortgage Loans. Neither the Trustee, the
Co-Trustee nor any other successor servicer or claims administrator shall be
held liable by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Servicer and Claims Administrator to deliver, or any delay in delivering, cash,
documents or records to it, or (ii) restrictions imposed by any regulatory
authority having jurisdiction over the Servicer and Claims Administrator
hereunder. No appointment of a successor to the Servicer and Claims
Administrator hereunder shall be effective until written notice of such proposed
appointment shall have been provided by the Trustee to each Certificateholder
and the Certificate Insurer, and the Trustee shall have consented thereto.
Neither the Trustee nor the Co- Trustee shall resign as servicer until a
successor servicer reasonably acceptable to the Certificate Insurer has been
appointed.
Pending appointment of a successor to the Servicer and the Claims
Administrator hereunder, the Trustee and the Co-Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee and the Co-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 and Claims Administrator pursuant to
Section 7.03 or otherwise as provided in this Agreement. The Servicer, the
Claims Administrator, the Trustee, the Co-Trustee, any Custodian and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
Section 10.03 WAIVER OF DEFAULTS.
The Certificate Insurer or the Majority Certificateholders may, on
behalf of all Certificateholders, and subject to the consent of the Certificate
Insurer, which consent may not be unreasonably withheld, waive any events
permitting removal of the Servicer and the Claims Administrator as servicer
pursuant to this Article X, provided, however, that the Majority
Certificateholders or the Certificate Insurer may not waive a default in making
a required distribution on a Certificate without the consent of the holder of
such Certificate. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except to the
extent expressly so waived.
Section 10.04 TRANSFER OF TAX MATTERS PERSON RESIDUAL INTEREST.
Upon any termination of, or appointment of any successor to, the
Servicer hereunder, the Servicer shall promptly upon the request of the Trustee
transfer all of the Tax Matters Person Residual Interest to the Representative,
for such time as the Trustee shall serve as successor Servicer and thereafter
the Representative shall transfer such Tax Matters Person Residual Interest to
the entity that is appointed to succeed the Trustee as Servicer.
Section 10.05. CONTROL BY MAJORITY CERTIFICATEHOLDERS.
The Certificate Insurer or the Majority Certificateholders with the
consent of the Certificate Insurer, which consent may not be unreasonably
withheld, may direct the time, method and place of conducting any proceeding
relating to the Trust Fund or the Certificates or for any remedy available to
the Trustee or the Co-Trustee with respect to the Certificates or exercising any
trust or power conferred on the Trustee or the Co-Trustee with respect to the
Certificates or the Trust Fund PROVIDED THAT:
(i) such direction shall not be in conflict with
any rule of law or with this Agreement;
(ii) the Trustee or the Co-Trustee, as the case may
be, shall have been provided with indemnity
satisfactory to it; and
(iii) the Trustee and the Co-Trustee may take any other
action deemed proper by the Trustee and the Co-Trustee which
is not inconsistent with such direction; PROVIDED, HOWEVER,
that the Trustee and the Co-Trustee need not take any action
which it determines might involve it in liability or may be
unjustly prejudicial to the Holders not so directing.
ARTICLE XI
TERMINATION
Section 11.01 TERMINATION.
Subject to Section 11.03, this Agreement shall terminate upon notice
to the Trustee of either: (a) the latter of the final payment or other
liquidation of the last Mortgage Loan or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan
and the remittance of all funds due thereunder, or (b) mutual consent of the
Servicer, the Certificate Insurer and all Certificateholders in writing;
provided, however, that in no event shall the Trust established by this
Agreement terminate later than twenty-one years after the death of the last
surviving lineal descendant of Joseph P. Kennedy, late Ambassador of the United
States to the Court of St. James, alive as of the date hereof.
Subject to Section 11.03, the Servicer may, at its option, and in the
absence of the exercise thereof by the Servicer, the Certificate Insurer may, at
its option, on any date on which the aggregate Principal Balance of the Mortgage
Loans is less than ten percent of the sum of (i) the aggregate Principal Balance
of the Initial Mortgage Loans as of the Cut-Off Date and (ii) the Original
Pre-Funded Amount (such date, the "Optional Servicer Termination Date"),
purchase on the next succeeding Remittance Date, all of the Mortgage Loans and
any related REO Properties at a price equal to the sum of (x) 100% of the
Principal Balances of the Mortgage Loans before the occurrence of Realized
Losses, and any related REO Property, and including the portion of the principal
balance of each 90 Day Delinquent FHA Loan for which the Certificateholders have
not received payment and for which a Claim was submitted to the FHA (y) 30 days'
interest thereon (or, with respect to the Pool II Mortgage Loans, interest for
the actual number of days since the last Remittance Date to but not including
the upcoming Remittance Date) at the weighted average Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8 and Class A-9
Remittance Rates in the case of the Pool I Mortgage Loans, the Class A-10
Remittance Rate in the case of the Pool II Mortgage Loans, the weighted average
Class A-11, Class A-11, Class A-12, Class A-13, Class A-14 and Class A-15
Remittance Rates in the case of the Pool III Mortgage Loans and the Class A-16
Remittance Rate in the case of the Pool IV Mortgage Loans, and (z) the interest
portion of any unreimbursed Insured Payments made by the Certificate Insurer
(the "Termination Price").
On any Remittance Date on or after the Cross-Over Date when Mortgage
Loans with aggregate original Principal Balances that equal or exceed 25% of the
sum of (i) the aggregate Principal Balance of the Initial Mortgage Loans as of
the Cut-Off Date and (ii) the Original Pre- Funded Amount have become Liquidated
Mortgage Loans, the Certificate Insurer may determine to purchase and may cause
the purchase from the Trust Fund of all Mortgage Loans and REO Properties at a
price equal to the sum of the Termination Price with respect to the Trust Fund
and the outstanding and unpaid fees and expenses of the Trustee and the
Servicer. In connection with such purchase, the Servicer shall remit to the
Trustee all amounts then on deposit in the applicable Principal and Interest
Account for deposit to the applicable Certificate Account, which deposit shall
be deemed to have occurred immediately preceding such purchase.
In connection with any purchase pursuant to this Section 11.01, the
Certificate Insurer shall provide to the Trustee and the Co-Trustee an opinion
of counsel experienced in federal income tax matters in form and substance
satisfactory to the Trustee and the Co-Trustee to the effect that such purchase
constitutes a "Qualified Liquidation," as such term is defined in the REMIC
Provisions.
Notice of any termination, specifying the Remittance Date upon which
the Trust Fund will terminate and the Certificateholders shall surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation shall be given promptly by the Servicer or the Certificate Insurer
by letter to the Certificateholders mailed during the month of such final
distribution before the Determination Date in such month, specifying (i) the
Remittance Date upon which final payment of the Certificates will be made upon
presentation and surrender of such Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Remittance Date is not applicable,
payments being made only upon presentation and surrender of such Certificates at
the office of the Trustee therein specified. The Servicer shall give such notice
to the Trustee therein specified. The Servicer shall give such notice to the
Trustee at the time such notice is given to Certificateholders. The obligations
of the Certificate Insurer hereunder with respect to the Trust Fund shall
terminate upon the deposit by the Servicer or the Certificate Insurer with the
Trustee of the Termination Price with respect to the Trust Fund. Any obligation
of the Servicer to pay amounts due to the Certificate Insurer and the Trustee
shall survive the termination of the Trust Fund.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned written notice, the Servicer shall give a second written
notice to such remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto and shall
at the expense of the Trust Fund cause to be published once, in the eastern
edition of THE WALL STREET JOURNAL notice that such money remains unclaimed. If
within six months after the second notice all of such Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates and the cost
thereof shall be paid out of the funds and other assets which remain subject
hereto. If within the period then specified in the escheat laws of the State of
New York after the second notice all the Certificates shall not have been
surrendered for cancellation, the Class R Certificateholders shall be entitled
to all unclaimed funds and other assets which remain subject hereto and the
Trustee upon transfer of such funds subject hereto and the Trustee upon transfer
of such funds shall be discharged of any responsibility for such funds and the
Certificateholders shall look to the Class R Certificateholders for payment.
Section 11.02. TERMINATION UPON LOSS OF REMIC STATUS.
(a) Following a final determination by the Internal Revenue Service,
or by a court of competent jurisdiction, in either case, from which no appeal is
taken within the permitted time for such appeal, or if any appeal is taken,
following a final determination of such appeal from which no further appeal can
be taken, to the effect that either of REMIC I or REMIC II does not and will no
longer qualify as a REMIC pursuant to Section 860D of the Code (the "Final
Determination"), at any time on or after the date which is 30 calendar days
following such Final Determination, (i) the Majority Certificateholders may
direct the Trustee and the Co-Trustee on behalf of REMIC I and REMIC II to adopt
a "plan of complete liquidation" (within the meaning of Section 860F(a)(4) of
the Code) and (ii) the Certificate Insurer may notify the Trustee of the
Certificate Insurer's determination to purchase from REMIC II all Mortgage Loans
and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure, or otherwise in respect of any Mortgage Loan then remaining in
REMIC II at a price equal to the Termination Price for the REMIC II. Upon
receipt of such direction by the Majority Certificateholders or of such notice
from the Certificate Insurer, the Trustee shall notify the Class R
Certificateholders of such election to liquidate or such determination to
purchase, as the case may be (the "Termination Notice"). The Holders of a
majority of the Percentage Interest of the Class R Certificates then outstanding
may, within 60 days from the date of receipt of the Termination Notice (the
"Purchase Option Period"), at their option, purchase from REMIC II all Mortgage
Loans and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure, or otherwise in respect of any Mortgage Loan then remaining in
REMIC II at a purchase price equal to the Termination Price for REMIC II.
(b) If, during the Purchase Option Period, the Class R
Certificateholders have not exercised the option described in the immediately
preceding paragraph, then upon the expiration of the Purchase Option Period (i)
in the event that the Majority Certificateholders have given the Trustee and the
Co-Trustee the direction described in clause (a)(i) above, the Trustee (or, with
respect to the Pool III Mortgage Loans, the Co-Trustee) shall sell the Mortgage
Loans and distribute the proceeds of the liquidation of REMIC II in accordance
with the plan of complete liquidation, such that, if so directed, the
liquidation of REMIC II, the distribution of the proceeds of the liquidation and
the termination of this Agreement occur no later than the close of the 60th day,
or such later day as the Class A Certificateholders shall permit or direct in
writing, after the expiration of the Purchase Option Period and (ii) in the
event that the Certificate Insurer has given the Trustee notice of the
Certificate Insurer's determination to purchase from REMIC II the assets
described in clause (a)(ii) preceding, the Certificate Insurer shall so purchase
such assets from REMIC II within 60 days after the expiration of the Purchase
Option Period. In connection with such purchase, the Servicer shall remit to the
Trustee all amounts then on deposit in the Principal and Interest Account for
deposit to the Certificate Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.
(c) Following a Final Determination, the Holders of a majority of the
Percentage Interest of the Class R Certificates then outstanding may, at their
option and upon delivery to the Trustee and the Certificate Insurer of an
opinion of nationally recognized tax counsel selected by the Holders of the
Class R Certificates which opinion shall be reasonably satisfactory in form and
substance to the Majority Certificateholders and the Certificate Insurer to the
effect that the effect of the Final Determination is to increase substantially
the probability that the gross income of REMIC II will be subject to federal
taxation, purchase from REMIC II all Mortgage Loans and all property theretofore
acquired by foreclosure, deed in lieu of foreclosure, or otherwise in respect of
any Mortgage Loan then remaining in REMIC II at a purchase price equal to the
Termination Price for REMIC II. In connection with such purchase, the Servicer
shall remit to the Trustee all amounts then on deposit in the Principal and
Interest Account for deposit to the applicable Certificate Account, which
deposit shall be deemed to have occurred immediately preceding such purchase.
The foregoing opinion shall be deemed satisfactory unless the Majority
Certificateholders give the Holders of a majority of the Percentage Interest of
the Class R Certificates notice that such opinion is not satisfactory within
thirty days after receipt of such opinion.
Section 11.03 ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event the Servicer or the Certificate Insurer exercises its
purchase option as provided in Section 11.01 or 11.02, each of REMIC I and REMIC
II shall be terminated in accordance with the following additional requirements,
unless the Trustee has been furnished with an Opinion of Counsel to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 11.03 will not (i) result in the imposition of taxes on "prohibited
transactions" on REMIC I or REMIC II as defined in Section 860F of the Code, or
(ii) cause REMIC I or REMIC II to fail to qualify as a REMIC at any time that
any Class A Certificates are outstanding:
(i) Within 90 days prior to the final Remittance
Date, the holders of the Class R-1 and Class R-2 Certificates
shall adopt a plan of complete liquidation of REMIC I and
REMIC II, respectively, meeting the requirements of a
"Qualified Liquidation" under Section 860F of the Code and any
regulations thereunder;
(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the final Remittance
Date, the Trustee (or, with respect to the Pool III Mortgage
Loans the Co-Trustee) shall sell for cash all of the assets of
REMIC I and REMIC II to the Servicer, the Certificate Insurer
or the Certificate Insurer's designee; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall (x) deposit into and withdraw
from the Certificate Accounts the amount of such final payment
and shall distribute or credit, or cause to be distributed or
credited, to the Certificateholders of each Class, the related
Class Principal Balance, plus 30 days' interest thereon (or,
with respect to the Adjustable Rate Certificates, interest on
the actual number of days since the last Remittance Date up to
but not including the upcoming Remittance Date) at the related
Class Remittance Rate, and (y) to the Class R-1
Certificateholders, distribute all cash on hand after such
payment to the respective Class A Certificateholders and REMIC
I and REMIC II shall terminate at such time.
(b) By their acceptance of the Class R Certificates the holders
thereof hereby (i) agree to adopt such a plan of complete liquidation upon the
written request of the Servicer or Certificate Insurer and to take such other
action in connection therewith as may be reasonably requested by the Servicer
and (ii) appoint the Servicer as their attorney-in-fact, with full power of
substitution, for purposes of adopting such a plan of complete liquidation.
Section 11.04 [omitted]
Section 11.05 ACCOUNTING UPON TERMINATION OF SERVICER AND CLAIMS
ADMINISTRATOR.
Upon termination of the Servicer and Claims Administrator under
Article X hereof, the Servicer and Claims Administrator shall:
(a) deliver to its successor or, if none shall yet have been
appointed, to the Trustee the funds in any Principal and Interest Account;
(b) deliver to its successor or, if none shall yet have been
appointed, to the Trustee (or, with respect to the Pool III Mortgage Loans, the
Custodian) all Mortgage Files and related documents and statements held by it
hereunder and a Mortgage Loan portfolio computer tape;
(c) deliver to its successor or, if none shall yet have been
appointed, to the Trustee and, upon request, to the Certificateholders a full
accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for the payments
or charges with respect to the Mortgage Loans; and
(d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Mortgage Loans and administering of the Claims to their
successor and to more fully and definitively vest in such successor all rights,
powers, duties, responsibilities, obligations and liabilities of the Servicer
and the Claims Administrator under this Agreement.
ARTICLE XII
THE TRUSTEE
Section 12.01 DUTIES OF TRUSTEE.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Default has occurred and has not been cured or waived,
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement, provided, however that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Servicer, the Representative, the Claims Administrator or any
Originator hereunder. If any such instrument is found not to conform to the
requirements of this Agreement in a material manner, the Trustee shall take
action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trustee's satisfaction, the Trustee will
provide notice thereof to the Certificateholders.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default,
and after the curing of all such Events of Default which may
have occurred, the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an
error of judgment made in good faith by officers of the
Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the
Certificate Insurer or the Class A Certificateholders,
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Agreement;
(iv) In the absence of actual knowledge of an Event of
Default other than an Event of Nonpayment, the Trustee shall
not be required to take notice or be deemed to have notice or
knowledge of any default or Event of Default unless the
Trustee shall be specifically notified in writing by the
Servicer or the Certificate Insurer or any of the Class A
Certificateholders. In the absence of actual knowledge or
receipt of such notice, the Trustee may conclusively assume
that there is no default or Event of Default; and
(v) The Trustee shall not be required to expend or
risk its own funds or otherwise incur financial liability for
the performance of any of its duties hereunder or the exercise
of any of its rights or powers if there is reasonable ground
for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured to it.
Section 12.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 12.01:
(i) The Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or
document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any opinion
of counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with
such opinion of counsel;
(iii) The Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Agreement or
to institute, conduct or defend by litigation hereunder or in
relation hereto at the request, order or direction of the
Certificate Insurer or any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such
Certificateholders or the Certificate Insurer, as applicable,
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon
the occurrence of an Event of Default (which has not been
cured), to exercise such of the rights and powers vested in it
by this Agreement, and to use the same degree of care and
skill in its exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person's
own affairs;
(iv) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of an Event of Default
hereunder and after the curing of all Events of Default which
may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so
by the Certificate Insurer, Holders of Class A Certificates
evidencing Percentage Interests aggregating not less than 25%
of each Class of Class A Certificates; provided, however, that
if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may
require reasonable indemnity against such expense or liability
as a condition to taking any such action. The reasonable
expense of every such examination shall be paid by the
Servicer or, if paid by the Trustee, shall be repaid by the
Servicer upon demand from the Servicer's own funds;
(vi) The right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a
duty, and the Trustee shall not be answerable for other than
its negligence or willful misconduct in the performance of
such act;
(vii) The Trustee shall not be required to give any bond or
surety in respect of the execution of the trust created hereby
or the powers granted hereunder; and
(viii) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys.
(b) Following the Startup Day, except for deposits into the Spread
Account pursuant to Section 6.05, the Trustee shall not knowingly accept any
contribution of assets to the Trust Fund, unless the Trustee shall have received
an Opinion of Counsel to the effect that the inclusion of such assets in the
Trust Fund will not cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding or subject the Trust Fund to any tax
under the REMIC Provisions or other applicable provisions of federal, New York
State or New York City law or ordinances.
Section 12.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the
certificate of authentication on the Certificates) shall be taken as the
statements of the Servicer, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Servicer of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Principal and Interest Account by the Servicer. The Trustee shall not be
responsible for the legality or validity of the Agreement or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
or intended to be issued hereunder.
Section 12.04 TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights it would have if it were
not Trustee, and may otherwise deal with the parties hereto.
Section 12.05 SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES.
The Servicer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Servicer will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith, provided that the Trustee shall have no
lien on the Trust Fund, other than the Expense Accounts, for the payment of its
fees and expenses. To the extent that actual fees and expenses of the Trustee
exceed the amount available for payment thereof on deposit in the Expense
Accounts as of the date such fees and expenses are due and payable, the Servicer
shall reimburse the Trustee for such shortfall out of its own funds without
reimbursement therefor, except as provided in Section 6.03. The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified by the
Servicer and held harmless against any loss, liability or expense (i) incurred
in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, and (ii) resulting from any error in any tax or information return
prepared by the Servicer. The obligations of the Servicer under this Section
12.05 shall survive payment of the Certificates, and shall extend to any
co-trustee appointed pursuant to this Article XII.
Section 12.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee hereunder shall at all times be a banking association
organized and doing business under the laws of any state or the United States of
America, (i) authorized under such laws to exercise corporate trust powers, (ii)
having a combined capital and surplus of at least $30,000,000, (iii) except in
the case of The Bank of New York, whose unsecured and unguaranteed long-term
debt obligations shall be rated at least "A" by S&P, or such other rating as is
acceptable to the Certificate Insurer, (iv) subject to supervision or
examination by federal or state authority, and (v) is reasonably acceptable to
the Certificate Insurer. If such banking association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section its combined capital and surplus shall be deemed to be as set forth in
its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign, upon the request of the Certificate Insurer
or the Majority Certificateholders, in the manner and with the effect specified
in Section 12.07.
Section 12.07 RESIGNATION AND REMOVAL OF THE TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Servicer, the Certificate
Insurer and to all Certificateholders. Upon receiving such notice of
resignation, the Servicer shall with the consent of the Certificate Insurer
promptly appoint a successor trustee by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
trustee. A copy of such instrument shall be delivered to the Certificateholders
by the Servicer. Unless a successor trustee shall have been so appointed and
have accepted appointment within 60 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appoint ment of a successor trustee. If the resigning
Trustee fails to petition an appropriate court, the Certificate Insurer may,
after such 60 day period, petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 12.06 and shall fail to resign after written
request therefor by the Servicer, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Servicer
may remove the Trustee and appoint, subject to the approval of the Certificate
Insurer, a successor trustee by written instrument, in duplicate, which
instrument shall be delivered to the Trustee so removed and to the successor
trustee. A copy of such instrument shall be delivered to the Certificateholders
by the Servicer.
The Majority Certificateholders with the consent of the Certificate
Insurer, which consent will not be unreasonably withheld, or the Certificate
Insurer may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Servicer, one complete set to the Trustee so removed
and one complete set to the successor Trustee so appointed.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 12.08.
Section 12.08 SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 12.07 shall
execute, acknowledge and deliver to the Servicer and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and related documents and statements held by it hereunder, and
the Servicer and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 12.06.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certifi cates at their addresses as shown in the
Certificate Register. If the Servicer fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Servicer.
Section 12.09 MERGER OR CONSOLIDATION OF TRUSTEE.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation or national banking association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or national banking association succeeding
to the business of the trustee, shall be the successor of the Trustee hereunder,
provided such corporation or national banking association shall be eligible
under the provisions of Section 12.06, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 12.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee, and the Certificate Insurer pursuant to the procedure set forth below,
to act as co-trustee or co-trustees, jointly with the Trustee, or separate
trustee or separate trustees, of all or any part of the Trust Fund, and to vest
in such Person or Persons, in such capacity, such title to the Trust Fund, or
any part thereof, and, subject to the other provisions of this Section 12.10,
such powers, duties, obligations, rights and trusts as the Servicer and the
Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in case an Event of Default shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 12.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 12.08 hereof. Any co-trustee with respect to the FHA
Loans must at all times have a valid FHA Contract of Insurance. The Trustee
shall notify the Certificate Insurer prior to the appointment of any
co-trustee(s) or separate trustee(s) and the Certificate Insurer shall have four
Business Days from its receipt of such notice to notify the Trustee whether it,
in its reasonable judgment, disapproves of such co-trustee(s) or separate
trustee(s). If the Certificate Insurer does not notify the Trustee within such
time frame, it will be deemed to have approved such co-trustee(s) or separate
trustee(s). If the Certificate Insurer notifies the Trustee within such time
frame that it, in its reasonable judgment, disapproves of such co-trustee(s) or
separate trustee(s) (which notice shall be accompanied by the name(s) of the
Certificate Insurer's alternative proposed co-trustee(s) or separate
trustee(s)), such appointments shall not be effective.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 12.10, all rights, powers, duties and obligations
conferred or imposed upon the trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. The Trustee shall not be responsible
for any action or inaction of any such separate trustee or co-trustee. If any
separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
The Servicer and the Trustee hereby appoint First Bank (N.A.) as
Co-Trustee with respect to all Pool III Mortgage Loans that constitute, or may
in the future constitute, part of the Trust Fund. Except as otherwise
specifically provided herein, whenever action, consent, approval or delivery to
or from the Trustee is required under this Agreement in connection with a Pool
III Mortgage Loan, such action, consent, approval or delivery to or from shall
be taken or made by the Co-Trustee. Also, any obligations of or benefits,
protection and indemnities provided to, the Trustee with respect to the Mortgage
Loans shall be obligations of, and benefits, protection and indemnities provided
to, the Co-Trustee with respect to the Pool III Mortgage Loans.
Notwithstanding any contrary provision contained herein, the
Co-Trustee shall be responsible hereunder solely for the express duties and
functions specified for it herein with respect to the acceptance, ownership,
servicing compliance oversight, FHA Title I insurance coverage, substitution,
sale, release and discharge of Pool III Mortgage Loans, and shall not be
responsible for, and shall incur no liability in connection with, the actions,
duties and functions of the Trustee, including without limitation the payment of
Certificates or the oversight of servicing compliance for Mortgage Loans not
constituting Pool III Mortgage Loans.
Section 12.11 AUTHENTICATING AGENT.
Upon the request of the Servicer, the Trustee shall appoint an
Authenticating Agent, with power to act on the Trustee's behalf and subject to
its direction in the authentication and delivery of the Certificates in
connection with transfers and exchanges under Section 4.02, as fully to all
intents and purposes as though the Authenticating Agent had been expressly
authorized by that Section to authenticate and deliver Certificates. For all
purposes of this Agreement, the authentication and delivery of Certificates by
the Authenticating Agent pursuant to this Section shall be deemed to be the
authentication and delivery of Certificates by the Trustee. Such Authenticating
Agent shall at all times be a Person meeting the requirements for the Trustee
set forth in Section 12.06, other than Section 12.06(iv).
Any corporation or national banking association into which any
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, consolidation or conversion to which any Authenticating Agent shall
be a party, or any corporation or national banking association succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of
the Authenticating Agent hereunder, if such successor corporation or national
banking association is otherwise eligible under this Section, without the
execution or filing of any further act on the part of the parties hereto or the
Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving notice of
resignation to the Trustee and the Servicer. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and the Servicer. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Trustee
shall promptly appoint a successor Authenticating Agent and shall give written
notice of such appointment to all Certificateholders as their names and
addresses appear on the Certificate Register. The Servicer agrees to pay to the
Authenticating Agent from time to time reasonable compensation for its services.
The provisions of Sections 4.04 and 12.03 shall be applicable to any
Authenticating Agent.
Section 12.12 TAX RETURNS AND REPORTS.
The Trustee, upon request, will furnish the Servicer with all such
information as may be reasonably required in connection with the Servicer's
preparation of all Tax Returns of REMIC I and REMIC II and, upon request within
five (5) Business Days after its receipt thereof, shall (i) sign on behalf of
REMIC I and REMIC II any Tax Return that the Trustee is required to sign
pursuant to applicable federal, state or local tax laws, and (ii) cause such Tax
Return to have been returned to the Servicer for filing.
For Federal income tax purposes, the taxable year of the Trust Fund
shall be a calendar year and the Servicer shall maintain or cause the
maintenance of the books of REMIC I and REMIC II on the accrual method of
accounting.
The Servicer shall prepare and file or cause to be filed with the
Internal Revenue Service Federal tax information returns with respect to REMIC I
and REMIC II and the Certificates containing such information and at the times
and in the manner as may be required by the Code or applicable Treasury
regulations, and shall furnish to each Holder of Certificates at any time during
the calendar year for which such returns or reports are made such statements or
information at the times and in the manner as may be required thereby. In
connection with the foregoing, the Servicer shall provide the name, address and
telephone number of the person who can be contacted to obtain information
required to be reported to the holders of regular interests in REMIC I and REMIC
II (the "REMIC Reporting Agent") as required by IRS Form 8811. The Servicer
shall indicate the election to treat each of REMIC I and REMIC II as a REMIC
(which election shall apply to the taxable period ending December 31, 1996 and
each calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe. The Trustee shall sign all tax information returns
filed pursuant to this Section and any other returns as may be required by the
Code, and in doing so shall rely entirely upon, and shall have no liability for
information provided by, or calculations provided by, the Servicer. The
Representative is hereby designated as the Tax Matters Person (within the
meaning of Section 1.860F-4(d) of the Regulations) for each of REMIC I and REMIC
II. Any Holder of a Class R Certificate will by acceptance thereof so appoint
the Representative as agent and attorney-in-fact for the purpose of acting as
Tax Matters Person for the related REMIC. In the event that the Code or
applicable Treasury Regulations prohibit the Trustee from signing tax or
information returns or other statements, or the Representative from acting as
Tax Matters Person (as an agent or otherwise), the Trustee or the Representative
shall take whatever action that in its sole good faith judgment is necessary for
the proper filing of such information returns or for the provision of a tax
matters person, including designation of the Holder of a Class R Certificate to
sign such returns or act as tax matters person. Each Holder of a Class R
Certificate shall be bound by this Section.
The Trustee shall provide upon request such information as required in
Section 860D(a)(6)(B) of the Code to the Internal Revenue Service and any Person
purporting to transfer a Class R Certificate.
Section 12.13 APPOINTMENT OF CUSTODIANS.
The Trustee may (or, with respect to the Pool III Mortgage Loans, the
Co-Trustee may), with the consent of the Servicer, appoint one or more
Custodians to hold all or a portion of the Trustee's Mortgage Files as agent for
the Trustee (or, with respect to the Pool III Mortgage Loans, the Co-Trustee),
by entering into a Custodial Agreement. Subject to this Article XII, the Trustee
(or, with respect to the Pool III Mortgage Loans, the Co-Trustee) agrees to
comply with the terms of each Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders and the Certificate Insurer. The Trustee (or, with respect to
the Pool III Mortgage Loans, the Co-Trustee) shall be liable for the fees of any
Custodian appointed hereunder. Each Custodian (other than First Trust National
Association) shall be a depository institution subject to supervision by federal
or state authority, shall be qualified to do business in the jurisdiction in
which it holds any Mortgage File.
The Co-Trustee and the Servicer hereby appoint First Trust National
Association as Custodian with respect to the Trustee's Mortgage Files relating
to all Pool III Mortgage Loans that constitute, or may in the future constitute,
part of the Trust Fund. The Custodian shall be responsible hereunder solely for
the express duties and functions specified for it herein with respect to the
custody, review and confirmation, safekeeping, substitution and release of the
Trustee's Mortgage Files relating to the Pool III Mortgage Loans.
Section 12.14. PROTECTION OF TRUST FUND.
(a) The Trustee will hold the Trust Fund in trust for the benefit of
the Holders and the Certificate Insurer and, upon request of the Certificate
Insurer, or, with the consent of the Certificate Insurer, at the request of the
Representative, will from time to time execute and deliver all such supplements
and amendments hereto pursuant to Section 13.02 hereof and all instruments of
further assurance and other instruments, and will take such other action upon
such request as it deems reasonably necessary or advisable, to:
(i) more effectively hold in trust all or any
portion of the Trust Fund;
(ii) perfect, publish notice of, or protect the
validity of any grant made or to be made by this
Agreement;
(iii) enforce any of the Mortgage Loans; or
(iv) preserve and defend title to the Trust Fund and the
rights of the Trustee, and the ownership interests of the
Owners represented thereby, in the Trust Fund against the
claims of all Persons and parties.
The Trustee shall send copies of any request received from the
Certificate Insurer or the Representative to take any action pursuant to this
Section 12.14 to the others.
(b) Subject to Article X hereof, the Trustee shall have the power to
enforce, and shall enforce the obligations of the other parties to this
Agreement and of the Certificate Insurer, by action, suit or proceeding at law
or equity, and shall also have the power to enjoin, by action or suit in equity,
any acts or occurrences which may be unlawful or in violation of the rights of
the Holders; provided, however, that nothing in this Section 12.14 shall require
any action by the Trustee unless the Trustee shall first (i) have been furnished
indemnity satisfactory to it and (ii) when required by this Agreement, have been
requested to take such action by the Majority Certificateholders, the
Certificate Insurer or the Representative in accordance with the terms of this
Agreement.
(c) The Trustee shall execute any instrument required pursuant to this
Section so long as such instrument does not conflict with this Agreement or with
the Trustee's fiduciary duties.
Section 12.15. CALCULATION OF LIBOR.
(a) On each Interest Determination Date, the Trustee will determine
LIBOR based on the rate for one-month U.S. dollar deposits (the "One Month Index
Maturity") which appears on Telerate Page 3750 as of 11:00 a.m., London time, on
such date in determining the Class A-10 and Class A-11 Remittance Rates for the
Remittance Date in the following month. If such LIBOR rate does not appear on
Telerate Page 3750, the LIBOR rate for that day will be determined on the basis
of the rates at which deposits in United States dollars, having the One-Month
Index Maturity and in a principal amount of not less than U.S. $1,000,000, are
offered at approximately 11:00 a.m., London time, on that day to prime banks in
the London interbank market by the Reference Banks. The Trustee will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are provided, the rate for that day
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided, the rate for that day will be the arithmetic mean of the rates quoted
by major banks in New York City, selected by the Trustee, at approximately 11:00
a.m., New York City time, on that day for loans in United States dollars to
leading European banks having a One-Month Index Maturity and in a principal
amount equal to an amount of not less than U.S. $1,000,000; provided that if the
banks selected as aforesaid are not quoting as mentioned in this sentence, LIBOR
in effect for the applicable Interest Period will be LIBOR in effect for the
previous Interest Period.
Neither the Representative, Servicer nor the Trustee shall have any
liability or responsibility to any Person for the selection of any Reference
Bank for the purpose of determining LIBOR. In determining LIBOR and the Class
A-10 and Class A-11 Remittance Rates, the Trustee may conclusively rely and
shall be protected in relying upon the rates appearing on Telerate Page 3750 or
the offered quotations (whether written, oral or on Telerate Page 3750) from
Reference Banks, as appropriate, in effect from time to time. Neither of the
Representative, the Servicer, the Certificate Insurer nor the Trustee shall have
liability or responsibility to any Person for (i) the Trustee's selection of
Reference Banks for purposes of determining LIBOR or (ii) the Trustee's or the
Servicer's inability, as applicable, following a good-faith reasonable effort,
to obtain such quotations from Reference Banks or such New York City banks or to
determine such arithmetic mean, all as provided for in this Section 12.15.
The establishment of LIBOR and the Class A-10 and Class A-11
Remittance Rates by the Trustee shall (in the absence of manifest error) be
final, conclusive and binding upon each Holder of a Certificate, the
Representative, the Servicer and the Certificate Insurer.
The Trustee is not responsible for determining (or for the failure of
the Servicer to determine) the Net Funds Cap.
<PAGE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 ACTS OF CERTIFICATEHOLDERS.
Except as otherwise specifically provided herein, whenever
Certificateholder action, consent or approval is required under this Agreement,
such action, consent or approval shall be deemed to have been taken or given on
behalf of, and shall be binding upon, all Certificateholders if the Majority
Certificateholders agree to take such action or give such consent or approval.
Section 13.02 AMENDMENT.
(a) This Agreement may be amended from time to time by the Servicer
and the Trustee by written agreement, upon the prior written consent of the
Certificate Insurer, without the notice to or consent of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions herein, to comply
with any changes in the Code, or to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, any Custodial Agreement or
the Insurance Agreement; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Trustee, adversely affect
the interests of any Certificateholder in any material respect or any other
party and further provided that no such amendment shall reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, or change the rights or obligations of any other party
hereto without the consent of such party.
(b) This Agreement may be amended from time to time by the
Originators, the Representative, the Servicer and the Trustee, with the prior
written consent of the Certificate Insurer, the Majority Certificateholders and
the Holders of the majority of the Percentage Interest in each of the Class X,
Class R-1 and Class R-2 Certificates for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders; provided, however, that
no such amendment shall be made unless the Trustee receives an Opinion of
Counsel, at the expense of the party requesting the change, that such change
will not adversely affect the status of either REMIC I or REMIC II as a REMIC or
cause a tax to be imposed on REMIC I or REMIC II, and provided further, that no
such amendment shall reduce in any manner the amount of, or delay the timing of,
any amounts which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate or reduce the percentage for each
Class the Holders of which are required to consent to any such amendment without
the consent of the Holders of 100% of each Class of Cer tificates affected
thereby.
(c) It shall not be necessary for the consent of Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof.
Section 13.03 RECORDATION OF AGREEMENT.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Certificateholders' expense on direction of the Majority
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 13.04 DURATION OF AGREEMENT.
This Agreement shall continue in existence and effect until terminated
as herein provided.
Section 13.05 GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 13.06 NOTICES.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by overnight mail, certified mail or registered mail, postage prepaid, to (i) in
the case of the Representative, the Servicer, the Claims Administrator, and each
Originator, The Money Store Inc., 2840 Morris Avenue, Union, New Jersey 07083,
Attention: Executive Vice President, or such other addresses as may hereafter be
furnished to the Certificateholders in writing by the Representative and the
Servicer, (ii) in the case of the Trustee, The Bank of New York, 101 Barclay
Street, 12th Floor East, New York, New York 10286, Attention: Corporate Trust
MBS Administration, (iii) in the case of the Certificateholders, as set forth in
the Certificate Register, (iv) in the case of Moody's, to Moody's Investors
Service, Home Equity Group, 99 Church Street, 4th Floor, New York, New York
10007, (v) in the case of S&P, to Standard & Poor's Corporation, 25 Broadway,
20th Floor, New York, New York 10004, Attention: Residential Mortgages and, (vi)
in the case of the Co-Trustee, c/o First Trust National Association, 180 East
Fifth Street, St. Paul, Minnesota 55101, Attention: Corporate Trust Department.
Any such notices shall be deemed to be effective with respect to any party
hereto upon the receipt of such notice by such party, except that notices to the
Certificateholders shall be effective upon mailing or personal delivery.
Section 13.07 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other covenants,
agreements, provisions or terms of this Agreement.
Section 13.08 NO PARTNERSHIP.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
the Certificate- holders.
Section 13.09 COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
Section 13.10 SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
Representative, the Servicer, the Originators, the Trustee and the
Certificateholders and their respective successors and assigns.
Section 13.11 HEADINGS.
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
Section 13.12 THE CERTIFICATE INSURER.
Any right conferred to the Certificate Insurer shall be suspended
during any period in which the Certificate Insurer is in default in its payment
obligations under a Certificate Insurance Policy. At such time as the
Certificates are no longer outstanding hereunder, and no amounts owed to the
Certificate Insurer hereunder remain unpaid, the Certificate Insurer's rights
hereunder shall terminate. The notice address of the Certificate Insurer is MBIA
Insurance Corporation, 113 King Street, Armonk, New York 10504, Attention:
Surveillance Department (The Money Store).
Section 13.13 PAYING AGENT.
The Trustee may, subject to the eligibility requirements for the
Trustee set forth in Section 12.06 hereof, other than Section 12.06(iv), appoint
one or more successor Paying Agents.
Each Paying Agent, immediately upon such appointment, shall signify
its acceptance of the duties and obligations imposed upon it by this Agreement
by written instrument of acceptance deposited with the Trustee.
Each such Paying Agent other than the Trustee shall execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee, subject to the provisions of Section 6.06, that such Paying Agent
will:
(1) allocate all sums received for distribution to the
Holders of Certificates of each Class for which it is
acting as Paying Agent on each Remittance Date among
such Holders in the proportion specified by the
Trustee; and
(2) hold all sums held by it for the distribution of
amounts due with respect to the Certificates in trust
for the benefit of the Holders entitled thereto until
such sums shall be paid to such Holders or otherwise
disposed of as herein provided and pay such sums to
such Persons as herein provided.
Any Paying Agent other than the Trustee may at any time resign and be
discharged of the duties and obligations created by this Agreement by giving at
least sixty (60) days written notice to the Trustee. Any such Paying Agent may
be removed at any time by an instrument filed with such Paying Agent signed by
the Trustee.
In the event of the resignation or removal of any Paying Agent other
than the Trustee such Paying Agent shall pay over, assign and deliver any moneys
held by it as Paying Agent to its successor, or if there be no successor, to the
Trustee.
Upon the appointment, removal or notice of resignation of any Paying
Agent, the Trustee shall notify the Certificate Insurer and the
Certificateholders by mailing notice thereof to their addresses appearing on the
Certificate Register.
Section 13.14 NOTIFICATION TO RATING AGENCIES.
The Trustee shall give prompt notice to the Rating Agencies of the
occurrence of any of the following events of which it has received notice: (1)
any modification or amendment to this Agreement, (2) any appointment of a
Custodian (other than First Trust National Association), (3) any change of the
Trustee or the Servicer (4) any Event of Default, and (5) the final payment of
all the Certificates. The Servicer shall promptly deliver to the Rating Agencies
a copy of each of the Servicer's Certificates. Further, the Representative shall
give prompt notice to the Rating Agencies if the Representative or any of its
affiliates acquire any Class A Certificates, which notice shall acknowledge that
the Representative, or such affiliate understands that such Class A Certificates
so acquired will not be entitled to the benefits of the Certificate Insurance
Policy and, accordingly, will not be rated by the Rating Agencies so long as
such Class A Certificates are owned by the Representative or any such affiliate.
Section 13.15 THIRD PARTY RIGHTS.
The Trustee, the Representative, the Servicer and each of the
Originators listed herein agree that the Certificate Insurer shall be deemed a
third-party beneficiary of this Agreement entitled to all the rights and
benefits set forth herein as fully as if it were a party hereto.
<PAGE>
IN WITNESS WHEREOF, the Representative, the Servicer, the Claims
Administrator, the Trustee and each Originator have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
THE MONEY STORE INC., as
Representative, Servicer
and Claims Administrator
By:________________________________
Name: Morton Dear
Title: Executive Vice President
THE BANK OF NEW YORK, as Trustee
By:________________________________
Name:
Title:
The Originators
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
By:_____________________________
Name: Morton Dear
Title: Executive Vice President
<PAGE>
ACCEPTANCE OF ASSISTANT CLAIMS ADMINISTRATOR
TMS Mortgage Inc., a New Jersey corporation, hereby accepts its
appointment pursuant to Section 9.05 of the within instrument to serve as
Assistant Claims Administrator. In connection therewith, TMS Mortgage Inc.
agrees to be bound by all applicable provisions of such instrument.
TMS MORTGAGE INC.,
as Assistant Claims
Administrator
By: ______________________________
Name: Morton Dear
Title: Executive Vice President
<PAGE>
ACCEPTANCE OF CO-TRUSTEE
First Bank (N.A.) hereby accepts its appointment pursuant to Section
12.10 of the within instrument to serve as Co-Trustee with respect to the Pool
III Mortgage Loans. In connection therewith, First Bank (N.A.) agrees to be
bound by all applicable provisions of such instrument.
FIRST BANK (N.A.), as Co-Trustee
By:__________________________________
Name:
Title:
<PAGE>
ACCEPTANCE OF CUSTODIAN
First Trust National Association hereby accepts its appointment
pursuant to Section 12.13 of the within instrument to serve as Custodian with
respect to the Pool III Mortgage Loans. In connection therewith, First Trust
National Association agrees to be bound by all applicable provisions of such
instrument.
FIRST TRUST NATIONAL ASSOCIATION, as
Custodian
By:_________________________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the 30th day of December 1996 before me, a Notary Public in and for
said State, personally appeared ____________________ known to me to be an
officer of The Bank of New York, a New York banking corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said New York banking corporation, and acknowledged to me that such
New York banking corporation, executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
My Commission expires
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the 30th day of December 1996 before me, a Notary Public in and for
the State of New York, personally appeared Morton Dear known to me to be the
Executive Vice President of The Money Store Inc., one of the corporations that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
My Commission expires
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the 30th day of December 1996 before me, a Notary Public in and for
the State of New York, personally appeared Morton Dear known to me to be the
Executive Vice President of each Originator listed on Exhibit I to the within
instrument, and also known to me to be the person who executed it on behalf of
each such corporation, and acknowledged to me that each such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
My Commission expires
<PAGE>
SCHEDULE I
DESCRIPTION OF CERTAIN LITIGATION
None.
<PAGE>
EXHIBIT A
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall
include a copy of any of the following items delivered to the Trustee (or the
Co-Trustee, in the case of Pool III Mortgage Loans) and an original of any of
the other following items, all of which shall be available for inspection by the
Certificateholders:
1. The original Mortgage Note, endorsed "Pay to the order
of holder" or "Pay to the order of ______________" and
signed in the name of the Person delivering the note by
a Responsible Officer, with all prior and intervening
endorsements showing a complete chain of endorsement
from the originator to such Person;
2. Either: (i) the original recorded Mortgage, with
evidence of recording thereon, (ii) a copy of
the Mortgage certified as a true copy by a
Responsible Officer where the original has been
transmitted for recording until such time as the
original is returned by the public recording
office or (iii) a copy of the Mortgage certified
by the public recording office in those
instances where the original recorded Mortgage
has been lost.
3. Either (i) the original Assignment of Mortgage
from the Person delivering such Assignment to
"The Bank of New York, as Trustee under the
Pooling and Servicing Agreement dated as of
November 30, 1996, Series 1996-D" or, in the
case of the Pool III Mortgage Loans, to "First
Bank (N.A.), as Co-Trustee under the Pooling and
Servicing Agreement dated as of November 30,
1996, Series 1996-D" with evidence of recording
thereon (provided, however, that where permitted
under the laws of the jurisdiction wherein the
Mortgaged Property is located, the Assignment of
Mortgage may be effected by one or more blanket
assignments for Mortgage Loans secured by
Mortgaged Properties located in the same county)
or (ii) a copy of the Assignment of Mortgage
certified as a true copy by a Responsible
Officer of the Originator where the original was
transmitted for recording (provided, however,
that where the original Assignment of Mortgage is
not being delivered to the Trustee (or the Co-Trustee,
in the case of Pool III Mortgage Loans), each such
Responsible Officer may complete one or more blanket
certificates attaching copies of one or more of such
Assignments of Mortgage relating to the Mortgages
originated by the related Originator).
4. The original policy of title insurance or, if
such policy has not yet been delivered by the
insurer, the commitment or binder to issue same,
or if the original principal balance of the
Mortgage Loan was less than or equal to $15,000
or the Mortgage Loan was not originated by a
Originator, other evidence of the status of
title, which shall consist of an attorney's
opinion of title or certificate of title, a
preliminary title report, a property search, a
title search, a lot book report, a property
information report or a report entitled "prelim"
or "PIRT" (property information report), and
(ii) proof of hazard insurance in the form of a
hazard insurance policy or hazard insurance
policy endorsement that names the related
Originator, its successors and assigns, as a
mortgagee/loss payee, and, if such endorsement
does not show the amount insured by the related
hazard insurance policy, some evidence of such
amount.
5. Originals of all assumption and modification
agreements, if any.
6. Either: (i) original intervening assignments, if
any, showing a complete chain of title from the
originator to the Person delivering such
Assignment, including warehousing assignments,
with recording information thereon, if such
assignments were recorded, (ii) copies of any
assignments certified as true copies by a
Responsible Officer of the Originator where the
original has been transmitted for recording until
such time as the originals are returned by the
public recording office, or (iii) copies of any
assignments certified by the public recording
office in those instances where the original
recorded assignments have been lost.
7. Mortgage Loan closing statement and any other
truth-in-lending or real estate settlement
procedure forms required by law.
8. Residential loan application.
9. Verification of employment and income, and tax
returns, if any.
10. Credit report on the mortgagor.
11. Except with respect to certain Mortgage Loans
with original principal balances of less than
$15,000, the appraisal made in connection with
the origination of the related Mortgage Loan
with photographs of the subject property and of
comparable properties (if available),
constituting evidence sufficient to indicate
that the Mortgaged Property relates to a
Residential Dwelling and identifying the type
thereof.
12. Copy of any Prior Lien.
13. All other papers and records developed or
originated by the Originator or others, required
to document the Mortgage Loan or to service the
Mortgage Loan.
14. Evidence of the inspection by the Originator of all
improvements and other goods and services provided
under the Pool III Mortgage loan as required under
Section 3.02(rrr).
<PAGE>
EXHIBIT B-1
[FORM OF CLASS A-1, CLASS A-2, CLASS A-3,
CLASS A-4, CLASS A-6, CLASS A-7, CLASS A-8, CLASS A-9,
CLASS A-12, CLASS A-13, CLASS A-14,
CLASS A-15 AND CLASS A-16 CERTIFICATES]
THE MONEY STORE TRUST 1996-D
[ %] THE MONEY STORE ASSET BACKED CERTIFICATES
CLASS A-_
Representing Certain Interests in a
Trust containing certain Mortgage
Loans formed by
THE MONEY STORE INC.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by, The Money Store
Inc. or any of its subsidiaries. This Certificate represents a fractional
ownership interest in the Trust described herein.)
No.: A-_-1 DECEMBER 30, 1996
Startup Day
$
Original Principal Amount Final Scheduled CUSIP
Distribution
CEDE & CO.
Registered Holder
The registered Holder named above is the registered Holder of a fractional
interest in a trust fund (the "Trust Fund"), the trust estate of which consists
primarily of four sub-trusts, including two pools ("Pool I" and "Pool II") of
one- to four-family ("single family") residential first and second mortgage
loans, having fixed rates, in the case of Pool I, and adjustable rates, in the
case of Pool II (the "Pool I Home Equity Loans" and "Pool II Home Equity
Loans"), one pool ("Pool III") of fixed rate single family residential first,
second and more junior home improvement mortgage loans (the "Pool III Home
Improvement Loans") and one pool ("Pool IV") of fixed rate five or more unit
residential or mixed-use residential and commercial ("multifamily") first
mortgage loans ("Pool IV Multifamily Loans") and certain related assets. The
Certificates are issued pursuant to a Pooling and Servicing Agreement, dated as
of November 30, 1996 (the "Pooling and Servicing Agreement"), among The Money
Store Inc. (the "Representative," "Servicer" and "Claims Administrator"),
certain subsidiaries of the Representative (the "Originators") and The Bank of
New York, as trustee (the "Trustee").
The Original Principal Amount set forth above is equal to the product of
(i) the Percentage Interest represented by this Certificate and (ii) the
aggregate original principal amount of the Class A-_ Certificates on December
30, 1996 (the "Startup Day"), which aggregate amount on December 30, 1996 was
$__________. The Holder hereof is entitled to principal payments on each
Remittance Date, as hereinafter described, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Remittance Date of the Class A-_ Certificates. Therefore,
the actual outstanding principal amount of this Certificate may, on any date
subsequent to the Remittance Date in July 1996 (the first Remittance Date) be
less than the Original Principal Amount set forth above.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS, OTHER THAN THE
FHA LOANS INCLUDED IN POOL III, ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER
GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as The Money Store Trust 1996-D, Asset Backed Certificates, Class A-_
(the "Class A-_ Certificates"), and issued under and subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement the Holder of this Certificate by virtue of
acceptance hereof assents and by which such Holder is bound. Also issued under
the Pooling and Servicing Agreement are Certificates designated as The Money
Store Trust 1996-D, Asset Backed Certificates, Class A-_ (the "Class A-_
Certificates"), The Money Store Trust 1996-D, Asset Backed Certificates, Class
A-_ (the "Class A-_ Certificates"), The Money Store Trust 1996-D, Asset Backed
Certificates, Class A-_ (the "Class A-_ Certificates"), The Money Store Trust
1996-D, Asset Backed Certificates, Class A-_ (the "Class A-_ Certificates"), The
Money Store Trust 1996-D, Asset Backed Certificates, Class A- (the "Class A-
Certificates"), The Money Store Trust 1996-D, Asset Backed Certificates, Class
A-_ (the "Class A-_ Certificates"), The Money Store Trust 1996-D, Asset Backed
Certificates, Class A-_ (the "Class A-_ Certificates"), The Money Store Trust
1996-D, Asset Backed Certificates, Class A-_ (the "Class A-_ Certificates), The
Money Store Trust 1996-D, Asset Backed Certificates, Class A-_ (the "Class A-_
Certificates"), The Money Store Trust 1996-D, Asset Backed Certificates, Class
A-_ (the "Class A-_ Certificates"), The Money Store Trust 1996-D, Asset Backed
Certificates, Class A-_ (the "Class A-_ Certificates"), The Money Store Trust
1996-D, Asset Backed Certificates, Class A-_ (the "Class A-_ Certificates"), The
Money Store Trust 1996-D, Asset Backed Certificates, Class A-_ (the "Class A-_
Certificates") and The Money Store Trust 1996-D, Asset Backed Certificates,
Class A-_ (the "Class A-_ Certificates" and together with the Class A-_, Class
A-_, Class A-_, Class A-_, Class A-_, Class A-_, Class A-_, Class A-_, Class
A-_, Class A-_, Class A-_, Class A-_, Class A-_ and Class A-_ Certificates, the
"Class A Certificates"), The Money Store Trust 1996-D, Asset Backed
Certificates, Class X (the "Class X Certificates") and Certificates designated
as The Money Store Trust 1996-D, Asset Backed Certificates, Class R-1 and Class
R-2 (the "Class R Certificates"). The Class A Certificates, Class X and the
Class R Certificates are together referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Remittance Date"),
commencing October 1996, the Holders of the Class A-_ Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which such Remittance Date occurs (the "Record Date") will
be entitled to receive that portion of the Pool [I][III][IV] Remittance Amount
relating to such Remittance Date as described in the Agreement. Except for the
final distribution, distributions will be made in immediately available funds to
Holders of the Class A-_ Certificates, by wire transfer or otherwise, to the
account of a Holder at a domestic bank or other entity having appropriate
facilities therefor, if such Holder has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Holder of record of a Class A-_ Certificate will be entitled to
receive such Holder's Percentage Interest in the amounts due on such Remittance
Date to the Holders of the Class A-_ Certificates. The Percentage Interest of
each Class A-_ Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on such
Class A-_ Certificate by $__________.
The Pool [I][III][IV] Remittance Amount for any Remittance Date will be an
amount equal to the sum of (i) the Pool [I][III][IV] Current Interest
Requirement, (ii) the Pool [I][III][IV] Principal Distribution Amount, (iii) the
Pool [I][III][IV] Carry-Forward Amount and (iv) any amount received by the
Trustee from the Servicer or an Originator and paid to the Holders of the Pool
[I][II][IV] Certificates that constitutes a Monthly Advance and that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code, as amended from time
to time (11 U.S.C.), in accordance with a final, nonappealable order of a court
having competent jurisdiction.
In the event that any amounts referenced in subclause (iv) above constitute
Insured Payments or any portion thereof, payment of such amounts shall be
disbursed to the trustee in bankruptcy named in the final order of the court
exercising jurisdiction and not directly to any Pool [I][III][IV]
Certificateholder unless such Pool [I][III][IV] Certificateholder has returned
principal or interest paid on the Pool [I][III][IV] Certificates to such trustee
in bankruptcy, in which case payment shall be disbursed to such Class A
Certificateholder.
The Mortgage Loans will be serviced by The Money Store Inc. (the
"Servicer") pursuant to the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement permits the Servicer to enter into Subservicing Agreements
with certain institutions eligible for appointment as Subservicers for the
servicing and administration of certain Mortgage Loans. No appointment of any
Subservicer shall release the Servicer from any of its obligations under the
Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by, The
Money Store Inc. or any of its subsidiaries or affiliates and, other than the
FHA Loans included in Pool III, are not insured or guaranteed by the Federal
Deposit Insurance Corporation, the Government National Mortgage Association, or
any other governmental agency. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Mortgage Loans and amounts
on deposit in the Certificate Account, and payments received by the Trustee
pursuant to the related MBIA Policy, all as more specifically set forth
hereinabove and in the Pooling and Servicing Agreement.
No Holder shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Holder of any Certificate shall have the right, which is absolute
and unconditional, to receive distributions to the extent provided in the
Pooling and Servicing Agreement with respect to such Certificate or to institute
suit for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Holder.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier to occur of (i) the distribution to the
Certificateholders of all amounts required to be distributed to them thereunder
and (ii) at any time when a Qualified Liquidation of the Trust is effected;
provided, however, that in no event shall the Trust continue beyond the
expiration of 21 years from the death of the survivor of the last lineal
descendant of Joseph P. Kennedy, the late ambassador of the United States to the
Court of St. James, living on the Startup Date.
Written notice of the final distribution to be made with respect to the
Class A-_ Certificates shall be given by the Trustee to the Class A-_
Certificateholders after the Trustee determines that a final distribution is
required to be made, specifying (i) the final Remittance Date upon which final
distribution on the Class A-_ Certificates will be made upon presentation and
surrender of the Certificates at the office of the Trustee therein designated,
(ii) the amount of any such final distribution and (iii) that the Record Date
otherwise applicable to such Remittance Date is not applicable.
The final distribution on any Certificate shall only be made upon
presentation of such Certificate to the Trustee.
The Holders of a majority of the Percentage Interests represented by the
Class A- _, Class A-_, Class A-_, Class A-_, Class A-_, Class A-_, Class A-_,
Class A-_, Class A-_, Class A-_, Class A-_, Class A-_ and Class A-_
Certificates, upon compliance with the requirements set forth in the Pooling and
Servicing Agreement, have the right to exercise any trust or power set forth in
the Pooling and Servicing Agreement with respect to the Certificates or the
Trust Fund.
As provided in the Pooling and Servicing Agreement, the transfer of this
Certificate is registrable in the Register upon surrender of this Certificate
for registration of transfer at the office designated as the location of the
Register duly endorsed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of like Class, tenor and a
like aggregate fractional undivided interest in the Trust Fund will be issued to
the designated transferee or transferees.
The Trustee is required to furnish certain information on each Remittance
Date to the Holder of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class A-_ Certificates are issuable only as registered Certificates in
the minimum Percentage Interest corresponding to a minimum denomination of
$1,000 original principal amount and integral multiples of $1,000. As provided
in the Pooling and Servicing Agreement, Class A-_ Certificates are exchangeable
for new Class A-_ Certificates of authorized denominations evidencing the same
aggregate Percentage Interest.
No service charge will be made for any such registration of transfer or
exchange, but the Certificate Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee or any such agent shall be affected by notice to the contrary.
STATEMENT OF INSURANCE
The MBIA Insurance Corporation (the "Insurer") has issued a policy
containing the following provisions, such policy being on file at The Bank of
New York, as trustee (the "Trustee"), New York, New York.
The Insurer in consideration of the payment of the premium and subject to
the terms of the policy hereby unconditionally and irrevocably guarantees to any
Owner (as described below) that an amount equal to each full and complete
Insured Payment (as described below) will be received by the Trustee or its
successor, on behalf of the Owners from the Insurer, for distribution by the
Trustee to each Owner of each Owner's proportionate share of the Insured
Payment. The Insurer's obligations hereunder with respect to a particular
Insured Payment shall be discharged to the extent funds equal to the applicable
Insured Payment are received by the Trustee, whether or not such funds are
properly applied by the Trustee. Insured Payments shall be made only at the time
set forth in the policy and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations (as that term is described
below) unless such acceleration is at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, the policy does not cover
shortfalls, if any, attributable to the liability of the Trust, any REMIC or the
Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability). Additionally, the policy does not guaranty
payment of any Certificateholder's LIBOR Interest Carryover.
"Obligations" shall mean:
[$___________ The Money Store Asset Backed
Certificates, Series 1996-D, Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8 and Class A-9]
[$___________ The Money Store Asset Backed
Certificates, Series 1996-D, Class A-10.]
[$__________ The Money Store Asset Backed
Certificates, Series 1996-D, Class A-11, Class A-12,
Class A-13, Class A-14 and Class A-15.]
[$___________ The Money Store Asset Backed
Certificates, Series 1996-D, Class A-16.]
The Insurer will pay any Insured Payment that is a Preference Amount on the
Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (i) a certified copy of such order, (ii) an opinion of
counsel satisfactory to the Insurer that such order is final and not subject to
appeal, (iii) an assignment in such form as is reasonably required by the
Insurer, irrevocably assigning to the Insurer all rights and claims of the Owner
relating to or arising under the Obligations against the debtor which made such
preference payment or otherwise with respect to such preference payment and (iv)
appropriate instruments to effect the appointment of the Insurer as agent for
such Owner in any legal proceeding related to such preference payment, such
instruments being in a form satisfactory to the Insurer, provided that if such
documents are received after 12:00 noon New York City time on such Business Day,
they will be deemed to be received on the following Business Day. Such payments
shall be disbursed to the receiver or trustee in bankruptcy named in the final
order of the court exercising jurisdiction on behalf of the Owner and not to any
Owner directly unless such Owner has returned principal or interest paid on the
Obligations to such receiver or trustee in bankruptcy, in which case such
payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable under the policy no later
than 12:00 noon New York City time on the later of the Remittance Date on which
the related Remittance Amount is due or the Business Day following receipt in
New York, New York on a Business Day by State Street Bank and Trust Company,
N.A. as Fiscal Agent for the Insurer or any successor fiscal agent appointed by
the Insurer (the "Fiscal Agent") of a Notice (as described below); provided that
if such Notice is received after 12:00 noon New York City time on such Business
Day, it will be deemed to be received on the following Business Day. If any such
Notice received by the Fiscal Agent is not in proper form or is otherwise
insufficient for the purpose of making a claim hereunder it shall be deemed not
to have been received by the Fiscal Agent for purposes of this paragraph, and
the Insurer or the Fiscal Agent shall promptly so advise the Trustee and the
Trustee may submit an amended Notice.
Insured Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit or cause to be deposited, sufficient funds to
make payments due under the policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Pooling and Servicing Agreement dated as of November
30, 1996, among The Money Store Inc., as Representative, Servicer and Claims
Administrator, the Originators listed therein and the Trustee, as trustee
without regard to any amendment or supplement thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee under the Agreement is located are
authorized or obligated by law or executive order to close.
"Deficiency Amount" means, with respect to any Remittance Date, (i) the
excess, if any, of (a) the Pool [I][III][IV] Current Interest Requirement over
(b) the sum of the Pool [I][II][IV] Available Remittance Amount (minus amounts
withdrawn to pay required premiums to the Insurer), and the Monthly Excess
Spread and the Subordination Reduction Amount, plus (ii) the Subordination
Deficit for Pool [I][II][IV], if any, with respect to such Remittance Date.
"Insured Payment" means (i) as of any Remittance Date, any Deficiency
Amount and (ii) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed in
writing by telecopy substantially in the form of Exhibit A attached to the
policy, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Payment which shall be
due and owing on the applicable Remittance Date.
"Owner" means each [Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6 and Class A-7, Class A-8 and Class A-9][Class A-10] [Class A-11, Class
A-12, Class A-13, Class A-14 and Class A-15][Class A-16] Certificateholder (as
defined in the Agreement)(other than the Servicer, the Originators or the
Trustee) who, on the applicable Remittance Date, is entitled under the terms of
the applicable [Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8 and Class A-9][Class A-10][Class A-11, Class A-12,
Class A-13, Class A-14 and Class A-15][Class A-16] Certificate to payment
thereunder.
"Preference Amount" means any amount previously distributed to an Owner on
the Certificates that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of the policy, without giving effect to any subsequent amendment or modification
to the Agreement unless such amendment or modification has been approved in
writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent of the
Insurer may be made at the address listed below for the Fiscal Agent of the
Insurer or such other address as the Insurer shall specify in writing to the
Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.
The policy is being issued under and pursuant to, and shall be construed
under, the laws of the State of New York, without giving effect to the conflict
of laws principles thereof.
The insurance provided by the policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
The policy is not cancelable for any reason. The premium on the policy is
not refundable for any reason including payment, or provision being made for
payment, prior to maturity of the Obligations.
Unless the certificate of authentication hereon has been executed by the
Trustee or an Authenticating Agent, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Servicer has caused this Certificate to be duly
executed on behalf of the Trust Fund.
THE MONEY STORE INC.,
as Servicer
By:________________________
Title: Executive Vice President
This is one of the Class A-_
Certificates referred to
in the within-mentioned
Pooling and Servicing
Agreement.
THE BANK OF NEW YORK
as Trustee
By:________________________
Authorized Signatory
Date: December 30, 1996
<PAGE>
EXHIBIT B-2
[FORM OF CLASS A-10 and CLASS A-11 CERTIFICATES]
THE MONEY STORE TRUST 1996-D
ADJUSTABLE RATE THE MONEY STORE ASSET BACKED CERTIFICATES
CLASS A-_
Representing Certain Interests in a
Trust containing certain Mortgage
Loans formed by
THE MONEY STORE INC.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
[THIS CLASS A-__ CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY
TO (1) EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT
ACCOUNTS OR KEOGH PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(a)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by, The Money Store
Inc. or any of its subsidiaries. This Certificate represents a fractional
ownership interest in the Trust described herein.)
No.: A-_-1 DECEMBER 30, 1996
Startup Day
$
Original Principal Amount Final Scheduled
CUSIP
Distribution
CEDE & CO.
Registered Holder
The registered Holder named above is the registered Holder of a fractional
interest in a trust fund (the "Trust Fund"), the trust estate of which consists
primarily of four sub-trusts, including two pools ("Pool I" and "Pool II") of
one- to four-family ("single family") residential first and second mortgage
loans, having fixed rates, in the case of Pool I, and adjustable rates, in the
case of Pool II (the "Pool I Home Equity Loans" and "Pool II Home Equity
Loans"), one pool ("Pool III") of fixed rate single family residential first,
second and more junior home improvement mortgage loans (the "Pool III Home
Improvement Loans") and one pool ("Pool IV") of fixed rate five or more unit
residential or mixed-use residential and commercial ("multifamily") first
mortgage loans ("Pool IV Multifamily Loans") and certain related assets. The
Certificates are issued pursuant to a Pooling and Servicing Agreement, dated as
of November 30, 1996 (the "Pooling and Servicing Agreement"), among The Money
Store Inc. (the "Representative," "Servicer" and "Claims Administrator"),
certain subsidiaries of the Representative (the "Originators") and The Bank of
New York, as trustee (the "Trustee").
The Original Principal Amount set forth above is equal to the product of
(i) the Percentage Interest represented by this Certificate and (ii) the
aggregate original principal amount of the Class A-_ Certificates on December
30, 1996 (the "Startup Day"), which aggregate amount on December 30, 1996 was
$_____________. The Holder hereof is entitled to principal payments on each
Remittance Date, as hereinafter described, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Remittance Date of the Class A-_ Certificates. Therefore,
the actual outstanding principal amount of this Certificate may, on any date
subsequent to the Remittance Date in October 1996 (the first Remittance Date),
be less than the Original Principal Amount set forth above.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS, OTHER THAN THE
FHA LOANS INCLUDED IN POOL III, ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER
GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as The Money Store Trust 1996-D, Asset Backed Certificates, Class A-_
(the "Class A-_ Certificates"), and issued under and subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement the Holder of this Certificate by virtue of
acceptance hereof assents and by which such Holder is bound. Also issued under
the Pooling and Servicing Agreement are Certificates designated as The Money
Store Trust 1996-D, Asset Backed Certificates, Class A-__ (the "Class A-__
Certificates"), The Money Store Trust 1996-D, Asset Backed Certificates, Class
A-__ (the "Class A-__ Certificates"), The Money Store Trust 1996-D, Asset Backed
Certificates, Class A-__ (the "Class A-__ Certif icates"), The Money Store Trust
1996-D, Asset Backed Certificates, Class A-__ (the "Class A- __ Certificates"),
The Money Store Trust 1996-D, Asset Backed Certificates, Class A-_ (the "Class
A-_ Certificates"), The Money Store Trust 1996-D, Asset Backed Certificates,
Class A-_ (the "Class A-_ Certificates"), The Money Store Trust 1996-D Asset
Backed Certificates, Class A-_ (the "Class A-_ Certificates"), The Money Store
Trust 1996-D Asset Backed Certificates, Class A-_ (the "Class A-_
Certificates"), The Money Store Trust 1996-D Asset Backed Certificates, Class
A-_ (the "Class A-_ Certificates"), The Money Store Trust 1996-D Asset Backed
Certificates, Class A-__ (the "Class A-__ Certificates"), The Money Store Trust
1996- D, Asset Backed Certificates, Class A-__ (the "Class A-__ Certificates")
and The Money Store Trust 1996-D, Asset Backed Certificates, Class A-__ (the
"Class A-__ Certificates"), The Money Store Trust 1996-D, Class A-__ (the "Class
A-__ Certificates") and The Money Store Trust 1996-D, Class A-__ (the "Class
A-__ Certificates," and together with the Class A-__, Class A-__ Class A-__,
Class A-__, Class A-_, Class A-_, Class A-_, Class A-_, Class A-_, Class A-__,
Class A-__, Class A-__, Class A-__, Class A-__ and Class A-__ Certificates, the
"Class A Certificates") ,Certificates designated as The Money Store Trust
1996-D, Asset Backed Certificates, Class X (the "Class X Certificates"), and
Certificates designated as The Money Store Trust 1996-D, Asset Backed
Certificates, Class R (the "Class R Certificates"). The Class A Certificates,
Class X and the Class R Certificates are together referred to herein as the
"Certificates."
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Remittance Date"),
commencing October 1996, the Holders of the Class A-__ Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which such Remittance Date occurs (the "Record Date") will
be entitled to receive that portion of the Pool [I][II][III] Remittance Amount
relating to such Remittance Date as described in the Agreement. Except for the
final distribution, distributions will be made in immediately available funds to
Holders of the Class A-__ Certificates, by wire transfer or otherwise, to the
account of a Holder at a domestic bank or other entity having appropriate
facilities therefor, if such Holder has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Holder of record of a Class A-__ Certificate will be entitled to
receive such Holder's Percentage Interest in the amounts due on such Remittance
Date to the Holders of the Class A-__ Certificates. The Percentage Interest of
each Class A-__ Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on such
Class A-__ Certificate by $-------------.
The Pool [I][II][III] Remittance Amount for any Remittance Date will be an
amount equal to the sum of (i) the Pool [I][II][III] Current Interest
Requirement, (ii) the Pool [I][II][III] Principal Distribution Amount, (iii) the
Pool [I][II][III] Carry-Forward Amount and (iv) any amount received by the
Trustee from the Servicer or an Originator and paid to the Holders of the Pool
[I][II][III] Certificates that constitutes a Monthly Advance and that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code, as amended from time
to time (11 U.S.C.), in accordance with a final, nonappealable order of a court
having competent jurisdiction.
With respect to the Remittance Date occurring in October 1996, the Class
A-__ Remittance Rate will be ______% per annum. For each Remittance Date
thereafter, the Class A-__ Remittance Rate will equal, subject to a maximum rate
equal to the Net Funds Cap, a per annum rate equal to [the sum of the London
interbank offered rate for one-month U.S. dollar deposits ("LIBOR"), determined
as described in the Pooling and Servicing Agreement and ____% (or ____% for each
Remittance Date occurring after the Optional Servicer Termination Date).][the
annual rate of interest determined according to the Auction Procedures.] [In no
event will the Class A-__ Remittance Rate exceed _____%.]
If on any Remittance Date, the Class A-__ Remittance Rate is based upon the
Net Funds Cap, the excess of (i) the amount of interest Class A-__ would be
entitled to receive on such Remittance Date at a rate equal to [LIBOR plus the
applicable margin][the rate determined according to the Auction Procedures] (but
in no event greater than ____%) over (ii) the amount of interest Class A-__ will
receive on such Remittance Date at the Net Funds Cap, together with the unpaid
portion of any such excess from prior Remittance Dates (and interest accrued
thereon at the then applicable Class A-__ Remittance Rate without giving effect
to the Net Funds Cap, but in no event exceeding _____% per annum) is referred to
herein as the "Certificateholders' Interest Carryover." Any Certificateholders'
Interest Carryover will be paid on future Remittance Dates as set forth in the
Agreement. No Certificateholders' Interest Carryover will be paid to the Class
A-__ Certificates after the related principal balance is reduced to zero. The
ratings of the Class A-__ Certificates do not address the likelihood of the
payment of the amount of any Certificateholders' Interest Carryover and the
policy issued by the Certificate Insurer does not guaranty payment of any such
amounts.
In the event that any amounts referenced in subclause (iv) above constitute
Insured Payments or any portion thereof, payment of such amounts shall be
disbursed to the trustee in bankruptcy named in the final order of the court
exercising jurisdiction and not directly to any Pool [I][II][III]
Certificateholder unless such Pool [I][II][III] Certificateholder has returned
principal or interest paid on the Pool [I][II][III] Certificates to such trustee
in bankruptcy, in which case payment shall be disbursed to such Class A
Certificateholder.
The Mortgage Loans will be serviced by The Money Store Inc. (the
"Servicer") pursuant to the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement permits the Servicer to enter into Subservicing Agreements
with certain institutions eligible for appointment as Subservicers for the
servicing and administration of certain Mortgage Loans. No appointment of any
Subservicer shall release the Servicer from any of its obligations under the
Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by, The
Money Store Inc. or any of its subsidiaries or affiliates and, other than the
FHA Loans included in Pool III, are not insured or guaranteed by the Federal
Deposit Insurance Corporation, the Government National Mortgage Association, or
any other governmental agency. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Mortgage Loans and amounts
on deposit in the Certificate Account, and payments received by the Trustee
pursuant to the related MBIA Policy, all as more specifically set forth
hereinabove and in the Pooling and Servicing Agreement.
No Holder shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Holder of any Certificate shall have the right, which is absolute
and unconditional, to receive distributions to the extent provided in the
Pooling and Servicing Agreement with respect to such Certificate or to institute
suit for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Holder.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier to occur of (i) the distribution to the
Certificateholders of all amounts required to be distributed to them thereunder
and (ii) at any time when a Qualified Liquidation of the Trust is effected;
provided, however, that in no event shall the Trust continue beyond the
expiration of 21 years from the death of the survivor of the last lineal
descendant of Joseph P. Kennedy, the late ambassador of the United States to the
Court of St. James, living on the Startup Date.
Written notice of the final distribution to be made with respect to the
Class A-__ Certificates shall be given by the Trustee to the Class A-__
Certificateholders after the Trustee determines that a final distribution is
required to be made, specifying (i) the final Remittance Date upon which final
distribution on the Class A-__ Certificates will be made upon presentation and
surrender of the Certificates at the office of the Trustee therein designated,
(ii) the amount of any such final distribution and (iii) that the Record Date
otherwise applicable to such Remittance Date is not applicable.
The final distribution on any Certificate shall only be made upon
presentation of such Certificate to the Trustee.
The Holders of a majority of the Percentage Interests represented by the
Class A- 1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class
A-14, Class A-15 and Class A-16 Certificates, upon compliance with the
requirements set forth in the Pooling and Servicing Agreement, have the right to
exercise any trust or power set forth in the Pooling and Servicing Agreement
with respect to the Certificates or the Trust Fund.
As provided in the Pooling and Servicing Agreement, the transfer of this
Certificate is registrable in the Register upon surrender of this Certificate
for registration of transfer at the office designated as the location of the
Register duly endorsed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of like Class, tenor and a
like aggregate fractional undivided interest in the Trust Fund will be issued to
the designated transferee or transferees.
The Trustee is required to furnish certain information on each Remittance
Date to the Holder of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class A-__ Certificates are issuable only as registered Certificates in
the minimum Percentage Interest corresponding to a minimum denomination of
$1,000 original principal amount and integral multiples of $1,000. As provided
in the Pooling and Servicing Agreement, Class A-__ Certificates are exchangeable
for new Class A-__ Certificates of authorized denominations evidencing the same
aggregate Percentage Interest.
No service charge will be made for any such registration of transfer or
exchange, but the Certificate Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee or any such agent shall be affected by notice to the contrary.
STATEMENT OF INSURANCE
The MBIA Insurance Corporation (the "Insurer") has issued a policy
containing the following provisions, such policy being on file at The Bank of
New York, as trustee (the "Trustee"), New York, New York.
The Insurer in consideration of the payment of the premium and subject to
the terms of the policy hereby unconditionally and irrevocably guarantees to any
Owner (as described below) that an amount equal to each full and complete
Insured Payment (as described below) will be received by the Trustee or its
successor, on behalf of the Owners from the Insurer, for distribution by the
Trustee to each Owner of each Owner's proportionate share of the Insured
Payment. The Insurer's obligations hereunder with respect to a particular
Insured Payment shall be discharged to the extent funds equal to the applicable
Insured Payment are received by the Trustee, whether or not such funds are
properly applied by the Trustee. Insured Payments shall be made only at the time
set forth in the policy and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations (as that term is described
below) unless such acceleration is at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, the policy does not cover
shortfalls, if any, attributable to the liability of the Trust, and REMIC or the
Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability). Additionally, the policy does not guaranty
payment of any Certificateholder's LIBOR Interest Carryover.
"Obligations" shall mean:
[$___________ The Money Store Asset Backed Certificates, Series
1996-D, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7, Class A-8 and Class A-9.]
[$___________ The Money Store Asset Backed
Certificates, Series 1996-D, Class A-10.]
[$___________ The Money Store Asset Backed
Certificates, Series 1996-D, Class A-11, Class A-12,
Class A-13, Class A-14, and Class A-15.]
[$___________ The Money Store Asset Backed
Certificates, Series 1996-D, Class A-16.]
The Insurer will pay any Insured Payment that is a Preference Amount on the
Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (i) a certified copy of such order requiring the return of a
preference payment, (ii) an opinion of counsel satisfactory to the Insurer that
such order is final and not subject to appeal, (iii) an assignment in such form
as is reasonably required by the Insurer, irrevocably assigning to the Insurer
all rights and claims of the Owner relating to or arising under the Obligations
against the debtor which made such preference payment or otherwise with respect
to such preference payment and (iv) appropriate instruments to effect the
appointment of the Insurer as agent for such Owner in any legal proceeding
related to such preference payment, such instruments being in a form
satisfactory to the Insurer, provided that if such documents are received after
12:00 noon New York City time on such Business Day, they will be deemed to be
received on the following Business Day. Such payments shall be disbursed to the
receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Owner and not to any Owner directly
unless such Owner has returned principal or interest paid on the Obligations to
such receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Owner.
The Insurer will pay any other amount payable under the policy no later
than 12:00 noon New York City time on the later of the Remittance Date on which
the related Remittance Amount is due or the Business Day following receipt in
New York, New York on a Business Day by State Street Bank and Trust Company,
N.A. as Fiscal Agent for the Insurer or any successor fiscal agent appointed by
the Insurer (the "Fiscal Agent") of a Notice (as described below); provided that
if such Notice is received after 12:00 noon New York City time on such Business
Day, it will be deemed to be received on the following Business Day. If any such
Notice received by the Fiscal Agent is not in proper form or is otherwise
insufficient for the purpose of making a claim hereunder it shall be deemed not
to have been received by the Fiscal Agent for purposes of this paragraph, and
the Insurer or the Fiscal Agent shall promptly so advise the Trustee and the
Trustee may submit an amended Notice.
Insured Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit or cause to be deposited, sufficient funds to
make payments due under the policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Pooling and Servicing Agreement dated as of November
30, 1996, among The Money Store Inc., as Representative, Servicer and Claims
Administrator, the Originators listed therein and the Trustee, as trustee
without regard to any amendment or supplement thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee under the Agreement is located are
authorized or obligated by law or executive order to close.
"Deficiency Amount" means, with respect to any Remittance Date, (i) the
excess, if any, of (a) the Pool [I][II][III] Current Interest Requirement over
(b) the sum of the Pool II Available Remittance Amount (minus amounts withdrawn
to pay required premiums to the Insurer), and the Monthly Excess Spread and the
Subordination Reduction Amount, plus (ii) the Subordination Deficit for Pool
[I][II][III], if any, with respect to such Remittance Date.
"Insured Payment" means (i) as of any Remittance Date, any Deficiency
Amount and (ii) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed in
writing by telecopy substantially in the form of Exhibit A attached to the
policy, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Payment which shall be
due and owing on the applicable Remittance Date.
"Owner" means each [Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7, Class A-8 and Class A-9][Class A-10][, Class A-11, Class
A-12, Class A-13, Class A-14 and Class A-15][Class A16] Certificateholder (as
defined in the Agreement)(other than the Servicer, the Originators or the
Trustee) who, on the applicable Remittance Date, is entitled under the terms of
the applicable [Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6
and Class A-7, Class A-8 and Class A-9][Class A-10][Class A-11, Class A-12,
Class A-13, Class A-14, Class A-15][Class A-16] Certificate to payment
thereunder.
"Preference Amount" means any amount previously distributed to an Owner on
the Certificates that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of the policy, without giving effect to any subsequent amendment or modification
to the Agreement unless such amendment or modification has been approved in
writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent of the
Insurer may be made at the address listed below for the Fiscal Agent of the
Insurer or such other address as the Insurer shall specify in writing to the
Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.
The policy is being issued under and pursuant to, and shall be construed
under, the laws of the State of New York, without giving effect to the conflict
of laws principles thereof.
The insurance provided by the policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
The policy is not cancelable for any reason. The premium on the policy is
not refundable for any reason including payment, or provision being made for
payment, prior to maturity of the Obligations.
Unless the certificate of authentication hereon has been executed by the
Trustee or an Authenticating Agent, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Servicer has caused this Certificate to be duly
executed on behalf of the Trust Fund.
THE MONEY STORE INC.,
as Servicer
By:______________________
Title: Executive Vice President
This is one of the Class A-__
Certificates referred to
in the within-mentioned
Pooling and Servicing
Agreement.
THE BANK OF NEW YORK
as Trustee
By:________________________
Authorized Signatory
Date: December 30, 1996
<PAGE>
EXHIBIT B-3
THE MONEY STORE TRUST 1996-D
ASSET BACKED CERTIFICATE
CLASS R
Representing Certain Interests in a Trust
containing certain Mortgage
Loans formed by
THE MONEY STORE INC.
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by, The Money Store
Inc. or any of its subsidiaries. This Certificate represents a fractional
ownership interest in the Trust Fund described herein.)
No.: R-_ DECEMBER 30, 1996
Startup Day
[.01%]
[99.99%] Percentage Interest
Final Scheduled
Distribution
Registered Holder
The registered Holder named above is the registered Holder of a fractional
interest in a trust fund (the "Trust Fund"), the trust estate of which consists
primarily of for sub-trusts, including two pools ("Pool I" and "Pool II") of
one- to four-family ("single family") residential first and second mortgage
loans, having fixed rates, in the case of Pool I, and adjustable rates, in the
case of Pool II (the "Pool I Home Equity Loans" and "Pool IV Home Equity
Loans"), one pool ("Pool III") of fixed rate single family residential first,
second and more junior home improvement mortgage loans (the "Pool III Home
Improvement Loans") and one pool ("Pool IV") of fixed rate five or more unit
residential or mixed-use residential and commercial ("multifamily") first
mortgage loans ("Pool IV Multifamily Loans") and certain related assets. The
Certificates are issued pursuant to a Pooling and Servicing Agreement, dated as
of November 30, 1996 (the "Pooling and Servicing Agreement"), among The Money
Store Inc. (the "Representative," "Servicer" and "Claims Administrator"),
certain subsidiaries of the Representative (the "Originators") and The Bank of
New York, as trustee (the "Trustee").
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS, OTHER THAN THE
FHA LOANS INCLUDED IN POOL III, ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER
GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as The Money Store Trust 1996-D, Asset-Backed Certificates, Class R
(the "Class R Certificates"), and issued under and subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement the Holder of this Certificate by virtue of
acceptance hereof assents and by which such Holder is bound. Also issued under
the Pooling and Servicing Agreement in connection with the Trust Fund are
Certificates designated as The Money Store Trust 1996-D, Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9,
Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15 and Class
A-16 Certificates (collectively, the "Class A Certificates"), and Certificates
designated as The Money Store Trust 1996-D, Class X (the "Class X
Certificates"). The Class A Certificates, Class X and Class R Certificates are
together referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Remittance Date"),
commencing in October 1996, the Holders of the Class R Certificates as of the
close of business on the Startup Day with respect to the first Remittance Date
and, with respect to each Remittance Date thereafter, on the last day of the
calendar month immediately preceding the calendar month in which such Remittance
Date occurs (the "Record Date") will be entitled to receive the amounts due on
such Remittance Date to the Holders of the Class R Certificates. Except for the
final distribution, distributions will be made in immediately available funds to
Holders of Certificates, by wire transfer or otherwise, to the account of a
Holder at a domestic bank or other entity having appropriate facilities
therefor, if such Holder has so notified the Trustee, or by check mailed to the
address of the person entitled thereto as it appears on the Register.
Each Holder of record of a Class R Certificate will be entitled to receive
such Holder's Percentage Interest in the amounts due on such Remittance Date to
the Holders of the Class R Certificates. The amounts due on each Remittance Date
are limited to certain residual amounts remaining after all amounts due to the
Holders of the Class A Certificates have been paid on such Remittance Date.
The Mortgage Loans will be serviced by The Money Store Inc. (the
"Servicer") pursuant to the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement permits the Servicer to enter into Subservicing Agreements
with certain institutions eligible for appointment as Subservicers for the
servicing and administration of certain Mortgage Loans. No appointment of any
Subservicer shall release the Servicer from any of its obligations under the
Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans, other than the FHA Loans
included in Pool III, insured or guaranteed by, The Money Store Inc. or any of
its subsidiaries or affiliates and are not insured or guaranteed by the Federal
Deposit Insurance Corporation, the Government National Mortgage Association, or
any other governmental agency. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Mortgage Loans and amounts
on deposit in the Certificate Account all as more specifically set forth
hereinabove and in the Pooling and Servicing Agreement.
No Holder shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Holder of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Holder.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier to occur of (i) the distribution to the
Certificateholders of all amounts required to be distributed to them thereunder
and (ii) at any time when a Qualified Liquidation of the Trust is effected;
provided, however, that in no event shall the trust created thereby continue
beyond the expiration of 21 years from the death of the survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the Startup Date.
Written notice of the final distribution to be made with respect to the
Class R Certificates shall be given by the Trustee to the Class R
Certificateholders, mailed promptly after the Trustee determines that a final
distribution is required to be made, specifying (i) the final Remittance Date
upon which final distribution on the Class R Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final distribution and (iii)
that the Record Date otherwise applicable to such Remittance Date is not
applicable.
The final distribution on any Certificate shall only be made upon
presentation of such Certificate to the Trustee.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of like Class,
tenor and a like aggregate fractional undivided interest in the Trust Fund will
be issued to the designated transferee or transferees.
The Trustee is required to furnish certain information on each Remittance
Date to the Holder of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class R Certificates are exchangeable for new
Class R Certificates evidencing the same aggregate Percentage Interest.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee or any such agent shall be affected by notice to the contrary.
Unless the certificate of authentication hereon has been executed by the
Trustee or an Authenticating Agent, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Servicer has caused this Certificate to be duly
executed on behalf of the Trust Fund.
THE MONEY STORE INC.,
as Servicer
By:______________________
Title: Executive Vice President
This is one of the Class R-_
Certificates referred
to in the within-mentioned
Pooling and Servicing Agreement
THE BANK OF NEW YORK,
as Trustee
By:
Authorized Signatory
Date: December 30, 1996
<PAGE>
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN THE ONLY "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G and
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R CERTIFICATE MAY BE
MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION 860E(e)(5) OF THE
CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME. NO
TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE CERTIFICATE
REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT AFFIRMING,
AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A DISQUALIFIED
ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE ACCOUNT OF A
DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED OF EACH
PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS- THRU ENTITY THAT HOLDS THIS CLASS R CERTIFICATE AND
THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD HOLDER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THRU ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THRU" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
IN ADDITION, THE TAX SIMPLIFICATION ACT OF 1991 (H.R. 2777 AND S. 1394),
INTRODUCED ON JUNE 26, 1991, PROVIDES THAT EACH PARTNER IN A "LARGE PARTNERSHIP"
HOLDING A RESIDUAL INTEREST IN A REMIC SHALL BE TREATED AS A DISQUALIFIED
ORGANIZATION FOR PURPOSES OF THE TAX IMPOSED ON PASS-THRU ENTITIES UNDER SECTION
860E(e)(6) OF THE CODE. IF ENACTED, THIS DEFINITION WOULD BE EFFECTIVE FOR A
PASS-THRU ENTITY'S TAXABLE YEARS ENDING ON OR AFTER DECEMBER 31, 1992. NO
PREDICTION CAN BE MADE REGARDING WHETHER SUCH LEGISLATION WILL BE ENACTED OR IF
SO, WHAT THE ULTIMATE EFFECTIVE DATE WILL BE.
<PAGE>
EXHIBIT C
PRINCIPAL AND INTEREST ACCOUNT LETTER AGREEMENT
December 30, 1996
To: First Union National Bank of North Carolina
One First Union Center, TW-19
Charlotte, North Carolina. 28288 (the "Depository")
As "Servicer" under the Pooling and Servicing Agreement, dated as of
November 30, 1996, The Money Store Asset Backed Certificates, Series 1996-D,
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class
A-14, Class A-15 and Class A-16 and Class R (the "Agreement"), we hereby
authorize and request you to establish an account, as a Principal and Interest
Account pursuant to Section 5.03 of the Agreement, to be designated as "The
Money Store Inc., in trust for the registered holders of The Money Store Asset
Backed Certificates, Series 1996-D, Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class A-12, Class A-13, Class A-14, Class A-15 and Class A-16 and Class R, and
various Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. You may refuse any deposit which
would result in violation of the requirement that the account be fully insured
as described below. This letter is submitted to you in duplicate. Please execute
and return one original to us.
The Money Store Inc.
By:_________________________
Name:
Title:
<PAGE>
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number ________________, at the
office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above. The amounts deposited at any time in the account
will be insured to the maximum amount provided by applicable law by the Federal
Deposit Insurance Corporation through the Bank Insurance Fund.
First Union National Bank of
North Carolina
(Name of Depository)
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT D
RESALE CERTIFICATION
_______________, 19__
[Representative]
[Servicer]
[Trustee]
[Co-Trustee]
[Certificate Insurer]
[Certificate Registrar]
Re: Class R Certificate issued under the Pooling and
Servicing Agreement, The Money Store Asset
Backed Certificates, Series 1996-D dated as of
November 30, 1996, among The Bank of New York, as
Trustee, The Money Store Inc. (the
"Representative"), and certain subsidiaries of
the Representative
Dear Sirs:
___________________________________________ ("Seller") intends to transfer
the captioned Certificate to _______________ ("Purchaser"), for registration in
the name of .
1. In connection with such transfer, and in accordance with
Section 4.02 of the captioned Agreement, Seller hereby certifies to you the
following facts: Neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Certificate, any
interest in the Certificate or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificate, any interest in the Certificate or any other similar security with,
any person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Certificate under the Securities Act of 1933,
as amended (the "1933 Act"), or which would render the disposition of the
Certificate a violation of Section 5 of the 1933 Act or require registration
pursuant thereto.
2. The Purchaser warrants and represents to, and covenants with,
the Seller, the Trustee and the Servicer pursuant to Section 4.02 of the Pooling
and Servicing Agreement that:
a. The Purchaser agrees to be bound, as
Certificateholder, by all of the terms, covenants and conditions of the Pooling
and Servicing Agreement, the Certificate and the Custodial Agreement, and from
and after the date hereof, the Purchaser assumes for the benefit of each of the
Servicer and the Seller all of the Seller's obligations as Certificateholder
thereunder;
b. The Purchaser understands that the Certificate has
not been registered under the 1933 Act or the securities laws of any state;
c. The Purchaser is acquiring the Certificate for
investment for its own account or the account of another qualified institutional
buyer (within the meaning of Rule 144A) only and not for any other person;
d. The Purchaser considers itself a substantial,
sophisticated institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of investment in the Certificate;
e. The Purchaser has been furnished with all
information regarding the Certificate that it has requested from the Seller, the
Trustee or the Servicer; and
f. Neither the Purchaser nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the
Certificate, any interest in the Certificate or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificate, any interest in the Certificate or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificate, any interest in the Certificate or any other similar security with,
any person (other than a qualified institutional buyer within the meaning of
Rule 144A) in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Certificate under the 1933 Act or which would
render the disposition of the Certificate a violation of Section 5 of the 1933
Act or require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with respect
to the Certificate.
[The following is to be completed if transfer is being
made pursuant to Rule 144A].
3. The Purchaser understands and agrees with the Seller that the
Seller is transferring the Certificate pursuant to the exemption from
registration under the 1933 Act provided by Rule 144A thereunder ("Rule 144A")
and the Purchaser hereby represents and warrants to the Seller, the Trustee and
the Servicer that the Purchaser is a "qualified institutional buyer" as defined
in Rule 144A because (i) the Purchaser owned and/or invested on a discretionary
basis $_________* in securities (except for the excluded securities referred to
below) as of the end of the Purchaser's most recent fiscal year (such amount
being calculated in accordance with Rule 144A) and (ii) the Purchaser satisfies
the criteria in the category marked below.
___ CORPORATION, ETC. The Purchaser is a corporation
other than a bank, savings and loan association or
similar institution), Massachusetts or similar business
trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue
Code.
___ BANK. The Purchaser (a) is a national bank or
banking institution organized under the laws of any
State, territory or the District of Columbia, the
business of which is substantially confined to banking
and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
___ SAVINGS AND LOAN. The Purchaser (a) is a savings
and loan association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
state or Federal authority having supervision over any
such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements,
a copy of which is attached hereto.
___ BROKER-DEALER. The Purchaser is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934.
___ INSURANCE COMPANY. The Purchaser is an insurance
company whose primary and predominant business activity
is the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or
a similar official or agency of a State, territory or
the District of Columbia.
The term "SECURITIES" as used herein DOES NOT INCLUDE (i) securities
of issuers that are affiliated with the Purchaser, (ii) securities that are part
of an unsold allotment to or subscription by the Purchaser (if the Purchaser is
a dealer), (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participation, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Purchaser, the Purchaser used
the cost of such securities to the Purchaser and did not include any of the
securities referred to in the preceding paragraph.
Further, in determining such aggregate amount, the Purchaser may have
included securities owned by subsidiaries of the Purchaser, but only if such
subsidiaries are consolidated with the Purchaser in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investment of such subsidiaries are managed under the Purchaser's direction.
However, such securities were not included if the Purchaser is a majority owned,
consolidated subsidiary of another enterprise and the Purchaser is not itself a
reporting company under the Securities Exchange Act of 1934.
The Purchaser acknowledges that it is familiar with Rule 144A and
understands that you are and will continue to rely on the statements made
herein.
The Purchaser agrees to notify you of any changes in the information
and conclusions herein. Until such notice is given to you, the Purchaser's
purchase of the Certificate will constitute a reaffirmation of the foregoing
certifications and acknowledgments as of the date of such purchase.
Further, if the Purchaser is a bank or savings and loan as provided
above, the Purchaser agrees that it will furnish the Seller with updated annual
financial statements promptly after they become available.
4. The Purchaser warrants and represents to, and covenants with, the
Seller, the Servicer, the Trustee and the Representative that:
a. The Purchaser agrees to be bound, as
Certificateholder, by the restrictions on transfer contained in the
Pooling and Servicing Agreement; and
b. Either: (1) the Purchaser is not an employee
benefit plan within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), ("Plan") or a plan within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code")
(also a "Plan"), and the Purchaser is not directly or indirectly purchasing the
Certificates on behalf of, as investment manager of, as named fiduciary of, as
trustee of, or with assets of a Plan; or (2) Purchaser shall deliver the opinion
of counsel required pursuant to Section 4.02(c) of the Pooling and Servicing
Agreement.
5. This Certification may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Resale Certification
to be executed by their duly authorized officers as of the date first above
written.
______________________________, ,
Seller Purchaser
By:____________________________ By:
Its:___________________________ Its:
Taxpayer Taxpayer
Identification No._____________ Identification No.
- --------
* The Purchaser must own and/or invest on a discretionary basis at
least $100,000,000 in securities unless Buyer is a dealer, and,
in that case, Buyer must own and/or invest on a discretionary
basis at least $10,000,000 in securities.
<PAGE>
EXHIBIT E
ASSIGNMENT
THIS ASSIGNMENT dated as of the ____ day of __________, 19__, by and
between _________________________, ("Assignor") and _________________________
("Assignee"), provides:
That for and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby agree as follows:
1. Assignor hereby grants, transfers and assigns to Assignee all
of the right, title and interest of Assignor, as Certificateholder, in, to and
under that certain Pooling and Servicing Agreement, The Money Store Asset Backed
Certificates, Series 1996-D, Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class
A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class X and Class R (the
"Pooling and Servicing Agreement"), dated as of November 30, 1996 by and among
The Bank of New York, as Trustee ("Trustee") and The Money Store Inc., as
Representative, Servicer and Claims Administrator, and the Originators, and that
certain Certificate, Class R No. __ Series 1996-D (the "Certificate") issued
thereunder by the Servicer.
2. For the purpose of inducing Assignee to purchase the
Certificate from Assignor, Assignor warrants and represents that:
a. Assignor is the lawful owner of the
Certificate with the full right to transfer the Certificate free from any and
all claims and encumbrances whatsoever;
b. The Assignor has not received notice, and has
no knowledge, of any offsets, counterclaims or other defenses available
to the Servicer with respect to the Pooling and Servicing Agreement or the
Certificate; and
c. The Assignor has no knowledge of and has not
received notice of any amendments to the Pooling and Servicing
Agreement or the Certificate.
3. By execution hereof Assignee agrees to be bound, as
Certificateholder, by all of the terms, covenants and conditions of the Pooling
and Servicing Agreement, and the Certificate and from and after the date hereof
Assignee assumes for the benefit of each of the Servicer, the Representative,
the Trustee and the Assignor all of Assignor's obligations as Certificateholder
thereunder.
4. The Assignee warrants and represents to, and covenants with, the
Assignor, the Representative and the Servicer that:
a. The Assignee agrees to be bound, as
Certificateholder, by the restrictions on transfer contained in the
Pooling and Servicing Agreement; and
b. Either: (1) the Assignee is not an employee
benefit plan within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), ("Plan") or a plan within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code")
(also a "Plan"), and the Assignee is not directly or indirectly purchasing the
Certificates on behalf of, as investment manager of, as named fiduciary of, as
trustee of, or with assets of a Plan; or (2) Assignee shall deliver the opinion
of counsel required pursuant to Section 4.02(c) of the Pooling and Servicing
Agreement.
5. This Assignment may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
WITNESS the following signatures.
________________
By By
Its Its
Taxpayer Taxpayer
Identification No.______ Identification No.
<PAGE>
EXHIBIT E(1)
WIRING INSTRUCTIONS FORM
_______________, 19__
[Paying Agent]
[Trustee]
========================
- ------------------------
Re: The Money Store Asset Backed Certificates, Series
1996-D [Class A- 1][Class A-2][Class A-3][Class
A-4][Class A-5][Class A-6][Class A- 7][Class A-8][Class
A-9][Class A-10][Class A-11][Class A-12][Class A-
13][Class A-14][Class A-15] [Class A-16][Class X][Class
R], Number ___ Issued by The Money Store Inc., as
Servicer
Dear Sir:
In connection with the sale of the above-captioned Certificate
by ___________________________________ to ____________________________________,
("Transferee") you, as Paying Agent with respect to the related Mortgages Loans,
are instructed to make all remittances to Transferee as Certificateholder as of
____________, 19__ by wire transfer. For such wire transfer, the wiring
instructions are as follows:
----------------------------
----------------------------
----------------------------
--------------------------------
Transferee
Certificateholder's mailing address:
Name:
Address:
<PAGE>
EXHIBIT F
FORM OF [TRUSTEE] [CUSTODIAN] INITIAL CERTIFICATION
, 1996
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
The Money Store, Inc.
2840 Morris Avenue
Union, New Jersey 07083
TMS Special Holdings, Inc.
2840 Morris Avenue
Union, New Jersey 07083
Lehman Brothers Inc., as
representative of the Underwriters
3 World Financial Center
New York, New York 10285-1200
Re: Pooling and Servicing Agreement The Money Store
Asset Backed Certificates, Series 1996-D, dated
as of November 30, 1996 among The Money Store
Inc. as Representative, Servicer and Claims
Administrator, THE ORIGINATORS AND THE BANK OF
NEW YORK, AS TRUSTEE
Gentlemen:
In accordance with Section 2.05 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as [Trustee] [Custodian], hereby certifies
that, except as noted on the attachment hereto, if any (the "Loan Exception
Report"), it has received an Assignment of Mortgage, or a certified copy
thereof, and a Mortgage Note with respect to each [Initial] [Subsequent]
[Mortgage Loan] [Pool III Mortgage Loan] listed in the Mortgage Loan Schedule
and the documents contained therein appear to bear original signatures.
The [Trustee] [Custodian] has made no independent examination of any
such documents beyond the review specifically required in the above-referenced
Pooling and Servicing Agreement. The [Trustee] [Custodian] makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any such documents or any of the [Mortgage Loans] [Pool III
Mortgage Loans] identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such [Mortgage
Loan] [Pool III Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[THE BANK OF NEW YORK,
as Trustee]
[FIRST TRUST NATIONAL ASSOCIATION,
as Custodian]
By:
NAME:
TITLE:
<PAGE>
EXHIBIT F-1
FORM OF [TRUSTEE] [CUSTODIAN] INTERIM CERTIFICATION
---------------, 1996
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
The Money Store Inc.
2840 Morris Avenue
Union, New Jersey 07083
TMS Special Holdings, Inc.
2840 Morris Avenue
Union, New Jersey 07083
Lehman Brothers Inc., as
representative of the Underwriters
3 World Financial Center
New York, New York 10285-1200
Re: Pooling and Servicing Agreement The Money Store
Asset Backed Certificates, Series 1996-D, dated
as of November 30, 1996 among The Money Store
Inc. as Representative, Servicer and Claims
Administrator, THE ORIGINATORS AND THE BANK OF
NEW YORK, AS TRUSTEE
Gentlemen:
In accordance with Section 2.05 of the above-referenced Pooling and
Servicing Agreement, the undersigned, as [Trustee] [Custodian], hereby certifies
that as to each [Initial] [Subsequent] [Mortgage Loan] [Pool III Mortgage Loan]
listed in the Mortgage Loan Schedule (other than any [Initial] [Subsequent]
[Mortgage Loan] [Pool III Mortgage Loan] paid in full or any [Initial]
[Subsequent] [Mortgage Loan] [Pool III Mortgage Loan] listed on the attachment
hereto), it has reviewed the documents delivered to it pursuant to Section 2.04
(other than items listed in Section 2.04(d)(ii)) of the Pooling and Servicing
Agreement and has determined that (i) all such documents are in its possession,
(ii) such documents have been reviewed by it and have not been mutilated,
damaged, torn or otherwise physically altered and relate to such [Mortgage Loan]
[Pool III Mortgage Loan], (iii) based on its examination and only as to the
foregoing documents, the information set forth in the Mortgage Loan Schedule
respecting such [Initial] [Subsequent] [Mortgage Loan] [Pool III Mortgage Loan]
is correct and (iv) each Mortgage Note has been endorsed as provided in Section
2.04 of the Pooling and Servicing Agreement. Further, [except for Mortgaged
Properties relating to [Mortgage Loans] [Pool III Mortgage Loans] identified on
the Mortgage Loan Schedule by an account number beginning with __________ or
________, each Mortgaged Property is a Residential Dwelling of the type set
forth in the appraisal obtained in connection with the origination of the
related [Mortgage Loan] [Pool III Mortgage Loan], and for each [Mortgage Loan]
[Pool III Mortgage Loan] with an original principal balance in excess of $15,000
for which the documents in the possession of the [Trustee] [Custodian] indicate
that the related Originator conducted a drive-by appraisal pursuant to FHLMC
Form 704 or alternative FNMA Form in connection with originating such [Mortgage
Loan] [Pool III Mortgage Loan], such [Mortgage Loan] [Pool III Mortgage Loan]
(A) had an original principal balance not in excess of $35,000, and (B) has a
Loan-to-Value Ratio less than 50% (based solely on the LTV included on the
Mortgage Loan Schedule) and/or an appraisal on FNMA/FHLMC Form 1004 was
performed by the related Originator within one year prior to the origination of
such [Mortgage Loan] [Pool III Mortgage Loan]. The [Trustee] [Custodian] has
made no independent examination of such documents beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The [Trustee]
[Custodian] makes no representations as to: (i) the validity, legality,
enforceability or genuineness of any such documents contained in each or any of
the [Mortgage Loans] [Pool III Mortgage Loans] identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such [Mortgage Loan] [Pool III Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[THE BANK OF NEW YORK
as Trustee]
[FIRST TRUST NATIONAL ASSOCIATION,
as Custodian]
By:
NAME:
TITLE:
<PAGE>
EXHIBIT G
FORM OF [TRUSTEE] [CUSTODIAN] FINAL CERTIFICATION
[date]
[Certificate Insurer]
[Servicer]
[Certificateholders]
[Representative]
Re: Pooling and Servicing Agreement dated as of
November 30, 1996 among The Money Store Inc. as
Representative, Servicer and Claims
Administrator, the Originators and The Bank of
New York, as Trustee, THE MONEY STORE ASSET
BACKED CERTIFICATES, SERIES 1996-D
Gentlemen:
In accordance with Section 2.05 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as [Trustee] [Custodian], hereby certifies
that, except as noted on the attachment hereto, as to each [Mortgage Loan] [Pool
III Mortgage Loan] listed in the Mortgage Loan Schedule (other than any
[Mortgage Loan] [Pool III Mortgage Loan] paid in full or listed on the
attachment hereto) it has reviewed the documents delivered to it pursuant to
Section 2.04 (other than items listed in Section 2.04(d)(ii)) of the Pooling and
Servicing Agreement and has determined that (i) all such documents are in its
possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged, torn or otherwise physically altered and relate to such
[Mortgage Loan] [Pool III Mortgage Loan], (iii) based on its examination, and
only as to the foregoing documents, the information set forth in the Mortgage
Loan Schedule respecting such [Mortgage Loan] [Pool III Mortgage Loan] is
correct and (iv) each Mortgage Note has been endorsed as provided in Section
2.04 of the Pooling and Servicing Agreement. Further, [except for Mortgaged
Properties relating to [Mortgage Loans] [Pool III Mortgage Loans] identified on
the Mortgage Loan Schedule by an account number beginning with _______ or
_______,] each Mortgaged Property is a Residential Dwelling of the type set
forth in the appraisal obtained in connection with the origination of the
related [Mortgage Loan] [Pool III Mortgage Loan], and for each [Mortgage Loan]
[Pool III Mortgage Loan] with an original principal balance in excess of $15,000
for which the documents in the possession of the [Trustee] [Custodian] indicate
that the related Originator conducted a drive-by appraisal pursuant to FHLMC
Form 704 or alternative FNMA Form in connection with originating such [Mortgage
Loan] [Pool III Mortgage Loan], such [Mortgage Loan] [Pool III Mortgage Loan]
(A) had an original principal balance not in excess of $35,000, and (B) has a
Loan-to-Value Ratio less than 50% (based solely on the LTV included on the
Mortgage Loan Schedule) and/or an appraisal on FNMA/FHLMC Form 1004 was
performed by the related Originator within one year prior to the origination of
such [Mortgage Loan] [Pool III Mortgage Loan]. The [Trustee] [Custodian]has made
no independent examination of such documents beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The [Trustee]
[Custodian]makes no representations as to: (i) the validity, legality,
enforceability or genuineness of any such documents contained in each or any of
the [Mortgage Loans] [Pool III Mortgage Loans] identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such [Mortgage Loan] [Pool III Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[THE BANK OF NEW YORK
as Trustee]
[FIRST TRUST NATIONAL ASSOCIATION,
as Custodian]
By:
NAME:
TITLE:
<PAGE>
EXHIBIT H
POOL I MORTGAGE LOAN SCHEDULE
[To Be Delivered to Trustee]
<PAGE>
EXHIBIT H-1
POOL II MORTGAGE LOAN SCHEDULE
[To Be Delivered to Trustee]
<PAGE>
EXHIBIT H-2
POOL III MORTGAGE LOAN SCHEDULE
[To Be Delivered to Co-Trustee]
<PAGE>
EXHIBIT H-3
POOL IV MORTGAGE LOAN SCHEDULE
[To Be Delivered to Trustee]
<PAGE>
EXHIBIT I
LIST OF ORIGINATORS
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
<PAGE>
EXHIBIT J
REQUEST FOR RELEASE OF DOCUMENTS
To: [Trustee]
[Custodian]
Re: Pooling and Servicing Agreement, The
Money Store Asset Backed
Certificates, Series 1996-D, dated as
of November 30, 1996
In connection with the administration of the pool of Mortgage Loans
held by you as [Trustee] [Custodian] for the Certificateholders, we request the
release, and acknowledge receipt, of the (Trustee's Mortgage File/[specify
document]) for the Mortgage Loan described below, for the reason indicated.
MORTGAGOR'S NAME, ADDRESS & ZIP CODE:
MORTGAGE LOAN NUMBER:
REASON FOR REQUESTING DOCUMENTS (check one)
____ 1. Mortgage Loan Paid in Full
(Servicer hereby certifies that all amounts received in
connection therewith have been credited to the
Principal and Interest Account and remitted to the
Trustee for deposit into the Certificate Account
pursuant to the Pooling and Servicing Agreement.)
____ 2. Mortgage Loan Liquidated
(Servicer hereby certifies that all proceeds of
foreclosure, insurance or other liquidation have been
finally received and credited to the Principal and
Interest Account and remitted to the Trustee for
deposit into the Certificate Account pursuant to the
Pooling and Servicing Agreement.)
____ 3. Mortgage Loan in Foreclosure
_____4. Mortgage Loan Purchased Pursuant to Section 11.01
of the Pooling and Servicing Agreement.
_____5. Mortgage Loan Repurchased or Substituted Pursuant to
Article II or III of the Pooling and Servicing
Agreement (Servicer hereby certifies that the
repurchase price or Substitution Adjustment has been
credited to the Principal and Interest Account and
remitted to the Trustee for deposit into the
Certificate Account pursuant to the Pooling and
Servicing Agreement.)
____ 6. Other (explain) ____________________________
If box 1 or 2 above is checked, and if all or part of the Trustee's
Mortgage File was previously released to us, please release to us our previous
receipt on file with you, as well as any additional documents in your possession
relating to the above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the
above documents to you as [Trustee] [Custodian], please acknowledge your receipt
by signing in the space indicated below, and returning this form.
THE MONEY STORE INC.
By:
Name:
Date:
Documents returned to [Trustee] [Custodian]:
- -------------------------------
[Trustee] [Custodian]
By:____________________________
Date:__________________________
<PAGE>
EXHIBIT J-1
REQUEST FOR RELEASE OF DOCUMENTS OF
90 DAY DELINQUENT FHA LOANS
To: [Custodian]
Re: Pooling and Servicing Agreement, The
Money Store Asset Backed
CERTIFICATES, SERIES 1996-D, DATED AS
OF NOVEMBER 30, 1996
In connection with the administration of the pool of Mortgage Loans
held by you as Custodian and agent for the Co-Trustee, we request the release,
and acknowledge receipt, of the (Trustee's Mortgage File/[specify document]) for
the 90 Day Delinquent FHA Loan described below, for the reason indicated.
MORTGAGOR'S NAME, ADDRESS & ZIP CODE:
MORTGAGE LOAN NUMBER:
Upon receipt of this request, please execute and deliver such 90 Day
Delinquent FHA Loan to us.
THE MONEY STORE INC.
By:
Name:
Date:
Documents returned to Custodian:
- -------------------------------
Custodian
By:____________________________
Date:__________________________
<PAGE>
EXHIBIT K
TRANSFER AFFIDAVIT
STATE OF )
: ss:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is a of
, the proposed transferee (the "Transferee") of a
Percentage Interest in a Class R Certificate (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement, The Money Store Asset Backed
Certificates, Series 1996-D, Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A- 8, Class A-9, Class A-10, Class A-11, Class
A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class X and Class R, dated
as of November 30, 1996, (the "Agreement") among The Money Store Inc., as
Representative, servicer (the "Servicer") and claims administrator ("Claims
Administrator"), the Originators and The Bank of New York, as Trustee.
Capitalized terms used, but not defined herein shall have the meanings ascribed
to such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as
of the date of the transfer, a Permitted Transferee. The Transferee is acquiring
its Percentage Interest in the Certificate either (i) for its own account or
(ii) as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that
(i) a tax will be imposed on transfers of the Certificate to Persons that are
not Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is a record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 4.02
of the Agreement (incorporated herein by reference) and understands the legal
consequences of the acquisition of a Percentage Interest in the Certificate
including, without limitation, the restrictions on subsequent Transfers and the
provisions regarding voiding the Transfer and mandatory sales. The Transferee
expressly agrees to be bound by and to abide by the provisions of Section 4.02
of the Agreement and the restrictions noted on the face of the Certificate. The
Transferee understands and agrees that any breach of any of the representations
included herein shall render the transfer to the
Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to transfer its Percentage Interest
in the Certificate, and in connection with any transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
transfer its Percentage Interest or cause any Percentage Interest to be
transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate (a "Transfer
Certificate") to the effect that such Transferee has no actual knowledge that
the Person to which the transfer is to be made is not a Permitted Transferee.
7. The Transferee's taxpayer identification number is
- -------------------.
8. Section references and defined terms not defined
herein have the meanings ascribed thereto in the Agreement.
<PAGE>
IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this
day of , 19__.
[NAME OF TRANSFEREE]
By:
Name:
Title:
[Corporate seal]
ATTEST:
- -------------------------
[Assistant] Secretary
<PAGE>
Personally appeared before me the
above-named , known or proved to me to be the same person who executed
the foregoing instrument and to be the of the Transferee,
and acknowledged that he executed the same as his free act and deed and the
free act and deed of the Transferee.
Subscribed and sworn before me this day of
, 19__
NOTARY PUBLIC
My Commission expires the
____ day of __________,
19__.
<PAGE>
EXHIBIT L-1
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: ___________
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER:
FORM OF NOTICE
State Street Bank and Trust
Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
20 Exchange Place
New York, NY 10005
Attention: Municipal Registrar and
Paying Agency (16th Floor)
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [Trustee], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
_____________ (the "Policy") issued by the Insurer in respect of the
$___________ The Money Store Asset Backed Certificates, Series 1996-D, Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8
and Class A-9 (the "Obligations"), that:
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement dated as of November 30, 1996, among The Money Store
Inc., as Representative, Servicer and Claims Administrator,
the Originators named therein and the Trustee, as trustee for
the Owners;
(ii) the Pool I Current Interest Requirement for the
Remittance Date occurring on ____________________ (the
"Applicable Remittance Date") is $_____________;
(iii) the sum of (a) the Pool I Available Remittance Amount
(including any amount transferred from the Spread Account to
the Certificate Account pursuant to Section 6.01(a)(iii) of
the Agreement and minus amounts withdrawn required to pay
premiums to the Insurer), (b) the Monthly Excess Spread and
(c) the Subordination Reduction Amount (the "Pool I Adjusted
Available Remittance Amount") respecting the Applicable
Remittance Date is $______________;
(iv) the Subordination Deficit respecting the
Applicable Remittance Date is $_______________;
(v) the amount of any previously distributed Pool I Available
Amount that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order
of a court having competent jurisdiction (the "Preference
Amount") is $______________;
(vi) the amount by which the Pool I Current Interest
Requirement exceeds the Pool I Adjusted Available Remittance
Amount, plus any Subordination Deficit, plus any Preference
Amount (the "Insured Payment") is
$------------;
(vii) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured
Payment set forth in (vi) above to be applied to the payment
of the Remittance Amount for the Applicable Remittance Date in
accordance with the Agreement; and
(viii) the Trustee directs that payment of the
Insured Payment be made to the following account by
bank wire transfer of federal or other immediately
available funds in accordance with the terms of the
Policy: [INSURANCE PAYING AGENT'S ACCOUNT].
<PAGE>
Any capitalized term used in this Notice and not otherwise
defined herein shall have the meaning assigned thereto in the Policy.
IN WITNESS WHEREOF, the Trustee has executed and delivered
this Notice under the Policy as of the _____ day of , ____.
[TRUSTEE]
BY
TITLE
<PAGE>
EXHIBIT L-2
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: ___________
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER:
FORM OF NOTICE
State Street Bank and Trust
Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
20 Exchange Place
New York, NY 10005
Attention: Municipal Registrar and
Paying Agency (16th Floor)
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [Trustee], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
_____________ (the "Policy") issued by the Insurer in respect of the $_________
The Money Store Asset Backed Certificates, Series 1996-D, Class A-10 (the
"Obligations"), that:
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement dated as of November 30, 1996, among The Money Store
Inc., as Representative, Servicer and Claims Administrator,
the Originators named therein and the Trustee, as trustee for
the Owners;
(ii) the Pool II Current Interest Requirement for the
Remittance Date occurring on ____________________ (the
"Applicable Remittance Date") is $_____________;
(iii) the sum of (a) the Pool II Available Remittance Amount
(including any amount transferred from the Spread Account to
the Certificate Account pursuant to Section 6.01(a)(iii) of
the Agreement and minus amounts withdrawn required to pay
premiums to the Insurer), (b) the Monthly Excess Spread and
(c) the Subordination Reduction Amount (the "Pool II Adjusted
Available Remittance Amount") respecting the Applicable
Remittance Date is $______________;
(iv) the Subordination Deficit respecting the
Applicable Remittance Date is $_______________;
(v) the amount of any previously distributed Pool II Available
Amount that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order
of a court having competent jurisdiction (the "Preference
Amount") is $______________;
(vi) the Supplemental Interest Trust Deficiency
Amount is $________________________;
(vii) the amount by which the Pool II Current Interest
Requirement exceeds the Pool II Adjusted Available Remittance
Amount, plus any Subordination Deficit, plus any Preference
Amount, plus any Supplemental Interest Trust Deficiency Amount
(the "Insured Payment") is $____________;
(viii) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured
Payment set forth in (vii) above to be applied to the payment
of the Remittance Amount and, if applicable, Supplemental
Interest Payments, for the Applicable Remittance Date in
accordance with the Agreement; and
(xi) the Trustee directs that payment of the Insured
Payment be made to the following account by bank wire
transfer of federal or other immediately available
funds in accordance with the terms of the Policy:
[INSURANCE PAYING AGENT'S ACCOUNT].
Any capitalized term used in this Notice and not otherwise
defined herein shall have the meaning assigned thereto in the Policy.
IN WITNESS WHEREOF, the Trustee has executed and delivered
this Notice under the Policy as of the _____ day of , ____.
[TRUSTEE]
BY
TITLE
<PAGE>
EXHIBIT L-3
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: ___________
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER:
FORM OF NOTICE
State Street Bank and Trust
Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
20 Exchange Place
New York, NY 10005
Attention: Municipal Registrar and
Paying Agency (16th Floor)
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [Trustee], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
_____________ (the "Policy") issued by the Insurer in respect of the $__________
The Money Store Asset Backed Certificates, Series 1996-D, Class A-11, Class
A-12, Class A-13, Class A-14 and Class A-15 (the "Obligations"), that:
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement dated as of November 30, 1996, among The Money Store
Inc., as Representative, Servicer and Claims Administrator,
the Originators named therein and the Trustee, as trustee for
the Owners;
(ii) the Pool III Current Interest Requirement for the
Remittance Date occurring on ____________________ (the
"Applicable Remittance Date") is $_____________;
(iii) the sum of (a) the Pool III Available Remittance Amount
(including any amount transferred from the Spread Account to
the Certificate Account pursuant to Section 6.01(a)(iii) of
the Agreement and minus amounts withdrawn required to pay
premiums to the Insurer and the FHA Premium), (b) the Monthly
Excess Spread and (c) the Subordination Reduction Amount (the
"Pool III Adjusted Available Remittance Amount") respecting
the Applicable Remittance Date is
$--------------;
(iv) the Subordination Deficit respecting the
Applicable Remittance Date is $_______________;
(v) the amount of any previously distributed Pool III
Available Amount that is recoverable and sought to be
recovered as a voidable preference by a trustee in bankruptcy
pursuant to the Bankruptcy Code in accordance with a final
nonappealable order of a court having competent jurisdiction
(the "Preference Amount") is $______________;
(vi) the amount by which the Pool III Current Interest
Requirement exceeds the Pool III Adjusted Available Remittance
Amount, plus any Subordination Deficit, plus any Preference
Amount (the "Insured
Payment") is $____________;
(vii) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured
Payment set forth in (vi) above to be applied to the payment
of the Remittance Amount for the Applicable Remittance Date in
accordance with the Agreement; and
(viii) the Trustee directs that payment of the
Insured Payment be made to the following account by
bank wire transfer of federal or other immediately
available funds in accordance with the terms of the
Policy: [INSURANCE PAYING AGENT'S ACCOUNT].
Any capitalized term used in this Notice and not otherwise
defined herein shall have the meaning assigned thereto in the Policy.
IN WITNESS WHEREOF, the Trustee has executed and delivered
this Notice under the Policy as of the _____ day of , ____.
[TRUSTEE]
BY
TITLE
<PAGE>
EXHIBIT L-4
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: ___________
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER:
FORM OF NOTICE
State Street Bank and Trust
Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
20 Exchange Place
New York, NY 10005
Attention: Municipal Registrar and
Paying Agency (16th Floor)
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [Trustee], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
_____________ (the "Policy") issued by the Insurer in respect of the
$____________ The Money Store Asset Backed Certificates, Series 1996-D, Class
A-16 (the "Obligations"), that:
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement dated as of November 30, 1996, among The Money Store
Inc., as Representative, Servicer and Claims Administrator,
the Originators named therein and the Trustee, as trustee for
the Owners;
(ii) the Pool IV Current Interest Requirement for the
Remittance Date occurring on ____________________ (the
"Applicable Remittance Date") is $_____________;
(iii) the sum of (a) the Pool IV Available Remittance Amount
(including any amount transferred from the Spread Account to
the Certificate Account pursuant to Section 6.01(a)(iii) of
the Agreement and minus amounts withdrawn required to pay
premiums to the Insurer), (b) the Monthly Excess Spread and
(c) the Subordination Reduction Amount (the "Pool IV Adjusted
Available Remittance Amount") respecting the Applicable
Remittance Date is $______________;
(iv) the Subordination Deficit respecting the
Applicable Remittance Date is $_______________;
(v) the amount of any previously distributed Pool IV Available
Amount that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order
of a court having competent jurisdiction (the "Preference
Amount") is $______________;
(vi) the amount by which the Pool IV Current Interest
Requirement exceeds the Pool IV Adjusted Available Remittance
Amount, plus any Subordination Deficit, plus any Preference
Amount (the "Insured Payment") is
$------------;
(vii) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured
Payment set forth in (vi) above to be applied to the payment
of the Remittance Amount for the Applicable Remittance Date in
accordance with the Agreement; and
(viii) the Trustee directs that payment of the
Insured Payment be made to the following account by
bank wire transfer of federal or other immediately
available funds in accordance with the terms of the
Policy: [INSURANCE PAYING AGENT'S ACCOUNT].
Any capitalized term used in this Notice and not otherwise
defined herein shall have the meaning assigned thereto in the Policy.
IN WITNESS WHEREOF, the Trustee has executed and delivered
this Notice under the Policy as of the _____ day of , ____.
[TRUSTEE]
By
Title
<PAGE>
EXHIBIT M
CUSTODIAL AGREEMENT
Dated __________, 1996
THE BANK OF NEW YORK, a New York banking corporation, as
Trustee (the "Trustee") and ____________________________, a
____________________________ (the "Custodian"), agree as follows:
WHEREAS, the Trustee, the Originators and The Money Store Inc.
("The Money Store") have entered into a Pooling and Servicing Agreement dated as
of November 30, 1996 relating to The Money Store Asset Backed Certificates,
Series 1996-D, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13,
Class A-14, Class A-15, Class A-16, Class X and Class R, (the "Pooling
Agreement"), the terms defined therein being used herein with the same meaning)
pursuant to which the Originators transferred, assigned, set-over and otherwise
conveyed to the Trustee, without recourse, all of the Originators' right, title
and interest in and to the mortgage loans identified in Exhibits H, H-1, H-2 and
H-3 to the Pooling Agreement (the "Mortgage Loans"); and
WHEREAS, in connection with such transfer and assignment and
pursuant to the Pooling Agreement, the Trustee holds, directly or pursuant to a
custodial agreement, the Mortgage Files:
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements
herein contained, the Custodian and the Trustee agree as follows:
1. APPOINTMENT AS CUSTODIAN; ACKNOWLEDGMENT OF Receipt.
Subject to the terms and conditions herein, the Trustee hereby appoints the
Custodian, and the Custodian hereby accepts such appointment, as its Custodian
to maintain custody of the Trustee's Mortgage Files. The Custodian hereby
acknowledges receipt of the Mortgage Notes, the Mortgages, the assignments and
other documents relating to the Mortgage Loans referred to in Section 2.04,
except for the items referred to in Section 2.04(d)(ii), of the Pooling
Agreement. The Trustee shall be liable for all of the Custodian's fees under
this Agreement.
2. MAINTENANCE OF OFFICE. The Custodian agrees to maintain
each Trustee's Mortgage File identified in Section 2.04 of the Pooling
Agreement, said Exhibit being incorporated herein by reference, at the office of
the Custodian located at ________ ___________________ or at such other office of
the Custodian in New York, New York as the Custodian shall designate from time
to time after giving the Trustee 30 days' prior written notice.
3. DUTIES OF CUSTODIAN. As Custodian, the Custodian
shall have and perform the following powers and duties:
(a) SAFEKEEPING. To segregate the Trustee's
Mortgage Files from all other mortgages and mortgage notes and similar records
in its possession, to identify the Trustee's Mortgage Files as being held and to
hold the Trustee's Mortgage Files for and on behalf of the Trustee for the
benefit of all present and future Certificateholders, to maintain accurate
records pertaining to each Mortgage Note and Mortgage in the Trustee's Mortgage
Files as will enable the Trustee to comply with the terms and conditions of the
Pooling Agreement, to maintain at all times a current inventory thereof and to
conduct periodic physical inspections of the Trustee's Mortgage Files held by it
under this Agreement in such a manner as shall enable the Trustee and the
Custodian to verify the accuracy of such record-keeping, inventory and physical
possession. The Custodian will promptly report to the Trustee any failure on its
part to hold the Trustee's Mortgage Files as herein provided and promptly take
appropriate action to remedy any such failure.
(b) RELEASE OF DOCUMENTS. To release any
Mortgage Note and Mortgage in the Trustee's Mortgage Files as
provided in the Pooling Agreement.
(c) ADMINISTRATION; REPORTS. In general, to
attend to all non-discretionary details in connection with maintaining custody
of the Trustee's Mortgage Files on behalf of the Trustee. In addition, the
Custodian shall assist the Trustee generally in the preparation of reports to
Certificateholders or to regulatory bodies to the extent necessitated by the
Custodian's custody of the Trustee's Mortgage Files.
4. ACCESS TO RECORDS. The Custodian shall permit the Trustee
or its duly authorized representatives, attorneys or auditors and those persons
permitted access pursuant to Section 5.13 of the Pooling Agreement to inspect
the Trustee's Mortgage Files and the books and records maintained by the
Custodian pursuant hereto at such times as they may reasonably request, subject
only to compliance with the terms of the Pooling Agreement.
5. INSTRUCTIONS; AUTHORITY TO ACT. The Custodian shall be
deemed to have received proper instructions with respect to the Trustee's
Mortgage Files upon its receipt of written instructions signed by a Responsible
Officer of the Trustee. A certified copy of a resolution of the Board of
Directors of the Trustee may be accepted by the Custodian as conclusive evidence
of the authority of any such officer to act and may be considered as in full
force and effect until receipt of written notice to the contrary by the
Custodian from the Trustee. Such instructions may be general or specific in
terms.
6. INDEMNIFICATION BY THE CUSTODIAN. The Custodian agrees to
indemnify the Trustee for any and all liabilities, obligations, losses, damages,
payments, costs or expenses, including attorneys' fees, of any kind whatsoever
which may be imposed on, incurred by or asserted against the Trustee as the
result of any act or omission in any way relating to the maintenance and custody
by the Custodian of the Trustee's Mortgage Files; provided, however, that the
Custodian shall not be liable for any portion of any such amount resulting from
the gross negligence or willful misconduct of the Trustee.
7. ADVICE OF COUNSEL. The Custodian and the Trustee further
agree that the Custodian shall be entitled to rely and act upon advice of
counsel with respect to its performance hereunder as Custodian and shall be
without liability for any action reasonably taken pursuant to such advice,
provided that such action is not in violation of applicable Federal or State
law. This paragraph shall not negate the Custodian's obligations under paragraph
6 above.
8. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT, AND
INTERPRETIVE AND ADDITIONAL PROVISIONS. This Agreement shall become effective as
of the date hereof and shall continue in full force and effect until terminated
as hereinafter provided, and may be amended at any time by mutual agreement of
the parties hereto. This Agreement may be terminated by either party in a
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect no sooner than sixty (60) days after the date of such
delivery or mailing. Concurrently with, or as soon as practicable after, the
termination of this Agreement, the Custodian shall redeliver the Trustee's
Mortgage Files to the Trustee at such place as the Trustee may reasonably
designate. In connection with the administration of this Agreement, the
Custodian and the Trustee may agree from time to time upon the interpretation of
the provisions of this Agreement as may in their opinion by consistent with the
general tenor and purposes of this Agreement, any such interpretation to be
signed and annexed hereto.
9. GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
10. NOTICES. Notices and other writings shall be delivered or
mailed, postage prepaid, to the Trustee at 101 Barclay Street, 12th Floor West,
New York, New York 10286, Attention: Corporate Trust Administration - MBS, or to
the Custodian at, _________________________________________, Attention:
__________; or to such other address as the Trustee or the Custodian may
hereafter specify in writing. Notices or other writings shall be effective only
upon actual receipt by the parties.
11. BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the Trustee and the Custodian and their respective
successors and assigns. Concurrently with the appointment of a successor trustee
as provided in Section 12.08 of the Pooling Agreement, the Trustee and the
Custodian shall amend this Agreement to make said successor trustee the
successor to the Trustee hereunder.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by a duly authorized
officer as of the day and year first above written.
THE BANK OF NEW YORK
as Trustee under the Pooling
Agreement referred to above
By:
, as Custodian
By:
<PAGE>
EXHIBIT M-1
CUSTODIAL AGREEMENT
(The Money Store Asset Backed Certificates, Series 1996-D)
Dated: December 30, 1996
FIRST BANK (N.A.), a national banking association
headquartered in Milwaukee, Wisconsin, as co-trustee (the "Co-Trustee"), and
FIRST TRUST NATIONAL ASSOCIATION, a national banking association headquartered
in St. Paul, Minnesota, as custodian ("Custodian"), agree as follows:
WHEREAS, the Trustee, the Originators and The Money Store Inc.
("The Money Store") have entered into a Pooling and Servicing Agreement dated as
of November 30, 1996 (the "Pooling Agreement") relating to The Money Store Asset
Backed Certificates, Series 1996- D, Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class A-12, Class A-13, Class A-14, Class A-15, Class A- 16, Class X and Class
R, (the applicable provisions of which Pooling Agreement have been accepted and
agreed to by the Co-Trustee and the Custodian in connection with The Pool III
Mortgage Loans) pursuant to which the Originators transferred, assigned,
set-over and otherwise conveyed to the Trustee (or, in connection with the Pool
III Mortgage Loans, to the Co-Trustee), without recourse, all of the
Originator's right, title and interest in and to the mortgage loans identified
in Exhibits H, H-1, H-2, and H-3 to the Pooling Agreement, including the Pool
III Mortgage Loans; and
WHEREAS, the Co-Trustee wishes to appoint the Custodian to
hold the Trustee's Mortgage Files relating to the Pool III Mortgage Loans as its
custodian:
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements
herein contained, the Custodian and the Co-Trustee agree as follows:
1. APPOINTMENT AS CUSTODIAN; ACKNOWLEDGMENT OF RECEIPT.
Subject to the terms and conditions herein, the Co-Trustee hereby appoints the
Custodian, and the Custodian hereby accepts such appointment, as its custodian
to maintain custody of the Trustee's Mortgage Loan Files relating to the Pool
III Mortgage Loans. The Custodian hereby acknowledges that it has possession of
the Trustee's Mortgages Files relating to the Pool III Mortgage Loans, except as
noted on the document exception listing previously delivered to The Money Store
or to be delivered to The Money Store and the Co-Trustee in accordance with the
Pooling Agreement.
2. CUSTODIAL ACCOUNT. The Custodian agrees to open a
segregated custody account in the Co-Trustee's name with itself at its office in
St. Paul, Minnesota or at such other of its offices in the State of Minnesota as
shall from time to time be identified to the Co-Trustee upon 30 days' prior
written notice, where the Trustee's Mortgage Files relating to the Pool III
Mortgage Loans will be held on behalf of the Co-Trustee.
3. DUTIES OF CUSTODIAN. As Custodian, the
Custodian shall have and perform the following powers and
duties:
(a) SAFEKEEPING. The Custodian will hold the
Trustee's Mortgage Files relating to the Pool III Mortgage Loans on behalf of
the Co-Trustee. The Custodian will promptly report to the Co-Trustee any failure
on its part to hold the Trustee's Mortgage Files relating to the Pool III
Mortgage Loans as herein provided and promptly take appropriate action to remedy
any such failure.
(b) ACCESS TO TRUSTEE'S MORTGAGE FILES. The
Custodian will, subject to security requirements of the Custodian applicable to
its own employees having access to similar records held by the Custodian and
such regulations as may be reasonably imposed by the Custodian, permit The Money
Store, the Co-Trustee or the Servicer or any of their duly authorized
representatives, attorneys or auditors to inspect the Trustee's Mortgage Files
relating to the Pool III Mortgage Loans at such times as the Co-Trustee may
reasonably request.
(c) RELEASE OF DOCUMENTS. The Custodian will
release any Pool III Mortgage Loan to the Servicer for servicing by the Servicer
or to The Money Store for purchase by The Money Store, all as provided in the
Pooling Agreement.
(d) ADMINISTRATION; REPORTS. The Custodian
will, in general, attend to all non-discretionary details in connection with
maintaining custody of the Trustee's Mortgage Files relating to the Pool III
Mortgage Loans on behalf of the Co-Trustee. In addition, the Custodian shall
assist The Money Store, the Co-Trustee and the Servicer generally in the
preparation of routine reports to Certificateholders or to regulatory bodies, if
any, to the extent necessitated by the Custodian's custody of the Trustee's
Mortgage Files relating to the Pool III Mortgage Loans.
4. INSTRUCTIONS; AUTHORITY TO ACT. The Custodian
shall be deemed to have received proper instructions with
respect to the Trustee's Mortgage Files relating to the Pool III
Mortgage Loans upon its receipt of written instructions signed by a Responsible
Officer of the Co-Trustee. A certified copy of a resolution of the Board of
Directors of the Co-Trustee may be received and accepted by the Custodian as
conclusive evidence of the authority of any such officer to act and may be
considered as in full force and effect until receipt of written notice to the
contrary by the Co-Trustee. Such instructions may be general or specific in
terms.
5. CUSTODIAL FEE. For its services under this
Agreement, the Custodian shall be entitled to reasonable compensation out of
the Co-Trustee's fees received pursuant to the Pooling Agreement.
6. INDEMNIFICATION BY THE CUSTODIAN. The Custodian agrees to
indemnify the Co- Trustee for any and all liabilities, obligations, losses,
damages, payments, costs or expenses, including attorneys' fees, of any kind
whatsoever which may be imposed on, incurred by or asserted against the
Co-Trustee as the result of any act or omission in any way relating to the
maintenance and custody by the Custodian of the Trustee's Mortgage Files
relating to the Pool III Mortgage Loans; provided, however, that the Custodian
shall not be liable for any portion of any such liabilities, obligations,
losses, damages, payments or costs due to the misconduct of the Co-Trustee.
7. ADVICE OF COUNSEL. The Custodian and the Co-Trustee further
agree that the Custodian shall be entitled to rely and act upon advice of
counsel with respect to its performance hereunder as Custodian and shall be
without liability for any action reasonably taken pursuant to such advice,
provided that such action is not in violation of applicable Federal or State
law.
8. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT, AND
INTERPRETIVE AND ADDITIONAL PROVISIONS. This Agreement shall become effective as
of the date hereof and shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by the Co-Trustee in a writing delivered or
mailed to the Custodian and The Money Store, postage prepaid, such termination
to take effect no sooner than sixty (60) days after the date of such delivery or
mailing. Concurrently with, or as soon as practicable after any such
termination, the Custodian shall assemble the Trustee's Mortgage Files relating
to the Pool III Mortgage Loans and return them to the Co-Trustee at such place
as the Co-Trustee may reasonably designate. In connection with the
administration of this Agreement, the Custodian and the Co-Trustee may agree
from time to time upon the interpretation of the provisions of this Agreement as
may in their joint opinion be consistent with the general tenor and purposes of
this Agreement, any such interpretation to be signed by all parties and annexed
hereto.
9. GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Minnesota.
10. NOTICES. Notices and other writings shall be delivered or
mailed, postage prepaid, to the Co-Trustee at First Bank (N.A.), 201 West
Wisconsin Avenue, Milwaukee, Wisconsin, Attn: Corporate Trust Department, or to
the Custodian at First Trust National Association, 180 East Fifth Street, St.
Paul, Minnesota 55101, Attention: Barbara K. Armstrong, or to such other address
as the Co-Trustee or the Custodian may hereafter specify in writing, shall be
conclusively presumed to have been duly given hereunder to the respective party,
whether or not such party receives such notice.
11. BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the Co-Trustee and the Custodian and their
respective successors and assigns. Concurrently with the appointment of a
successor co-trustee as provided in the Pooling Agreement, the Co-Trustee and
the Custodian shall amend this Agreement to make said successor co-trustee the
successor to the Co-Trustee hereunder.
12. TERMS. Capitalized terms not otherwise defined
in this Agreement shall have the respective meanings given to them in the
Pooling Agreement.
<PAGE>
FIRST BANK (N.A.),
as Co-Trustee under the Pooling
Agreement referred to above
By:
Its:___________________________
By:
Its:____________________________
FIRST TRUST NATIONAL ASSOCIATION
as Custodian under the Pooling
Agreement referred to above
By:
Its:___________________________
By:
Its:____________________________
<PAGE>
EXHIBIT N
FORM OF LIQUIDATION REPORT
Customer Name:
Account number:
Original Principal Balance:
1. Liquidation Proceeds
Principal Prepayment $________
Property Sale Proceeds ________
Insurance Proceeds ________
Other (Itemize) ________
Total Proceeds $_______
2. Servicing Advances $________
Monthly Advances ________
Total Advances $_______
3. Net Liquidation Proceeds $_______
(Line 1 minus Line 2)
4. Principal Balance of the Mortgage
Loan on date of liquidation $_______
5. Realized (Loss) or Gain $_______
(Line 3 minus Line 4)
<PAGE>
EXHIBIT O
FORM OF DELINQUENCY REPORT
DELINQUENCY AND FORECLOSURE INFORMATION
REO FORECLOSURES
OUTSTANDING # # OF
# OF OUTSTANDING # OF OUTSTANDING
INVESTOR DOLLARS ACCT RANGES AMOUNT ACCTS. PCT
ACCTS DOLLARS % ACCTS DOLLARS %
1 TO 29 DAYS
30 TO 59 DAYS
60 TO 89 DAYS
90 AND OVER
TOTALS
<PAGE>
EXHIBIT P
[OMITTED]
<PAGE>
EXHIBIT Q
[OMITTED]
<PAGE>
EXHIBIT R
SERVICER'S MONTHLY COMPUTER TAPE FORMAT
The computer tape to be delivered to the Trustee pursuant to Section
6.10 shall contain the following information for each Mortgage Loan as of the
related Record Date:
1. Name of the Mortgagor, address of the Mortgaged
Property and Account Number.
2. The LTV as of the origination date of the Mortgage
Loan.
3. The Due Date.
4. The Mortgage Loan Original Principal Balance.
5. The Mortgage Interest Rate.
6. The Monthly Payment.
7. The date on which the last payment was received and
the amount of such payment segregated into the
following categories; (a) total interest received
(including Servicing Fee, Contingency Fee and Excess
Spread); (b) Servicing Fee and Contingency Fee;
(c) Excess Spread; (d) The amount equal to total interest
received minus Servicing Fee, Contingency Fee and
Excess Spread; (e) principal and Excess Payments
received; (f) Curtailments received; and
(g) Principal Prepayments received.
8. The Mortgage Loan Principal Balance.
9. The Mortgage Note maturity date.
10. A "Delinquency Flag" noting that the Mortgage Loan is
current or delinquent. If delinquent, state the date
on which the last payment was received.
11. A "Foreclosure Flag" noting that the Mortgage Loan is
the subject of foreclosure proceedings.
12. An "REO Flag" noting that the Mortgage Loan is an REO
Property.
13. A "Liquidated Mortgage Loan Flag" noting that the
Mortgage Loan is a Liquidated Mortgage Loan and the
Net Liquidation Proceeds received in connection
therewith.
14. Lifetime Cap.
15. Lifetime Floor.
16. Periodic Cap.
17. Net Funds Cap.
18. Any additional information reasonably requested by the
Trustee.
<PAGE>
EXHIBIT S
SUB-SERVICING AGREEMENT
THIS SUB-SERVICING AGREEMENT is made effective as of the ____ day of
December 1996, by and between The Money Store Inc., a New Jersey corporation
(the "Servicer") whose principal business address is 2840 Morris Avenue, Union,
New Jersey 07083, and each of the entities listed on Schedule A hereto (each an
"Originator", and collectively the "Originators").
RECITALS
1. Each Originator is a wholly-owned subsidiary of the Servicer.
2. The Servicer, the Originators and The Bank of New York, as trustee
(the "Trustee"), are parties to that certain Pooling and Servicing Agreement
dated and effective as of November 30, 1996 (the "Pooling and Servicing
Agreement").
3. Pursuant to the terms of the Pooling and Servicing Agreement, each
Originator has transferred those certain Mortgage Loans (as defined in the
Pooling and Servicing Agreement) listed next to each Originator's name on
Schedule B hereto to the Trustee or (in the case of the Pool III Loans
Co-Trustee), for the benefit of Certificateholders (as defined in the Pooling
and Servicing Agreement).
4. The Originators desire to convey to the Servicer the right to
service the Mortgage Loans. As authorized by the Pooling and Servicing
Agreement, the Servicer desires to enter into a subservicing agreement with each
Originator so that each Originator will perform subservicing functions for the
Mortgage Loans transferred by it to the Trustee or (in the case of the Pool III
Loans Co-Trustee), such subservicing functions to be rendered in compliance with
the terms of the Pooling and Servicing Agreement.
5. Each Originator desires to undertake such subservicing and
supervision of the Mortgage Loans on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the agreements of the parties
herein and other good and valuable consideration, the receipt and sufficiency of
which each party hereby acknowledges, and in order in part to induce the Trustee
to enter into the Pooling and Servicing Agreement and perform its obligations
thereunder, the parties agree as follows:
1. ASSIGNMENT OF SERVICING; SUBSERVICING AGREEMENT. Each Originator
hereby assigns, transfers, conveys and sets over to the Servicer, its successors
and assigns, all of such Originator's right, title and interest to service the
Mortgage Loans listed next to such Originator's name on the schedule furnished
by each Originator to the Servicer and dated the date hereof, to have and to
hold such rights hereby assigned, conveyed and transferred to the Servicer, for
its own use and benefit, and that of its successors and assigns, forever. In
consideration of the foregoing assignment, the Servicer hereby appoints each
Originator as subservicer with respect to the Mortgage Loans conveyed by each
such Originator to the Trustee (or, in the case of the Pool III Loans, to the
Co-Trustee), each such Originator to service and supervise such Mortgage Loans
as provided for herein, such subservicing to commence on the effective date of
this Agreement and to terminate as provided for herein. As compensation for such
subservicing and supervision, each Originator shall be entitled to an annual fee
for each Mortgage Loan serviced, such fee to be computed and paid as set forth
on Schedule B hereto. Each Originator, as contract subservicer, shall service
and administer the Mortgage Loans and shall have full power and authority,
acting alone, to do any and all things in connection with such servicing and
administration which the Originator may deem necessary or desirable; PROVIDED,
HOWEVER, that each Originator shall conduct its servicing activities (i) in
compliance with and pursuant to the servicing requirements set out in the
Pooling and Servicing Agreement, as such requirements relate to subservicing
rendered thereunder, and (ii) to the extent not inconsistent with such
Originator's obligations as an authorized subservicer under the Pooling and
Servicing Agreement, (x) in accordance with the provisions of Section 3 hereof
and (y) otherwise in accordance with the standards and requirements set forth on
Schedule C hereto and subject to applicable Federal, state and local laws and
regulations. On or after the date hereof, each Originator shall deliver such
appropriately executed and authenticated instruments of sale, assignment,
transfer and conveyance to the Servicer, if any, including limited powers of
attorney, as the Servicer or its counsel determine to be reasonable in order to
accomplish the transfer to the Servicer of such Originator's rights with respect
to the servicing.
2. REPRESENTATIONS AND WARRANTIES. Each Originator represents and
warrants as follows:
2.1 Such Originator is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation. Originator is
and at all relevant times has been properly licensed and qualified to transact
business in all appropriate jurisdictions, to conduct all activities performed
with respect to origination and servicing of the Mortgage Loans and is in good
standing in each jurisdiction in which the failure to be in such good standing
would have a material, adverse effect on the consummation of the transactions
contemplated hereby.
2.2 Originator has all requisite corporate power, authority and
capacity to enter into this Agreement and to perform the obligations required of
it hereunder. The execution and delivery of this Agreement by the Originator,
and the consummation of the transactions contemplated hereby, have each been
duly and validly authorized by all necessary corporate action. This Agreement
constitutes the valid and legally binding agreement of Originator enforceable in
accordance with its terms, and no offset, counterclaim or defense exists to the
full performance of this Agreement, subject to laws respecting bankruptcy,
receivership, insolvency and other laws affecting creditors' rights generally.
2.3 The execution, delivery and performance of this Agreement by
Originator, its compliance with the terms hereof and consummation of the
transactions contemplated will not violate, conflict with, result in a breach
of, constitute a default under, be prohibited by or require any additional
approval under its certificate of incorporation, bylaws, or any instrument or
agreement to which it is a party or by which it is bound or which affects the
servicing conveyed hereunder.
2.4 Such Originator is the lawful owner of the servicing, has the sole
right and authority to transfer the servicing as contemplated hereby, and is not
contractually obligated to sell the servicing to any other party. The transfer,
assignment and delivery of the servicing in accordance with the terms and
conditions of this Agreement shall vest in the Servicer all rights as servicer
free and clear of any and all claims, charges, defenses, offsets and
encumbrances of any kind or nature whatsoever, including but not limited to
those of Originator.
2.5 With respect to each individual Mortgage Loan for which servicing
rights are assigned hereunder, such Originator makes to the Servicer those
representations and warranties that are contained in Section 3.02 of the Pooling
and Servicing Agreement.
3. ORIGINATOR'S DUTIES. Until the principal, interest and any other
amounts due on each Mortgage Loan are paid in full, each Originator shall:
A. Proceed diligently to collect all payments due
under the terms of each Mortgage Loan as they become due.
B. Keep a complete and accurate account of and properly apply
all sums collected by it from the mortgagor on account of each such
Mortgage Loan for principal and interest, and upon request, furnish
evidence acceptable to the Servicer of all expenditures for taxes,
assessments and other public charges and hazard insurance premiums. In
the event any Mortgagor fails to make a payment to an Originator
required to be made under the terms of any such Mortgage Loan, such
Originator will notify the Servicer of such fact within 20 days after
the same shall have become due and payable.
C. Deposit all funds received in respect of each Mortgage Loan
in an account in an institution the accounts of which are insured by an
agency of the United States government. Unless directed otherwise by
the Servicer such account shall be held by a Originator, which shall
maintain or shall cause to be maintained detailed records to show the
respective interest of each individual mortgagor in the account.
D. Pay into the related Principal and Interest Accounts
(as defined in the Pooling and Servicing Agreement) all amounts
of principal and interest collected under the Mortgage Loans.
E. Submit to the Servicer at least annually an
accounting of the balances in each such account, if any.
F. Perform such other customary duties, furnish such other
reports and execute such other documents in connection with its duties
hereunder as the Servicer from time to time reasonably may require.
4. ADVANCES BY ORIGINATOR. In the event an Originator, on behalf of
the Servicer, makes any advance of principal and/or interest to the holder of a
mortgage serviced hereunder before such Originator has received the applicable
mortgage payment from any mortgagor, or makes any other advance to protect the
security of a mortgage or otherwise (including but not limited to property
taxes, special assessments, and hazard insurance premiums), EXCEPT advances
related to foreclosure or real estate owned losses (which are covered by Section
8), then the Servicer, promptly upon being billed therefore, shall, at its
option, either (i) reimburse such Originator the full amount of all such
advances, (ii) credit such amount as a set-off against amounts such Originator
may then owe to the Servicer pursuant to this Agreement, (iii) use a combination
of such reimbursement and crediting to fully discharge such amount or (iv)
forego such reimbursement or crediting with respect to all or a portion of such
amount, in which case the amount not reimbursed or offset shall be deemed
currently due and payable and, until paid to such Originator, shall bear
interest on the average monthly balance thereof at the underlying Mortgage Loan
Rate.
5. ORIGINATOR'S RECORDS; MONITORING OF PROPERTY. Each Originator will
during regular business hours make all of its records and files relating to
Mortgage Loans covered by this Agreement available for inspection by the
Servicer and its authorized agents. In addition, an Originator will use ordinary
diligence to ascertain, and will forthwith notify the Servicer of any of the
following which might come to the attention of such Originator:
A. The vacating of or any change in the occupancy of any
premises securing a mortgage.
B. The sale or transfer of any such premises.
C. The death, bankruptcy, insolvency or other disability of a
mortgagor which might impair ability to repay the Mortgage Loan.
D. Any loss or damage in excess of $10,000 to any such
premises, in which event, in addition to notifying the Servicer, an
Originator shall see to it that the insurance companies concerned are
promptly notified. For losses or damages of $10,000 or less, the
Servicer hereby authorizes an Originator to endorse insurance checks
or drafts on behalf of the Servicer. For losses or damages in excess
of $10,000, an Originator shall make a report to the Servicer and the
Servicer retains the right to endorse any insurance drafts related to
such loss or damage.
E. Any lack of repair or any other deterioration or waste
suffered or committed in respect to the premises covered by any
mortgage.
It is understood and agreed, however, that no notice need be given to the
Servicer of any facts other than those of which an Originator has actual notice,
or those of which an Originator would, except for its negligence, have had
actual notice.
6. NO WAIVER, RELEASE OR CONSENT BY ORIGINATOR. An Originator will not
waive, modify, release or consent to postponement on the part of the mortgagor
of any term or provision of any Mortgage Loan without the consent of the
Servicer.
7. HAZARD INSURANCE. An Originator shall cause to be maintained such
fire and hazard insurance as shall be requested by the Servicer pursuant to
Sections 5.07 and 5.08 of the Pooling and Servicing Agreement.
8. FORECLOSURE AND REAL ESTATE OWNED. An Originator will assist in the
foreclosure or other acquisition of the property securing any Mortgage Loan and
the transfer of such property, pursuant to instruction of the Servicer given
under Section 5.10 of the Pooling and Servicing Agreement.
9. TERM; TERMINATION. This Agreement shall commence on the date hereof
and shall, subject to earlier termination pursuant to the provisions of this
Section 9, terminate upon the termination of the Pooling and Servicing
Agreement. This Agreement may be canceled and terminated (i) at any time
hereunder by the Servicer on 10 days notice to an Originator, or (ii) by the
Trustee or the Co-Trustee on notice to an Originator, at any time after the
Trustee or the Co- Trustee, as the case may be, shall have become the successor
servicer with respect to the Mortgage Loans or Pool III Loans, as the case may
be, pursuant to Sections 10.01 and 10.02 of the Pooling and Servicing Agreement.
In addition, this Agreement may be canceled and terminated by the Servicer, by
notice to an Originator, if:
A. An Originator fails in a material respect to perform its
obligations hereunder and (i) does not cure or rectify such failure
within 45 days or, (ii) if the character of such cure or rectification
is such that it cannot reasonably be effected within 45 days, does not
commence such cure or rectification within 45 days and complete the
same within a commercially reasonable time thereafter, given the
circumstances.
B. An Originator becomes insolvent or bankrupt or is placed
under conservatorship or receivership.
C. An Originator assigns or attempts to assign its rights and
obligations hereunder, without written consent of the Servicer,
provided that any assignment, transfer or other conveyance of an
Originator's rights and obligations hereunder that occurs as a result
of a merger, consolidation, reorganization, name change or acquisition
of or involving an Originator shall not be construed as an assignment
(or attempted assignment) under the provisions of this Section 9.C.
Upon termination of this Agreement, an Originator will account for and turn over
to the Servicer all funds collected under each Mortgage Loan for which said
termination is effective, less only the compensation, fees and reimbursements
then due an Originator, and will deliver to the Servicer or its designee all
records and documents relating to each such mortgage.
10. COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Each Originator will
comply with, and will use all reasonable efforts to cause each Mortgagor to
comply with, all applicable state and federal rules and regulations or
requirements including those requiring the giving of notices.
11. FIDELITY, ERRORS AND OMISSIONS INSURANCE, ETC. Each Originator
agrees to be responsible, at no expense to the Servicer, for seeing to it that
at all times, while this Agreement is in force, policies of fidelity, fire, and
extended coverage, theft, forgery, and errors and omissions insurance are
maintained in conformity with the Pooling and Servicing Agreement. Each
Originator will, without demand therefore, provide the Servicer annually, on a
date agreeable to the Servicer, a certificate or binder of insurance delineating
the various types of insurance carried by such Originator.
12. MISCELLANEOUS. This document contains the entire agreement between
the parties hereto and cannot be modified in any respect except by an amendment
in writing signed by each party. The invalidity of any portion of this Agreement
shall in no way affect the balance thereof. Any notice permitted or required
hereunder shall be in writing and shall be deemed given when hand delivered to
an officer or authorized agent of, or when mailed, registered or certified mail,
postage prepaid, to Servicer or an Originator at the address of the Servicer set
forth above. The captions and headings used in this Agreement are for
convenience only, and do not define or limit the terms and provisions of this
Agreement. Notwithstanding any provision in this Agreement to the contrary,
nothing contained herein shall be deemed an attempt to assign or an assignment
of any servicing rights by an Originator to the Servicer if an attempted
assignment of the same without the consent of any agency or instrumentality of
the United States or a state thereof (a "Regulatory Authority") with
jurisdiction over such assignment would constitute a breach of an applicable
regulatory requirement or agreement between an Originator and such Regulatory
Authority unless and until such consent shall have been obtained. In the event
the consent of any Regulatory Authority is required to authorize the conveyance
of any or all of the servicing to be conveyed hereunder and such consent shall
not have been granted prior to the occurrence of an Event of Default under
Section 10.01 of the Pooling and Servicing Agreement, then upon the occurrence
of an Event of Default, each Originator shall enter into an agreement with the
Trustee (or, in the case of the Pool III Loans, the Co-Trustee), which agreement
shall be in form and substance satisfactory to the Trustee (or, in the case of
the Pool III Loans, the Co- Trustee) and its counsel, which recognizes the
Trustee (or, in the case of the Pool III Loans, the Co-Trustee) as the successor
servicer of the Mortgage Loans as provided for by such Section 10.01, and shall
continue to subservice the Mortgage Loans or shall convey such subservicing at
the election and upon the direction of the Trustee (or, in the case of the Pool
III Loans, the Co- Trustee).
IN WITNESS WHEREOF, each party has caused this instrument to be signed
in its corporate name on its behalf by its proper officials duly authorized as
of the day and year first above written.
SERVICER:
ATTEST: The Money Store Inc.
By: ______________________ By: ______________________________
Philip Arem Morton Dear
Assistant Secretary Executive Vice President
ORIGINATORS:
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
ATTEST:
By: _______________________ By: ______________________________
Philip Arem Morton Dear
Assistant Secretary Executive Vice President
<PAGE>
SCHEDULE A
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
<PAGE>
SCHEDULE B
Each Originator shall receive 25 basis points as compensation for
servicing hereunder as well as other servicing fees as permitted.
ORIGINATORS MORTGAGE LOANS TRANSFERRED
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
<PAGE>
SCHEDULE C
1. Make telephone contact with any Mortgagor whose account is either a first
payment default or delinquent 9-29 days.
2. Confirm telephone contacts as necessary.
3. Contact, in writing, each Mortgagor who can not be contacted.
4. Send a "default" letter to any Mortgagor who is 30 days
delinquent.
5. Commence foreclosure proceedings after 60 days delinquency.
6. Obtain legal counsel where appropriate including in foreclosure matter
commenced by prior lienholders and bankruptcy matters.
7. Monitor all outside counsel and proceedings.
8. Monitor loans for continuing performance.
