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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)
June 12, 1997
ContiMortgage Home Equity Loan Trust 1997-3
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(Exact name of registrant as specified in its charter)
New York 333-19427 Application Pending
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(State or Other Jurisdiction) (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
c/o Manufacturers & Traders Trust Company
One M&T Plaza
Buffalo, NY 14240
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (716) 842-4217
No Change
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
Description of the Certificates and the Mortgage Loans
ContiSecurities Asset Funding Corp. registered issuances of up to
$5,000,000,000 principal amount of 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. 333-19427) (as amended, the "Registration Statement"). Pursuant to the
Registration Statement, ContiMortgage Home Equity Loan Trust 1997-3 (the
"Registrant" or the "Trust") issued $1,265,000,000 in aggregate principal amount
of its Home Equity Pass-Through Certificates, Series 1997-3 (the
"Certificates"), on June 12, 1997. This Current Report on Form 8-K is being
filed to satisfy an undertaking to file copies of certain agreements executed in
connection with the issuance of the Certificates, the forms of which were filed
as Exhibits to the Registration Statement.
The Certificates were issued pursuant to a Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement") attached hereto as Exhibit 4.1, dated as
of June 1, 1997, among ContiSecurities Asset Funding Corp. (the "Depositor"),
ContiMortgage Corporation (the "Company"), as a seller and servicer (the
"Servicer"), ContiWest Corporation, as a seller and Manufacturers and Traders
Trust Company, in its capacity as trustee (the "Trustee"). The Certificates
consist of the following 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-11IO Certificates (collectively, the "Class A Certificates"), Class M-1F and
M-1A Certificates (the "Class M-1 Certificates") Class M-2F and Class M-2A
Certificates (the "Class M-2 Certificates" and collectively with the Class M-1
Certificates, the "Mezzanine Certificates"), the Class B-1F and Class B-1A
Certificates (the "Class B Certificates"), the Class C Certificates (the "Class
C Certificates") and the Class R Certificates (the "Class R Certificates" and,
together with the Class A Certificates, the Mezzanine Certificates, the Class B
Certificates and the Class C Certificates, the "Certificates"). Only the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates
(collectively, the "Offered Certificates") were offered pursuant to the
Registration Statement. The Certificates evidence, in the aggregate, 100% of the
undivided beneficial ownership interests in the Trust.
The assets of the Trust initially include a pool of closed-end home equity
loans (the "Home Equity Loans") secured by mortgages or deeds of trust primarily
on one-to-four family residential properties. Interest distributions on the
Offered Certificates are based on the Certificate Principal Balance thereof and
the applicable Pass-Through Rate thereof. The Pass-Through Rates for the Offered
Certificates are as follows: Class A-1, 6.42%; Class A-2, 6.51%; Class A-3,
6.68%; Class A-4, 6.82%; Class A-5, 7.01%; Class A-6, 7.13%; Class A-7, 7.28%;
Class A-8, 7.58%; Class A-9, 7.12%; Class A-10, a variable rate as described in
the Pooling and Servicing Agreement; Class A-11IO, 8.50%; Class M-1F, 7.31%;
Class M-1A, a variable rate as described in the Pooling and Servicing Agreement;
Class M-2F, 7.55%; Class M-2A, a variable rate as described in the Pooling and
Servicing Agreement; Class B-1F, 7.89% and Class B-1A, a variable rate as
described in the Pooling and Servicing Agreement. The Offered Certificates have
initial aggregate principal amounts as follows: Class A-1, $130,000,000; Class
A-2, $135,000,000; Class A-3, $215,000,000; Class A-4, $73,000,000; Class A-5,
$71,000,000; Class A-6, $36,000,000; Class A-7, $65,000,000; Class A-8,
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$38,600,000; Class A-9, $68,000,000; Class A-10, $259,200,000; Class M-1F,
$54,337,000; Class M-2A, $25,600,000; Class M-2F, $49,613,000; Class M-2A,
$20,000,000; Class B-1F, $9,450,000 and Class B-1A, $15,200,000. The Class
A-11IO does not have any principal amount and payments on the Class A-11IO are
based on a Notional Certificate Principal Balance which is equal to the
outstanding principal balance of the Class A-9.
As of the Cut-Off Date, the Home Equity Loans possessed the characteristics
described in the Prospectus dated February 19, 1997 and the Prospectus
Supplement dated June 5, 1997 filed pursuant to Rule 424(b)(5) of the Act on
June 11, 1997. In such Prospectus Supplement, the Depositor committed to provide
a description of the pool of Home Equity Loans, including loans acquired between
the Cut-Off Date and the Closing Date in a current report on Form 8-K. Such
description is attached hereto as Exhibit 99.1
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibits:
1.1 Underwriting Agreement dated June 5, 1997, between ContiSecurities
Asset Funding Corp. and Morgan Stanley & Co. Incorporated, as
Representative of the Several Underwriters.
4.1 Pooling and Servicing Agreement dated as of June 1, 1997, among
ContiSecurities Asset Funding Corp., ContiMortgage Corporation, as a
seller and the servicer, ContiWest Corporation, as a seller, and
Manufacturers and Traders Trust Company, as trustee.
99.1 Description of the Home Equity Loans as of the Closing Date (June 12,
1997).
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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 hereunto duly authorized.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
By: CONTISECURITIES ASSET FUNDING CORP., as
Depositor
By: /s/ James E. Moore
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Name: James E. Moore
Title: President
By: /s/ Jerome M. Perelson
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Name: Jerome M. Perelson
Title: Vice President
Dated: June 24, 1997
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EXHIBIT INDEX
Exhibit No. Description Page No.
1.1 Underwriting Agreement dated June 5, 1997,
between ContiSecurities Asset Funding Corp.
and Morgan Stanley & Co. Incorporated, as
Representative of the Several Underwriters.
_________
4.1 Pooling and Servicing Agreement dated as of
June 1, 1997, among ContiSecurities Asset
Funding Corp., ContiMortgage Corporation, as a
seller and the servicer, ContiWest Corporation,
as a seller, and Manufacturers and
Traders Trust Company, as trustee. _________
99.1 Description of the Home Equity Loans as of the
Closing Date (June 12, 1997). _________
Exhibit 1.1
$1,265,000,000
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
Home Equity Loan Pass-Through Certificates,
Series 1997-3
UNDERWRITING AGREEMENT
June 5, 1997
Morgan Stanley & Co. Incorporated
As Representative of the Several Underwriters
1585 Broadway
New York, New York 10036
Dear Ladies and Gentlemen:
ContiSecurities Asset Funding Corp. (the "Depositor"), a Delaware
corporation, has authorized the issuance and sale of Home Equity Loan
Pass-Through Certificates, Series 1997-3, 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-11IO (the "Class A Certificates"), Class M-1F and Class M-1A (the "Class M-1
Certificates"), Class M-2F and Class M-2A (the "Class M-2 Certificates" and,
collectively with the Class M-1 Certificates, the "Mezzanine Certificates"),
Class B-1F and Class B-1A (the "Class B Certificates" and, collectively with the
Mezzanine Certificates, the "Subordinate Certificates"). The Class A
Certificates and the Subordinate Certificates are collectively the "Offered
Certificates". Also issued are the Class C and the Class R Certificates (the
"Retained Certificates"). The Offered Certificates and the Retained Certificates
(collectively the "Certificates" ) evidence interests in a pool of fixed and
adjustable rate home equity loans (the "Home Equity Loans"). The Home Equity
Loans are secured primarily by first and second deeds of trust or mortgages on
one- to four-family residential properties.
Only the Offered Certificates are being purchased by the Underwriters named
in Schedule A hereto, and the Underwriters are purchasing, severally, only the
Offered Certificates set forth opposite their names in Schedule A, except that
the amounts purchased by the Underwriters may change in accordance with Section
X of this Agreement. Morgan Stanley & Co. Incorporated ("Morgan Stanley") is
acting as representative of the Several Underwriters and in such capacity is
hereinafter referred to as the "Representative."
The Certificates will be issued under a pooling and servicing agreement
(the "Pooling and Servicing Agreement"), to be dated as of June 1, 1997 among
the Depositor, ContiMortgage Corporation ("ContiMortgage"), as the servicer and
a seller (in such capacity, the "Servicer" or a "Seller," as the case may be),
ContiWest Corporation ("ContiWest"), as a seller (a "Seller," and collectively
with ContiMortgage, the "Sellers") and Manufacturers and Traders Trust Company,
as the trustee (the "Trustee"). The Certificates will evidence fractional
undivided interests in the
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trust (the "Trust") formed pursuant to the Pooling and Servicing Agreement.
The assets of the Trust will initially include, among other things, a pool of
fixed and adjustable rate home equity loans having a Cut-Off Date (as defined
herein) as of the close of business on May 31, 1997 (the "Home Equity Loans"),
and such amounts as may be held by the Trustee in any accounts held by the
Trustee for the Trust. The pool of Home Equity Loans will be divided into two
groups (each, a "Group"), with all fixed rate Home Equity Loans assigned to
Group I and all adjustable rate Home Equity Loans assigned to Group II. A form
of the Pooling and Servicing Agreement has been filed as an exhibit to the
Registration Statement (hereinafter defined).
The Certificates are more fully described in a Registration Statement which
the Depositor has furnished to the Underwriters. Capitalized terms used but not
defined herein shall have the meanings given to them in the Pooling and
Servicing Agreement.
Pursuant to Section 3.05 of the Pooling and Servicing Agreement and
concurrently with the execution thereof, ContiMortgage and ContiWest will
transfer to the Depositor all of their right, title and interest in and to the
unpaid principal balances of the Home Equity Loans as of the Cut-Off Date and
interest due after the Cut-Off Date and the collateral securing each Home Equity
Loan.
SECTION I. Representations and Warranties of the Depositor. The Depositor
represents and warrants to, and agrees with the Underwriters that:
A. A Registration Statement on Form S-3 (No. 333-19427), has (i)
been prepared by the Depositor in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the United States Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective and is still
effective as of the date hereof under the Securities Act. Copies of such
Registration Statement have been delivered by the Depositor to the Underwriters.
As used in this Agreement, "Effective Time" means the date and the time as of
which such Registration Statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Registration Statement" means such
registration statement, at the Effective Time, including any documents
incorporated by reference therein at such time; "Basic Prospectus" means such
final prospectus dated February 19, 1997; and "Prospectus Supplement" means the
final prospectus supplement relating to the Offered Certificates, to be filed
with the Commission pursuant to paragraphs (2), (3) or (5) of Rule 424(b) of the
Rules and Regulations. "Prospectus" means the Basic Prospectus together with the
Prospectus Supplement. Reference made herein to the Prospectus shall be deemed
to refer to and include any documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act, as of the date of the
Prospectus and any reference to any amendment or supplement to the Prospectus
shall be deemed to refer to and include any document filed under the Securities
Exchange Act of 1934 (the "Exchange Act") after the date of the Prospectus, and
incorporated by reference in the Prospectus and any reference to any amendment
to the Registration Statement shall be deemed to include any report of the
Depositor filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after
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the Effective Time that is incorporated by reference in the Registration
Statement. The Commission has not issued any order preventing or suspending the
use of the Prospectus or the effectiveness of the Registration Statement and no
proceedings for such purpose are pending or, to the Depositor's knowledge,
threatened by the Commission. There are no contracts or documents of the
Depositor which are required to be filed as exhibits to the Registration
Statement pursuant to the Securities Act or the Rules and Regulations which have
not been so filed or incorporated by reference therein on or prior to the
Effective Date of the Registration Statement other than such documents or
materials, if any, as any Underwriter delivers to the Depositor pursuant to
Section VIII D hereof for filing on Form 8-K. The conditions for use of Form
S-3, as set forth in the General Instructions thereto, have been satisfied.
To the extent that any Underwriter has provided to the Depositor
Computational Materials that such Underwriter has provided to a prospective
investor, the Depositor will file or cause to be filed with the Commission a
report on Form 8-K containing such Computational Materials, as soon as
reasonably practicable after the date of this Agreement, but in any event, not
later than 11:00 a.m. New York time the date on which the Prospectus is made
available to the Underwriter and is filed with the Commission pursuant to Rule
424 of the Rules and Regulations.
B. The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, when they become effective or are filed with the Commission, as the
case may be, in all respects to the requirements of the Securities Act and the
Rules and Regulations. The Registration Statement, as of the Effective Date
thereof and of any amendment thereto, did 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 as of
its date, and as amended or supplemented as of the Closing Date does not and
will not contain any 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 that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Depositor in writing by any
Underwriters through the Representative expressly for use therein.
C. The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents 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; and any further
documents so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder 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; provided that no representation
is made as to documents deemed to be incorporated
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by reference in the Prospectus as the result of filing a Form 8-K at the
request of the Underwriters except to the extent such documents reflect
information furnished by the Depositor to the Underwriters for the purpose of
preparing such documents.
D. Since the respective dates as of which information is given in the
Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition, or results of operations of the
Depositor, otherwise than as set forth or contemplated in the Prospectus as
supplemented or amended as of the Closing Date.
E. The Depositor has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and is in good standing as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the conduct of its business so requires
such standing. The Depositor has all power and authority necessary to own or
hold its properties, to conduct the business in which it is engaged and to enter
into and perform its obligations under this Agreement and the Pooling and
Servicing Agreement and to cause the Certificates to be issued.
F. There are no actions, proceedings or investigations pending with respect
to which the Depositor has received service of process before or threatened by
any court, administrative agency or other tribunal to which the Depositor is a
party or of which any of its properties is the subject (a) which if determined
adversely to the Depositor would have a material adverse effect on the business
or financial condition of the Depositor, (b) asserting the invalidity of this
Agreement, the Pooling and Servicing Agreement or the Certificates (c) seeking
to prevent the issuance of the Certificates or the consummation by the Depositor
of any of the transactions contemplated by the Pooling and Servicing Agreement
or this Agreement, as the case may be, or (d) which might materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, the Pooling and Servicing Agreement, this
Agreement or the Certificates.
G. This Agreement has been, and the Pooling and Servicing Agreement when
executed and delivered as contemplated hereby and thereby will have been, duly
authorized, executed and delivered by the Depositor, and this Agreement
constitutes, and the Pooling and Servicing Agreement when executed and delivered
as contemplated herein will constitute, legal, valid and binding instruments
enforceable against the Depositor in accordance with their respective terms,
subject as to enforceability to (x) applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally, (y) general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law), and (z) with respect to rights
of indemnity under this Agreement and limitations of public policy under
applicable securities laws.
H. The execution, delivery and performance of this Agreement and the
Pooling and Servicing Agreement by the Depositor and the consummation of the
transactions contemplated hereby and thereby, and the issuance and delivery of
the Certificates do not and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument
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to which the Depositor is a party, by which the Depositor is bound or
to which any of the properties or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a material adverse
effect on the business, operations or financial condition of the Depositor or
its ability to perform its obligations under this Agreement and the Pooling and
Servicing Agreement, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the Depositor or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Depositor or any of its properties or assets,
which breach or violation would have a material adverse effect on the business,
operations or financial condition of the Depositor or its ability to perform its
obligations under this Agreement and the Pooling and Servicing Agreement.
I. The Depositor has no reason to know that Arthur Andersen & Co. are not
independent public accountants with respect to the Depositor as required by the
Securities Act and the Rules and Regulations.
J. The execution of the Certificates by the Depositor and the direction by
the Depositor to the Trustee to authenticate, issue and deliver the Certificates
have been duly authorized by the Depositor, and, assuming the Trustee has been
duly authorized to do so, when executed by the Depositor, and authenticated,
issued and delivered by the Trustee in accordance with the Pooling and Servicing
Agreement, the Certificates will be validly issued and outstanding and the
holders of the Certificates will be entitled to the rights and benefits of the
Certificates as provided by the Pooling and Servicing Agreement.
K. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance of the Certificates and the sale of the
Offered Certificates to the Underwriters, or the consummation by the Depositor
of the other transactions contemplated by this Agreement and the Pooling and
Servicing Agreement except such consents, approvals, authorizations,
registrations or qualifications as may be required under State securities or
Blue Sky laws in connection with the purchase and distribution of the Offered
Certificates by the Underwriters or as have been obtained.
L. The Depositor possesses all material licenses, certificates, authorities
or permits issued by the appropriate State, Federal or foreign regulatory
agencies or bodies necessary to conduct the business now conducted by it and as
described in the Prospectus, and the Depositor has not received notice of any
proceedings relating to the revocation or modification of any such license,
certificate, authority or permit which if decided adversely to the Depositor
would, singly or in the aggregate, materially and adversely affect the conduct
of its business, operations or financial condition.
M. At the time of execution and delivery of the Pooling and Servicing
Agreement, the Depositor will: (i) have good title to the Home Equity Loans
conveyed by the Sellers, free and clear of any lien, mortgage, pledge, charge,
encumbrance, adverse claim or other security interest (collectively, "Liens");
(ii) not have assigned to any person any of its right or title in the Home
Equity Loans contemplated in the Pooling and Servicing Agreement or in the
Certificates being issued pursuant thereto; and (iii) have the power and
authority to sell its interest in the Home
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Equity Loans to the Trustee and to sell the Offered Certificates to the
Underwriters. Upon execution and delivery of the Pooling and Servicing Agreement
by the Trustee, the Trustee will have acquired beneficial ownership of all of
the Depositor's right, title and interest in and to the Home Equity Loans. Upon
delivery to the Underwriters of the Offered Certificates, the Underwriters will
have good title to the Offered Certificates, free of any Liens.
N. Reserved.
O. As of the Statistical Calculation Date, each of the Home Equity Loans
will meet the eligibility criteria described in the Prospectus and will conform
to the descriptions thereof contained in the Prospectus.
P. Reserved.
Q. Neither the Depositor nor the Trust created by the Pooling and Servicing
Agreement is an "investment company" within the meaning of such term under the
Investment Company Act of 1940 (the "1940 Act") and the rules and regulations of
the Commission thereunder.
R. At the Closing Date, the Offered Certificates and the Pooling and
Servicing Agreement will conform in all material respects to the descriptions
thereof contained in the Prospectus.
S. At the Closing Date, the Class A Certificates shall have been rated in
the highest rating category by Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies
("Standard & Poor's") and Fitch Investors Service, L.P. ("Fitch"). In addition,
each Class of the Class M-1 Certificates shall receive ratings of "Aa2", the
Class M-2F Certificates shall receive a rating of "A2", the Class M-2A shall
receive a rating of "A3" and each Class of the Class B Certificates shall
receive ratings of "Baa3", from Moody's, each Class of the Class M-1, Class M-2
and Class B Certificates shall receive ratings of "AA", "A-" and "BBB-",
respectively, from Standard & Poor's and each Class of the Class M-1
Certificates shall receive ratings of "AA+", the Class M-2F Certificates shall
receive a rating of "A", the Class M-2A shall receive a rating of "A+" and each
Class of the Class B shall receive ratings of "BBB" from Fitch.
T. Any taxes, fees and other governmental charges in connection with the
execution, delivery and issuance of this Agreement, the Pooling and Servicing
Agreement and the Certificates have been paid or will be paid at or prior to the
Closing Date.
U. At the Closing Date, each of the representations and warranties of the
Depositor set forth in the Pooling and Servicing Agreement will be true and
correct in all material respects.
Any certificate signed by an officer of the Depositor and delivered to the
Representative or counsel for the Representative in connection with an offering
of the Offered Certificates shall
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be deemed, and shall state that it is, a representation and warranty as to
the matters covered thereby to each person to whom the representations and
warranties in this Section I are made.
SECTION II. Purchase and Sale. The commitment of the Underwriters to
purchase the Offered Certificates pursuant to this Agreement shall be deemed to
have been made on the basis of the representations and warranties herein
contained and shall be subject to the terms and conditions herein set forth. The
Depositor agrees to instruct the Trustee to issue the Offered Certificates and
agrees to sell to the Underwriters, and the Underwriters agree (except as
provided in Sections X and XI hereof) severally and not jointly to purchase from
the Depositor, the aggregate initial principal amounts or percentage interests
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-11IO, Class M-1F, Class M-1A,
Class M-2F, Class M-2A, Class B-1F and Class B-1A Certificates set forth
opposite their names on Schedule A, at the purchase price or prices set forth on
Schedule A.
SECTION III. Delivery and Payment. Delivery of and payment for 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-11IO, Class M-1F, Class M-1A, Class M-2F, Class
M-2A, Class B-1F and Class B-1A Certificates shall be made at the offices of
Dewey Ballantine, 1301 Avenue of the Americas, New York, New York 10019, or at
such other place as shall be agreed upon by the Representative and the Depositor
at 10:00 A.M. New York City time on June 12, 1997 or at such other time or date
as shall be agreed upon in writing by the Representative and the Depositor (such
date being referred to as the "Closing Date"). Payment shall be made to the
Depositor by wire transfer of same day funds payable to the account of the
Depositor. Delivery of the Offered Certificates shall be made to the
Representative for the accounts of the Underwriters against payment of the
purchase price thereof. The Certificates shall be in such authorized
denominations and registered in such names as the Representative may request in
writing at least two business days prior to the Closing Date. The Offered
Certificates will be made available for examination by the Representative no
later than 2:00 p.m. New York City time on the first business day prior to the
Closing Date.
SECTION IV. Offering by the Underwriters. It is understood that, subject to
the terms and conditions hereof, the Underwriters propose to offer the Offered
Certificates for sale to the public as set forth in the Prospectus.
SECTION V. Covenants of the Depositor. The Depositor and, to the extent the
provisions of Sections H. and I. below relate to ContiMortgage and ContiWest,
respectively, ContiMortgage and ContiWest agree as follows:
A. To prepare the Prospectus in a form approved by the Underwriters and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act not later
than the Commission's close of business on the second business day following the
availability of the Prospectus to the Underwriters; to make no further amendment
or any supplement to the Registration Statement or to the Prospectus prior to
the Closing Date except as permitted herein; to advise the Underwriters,
promptly after it receives notice thereof, of the time when any amendment to the
Registration
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Statement has been filed or becomes effective prior to the Closing Date or
any supplement to the Prospectus or any amended Prospectus has been filed prior
to the Closing Date and to furnish the Underwriters with copies thereof without
charge; to file promptly all reports and any definitive proxy or information
statements required to be filed by the Depositor with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus and, for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Offered Certificates; to promptly
advise the Underwriters of its receipt of notice of the issuance by the
Commission of any stop order or the institution of or, to the knowledge of the
Depositor, the threatening of any proceeding for such purpose, or of: (i) any
order preventing or suspending the use of the Prospectus; (ii) the suspension of
the qualification of the Offered Certificates for offering or sale in any
jurisdiction; (iii) the initiation of or threat of any proceeding for any such
purpose; or (iv) any request by the Commission for the amending or supplementing
of the Registration Statement or the Prospectus or for additional information.
In the event of the issuance of any stop order or of any order preventing or
suspending the use of the Prospectus or suspending any such qualification, the
Depositor promptly shall use its best efforts to obtain the withdrawal of such
order by the Commission.
B. To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriters without charge such number of
the following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case including exhibits); (ii)
the Prospectus and any amended or supplemented Prospectus; and (iii) any
document incorporated by reference in the Prospectus (including exhibits
thereto). If the delivery of a prospectus is required at any time prior to the
expiration of nine months after the Effective Time in connection with the
offering or sale of the Offered Certificates, and if at such time any events
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Securities Act or the Exchange Act, the Depositor shall
notify the Underwriters and, upon any Underwriters' request, shall file such
document and prepare and furnish without charge to the Underwriters and to any
dealer in securities as many copies as the Underwriters may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which corrects such statement or omission or effects such compliance, and in
case the Underwriters are required to deliver a Prospectus in connection with
sales of any of the Offered Certificates at any time nine months or more after
the Effective Time, upon the request of the Underwriters but at their expense,
the Depositor shall prepare and deliver to the Underwriters as many copies as
the Underwriters may reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act.
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D. To file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in the
judgment of the Depositor or the Underwriters, be required by the Securities Act
or requested by the Commission. Neither the Underwriters' consent to nor their
distribution of any amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section VI.
E. To furnish the Underwriters and counsel for the Underwriters, prior to
filing with the Commission, and to obtain the consent of the Underwriters for
the filing of the following documents relating to the Certificates: (i) any
Post-Effective Amendment to the Registration Statement or supplement to the
Prospectus, or document incorporated by reference in the Prospectus, or (ii)
Prospectus pursuant to Rule 424 of the Rules and Regulations.
F. To make generally available to holders of the Offered Certificates as
soon as practicable, but in any event not later than 90 days after the close of
the period covered thereby, a statement of earnings of the Trust (which need not
be audited) complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Depositor, Rule 158) and covering a
period of at least twelve consecutive months beginning not later than the first
day of the first fiscal quarter following the Closing Date.
G. To use its best efforts, in cooperation with the Underwriters, to
qualify the Offered Certificates for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States or
elsewhere as the Underwriters may designate, and maintain or cause to be
maintained such qualifications in effect for as long as may be required for the
distribution of the Offered Certificates. The Depositor will file or cause the
filing of such statements and reports as may be required by the laws of each
jurisdiction in which the Offered Certificates have been so qualified.
H. Unless the Underwriters shall otherwise have given their written
consent, no collateralized mortgage obligations or other similar securities
representing interests in or secured by other mortgage-related assets originated
or owned by ContiMortgage shall be publicly offered or sold, nor shall
ContiMortgage enter into any contractual arrangements that contemplate the
public offering or sale of such securities, until the earlier to occur of the
termination of the syndicate or the Closing Date.
I. Unless the Underwriters shall otherwise have given their written
consent, no collateralized mortgage obligations or other similar securities
representing interests in or secured by other mortgage-related assets originated
or owned by ContiWest shall be publicly offered or sold, nor shall ContiWest
enter into any contractual arrangements that contemplate the public offering or
sale of such securities, until the earlier to occur of the termination of the
syndicate or the Closing Date.
J. Unless the Underwriters shall otherwise have given their written consent
(such consent not to be unreasonably withheld), no collateralized mortgage
obligations or other similar securities representing interests in or secured by
other mortgage-related assets that are similar to
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the Home Equity Loans originated or owned by the Depositor shall be
publicly offered or sold until the earlier to occur of the termination of the
syndicate or the Closing Date.
K. So long as the Offered Certificates shall be outstanding the Depositor
shall cause the Trustee, pursuant to the Pooling and Servicing Agreement, to
deliver to the Underwriters as soon as such statements are furnished to the
Trustee: (i) the annual statement as to compliance delivered to the Trustee
pursuant to Section 8.16 of the Pooling and Servicing Agreement; (ii) the annual
statement of a firm of independent public accountants furnished to the Trustee
pursuant to Section 8.17 of the Pooling and Servicing Agreement; (iii) the
monthly servicing report furnished to the Trustee pursuant to Section 7.08 of
the Pooling and Servicing Agreement; and (iv) the monthly reports furnished to
the Certificateholders pursuant to Section 7.09 of the Pooling and Servicing
Agreement.
L. To apply the net proceeds from the sale of the Offered Certificates in
the manner set forth in the Prospectus.
SECTION VI. Conditions to the Underwriters' Obligations. The obligations of
the Underwriters hereunder to purchase the Offered Certificates pursuant to the
Agreement are subject to: (i) the accuracy on and as of the Closing Date of the
representations and warranties on the part of the Depositor herein contained;
(ii) the performance by the Depositor of all of its obligations hereunder; and
(iii) the following conditions as of the Closing Date:
A. The Underwriters shall have received confirmation of the effectiveness
of the Registration Statement. No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission. Any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus shall have been
complied with.
B. The Underwriters shall not have discovered and disclosed to the
Depositor on or prior to the Closing Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact or omits to state a fact which, in the opinion of Dewey Ballantine,
counsel for the Underwriters, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
C. All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the Pooling and Servicing
Agreement, the Certificates, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be satisfactory in all respects to counsel for the
Underwriters, and the Depositor shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to
pass upon such matters.
D. Arter & Hadden shall have furnished to the Underwriters their written
opinion, as counsel to the Depositor, addressed to the Underwriters and dated
the Closing Date, in form and substance satisfactory to the Underwriters, to the
effect that:
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1. The conditions to the use by the Depositor of a registration statement
on Form S-3 under the Securities Act, as set forth in the General Instructions
to Form S-3, have been satisfied with respect to the Registration Statement and
the Prospectus.
2. The Registration Statement and any amendments thereto have become
effective under the 1933 Act; to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has been issued
and not withdrawn and no proceedings for that purpose have been instituted or
threatened and not terminated; and the Registration Statement, the Prospectus
and each amendment or supplement thereto, as of their respective effective or
issue dates (other than the financial and statistical information contained
therein, as to which such counsel need express no opinion), complied as to form
in all material respects with the applicable requirements of the 1933 Act and
the rules and regulations thereunder.
3. To the best of such counsel's knowledge, there are no material
contracts, indentures or other documents of a character required to be described
or referred to in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto.
4. The statements set forth in the Basic Prospectus under the captions
"Summary of Prospectus," "Description of The Certificates," "The Trusts" and
"The Pooling and Servicing Agreement" and in the Prospectus Supplement under the
captions "Description of The Offered Certificates" and "The Pooling and
Servicing Agreement," to the extent such statements purport to summarize certain
provisions of the Certificates or of the Pooling and Servicing Agreement, are
fair and accurate in all material respects.
5. The statements set forth in the Prospectus and the Prospectus Supplement
under the captions "ERISA Considerations," "Certain Legal Aspects of the
Mortgage Assets" and "Certain Federal Income Tax Considerations" to the extent
that they constitute matters of federal law, provide a fair and accurate summary
of such law or conclusions.
6. The Pooling and Servicing Agreement conforms in all material respects to
the description thereof contained in the Prospectus and is not required to be
qualified under the Trust Indenture Act of 1939, as amended, and the Trust is
not required to be registered under the Investment Company Act of 1940, as
amended.
7. Neither the Depositor nor the Trust is an "investment company" or under
the "control" of an "investment company" as such terms are defined in the 1940
Act.
8. Assuming that (a) the Trustee causes certain assets of the Trust Estate,
as the Trustee has covenanted to do in the Pooling and Servicing Agreement, to
be treated as a "real estate mortgage investment conduit" ("REMIC"), as such
term is defined in the Internal Revenue Code of 1986, as amended (the "Code"),
and (b) the parties to the Pooling and Servicing Agreement comply with the terms
thereof, the Lower-Tier REMIC and the Upper-Tier REMIC will each be treated as a
REMIC, each Class of the Class A Certificates, each Class of the Subordinate
Certificates and the Class C Certificates will be treated as "regular interests"
in the
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Upper-Tier REMIC and the Upper-Tier REMIC Residual Class will be treated as
the sole "residual interest" in the Upper-Tier REMIC. The Lower-Tier Interests
A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, A-9, A-10, A-11IO, M-1F, M-1A, M-2F,
M-2A, B-1F and B-1A will be treated as the "regular interests" in the Lower-Tier
REMIC and the Class R Certificates will be treated as the sole "residual
interest" in the Lower-Tier REMIC. The Trust is not subject to tax upon its
income or assets by any taxing authority of the State of New York.
9. To the best of such counsel's knowledge, there are no actions,
proceedings or investigations pending that would adversely affect the status of
the Lower-Tier REMIC or the Upper-Tier REMIC as a REMIC.
10. As a consequence of the qualification of the Lower-Tier REMIC and the
Upper-Tier REMIC as a REMIC, the Offered Certificates will be treated as
"regular . . . interest(s) in a REMIC" under Section 7701(a)(19)(C) of the Code
and "real estate assets" under Section 856(c) of the Code in the same proportion
that the assets in the Trust consist of qualifying assets under such Sections.
In addition, as a consequence of the qualification of the Lower-Tier REMIC and
the Upper-Tier REMIC as a REMIC, interest on the Offered Certificates will be
treated as "interest on obligations secured by mortgages on real property" under
Section 856(c) of the Code to the extent that such Offered Certificates are
treated as "real estate assets" under Section 856(c) of the Code.
11. Assuming that the Class A-10 Certificates and the Class M-1A
Certificates are rated at the time of issuance in one of the two highest rating
categories by a nationally recognized statistical rating organization, such
Certificates at such time will be a "mortgage related security" as such term is
defined in Section 3(a)(41) of the Securities Exchange Act of 1934, as amended.
12. Assuming that the Class A-10 Certificates and the Class M-1A
Certificates are rated at the time of issuance in one of the two highest rating
categories by a nationally recognized statistical
13. The Certificates have been duly executed and delivered by the Depositor
to the Trustee for authentication.
Such counsel shall also have furnished to the Underwriters a written statement,
addressed to the Underwriters and dated the Closing Date, in form and substance
satisfactory to the Underwriters to the effect that nothing has come to the
attention of such counsel which lead them to believe that: (a) the Registration
Statement, at the time such Registration Statement 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 (except as to financial or statistical data contained in the
Registration Statement); (b) the Prospectus, as of its date and as of the
Closing Date, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (c) any document
incorporated by reference in the Prospectus or any further amendment or
supplement to any such incorporated document made by the Depositor prior to the
Closing Date
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(other than any document filed at the request of an Underwriter to the
extent such document relates to Computational Materials) contained, as of the
time it became effective or was filed with the Commission, as the case may be,
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
E. The Underwriters shall have received the favorable opinion, dated the
Closing Date, of Arter & Hadden, special counsel to the Depositor, addressed to
the Depositor and satisfactory to Moody's, Standard & Poor's, Fitch and the
Underwriters, with respect to certain matters relating to the transfer of the
Home Equity Loans to the Depositor and from the Depositor to the Trust, and such
counsel shall have consented to reliance on such opinion by Moody's, Standard &
Poor's, Fitch and the Underwriters as though such opinion had been addressed to
each such party.
F. Arter & Hadden, counsel for ContiMortgage in its capacity as both a
Seller and the Servicer and ContiWest in its capacity as a Seller, shall have
furnished to the Underwriters their written opinion, as counsel to ContiMortgage
and ContiWest, addressed to the Underwriters and the Depositor and dated the
Closing Date, in form and substance satisfactory to the Underwriters, to the
effect that:
1. ContiMortgage is duly organized, validly existing in good standing as a
corporation under the laws of the State of Delaware.
2. ContiMortgage has full corporate power and authority to serve in the
capacity of a seller and the servicer of the Home Equity Loans as contemplated
in the Pooling and Servicing Agreement and to transfer the Home Equity Loans to
the Depositor as contemplated in the Pooling and Servicing Agreement.
3. The Pooling and Servicing Agreement has been duly authorized, executed
and delivered by ContiMortgage, and, assuming the due authorization, execution
and delivery of such agreement by the other parties thereto, constitute the
legal, valid and binding agreements of ContiMortgage, enforceable against
ContiMortgage in accordance with its terms, subject as to enforceability to (x)
bankruptcy, insolvency, reorganization, moratorium, receivership or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (y) the qualification that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion, with respect to such remedies, of the court before which any
proceedings with respect thereto may be brought.
4. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over ContiMortgage is required for the consummation by
ContiMortgage of the transactions contemplated by the Pooling and Servicing
Agreement except such consents, approvals, authorizations, registrations and
qualifications as have been obtained.
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5. Neither the sale and transfer of the Home Equity Loans by ContiMortgage
to the Depositor, nor the execution, delivery or performance by ContiMortgage of
the Pooling and Servicing Agreement and the transactions contemplated thereby
(A) conflict with or result in a breach of, or constitute a default under, (i)
any term or provision of the Certificate of Incorporation or By-Laws of
ContiMortgage; (ii) any term or provision of any material agreement, deed of
trust, mortgage loan agreement, contract, instrument or indenture, or other
agreement to which ContiMortgage is a party or is bound or to which any of the
property or assets of ContiMortgage or any of its subsidiaries is subject; (iii)
to the best of such firm's knowledge without independent investigation any
order, judgment, writ, injunction or decree of any court or governmental
authority having jurisdiction over ContiMortgage; or (iv) any law, rule or
regulation, applicable to ContiMortgage; or (B) to the best of such firm's
knowledge without independent investigation, results in the creation or
imposition of any lien, charge or encumbrance upon the Trust Estate or upon the
Certificates.
6. The execution of the Pooling and Servicing Agreement is sufficient to
convey all of ContiMortgage's and ContiWest's right, title and interest in their
respective Home Equity Loans to the Depositor and following the consummation of
the transaction contemplated by Section 3.05 of the Pooling and Servicing
Agreement, the transfers of the respective Home Equity Loans by ContiMortgage
and ContiWest to the Depositor are both a sale thereof.
7. There are, to the best of such counsel's knowledge without independent
investigation, no actions, proceedings or investigations pending with respect to
which ContiMortgage has received service of process or threatened against
ContiMortgage before any court, administrative agency or other tribunal (a)
asserting the invalidity of the Pooling and Servicing Agreement, the
Underwriting Agreement or the Certificates, (b) seeking to prevent the
consummation of any of the transactions contemplated by the Pooling and
Servicing Agreement or (c) which would materially and adversely affect the
performance by ContiMortgage of its obligations under, or the validity or
enforceability of, the Pooling and Servicing Agreement or the Underwriting
Agreement.
G. Michael R. Mayberry, Esq., Counsel for ContiWest, in its capacity as a
Seller, shall have furnished to the Underwriters his written opinion, addressed
to the Underwriters and dated as of the Closing Date, in form and substance
satisfactory to the Underwriters, to the effect that:
1. ContiWest is duly organized, validly existing in good standing as a
corporation under the laws of the State of Nevada.
2. ContiWest has full corporate power and authority to serve in the
capacity of a seller of the Home Equity Loans as contemplated in the Pooling and
Servicing Agreement and to transfer the Home Equity Loans to the Depositor as
contemplated in the Pooling and Servicing Agreement.
3. The Pooling and Servicing Agreement has been duly authorized, executed
and delivered by ContiWest, and, assuming the due authorization, execution and
delivery of such
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agreement by the other parties thereto, constitute the legal, valid and
binding agreements of ContiWest, enforceable against ContiWest in accordance
with its terms, subject as to enforceability to (x) bankruptcy, insolvency,
reorganization, moratorium, receivership or other similar laws now or hereafter
in effect relating to creditors' rights generally and (y) the qualification that
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion, with respect
to such remedies, of the court before which any proceedings with respect thereto
may be brought.
4. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over ContiWest is required for the consummation by ContiWest of the
transactions contemplated by the Pooling and Servicing Agreement except such
consents, approvals, authorizations, registrations and qualifications as have
been obtained.
5. Neither the sale and transfer of the Home Equity Loans by ContiWest to
the Depositor, nor the execution, delivery or performance by ContiWest of the
Pooling and Servicing Agreement and the transactions contemplated thereby (A)
conflict with or result in a breach of, or constitute a default under, (i) any
term or provision of the Articles of Incorporation or By-Laws of ContiWest; (ii)
any term or provision of any material agreement, deed of trust, mortgage loan
agreement, contract, instrument or indenture, or other agreement to which
ContiWest is a party or is bound or to which any of the property or assets of
ContiWest or any of its subsidiaries is subject; (iii) to the best of such
counsel's knowledge without independent investigation any order, judgment, writ,
injunction or decree of any court or governmental authority having jurisdiction
over ContiWest; or (iv) any law, rule or regulation, applicable to ContiWest; or
(B) to the best of such counsel's knowledge without independent investigation,
results in the creation or imposition of any lien, charge or encumbrance upon
the Trust Estate or upon the Certificates.
6. There are, to the best of such counsel's knowledge without independent
investigation, no actions, proceedings or investigations pending with respect to
which ContiWest has received service of process or threatened against ContiWest
before any court, administrative agency or other tribunal (a) asserting the
invalidity of the Pooling and Servicing Agreement, the Underwriting Agreement or
the Certificates, (b) seeking to prevent the consummation of any of the
transactions contemplated by the Pooling and Servicing Agreement or (c) which
would materially and adversely affect the performance by ContiWest of its
obligations under, or the validity or enforceability of, the Pooling and
Servicing Agreement or the Underwriting Agreement.
H. Michael R. Mayberry, Esq., Counsel for the Depositor, shall have
furnished to the Underwriters his written opinion, addressed to the Underwriters
and dated the Closing Date, in form and substance satisfactory to the
Underwriters, to the effect that:
1. The Depositor has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and is in
good standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its business so requires such
standing except where the failure to be in good standing would not result
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in a material adverse change in the condition of the Depositor, whether or
not arising in the ordinary course of business. The Depositor has all power and
authority necessary to own or hold its properties and to conduct the business in
which it is engaged and to enter into and perform its obligations under this
Agreement and the Pooling and Servicing Agreement and to cause the Certificates
to be issued.
2. The Depositor is not in violation of its articles of incorporation or
by-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Depositor is a party or by which it or its properties may be bound, which
default might result in any material adverse changes in the financial condition,
earnings, affairs or business of the Depositor or which might materially and
adversely affect the properties or assets, taken as a whole, of the Depositor.
3. This Agreement and the Pooling and Servicing Agreement have been duly
authorized, executed and delivered by the Depositor and, assuming the due
authorization, execution and delivery of such agreements by the other parties
thereto, such agreements constitute valid and binding obligations, enforceable
against the Depositor in accordance with their respective terms, subject as to
enforceability to (x) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, (y) general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law) and (z) with respect to rights of
indemnity under this Agreement, limitations of public policy under applicable
securities laws.
4. The execution, delivery and performance of this Agreement and the
Pooling and Servicing Agreement by the Depositor, the consummation of the
transactions contemplated hereby and thereby, and the issuance and delivery of
the Certificates do not and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party or by which the Depositor is bound
or to which any of the property or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a material adverse
effect on the business, operations or financial condition of the Depositor or
its ability to perform its obligations under this Agreement and the Pooling and
Servicing Agreement nor will such actions result in a violation of the
provisions of the articles of incorporation or by-laws of the Depositor or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Depositor or any of its properties or assets,
which breach or violation would have a material adverse effect on the business,
operations or financial condition of the Depositor or its ability to perform its
obligations under this Agreement and the Pooling and Servicing Agreement.
5. The execution of the Certificates by the Depositor and the direction by
the Depositor to the Trustee to issue, authenticate and deliver the Certificates
has been duly authorized by the Depositor and, assuming that the Trustee has
been duly authorized to do so, when executed by the Depositor and authenticated
and delivered by the Trustee in accordance with the Pooling
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and Servicing Agreement, the Certificates will be validly issued and
outstanding and will be entitled to the benefits of the Pooling and Servicing
Agreement.
6. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the issuance of the Certificates, and the sale of the Offered Certificates
to the Underwriters, or the consummation by the Depositor of the other
transactions contemplated by this Agreement and the Pooling and Servicing
Agreement, except such consents, approvals, authorizations, registrations or
qualifications as may be required under the 1933 Act or State securities or Blue
Sky laws in connection with the purchase and distribution of the Offered
Certificates by the Underwriters or as have been previously obtained.
7. There are not, to the best of his knowledge without independent
investigation, any actions, proceedings or investigations pending with respect
to which the Depositor has received service of process before or threatened by
any court, administrative agency or other tribunal to which the Depositor is a
party or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the business,
results of operations or financial condition of the Depositor; (b) asserting the
invalidity of the Pooling and Servicing Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by the
Depositor of any of the transactions contemplated by the Pooling and Servicing
Agreement or this Agreement, as the case may be; or (d) which might materially
and adversely affect the performance by the Depositor of its obligations under,
or the validity or enforceability of, the Pooling and Servicing Agreement, this
Agreement or the Certificates.
8. The Certificates have been duly and validly authorized and issued and,
immediately prior to the sale of the Offered Certificates to the Underwriters,
such Certificates are owned by the Depositor, free and clear of all Liens.
I. The Underwriters shall have received the favorable opinion of counsel to
the Trustee, dated the Closing Date, addressed to the Underwriters and in form
and scope satisfactory to counsel to the Underwriters, to the effect that:
1. The Trustee is a banking corporation duly incorporated and validly
existing under the law of the State of New York.
2. The Trustee has the full corporate trust power to execute, deliver and
perform its obligations under the Pooling and Servicing Agreement.
3. The execution and delivery by the Trustee of the Pooling and Servicing
Agreement and the performance by the Trustee of its obligations under the
Pooling and Servicing Agreement have been duly authorized by all necessary
corporate action of the Trustee.
4. The Pooling and Servicing Agreement is a valid and legally binding
obligation of the Trustee enforceable against the Trustee.
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5. The execution and delivery by the Trustee of the Pooling and Servicing
Agreement do not (a) violate the Organization Certificate of the Trustee or the
By-laws of the Trustee, (b) to such counsel's knowledge, violate any judgment,
decree or order of any New York or United States federal court or other New York
or United States federal governmental authority by which the Trustee is bound or
(c) assuming the non-existence of any judgment, decree or order of any court or
other governmental authority that would be violated by such execution and
delivery, violate any New York or United States federal statute, rule or
regulation or require any consent, approval or authorization of any New York or
United States federal court or other New York or United States federal
governmental authority.
6. The Certificates have been duly authenticated and delivered by the
Trustee.
7. If the Trustee were acting as Servicer under the Pooling and Servicing
Agreement as of the date of such opinion, the Trustee would have the full
corporate trust power to perform the obligations of the Servicer under the
Pooling and Servicing Agreement; and
8. To the best of such counsel's knowledge, there are no actions,
proceedings or investigations pending or threatened against or affecting the
Trustee before or by any court, arbitrator, administrative agency or other
governmental authority which, if decided adversely to the Trustee, would
materially and adversely affect the ability of the Trustee to carry out the
transactions contemplated in the Pooling and Servicing Agreement.
J. The Underwriters shall have received the favorable opinion or opinions,
dated the Closing Date, of counsel for the Underwriters, with respect to the
issue and sale of the Offered Certificates, the Registration Statement, this
Agreement, the Prospectus and such other related matters as the Underwriters may
reasonably require.
K. Reserved.
L. The Depositor, ContiMortgage and ContiWest shall each have furnished to
the Underwriters a certificate, dated the Closing Date and signed by the
Chairman of the Board, the President or a Vice President of the Depositor,
ContiMortgage and ContiWest, respectively, stating as it relates to each:
1. The representations and warranties of the Depositor in this Agreement
are true and correct as of the Closing Date; and the Depositor has complied with
all agreements contained herein which are to have been complied with on or prior
to the Closing Date;
2. The information contained in the Prospectus relating to ContiMortgage,
ContiWest and the Home Equity Loans is true and accurate in all material
respects and nothing has come to his or her attention that would lead such
officer to believe that the Registration Statement or the Prospectus includes
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein not misleading;
18
<PAGE>
3. There has been no amendment or other document filed affecting the
Certificate of Incorporation or bylaws of the Depositor since May 18, 1995 or
the Certificate of Incorporation or bylaws of ContiMortgage since October 19,
1990 or the Articles of Incorporation or bylaws of ContiWest since January 1,
1997 and no such amendment has been authorized. No event has occurred since
March 31, 1997 which has affected the good standing of the Depositor,
ContiMortgage or ContiWest under the laws of the States of Delaware and Nevada,
as applicable; and
4. There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Depositor,
ContiMortgage or ContiWest from March 31, 1997.
M. The Trustee shall have furnished to the Underwriters a certificate of
the Trustee, signed by one or more duly authorized officers of the Trustee,
dated the Closing Date, as to the due authorization, execution and delivery of
the Pooling and Servicing Agreement by the Trustee and the acceptance by the
Trustee of the trusts created thereby and the due execution, authentication and
delivery of the Certificates by the Trustee thereunder and such other matters as
the Representative shall reasonably request.
N. Reserved.
O. The Class A Certificates shall have been rated "Aaa" by Moody's and
"AAA" by Standard & Poor's and Fitch. Each Class of the Class M-1 shall have
been rated "Aa2", the Class M-2F shall have been rated "A2", the Class M-2A
shall have been rated "A3" and each Class of the Class B Certificates shall have
been rated "BBB", by Moody's, each Class of the Class M-1, Class M-2 and Class B
Certificates shall have been rated "AA," "A-" and "BBB-," respectively, by
Standard & Poor's and each Class of Class M-1 Certificates shall have been rated
"AA+", the Class M-2F shall have been rated "A", the Class M-2A shall have been
rated "A+" and each Class of Class B Certificates shall have been rated "BBB" by
Fitch and shall not have been put on credit watch for possible downgrade.
P. The Depositor shall have furnished to the Underwriters such further
information, certificates and documents as the Underwriters may reasonably have
requested not less than three full business days prior to the Closing Date.
Q. Prior to the Closing Date, 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 sale of the
Certificates as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained, and
all proceedings taken by the Depositor in connection with the issuance and sale
of the Certificates as herein contemplated shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.
19
<PAGE>
R. Subsequent to the execution and delivery of this Agreement none of the
following shall have occurred: (i) trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the over-the counter market
shall have been suspended or minimum prices shall have been established on
either of such exchanges or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having jurisdiction; (ii)
a banking moratorium shall have been declared by Federal or state authorities;
(iii) the United States shall have become engaged in hostilities, there shall
have been an escalation of hostilities involving the United States or there
shall have been a declaration of a national emergency or war by the United
States; or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets of the United States shall be
such) as to make it in each of the instances set forth in clauses (i), (ii),
(iii) and (iv) herein, in the reasonable judgment of the Underwriters,
impractical or inadvisable to proceed with the public offering or delivery of
the Certificates on the terms and in the manner contemplated in the Prospectus.
S. The Representative shall have received letters, including bring-down
letters, from Arthur Andersen LLP, dated on or before the Closing Date, in form
and substance satisfactory to the Representative and counsel for the
Underwriters, to the effect that they have performed certain specified
procedures requested by the Representative with respect to the information set
forth in the Prospectus and certain matters relating to ContiMortgage.
T. The Underwriters shall have received any other opinions delivered to the
Ratings Agencies.
If any condition specified in this Section VI shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notice to the Depositor at any time at or prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Section VII.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION VII. Payment of Expenses. The Depositor agrees to pay:
(a) the costs incident to the authorization, issuance, sale and delivery of
the Certificates and any taxes payable in connection therewith; (b) the costs
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement; (d) the costs of reproducing and distributing this Agreement; (e) the
fees and expenses of qualifying the Certificates under the securities laws of
the several jurisdictions as provided in Section V(G) hereof and of preparing,
printing and distributing a Blue Sky Memorandum and a Legal Investment Survey
(including related fees and expenses of counsel to the Representative); (f) any
fees charged by securities rating services for
20
<PAGE>
rating the Offered Certificates; (g) the cost of the accountants comfort
letter relating to the Prospectus; and (h) all other costs and expenses
incidental to the performance of the obligations of the Depositor (including
costs and expenses of counsel to the Depositor); provided that, except as
provided in this Section VII, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Offered Certificates which they may sell and the expenses of advertising
any offering of the Offered Certificates made by the Underwriters, and the
Underwriters shall pay the cost of any accountant's comfort letters relating to
any Computational Materials (as defined herein).
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section VI or Section XI, the Depositor shall cause the
Underwriters to be reimbursed for all reasonable out-of-pocket expenses,
including fees and disbursements of Dewey Ballantine, counsel for the
Underwriters.
SECTION VIII. Indemnification and Contribution. A. The Depositor agrees to
indemnify and hold harmless each Underwriter, each Underwriter's respective
officers and directors and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act from and against any and
all loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of the Offered Certificates), to which
such Underwriter or any such controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or
any amendment thereof or supplement thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus, or any amendment thereof or supplement thereto, or (iv) the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and shall reimburse
such Underwriter and each such controlling person promptly upon demand for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Depositor shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in the Prospectus, or any
amendment thereof or supplement thereto, or the Registration Statement, or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
written information furnished to the Depositor by or on behalf of such
Underwriter through the Representative, specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the
Depositor may otherwise have to any Underwriter or any such officer or director
or any controlling person of any such Underwriter.
B. Each Underwriter severally agrees to indemnify and hold harmless the
Depositor, each of its directors, each of its officers who signed the
Registration Statement, and each person,
21
<PAGE>
if any, who controls the Depositor within the meaning of Section 15 of the
Securities Act against any and all loss, claim, damage or liability, or any
action in respect thereof, to which the Depositor or any such director, officer
or controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereof or
supplement thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus, or any amendment thereof or
supplement thereto, or (iv) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Depositor by or
on behalf of such Underwriter specifically for inclusion therein, and shall
reimburse the Depositor and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Depositor or any
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Depositor or any such director, officer or controlling person.
C. Promptly after receipt by any indemnified party under this Section VIII
of notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section VIII, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section VIII except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify any
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section VIII.
If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, except to the extent provided in the
next following paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section VIII for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
22
<PAGE>
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to one local counsel per jurisdiction) at any time for all such
indemnified parties, which firm shall be designated in writing by the related
Underwriter, if the indemnified parties under this Section VIII consist of one
or more Underwriters or any of its or their controlling persons, or the
Depositor, if the indemnified parties under this Section VIII consist of the
Depositor or any of the Depositor's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section VIII(A) and (B), shall use its reasonable best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject of such action.
Notwithstanding the foregoing paragraph, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
D. Each Underwriter agrees to provide the Depositor no later than two
Business Days prior to the day on which the Prospectus Supplement is required to
be filed pursuant to Section I.A. hereof with a copy of any Computational
Materials (defined below) produced by such Underwriter for filing with the
Commission on Form 8-K.
E. Each Underwriter severally agrees, to the extent that all Seller
Provided Information is accurate and complete in all material respects, to
indemnify and hold harmless the
23
<PAGE>
Depositor, each of the Depositor's officers and directors and each person
who controls the Depositor within the meaning of Section 15 of the Securities
Act against any and all losses, claims, damages or liabilities, to which they
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement of a material fact contained in the
Computational Materials provided by such Underwriter, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading when read in conjunction with the
Prospectus, and agrees to reimburse each such indemnified party for any legal or
other expenses reasonably incurred by him, her or it in connection with
investigating or defending or preparing to defend any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that in no
event shall an Underwriter be liable to the Depositor under this paragraph E in
an amount in excess of the fees received by such Underwriter in connection with
the offering of the Offered Certificates. The obligations of an Underwriter
under this Section VIII (E) shall be in addition to any liability which such
Underwriter may otherwise have.
The procedures set forth in Section VIII (C) shall be equally applicable to
this Section VIII (E).
F. If the indemnification provided for in this Section VIII shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section VIII (A), (B) or (E) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Depositor on the one hand and the Underwriters on the other from
the offering of the relevant class of Offered Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law or if
the indemnified party failed to give the notice required under Section VIII (C),
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Depositor on
the one hand and the related Underwriter on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations.
The relative benefits of an Underwriter and the Depositor shall be deemed
to be in such proportion as the total net proceeds from the offering (before
deducting expenses) received by the Depositor bear to the total underwriting
discounts and commissions received by the related Underwriter from time to time
in negotiated sales of the related Offered Certificates.
The relative fault of an Underwriter and the Depositor shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Depositor or by such Underwriter, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission and other equitable
considerations.
24
<PAGE>
The Depositor and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section VIII (F) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purposes) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
VIII (F) shall be deemed to include, for purposes of this Section VIII (F), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
For purposes of this Section VIII, in no case shall any Underwriter (except
with respect to any document (other than the Computational Materials)
incorporated by reference into the Registration Statement or Prospectus at the
request of such Underwriter through the Representative and except as may be
provided in any agreement among the Underwriters relating to the offering of the
Offered Certificates) be responsible for any amount in excess of the amount by
which (x) the amount received by such Underwriter in connection with its sale of
the Offered Certificates exceeds (y) the amount paid by such Underwriter to the
Depositor for the Offered Certificates hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of
fraudulent misrepresentation.
G. For purposes of this Section VIII, as to each Underwriter the term
"Computational Materials" means such portion, if any, of the information
delivered to the Depositor by such Underwriter pursuant to Section VIII(D) for
filing with the Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking into account
information incorporated therein by reference; and
(ii) does not constitute Seller Provided Information.
"Seller Provided Information" means any computer tape (or other information)
furnished to any Underwriter by the Sellers concerning the assets comprising the
Trust.
H. The Underwriters confirm that the information set forth in the last
paragraph on the cover page of the Prospectus Supplement and the Computational
Materials are correct and constitute the only information furnished in writing
to the Depositor by or on behalf of any Underwriter specifically for inclusion
in the Registration Statement and the Prospectus.
SECTION IX. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Depositor submitted pursuant hereto
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or controlling persons
thereof, or by or on behalf of the Depositor, and shall survive delivery of any
Offered Certificates to the Underwriters.
25
<PAGE>
SECTION X. Default by One or More of the Underwriters. If one or more of
the Underwriters participating in the public offering of the Offered
Certificates shall fail at the Closing Date to purchase the Offered Certificates
which it is (or they are) obligated to purchase hereunder (the "Defaulted
Certificates"), then the non-defaulting Underwriters shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Certificates in such amounts as may be agreed
upon and upon the terms herein set forth. If, however, the Underwriters have not
completed such arrangements within such 24-hour period, then:
(i) if the aggregate principal amount of Defaulted Certificates does not
exceed 10% of the aggregate principal amount of the Offered Certificates to be
purchased pursuant to this Agreement, the non-defaulting Underwriters named in
this Agreement shall be obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all such non-defaulting Underwriters, or
(ii) if the aggregate principal amount of Defaulted Certificates exceeds
10% of the aggregate principal amount of the Offered Certificates to be
purchased pursuant to this Agreement, this Agreement shall terminate, without
any liability on the part of any non-defaulting Underwriters.
No action taken pursuant to this Section X shall relieve any defaulting
Underwriter from the liability with respect to any default of such Underwriter
under this Agreement.
In the event of a default by any Underwriter as set forth in this Section
X, each of the Underwriters and the Depositors shall have the right to postpone
the Closing Date for a period not exceeding five Business Days in order that any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements may be effected.
SECTION XI. Termination of Agreement. The Underwriters may terminate this
Agreement immediately upon notice to the Depositor, at any time at or prior to
the Closing Date if any of the events or conditions described in Section VI (R)
of this Agreement shall occur and be continuing. In the event of any such
termination, the covenant set forth in Section V (G), the provisions of Section
VII, the indemnity agreement set forth in Section VIII, and the provisions of
Sections IX and XIV shall remain in effect.
SECTION XII. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
A. if to the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission to Morgan Stanley & Co. Incorporated, 1585 Broadway, New
York, New York 10036, Attention: Asset Finance Group (Fax: 212/761-0260); and
B. if to the Depositor, shall be delivered or sent by mail, telex or
facsimile transmission to care of ContiSecurities Asset Funding Corporation, 277
Park Avenue, New York, New York 10172, Attention: Chief Counsel (Fax:
212-207-2937).
26
<PAGE>
SECTION XIII. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriters and
the Depositor, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any of the Underwriters within the meaning of Section 15 of
the Securities Act, and for the benefit of each Underwriter's respective
officers and directors and for the benefit of directors of the Depositor,
officers of the Depositor who have signed the Registration Statement and any
person controlling the Depositor within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section XIII, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
SECTION XIV. Survival. The respective indemnities, representations,
warranties and agreements of the Depositor and the Underwriters contained in
this Agreement, or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Certificates and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
SECTION XV. Definition of the Term "Business Day". For purposes of this
Agreement, "Business Day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
SECTION XVI. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to the principles of
conflicts of law thereof.
The parties hereto hereby submit to the jurisdiction of the United States
District Court for the Southern District of New York and any court in the State
of New York located in the City and County of New York, and appellate court from
any thereof, in any action, suit or proceeding brought against it or in
connection with this Agreement or any of the related documents or the
transactions contemplated hereunder or for recognition or enforcement of any
judgment, and the parties hereto hereby agree that all claims in respect of any
such action or proceeding may be heard or determined in New York State court or,
to the extent permitted by law, in such federal court.
The parties hereto hereby irrevocably waive, to the fullest extent
permitted by law, any and all rights to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
SECTION XVII. Counterparts. This Agreement may be executed in counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
27
<PAGE>
SECTION XVIII. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
28
<PAGE>
If the foregoing correctly sets forth the agreement between the Depositor
and the Underwriters, please indicate your acceptance in the space provided for
the purpose below.
Very truly yours,
CONTISECURITIES ASSET FUNDING
CORP.
By: /s/ A. John Banu
--------------------------------
Name: A. John Banu
Title: Authorized Signatory
By: /s/ Susan C. Valenti
--------------------------------
Name: Susan C. Valenti
Title: Authorized Signatory
CONFIRMED AND ACCEPTED, as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
Acting on its own behalf and as
Representative of the Several
Underwriters referred to in the
foregoing Agreement
By: /s/ Murray C. Stoltz
- - --------------------------------------
Name: Murray C. Stoltz
Title: Principal
CONTIMORTGAGE CORPORATION CONTIWEST CORPORATION
Accepts and hereby agrees solely Accepts and hereby agrees solely
to the provisions of Section V.H. to the provisions of Section V.I.
By: /s/ Robert J. Babjak By: /s/ Peter Abeles
- - --------------------------------------- ---------------------------------
Name: Robert J. Babjak Name: Peter Abeles
Title: Executive Vice President & COO Title: President
By: /s/ Daniel J. Egan By: /s/ Robert E. Riedl
- - --------------------------------------- ---------------------------------
Name: Daniel J. Egan Name: Robert E. Riedl
Title: Senior Vice President & CFO Title: Secretary
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Class of Certificates Initial Principal Dollar
Name of Purchased by the Amount of Certificates Price to
Underwriter Underwriters Purchased by Underwriters Public**
- - ----------- ------------ ------------------------- --------
<S> <C> <C> <C>
Morgan Stanley
A-1 $21,666,670 99.984375%
A-2 22,500,000 100.000000
A-3 34,166,670 99.968750
A-4 12,166,670 100.000000
A-5 11,833,335 99.968750
A-6 6,000,000 99.984375
A-7 10,833,335 99.937500
A-8 6,433,335 100.000000
A-9 11,333,335 99.953125
A-10 43,200,000 100.000000
A-1110 10,090 19.259600
M-1F 9,056,170 99.984375
M-1A 4,266,670 100.000000
M-2F 8,268,835 99.953125
M-2A 3,333,335 100.000000
B-1F 1,575,000 100.000000
B-1A 2,533,335 100.000000
TOTAL:
Bear Stearns & Co. Inc.
A-1 21,666,666 99.984375%
A-2 22,500,000 100.000000
A-3 34,166,666 99.968750
A-4 12,166,666 100.000000
A-5 11,833,333 99.968750
A-6 6,000,000 99.984375
A-7 10,833,333 99.937500
A-8 6,433,333 100.000000
A-9 11,333,333 99.953125
A-10 43,200,000 100.000000
M-1F 9,056,166 99.984375
M-1A 4,266,666 100.000000
M-2F 8,268,833 99.953125
M-2A 3,333,333 100.000000
B-1F 1,575,000 100.000000
B-1A 2,533,333 100.000000
TOTAL:
ContiFinancial Services
Corporation
A-3 10,000,000 99.818750%
TOTAL:
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class of Certificates Initial Principal Dollar
Name of Purchased by the Amount of Certificates Price to
Underwriter Underwriters Purchased by Underwriters Public**
- - ----------- ------------ ------------------------- --------
<S> <C> <C> <C>
Credit Suisse First Boston
A-1 21,666,666 99.984375%
A-2 22,500,000 100.000000
A-3 34,166,666 99.968750
A-4 12,166,666 100.000000
A-5 11,833,333 99.968750
A-6 6,000,000 99.984375
A-7 10,833,333 99.937500
A-8 6,433,333 100.000000
A-9 11,333,333 99.953125
A-10 43,200,000 100.000000
M-1F 9,056,166 99.984375
M-1A 4,266,666 100.000000
M-2F 8,268,833 99.953125
M-2A 3,333,333 100.000000
B-1F 1,575,000 100.000000
B-1A 2,533,333 100.000000
TOTAL:
Greenwich Capital Markets,
Inc.
A-1 21,666,666 99.984375%
A-2 22,500,000 100.000000
A-3 34,166,666 99.968750
A-4 12,166,666 100.000000
A-5 11,833,333 99.968750
A-6 6,000,000 99.984375
A-7 10,833,333 99.937500
A-8 6,433,333 100.000000
A-9 11,333,333 99.953125
A-10 43,200,000 100.000000
M-1F 9,056,166 99.984375
M-1A 4,266,666 100.000000
M-2F 8,268,833 99.953125
M-2A 3,333,333 100.000000
B-1F 1,575,000 100.000000
B-1A 2,533,333 100.000000
TOTAL:
Lehman Brothers, Inc.
A-1 21,666,666 99.984375%
A-2 22,500,000 100.000000
A-3 34,166,666 99.968750
A-4 12,166,666 100.000000
A-5 11,833,333 99.968750
A-6 6,000,000 99.984375
A-7 10,833,333 99.937500
A-8 6,433,333 100.000000
A-9 11,333,333 99.953125
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class of Certificates Initial Principal Dollar
Name of Purchased by the Amount of Certificates Price to
Underwriter Underwriters Purchased by Underwriters Public**
- - ----------- ------------ ------------------------- --------
<S> <C> <C> <C>
A-10 43,200,000 100.000000
M-1F 9,056,166 99.984375
M-1A 4,266,666 100.000000
M-2F 8,268,833 99.953125
M-2A 3,333,333 100.000000
B-1F 1,575,000 100.000000
B-1A 2,533,333 100.000000
TOTAL:
Merrill Lynch, Pierce, Fenner
& Smith Inc.
A-1 21,666,666 99.984375%
A-2 22,500,000 100.000000
A-3 34,166,666 99.968750
A-4 12,166,666 100.000000
A-5 11,833,333 99.968750
A-6 6,000,000 99.984375
A-7 10,833,333 99.937500
A-8 6,433,333 100.000000
A-9 11,333,333 99.953125
A-10 43,200,000 100.000000
M-1F 9,056,166 99.984375
M-1A 4,266,666 100.000000
M-2F 8,268,833 99.953125
M-2A 3,333,333 100.000000
B-1F 1,575,000 100.000000
B-1A 2,533,333 100.000000
TOTAL:
TOTAL:
</TABLE>
*=Notional Principal Balance
**=Plus accured interest
<PAGE>
EXHIBIT A
[Letterhead of the
CONTIFINANCIAL CORPORATION]
June 12, 1997
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
This Guaranty is made by ContiFinancial Corporation, a Delaware corporation
with its principal office at 277 Park Avenue, New York, New York 10172 ("CFC"),
in favor of Morgan Stanley & Co. Incorporated, as Representative of the Several
Underwriters, with its principal office at 1585 Broadway, New York, New York
10036.
As an inducement to you and in consideration of your entering into the
Underwriting Agreement referred to below, CFC hereby absolutely, unconditionally
and irrevocably guarantees the prompt performance of the obligations, including
any payment obligations, of ContiSecurities Asset Funding Corp., ("Depositor"),
a Delaware corporation with its principal office at 277 Park Avenue, New York,
New York 10172, under Section VIII of the Underwriting Agreement, dated June __,
1997, between Depositor and Morgan Stanley & Co. Incorporated, as Representative
of the Several Underwriters. This Guaranty is a guaranty of performance and
payment and not of collection. The obligations of CFC hereunder shall not be
impaired by failure of Depositor to provide notice to CFC of any modification or
amendment of said contract agreed to by the parties thereto. This Guaranty may
be amended only by an instrument in writing executed by the undersigned.
This Guaranty shall be governed by the laws of the State of New York
applicable to agreements made and to be performed in the State of New York
without giving effect to the conflict of law rules thereof.
<PAGE>
IN WITNESS WHEREOF, CFC has caused this Guaranty to be executed by duly
authorized corporate officers the day and year first above written.
CONTIFINANCIAL CORPORATION
By: /s/ A. John Banu
--------------------------------
Name: A. John Banu
Title: Authorized Signatory
By: /s/ Susan C. Valenti
--------------------------------
Name: Susan C. Valenti
Title: Authorized Signatory
ACCEPTED
as of June 12, 1997
MORGAN STANLEY & CO. INCORPORATED
as representative of the Several Underwriters
By: Murray C. Stoltz
--------------------------------
Name: Murray C. Stoltz
Title: Principal
Exhibit 4.1
POOLING AND SERVICING AGREEMENT
Relating to
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
Among
CONTISECURITIES ASSET FUNDING CORP.,
as the Depositor
CONTIMORTGAGE CORPORATION,
as a Seller and the Servicer,
CONTIWEST CORPORATION,
as a Seller
and
MANUFACTURERS AND TRADERS TRUST COMPANY
as the Trustee
Dated as of June 1, 1997
<PAGE>
CONTENTS
--------
Page
CONVEYANCE ............................................................ 1
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION ................................ 2
Section 1.01 Definitions ........................................ 2
Section 1.02 Use of Words and Phrases............................ 43
Section 1.03 Captions; Table of Contents ........................ 43
Section 1.04 Opinions ........................................... 43
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST ....................... 44
Section 2.01 Establishment of the Trust ......................... 44
Section 2.02 Office ............................................. 44
Section 2.03 Purposes and Powers ................................ 44
Section 2.04 Appointment of the Trustee;
Declaration of Trust ............................... 44
Section 2.05 Expenses of the Trust .............................. 44
Section 2.06 Ownership of the Trust ............................. 44
Section 2.07 Situs of the Trust ................................. 45
Section 2.08 Miscellaneous REMIC Provisions ..................... 45
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEPOSITOR, THE
SERVICER AND THE SELLERS; COVENANT OF SELLERS TO CONVEY HOME
EQUITY LOANS ...................................................... 48
Section 3.01 Representations and Warranties of the Depositor .... 48
Section 3.02 Representations and Warranties of the Servicer ..... 49
Section 3.03 Representations and Warranties of the Sellers ...... 51
Section 3.04 Covenants of the Sellers to Take Certain Actions
with Respect to the Home Equity Loans In
Certain Situations ................................. 56
Section 3.05 Conveyance of the Home Equity Loans and
Qualified Replacement Mortgages .................... 63
Section 3.06 Acceptance by Trustee; Certain Substitutions
of Home Equity Loans; Certification
by Trustee ......................................... 66
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES ................................. 68
Section 4.01 Issuance of Certificates ........................... 68
Section 4.02 Sale of Certificates ............................... 68
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS ............................ 69
Section 5.01 Terms .............................................. 69
Section 5.02 Forms .............................................. 69
Section 5.03 Execution, Authentication and Delivery ............. 69
Section 5.04 Registration and Transfer of Certificates .......... 70
Section 5.05 Mutilated, Destroyed, Lost or Stolen Certificates .. 72
Section 5.06 Persons Deemed Owners .............................. 72
<PAGE>
Section 5.07 Cancellation ....................................... 72
Section 5.08 Limitation on Transfer of Ownership Rights ......... 72
Section 5.09 Assignment of Rights ............................... 73
ARTICLE VI
COVENANTS ......................................................... 74
Section 6.01 Distributions ...................................... 74
Section 6.02 Money for Distributions to be Held in Trust;
Withholding ........................................ 74
Section 6.03 Protection of Trust Estate ......................... 75
Section 6.04 Performance of Obligations ......................... 75
Section 6.05 Negative Covenants ................................. 76
Section 6.06 No Other Powers .................................... 76
Section 6.07 Limitation of Suits ................................ 76
Section 6.08 Unconditional Rights of Owners to
Receive Distributions .............................. 77
Section 6.09 Rights and Remedies Cumulative ..................... 77
Section 6.10 Delay or Omission Not Waiver ....................... 77
Section 6.11 Control by Owners .................................. 77
Section 6.12 Indemnification .................................... 78
Section 6.13 Access to Owners of Certificates'
Names and Addresses ................................ 78
ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES .............................. 79
Section 7.01 Collection of Money ................................ 79
Section 7.02 Establishment of Accounts .......................... 79
Section 7.03 Flow of Funds ...................................... 79
Section 7.04 Reserved ........................................... 86
Section 7.05 Investment of Accounts ............................. 86
Section 7.06 Payment of Trust Expenses .......................... 86
Section 7.07 Eligible Investments ............................... 86
Section 7.08 Accounting and Directions by Trustee ............... 88
Section 7.09 Reports by Trustee to Owners ....................... 89
Section 7.10 Reports by Trustee ................................. 91
ARTICLE VIII
SERVICING AND ADMINISTRATION OF HOME EQUITY LOANS ................. 92
Section 8.01 Servicer and Sub-Servicers ......................... 92
Section 8.02 Collection of Certain Home Equity Loan Payments .... 93
Section 8.03 Sub-Servicing Agreements Between Servicer and
Sub-Servicers....................................... 93
Section 8.04 Successor Sub-Servicers ............................ 93
Section 8.05 Liability of Servicer; Indemnification ............. 93
Section 8.06 No Contractual Relationship Between Sub-Servicer,
Trustee or the Owners .............................. 94
Section 8.07 Assumption or Termination of Sub-Servicing
Agreement by Trustee ............................... 94
Section 8.08 Principal and Interest Account ..................... 94
Section 8.09 Delinquency Advances and Servicing Advances ........ 96
Section 8.10 Compensating Interest; Repurchase of
Home Equity Loans .................................. 97
Section 8.11 Maintenance of Insurance ........................... 97
Section 8.12 Due-on-Sale Clauses; Assumption
and Substitution Agreements ........................ 98
Section 8.13 Realization Upon Defaulted Home Equity Loans;
Modification ....................................... 98
Section 8.14 Trustee to Cooperate; Release of Files ............. 99
Section 8.15 Servicing Compensation ............................. 100
Section 8.16 Annual Statement as to Compliance .................. 100
Section 8.17 Annual Independent Certified Public
Accountants' Reports ............................... 101
<PAGE>
Section 8.18 Access to Certain Documentation and Information
Regarding the Home Equity Loans .................... 101
Section 8.19 Assignment of Agreement ............................ 101
Section 8.20 Removal of Servicer; Resignation of Servicer ....... 101
Section 8.21 Inspections; Errors and Omissions Insurance104
ARTICLE IX
TERMINATION OF TRUST .............................................. 105
Section 9.01 Termination of Trust ............................... 105
Section 9.02 Termination Upon Option of Owners of
Class R Certificates ............................... 105
Section 9.03 Termination Upon Loss of REMIC Status .............. 106
Section 9.04 Disposition of Proceeds ............................ 107
ARTICLE X
THE TRUSTEE ....................................................... 108
Section 10.01 Certain Duties and Responsibilities ................ 108
Section 10.02 Removal of Trustee for Cause ....................... 109
Section 10.03 Certain Rights of the Trustee ...................... 110
Section 10.04 Not Responsible for Recitals or
Issuance of Certificates ........................... 111
Section 10.05 May Hold Certificates .............................. 111
Section 10.06 Money Held in Trust ................................ 112
Section 10.07 Compensation and Reimbursement; No Lien for Fees ... 112
Section 10.08 Corporate Trustee Required; Eligibility ............ 112
Section 10.09 Resignation and Removal; Appointment of Successor .. 112
Section 10.10 Acceptance of Appointment by Successor Trustee ..... 113
Section 10.11 Merger, Conversion, Consolidation or Succession to
Business of the Trustee ............................ 114
Section 10.12 Reporting; Withholding ............................. 114
Section 10.13 Liability of the Trustee ........................... 115
Section 10.14 Appointment of Co-Trustee or Separate Trustee ...... 115
ARTICLE XI
MISCELLANEOUS ..................................................... 117
Section 11.01 Compliance Certificates and Opinions ............... 117
Section 11.02 Form of Documents Delivered to the Trustee ......... 117
Section 11.03 Acts of Owners ..................................... 118
Section 11.04 Notices, etc. to Trustee ........................... 118
Section 11.05 Notices and Reports to Owners; Waiver of Notices ... 118
Section 11.06 Rules by Trustee ................................... 119
Section 11.07 Successors and Assigns ............................. 119
Section 11.08 Severability ....................................... 119
Section 11.09 Benefits of Agreement .............................. 119
Section 11.10 Legal Holidays ..................................... 119
Section 11.11 Governing Law; Submission to Jurisdiction .......... 119
Section 11.12 Counterparts. ...................................... 120
Section 11.13 Usury .............................................. 120
Section 11.14 Amendment .......................................... 121
Section 11.15 Paying Agent; Appointment and
Acceptance of Duties ............................... 121
Section 11.16 REMIC Status ....................................... 122
Section 11.17 Additional Limitation on Action and
Imposition of Tax .................................. 123
Section 11.18 Appointment of Tax Matters Person .................. 123
Section 11.19 Notices ............................................ 124
<PAGE>
SCHEDULE I-A SCHEDULE OF GROUP I HOME EQUITY LOANS
SCHEDULE I-B SCHEDULE OF GROUP II HOME EQUITY LOANS
SCHEDULE II RESERVED
SCHEDULE III HOME EQUITY LOANS WITH DELINQUENCY CHARACTERISTICS
SCHEDULE IV HOME EQUITY LOANS WITH 15-YEAR "BALLOON" PAYMENTS
SCHEDULE V HOME EQUITY LOANS WITH 5-YEAR "BALLOON" PAYMENTS
EXHIBIT A-1 FORM OF CLASS A-1 CERTIFICATE
EXHIBIT A-2 FORM OF CLASS A-2 CERTIFICATE
EXHIBIT A-3 FORM OF CLASS A-3 CERTIFICATE
EXHIBIT A-4 FORM OF CLASS A-4 CERTIFICATE
EXHIBIT A-5 FORM OF CLASS A-5 CERTIFICATE
EXHIBIT A-6 FORM OF CLASS A-6 CERTIFICATE
EXHIBIT A-7 FORM OF CLASS A-7 CERTIFICATE
EXHIBIT A-8 FORM OF CLASS A-8 CERTIFICATE
EXHIBIT A-9 FORM OF CLASS A-9 CERTIFICATE
EXHIBIT A-10 FORM OF CLASS A-10 CERTIFICATE
EXHIBIT A-11 FORM OF CLASS A-11IO CERTIFICATE
EXHIBIT B-1 FORM OF CLASS M-1F CERTIFICATE
EXHIBIT B-2 FORM OF CLASS M-1A CERTIFICATE
EXHIBIT B-3 FORM OF CLASS M-2F CERTIFICATE
EXHIBIT B-4 FORM OF CLASS M-2A CERTIFICATE
EXHIBIT B-5 FORM OF CLASS B-1F CERTIFICATE
EXHIBIT B-6 FORM OF CLASS B-1A CERTIFICATE
EXHIBIT C-1 FORM OF CLASS C CERTIFICATE
EXHIBIT C-2 FORM OF CLASS R CERTIFICATE
EXHIBIT D FORM OF CERTIFICATE RE: HOME EQUITY LOANS
PREPAID IN FULL AFTER CUT-OFF DATE
EXHIBIT E FORM OF TRUSTEE'S RECEIPT
EXHIBIT F FORM OF POOL CERTIFICATION
EXHIBIT G FORM OF DELIVERY ORDER
EXHIBIT H [RESERVED]
EXHIBIT I FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
<PAGE>
POOLING AND SERVICING AGREEMENT, relating to CONTIMORTGAGE HOME EQUITY LOAN
TRUST 1997-3, dated as of June 1, 1997 by and among CONTISECURITIES ASSET
FUNDING CORP., a Delaware corporation, in its capacity as Depositor (the
"Depositor"), CONTIMORTGAGE CORPORATION, a Delaware corporation in its
capacities as a Seller (in such capacity, a "Seller") and as Servicer (in such
capacity, the "Servicer"), CONTIWEST CORPORATION, a Nevada corporation, in its
capacity as a Seller (a "Seller" and together with ContiMortgage Corporation,
the "Sellers") and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation, in its capacity as the trustee (the "Trustee").
WHEREAS, the Depositor wishes to establish the Trust and two subtrusts and
provide for the allocation and sale of the beneficial interests therein and the
maintenance and distribution thereof;
WHEREAS, the Servicer has agreed to service the Home Equity Loans, which
constitute the principal assets of the Trust Estate;
WHEREAS, all things necessary to make the Certificates, when executed by
the Depositor and authenticated by the Trustee, valid instruments, and to make
this Agreement a valid agreement, in accordance with their and its terms, have
been done;
WHEREAS, Manufacturers and Traders Trust Company is willing to serve in the
capacity of Trustee hereunder;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Sellers, the Servicer, and the Trustee hereby agree as
follows:
CONVEYANCE
To provide for the distribution of the interest on and/or principal of the
Certificates in accordance with their terms, all of the sums distributable under
this Agreement with respect to the Certificates and the performance of the
covenants contained in this Agreement, each Seller hereby bargains, sells,
conveys, assigns and transfers to the Depositor and the Depositor hereby
bargains, sells, conveys, assigns and transfers to the Trust, without recourse
and for the exclusive benefit of the Owners of the Certificates, all of its
respective right, title and interest in and to any and all benefits accruing to
it from (a) the Home Equity Loans (other than any principal and interest
payments received thereon on or prior to the Cut-Off Date) listed in Schedule
I-A and I-B to this Agreement which the Sellers are causing to be delivered to
the Depositor and the Depositor is causing to be delivered to the Trustee
herewith (and all substitutions therefor as provided by Sections 3.03, 3.04 and
3.06), together wit h the related Home Equity Loan documents and each Seller's
interest in any Property which secured a Home Equity Loan but which has been
acquired by foreclosure or deed in lieu of foreclosure, and all payments thereon
and proceeds of the conversion, voluntary or involuntary, of the foregoing; (b)
such amounts as may be held by the Trustee in the Certificate Account, the
Upper-Tier Group I Distribution Account and the Upper-Tier Group II Distribution
Account together with investment earnings on such amounts and such amounts as
may be held in the name of the Trustee in the Principal and Interest Account, if
any, exclusive of investment earnings thereon (except as otherwise provided
herein), whether in the form of cash, instruments, securities or other
properties (including any Eligible Investments held by the Servicer); and (c)
proceeds of all the foregoing (including, but not by way of limitation, all
proceeds of any mortgage insurance, hazard insurance and title insurance policy
relating to the Home Equity L oans, cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
rights to payment of any and every kind, and other forms of obligations and
receivables which at any time constitute all or part of or are included in the
proceeds of any of the foregoing) to pay the Certificates as specified herein
((a)-(c) above shall be collectively referred to herein as the "Trust Estate").
The Trustee acknowledges such sale, accepts the Trust hereunder in
accordance with the provisions hereof and agrees to perform the duties herein to
the best of its ability to the end that the interests of the Owners may be
adequately and effectively protected.
<PAGE>
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01 Definitions.
For all purposes of this Agreement, the following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
"Account": Any account established in accordance with Section 7.02 or 8.08
hereof.
"Accrual Period": With respect to the Group I Certificates and any Payment
Date, the calendar month immediately preceding the month in which the Payment
Date occurs. A "calendar month" shall be deemed to be 30 days. With respect to
the Group II Certificates and any Payment Date, the period commencing on the
immediately preceding Payment Date (or the Closing Date in the case of the first
Payment Date) to and including the day prior to the current Payment Date. All
calculations of interest on the Group I Certificates will be made on the basis
of a 360-day year assumed to consist of twelve 30-day months and calculations of
interest on the Group II Certificates will be made on the basis of the actual
number of days elapsed in the related Accrual Period and in a year of 360 days.
"Aggregate Certificate Principal Balance": As of any date of determination
thereof, the sum of the then outstanding Certificate Principal Balance of the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates.
"Agreement": This Pooling and Servicing Agreement, as it may be amended
from time to time, including the Exhibits and Schedules hereto.
"Appraised Value": The appraised value of any Property based upon the
appraisal or other valuation made at the time of the origination of the related
Home Equity Loan, or, in the case of a Home Equity Loan which is a purchase
money mortgage, the sales price of the Property at such time of ori gination, if
such sales price is less than such appraised value.
"Authorized Officer": With respect to any Person, any officer of such
Person who is authorized to act for such Person in matters relating to the
Agreement, and whose action is binding upon such Person; with respect to the
Depositor, the Sellers and the Servicer, initially including those individuals
whose names appear on the lists of Authorized Officers delivered at the Closing;
with respect to the Trustee, any Vice President, Assistant Vice President, Trust
Officer or any Officer of the Trustee located at the Corporate Trust Office.
"Business Day": Any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in The City of New York, or in the city in
which the principal corporate trust office of the Trustee is located, are
authorized or obligated by law or executive order to be closed.
"Certificate": Any one of the Class A Certificates, Mezzanine Certificates,
Class B Certificates, Class C Certificates or Class R Certificates, each
representing the interests and the rights described in this Agreement.
"Certificate Account": The certificate account established in accordance
with Section 7.02(a) hereof and maintained in the corporate trust department of
the Trustee; provided that the funds in such account shall not be commingled
with other funds held by the Trustee.
2
<PAGE>
"Certificate Principal Balance": As of the Startup Day as to each of the
following Classes of Certificates, the Certificate Principal Balances thereof,
as follows:
Class A-1 Certificates -- $130,000,000
Class A-2 Certificates -- $135,000,000
Class A-3 Certificates -- $215,000,000
Class A-4 Certificates -- $ 73,000,000
Class A-5 Certificates -- $ 71,000,000
Class A-6 Certificates -- $ 36,000,000
Class A-7 Certificates -- $ 65,000,000
Class A-8 Certificates -- $ 38,600,000
Class A-9 Certificates -- $ 68,000,000
Class A-10 Certificates -- $259,200,000
Class M-1F Certificates -- $ 54,337,000
Class M-1A Certificates -- $ 25,600,000
Class M-2F Certificates -- $ 49,613,000
Class M-2A Certificates -- $ 20,000,000
Class B-1F Certificates -- $ 9,450,000
Class B-1A Certificates -- $ 15,200,000
The Class A-11IO Certificates, Class C Certificates and the Class R
Certificates do not have a Certificate Principal Balance.
"Class": Any Class of the Class A Certificates, any Class of the Mezzanine
Certificates, either Class of the Class B Certificates, the Class C Certificates
or the Class R Certificates.
"Class A Certificate": Any one of the Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates, Class A-7 Certificates, Class A-8
Certificates, Class A-9 Certificates, Class A-10 Certificates or Class A-11IO
Certificates.
"Class A Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A
Certificates less any amounts actually distributed on such Class A Certificates
with respect to the Class A Principal Distribution Amount pursuant to Section
7.03(d) hereof with respect to principal thereon on all prior Payment Dates plus
any amount previously distributed with respect to principal that is recovered as
a voidable preference by a trustee in bankr uptcy pursuant to a final,
nonappealable order.
"Class A Distribution Amount": The sum of the Class A-1 Distribution
Amount, the Class A-2 Distribution Amount, the Class A-3 Distribution Amount,
the Class A-4 Distribution Amount, the Class A-5 Distribution Amount, the Class
A-6 Distribution Amount, the Class A-7 Distribution Amount, the Class A-8
Distribution Amount, the Class A-9 Distribution Amount, the Class A-10
Distribution Amount and the Class A-11IO Current Interest.
"Class A-1 Certificate": Any one of the Certificates designated on the face
thereof as a Class A-1 Certificate, substantially in the form annexed hereto as
Exhibit A-1, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-1 Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A-1
Certificates less any amounts actually distributed with respect to the Group I
Class A Principal Distribution Amount pursuant to Section 7.03(d) hereof with
respect to principal thereon on all prior Payment Dates plus any amount
previously distributed with respect to principal that is recovered as a voidable
preference by a trustee in bankruptcy pursuant to a final, nonappealable order.
3
<PAGE>
"Class A-1 Certificate Termination Date": The Payment Date on which the
Class A-1 Certificate Principal Balance is reduced to zero.
"Class A-1 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-1 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class A-1
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class A-1
Certificates as it relates to interest previously paid on the Class A-1
Certificates.
"Class A-1 Distribution Amount": With respect to any Payment Date, the sum
of (x) the Class A-1 Current Interest, (y) the Class A-1 Interest Carry Forward
Amount and (z) the Group I Class A Principal Distribution Amount payable to the
Owners of the Class A-1 Certificates pursuant to Section 7.03 (d) hereof.
"Class A-1 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-1 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-1 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class A-1 Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class A-1
Pass-Through Rate.
"Class A-1 Pass-Through Rate": 6.42% per annum.
"Class A-2 Certificate": Any one of the Certificates designated on the face
thereof as a Class A-2 Certificate, substantially in the form annexed hereto as
Exhibit A-2, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-2 Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A-2
Certificates less any amounts actually distributed with respect to the Group I
Class A Principal Distribution Amount pursuant to Section 7.03(d) hereof with
respect to principal thereon on all prior Payment Dates plus any amount
previously distributed with respect to principal that is recovered as a voidable
preference by a trustee in bankruptcy pursuant to a final, nonappealable order.
"Class A-2 Certificate Termination Date": The Payment Date on which the
Class A-2 Certificate Principal Balance is reduced to zero.
"Class A-2 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-2 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class A-2
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class A-2
Certificates as it relates to interest previously paid on the Class A-2
Certificates.
"Class A-2 Distribution Amount": With respect to any Payment Date, the sum
of (x) the Class A-2 Current Interest, (y) the Class A-2 Interest Carry Forward
Amount and (z) the Group I Class A Principal Distribution Amount payable to the
Owners of Class A-2 Certificates pursuant to Section 7.03(d) hereof.
"Class A-2 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-2 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-2 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the
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Class A-2 Certificates on such immediately preceding Payment Date and (y)
30 days' interest on such amount at the Class A-2 Pass-Through Rate.
"Class A-2 Pass-Through Rate": 6.51% per annum.
"Class A-3 Certificate": Any one of the Certificates designated on the face
thereof as a Class A-3 Certificate, substantially in the form annexed hereto as
Exhibit A-3, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-3 Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A-3
Certificates less any amounts actually distributed with respect to the Group I
Class A Principal Distribution Amount pursuant to Section 7.03(d) hereof with
respect to principal thereon on all prior Payment Dates plus any amount
previously distributed with respect to principal that is recovered as a voidable
preference by a trustee in bankruptcy pursuant to a final, nonappealable order.
"Class A-3 Certificate Termination Date": The Payment Date on which the
Class A-3 Certificate Principal Balance is reduced to zero.
"Class A-3 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-3 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class A-3
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class A-3
Certificates as it relates to interest previously paid on the Class A-3
Certificates.
"Class A-3 Distribution Amount": With respect to any Payment Date, the sum
of (x) the Class A-3 Current Interest, (y) the Class A-3 Interest Carry Forward
Amount and (z) the Group I Class A Principal Distribution Amount payable to the
Owners of the Class A-3 Certificates pursuant to Section 7.03 (d) hereof.
"Class A-3 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-3 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-3 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class A-3 Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class A-3
Pass-Through Rate.
"Class A-3 Pass-Through Rate": 6.68% per annum.
"Class A-4 Certificate": Any one of the Certificates designated on the face
thereof as a Class A-4 Certificate, substantially in the form annexed hereto as
Exhibit A-4, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-4 Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A-4
Certificates less any amounts actually distributed with respect to the Group I
Class A Principal Distribution Amount pursuant to Section 7.03(d) hereof with
respect to principal thereon on all prior Payment Dates plus any amount
previously distributed with respect to principal that is recovered as a voidable
preference by a trustee in bankruptcy pursuant to a final, nonappealable order.
"Class A-4 Certificate Termination Date": The Payment Date on which the
Class A-4 Certificate Principal Balance is reduced to zero.
"Class A-4 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-4 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period
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at the Class A-4 Pass-Through Rate plus the Preference Amount owed to the
Owners of the Class A-4 Certificates as it relates to interest previously paid
on the Class A-4 Certificates.
"Class A-4 Distribution Amount": With respect to any Payment Date, the sum
of (x) the Class A-4 Current Interest, (y) the Class A-4 Interest Carry Forward
Amount and (z) the Group I Class A Principal Distribution Amount payable to the
Owners of the Class A-4 Certificates pursuant to Section 7.0 3(d) hereof.
"Class A-4 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-4 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-4 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class A-4 Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class A-4
Pass-Through Rate.
"Class A-4 Pass-Through Rate": 6.82% per annum.
"Class A-5 Certificate": Any one of the Certificates designated on the face
thereof as a Class A-5 Certificate, substantially in the form annexed hereto as
Exhibit A-5, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-5 Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A-5
Certificates less any amounts actually distributed with respect to the Group I
Class A Principal Distribution Amount pursuant to Section 7.03(d) hereof with
respect to principal thereon on all prior Payment Dates plus any amount
previously distributed with respect to principal that is recovered as a voidable
preference by a trustee in bankruptcy pursuant to a final, nonappealable order.
"Class A-5 Certificate Termination Date": The Payment Date on which the
Class A-5 Certificate Principal Balance is reduced to zero.
"Class A-5 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-5 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class A-5
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class A-5
Certificates as it relates to interest previously paid on the Class A-5
Certificates.
"Class A-5 Distribution Amount": With respect to any Payment Date, the sum
of (x) the Class A-5 Current Interest, (y) the Class A-5 Interest Carry Forward
Amount and (z) the Group I Class A Principal Distribution Amount payable to the
Owners of the Class A-5 Certificates pursuant to Section 7.03 (d) hereof.
"Class A-5 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-5 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-5 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class A-5 Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class A-5
Pass-Through Rate.
"Class A-5 Pass-Through Rate": 7.01% per annum.
"Class A-6 Certificate": Any one of the Certificates designated on the face
thereof as a Class A-6 Certificate, substantially in the form annexed hereto as
Exhibit A-6, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
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"Class A-6 Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A-6
Certificates less any amounts actually distributed with respect to the Group I
Class A Principal Distribution Amount pursuant to Section 7.03(d) hereof with
respect to principal thereon on all prior Payment Dates plus any amount
previously distributed with respect to principal that is recovered as a voidable
preference by a trustee in bankruptcy pursuant to a final, nonappealable order.
"Class A-6 Certificate Termination Date": The Payment Date on which the
Class A-6 Certificate Principal Balance is reduced to zero.
"Class A-6 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-6 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class A-6
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class A-6
Certificates as it relates to interest previously paid on the Class A-6
Certificates.
"Class A-6 Distribution Amount": With respect to any Payment Date, the sum
of (x) the Class A-6 Current Interest, (y) the Class A-6 Interest Carry Forward
Amount and (z) the Group I Class A Principal Distribution Amount payable to the
Owners of the Class A-6 Certificates pursuant to Section 7.03 (d) hereof.
"Class A-6 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-6 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-6 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class A-6 Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class A-6
Pass-Through Rate.
"Class A-6 Pass-Through Rate": On any Payment Date, the lesser of (x) 7.13%
per annum, and (y) the weighted average Coupon Rate of the Home Equity Loan in
Group I less the sum of (A) 0.50% per annum, (B) the Trustee Fee Rate and (C)
for Payment Dates during the Interest Only Period, the Class A- 11IO Interest
Allocation Rate.
"Class A-7 Certificate": Any one of the Certificates designated on the face
thereof as a Class A-7 Certificate, substantially in the form annexed hereto as
Exhibit A-7, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-7 Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A-7
Certificates less any amounts actually distributed with respect to the Group I
Class A Principal Distribution Amount pursuant to Section 7.03(d) hereof with
respect to principal thereon on all prior Payment Dates plus any amount
previously distributed with respect to principal that is recovered as a voidable
preference by a trustee in bankruptcy pursuant to a final, nonappealable order.
"Class A-7 Certificate Termination Date": The Payment Date on which the
Class A-7 Certificate Principal Balance is reduced to zero.
"Class A-7 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-7 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class A-7
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class A-7
Certificates as it relates to interest previously paid on the Class A-7
Certificates.
"Class A-7 Distribution Amount": With respect to any Payment Date, the sum
of (x) the Class A-7 Current Interest, (y) the Class A-7 Interest Carry Forward
Amount and (z) the Group I Class A Principal Distribution Amount payable to the
Owners of the Class A-7 Certificates pursuant to Section 7.03 (c) hereof.
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"Class A-7 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-7 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-7 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class A-7 Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class A-7
Pass-Through Rate.
"Class A-7 Pass-Through Rate": On any Payment Date, the lesser of (x) 7.28%
per annum and (y) the weighted average Coupon Rate on the Home Equity Loans in
Group I less the sum of (A) 0.50%, (B) the Trustee Fee Rate and (C) for Payment
Dates during the Interest Only Period, the Class A-11IO Interest Allocation
Rate.
"Class A-8 Certificate": Any one of the Certificates designated on the face
thereof as a Class A-8 Certificate, substantially in the form annexed hereto as
Exhibit A-8, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-8 Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A-8
Certificates less any amounts actually distributed with respect to the Group I
Class A Principal Distribution Amount pursuant to Section 7.03(d) hereof with
respect to principal thereon on all prior Payment Dates plus any amount
previously distributed with respect to principal that is recovered as a voidable
preference by a trustee in bankruptcy pursuant to a final, nonappealable order.
"Class A-8 Certificate Termination Date": The Payment Date on which the
Class A-8 Certificate Principal Balance is reduced to zero.
"Class A-8 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-8 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class A-8
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class A-8
Certificates as it relates to interest previously paid on the Class A-8
Certificates.
"Class A-8 Distribution Amount": With respect to any Payment Date, the sum
of (x) the Class A-8 Current Interest, (y) the Class A-8 Interest Carry Forward
Amount and (z) the Group I Class A Principal Distribution Amount payable to the
Owners of the Class A-8 Certificates pursuant to Section 7.0 3(d) hereof.
"Class A-8 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-8 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-8 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class A-8 Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class A-8
Pass-Through Rate.
"Class A-8 Pass-Through Rate": On any Payment Date, the lesser of (x) 7.58%
per annum and (y) the weighted average of the Coupon Rates of the Home Equity
Loans in Group I less the sum of (A) 0.50% per annum, (B) the Trustee Fee Rate,
and (C) for Payment Dates during the Interest Only Period, the Class A-11
Interest Only Interest Allocation Rate.
"Class A-9 Certificate": Any one of the Certificates designated on the face
thereof as a Class A-9 Certificate, substantially in the form annexed hereto as
Exhibit A-9, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-9 Certificate Principal Balance": As of any time of determination,
the Certificate Principal Balance as of the Startup Day of all Class A-9
Certificates less any amounts actually distributed with respect to
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the Group I Class A Distribution Amount pursuant to Section 7.03(d) hereof
with respect to principal thereon on all prior Payment Dates plus any amount
previously distributed with respect to principal that is recovered as a voidable
preference by a trustee in bankruptcy pursuant to a final, nonappealable order.
"Class A-9 Certificate Termination Date": The Payment Date on which the
Class A-9 Certificate Principal Balance is reduced to zero.
"Class A-9 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-9 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class A-9
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class A-9
Certificates as it relates to interest previously paid on the Class A-9
Certificates.
"Class A-9 Distribution Amount": With respect to any Payment Date, the sum
of (w) the Class A-9 Current Interest, (x) the Class A-9 Interest Carry Forward
Amount, (y) the Class A-9 Lockout Distribution Amount payable to the Owners of
the Class A-9 Certificates pursuant to Section 7.03(c) and (z) the Group I Class
A Principal Distribution Amount payable to the Owners of the Class A-9
Certificates pursuant to Section 7.03(d) hereof.
"Class A-9 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-9 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-9 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class A-9 Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class A-9
Pass-Through Rate.
"Class A-9 Lockout Distribution Amount": For any Payment Date, the product
of (i) the applicable Class A-9 Lockout Percentage for such Payment Date and
(ii) the Class A-9 Lockout Pro Rata Distribution Amount for such Payment Date.
"Class A-9 Lockout Percentage": For each Payment Date, the percentage set
forth below:
Class A-9
Payment Dates Lockout Percentage
------------- ------------------
July 1997 - June 2000 0%
July 2000 - June 2002 45%
July 2002 - June 2003 80%
July 2003 - June 2004 100%
July 2004 and thereafter 300%
"Class A-9 Lockout Pro Rata Distribution Amount": For any Payment Date, an
amount equal to the product of (x) a fraction, the numerator of which is the
Class A-9 Certificate Principal Balance immediately prior to such Payment Date
and the denominator of which is the aggregate Certificate Principal Balance of
the Class A Certificates related to Group I immediately prior to such Payment
Date and (y) the Class A Principal Distribution Amount for such Payment Date.
"Class A-9 Pass-Through Rate": On any Payment Date, the lesser of (x) 7.12%
per annum and (y) the sum of (A) 0.50%, (B) the Trustee Fee Rate and (C) for
Payment Dates during the Interest Only Period, the Class A-11IO Interest
Allocation Rate.
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"Class A-10 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-10 Certificate, substantially in the form annexed
hereto as Exhibit A-10, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.
"Class A-10 Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A-10 Certificates less any amounts actually distributed with respect to
the Group II Class A Principal Distribution Amount pursuant to Section 7.03(e)
hereof with respect to principal thereon on all prior Payment Dates plus any
amount previously distributed with respect to principal that is recovered as a
voidable preference by a trustee in bankruptcy pursuant to a final,
nonappealable order.
"Class A-10 Certificate Termination Date": The Payment Date on which the
Class A-10 Certificate Principal Balance is reduced to zero.
"Class A-10 Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class A-10 Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class A-10
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class
A-10 Certificates as it relates to interest previously paid on the Class A-10
Certificates.
"Class A-10 Distribution Amount": With respect to any Payment Date, the sum
of (x) the Class A-10 Current Interest, (y) the Class A-10 Interest Carry
Forward Amount and (z) the Group II Class A Principal Distribution Amount
payable to the Owners of the Class A-10 Certificates pursuant to Section 7.03(e)
hereof.
"Class A-10 Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-10 Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-10 Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class A-10 Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class A-10
Pass-Through Rate.
"Class A-10 Pass-Through Rate": For any Payment Date in any month up to and
including the month in which the Clean-Up Call Date occurs, the lesser of (i)
LIBOR plus 0.21% per annum and (ii) the Group II Available Funds Cap Rate for
such Payment Date and for any month following the month in which the Clean-Up
Call Date occurs, the lesser of (i) LIBOR plus 0.42% per annum and (ii) the
Group II Available Funds Cap Rate.
"Class A-11IO Interest Allocation Rate": For any Payment Date during the
Interest Only Period, (A) the product of (x) 8.50% and (y) the Class A-11IO
Notional Principal Amount divided by (B) the Loan Balance of the Home Equity
Loans in the Fixed Rate Group.
"Class A-11IO Certificate": Any one of the Certificates designated on the
face thereof as a Class A-11IO Certificate, substantially in the form annexed
hereto as Exhibit 11IO, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.
"Class A-11IO Certificate Termination Date": The Payment Date on which the
Class A-11IO Notional Principal Amount is reduced to zero.
"Class A-11IO Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-11IO Notional Principal Amount
immediately prior to such Payment Date during the related Accrual Period at the
Class A-11IO Pass-Through Rate plus the Preference Amount owed to the Owners of
the Class A-11IO Certificates as it relates to interest previously paid on the
Class A-11IO Certificates plus the Class A-11IO Interest Carry Forward Amount.
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"Class A-11IO Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
A-11IO Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class A-11IO Interest Carry Forward Amount from all previous Payment
Dates exceeds (ii) the amount of the actual distribution made to Owners of the
Class A-11IO Certificates on such immediately preceding Payment Date and (y) 30
days' interest on such amount at the Class A-11IO Pass-Through Rate.
"Class A-11IO Notional Principal Amount": For Payment Dates during the
Interest Only Period, the Class A-9 Certificate Principal Balance and
thereafter, zero.
"Class A-11IO Pass-Through Rate": 8.50% per annum.
"Class B Certificates": Any one of the Class B-1F Certificates or Class
B-1A Certificates.
"Class B-1A Applied Realized Loss Amount": As to any Payment Date, the
lesser of (x) the Class B-1A Certificate Principal Balance (after taking into
account the distribution of the Group II Principal Distribution Amount on such
Payment Date, but prior to the application of the Class B-1A Applied Realized
Loss Amount, if any, on such Payment Date) and (y) the Group II Applied Realized
Loss Amount as of such Payment Date.
"Class B-1A Certificate": Any one of the Certificates designated on the
face thereof as a Class B-1A Certificate, substantially in the form annexed
hereto as Exhibit B-6, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.
"Class B-1A Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class B-1A Certificates less the sum of (x) any amounts of the Class B-1A
Principal Distribution Amount actually distributed to the Owners of the Class
B-1A Certificates pursuant to Section 7.03(e) hereof on all prior Payment Dates
and (y) the aggregate, cumulative amount of the Class B-1A Applied Realized Loss
Amounts on all prior Payment Dates plus any amount previously distributed with
respect to principal that is recovered as a voidable preference by a trustee in
bankruptcy pursuant to a final, nonappealable order.
"Class B-1A Certificate Termination Date": The Payment Date on which the
Class B-1A Certificate Principal Balance is reduced to zero.
"Class B-1A Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class B-1A Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class B-1A
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class
B-1A Certificates as it relates to interest previously paid on the Class B-1A
Certificates.
"Class B-1A Distribution Amount": With respect to any Payment Date, the sum
of (w) the Class B- 1A Current Interest, (x) the Class B-1A Principal
Distribution Amount, if any, (y) the Class B-1A Interest Carry Forward Amount,
if any, and (z) the Class B-1A Realized Loss Amortization Amount, if any.
"Class B-1A Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
B-1A Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class B-1A Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class B-1A Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class B-1A
Pass-Through Rate.
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"Class B-1A Pass-Through Rate": For any Payment Date in any month up to and
including the month in which the Clean-Up Call Date occurs, the lesser of (i)
LIBOR plus 1.00% per annum and (ii) the Group II Available Funds Cap Date for
such Payment Date and for any month following the month in which the Clean-Up
Call Date occurs, the lessor of (i) LIBOR plus 1.50% per annum and (ii) the
Group II Available Funds Cap Rate.
"Class B-1A Principal Distribution Amount": As of any Payment Date on or
after the Group II Stepdown Date and as long as a Group II Trigger Event is not
in effect, the positive difference, if any, of the excess of (x) the aggregate
Certificate Principal Balance of the Group II Certificates (after taking into
account the payment of the Group II Class A Principal Distribution Amount, the
Class M-1A Principal Distribution Amount and the Class M-2A Principal
Distribution Amount on such Payment Date) over (y) the Group II B Target
Certificate Balance.
"Class B-1A Realized Loss Amortization Amount": As of any Payment Date, the
lesser of (x) the related Unpaid Realized Loss Amount as of such Payment Date
and (y) the excess of (i) the Group II Monthly Excess Cashflow Amount over (ii)
the sum of the Group II Extra Principal Distribution Amount, the Class M-1A
Realized Loss Amortization Amount, the Class M-2A Realized Loss Amortization
Amount, the Class M-1A Interest Carry Forward Amount, the Class M-2A Interest
Carry Forward Amount and the Class B-1A Interest Carry Forward Amount in each
case for such Payment Date.
"Class B-1F Applied Realized Loss Amount": As to any Payment Date, the
lesser of (x) the Class B-1F Certificate Principal Balance (after taking into
account the distribution of the Group I Principal Distribution Amount on such
Payment Date, but prior to the application of the Class B-1F Applied Realized
Loss Amount, if any, on such Payment Date) and (y) the Group I Applied Realized
Loss Amount as of such Payment Date.
"Class B-1F Certificate": Any one of the Certificates designated on the
face thereof as a Class B-1F Certificate, substantially in the form annexed
hereto as Exhibit B-5, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.
"Class B-1F Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class B-1F Certificates less the sum of (x) any amounts of the Class B-1F
Principal Distribution Amount actually distributed to the Owners of the Class
B-1F Certificates pursuant to Section 7.03(d) hereof on all prior Payment Dates
and (y) the aggregate, cumulative amount of the Class B-1F Applied Realized Loss
Amounts on all prior Payment Dates plus any amount previously distributed with
respect to principal that is recovered as a voidable preference by a trustee in
bankruptcy pursuant to a final, nonappealable order.
"Class B-1F Certificate Termination Date": The Payment Date on which the
Class B-1F Certificate Principal Balance is reduced to zero.
"Class B-1F Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class B-1F Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class B-1F
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class
B-1F Certificates as it relates to interest previously paid on the Class B-1F
Certificates.
"Class B-1F Distribution Amount": With respect to any Payment Date, the sum
of (w) the Class B- 1F Current Interest, (x) the Class B-1F Principal
Distribution Amount, if any, (y) the Class B-1F Interest Carry Forward Amount,
if any, and (z) the Class B-1F Realized Loss Amortization Amount, if any.
"Class B-1F Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
B-1F Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class B-1F Interest Carry Forward Amount from all previous Payment Dates
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exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class B-1F Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class B-1F
Pass-Through Rate.
"Class B-1F Pass-Through Rate": On any Payment Date, the lesser of (x)
7.89% per annum and (y) the weighted average of the Coupon Rates of the Home
Equity Loans in Group I less the sum of (A) 0.50% per annum, (B) the Trustee Fee
Rate, and (C) for Payment Dates during the Interest Only Period, the Class
A-11IO Interest Allocation Rate.
"Class B-1F Principal Distribution Amount": As of any Payment Date on or
after the Group I Stepdown Date and as long as a Group I Trigger Event is not in
effect, the positive difference, if any, of the excess of (x) the aggregate
Certificate Principal Balance of the Group I Certificates (after taking into
account the payment of the Group I Class A Principal Distribution Amount, the
Class M-1F Principal Distribution Amount and the Class M-2F Principal
Distribution Amount on such Payment Date) over (y) the Group I B Target
Certificate Balance.
"Class B-1F Realized Loss Amortization Amount": As of any Payment Date, the
lesser of (x) the Class B-1F Unpaid Realized Loss Amount as of such Payment Date
and (y) the excess of (i) the Group I Monthly Excess Cashflow Amount over (ii)
the sum of the Group I Extra Principal Distribution Amount, the Class M-1F
Realized Loss Amortization Amount, the Class M-2F Realized Loss Amortization
Amount, the Class M-1F Interest Carry Forward Amount, the Class M-2F Interest
Carry Forward Amount and the Class B-1F Interest Carry Forward Amount in each
case for such Payment Date.
"Class C Certificate": Any one of the Certificates designated on the face
thereof as a Class C Certificate, substantially in the form annexed hereto as
Exhibit C-1, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein. The Class C Certificates represent a class
of "regular interests" in the Upper-Tier REMIC.
"Class C Distribution Amount": With respect to any Payment Date, the sum
of:
(a)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class A-1 Certificate Principal Balance over (y)
the interest payable at the Class A-1 Pass-Through Rate on the Class A-1
Certificate Principal Balance; and
(b)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class A-2 Certificate Principal Balance over (y)
the interest payable at the Class A-2 Pass- Through Rate on the Class A-2
Certificate Principal Balance; and
(c)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class A-3 Certificate Principal Balance over (y)
the interest payable at the Class A-3 Pass- Through Rate on the Class A-3
Certificate Principal Balance; and
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<PAGE>
(d)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class A-4 Certificate Principal Balance over (y)
the interest payable at the Class A-4 Pass- Through Rate on the Class A-4
Certificate Principal Balance; and
(e)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class A-5 Certificate Principal Balance over (y)
the interest payable at the Class A-5 Pass- Through Rate on the Class A-5
Certificate Principal Balance; and
(f)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class A-6 Certificate Principal Balance over (y)
the interest payable at the Class A-6 Pass- Through Rate on the Class A-6
Certificate Principal Balance; and
(g)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class A-7 Certificate Principal Balance over (y)
the interest payable at the Class A-7 Pass- Through Rate on the Class A-7
Certificate Principal Balance; and
(h)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class A-8 Certificate Principal Balance over (y)
the interest payable at the Class A-8 Pass- Through Rate on the Class A-8
Certificate Principal Balance; and
(i)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class A-9 Certificate Principal Balance over (y)
the interest payable at the Class A-9 Pass- Through Rate on the Class A-9
Certificate Principal Balance; and
(j)the excess of (x) the interest payable at the Group II Net Weighted
Average Coupon Rate on the Class A-10 Certificate Principal Balance over
(y) the interest payable at the Class A-10 Pass- Through Rate on the Class
A-10 Certificate Principal Balance; and
(k)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class M-1F Certificate Principal Balance over
(y) the interest payable at the Class M-1F Pass- Through Rate on the Class
M-1F Certificate Principal Balance; and
(l)the excess of (x) the interest payable at the Group II Net Weighted
Average Coupon Rate on the Class M-1A Certificate Principal Balance over
(y) the interest payable at the Class M-1A Pass-Through Rate on the Class
M-1A Certificate Principal Balance; and
(m)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class M-2F Certificate Principal Balance over
(y) the interest payable at the Class M-2F Pass- Through Rate on the Class
M-2F Certificate Principal Balance; and
(n)the excess of (x) the interest payable at the Group II Net Weighted
Average Coupon Rate on the Class M-2A Certificate Principal Balance over
(y) the interest payable at the Class M-2A Pass-Through Rate on the Class
M-2A Certificate Principal Balance; and
(o)the excess of (x) the interest payable at the Group I Net Weighted
Average Coupon Rate on the Class B-1F Certificate Principal Balance over
(y) the interest payable at the Class B-1F Pass- Through Rate on the Class
B-1F Certificate Principal Balance; and
(p)the excess of (x) the interest payable at the Group II Net Weighted
Average Coupon Rate on the Class B-1A Certificate Principal Balance over
(y) the interest payable at the Class B-1A Pass- Through Rate on the Class
B-1A Certificate Principal Balance.
"Class M-1 Certificate": Any one of the Class M-1F Certificates or the
Class M-1A Certificates.
"Class M-1A Applied Realized Loss Amount": As to any Payment Date, the
lesser of (x) the Class M-1A Certificate Principal Balance (after taking into
account the distribution of the Group II Principal Distribution Amount on such
Payment Date, but prior to the application of the Class M-1A Applied Realized
Loss Amount, if any, on such Payment Date) and (y) the excess of (i) the Group
II Applied Realized Loss Amount as of such
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<PAGE>
Payment Date over (ii) the sum of the Class M-2A Applied Realized Loss
Amount and the Class B-1A Applied Realized Loss Amount, in each case as of such
Payment Date.
"Class M-1A Certificate": Any one of the Certificates designated on the
face thereof as a Class M- 1A Certificate, substantially in the form annexed
hereto as Exhibit B-2, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.
"Class M-1A Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class M-1A Certificates less the sum of (x) any amounts of the Class M-1A
Principal Distribution Amount actually distributed to the Owners of the Class
M-1A Certificates pursuant to Section 7.03(e) hereof on all prior Payment Dates
and (y) the aggregate, cumulative amount of Class M-1A Applied Realized Loss
Amounts on all prior Payment Dates plus any amount previously distributed with
respect to principal that is recovered as a voidable preference by a trustee in
bankruptcy pursuant to a final, nonappealable order.
"Class M-1A Certificate Termination Date": The Payment Date on which the
Class M-1A Certificate Principal Balance is reduced to zero.
"Class M-1A Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class M-1A Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class M-1A
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class
M-1A Certificates as it relates to interest previously paid on the Class M-1A
Certificates.
"Class M-1A Distribution Amount": With respect to any Payment Date, the sum
of (w) the Class M-1A Current Interest, (x) the Class M-1A Principal
Distribution Amount, if any, (y) the Class M-1A Interest Carry Forward Amount
and (z) the Class M-1A Realized Loss Amortization Amount.
"Class M-1A Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
M-1A Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class M-1A Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class M-1A Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class M-1A
Pass-Through Rate.
"Class M-1A Pass-Through Rate": For any Payment Date in any month up to and
including the month in which the Clean-Up Call Date occurs, the lesser of (i)
LIBOR plus 0.34% per annum and (ii) the Group II Available Funds Cap Rate for
such Payment Date and for any month following the month in which the Clean-Up
Call Date occurs, the lesser of (i) LIBOR plus 0.51% per annum and (ii) the
Group II Available Funds Cap Rate.
"Class M-1A Principal Distribution Amount": As of any Payment Date on or
after the Group II Stepdown Date and as long as a Group II Trigger Event is not
in effect, the positive difference, if any, of the excess of (x) the sum of (i)
the Class A-10 Certificate Principal Balance (after taking into account the
payment of the Group II Class A Principal Distribution Amount on such Payment
Date) and (ii) the Class M-1A Certificate Principal Balance immediately prior to
such Payment Date over (y) the Group II M-1 Target Certificate Balance.
"Class M-1A Realized Loss Amortization Amount": As of any Payment Date, the
lesser of (x) the Class M-1A Unpaid Realized Loss Amount as of such Payment Date
and (y) the excess of (i) the Group II Monthly Excess Cashflow Amount over (ii)
the sum of the Group II Extra Principal Distribution Amount and the Class M-1A
Interest Carry Forward Amount, in each case for such Payment Date.
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<PAGE>
"Class M-1F Applied Realized Loss Amount": As to any Payment Date, the
lesser of (x) the Class M-1F Certificate Principal Balance (after taking into
account the distribution of the Group I Principal Distribution Amount on such
Payment Date, but prior to the application of the Class M-1F Applied Realized
Loss Amount, if any, on such Payment Date) and (y) the excess of (i) the Group I
Applied Realized Loss Amount as of such Payment Date over (ii) the sum of the
Class M-2F Applied Realized Loss Amount and the Class B-1F Applied Realized Loss
Amount, in each case as of such Payment Date.
"Class M-1F Certificate": Any one of the Certificates designated on the
face thereof as a Class M-1F Certificate, substantially in the form annexed
hereto as Exhibit B-1, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.
"Class M-1F Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class M-1F Certificates less the sum of (x) any amounts of the Class M-1F
Principal Distribution Amount actually distributed to the Owners of the Class
M-1F Certificates pursuant to Section 7.03(d) hereof on all prior Payment Dates
and (y) the aggregate, cumulative amount of Class M-1F Applied Realized Loss
Amounts on all prior Payment Dates plus any amount previously distributed with
respect to principal that is recovered as a voidable preference by a trustee in
bankruptcy pursuant to a final, nonappealable order.
"Class M-1F Certificate Termination Date": The Payment Date on which the
Class M-1F Certificate Principal Balance is reduced to zero.
"Class M-1F Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class M-1F Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class M-1F
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class
M-1F Certificates as it relates to interest previously paid on the Class M-1F
Certificates.
"Class M-1F Distribution Amount": With respect to any Payment Date, the sum
of (w) the Class M- 1F Current Interest, (x) the Class M-1F Principal
Distribution Amount, if any, (y) the Class M-1F Interest Carry Forward Amount
and (z) the Class M-1F Realized Loss Amortization Amount.
"Class M-1F Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
M-1F Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class M-1F Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class M-1F Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class M-1F
Pass-Through Rate.
"Class M-1F Pass-Through Rate": The Class M-1F Pass-Through Rate shall be
the lesser of (x) 7.31% per annum and (y) the weighted average of the Coupon
Rates of the Home Equity Loans in Group I less the sum of (A) 0.50% per annum,
(B) the Trustee Fee Rate, (C) for Payment Dates during the Interest Only Period,
the Class A-11IO Interest Allocation Rate.
"Class M-1F Principal Distribution Amount": As of any Payment Date on or
after the Group I Stepdown Date and as long as a Group I Trigger Event is not in
effect, the positive difference, if any, of the excess of (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class A Certificates related to
Group I (after taking into account the payment of the Group I Class A Principal
Distribution Amount on such Payment Date) and (ii) the Class M-1F Certificate
Principal Balance immediately prior to such Payment Date over (y) the Group
IM-1 Target Certificate Balance.
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<PAGE>
"Class M-1F Realized Loss Amortization Amount": As of any Payment Date, the
lesser of (x) the Class M-1F Unpaid Realized Loss Amount as of such Payment Date
and (y) the excess of (i) the Group I Monthly Excess Cashflow Amount over (ii)
the sum of the Group I Extra Principal Distribution Amount and the Class M-1F
Interest Carry Forward Amount, in each case for such Payment Date.
"Class M-2 Certificate": Any one of the Class M-2F Certificates or the
Class M-2A Certificates.
"Class M-2A Applied Realized Loss Amount": As to any Payment Date, the
lesser of (x) the Class M-2A Certificate Principal Balance (after taking into
account the distribution of the Group II Principal Distribution Amount on such
Payment Date, but prior to the application of the Class M-2A Applied Realized
Loss Amount, if any, on such Payment Date) and (y) the excess of (i) the Group
II Applied Realized Loss Amount as of such Payment Date over (ii) the sum of the
Class B-1A Applied Realized Loss Amount and the Class M-1A Applied Realized Loss
Amount, in each case as of such Payment Date.
"Class M-2A Certificate": Any one of the Certificates designated on the
face thereof as a Class M- 2A Certificate, substantially in the form annexed
hereto as Exhibit B-4, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.
"Class M-2A Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class M-2A Certificates less the sum of (x) any amounts of the Class M-2A
Principal Distribution Amount actually distributed and to the Owners of the
Class M-2A Certificates, pursuant to Section 7.03(e) hereof on all prior Payment
Dates and (y) the aggregate, cumulative amount of Class M-2A Applied Realized
Loss Amounts on all prior Payment Dates.
"Class M-2A Certificate Termination Date": The Payment Date on which the
Class M-2A Certificate Principal Balance is reduced to zero.
"Class M-2A Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class M-2A Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class M-2A
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class
M-2A Certificates as it relates to interest previously paid on the Class M-2A
Certificates.
"Class M-2A Distribution Amount": With respect to any Payment Date, the sum
of (w) the Class M-2A Current Interest, (x) the Class M-2A Principal
Distribution Amount, if any, (y) the Class M-2A Interest Carry Forward Amount,
if any, and (z) the Class M-2A Realized Loss Amortization Amount, if any.
"Class M-2A Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
M-2A Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class M-2A Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class M-2A Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class M-2A
Pass-Through Rate.
"Class M-2A Pass-Through Rate": For any Payment Date in any month up to and
including the month in which the Clean-Up Call Date occurs, the lesser of (i)
LIBOR plus 0.58% per annum and (ii) the Group II Available Funds Cap Rate for
such Payment Date and for any month following the month in which the Clean-Up
Call Date occurs, the lesser of (i) LIBOR plus 0.87% per annum and (ii) the
Group II Available Funds Cap Rate.
"Class M-2A Principal Distribution Amount": As of any Payment Date on or
after the Stepdown Date and as long as a Group II Trigger Event is not in
effect, the positive difference, if any, of the excess of (x) the sum of (i) the
Class A-10 Certificate Principal Balance (after taking into account the payment
of the Group II Class
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<PAGE>
A Principal Distribution Amount on such Payment Date), (ii) the Class M-1A
Certificate Principal Balance (after taking into account the payment of the
Class M-1A Principal Distribution Amount on such Payment Date) and (iii) the
Class M-2A Certificate Principal Balance immediately prior to such Payment Date
over (y) the Group II M-2 Target Certificate Balance.
"Class M-2A Realized Loss Amortization Amount": As of any Payment Date, the
lesser of (x) the Class M-2A Unpaid Realized Loss Amount as of such Payment Date
and (y) the excess of (i) the Group II Monthly Excess Cashflow Amount over (ii)
the sum of the Group II Extra Principal Distribution Amount, the Class M-1A
Realized Loss Amortization Amount, the Class M-1 Interest Carry Forward Amount
and the Class M-2A Interest Carry Forward Amount, in each case for such Payment
Date.
"Class M-2F Applied Realized Loss Amount": As to any Payment Date, the
lesser of (x) the Class M-2F Certificate Principal Balance (after taking into
account the distribution of the Group I Principal Distribution Amount on such
Payment Date, but prior to the application of the Class M-2F Applied Realized
Loss Amount, if any, on such Payment Date) and (y) the excess of (i) the Group I
Applied Realized Loss Amount as of such Payment Date over (ii) the sum of the
Class B-1F Applied Realized Loss Amount and the Class M-1F Applied Realized Loss
Amount, in each case as of such Payment Date.
"Class M-2F Certificate": Any one of the Certificates designated on the
face thereof as a Class M-2F Certificate, substantially in the form annexed
hereto as Exhibit B-3, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.
"Class M-2F Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class M-2F Certificates less the sum of (x) any amounts of the Class M-2F
Principal Distribution Amount actually distributed and to the Owners of the
Class M-2F Certificates, pursuant to Section 7.03(d) hereof on all prior Payment
Dates and (y) the aggregate, cumulative amount of Class M-2F Applied Realized
Loss Amounts on all prior Payment Dates plus any amount previously distributed
with respect to principal that is recovered as a voidable preference by a
trustee in bankruptcy pursuant to a final, nonappealable order.
"Class M-2F Certificate Termination Date": The Payment Date on which the
Class M-2F Certificate Principal Balance is reduced to zero.
"Class M-2F Current Interest": With respect to any Payment Date, the amount
of interest accrued on the Class M-2F Certificate Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Class M-2F
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class
M-2F Certificates as it relates to interest previously paid on the Class M-2F
Certificates.
"Class M-2F Distribution Amount": With respect to any Payment Date, the sum
of (w) the Class M- 2F Current Interest, (x) the Class M-2F Principal
Distribution Amount, if any, (y) the Class M-2F Interest Carry Forward Amount,
if any, and (z) the Class M-2F Realized Loss Amortization Amount, if any.
"Class M-2F Interest Carry Forward Amount": With respect to any Payment
Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the Class
M-2F Current Interest as of the immediately preceding Payment Date and (B) any
unpaid Class M-2F Interest Carry Forward Amount from all previous Payment Dates
exceeds (ii) the amount of the actual distribution with respect to interest made
to the Owners of the Class M-2F Certificates on such immediately preceding
Payment Date and (y) 30 days' interest on such amount at the Class M-2F
Pass-Through Rate.
"Class M-2F Pass-Through Rate": The Class M-2F Pass-Through Rate shall be
the lesser of (i) 7.55% per annum and (ii) the weighted average of the Coupon
Rates of the Home Equity Loans in Group I less the sum
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<PAGE>
of (A) 0.50% per annum, (B) the Trustee Fee Rate, and (C) for Payment Dates
during the Interest Only Period, the Class A-11 Interest Allocation Rate.
"Class M-2F Principal Distribution Amount": As of any Payment Date on or
after the Group I Stepdown Date and as long as a Group I Trigger Event is not in
effect, the positive difference, if any, of the excess of (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class A Certificates related to
Group I (after taking into account the payment of the Group I Class A Principal
Distribution Amount on such Payment Date), (ii) the Class M-1F Certificate
Principal Balance (after taking into account the payment of the Class M-1F
Principal Distribution Amount on such Payment Date) and (iii) the Class M-2F
Certificate Principal Balance immediately prior to such Payment Date over (y)
the Group I M-2 Target Certificate Balance.
"Class M-2F Realized Loss Amortization Amount": As of any Payment Date, the
lesser of (x) the Class M-2F Unpaid Realized Loss Amount as of such Payment Date
and (y) the excess of (i) the Group I Monthly Excess Cashflow Amount over (ii)
the sum of the Group I Extra Principal Distribution Amount, the Class M-1F
Realized Loss Amortization Amount, the Class M-1 Interest Carry Forward Amount
and the Class M-2F Interest Carry Forward Amount, in each case for such Payment
Date.
"Class R Certificate": Any one of the Certificates designated on the face
thereof as a Class R Certificate, substantially in the form annexed hereto as
Exhibit C-2, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein, and evidencing an interest designated as
the "residual interest" in the Upper-Tier REMIC for the purposes of the REMIC
Provisions.
"Clean-Up Call Date": The first Monthly Remittance Date immediately
following the date on which the aggregate Loan Balances of the Home Equity Loans
has declined to $126,500,408.10 or less.
"Closing": As defined in Section 4.02 hereof.
"Code": The Internal Revenue Code of 1986, as amended.
"Compensating Interest": As defined in Section 8.10(a) hereof.
"ContiMortgage": ContiMortgage Corporation, a Delaware corporation that is
the originator of each Home Equity Loan, one of the Sellers and the Servicer.
"ContiWest": ContiWest Corporation, a Nevada corporation that is one of the
Sellers.
"Corporate Trust Office": The principal office of the Trustee at One M&T
Plaza, Buffalo, New York 14240.
"Coupon Rate": The rate of interest borne by each Note.
"Cumulative Realized Loss Termination Trigger": A Cumulative Realized Loss
Termination Event occurs on any date of determination if the amount of
Cumulative Realized Losses expressed as a percentage of the Original Aggregate
Loan Balance on any date of determination equals or exceeds the percentage for
such date set out below:
Date Percentage
---- ----------
July 1997-June 1999 1.575%
July 1999-June 2000 2.700%
July 2000-June 2001 3.600%
July 2001-June 2002 4.275%
July 2002 and thereafter 4.500%
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<PAGE>
"Cumulative Realized Loss Trigger Event": A Cumulative Realized Loss
Trigger Event occurs on any date of determination if the amount of Cumulative
Realized Losses expressed as a percentage of the Original Aggregate Loan Balance
on any date of determination equals or exceeds the percentage for such date set
out below:
Date Percentage
---- ----------
July 1997-June 1999 1.05%
July 1999-June 2000 1.80%
July 2000-June 2001 2.40%
July 2001-June 2002 2.85%
July 2002 and thereafter 3.00%
"Cumulative Realized Losses": As of any date of determination, the
aggregate amount of Realized Losses with respect to the Home Equity Loans since
the Startup Day.
"Current Interest": With respect to any Payment Date, the sum of the Class
A-1 Current Interest, the Class A-2 Current Interest, the Class A-3 Current
Interest, the Class A-4 Current Interest, the Class A-5 Current Interest, the
Class A-6 Current Interest, the Class A-7 Current Interest, the Class A-8
Current Interest, the Class A-9 Current Interest, the Class A-10 Current
Interest, the Class A-11IO Current Interest, the Class M-1F Current Interest,
the class M-1A Current Interest, the Class M-2F Current Interest, the Class M-2A
Current Interest, the Class B-1F Current Interest and the Class B-1A Current
Interest.
"Cut-Off Date": As of the close of business on May 31, 1997.
"Daily Collections": As defined in Section 8.08(c) hereof.
"Date-of-Payment Loans": Any Home Equity Loan as to which, pursuant to the
Note relating thereto, interest is computed and charged to the Mortgagor at the
Coupon Rate on the outstanding principal balance of such Note based on the
number of days elapsed between receipt of the Mortgagor's last payment through
receipt of the Mortgagor's most current payment.
"Delinquency Advance": As defined in Section 8.09(a) hereof.
"Delinquent": A Home Equity Loan is "Delinquent" if any payment due thereon
is not made by the close of business on the day such payment is scheduled to be
due. A Home Equity Loan is "30 days Delinquent" if such payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days Delinquent," "90
days Delinquent" and so on.
"Delivery Order": Each delivery order in the form set forth as Exhibit G
hereto and delivered by each Seller to the Trustee on the Startup Day pursuant
to Section 4.01 hereof.
"Depositor": ContiSecurities Asset Funding Corp., a Delaware corporation,
or any successor thereto.
"Depository": The Depository Trust Company, 7 Hanover Square, New York, New
York 10004, and any successor Depository hereafter named.
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"Designated Depository Institution": With respect to the Principal and
Interest Account, a trust account maintained by the trust department of a
federal or state chartered depository institution acting in its fiduciary
capacity, having combined capital and surplus of at least $50,000,000; provided,
however, that if the Principal and Interest Account is not maintained with the
Trustee, (i) such institution shall have a long-term debt rating of at least
"A2" by Moody's, and, if rated by Fitch, at least "A" by Fitch (ii) a short-term
debt rating of at least "A-1" by Standard & Poor's and (iii) if such Principal
and Interest Account is moved to a new institution, the Servicer shall provide
the Trustee and the Owners with a statement identifying the location of the
Principal and Interest Account.
"Determination Date": As to each Payment Date, the third Business Day next
preceding such Payment Date.
"Direct Participant" or "DTC Participant": Any broker-dealer, bank or other
financial institution for which the Depository holds Offered Certificates from
time to time as a securities depository.
"Disqualified Organization": The meaning set forth from time to time in the
definition thereof at Section 860E(e)(5) of the Code (or any successor statute
thereto) and applicable to the Trust.
"Eligible Investments": Those investments so designated pursuant to Section
7.07 hereof.
"FannieMae": FannieMae, a federally-chartered and privately-owned
corporation existing under the Federal National Mortgage Association Charter
Act, as amended, or any successor thereof.
"FannieMae Guide": FannieMae's Servicing Guide, as the same may be amended
by FannieMae from time to time, and the Servicer shall elect to apply such
amendments in accordance with Section 8.01 hereof.
"FDIC": The Federal Deposit Insurance Corporation, a corporate
instrumentality of the United States, or any successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the Emergency Home
Finance Act of 1970, as amended, or any successor thereof.
"File": The documents delivered to the Trustee pursuant to Section 3.05
hereof pertaining to a particular Home Equity Loan and any additional documents
required to be added to the File pursuant to this Agreement.
"Final Determination": As defined in Section 9.03(a) hereof.
"Final Scheduled Payment Date": For each Class of Certificates, as set out
in Section 2.08(k).
"First Mortgage Loan": A Home Equity Loan which constitutes a first
priority mortgage lien with respect to the related Property.
"Fitch": Fitch Investors Service, L.P.
"Group I": The pool of Home Equity Loans identified in the related Schedule
of Home Equity Loans as having been assigned to Group I in Schedule I-A hereto,
including any Qualified Replacement Mortgages delivered in replacement thereof.
"Group I Applied Realized Loss Amount": As of any Payment Date, the excess
of (x) the aggregate Certificate Principal Balance of the Group I Certificates
on such Payment Date, after taking into account the distribution of the Group I
Principal Distribution Amount on such Payment Date but prior to the application
of
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the Group I Applied Realized Loss Amount, if any, on such Payment Date over
(y) the aggregate outstanding Loan Balance of the Home Equity Loans in Group I
as of the last day of the related Remittance Period.
"Group I B Target Certificate Balance": As of any Payment Date on and after
the Group I Stepdown Date and as to which a Group I Trigger Event is not in
effect:
(i) if a Cumulative Realized Loss Trigger Event is not in effect on such
Payment Date, the lesser of:
(A) the product of (x) 98% and (y) the outstanding aggregate Loan
Balance of the Home Equity Loans in Group I as of the last day
of the related Remittance Period, and
(B) the outstanding aggregate Loan Balance of the Home Equity
Loans in Group I as of the last day of the related
Remittance Period minus $4,725,000; or
(ii) if a Cumulative Realized Loss Trigger Event is in effect on such
Payment Date, the product of (x) 100% minus the percentage
equivalent of a fraction, the numerator of which is $22,680,000
and the denominator of which is the outstanding aggregate Loan
Balance of the Home Equity Loans in Group I as of the last day
of the related Remittance Period and (y) the outstanding
aggregate Loan Balance of the Home Equity Loans in Group I as of
the last day of the related Remittance Period.
"Group I Certificates": The Class A Certificates (other than the Class A-10
Certificates), the Class M-1F Certificates, the Class M-2F Certificates and the
Class B-1F Certificates.
"Group I Class A Principal Distribution Amount": As of any Payment Date (a)
prior to the Group I Stepdown Date or with respect to which a Group I Trigger
Event is in effect, the lesser of (i) 100% of the Group I Principal Distribution
Amount and (ii) the aggregate Certificate Principal Balance of the Class A
Certificates related to Group I and (b) on or after the Group I Stepdown Date
and as to which a Group I Trigger Event is not in effect, the positive
difference, if any, of the excess of (x) the aggregate Certificate Principal
Balance of the Class A Certificates related to Group I immediately prior to such
Payment Date over (y) the Group I Senior Target Certificate Balance.
"Group I Cumulative Realized Losses": As of any date of determination, the
aggregate amount of Realized Losses with respect to the Home Equity Loans in
Group I since the Cut-Off Date.
"Group I Extra Principal Distribution Amount": As of any Payment Date, the
lesser of (x) the Group I Monthly Excess Interest Amount for such Payment Date
and (y) the Group I Overcollateralization Deficiency for such Payment Date.
"Group I Interest Amount Available": As of any Payment Date, the Group I
Interest Remittance Amount less the portion of the Trustee Fee related to Group
I.
"Group I Interest Remittance Amount": As of any Monthly Remittance Date,
the sum, without duplication, of (i) all interest due during the related
Remittance Period with respect to the Home Equity Loans in Group I (less the
Servicing Fee with respect to such Home Equity Loans), (ii) all Compensating
Interest paid by the Servicer on such Monthly Remittance Date with respect to
Home Equity Loans in Group I, (iii) the portion of the Substitution Amount
relating to interest on the Home Equity Loans in Group I, (iv) the portion of
any Loan Purchase Price relating to interest on any Home Equity Loan in Group I
repurchased during the related Remittance Period and (v) the portion of Net
Liquidation Proceeds relating to interest on Home Equity Loans in Group I.
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"Group I M-1 Target Certificate Balance": As of any Payment Date on and
after the Group I Stepdown Date and as to which a Group I Trigger Event is not
in effect:
(i) if a Cumulative Realized Loss Trigger Event is not in effect on such
Payment Date, the lesser of:
(A) the product of (x) 85.5% and (y) the outstanding aggregate Loan
Balance of the Home Equity Loans in Group I as of the last day
of the related Remittance Period, and
(B) the outstanding aggregate Loan Balance of the Home Equity
Loans in Group I as of the last day of the related
Remittance Period minus $4,725,000; or
(ii) if a Cumulative Realized Loss Trigger Event is in effect on such
Payment Date, the product of (x) 87.5% minus the percentage
equivalent of a fraction, the numerator of which is $22,680,000
and the denominator of which is the outstanding aggregate Loan
Balance of the Home Equity Loans in Group I as of the last day
of the related Remittance Period and (y) the outstanding
aggregate Loan Balance of the Home Equity Loans in Group I as of
the last day of the related Remittance Period.
"Group I M-2 Target Certificate Balance": As of any Payment Date on and
after the Group I Stepdown Date and as to which a Group I Trigger Event is not
in effect:
(i) if a Cumulative Realized Loss Trigger Event is not in effect on
such Payment Date, the lesser of:
(A) the product of (x) 96% and (y) the outstanding aggregate Loan
Balance of the Home Equity Loans in Group I as of the last day
of the related Remittance Period and
(B) the outstanding aggregate Loan Balance of the Home Equity
Loans in Group I as of the last day of the related
Remittance Period minus $4,725,000; or
(ii) if a Cumulative Realized Loss Trigger Event is in effect on such
Payment Date, the product of (x) 98% minus the percentage
equivalent of a fraction, the numerator of which is $22,680,000
and the denominator of which is the outstanding aggregate Loan
Balance of the Home Equity Loans in Group I as of the last day
of the related Remittance Period and (y) the outstanding
aggregate Loan Balance of the Home Equity Loans in Group I as of
the last day of the related Remittance Period.
"Group I Monthly Excess Cashflow Amount": For any Payment Date, the sum of
(x) the Group I Monthly Excess Interest Amount and (y) the Group I
Overcollateralization Release Amount for such Payment Date.
"Group I Monthly Excess Interest Amount": With respect to any Payment Date,
the excess, if any, of (i) the Group I Interest Amount Available for the related
Remittance Period over (ii) the Current Interest plus the Interest Carry Forward
Amount, if any, with respect to the Class A Certificates related to Group I on
the Group I Certificates on such Payment Date.
"Group I Net Weighted Average Coupon Rate": With respect to any Payment
Date, the weighted average of the Coupon Rates of the Home Equity Loans in Group
I (weighted by the Loan Balances of the Home Equity Loans in Group I), less the
sum of (A) 0.50% per annum, (B) the Trustee Fee Rate, and (C) for Payment Dates
during the Interest Only Period, the Class A-11IO Interest Allocation Rate.
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"Group I Overcollateralization Amount": As of any Payment Date, the
positive difference, if any, between (x) the Loan Balance of the Home Equity
Loans in Group I as of the last day of the immediately preceding Remittance
Period and (y) the aggregate Certificate Principal Balance of the Group I
Certificates (after taking into account all distributions of principal on such
Group I Certificates as of such Payment Date).
"Group I Overcollateralization Deficiency": As of any Payment Date, the
excess, if any, of (x) the Group I Targeted Overcollateralization Amount for
such Payment Date over (y) the Group I Overcollateralization Amount for such
Payment Date, calculated for this purpose after taking into account the
reduction on such Payment Date of the aggregate Certificate Principal Balance of
the Group I Certificates resulting from the distribution of the Group I
Principal Remittance Amount (but not the Group I Extra Principal Distribution
Amount) on such Payment Date, but prior to taking into account any Group I
Applied Realized Loss Amount on such Payment Date.
"Group I Overcollateralization Release Amount": As of any Payment Date, the
lesser of (x) the Group I Principal Remittance Amount for such Payment Date and
(y) the excess of (i) the Group I Overcollateralization Amount for such Payment
Date, assuming that 100% of the Group I Principal Remittance Amount is applied
on such Payment Date to the payment of principal on the Group I Certificates and
(ii) the Group I Targeted Overcollateralization Amount for such Payment Date.
"Group I Principal Distribution Amount": As of any Payment Date, the sum of
(i) the Group I Principal Remittance Amount (minus, for Payment Dates occurring
on and after the Group I Stepdown Date and with respect to which a Trigger Event
is not in effect the Group I Overcollateralization Release Amount, if any) and
(ii) the Group I Extra Principal Distribution Amount, if any.
"Group I Principal Remittance Amount": As of any Monthly Remittance Date,
the sum, without duplication, of (i) the principal actually collected by the
Servicer with respect to Home Equity Loans in Group I during the related
Remittance Period, (ii) the Loan Balance of each Home Equity Loan in Group I
that was purchased from the Trustee on or prior to such Monthly Remittance Date,
to the extent such Loan Balance was actually deposited in the Principal and
Interest Account, (iii) any Substitution Amounts relating to principal delivered
by the Seller in connection with a substitution of a Home Equity Loan in Group I
to the extent such Substitution Amounts were actually deposited in the Principal
and Interest Account on or prior to such Monthly Remittance Date, and (iv) all
Net Liquidation Proceeds actually collected by the Servicer with respect to the
Home Equity Loans in Group I during the related Remittance Period (to the extent
such Net Liquidation Proceeds related to principal).
"Group I Senior Enhancement Percentage": For any Payment Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Subordinate Certificates relating to Group I and (ii)
the Group I Overcollateralization Amount, in each case after taking into account
the distribution of the Group I Principal Distribution Amount on such Payment
Date by (y) the Loan Balance of the Home Equity Loans in Group I as of the last
day of the related Remittance Period.
"Group I Senior Specified Enhancement Percentage": On any date of
determination thereof means 26%.
"Group I Senior Target Certificate Balance": As of any Payment Date on and
after the Group I Stepdown Date and as to which a Group I Trigger Event is not
in effect:
(i) if a Cumulative Realized Loss Trigger Event is not in effect on
such Payment Date, the lesser of:
(A) the product of (x) 74% and (y) the outstanding aggregate Loan
Balance of the Home Equity Loans in Group I as of the last day
of the related Remittance Period, and
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(B) the outstanding aggregate Loan Balance of the Home Equity
Loans in Group I as of the last day of the related
Remittance Period minus $4,725,000; or
(ii) if a Cumulative Realized Loss Trigger Event is in effect on such
Payment Date, the product of (x) 76% minus the percentage
equivalent of a fraction, the numerator of which is $22,680,000
and the denominator of which is the outstanding aggregate Loan
Balance of the Home Equity Loans in Group I as of the last day
of the related Remittance Period and (y) the outstanding
aggregate Loan Balance of the Home Equity Loans in Group I as of
the last day of the related Remittance Period.
"Group I Stepdown Date": The earlier to occur of (i) the later to occur of
(x) the Payment Date in July 2000 and (y) the first Payment Date on which the
Group I Senior Enhancement Percentage (after taking into account distributions
of principal on such Payment Date) is equal to or greater than the Group I
Senior Specified Enhancement Percentage and (ii) the date on which the aggregate
Certificate Principal Balance of the Class A Certificates related to Group I has
been reduced to zero.
"Group I Stepped Up Enhancement Level": The Group I Stepped Up Enhancement
Level will be considered met on a Payment Date if (x) the Percent Below for the
Most Senior Outstanding Class relating to Group I on such Payment Date equals or
exceeds (y) 2 times the Three-Month Rolling Average of 60+ Day Delinquent Loans.
"Group I Targeted Overcollateralization Amount": On any Payment Date (x)
prior to the Group I Stepdown Date, $9,450,000 and (y) on or after the Group I
Stepdown Date (A) if a Group I Trigger Event is not in effect, the greater of
(x) 2% of the aggregate outstanding Loan Balance of the Home Equity Loans in
Group I as of the last day of the related Remittance Period and (y) $4,725,000
or (B) if a Group I Trigger Event is in effect, the Group I Targeted
Overcollateralization Amount will be equal to the Group I Targeted
Overcollateralization Amount for the immediately preceding Payment Date;
provided that, upon the occurrence and during the continuance of a Cumulative
Realized Loss Trigger Event, the Group I Targeted Overcollateralization Amount
shall be $22,680,000.
"Group I Trigger Event": A Group I Trigger Event has occurred with respect
to a Payment Date (i) if the Three-Month Rolling Average of 60+ Day Delinquent
Loans in Group I equals or exceeds one-half of the Group I Senior Enhancement
Percentage; or (ii) that if the Certificate Principal Balance of the Class A
Certificates related to Group I has been reduced to zero, a Group I Trigger
Event will have occurred if the Three-Month Rolling Average of 60+ Day
Delinquent Loans related to Group I equals or exceeds 13%; provided, further,
that, notwithstanding the foregoing clause (i) or clause (ii), a Group I Trigger
Event will not be in effect on a Payment Date if the Group I Stepped Up
Enhancement Level has been met with respect to such Payment Date.
"Group I Weighted Average Pass-Through Rate": As to any Payment Date, the
sum of (x) weighted average of the Class A-1 Pass-Through Rate, the Class A-2
Pass-Through Rate, the Class A-3 Pass-Through Rate, the Class A-4 Pass-Through
Rate, the Class A-5 Pass-Through Rate, the Class A-6 Pass-Through Rate, the
Class A-7 Pass-Through Rate, the Class A-8 Pass-Through Rate, the Class A-9
Pass-Through Rate, the Class M-1F Pass-Through Rate, the Class M-2F Pass-Through
Rate and the Class B-1F Pass-Through Rate (such rate calculated for this purpose
on the basis of 360-day year assumed to consist of twelve 30 day months)
weighted by the respective Certificate Principal Balance of the related Class as
of such Payment Date before taking into account any distributions to be made on
such Payment Date and (y) the Class A-11IO Pass-Through Rate.
"Group II": The pool of Home Equity Loans identified in the related
Schedule of Home Equity Loans as having been assigned to Group II in Schedule
I-B hereto, including any Qualified Replacement Mortgages delivered in
replacement thereof.
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"Group II Applied Realized Loss Amount": As of any Payment Date, the excess
of (x) the aggregate Certificate Principal Balance of the Group II Certificates
on such Payment Date, after taking into account the distribution of the Group II
Principal Distribution Amount on such Payment Date but prior to the application
of the Group II Applied Realized Loss Amount, if any, on such Payment Date over
(y) the aggregate outstanding Loan Balance of the Home Equity Loans in Group II
as of the last day of the related Remittance Period.
"Group II Available Funds Cap Rate": With respect to Group II, on any
Payment Date, a rate equal the Net Weighted Average Coupon Rate.
"Group II B Target Certificate Balance": As of any Payment Date on and
after the Group II Stepdown Date and as to which a Group II Trigger Event is not
in effect:
(i) if a Cumulative Realized Loss Trigger Event is not in effect on
such Payment Date, the lesser of:
(A) the product of (x) 97.5% and (y) the outstanding aggregate Loan
Balance of the Home Equity Loans in Group II as of the last day
of the related Remittance Period, and
(B) the outstanding aggregate Loan Balance of the Home Equity
Loans in Group II as of the last day of the related
Remittance Period minus $1,600,000; or
(ii) if a Cumulative Realized Loss Trigger Event is in effect on such
Payment Date, the product of (x) 100% minus the percentage
equivalent of a fraction, the numerator of which is $8,480,000
and the denominator of which is the outstanding aggregate Loan
Balance of the Home Equity Loans in Group II as of the last day
of the related Remittance Period and (y) the outstanding
aggregate Loan Balance of the Home Equity Loans in Group II as
of the last day of the related Remittance Period.
"Group II Certificates": The Class A-10 Certificates, the Class M-1A
Certificates, the Class M-2A Certificates and the Class B-1A Certificates.
"Group II Class A Principal Distribution Amount": As of any Payment Date
(a) prior to the Group II Stepdown Date or with respect to which a Group II
Trigger Event is in effect, the lesser of (i) 100% of the Group II Principal
Distribution Amount and (ii) the Class A-10 Certificate Principal Balance and
(b) on or after the Group II Stepdown Date and as to which a Group II Trigger
Event is not in effect, the positive difference, if any, of the excess of (x)
the aggregate Certificate Principal Balance of the Class A-10 Certificates
immediately prior to such Payment Date over (y) the Group II Senior Target
Certificate Balance.
"Group II Cumulative Realized Losses": As of any date of determination, the
aggregate amount of Realized Losses with respect to the Home Equity Loans in
Group II since the Cut-Off Date.
"Group II Extra Principal Distribution Amount": As of any Payment Date, the
lesser of (x) the Group II Monthly Excess Interest Amount for such Payment Date
and (y) the Group II Overcollateralization Deficiency for such Payment Date.
"Group II Interest Amount Available": As of any Payment Date, the Group II
Interest Remittance Amount less the portion of the Trustee Fee related to Group
II.
"Group II Interest Remittance Amount": As of any Monthly Remittance Date,
the sum, without duplication, of (i) all interest due during the related
Remittance Period with respect to the Home Equity Loans in Group II (less the
Servicing Fee with respect to such Home Equity Loans), (ii) all Compensating
Interest paid
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by the Servicer on such Monthly Remittance Date with respect to Home Equity
Loans in Group II, (iii) the portion of the Substitution Amount relating to
interest on the Home Equity Loans in Group II, (iv) the portion of any Loan
Purchase Price relating to interest on any Home Equity Loan in Group II
repurchased during the related Remittance Period and (v) the portion of Net
Liquidation Proceeds relating to interest on Home Equity Loans in Group II.
"Group II M-1 Target Certificate Balance": As of any Payment Date on and
after the Group II Stepdown Date and as to which a Group II Trigger Event is not
in effect:
(i) if a Cumulative Realized Loss Trigger Event is not in effect on
such Payment Date, the lesser of:
(A) the product of (x) 70% and (y) the outstanding aggregate Loan
Balance of the Home Equity Loans in Group II as of the last day
of the related Remittance Period, and
(B) the outstanding aggregate Loan Balance of the Home Equity
Loans in Group II as of the last day of the related
Remittance Period minus $1,600,000; or
(ii) if a Cumulative Realized Loss Trigger Event is in effect on such
Payment Date, the product of (x) 72.5% minus the percentage
equivalent of a fraction, the numerator of which is $8,480,000
and the denominator of which is the outstanding aggregate Loan
Balance of the Home Equity Loans in Group II as of the last day
of the related Remittance Period and (y) the outstanding
aggregate Loan Balance of the Home Equity Loans in Group II as
of the last day of the related Remittance Period.
"Group II M-2 Target Certificate Balance": As of any Payment Date on and
after the Group II Stepdown Date and as to which a Group II Trigger Event is not
in effect:
(i) if a Cumulative Realized Loss Trigger Event is not in effect on
such Payment Date, the lesser of:
(A) the product of (x) 85.625% and (y) the outstanding aggregate
Loan Balance of the Home Equity Loans in Group II as of the last
day of the related Remittance Period, and
(B) the outstanding aggregate Loan Balance of the Home Equity
Loans in Group II as of the last day of the related
Remittance Period minus $1,600,000; or
(ii) if a Cumulative Realized Loss Trigger Event is in effect on such
Payment Date, the product of (x) 88.125% minus the percentage
equivalent of a fraction, the numerator of which is $8,480,000 and
the denominator of which is the outstanding aggregate Loan Balance
of the Home Equity Loans in Group II as of the last day of the
related Remittance Period and (y) the outstanding aggregate Loan
Balance of the Home Equity Loans in Group II as of the last day of
the related Remittance Period.
"Group II Monthly Excess Cashflow Amount": For any Payment Date, the sum of
(x) the Group II Monthly Excess Interest Amount and (y) the Group II
Overcollateralization Release Amount for such Payment Date.
"Group II Monthly Excess Interest Amount": With respect to any Payment
Date, the excess, if any, of (i) the Group II Interest Amount Available for the
related Remittance Period over (ii) the Current Interest plus the Class A-10
Interest Carry Forward Amount, on the Group II Certificates on such Payment
Date.
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<PAGE>
"Group II Net Weighted Average Coupon Rate": With respect to any Payment
Date, the weighted average of the Coupon Rates of the Home Equity Loans in Group
II (weighted by the Loan Balances of the Home Equity Loans in Group II), less
the sum of (A) 1.00% per annum and (B) the Trustee Fee Rate.
"Group II Overcollateralization Amount": As of any Payment Date, the
positive difference, if any, between (x) the Loan Balance of the Home Equity
Loans in Group II as of the last day of the immediately preceding Remittance
Period and (y) the aggregate Certificate Principal Balance of the Group II
Certificates (after taking into account all distributions of principal on such
Group II Certificates as of such Payment Date).
"Group II Overcollateralization Deficiency": As of any Payment Date, the
excess, if any, of (x) the Group II Targeted Overcollateralization Amount for
such Payment Date over (y) the Group II Overcollateralization Amount for such
Payment Date, calculated for this purpose after taking into account the
reduction on such Payment Date of the aggregate Certificate Principal Balance of
the Group II Certificates resulting from the distribution of the Group II
Principal Remittance Amount (but not the Group II Extra Principal Distribution
Amount) on such Payment Date, but prior to taking into account any Group II
Applied Realized Loss Amount on such Payment Date.
"Group II Overcollateralization Release Amount": As of any Payment Date,
the lesser of (x) the Group II Principal Remittance Amount for such Payment Date
and (y) the excess of (i) the Group II Overcollateralization Amount for such
Payment Date, assuming that 100% of the Group II Principal Remittance Amount is
applied on such Payment Date to the payment of principal on the Group II
Certificates and (ii) the Group II Targeted Overcollateralization Amount for
such Payment Date.
"Group II Principal Distribution Amount": As of any Payment Date, the sum
of (i) the Group II Principal Remittance Amount (minus, for Payment Dates
occurring on and after the Group II Stepdown Date and with respect to which a
Trigger Event is not in effect, the Group II Overcollateralization Release
Amount, if any) and (ii) the Group II Extra Principal Distribution Amount, if
any.
"Group II Principal Remittance Amount": As of any Monthly Remittance Date,
the sum, without duplication, of (i) the principal actually collected by the
Servicer with respect to Home Equity Loans in Group II during the related
Remittance Period, (ii) the Loan Balance of each Home Equity Loan in Group II
that was purchased from the Trustee on or prior to such Monthly Remittance Date,
to the extent such Loan Balance was actually deposited in the Principal and
Interest Account, (iii) any Substitution Amounts relating to principal delivered
by the Seller in connection with a substitution of a Home Equity Loan in Group
II to the extent such Substitution Amounts were actually deposited in the
Principal and Interest Account on or prior to such Monthly Remittance Date, and
(iv) all Net Liquidation Proceeds actually collected by the Servicer with
respect to the Home Equity Loans in Group II during the related Remittance
Period (to the extent such Net Liquidation Proceeds related to principal).
"Group II Senior Enhancement Percentage": For any Payment Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Subordinate Certificates relating to Group II and (ii)
the Group II Overcollateralization Amount, in each case after taking into
account the distribution of the Group II Principal Distribution Amount on such
Payment Date by (y) the Loan Balance of the Home Equity Loans in Group II as of
the last day of the related Remittance Period.
"Group II Senior Specified Enhancement Percentage": On any date of
determination thereof means 50%.
"Group II Senior Target Certificate Balance": As of any Payment Date on and
after the Group II Stepdown Date and as to which a Group II Trigger Event is not
in effect:
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(i) if a Cumulative Realized Loss Trigger Event is not in effect on
such Payment Date, the lesser of:
(A) the product of (x) 50% and (y) the outstanding aggregate Loan
Balance of the Home Equity Loans in Group II as of the last day
of the related Remittance Period, and
(B) the outstanding aggregate Loan Balance of the Home Equity
Loans in Group II as of the last day of the related
Remittance Period minus $1,600,000; or
(ii) if a Cumulative Realized Loss Trigger Event is in effect on such
Payment Date, the product of (x) 52.5% minus the percentage
equivalent of a fraction, the numerator of which is $8,480,000
and the denominator of which is the outstanding aggregate Loan
Balance of the Home Equity Loans in Group II as of the last day
of the related Remittance Period and (y) the outstanding
aggregate Loan Balance of the Home Equity Loans in Group II as
of the last day of the related Remittance Period.
"Group II Stepdown Date": The earlier to occur of (i) the later to occur of
(x) the Payment Date in July 2000 and (y) the first Group II Payment Date on
which the Group II Senior Enhancement Percentage (after taking into account
distributions of principal on such Payment Date) is equal to or greater than the
Group II Senior Specified Enhancement Percentage and (ii) the date on which the
Class A-10 Certificate Principal Balance has been reduced to zero.
"Group II Stepped Up Enhancement Level": The Group II Stepped Up
Enhancement Level will be considered met on a Payment Date if (x) the Percent
Below for the Most Senior Outstanding Class relating to Group II on such Payment
Date equals or exceeds (y) 2 times the Three-Month Rolling Average of 60+ Day
Delinquent Loans.
"Group II Targeted Overcollateralization Amount": On any Payment Date (x)
prior to the Group II Stepdown Date, $3,200,000 and (y) on or after the Group II
Stepdown Date, (A) if a Group II Trigger Event is not in effect the greater of
(x) 2.5% of the aggregate outstanding Loan Balance of the Home Equity Loans in
Group II as of the last day of the related Remittance Period and (y) $1,600,000
or (B) if a (B) if a Group II Trigger Event is in effect, the Group II Targeted
Overcollateralization Amount for the immediately preceding Payment Dates;
provided, that, upon the occurrence and during the continuance of a Cumulative
Realized Loss Trigger Event, the Group II Targeted Overcollateralization Amount
shall be $8,480,000.
"Group II Trigger Event": A Group II Trigger Event has occurred with
respect to a Payment Date (i) if the Three Month Rolling Average of 60+ Day
Delinquent Loans in Group II equals or exceeds one-half of the Group II Senior
Enhancement Percentage; or (ii) that if the Class A-10 Certificate Principal
Balance has been reduced to zero, a Group II Trigger Event will have occurred if
the Three-Month Rolling Average of 60+ Day Delinquent Loans related to Group II
equals or exceeds 25%; provided, further, that, notwithstanding the foregoing
clause (i) or clause (ii), a Group II Trigger Event will not be in effect on a
Payment Date if the Group II Stepped Up Enhancement Level has been met with
respect to such Payment Date.
"Group II Weighted Average Pass-Through Rate": As to any Payment Date, the
weighted average of the Class A-10 Pass-Through Rate, the Class M-1A
Pass-Through Rate, the Class M-2A Pass-Through Rate and the Class B-1A
Pass-Through Rate weighted by the respective Certificate Principal Balance of
the related Class as of such Payment Date before taking into account any
distributions to be made on such Payment Date.
"Highest Lawful Rate": As defined in Section 11.13.
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"Home Equity Loan Group" or "Group": Group I or Group II, as the case may
be. References herein to the related Class(es) of Offered Certificates, when
used with respect to a Home Equity Loan Group, shall mean (A) in the case of
Group I, the Group I Certificates and (B) in the case of Group II, the Group II
Certificates.
"Home Equity Loans": Such of the home equity loans transferred and assigned
to the Trust pursuant to Section 3.05(a) hereof, together with any Qualified
Replacement Mortgages substituted therefor in accordance with this Agreement, as
from time to time are held as a part of the Trust Estate, the Home Equity Loans
originally so held being identified in the Schedules of Home Equity Loans. The
term "Home Equity Loan" includes the terms "First Mortgage Loan" and "Second
Mortgage Loan". The term "Home Equity Loan" includes any Home Equity Loan which
is Delinquent, which relates to a foreclosure or which relates to a Property
which is REO Property prior to such Property's disposition by the Trust. Any
home equity loan which, although intended by the parties hereto to have been,
and which purportedly was, transferred and assigned to the Trust by the
Depositor, in fact was not transferred and assigned to the Trust for any reason
whatsoever, including, without limitation, the incorrectness of the statement
set forth in Section 3.04(b)(x) hereof with respect to such home equity loan,
shall nevertheless be considered a "Home Equity Loan" for all purposes of this
Agreement.
"Indirect Participant": Any financial institution for whom any Direct
Participant holds an interest in a Offered Certificate.
"Insurance Policy": Any hazard, flood, title or primary mortgage insurance
policy relating to a Home Equity Loan plus any amount remitted under Section
8.11 hereof.
"Interest Only Period": The period from the Startup Day through and
including December 31, 1999.
"Interest Remittance Amount": As of any Monthly Remittance Date, the sum of
the Group I Interest Remittance Amount and the Group II Interest Remittance
Amount.
"LIBOR": With respect to any Accrual Period for the Group II Certificates,
the rate determined by the Trustee on the related LIBOR Determination Date on
the basis of the offered rate for one-month U.S. dollar deposits as such rate
appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such date;
provided that if such rate does not appear on Telerate Page 3750, the rate for
such date will be determined on the basis of the rates at which one-month U.S.
dollar deposits are offered by the Reference Banks at approximately 11:00 a.m.
(London time) on such date to prime banks in the London interbank market. In
such event, the Trustee will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations (rounded upwards if necessary to the nearest whole multiple of
1/16%). If fewer than two quotations are provided as requested, the rate for
that date will be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Servicer, at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loan to leading European banks.
"LIBOR Determination Date": With respect to any Accrual Period for the
Group II Certificates, the second London Business Day preceding the commencement
of such Accrual Period.
"Liquidated Loan": As defined in Section 8.13(b) hereof.
"Liquidation Expenses": Expenses, not to exceed Liquidation Proceeds, which
are incurred by the Servicer in connection with the liquidation of any defaulted
Home Equity Loan, such expenses including, without limitation, legal fees and
expenses, and any unreimbursed Servicing Advances expended by the Servicer
pursuant to Section 8.09(b) with respect to the related Home Equity Loan.
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"Liquidation Proceeds": With respect to any Liquidated Loan, any amounts
(including the proceeds of any Insurance Policy) recovered by the Servicer in
connection with such Liquidated Loan, whether through trustee's sale,
foreclosure sale or otherwise.
"Loan Balance": With respect to each Home Equity Loan and as of any date of
determination, the outstanding principal balance thereof on the Cut-Off Date,
less any principal payments relating to such Home Equity Loan included in
previous Monthly Remittance Amounts, provided, however, that the Loan Balance
for any Home Equity Loan that has become a Liquidated Loan shall be zero as of
the first day of the Remittance Period following the Remittance Period in which
such Home Equity Loan becomes a Liquidated Loan, and at all times thereafter.
"Loan Purchase Price": With respect to any Home Equity Loan purchased from
the Trust on a Monthly Remittance Date pursuant to Section 3.03, 3.04, 3.06(b),
8.10(b) or 8.13(a) hereof, an amount equal to the Loan Balance of such Home
Equity Loan as of the date of purchase (assuming that the Monthly Remittance
Amount remitted by the Servicer on such Monthly Remittance Date has already been
remitted), plus one month's interest on the outstanding Loan Balance thereof as
of the beginning of the related Remittance Period computed at the then
applicable Coupon Rate, together with (without duplication) the aggregate
amounts of (i) all unreimbursed Delinquency Advances and Servicing Advances
theretofore made with respect to such Home Equity Loan, (ii) all Delinquency
Advances and Servicing Advances which the Servicer has theretofore failed to
remit with respect to such Home Equity Loan and (iii) all reimbursed Delinquency
Advances to the extent that reimbursement is not made from the Mortgagor or from
Liquidation Proceeds from the respective Home Equity Loan.
"Loan-to-Value Ratio": As of any particular date (i) with respect to any
First Mortgage Loan, the percentage obtained by dividing the Appraised Value
into the original principal balance of the Note relating to such First Mortgage
Loan and (ii) with respect to any Second Mortgage Loan, the percentage obtained
by dividing the Appraised Value as of the date of origination of such Second
Mortgage Loan into an amount equal to the sum of (a) the remaining principal
balance of the Senior Lien note relating to such First Mortgage Loan as of the
date of origination of the related Second Mortgage Loan and (b) the original
principal balance of the Note relating to such Second Mortgage Loan.
"London Business Day": Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
"Lower-Tier A-1 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-1 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-1 Pass-Through Rate.
"Lower-Tier A-1 Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier A-2 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-2 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-2 Pass-Through Rate.
"Lower-Tier A-2 Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier A-3 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-3 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-3 Pass-Through Rate.
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"Lower-Tier A-3 Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier A-4 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-4 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-4 Pass-Through Rate.
"Lower-Tier A-4 Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier A-5 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-5 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-5 Pass-Through Rate.
"Lower-Tier A-5 Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier A-6 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-6 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-6 Pass-Through Rate.
"Lower-Tier A-6 Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier A-7 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-7 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-7 Pass-Through Rate.
"Lower-Tier A-7 Pass-Through Rate": For any Payment Date the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier A-8 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-8 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-8 Pass-Through Rate.
"Lower-Tier A-8 Pass-Through Rate": For any Payment Date the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier A-9 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-9 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-9 Pass-Through Rate.
"Lower-Tier A-9 Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier A-10 Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-10 immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier A-10 Pass-Through Rate.
"Lower-Tier A-10 Pass-Through Rate": For any Payment Date, the Group II Net
Weighted Average Coupon Rate.
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"Lower-Tier A-11IO Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
A-11IO immediately prior to such Payment Date during the related Accrual Period
at the Lower-Tier A-11IO Pass-Through Rate.
"Lower-Tier A-11IO Pass-Through Rate": During the Interest Only Period, the
sum of (x) 8.50% per annum and (y) the Trustee Fee Rate and thereafter, zero.
"Lower-Tier B-1A Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
B-1A immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier B-1A Pass-Through Rate.
"Lower-Tier B-1A Pass-Through Rate": For any Payment Date, the Group II Net
Weighted Average Coupon Rate.
"Lower-Tier B-1F Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
B-1F immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier B-1F Pass-Through Rate.
"Lower-Tier B-1F Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier Balance": As to each Class of Lower-Tier Interests and any
Payment Date, the Initial Lower-Tier Balance as set forth in Section 2.08(a)
minus all amounts distributed as principal of such Class on previous Payments
Dates pursuant to Section 7.03(d) or (e).
"Lower-Tier Group I Distribution Amount": With respect to any Payment
Date, the sum of the Lower-Tier A-1 Monthly Interest, the Lower-Tier A-2
Monthly Interest, the Lower-Tier A-3 Monthly Interest, the Lower-Tier A-4
Monthly Interest, the Lower-Tier A-5 Monthly Interest, the Lower-Tier A-6
Monthly Interest, the Lower-Tier A-7 Monthly Interest, the Lower-Tier A-8
Monthly Interest, the Lower-Tier A-9 Monthly Interest, the Lower-Tier A-11IO
Monthly Interest, the Lower-Tier B-1F Monthly Interest, the Lower-Tier M-1F
Monthly Interest, the Lower-Tier M-2F Monthly Interest, the Group I Class A
Principal Distribution Amount, the Class M-1F Principal Distribution Amount, the
Class M-2F Principal Distribution Amount and the Class B-1F Principal
Distribution Amount. Such Group I Class A Principal Distribution Amount is
allocated as follows: (a) to the Lower-Tier Interest A-9 an amount equal to the
Class A-9 Lockout Distribution Amount and (b) the remainder as follows, as a
distribution on the Lower-Tier Interest A-1 until the Lower-Tier Interest A-1
Termination Date, the Class A-1 Distribution Amount; as a distribution on the
Lower-Tier Interest A-2 until the Lower-Tier Interest A-2 Termination Date, the
Class A-2 Distribution Amount; as a distribution on the Lower-Tier Interest A-3
until the Lower-Tier Interest A-3 Termination Date, the Class A-3 Distribution
Amount; as a distribution on the Lower-Tier Interest A-4 until the Lower-Tier
Interest A-4 Termination Date, the Class A-4 Distribution Amount; as a
distribution on the Lower-Tier Interest A-5 until the Lower-Tier Interest A-5
Termination Date, the Class A-5 Distribution Amount; as a distribution on the
Lower-Tier Interest A-6 until the Lower-Tier Interest A-6 Termination Date, the
Class A-6 Distribution Amount; as a distribution on the Lower-Tier Interest A-7
until the Lower-Tier Interest A-7 Termination Date, the Class A-7 Distribution
Amount; as a distribution on the Lower-Tier Interest A-8 until the Lower-Tier
Interest A-8 Termination Date; and as a distribution on the Lower-Tier Interest
A-9 until the Lower-Tier Interest A-9 Termination Date.
"Lower-Tier Group II Distribution Amount": With respect to any Payment
Date, the sum of the Lower-Tier A-10 Monthly Interest, the Lower-Tier M-1A
Monthly Interest, the Lower-Tier M-2A Monthly Interest, the Lower-Tier B-1A
Monthly Interest, the Lower-Tier Interest OC Monthly Interest, the Group II
Class A Principal Distribution Amount, the Class M-1A Principal Distribution
Amount, the Class M-2A Principal Distribution Amount and the Class B-1A
Principal Distribution Amount.
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"Lower-Tier Interest A-1": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-2": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-3": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-4": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-5": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-6": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-7": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-8": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-9": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-10": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest A-11IO": The interest of that name established
pursuant to Section 2.08(a) hereof.
"Lower-Tier Interest B-1A": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest B-1F": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest M-1A": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest M-1F": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest M-2A": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest M-2F": The interest of that name established pursuant
to Section 2.08(a) hereof.
"Lower-Tier Interest OC": The interest of that name established pursuant to
Section 2.08(a) hereof.
"Lower-Tier Interest A-1 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-1 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-1 on such Payment Date.
"Lower-Tier Interest A-2 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-2 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-2 on such Payment Date.
"Lower-Tier Interest A-3 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-3 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-3 on such Payment Date.
"Lower-Tier Interest A-4 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-4 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-4 on such Payment Date.
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"Lower-Tier Interest A-5 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-5 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-5 on such Payment Date.
"Lower-Tier Interest A-6 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-6 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-6 on such Payment Date.
"Lower-Tier Interest A-7 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-7 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-7 on such Payment Date.
"Lower-Tier Interest A-8 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-8 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-8 on such Payment Date.
"Lower-Tier Interest A-9 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-9 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-9 on such Payment Date.
"Lower-Tier Interest A-10 Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest A-10 is reduced to zero through the
distribution made in respect of Lower-Tier Interest A-10 on such Payment Date.
"Lower-Tier Interest A-11IO Termination Date": December 15, 1999.
"Lower-Tier Interest B-1A Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest B-1A is reduced to zero through the
distribution made in respect of Lower-Tier Interest B-1A on such Payment Date.
"Lower-Tier Interest B-1F Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest B-1F is reduced to zero through the
distribution made in respect of Lower-Tier Interest B-1F on such Payment Date.
"Lower-Tier Interest M-1A Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest M-1A is reduced to zero through the
distribution made in respect of Lower-Tier Interest M-1A on such Payment Date.
"Lower-Tier Interest M-1F Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest M-1F is reduced to zero through the
distribution made in respect of Lower-Tier Interest M-1F on such Payment Date.
"Lower-Tier Interest M-2A Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest M-2A is reduced to zero through the
distribution made in respect of Lower-Tier Interest M-2A on such Payment Date.
"Lower-Tier Interest M-2A Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest M-2A is reduced to zero through the
distribution made in respect of Lower-Tier Interest M-2A on such Payment Date.
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"Lower-Tier Interest OC Monthly Interest": With respect to any Payment
Date, the amount of interest accrued on the Lower-Tier Balance of the Lower-Tier
Interest OC immediately prior to such Payment Date during the related Accrual
Period of the Lower-Tier Interest OC Pass-Through Rate.
"Lower-Tier Interest OC Pass-Through Rate": The sum of (x) 0.50% per annum
and (y) the Trustee Fee Rate.
"Lower-Tier Interest OC Termination Date": The Payment Date on which the
Lower-Tier Balance of Lower-Tier Interest OC is reduced to zero through the
distribution made in respect of Lower-Tier Interest OC on such Payment Date.
"Lower-Tier M-1A Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
M-1A immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier M-1A Pass-Through Rate.
"Lower-Tier M-1A Pass-Through Rate": For any Payment Date, the Group II Net
Weighted Average Coupon Rate.
"Lower-Tier M-1F Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
M-1F immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier M-1F Pass-Through Rate.
"Lower-Tier M-1F Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier M-2A Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
M-2A immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier M-2A Pass-Through Rate.
"Lower-Tier M-2A Pass-Through Rate": For any Payment Date, the Group II Net
Weighted Average Coupon Rate.
"Lower-Tier M-2F Monthly Interest": With respect to any Payment Date, the
amount of interest accrued on the Lower-Tier Balance of the Lower-Tier Interest
M-2F immediately prior to such Payment Date during the related Accrual Period at
the Lower-Tier M-2F Pass-Through Rate.
"Lower-Tier M-2F Pass-Through Rate": For any Payment Date, the Group I Net
Weighted Average Coupon Rate.
"Lower-Tier Pass-Through Rate": As to each of the respective Lower-Tier
Interests, the applicable "Lower-Tier Pass-Through Rate" set forth in Section
2.08 hereof.
"Lower-Tier REMIC": The segregated pool of assets referred to as the Trust
Estate, other than the Upper-Tier Group I Distribution Account and the
Upper-Tier Group II Distribution Account which are assets of the Upper-Tier
REMIC.
"Lower-Tier REMIC Residual Class": With respect to the Lower-Tier REMIC,
the interest therein designated as the "residual interest" therein for purposes
of the REMIC Provisions. The Lower-Tier REMIC Residual Class shall be
uncertificated, and shall be issuable only in Percentage Interests of 99.999% to
ContiSecurities Asset Funding II, L.L.C. and 0.001% to ContiFunding Corporation,
as Tax Matters Person. Such interests shall be non-transferrable, except that
ContiFunding Corporation may assign such interest to another person who accepts
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such assignment and the designation as Tax Matters Person pursuant to Section
11.18 hereof. The Lower-Tier REMIC Residual Class is entitled only to any
amounts at any time held in the Certificate Account and not required to be paid
to the Upper-Tier REMIC, which is expected to be zero at all times during the
term of this Agreement.
"Mezzanine Certificates": Collectively, the Class M-1 Certificates and the
Class M-2 Certificates.
"Monthly Remittance Amount": As of any Monthly Remittance Date, the sum of
(i) the Interest Remittance Amount and (ii) the Principal Remittance Amount for
such Monthly Remittance Date.
"Monthly Remittance Date": The 10th day of each month or, if such day is
not a Business Day, the Business Day succeeding such day, commencing in the
month following the Startup Day.
"Moody's": Moody's Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple interest in real property
securing a Note.
"Mortgagor": The obligor on a Note.
"Most Senior Outstanding Class": As to any Payment Date and either Group,
the most senior class of Certificates relating to such Group which has a
Certificate Principal Balance greater than zero on such Payment Date, after
taking into account all distributions on such Payment Date.
"Net Liquidation Proceeds": As to any Liquidated Loan, Liquidation Proceeds
net of Liquidation Expenses and unreimbursed Delinquency Advances relating to
such Home Equity Loan. In no event shall Net Liquidation Proceeds with respect
to any Liquidated Loan be less than zero.
"Note": The note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Home Equity Loan.
"Offered Certificates": Collectively, the Class A Certificates the
Mezzanine Certificates and the Subordinate Certificates.
"Officer's Certificate": A certificate signed by any Authorized Officer of
any Person delivering such certificate and delivered to the Trustee.
"Operative Documents": Collectively, this Agreement, the Underwriting
Agreement and the Certificates.
"Original Aggregate Loan Balance": The aggregate Loan Balances of the Home
Equity Loans as of the Cut-Off Date, i.e., $1,265,004,080.96.
"Outstanding": With respect to all Certificates of a Class, as of any date
of determination, all such Certificates theretofore executed and delivered
hereunder except:
(i) Certificates theretofore canceled by the Registrar or delivered to
the Registrar for cancellation;
(ii) Certificates or portions thereof for which full and final payment
of money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent in trust for the Owners of such Certificates;
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(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to this Agreement,
unless proof satisfactory to the Trustee is presented that any such
Certificates are held by a bona fide purchaser;
(iv) Certificates alleged to have been destroyed, lost or stolen for
which replacement Certificates have been issued as provided for in Section
5.05 hereof; and
(v) Certificates as to which the Trustee has made the final
distribution thereon, whether or not such Certificate is ever returned to
the Trustee.
"Overcollateralization Release Amount": For any Payment Date, the sum of
the Group I Overcollateralization Release Amount and the Group II
Overcollateralization Release Amount.
"Owner": The Person in whose name a Certificate is registered in the
Register to the extent described in Section 5.06 hereof; provided that solely
for the purposes of determining the exercise of any voting rights hereunder, if
any Offered Certificates are beneficially owned by a Seller or any affiliate
thereof, such Seller or such affiliate shall not be considered an Owner
hereunder.
"Paying Agent": Initially, the Trustee, and thereafter, the Trustee or any
other Person that meets the eligibility standards for the Paying Agent specified
in Section 11.15 hereof and is authorized by the Trustee and the Depositor to
make payments on the Certificates on behalf of the Trustee.
"Payment Date": Any date on which the Trustee is required to make
distributions to the Owners, which shall be the 15th day of each month or if
such day is not a Business Day, the next Business Day thereafter, commencing in
the month following the Startup Day.
"Percentage Interest": With respect to a Class of the Offered Certificates,
a fraction, expressed as a percentage, the numerator of which is the initial
Certificate Principal Balance represented by such Certificate and the
denominator of which is the aggregate initial Certificate Principal Balance
represented by all the Certificates in such Class. With respect to a Class of
the Class A-11IO Certificates a fraction, expressed as a percentage, the
numerator of which is the initial Class A-11IO Notional Principal Amount
represented by such Class A-11IO Certificate and the denominator of which is the
aggregate initial Class A- 11IO Notional Principal Amount represented by all of
the Class A-11IO Certificates. With respect to a Class C Certificate or a Class
R Certificate, the portion of the Class evidenced thereby, expressed as a
percentage, as stated on the face of such Certificate, all of which shall total
100% with respect to the related Class.
"Percent Below": As to any Payment Date and either Gorup, the percentage
equivalent of a fraction, the numerator of which is the aggregate Certificate
Principal Balance (after taking into account all distributions on such Payment
Date) of all Classes of Offered relating to such Group which are subordinate to
the Most Senior Outstanding Class, and the denominator of which is the
outstanding aggregate Loan Balance of the Home Equity Loans in the related Group
as of the last day of the related Remittance Period.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Preference Amount": With respect to the Offered Certificates, any amounts
of Current Interest and principal included in previous distributions to the
Owners of such Certificates which are recovered from such Owners as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code in accordance with a final, nonappealable order of a court having competent
jurisdiction and which have not theretofore been repaid to such Owners.
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<PAGE>
"Prepaid Installment": With respect to any Home Equity Loan, any
installment of principal thereof and interest thereon received by the Servicer
prior to the scheduled due date for such installment, intended by the Mortgagor
as an early payment thereof and not as a Prepayment with respect to such Home
Equity Loan.
"Prepayment": Any payment of principal of a Home Equity Loan which is
received by the Servicer in advance of the scheduled due date for the payment of
such principal (other than the principal portion of any Prepaid Installment),
Substitution Amounts, the portion of the purchase price of any Home Equity Loan
purchased from the Trust pursuant to Section 3.03, 3.04, 3.06(b), 8.10(b) or
8.13(a) hereof representing principal and the proceeds of any Insurance Policy
which are to be applied as a payment of principal on the related Home Equity
Loan shall be deemed to be Prepayments for all purposes of this Agreement.
"Preservation Expenses": Expenditures made by the Servicer in connection
with a foreclosed Home Equity Loan prior to the liquidation thereof, including,
without limitation, expenditures for real estate property taxes, hazard
insurance premiums, property restoration or preservation.
"Principal and Interest Account": The principal and interest account
created by the Servicer pursuant to Section 8.08(a) hereof.
"Principal Remittance Amount": As of any Monthly Remittance Date, the sum
of the Group I Principal Remittance Amount and the Group II Principal Remittance
Amount.
"Prohibited Transaction": The meaning set forth from time to time in the
definition thereof at Section 860F(a)(2) of the Code (or any successor statute
thereto) and applicable to the Trust.
"Property": The underlying property (including all building thereon)
securing a Home Equity Loan.
"Prospectus": The Prospectus dated February 19, 1997 constituting part of
the Registration Statement.
"Prospectus Supplement": The ContiMortgage Home Equity Loan Trust 1997-3
Prospectus Supplement dated June 5, 1997 to the Prospectus.
"Purchase Option Period": As defined in Section 9.03(a) hereof.
"Qualified Liquidation": The meaning set forth from time to time in the
definition thereof at Section 860F(a)(4) of the Code (or any successor statute
thereto) and applicable to the Trust.
"Qualified Mortgage": The meaning set forth from time to time in the
definition thereof at Section 860G(a)(3) of the Code (or any successor statute
thereto) and applicable to the Trust.
"Qualified Replacement Mortgage": A Home Equity Loan substituted for
another pursuant to Section 3.03, 3.04 or 3.06(b) hereof, which (i) has a Coupon
Rate at least equal to the Coupon Rate of the Home Equity Loan being replaced,
(ii) is of the same property type or is a single family dwelling and the same
occupancy status or is a primary residence as the replaced Home Equity Loan,
(iii) shall mature no later than June 1, 2027, (iv) has a Loan-to-Value Ratio as
of the Replacement Cut-Off Date no higher than the Loan-to-Value Ratio of the
replaced Home Equity Loan at such time, (v) shall be of the same or higher
credit quality classification (determined in accordance with ContiMortgage's
credit underwriting guidelines set forth in ContiMortgage's underwriting manual)
as the Home Equity Loan which such Qualified Replacement Mortgage replaces, (vi)
has a Loan Balance as of the related Replacement Cut-Off Date equal to or less
than the Loan Balance of the replaced Home Equity Loan as of such Replacement
Cut-Off Date, (vii) shall not provide for a "balloon" payment if the related
Home Equity Loan did not provide for a "balloon" payment (and if such related
Home Equity Loan provided for a "balloon" payment, such Qualified Replacement
Mortgage shall have an original maturity of not less than the original maturity
39
<PAGE>
of such related Home Equity Loan), (viii) shall be a fixed rate Home Equity Loan
if the Home Equity Loan being replaced is in Group I and shall be a first lien
adjustable rate Home Equity Loan if the Home Equity Loan being replaced is in
Group II and (ix) satisfies the criteria set forth from time to time in the
definition thereof at Section 860G(a)(3) of the Code (or any successor statute
thereto) and applicable to the Trust.
"Rating Agencies": Collectively, Moody's, Standard & Poor's and Fitch or
any successors thereto.
"Realized Loss": As to any Liquidated Loan, the amount, if any, by which
the Loan Balance thereof as of the date of liquidation is in excess of Net
Liquidation Proceeds realized thereon applied in reduction of such Loan Balance.
"Record Date": With respect to the Group I Certificates and any Payment
Date, the last day of the calendar month immediately preceding the calendar
month in which such Payment Date occurs and with respect to the Group II
Certificates, the day immediately preceding such Payment Date.
"Reference Banks": Bankers Trust Company, Barclays Bank PLC, The Bank of
Tokyo and National Westminster Bank PLC, provided that if any of the foregoing
banks are not suitable to serve as a Reference Bank, then any leading banks
selected by the Trustee which are engaged in transactions in Eurodollar deposits
in the international Eurocurrency market (i) with an established place of
business in London, (ii) not controlling, under the control of or under common
control with either Seller or any affiliate thereof, (iii) whose quotations
appear on Telerate Page 3750 on the relevant LIBOR Determination Date and (iv)
which have been designated as such by the Trustee.
"Register": The register maintained by the Registrar in accordance with
Section 5.04 hereof, in which the names of the Owners are set forth.
"Registrar": The Trustee, acting in its capacity as Registrar appointed
pursuant to Section 5.04 hereof, or any duly appointed and eligible successor
thereto.
"Registration Statement": The Registration Statement filed by the Depositor
with the Securities and Exchange Commission (Registration Number 333-19427),
including all amendments thereto and including the Prospectus relating to the
Offered Certificates constituting a part thereof.
"REMIC": A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
"REMIC Opinion": As defined in Section 3.03 hereof.
"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 and revenue rulings promulgated thereunder, as the foregoing may be
in effect from time to time.
"Remittance Period": The calendar month immediately preceding the month in
which a Monthly Remittance Date occurs.
"REO Property": A Property acquired by the Servicer on behalf of the Trust
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Home Equity Loan.
"Replacement Cut-Off Date": With respect to any Qualified Replacement
Mortgage, the first day of the calendar month in which such Qualified
Replacement Mortgage is conveyed to the Trust.
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<PAGE>
"Representation Letter": Letters to, or agreements with, the Depository to
effectuate a book entry system with respect to the Offered Certificates
registered in the Register under the nominee name of the Depository.
"Retained Certificates": Collectively, the Class C Certificates and the
Class R Certificates.
"Schedule of Home Equity Loans": Each of the schedules of Home Equity
Loans, segregated by Home Equity Loan Group, listing each Home Equity Loan in
the related Home Equity Loan Group to be conveyed on the Startup Day. Such
Schedules of Home Equity Loans shall identify each Home Equity Loan by the
Servicer's loan number and the borrower's name and address (including the state)
of the Property and shall set forth as to each Home Equity Loan the lien status
thereof (and with respect to Home Equity Loans in Group II, the margin), the
Loan-to-Value Ratio and the Loan Balance as of the Cut-Off Date the Coupon Rate
thereof, the current scheduled monthly payment of principal and interest and the
maturity of the related Note, the property type, occupancy status, Appraised
Value and original term-to-maturity thereof, whether or not such Home Equity
Loan (including related Note) has been modified and the aggregate Loan Balances
of all Home Equity Loans. Such Schedules shall also identify the Seller of each
Home Equity Loan.
"Scheduled Payment": As of any date of calculation, with respect to a Home
Equity Loan, the then stated scheduled monthly installment of principal and
interest payable thereunder which, if timely paid, would result in the full
amortization of principal over the term thereof (or, in the case of a "balloon"
Note, the term to the nominal maturity date for amortization purposes, without
regard to the actual maturity date).
"Second Mortgage Loan": A Home Equity Loan which constitutes a second
priority mortgage lien with respect to the related Property.
"Securities Act": The Securities Act of 1933, as amended.
"Sellers": ContiMortgage and ContiWest.
"Senior Lien": With respect to any Second Mortgage Loan, the mortgage loan
relating to the corresponding Property having a first priority lien.
"Servicer": ContiMortgage Corporation, a Delaware corporation, and its
permitted successors and assigns.
"Servicer Affiliate": A Person (i) controlling, controlled by or under
common control with the Servicer and (ii) which is qualified to service
residential mortgage loans.
"Servicing Advance": As defined in Section 8.09(b) and Section 8.13(a)
hereof.
"Servicing Fee": With respect to any Home Equity Loan, an amount retained
by the Servicer as compensation for servicing and administration duties relating
to such Home Equity Loan pursuant to Section 8.15 and equal to 0.50% per annum
of the then outstanding principal amount of such Home Equity Loan as of the
first day of each calendar month payable on a monthly basis.
"60+ Day Delinquent Loan": With respect to any Determination Date, all REO
Properties and each Home Equity Loan with respect to which any portion of a
Monthly Payment is, as of the last day of the prior Remittance Period, two
months or more past due (without giving effect to any grace period).
"Standard & Poor's": Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies.
"Startup Day": June 12, 1997.
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<PAGE>
"Subordinate Certificate": With respect to either Group, collectively, the
Mezzanine Certificates and the Class B Certificates relating to such Group.
"Sub-Servicer": Any Person with whom the Servicer has entered into a
Sub-Servicing Agreement and who satisfies any requirements set forth in Section
8.03 hereof in respect of the qualification of a Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the Servicer and
any Sub-Servicer relating to servicing and/or administration of certain Home
Equity Loans as permitted by Section 8.03.
"Substitution Amount": As defined in Section 3.03 hereof.
"Tax Matters Certificate": The Class R Certificate initially issued to
ContiFunding Corporation as the initial Tax Matters Person.
"Tax Matters Person": The Person appointed for the Trust pursuant to
Section 11.18 hereof to act as the Tax Matters Person under the Code.
"Tax Matters Person Residual Interest": The 0.001% interest in the Class R
Certificates and the Lower-Tier REMIC Residual Class, each of which shall be
issued to and held by ContiFunding Corporation throughout the term hereof unless
another Person shall accept an assignment of such interest and the designation
of Tax Matters Person pursuant to Section 11.18 hereof.
"Telerate Page 3750": The display designated as page "3750" on the Dow
Jones Telerate Capital Markets Report (or such other page as may replace page
3750 on that report for the purpose of displaying London interbank offered rates
of major banks).
"Termination Date Pass-Through Rate": A rate equal to the sum of (a) (i)
the Group I Weighted Average Pass-Through Rate in the case of the Home Equity
Loans in Group I or (ii) the Group II Weighted Average Pass-Through Rate in the
case of the Home Equity Loans in Group II and (b) any portion of the Trustee Fee
(calculated as a percentage of the outstanding principal amount of the related
Certificates) then accrued and outstanding.
"Termination Notice": As defined in Section 9.03(a) hereof.
"Three-Month Rolling Average of 60+ Day Delinquent Loans": With respect to
a Home Equity Loan Group and on a Payment Date, the fraction, expressed as a
percentage (A) the numerator of which is the sum of the following three
percentages for each of the past three Remittance Periods (x) the principal
amount of 60+ Day Delinquent Loans in such Home Equity Loan Group by (y) the
aggregate outstanding Loan Balance of the Home Equity Loans in such Home Equity
Loan Group as of the last day of the related Remittance Period for each of the
past three Remittance Periods and (B) the denominator of which is 3.
"Trust": ContiMortgage Home Equity Loan Trust 1997-3, the trust created
under this Agreement.
"Trust Estate": As defined in the conveyance clause under this Agreement.
"Trustee": Manufacturers and Traders Trust Company, a New York banking
corporation, the Corporate Trust Department of which is located on the date of
execution of this Agreement at One M&T Plaza, Buffalo, New York 14240, not in
its individual capacity but solely as Trustee under this Agreement, and any
successor hereunder.
"Trustee Fee": The fee payable monthly on each Payment Date in an amount
equal to one-twelfth of the sum of (i) 0.0018% multiplied by the
then-outstanding Aggregate Certificate Principal Balance and (ii) $4,750.
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<PAGE>
"Trustee Fee Rate": A fraction expressed as a percentage, the numerator of
which is the product of (x) 12 and (y) the Trustee Fee and the denominator of
which is the Aggregate Certificate Principal Balance.
"Underwriters": Morgan Stanley & Co. Incorporated, Bear, Stearns & Co.,
ContiFinancial Services Corporation, Credit Suisse First Boston, Greenwich
Capital Markets, Inc., Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner &
Smith, Inc.
"Unpaid Realized Loss Amount": For any Class of the Subordinate
Certificates and as to any Payment Date, the excess of (x) the aggregate
cumulative amount of related Applied Realized Loss Amounts with respect to such
Class for all prior Payment Dates over (y) the aggregate, cumulative amount of
related Realized Loss Amortization Amounts with respect to such Class for all
prior Payment Dates.
"Upper-Tier Group I Distribution Account": The Upper-Tier Group I
Distribution Account established pursuant to Section 7.02(a) hereof.
"Upper-Tier Group II Distribution Account": The Upper-Tier Group II
Distribution Account established pursuant to Section 7.02(a) hereof.
"Upper-Tier REMIC": The REMIC established pursuant to Section 2.08 hereof
with respect to the Certificates. The assets of the Upper-Tier REMIC shall
include the Upper-Tier Group I Distribution Account, the Upper-Tier Group II
Distribution Account and the right to receive the distributions deposited
therein with respect to each Lower-Tier Interest.
Section 1.02 Use of Words and Phrases.
"Herein", "hereby", "hereunder", "hereof", "hereinbefore", "hereinafter"
and other equivalent words refer to this Agreement as a whole and not solely to
the particular section of this Agreement in which any such word is used. The
definitions set forth in Section 1.01 hereof include both the singular and the
plural. Whenever used in this Agreement, any pronoun shall be deemed to include
both singular and plural and to cover all genders.
Section 1.03 Captions; Table of Contents.
The captions or headings in this Agreement and the Table of Contents are
for convenience only and in no way define, limit or describe the scope and
intent of any provisions of this Agreement.
Section 1.04 Opinions.
Each opinion with respect to the validity, binding nature and
enforceability of documents or Certificates may be qualified to the extent that
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether considered in a
proceeding or action in equity or at law) and may state that no opinion is
expressed on the availability of the remedy of specific enforcement, injunctive
relief or any other equitable remedy. Any opinion required to be furnished by
any Person hereunder must be delivered by counsel upon whose opinion the
addressee of such opinion may reasonably rely, and such opinion may state that
it is given in reasonable reliance upon an opinion of another, a copy of which
must be attached, concerning the laws of a foreign jurisdiction.
END OF ARTICLE I
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<PAGE>
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST
Section 2.01 Establishment of the Trust.
The parties hereto do hereby create and establish, pursuant to the laws of
the State of New York and this Agreement, the Trust, which, for convenience,
shall be known as "ContiMortgage Home Equity Loan Trust 1997-3" and which shall
contain two subtrusts.
Section 2.02 Office.
The office of the Trust shall be in care of the Trustee, addressed to One
M&T Plaza, Buffalo, New York 14240, Attention Corporate Trust Department, or at
such other address as the Trustee may designate by notice to the Depositor, the
Seller and the Servicer.
Section 2.03 Purposes and Powers.
The purpose of the Trust is to engage in the following activities and only
such activities: (i) the issuance of the Certificates and the acquiring, owning
and holding of Home Equity Loans and the Trust Estate in connection therewith;
(ii) activities that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith, including the
investment of moneys in accordance with this Agreement; and (iii) such other
activities as may be required in connection with conservation of the Trust
Estate and distributions to the Owners; provided, however, that nothing
contained herein shall permit the Trustee to take any action which would
adversely affect either the Lower-Tier REMIC's or the Upper-Tier REMIC's status
as a REMIC.
Section 2.04 Appointment of the Trustee; Declaration of Trust.
The Depositor hereby appoints the Trustee as trustee of the Trust effective
as of the Startup Day, to have all the rights, powers and duties set forth
herein. The Trustee hereby acknowledges and accepts such appointment, represents
and warrants its eligibility as of the Startup Day to serve as Trustee pursuant
to Section 10.08 hereof and declares that it will hold the Trust Estate in trust
upon and subject to the conditions set forth herein for the benefit of the
Owners.
Section 2.05 Expenses of the Trust.
The expenses of the Trust, including (i) the fees of the Trustee (including
any portion of the Trustee Fee not paid pursuant to Section 7.03(c) and (d)
hereof), (ii) any reasonable expenses of the Trustee, and (iii) any other
expenses of the Trust that have been reviewed by ContiMortgage, which review
shall not be required in connection with the enforcement of a remedy by the
Trustee resulting from a default under this Agreement, shall be paid directly by
ContiMortgage. ContiMortgage shall pay directly the reasonable fees and expenses
of counsel to the Trustee. The reasonable fees and expenses of the Trustee's
counsel in connection with the review and delivery of this Agreement and related
documentation shall be paid by ContiMortgage on the Startup Day.
Section 2.06 Ownership of the Trust.
On the Startup Day the ownership interests in the Trust shall be
transferred as set forth in Section 4.02 hereof, such transfer to be evidenced
by sale of the Certificates as described therein. Thereafter, transfer of any
ownership interest shall be governed by Sections 5.04 and 5.08 hereof.
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<PAGE>
Section 2.07 Situs of the Trust.
It is the intention of the parties hereto that the Trust constitute a trust
under the laws of the State of New York. The Trust will be created and
administered in, and all Accounts maintained by the Trustee on behalf of the
Trust will be located in, the State of New York. The Trust will not have any
employees and will not have any real or personal property (other than property
acquired pursuant to Section 8.13 hereof) located in any state other than in the
State of New York and payments will be received by the Trustee only in the State
of New York and payments from the Trustee will be made only from the State of
New York. The Trust's only office will be at the office of the Trustee as set
forth in Section 2.02 hereof.
Section 2.08 Miscellaneous REMIC Provisions.
(a) The beneficial ownership interest in the Lower-Tier REMIC shall be
evidenced by the interests having the characteristics and terms as follows:
<TABLE>
<CAPTION>
Initial Lower- Lower-Tier Final Scheduled
Class Designation Tier Balance Pass-Through Rate Payment Dates
----------------- ------------ ----------------- -------------
<S> <C> <C> <C>
Lower-Tier Interest A-1 $130,000,000 (1) April 15, 2007
Lower-Tier Interest A-2 135,000,000 (1) May 15, 2012
Lower-Tier Interest A-3 215,000,000 (1) May 15, 2012
Lower-Tier Interest A-4 73,000,000 (1) May 15, 2012
Lower-Tier Interest A-5 71,000,000 (1) August 15, 2013
Lower-Tier Interest A-6 36,000,000 (1) March 15, 2015
Lower-Tier Interest A-7 65,000,000 (1) May 15, 2024
Lower-Tier Interest A-8 38,600,000 (1) August 15, 2028
Lower-Tier Interest A-9 68,000,000 (1) August 15, 2028
Lower-Tier Interest A-10 259,200,000 (1) August 15, 2028
Lower-Tier Interest A-11IO $0* 8.50% December 15, 1999
Lower-Tier Interest M-1F 54,337,000 (1) August 15, 2028
Lower-Tier Interest M-1A 25,600,000 (2) August 15, 2028
Lower-Tier Interest M-2F 49,613,000 (1) August 15, 2028
Lower-Tier Interest M-2A 20,000,000 (2) August 15, 2028
Lower-Tier Interest B-1F 9,450,000 (1) August 15, 2028
Lower-Tier Interest B-1A 15,200,000 (2) August 15, 2028
Lower-Tier Interest OC $0** (3) August 15, 2028
Lower-Tier REMIC Residual Class (4) (4) August 15, 2028
</TABLE>
- - ----------
* Notional principal amount equal to the outstanding Certificate Principal
Balance of the Class A-9 Certificates during the Interest Only Period, and
thereafter, zero.
** Notional principal amount equal to the aggregate outstanding Loan Balance
of the Home Equity Loans.
(1) On any Payment Date, the Group I Net Weighted Average Coupon Rate.
(2) On any Payment Date, the Group II Net Weighted Average Coupon Rate.
(3) The sum of (x) 0.50% per annum and (y) the Trustee Fee Rate.
(4) The Lower-Tier REMIC Residual Class is not issued with a Lower-Tier Balance
or a Lower-Tier Pass-Through Rate.
(b) The Lower-Tier Interests A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, A-9,
A-10, A-11IO, M-1F, M-1A, M-2F, M-2A, B-1F and B-1A Certificates shall be issued
as non-certificated interests. The Lower- Tier REMIC Residual Class shall be
issued from the Lower-Tier REMIC as a non-certificated interest.
(c) The Depositor hereby designates Lower-Tier Interest A-1, Lower-Tier
Interest A-2, Lower- Tier Interest A-3, Lower-Tier Interest A-4, Lower-Tier
Interest A-5, Lower-Tier Interest A-6, Lower-Tier Interest A-7, Lower-Tier
Interest A-8, Lower-Tier Interest A-9, Lower-Tier Interest A-10, Lower-Tier
Interest A-11IO, Lower-Tier Interest M-1F, Lower-Tier Interest M-1A, Lower-Tier
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<PAGE>
Interest M-2F, Lower- Tier Interest M-2A, Lower-Tier Interest B-1F, Lower-Tier
Interest B-1A and Lower-Tier Interest OC as "regular interests" and the
Lower-Tier REMIC Residual Class as the single class of "residual interests" in
the Lower-Tier REMIC for purposes of the REMIC Provisions.
(d) The Depositor hereby designates 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-11IO, Class M-1F, Class M-1A, Class M- 2F, Class M-2A, Class B-1F, Class
B-1A and Class C Certificates as "regular interests," and the Class R
Certificates as the single class of "residual interests" in the Upper-Tier REMIC
for purposes of the REMIC Provisions. The Depositor hereby designates the
Lower-Tier Interest A-1, the Lower-Tier Interest A-2, the Lower-Tier Interest
A-3, the Lower-Tier Interest A-4, the Lower-Tier Interest A-5, the Lower-Tier
Interest A-6, the Lower-Tier Interest A-7, the Lower-Tier Interest A-8,
Lower-Tier Interest A-9, Lower-Tier Interest A-10, Lower-Tier Interest A-11IO,
Lower-Tier Interest M-1F, Lower-Tier Interest M-1A, Lower-Tier Interest M-2F,
Lower-Tier Interest M-2A, Lower-Tier Interest B-1F, Lower-Tier Interest B-1A,
Lower-Tier Interest OC, the Upper-Tier Group I Distribution Account and the
Upper-Tier Group II Distribution Account as the only assets of the Upper-Tier
REMIC.
(e) The Startup Day is hereby designated as the "startup day" of the
Upper-Tier REMIC and the Lower-Tier REMIC within the meaning of Section
860G(a)(9) of the Code.
(f) The Owner of the Tax Matters Person Residual Interests in the
Upper-Tier REMIC and the Lower-Tier REMIC is hereby designated as "tax matters
person" as defined in the REMIC Provisions with respect to each such REMIC.
(g) The Trust and each REMIC shall, for federal income tax purposes,
maintain books on a calendar year basis and report income on an accrual basis.
(h) The Trustee shall cause the Upper-Tier REMIC and the Lower-Tier REMIC
each to elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of the
Trust shall be resolved in a manner that preserves the validity of such election
to be treated as a REMIC. The Trustee shall report all expenses of the Trust
Estate to the Lower-Tier REMIC.
(i) For all Federal tax law purposes amounts transferred by the Trustee to
the Owners of the Class R Certificates shall be treated as distributions by the
Upper-Tier REMIC and amounts, if any, distributed on the Lower-Tier REMIC
Residual Class, if any, shall be treated as distributions by the Lower- Tier
REMIC. It is expected that there shall not be any distributions to the
Lower-Tier REMIC Residual Class.
(j) The Trustee shall provide to the Internal Revenue Service and to the
person described in Section 860(E)(e)(3) and (6) of the Code the information
described in Treasury Regulation Section 1.860D-1(b)(5)(ii), or any successor
regulation thereto with respect to both the Lower-Tier REMIC and the Upper-Tier
REMIC. Such information will be provided in the manner described in Treasury
Regulation Section 1.860E-2(a)(5), or any successor regulation thereto.
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<PAGE>
(k) For federal income tax purposes, the Final Scheduled Payment Date for
each Class of the Offered Certificates is hereby set to be the Payment Date
indicated below:
Final Scheduled
Class Payment Date
----- ------------
Class A-1 Certificates April 15, 2007
Class A-2 Certificates May 15, 2012
Class A-3 Certificates May 15, 2012
Class A-4 Certificates May 15, 2012
Class A-5 Certificates August 15, 2013
Class A-6 Certificates March 15, 2015
Class A-7 Certificates May 15, 2024
Class A-8 Certificates August 15, 2028
Class A-9 Certificates August 15, 2028
Class A-10 Certificates August 15, 2028
Class A-11IO Certificates December 15, 1999
Class M-1F Certificates August 15, 2028
Class M-1A Certificates August 15, 2028
Class M-2F Certificates August 15, 2028
Class M-2A Certificates August 15, 2028
Class B-1F Certificates August 15, 2028
Class B-1A Certificates August 15, 2028
END OF ARTICLE II
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ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE DEPOSITOR, THE SERVICER AND THE SELLERS;
COVENANT OF SELLERS TO CONVEY HOME EQUITY LOANS
Section 3.01 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the Trustee and
the Owners that as of the Startup Day:
(a) The Depositor is a corporation duly organized, validly existing and in
good standing under the laws governing its creation and existence and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
its business, or the properties owned or leased by it make such qualification
necessary. The Depositor has all requisite corporate power and authority to own
and operate its properties, to carry out its business as presently conducted and
as proposed to be conducted and to enter into and discharge its obligations
under this Agreement and the other Operative Documents to which it is a party.
(b) The execution and delivery of this Agreement by the Depositor and its
performance and compliance with the terms of this Agreement and the other
Operative Documents to which it is a party have been duly authorized by all
necessary corporate action on the part of the Depositor and will not violate the
Depositor's Certificate of Incorporation or Bylaws or constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in a breach of, any material contract, agreement or
other instrument to which the Depositor is a party or by which the Depositor is
bound or violate any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having jurisdiction over the
Depositor or any of its properties.
(c) This Agreement and the other Operative Documents to which the Depositor
is a party, assuming due authorization, execution and delivery by the other
parties hereto and thereto, each constitutes a valid, legal and binding
obligation of the Depositor, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) The Depositor is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default would materially and adversely affect the
condition (financial or other) or operations of the Depositor or its properties
or the consequences of which would materially and adversely affect its
performance hereunder or under the other Operative Documents to which the
Depositor is a party.
(e) No litigation is pending with respect to which the Depositor has
received service of process or, to the best of the Depositor's knowledge,
threatened against the Depositor which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative Documents
to which it is a party or that would materially and adversely affect the
condition (financial or otherwise) or operations of the Depositor or its
properties or might have consequences that would materially and adversely affect
its performance hereunder and under the other Operative Documents to which the
Depositor is a party.
(f) No certificate of an officer, statement furnished in writing or report
delivered pursuant to the terms hereof by the Depositor contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the certificate, statement or report not misleading.
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(g) The statements contained in the Registration Statement which describe
the Depositor or matters or activities for which the Depositor is responsible in
accordance with the Operative Documents or which are attributable to the
Depositor therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement of a material fact
with respect to the Depositor required to be stated therein or necessary to make
the statements contained therein with respect to the Depositor, in light of the
circumstances under which they were made, not misleading. The Registration
Statement does not contain any untrue statement of a material fact required to
be stated therein or omit to state any material fact necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to the Depositor that
materially adversely affects or in the future may (so far as the Depositor can
now reasonably foresee) materially adversely affect the Depositor or the Home
Equity Loans or the ownership interests therein represented by the Certificates
that has not been set forth in the Registration Statement.
(h) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Depositor makes no such representation or warranty),
that are necessary or advisable in connection with the purchase and sale of the
Certificates and the execution and delivery by the Depositor of the Operative
Documents to which it is a party, have been duly taken, given or obtained, as
the case may be, are in full force and effect on the date hereof, are not
subject to any pending proceedings or appeals (administrative, judicial or
otherwise) and either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may be obtained
or appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative Documents on
the part of the Depositor and the performance by the Depositor of its
obligations under this Agreement and such of the other Operative Documents to
which it is a party.
(i) The transactions contemplated by this Agreement are in the ordinary
course of business of the Depositor.
(j) The Depositor is not insolvent, nor will it be made insolvent by the
transfer of the Home Equity Loans, nor is the Depositor aware of any pending
insolvency.
(k) The transfer, assignment and conveyance of the Notes and the Mortgages
by the Depositor hereunder are not subject to the bulk transfer laws or any
similar statutory provisions in effect in any applicable jurisdiction.
(l) The Depositor is not transferring the Home Equity Loans to the Trustee
with any intent to hinder, delay or defraud its creditors.
It is understood and agreed that the representations and warranties set
forth in this Section 3.01 shall survive delivery of the respective Home Equity
Loans to the Trustee.
Section 3.02 Representations and Warranties of the Servicer.
The Servicer hereby represents, warrants and covenants to the Trustee and
the Owners that as of the Startup Day:
(a) The Servicer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, is, and each Sub-Servicer
is, in compliance with the laws of each state in which any Property is located
to the extent necessary to enable it to perform its obligations hereunder and is
in good standing as a
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foreign corporation in each jurisdiction in which the nature of its business, or
the properties owned or leased by it make such qualification necessary. The
Servicer and each Sub-Servicer has all requisite corporate power and authority
to own and operate its properties, to carry out its business as presently
conducted and as proposed to be conducted and to enter into and discharge its
obligations under this Agreement and the other Operative Documents to which it
is a party. The Servicer is designated as an approved seller-servicer by
FannieMae for first and second mortgage loans and has combined equity and
subordinated debt of at least $1,500,000, as determined in accordance with
generally accepted accounting principles.
(b) The execution and delivery of this Agreement by the Servicer and its
performance and compliance with the terms of this Agreement have been duly
authorized by all necessary corporate action on the part of the Servicer and
will not violate the Servicer's Certificate of Incorporation or Bylaws or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any material
contract, agreement or other instrument to which the Servicer is a party or by
which the Servicer is bound or violate any statute or any order, rule or
regulation of any court, governmental agency or body or other tribunal having
jurisdiction over the Servicer or any of its properties.
(c) This Agreement and the Operative Documents to which the Servicer is a
party, assuming due authorization, execution and delivery by the other parties
hereto and thereto, each constitutes a valid, legal and binding obligation of
the Servicer, enforceable against it in accordance with the terms hereof and
thereof, except as the enforcement hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) The Servicer is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default might have consequences that would materially
and adversely affect the condition (financial or otherwise) or operations of the
Servicer or its properties or might have consequences that would materially and
adversely affect its performance hereunder or under the other Operative
Documents to which the Servicer is a party.
(e) No litigation is pending with respect to which the Servicer has
received service of process or, to the best of the Servicer's knowledge,
threatened against the Servicer which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative Documents
to which the Servicer is a party or that would materially and adversely affect
the condition (financial or otherwise) or operations of the Servicer or its
properties or might have consequences that would materially and adversely affect
its performance hereunder and the other Operative Documents to which the
Servicer is a party.
(f) No certificate of an officer, statement furnished in writing or report
delivered pursuant to the terms hereof by the Servicer contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the certificate, statement or report not misleading.
(g) The statements contained in the Registration Statement which describe
the Servicer or matters or activities for which the Servicer is responsible in
accordance with the Operative Document or which are attributed to the Servicer
therein are true and correct in all material respects, and the Registration
Statement does not contain any untrue statement of a material fact with respect
to the Servicer or omit to state a material fact required to be stated therein
or necessary to make the statements contained therein with respect to the
Servicer, in light of the circumstances under which they were made, not
misleading.
(h) The Servicing Fee is a "current (normal) servicing fee rate" as that
term is used in Statement of Financial Accounting Standards No. 65 issued by the
Financial Accounting Standards Board. Neither the Servicer nor any affiliate
thereof will report on any financial statements any part of the Servicing Fee as
an adjustment to the sales price of the Home Equity Loans.
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(i) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Servicer makes no such representation or warranty),
that are necessary or advisable in connection with the execution and delivery by
the Servicer of the Operative Documents to which it is a party, have been duly
taken, given or obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within which any
appeal therefrom may be taken or review thereof may be obtained has expired or
no review thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by this Agreement
and the other Operative Documents on the part of the Servicer and the
performance by the Servicer of its obligations under this Agreement and such of
the other Operative Documents to which it is a party.
(j) The collection practices used by the Servicer with respect to the Home
Equity Loans have been, in all material respects, legal, proper, prudent and
customary in the mortgage servicing business and in conformity with relevant
FannieMae guidelines.
(k) The transactions contemplated by this Agreement are in the ordinary
course of business of the Servicer.
It is understood and agreed that the representations and warranties set
forth in this Section 3.02 shall survive delivery of the Home Equity Loans to
the Trustee.
Upon discovery by any of either Seller, the Servicer, any Sub-Servicer, any
Owner or the Trustee (each, for purposes of this paragraph, a party) of a breach
of any of the representations and warranties set forth in this Section 3.02
which materially and adversely affects the interests of the Owners, the party
discovering such breach shall give prompt written notice to the other parties.
Within 60 days of its discovery or its receipt of notice of breach, the Servicer
shall cure such breach in all material respects and, upon the Servicer's
continued failure to cure such breach, may thereafter be removed by the Trustee
pursuant to Section 8.20 hereof.
Section 3.03 Representations and Warranties of the Sellers.
(1) ContiMortgage hereby represents, warrants and covenants to the Trustee
and the Owners that as of the Startup Day:
(a) ContiMortgage is a corporation duly organized, validly existing and in
good standing under the laws governing its creation and existence and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
its business, or the properties owned or leased by it, make such qualification
necessary. ContiMortgage has all requisite corporate power and authority to own
and operate its properties, to carry out its business as presently conducted and
as proposed to be conducted and to enter into and discharge its obligations
under this Agreement and the other Operative Documents to which it is a party.
(b) The execution and delivery of this Agreement by ContiMortgage and its
performance and compliance with the terms of this Agreement and the other
Operative Documents to which it is a party have been duly authorized by all
necessary corporate action on the part of ContiMortgage and will not violate
ContiMortgage's Certificate of Incorporation or Bylaws or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in a breach of, any material contract, agreement or
other instrument to which ContiMortgage is a party or by which ContiMortgage is
bound or violate any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having jurisdiction over
ContiMortgage or any of its properties.
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(c) This Agreement and the other Operative Documents to which ContiMortgage
is a party, assuming due authorization, execution and delivery by the other
parties hereto and thereto, each constitutes a valid, legal and binding
obligation of ContiMortgage, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) ContiMortgage is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default would materially and adversely affect the
condition (financial or other) or operations of ContiMortgage or its properties
or the consequences of which would materially and adversely affect its
performance hereunder and under the other Operative Documents to which
ContiMortgage is a party.
(e) No litigation is pending with respect to which ContiMortgage has
received service of process or, to the best of ContiMortgage's knowledge,
threatened against ContiMortgage which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative Documents
to which it is a party or that would materially and adversely affect the
condition (financial or otherwise) or operations of ContiMortgage or its
properties or might have consequences that would materially and adversely affect
its performance hereunder and under the other Operative Documents to which
ContiMortgage is a party.
(f) No certificate of an officer, statement furnished in writing or report
delivered pursuant to the terms hereof by ContiMortgage contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the certificate, statement or report not misleading.
(g) The statements contained in the Registration Statement which describe
ContiMortgage or matters or activities for which ContiMortgage is responsible in
accordance with the Operative Documents or which are attributable to
ContiMortgage 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 ContiMortgage required to be stated therein or necessary to make
the statements contained therein with respect to ContiMortgage, in light of the
circumstances under which they were made, not misleading. The Registration
Statement does not contain any untrue statement of a material fact required to
be stated therein or omit to state any material fact necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to ContiMortgage that
materially adversely affects or in the future may (so far as ContiMortgage can
now reasonably foresee) materially adversely affect ContiMortgage or the Home
Equity Loans or the ownership interests therein represented by the Certificates
that has not been set forth in the Registration Statement.
(h) Upon the receipt of each Home Equity Loan (including the related Note)
and other items of the Trust Estate delivered by ContiMortgage to the Depositor
and by the Depositor to the Trustee under this Agreement, the Trust will have
good title to such Home Equity Loan (including the related Note) and such other
items of the Trust Estate free and clear of any lien, charge, mortgage,
encumbrance or rights of others, except as set forth in Section 3.04 (b)(ix)
(other than liens which will be simultaneously released).
(i) Neither ContiMortgage nor any affiliate thereof will report on any
financial statement any part of the Servicing Fee as an adjustment to the sales
price of the Home Equity Loans.
(j) 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 ContiMortgage makes no such representation or warranty),
that are necessary or advisable in connection with the purchase and sale of the
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Certificates and the execution and delivery by ContiMortgage of the Operative
Documents to which it is a party, have been duly taken, given or obtained, as
the case may be, are in full force and effect on the date hereof, are not
subject to any pending proceedings or appeals (administrative, judicial or
otherwise) and either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may be obtained
or appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative Documents on
the part of ContiMortgage and the performance by ContiMortgage of its
obligations under this Agreement and such of the other Operative Documents to
which it is a party.
(k) The origination practices used by ContiMortgage with respect to the
Home Equity Loans have been, in all material respects, legal, proper, prudent
and customary in the mortgage lending business.
(l) The transactions contemplated by this Agreement are in the ordinary
course of business of ContiMortgage.
(m) ContiMortgage is not insolvent, nor will it be made insolvent by the
transfer of the Home Equity Loans, nor is ContiMortgage aware of any pending
insolvency.
(n) The transfer, assignment and conveyance of the Notes and the Mortgages
by ContiMortgage hereunder are not subject to the bulk transfer laws or any
similar statutory provisions in effect in any applicable jurisdiction.
(o) ContiMortgage is not transferring the Home Equity Loans to the
Depositor with any intent to hinder, delay or defraud its creditors.
It is understood and agreed that the representations and warranties set
forth in this Section 3.03(1) shall survive delivery of the respective Home
Equity Loans to the Trustee.
Upon discovery by any of the Servicer, any Sub-Servicer, either Seller or
the Trustee (each, for purposes of this paragraph, a "party") of a breach of any
of the representations and warranties set forth in this Section 3.03 which
materially and adversely affects the interests of the Owners, the party
discovering such breach shall give prompt written notice to the other parties.
ContiMortgage hereby covenants and agrees that within 60 days of its discovery
or its receipt of notice of breach, it shall cure such breach in all material
respects or, with respect to a breach of clause (h) above, ContiMortgage may (or
may cause an affiliate of ContiMortgage to) on the Monthly Remittance Date next
succeeding such discovery or receipt of notice (i) substitute in lieu of any
Home Equity Loan not in compliance with clause (h) a Qualified Replacement
Mortgage and, if the outstanding principal amount of such Qualified Replacement
Mortgage as of the applicable Replacement Cut-Off Date is less than the Loan
Balance of such Home Equity Loan as of such Replacement Cut-Off Date, deliver an
amount equal to such difference together with the aggregate amount of (A) all
Delinquency Advances and Servicing Advances theretofore made with respect to
such Home Equity Loan and (B) all Delinquency Advances and Servicing Advances
which the Servicer has theretofore failed to remit with respect to such Home
Equity Loan (a "Substitution Amount") to the Servicer for deposit in the
Principal and Interest Account or (ii) purchase such Home Equity Loan from the
Trust at the Loan Purchase Price, which purchase price shall be delivered to the
Servicer for deposit in the Principal and Interest Account. Notwithstanding any
provision of this Agreement to the contrary, with respect to any Home Equity
Loan which is not in default or as to which no default is imminent, no
repurchase or substitution pursuant to Section 3.03, 3.04 or 3.06 shall be made
unless ContiMortgage obtains for the Trustee an opinion of counsel experienced
in federal income tax matters to the effect that such a repurchase or
substitution would not constitute a Prohibited Transaction for the Trust or any
REMIC therein or otherwise subject the Trust or any REMIC therein to tax and
would not jeopardize the status of either of the Lower-Tier REMIC or Upper-Tier
REMIC as a REMIC (a "REMIC Opinion") addressed to the Trustee and acceptable to
the Trustee. Any Home Equity Loan as to which repurchase or substitution was
delayed pursuant
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to this Section shall be repurchased or substituted for (subject to compliance
with Sections 3.03, 3.04 or 3.06, as the case may be) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such Home Equity
Loan and (b) receipt by the Trustee of a REMIC Opinion.
(2) ContiWest hereby represents, warrants and covenants to the Trustee and
the Owners that as of the Startup Day:
(a) ContiWest is a corporation duly organized, validly existing and in good
standing under the laws governing its creation and existence and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
its business, or the properties owned or leased by it, make such qualification
necessary. ContiWest has all requisite corporate power and authority to own and
operate its properties, to carry out its business as presently conducted and as
proposed to be conducted and to enter into and discharge its obligations under
this Agreement and the other Operative Documents to which it is a party.
(b) The execution and delivery of this Agreement by ContiWest and its
performance and compliance with the terms of this Agreement and the other
Operative Documents to which it is a party have been duly authorized by all
necessary corporate action on the part of ContiWest and will not violate
ContiWest's Certificate of Incorporation or Bylaws or constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in a breach of, any material contract, agreement or
other instrument to which ContiWest is a party or by which ContiWest is bound or
violate any statute or any order, rule or regulation of any court, governmental
agency or body or other tribunal having jurisdiction over ContiWest or any of
its properties.
(c) This Agreement and the other Operative Documents to which ContiWest is
a party, assuming due authorization, execution and delivery by the other parties
hereto and thereto, each constitutes a valid, legal and binding obligation of
ContiWest, enforceable against it in accordance with the terms hereof and
thereof, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) ContiWest is not in default with respect to any order or decree of any
court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default would materially and adversely affect the
condition (financial or other) or operations of ContiWest or its properties or
the consequences of which would materially and adversely affect its performance
hereunder and under the other Operative Documents to which ContiWest is a party.
(e) No litigation is pending with respect to which ContiWest has received
service of process or, to the best of ContiWest's knowledge, threatened against
ContiWest which litigation might have consequences that would prohibit its
entering into this Agreement or any other Operative Documents to which it is a
party or that would materially and adversely affect the condition (financial or
otherwise) or operations of ContiWest or its properties or might have
consequences that would materially and adversely affect its performance
hereunder and under the other Operative Documents to which ContiWest is a party.
(f) No certificate of an officer, statement furnished in writing or report
delivered pursuant to the terms hereof by ContiWest contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the certificate, statement or report not misleading.
(g) The statements contained in the Registration Statement which describe
ContiWest or matters or activities for which ContiWest is responsible in
accordance with the Operative Documents or which are attributable to ContiWest
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 ContiWest required to be stated therein
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or necessary to make the statements contained therein with respect to ContiWest,
in light of the circumstances under which they were made, not misleading. The
Registration Statement does not contain any untrue statement of a material fact
required to be stated therein or omit to state any material fact necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading. There is no fact known to ContiWest that
materially adversely affects or in the future may (so far as ContiWest can now
reasonably foresee) materially adversely affect ContiWest or the Home Equity
Loans or the ownership interests therein represented by the Certificates that
has not been set forth in the Registration Statement.
(h) Upon the receipt of each Home Equity Loan (including the related Note)
and other items of the Trust Estate delivered by ContiWest to the Depositor and
by the Depositor to the Trustee under this Agreement, the Trust will have good
title to such Home Equity Loan (including the related Note) and such other items
of the Trust Estate free and clear of any lien, charge, mortgage, encumbrance or
rights of others, except as set forth in Section 3.04 (b) (ix) (other than liens
which will be simultaneously released).
(i) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which ContiWest 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 ContiWest of the Operative
Documents to which it is a party, have been duly taken, given or obtained, as
the case may be, are in full force and effect on the date hereof, are not
subject to any pending proceedings or appeals (administrative, judicial or
otherwise) and either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may be obtained
or appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative Documents on
the part of ContiWest and the performance by ContiWest of its obligations under
this Agreement and such of the other Operative Documents to which it is a party.
(j) The transactions contemplated by this Agreement are in the ordinary
course of business of ContiWest.
(k) ContiWest is not insolvent, nor will it be made insolvent by the
transfer of the Home Equity Loans, nor is ContiWest aware of any pending
insolvency.
(l) The transfer, assignment and conveyance of the Notes and the Mortgages
by ContiWest hereunder are not subject to the bulk transfer laws or any similar
statutory provisions in effect in any applicable jurisdiction.
(m) ContiWest is not transferring the Home Equity Loans to the Depositor
with any intent to hinder, delay or defraud its creditors.
It is understood and agreed that the representations and warranties set
forth in this Section 3.03(2) shall survive delivery of the respective Home
Equity Loans to the Trustee.
Upon discovery by any of the Servicer, any Sub-Servicer, either Seller or
the Trustee (each, for purposes of this paragraph, a "party") of a breach of any
of the representations and warranties set forth in this Section 3.03 which
materially and adversely affects the interests of the Owners, the party
discovering such breach shall give prompt written notice to the other parties.
ContiWest hereby covenants and agrees that within 60 days of its discovery or
its receipt of notice of breach, it shall cure such breach in all material
respects or, with respect to a breach of clause (h) above, ContiWest may (or may
cause an affiliate of ContiWest to) on the Monthly Remittance Date next
succeeding such discovery or receipt of notice (i) substitute in lieu of any
Home Equity
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Loan not in compliance with clause (h) a Qualified Replacement Mortgage and, if
the outstanding principal amount of such Qualified Replacement Mortgage as of
the applicable Replacement Cut-Off Date is less than the Loan Balance of such
Home Equity Loan as of such Replacement Cut-Off Date, deliver an amount equal to
such difference together with the aggregate amount of (A) all Delinquency
Advances and Servicing Advances theretofore made with respect to such Home
Equity Loan and (B) all Delinquency Advances and Servicing Advances which the
Servicer has theretofore failed to remit with respect to such Home Equity Loan
(a "Substitution Amount") to the Servicer for deposit in the Principal and
Interest Account or (ii) purchase such Home Equity Loan from the Trust at the
Loan Purchase Price, which purchase price shall be delivered to the Servicer for
deposit in the Principal and Interest Account. Notwithstanding any provision of
this Agreement to the contrary, with respect to any Home Equity Loan which is
not in default or as to which no default is imminent, no repurchase or
substitution pursuant to Section 3.03, 3.04 or 3.06 shall be made unless
ContiWest obtains for the Trustee an opinion of counsel experienced in federal
income tax matters to the effect that such a repurchase or substitution would
not constitute a Prohibited Transaction for the Trust or any REMIC therein or
otherwise subject the Trust or any REMIC therein to tax and would not jeopardize
the status of either of the Lower-Tier REMIC or Upper-Tier REMIC as a REMIC (a
"REMIC Opinion") addressed to the Trustee and acceptable to the Trustee. Any
Home Equity Loan as to which repurchase or substitution was delayed pursuant to
this Section shall be repurchased or substituted for (subject to compliance with
Sections 3.03, 3.04 or 3.06, as the case may be) upon the earlier of (a) the
occurrence of a default or imminent default with respect to such Home Equity
Loan and (b) receipt by the Trustee of a REMIC Opinion.
Section 3.04 Covenants of the Sellers to Take Certain Actions with Respect
to the Home Equity Loans In Certain Situations.
(a) Upon the discovery by either Seller, the Servicer, any Sub-Servicer or
the Trustee (i) that any of the statements set forth in subsection (b) below
were untrue as of the Startup Day with the result that the interests of the
Owners are materially and adversely affected or (ii) that statements set forth
in Clauses (ix), (x), (xiii), (xxxvi), (xl), or (xli) of subsection (b) below
were untrue in any material respect as of the Startup Day, the party discovering
such breach shall give prompt written notice to the other parties. Upon the
earliest to occur of such Seller's discovery, its receipt of notice of breach
from any one of the other parties or such time as a situation resulting from an
existing statement which is untrue materially and adversely affects the
interests of the Owners, such Seller hereby covenants and warrants that it shall
promptly cure such breach in all material respects or subject to the last two
sentences of Section 3.03 it shall on the second Monthly Remittance Date next
succeeding such discovery, receipt of notice or such time (i) substitute in lieu
of each Home Equity Loan which has given rise to the requirement for action by
such Seller a Qualified Replacement Mortgage and deliver the Substitution Amount
to the Servicer for deposit in the Principal and Interest Account or (ii)
purchase such Home Equity Loan from the Trust at a purchase price equal to the
Loan Purchase Price thereof, which purchase price shall be delivered to the
Servicer for deposit in the Principal and Interest Account. Other than as
specified in Section 6.12 hereof, it is understood and agreed that the
obligation of a Seller so to substitute or purchase any Home Equity Loan as to
which such a statement set forth below is untrue in any material respect and has
not been remedied shall constitute the sole remedy respecting a discovery of any
such statement which is untrue in any material respect in this Section 3.04
available to the Owners and the Trustee.
(b) Unless otherwise specified, the information set out below specifies as
of the Startup Day:
(i) The information with respect to each Home Equity Loan and the
aggregate Loan Balance of all Home Equity Loans set forth in the related
Schedule of Home Equity Loans is true and correct as of the Cut-Off Date;
(ii) All the original or certified documentation set forth in Section
3.05 (including all material documents related thereto) with respect to
each Home Equity Loan has been or will be delivered to the Trustee on the
Startup Day or as otherwise provided in Section 3.05;
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(iii) Each Home Equity Loan being transferred to the Trust is a
Qualified Mortgage;
(iv) Each Property is improved by a single (one-to-four) family
residential dwelling, which may include condominiums and townhouses,
manufactured housing or small multifamily or mixed-use property but shall
not include co-operatives or mobile homes; provided, however, that not more
than 0.04% and 0.09% of the aggregate Loan Balance of the Home Equity Loans
in Group I and Group II, respectively, are secured by condominiums with
more than 4 stories and no more than 0.56% and 1.28% of the Loan Balance of
the Home Equity Loans in Group I and Group II, respectively, are secured by
condominiums of less than 4 stories;
(v) No Home Equity Loan in Group I has a Loan-to-Value Ratio in excess
of 85%, except 13% of such Home Equity Loans which have a Loan-to-Value
Ratio not greater than 95% and no Home Equity Loan in Group II has a
Loan-to-Value Ratio in excess of 85%, except 4.6% of such Home Equity Loans
which have a Loan-to-Value Ratio not greater than 95%;
(vi) Each Home Equity Loan is being serviced by the Servicer;
(vii) The Note related to each Home Equity Loan in Group I bears a
fixed Coupon Rate of at least 7.625% per annum, and the Note related to
each Home Equity Loan in Group II bears a current Coupon Rate of at least
5.990% per annum. The weighted average Coupon Rate of the Home Equity Loans
in Group I is at least 11.568% and the weighted average Coupon Rate of the
Home Equity Loans in Group II is at least 10.185%;
(viii) Each Note with respect to the Home Equity Loans will provide
for a schedule of substantially level and equal monthly Scheduled Payments
which are sufficient to amortize fully the principal balance of such Note
on or before its maturity date (other than Notes representing not more than
50.6% of the aggregate Loan Balance of the Initial Home Equity Loans in
Group I, which may provide for a "balloon" payment due at the end of the
15th year, which maturity date is not more than 15 years from the date of
origination);
(ix) As of the Startup Day, each Mortgage is a valid and subsisting
first or second lien of record on the Property subject in the case of any
Second Mortgage Loan only to a Senior Lien on such Property and subject in
all cases to the exceptions to title set forth in the title insurance
policy or attorney's opinion of title with respect to the related Home
Equity Loan, which exceptions are generally acceptable to banking
institutions in connection with their regular mortgage lending activities,
and such other exceptions to which similar properties are commonly subject
and which do not individually, or in the aggregate, materially and
adversely affect the benefits of the security intended to be provided by
such Mortgage;
(x) Immediately prior to the transfer and assignment of the Home
Equity Loans by the related Seller to the Depositor and by the Depositor to
the Trust herein contemplated, such Seller and the Depositor, as the case
may be, held good and indefeasible title to, and was the sole owner of,
each Home Equity Loan (including the related Note) conveyed by such Seller
subject to no liens, charges, mortgages, encumbrances or rights of others
except as set forth in clause (ix) or other liens which will be released
simultaneously with such transfer and assignment; and immediately upon the
transfer and assignment herein contemplated, the Trustee will hold good and
indefeasible title to, and be the sole owner of, each Home Equity Loan
subject to no liens, charges, mortgages, encumbrances or rights of others
except as set forth in paragraph (ix) or other liens which will be released
simultaneously with such transfer and assignment;
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(xi) As of the Startup Day, (a) no more than 0.79% and 0.51% of the
Home Equity Loans in Group I and II, respectively, as a percentage of the
outstanding aggregate Loan Balance of the Home Equity Loans are 30-59 days
Delinquent, (b) no more than 0.14% and 0.10% of the Home Equity Loans in
Group I and II, respectively, as a percentage of the outstanding aggregate
Loan Balance of the Home Equity Loans in such Group, are 60-89 days
Delinquent, (c) none of the Home Equity Loans, is 90 or more days
Delinquent, (d) no Mortgagor of any Home Equity Loan has been 30 days or
more Delinquent more than once during the 12 months immediately preceding
the Startup Day except as indicated on Schedule III attached hereto and (e)
no Mortgagor of any Home Equity Loan has been 90 or more days Delinquent
during the 12 months immediately preceding the Startup Day except as
indicated on Schedule III attached hereto.
(xii) There is no delinquent tax or assessment lien on any Property,
and each Property is free of substantial damage and is in good repair;
(xiii) There is no valid and enforceable offset, defense or
counterclaim to any Note or Mortgage, including the obligation of the
related Mortgagor to pay the unpaid principal of or interest on such Note;
(xiv) There is no mechanics' lien or claim for work, labor or material
affecting any Property which is or may be a lien prior to, or equal with,
the lien of the related Mortgage except those which are insured against by
any title insurance policy referred to in paragraph (xvi) below;
(xv) Each Home Equity Loan at the time it was made complied in all
material respects with applicable state and federal laws and regulations,
including, without limitation, the federal Truth-in-Lending Act and other
consumer protection laws, usury, equal credit opportunity, disclosure and
recording laws;
(xvi) With respect to each Home Equity Loan either (a) an attorney's
opinion of title has been obtained but no title policy has been obtained
(provided that no title policy has been obtained with respect to not more
than 1.0% of the Original Aggregate Loan Balance of the Home Equity Loans),
or (b) a lender's title insurance policy, issued in standard American Land
Title Association form by a title insurance company authorized to transact
business in the state in which the related Property is situated, in an
amount at least equal to the original balance of such Home Equity Loan
together, in the case of a Second Mortgage Loan, with the then-current
principal balance of the mortgage note relating to the Senior Lien,
insuring the mortgagee's interest under the related Home Equity Loan as the
holder of a valid first or second mortgage lien of record on the real
property described in the related Mortgage, as the case may be, subject
only to exceptions of the character referred to in paragraph (ix) above,
was effective on the date of the origination of such Home Equity Loan, and,
as of the Startup Day, such policy is valid and thereafter such policy
shall continue in full force and effect;
(xvii) Each Sub-Servicer, if any, is a qualified servicer as defined
in Section 8.03 with respect to the Home Equity Loans serviced by it;
(xviii) The improvements upon each 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 not less than
the least of (A) the outstanding principal balance of the related Home
Equity Loan (together, in the case of a Second Mortgage Loan, with the
outstanding principal balance of the Senior Lien), (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis or
(C) the full insurable value of the Property;
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(xix) If any Property is in an area identified in the Federal Register
by the Federal Emergency Management Agency as having special flood hazards,
a flood insurance policy in a form meeting the requirements of the current
guidelines of the Flood Insurance Administration is in effect with respect
to such Property with a generally acceptable carrier in an amount
representing coverage not less than the least of (A) the outstanding
principal balance of the related Home Equity Loan (together, in the case of
a Second Mortgage Loan, with the outstanding principal balance of the
Senior Lien), (B) the minimum amount required to compensate for damage or
loss on a replacement cost basis or (C) the maximum amount of insurance
that is available under the Flood Disaster Protection Act of 1973;
(xx) Each Mortgage and Note is the legal, valid and binding obligation
of the maker thereof and is enforceable in accordance with its terms,
except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law), and all parties
to each Home Equity Loan had full legal capacity to execute all documents
relating to such Home Equity Loan and convey the estate therein purported
to be conveyed;
(xxi) Each Seller has caused and will cause to be performed any and
all acts required to be performed to preserve the rights and remedies of
the Trustee in any Insurance Policies applicable to any Home Equity Loans
delivered by such Seller 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;
(xxii) As of the Startup Day, no more than 0.24% and 0.43% of the
aggregate Loan Balance of the Home Equity Loans in Group I and Group II,
respectively, will be secured by Properties located within any single zip
code area;
(xxiii) Each original Mortgage was recorded or is in the process of
being recorded, and all subsequent assignments of the original Mortgage
have been delivered for recordation or have been recorded in the
appropriate jurisdictions wherein such recordation is necessary to perfect
the lien thereof as against creditors of or purchasers from the Seller
delivering the related Home Equity Loan (or, subject to Section 3.05
hereof, are in the process of being recorded);
(xxiv) The terms of each Note and each Mortgage have not been
impaired, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interest
of the Owners and which has been delivered to the Trustee. The substance of
any such alteration or modification is reflected on the related Schedule of
Home Equity Loans;
(xxv) The proceeds of each Home Equity Loan have been fully disbursed,
and there is no obligation on the part of the mortgagee to make future
advances thereunder. Any and all requirements as to completion of any
on-site or off-site improvements and as to disbursements of any escrow
funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing or recording such Home Equity Loans were
paid;
(xxvi) The related Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(xxvii) No Home Equity Loan was originated under a buydown plan;
(xxviii) No Home Equity Loan has a shared appreciation feature, or
other contingent interest feature;
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(xxix) Each Property is located in the state identified in the
respective Schedule of Home Equity Loans and consists of one or more
parcels of real property with a residential dwelling erected thereon;
(xxx) Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Home Equity Loan in
the event the related Property is sold without the prior consent of the
mortgagee thereunder;
(xxxi) Any advances made after the date of origination of a Home
Equity Loan but prior to the Cut-Off Date have been consolidated with the
outstanding principal amount secured by the related Mortgage, and the
secured principal amount, as consolidated, bears a single interest rate and
single repayment term reflected on the respective Schedule of Home Equity
Loans. The consolidated principal amount does not exceed the original
principal amount of the related Home Equity Loan. No Note permits or
obligates the Servicer to make future advances to the related Mortgagor at
the option of the Mortgagor;
(xxxii) There is no proceeding pending or threatened for the total or
partial condemnation of any Property, nor is such a proceeding currently
occurring, and each Property is undamaged by waste, fire, water, flood,
earthquake or earth movement.
(xxxiii) All of the improvements which were included for the purposes
of determining the Appraised Value of any Property lie wholly within the
boundaries and building restriction lines of such Property, and no
improvements on adjoining properties encroach upon such Property, and are
stated in the title insurance policy and affirmatively insured;
(xxxiv) No improvement located on or being part of any Property is in
violation of any applicable zoning law or regulation. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of each Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained
from the appropriate authorities and such Property is lawfully occupied
under the applicable law;
(xxxv) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage,
and no fees or expenses are or will become payable by the Owners or the
Trust to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the related Mortgagor;
(xxxvi) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the related Property of the benefits of the security,
including (A) in the case of a Mortgage designated as a deed of trust, by
trustee's sale and (B) otherwise by judicial foreclosure. There is no
homestead or other exemption available to the related Mortgagor which would
materially interfere with the right to sell the related Property at a
trustee's sale or the right to foreclose the related Mortgage;
(xxxvii) There is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Note and no event
which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or
event of acceleration; and neither the Servicer nor the related Seller has
waived any default, breach, violation or event of acceleration;
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(xxxviii) No instrument of release or waiver has been executed in
connection with any Home Equity 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;
(xxxix) The maturity date of each Home Equity Loan is at least twelve
months prior to the maturity date of the related first mortgage loan if
such first mortgage loan provides for a balloon payment;
(xl) Each Home Equity Loan conforms, and all such Home Equity Loans in
the aggregate conform, in all material respects to the description thereof
set forth in the Prospectus Supplement;
(xli) The credit underwriting guidelines applicable to each Home
Equity Loan conform in all material respects to the description thereof set
forth in the Prospectus Supplement;
(xlii) Each Home Equity Loan was originated based upon a full
appraisal, which included an interior inspection of the subject property;
(xliii) The Home Equity Loans were not selected for inclusion in the
Trust by the Sellers on any basis intended to adversely affect the Trust;
(xliv) No more than 4.22% and 4.21% of the aggregate Loan Balance of
the Home Equity Loans in Group I and Group II, respectively, are secured by
Properties that are non-owner occupied Properties (i.e., investor-owned and
vacation);
(xlv) No more than 4.7% and 8.0% of the aggregate Loan Balance of the
Home Equity Loans in Group I and Group II, respectively, are secured by
Home Equity Loans which were originated under ContiMortgage's non-income
verification program;
(xlvi) Neither Seller has any actual knowledge that there exist 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 any Property;
(xlvii) Both Sellers were properly licensed or otherwise authorized,
to the extent required by applicable law, to originate or purchase each
Home Equity Loan; and the consummation of the transactions herein
contemplated, including, without limitation, the receipt of interest by the
Owners and the ownership of the Home Equity Loans by the Trustee as trustee
of the Trust will not involve the violation of such laws;
(xlviii) With respect to each Property subject to a ground lease (i)
the current ground lessor has been identified and all ground rents which
have previously become due and owing have been paid; (ii) the ground lease
term extends, or is automatically renewable, for at least five years beyond
the maturity date of the related Home Equity Loan; (iii) the ground lease
has been duly executed and recorded; (iv) the amount of the ground rent and
any increases therein are clearly identified in the lease and are for
predetermined amounts at predetermined times; (v) the ground rent payment
is included in the borrower's monthly payment as an expense item; (vi) the
Trust has the right to cure defaults on the ground lease; and (vii) the
terms and conditions of the leasehold do not prevent the free and absolute
marketability of the Property. As of the Cut-Off Date, the Loan Balance of
the Home Equity Loans with related Properties subject to ground leases does
not exceed 1% of the Original Aggregate Loan Balance;
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(xlix) 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;
(l) As of the Startup Day, neither Seller has received a notice of
default of any first mortgage loan secured by any Property which has not
been cured by a party other than such Seller;
(li) All of the Home Equity Loans in Group II are in a first lien
position;
(lii) As of the Cut-off Date, each Home Equity Loan has an outstanding
balance of less than $450,000;
(liii) Each Home Equity Loan is secured by a mortgage on property
which, at the time of origination of each Home Equity Loan, has an
appraised value of not more than $1,100,000;
(liv) No more than 7.24% of the Home Equity Loans in Group I and none
of the Home Equity Loans in Group II are in a second priority position; and
(lv) The weighted average margin of the Home Equity Loans in Group II
is 6.454%.
(c) In the event that any such repurchase results in a prohibited
transaction tax, the Trustee shall immediately notify the related Seller in
writing thereof and such Seller will, within 10 days of receiving notice thereof
from the Trustee, deposit the amount due from the Trust with the Trustee for the
payment thereof, including any interest and penalties, in immediately available
funds. In the event that any Qualified Replacement Mortgage is delivered by
either Seller to the Trust pursuant to Section 3.03, Section 3.04 or Section
3.06 hereof, such Seller shall be obligated to take the actions described in
Section 3.04(a) with respect to such Qualified Replacement Mortgage upon the
discovery by any of the Owners, the other Seller, the Servicer, any Sub-Servicer
or the Trustee that the statements set forth in clause (ix), (x), (xiii),
(xxxvi), (xl) or (xli) of subsection (b) above are untrue in any material
respect on the date such Qualified Replacement Mortgage is conveyed to the Trust
or that any of the other statements set forth in subsection (b) above are untrue
on the date such Qualified Replacement Mortgage is conveyed to the Trust such
that the interests of the Owners in the related Qualified Replacement Mortgage
are materially and adversely affected; provided, however, that for the purposes
of this subsection (c) the statements in subsection (b) above referring to items
"as of the Cut-Off Date" or "as of the Startup Day" shall be deemed to refer to
such items as of the date such Qualified Replacement Mortgage is conveyed to the
Trust. Notwithstanding the fact that a representation contained in subsection
(b) above may be limited to a Seller's knowledge, such limitation shall not
relieve a Seller of its repurchase obligation under this Section and Section
3.05 hereof.
(d) It is understood and agreed that the covenants set forth in this
Section 3.04 shall survive delivery of the respective Home Equity Loans
(including Qualified Replacement Mortgages) to the Trustee.
(e) The Trustee shall have no duty to conduct any affirmative investigation
other than as specifically set forth in this Agreement as to the occurrence of
any condition requiring the repurchase or substitution of any Home Equity Loan
pursuant to this Article III or the eligibility of any Home Equity Loan for the
purpose of this Agreement.
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Section 3.05 Conveyance of the Home Equity Loans and Qualified Replacement
Mortgages.
(a) On the Startup Day each Seller, concurrently with the execution and
delivery hereof, hereby transfers, assigns, sets over and otherwise conveys to
the Depositor and the Depositor, concurrently with the execution and delivery
hereof, transfers, assigns, sets over and otherwise conveys, without recourse,
to the Trust all of their respective right, title and interest in and to the
Trust Estate; provided, however, that each Seller reserves and retains all of
its right, title and interest in and to principal (including Prepayments)
collected and interest accrued on each Home Equity Loan on or prior to the
Cut-Off Date. The transfer by the Depositor of the Home Equity Loans set forth
on the Schedule of Home Equity Loans to the Trustee is absolute and is intended
by the Owners and all parties hereto to be treated as a sale by the Depositor.
It is intended that the sale, transfer, assignment and conveyance herein
contemplated constitute a sale of the Home Equity Loans conveying good title
thereto free and clear of any liens and encumbrances from each Seller to the
Depositor and from the Depositor to the Trust and that the Home Equity Loans not
be part of the Depositor's or either Seller's estate in the event of insolvency.
In the event that such conveyance is deemed to be a loan, the parties intend
that each Seller shall be deemed to have granted to the Depositor and the
Depositor shall be deemed to have granted to the Trustee a first priority
perfected security interest in the Trust Estate, and that this Agreement shall
constitute a security agreement under applicable law.
In connection with such sale, transfer, assignment, and conveyance from the
Sellers to the Depositor, each Seller has filed, in the appropriate office or
offices in the States of Delaware, Pennsylvania and Nevada, as the case may be,
a UCC-1 financing statement executed by such Seller as debtor, naming the
Depositor as secured party and listing the Home Equity Loans and the other
property described above as collateral. The characterization of a Seller as
debtor and the Depositor as secured party on such financing statements is solely
for protective purposes and shall in no way be construed as being contrary to
the intent of the parties that this transaction be treated as a sale of such
Seller's entire right, title and interest in and to the Trust Estate. In
connection with such filing, each Seller agrees that it shall cause to be filed
all necessary continuation statements thereof and to take or cause to be taken
such actions and execute such documents as are necessary to perfect and protect
the Trustee's and the Owners' interest in the Trust Estate.
In connection with such sale, transfer, assignment, and conveyance from the
Depositor to the Trustee, the Depositor has filed, in the appropriate office or
offices in the States of New York and Delaware, a UCC-1 financing statement
executed by the Depositor as debtor, naming the Trustee as secured party and
listing the Home Equity Loans and the other property described above as
collateral. The characterization of the Depositor as debtor and the Trustee as
secured party in such financing statements is solely for protective purposes and
shall in no way be construed as being contrary to the intent of the parties that
this transaction be treated as a sale of the Depositor's entire right, title and
interest in and to the Trust Estate. In connection with such filing, the
Depositor agrees that it shall cause to be filed all necessary continuation
statements thereof and to take or cause to be taken such actions and execute
such documents as are necessary to perfect and protect the Trustee's and the
Owners' interest in the Trust Estate.
(b) In connection with the transfer and assignment of the Home Equity
Loans, the Depositor agrees to:
(i) deliver without recourse to the Trustee on the Startup Day with
respect to each Home Equity Loan (A) the original Notes endorsed in blank
or to the order of the Trustee, (B) the original title insurance policy or
a copy certified by the issuer of the title insurance policy, or the
attorney's opinion of title, (C) originals or certified copies of all
intervening assignments, showing a complete chain of title from origination
to the Trustee, if any, including warehousing assignments, with evidence of
recording thereon, (D) originals of all assumption and modification
agreements, if any and (E) either: (1) the original Mortgage, with evidence
of recording thereon (if such original Mortgage has been returned to the
related Seller from the applicable recording office or a certified copy
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thereof if such original Mortgage has not been returned to the related
Seller from the applicable recording office), or (2) a copy of the Mortgage
certified by the public recording office in those instances where the
original recorded Mortgage has been lost,
(ii) cause, within 60 days following the Startup Day, assignments of
the Mortgages to "Manufacturers and Traders Trust Company, as Trustee of
ContiMortgage Home Equity Loan Trust 1997-3 under the Pooling and Servicing
Agreement dated as of June 1, 1997" to be submitted for recording in the
appropriate jurisdictions; provided, however, that the Depositor shall not
be required to record an assignment of a Mortgage if the Depositor
furnishes to the Trustee, on or before the Startup Day, at the Depositor's
expense an opinion of counsel with respect to the relevant jurisdiction
that such recording is not necessary to perfect the Trustee's interest in
the related Home Equity Loans (in form and substance and from counsel
satisfactory to the Rating Agencies); and
(iii) deliver the title insurance policy or title searches, the
original Mortgages and such recorded assignments, together with originals
or duly certified copies of any and all prior assignments, to the Trustee
within 15 days of receipt thereof by the Depositor (but in any event, with
respect to any Mortgage as to which original recording information has been
made available to the Depositor, within one year after the Startup Day).
Notwithstanding anything to the contrary contained in this Section 3.05, in
those instances where the public recording office retains the original Mortgage,
the assignment of a Mortgage or the intervening assignments of the Mortgage
after it has been recorded, the Depositor shall be deemed to have satisfied its
obligations hereunder upon delivery to the Trustee of a copy of such Mortgage,
such assignment or assignments of Mortgage certified by the public recording
office to be a true copy of the recorded original thereof.
Not later than ten days following the end of the 60-day period referred in
clause (ii) of the second preceding paragraph, each Seller shall deliver to the
Trustee a list of all Mortgages with respect to Home Equity Loans delivered by
such Seller for which no Mortgage assignment has yet been submitted for
recording by such Seller, which list shall state the reason why such Seller has
not yet submitted such Mortgage assignments for recording. With respect to any
Mortgage assignment disclosed on such list as not yet submitted for recording
for a reason other than a lack of original recording information, the Trustee
shall make an immediate demand on such Seller to prepare such Mortgage
assignments. Thereafter, the Trustee shall cooperate in executing any documents
submitted to the Trustee in connection with this provision. Following the
expiration of the 60-day period referred to in clause (ii) of the second
preceding paragraph, each Seller shall promptly prepare a Mortgage assignment
for any Mortgage with respect to Home Equity Loans delivered by such Seller for
which original recording information is subsequently received by such Seller,
and shall promptly deliver a copy of such Mortgage assignment to the Trustee.
Each Seller agrees that it will follow its normal servicing procedures and
attempt to obtain the original recording information necessary to complete a
Mortgage assignment with respect to Home Equity Loans delivered by such Seller.
In the event that a Seller is unable to obtain such recording information with
respect to any Mortgage prior to the end of the 18th calendar month following
the Startup Day and has not provided to the Trustee a Mortgage assignment with
evidence of recording thereon relating to the assignment of such Mortgage to the
Trustee, the Trustee shall notify such Seller of such Seller's obligation to
provide a completed assignment (with evidence of recording thereon) on or before
the end of the 20th calendar month following the Startup Day with respect to the
Home Equity Loans. A copy of such notice shall be sent by the Trustee to the
Rating Agencies. If no such completed assignment (with evidence of recording
thereon) is provided before the end of such 20th calendar month, the related
Home Equity Loan shall be deemed to have breached the representation contained
in clause (xxiii) of Section 3.04(b) hereof; provided, however, that if as of
the end of such 20th calendar month either Seller then required to deliver such
a completed assignment demonstrates to the satisfaction of the Trustee that it
is exercising its best efforts to obtain such completed assignment and, during
each month thereafter until such completed assignment is delivered to the
Trustee, such Seller continues to demonstrate to the satisfaction of the Trustee
that it is exercising its best efforts to obtain such completed assignment, the
related Home Equity Loan will not be deemed to have breached such
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representation. The requirement to deliver a completed assignment with evidence
of recording thereon will be deemed satisfied upon delivery of a copy of the
completed assignment certified by the applicable public recording office.
Copies of all Mortgage assignments received by the Trustee shall be
retained in the related File.
All recording required pursuant to this Section 3.05 with respect to one or
more Home Equity Loans shall be accomplished at the expense of the Seller
delivering such Home Equity Loan.
(c) In the case of Home Equity Loans which have been prepaid in full after
the Cut-Off Date and prior to the Startup Day, the Depositor, in lieu of the
foregoing, will deliver within six (6) days after the Startup Day to the Trustee
a certification of an Authorized Officer in the form set forth in Exhibit D.
(d) Each Seller shall transfer, assign, set over and otherwise convey,
without recourse, to the Trustee all right, title and interest of such Seller in
and to any Qualified Replacement Mortgage delivered to the Trustee on behalf of
the Trust by such Seller pursuant to Section 3.03, 3.04 or 3.06 hereof and all
its right, title and interest to principal and interest due on such Qualified
Replacement Mortgage after the applicable Replacement Cut-Off Date; provided,
however, that such Seller shall reserve and retain all right, title and interest
in and to payments of principal and interest due on such Qualified Replacement
Mortgage on or prior to the applicable Replacement Cut-Off Date.
(e) As to each Home Equity Loan released from the Trust in connection with
the conveyance of a Qualified Replacement Mortgage therefor, the Trustee will
transfer, assign, set over and otherwise convey without recourse or
representation, on the order of the Seller delivering such Home Equity Loan, all
of its right, title and interest in and to such released Home Equity Loan and
all the Trust's right, title and interest to principal and interest due on such
released Home Equity Loan after the applicable Replacement Cut-Off Date;
provided, however, that the Trust shall reserve and retain all right, title and
interest in and to payments of principal and interest due on such released Home
Equity Loan on or prior to the applicable Replacement Cut-Off Date.
(f) In connection with any transfer and assignment of a Qualified
Replacement Mortgage to the Trustee on behalf of the Trust, each Seller agrees
to (i) deliver without recourse to the Trustee on the date of delivery of such
Qualified Replacement Mortgage the original Note relating thereto, endorsed in
blank or to the order of the Trustee, (ii) cause promptly to be recorded an
assignment in the appropriate jurisdictions, (iii) deliver the original
Qualified Replacement Mortgage and such recorded assignment, together with
original or duly certified copies of any and all prior assignments, to the
Trustee within 15 days of receipt thereof by such Seller (but in any event
within 120 days after the date of conveyance of such Qualified Replacement
Mortgage) and (iv) deliver the title insurance policy, or where no such policy
is required to be provided under Section 3.05(b)(i)(B), the other evidence of
title in the same manner required in Section 3.05(b)(i)(B).
(g) As to each Home Equity Loan released from the Trust in connection with
the conveyance of a Qualified Replacement Mortgage the Trustee shall deliver on
the date of conveyance of such Qualified Replacement Mortgage and on the order
of the Seller delivering such Qualified Replacement Mortgage (i) the original
Note relating thereto, endorsed without recourse or representation, to such
Seller, (ii) the original Mortgage so released and all assignments relating
thereto and (iii) such other documents as constituted the File with respect
thereto.
(h) If a Mortgage assignment is lost during the process of recording, or is
returned from the recorder's office unrecorded due to a defect therein, the
Seller that delivered the corresponding Home Equity Loan shall prepare a
substitute assignment or cure such defect, as the case may be, and thereafter
cause each such assignment to be duly recorded.
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Section 3.06 Acceptance by Trustee; Certain Substitutions of
Home Equity Loans; Certification by Trustee.
(a) The Trustee agrees to execute and deliver on the Startup Day an
acknowledgment of receipt of the items delivered by each of the Sellers and the
Depositor in the form attached as Exhibit E hereto, and declares that it will
hold such documents and any amendments, replacement or supplements thereto, as
well as any other assets included in the definitions of Trust Estate and
delivered to the Trustee, as Trustee in trust upon and subject to the conditions
set forth herein for the benefit of the Owners. The Trustee agrees, for the
benefit of the Owners, to review such items within 45 days after the Startup Day
(or, with respect to any document delivered after the Startup Day, within 45
days of receipt and with respect to any Qualified Replacement Mortgage, within
45 days after the assignment thereof) and to deliver to the Depositor, each of
the Sellers and the Servicer a certification in the form attached hereto as
Exhibit F (a "Pool Certification") to the effect that, as to each Home Equity
Loan listed in the Schedule of Home Equity Loans (other than any Home Equity
Loan paid in full or any Home Equity Loan specifically identified in such Pool
Certification as not covered by such Pool Certification), (i) all documents
required to be delivered to it pursuant to Section 3.05(b)(i) of this Agreement
are in its possession, (ii) such documents have been reviewed by it and have not
been mutilated, damaged or torn and relate to such Home Equity Loan and (iii)
based on its examination and only as to the foregoing documents, the information
set forth on the Schedule of Home Equity Loans accurately reflects the
information set forth in the File. The Trustee shall have no responsibility for
reviewing any File except as expressly provided in this subsection 3.06(a).
Without limiting the effect of the preceding sentence, in reviewing any File,
the Trustee shall have no responsibility for determining whether any document is
valid and binding, whether the text of any assignment is in proper form (except
to determine if the Trustee is the assignee), whether any document has been
recorded in accordance with the requirements of any applicable jurisdiction or
whether a blanket assignment is permitted in any applicable jurisdiction, but
shall only be required to determine whether a document has been executed, that
it appears to be what it purports to be, and, where applicable, that it purports
to be recorded. The Trustee shall be under no duty or obligation to inspect,
review or examine any such documents, instruments, certificates or other papers
to determine that they are genuine, enforceable, or appropriate for the
represented purpose or that they are other than what they purport to be on their
face, nor shall the Trustee be under any duty to determine independently whether
there are any intervening assignments or assumption or modification agreements
with respect to any Home Equity Loan.
(b) If the Trustee during such 45-day period finds any document
constituting a part of a File which is not executed, has not been received, or
is unrelated to the Home Equity Loans identified in the Schedule of Home Equity
Loans, or that any Home Equity Loan does not conform to the description thereof
as set forth in the Schedule of Home Equity Loans, the Trustee shall promptly so
notify the Depositor, each of the Sellers and the Owners. In performing any such
review, the Trustee may conclusively rely as to the purported genuineness of any
such document and any signature thereon. It is understood that the scope of the
Trustee's review of the items delivered by each of the Sellers pursuant to
Section 3.05(b)(i) is limited solely to confirming that the documents listed in
Section 3.05(b)(i) have been executed and received, relate to the Files
identified in the Schedule of Home Equity Loans and conform to the description
thereof in the Schedule of Home Equity Loans. Each Seller agrees to use
reasonable efforts to remedy a material defect in a document constituting part
of a File delivered by such Seller of which it is so notified by the Trustee.
If, however, within 60 days after the Trustee's notice to it respecting such
defect the related Seller has not remedied the defect and the defect materially
and adversely affects the interest of the Owners in the related Home Equity Loan
such Seller will (or will cause an affiliate of such Seller to) on the next
succeeding Monthly Remittance Date (i) substitute in lieu of such Home Equity
Loan a Qualified Replacement Mortgage and deliver the Substitution Amount to the
Servicer for deposit in the Principal and Interest Account or (ii) purchase such
Home Equity Loan at a purchase price equal to the Loan Purchase Price thereof,
which purchase price shall be delivered to the Servicer for deposit in the
Principal and Interest Account.
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(c) In addition to the foregoing, the Trustee also agrees to make a review
during the 12th month after the Startup Day indicating the current status of the
exceptions previously indicated on the Pool Certification (the "Final
Certification"). After delivery of the Final Certification, the Trustee and the
Servicer shall monitor no less frequently than monthly, updated certifications
indicating the then current status of exceptions, until all such exceptions have
been eliminated.
END OF ARTICLE III
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ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.01 Issuance of Certificates
On the Startup Day, upon the Trustee's receipt from the Depositor of an
executed Delivery Order in the form set forth as Exhibit G hereto, the Trustee
shall authenticate and deliver the Certificates on behalf of the Trust.
Section 4.02 Sale of Certificates.
At 11 a.m. New York City time on the Startup Day (the "Closing"), at the
offices of Dewey Ballantine, 1301 Avenue of the Americas, New York, New York (or
at such other location acceptable to the Seller), the Sellers will sell and
convey the Home Equity Loans and the money, instruments and other property
related thereto to the Depositor and the Depositor will sell and convey the Home
Equity Loans and the money, instruments and other property related thereto to
the Trustee, and the Trustee will deliver (i) to the Underwriters the Offered
Certificates with an aggregate Percentage Interest in each Class equal to 100%,
registered in the name of Cede & Co., or in such other names as the Underwriters
shall direct, against payment of the purchase price thereof by wire transfer of
immediately available funds to the Trustee and (ii) to the respective registered
Owners thereof, a Class C Certificate with a Percentage Interest equal to 100%,
registered in the name of ContiSecurities Asset Funding II, L.L.C., a Class R
Certificate with a Percentage Interest equal to 99.999%, registered in the name
of ContiSecurities Asset Funding II, L.L.C. and a Class R Certificate with a
Percentage Interest equal to .001%, registered in the name of ContiFunding
Corporation.
Upon the Trustee's receipt of the entire net proceeds of the sale of the
Certificates, the Trustee shall remit the entire balance of such net proceeds to
the Depositor in accordance with instructions delivered by the Depositor.
END OF ARTICLE IV
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ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01 Terms.
(a) The Certificates are pass-through securities having the rights
described therein and herein. Notwithstanding references herein or therein with
respect to the Certificates to "principal" and "interest" no debt of any Person
is represented thereby, nor are the Certificates or the underlying Notes
guaranteed by any Person (except that the Notes may be recourse to the
Mortgagors thereof to the extent permitted by law). The Certificates are payable
solely from payments received on or with respect to the Home Equity Loans (other
than the Servicing Fees), moneys in the Principal and Interest Account, earnings
on moneys and the proceeds of property held as a part of the Trust Estate. Each
Certificate entitles the Owner thereof to receive monthly on each Payment Date,
in order of priority of distributions with respect to such Class of Certificates
as set forth in Section 7.03, a specified portion of such payments with respect
to the Home Equity Loans, pro rata in accordance with such Owner's Percentage
Interest.
(b) Each Owner is required, and hereby agrees, to return to the Trustee any
Certificate with respect to which the Trustee has made the final distribution
due thereon. Any such Certificate as to which the Trustee has made the final
distribution thereon shall be deemed canceled and shall no longer be Outstanding
for any purpose of this Agreement, whether or not such Certificate is ever
returned to the Trustee.
Section 5.02 Forms.
The Class A-1 Certificates, the Class A-2 Certificates, the Class A-3
Certificates, the Class A-4 Certificates, the Class A-5 Certificates, the Class
A-6 Certificates, the Class A-7 Certificates, the Class A-8 Certificates, the
Class A-9 Certificates, the Class A-10 Certificates, the Class A-11IO
Certificates, the Class M-1F Certificates, the Class M-1A Certificates, the
Class M-2F Certificates, the Class M-2A Certificates, the Class B-1F
Certificates, the Class B-1A Certificates, the Class C Certificates and the
Class R Certificates shall be in substantially the forms set forth in Exhibits
A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, A-9, A-10, A-11IO, B-1, B-2, B-3, B-4,
B-5, B-6, C-1 and C-2 hereof, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement or as may in the Depositor's judgment be necessary, appropriate
or convenient to comply, or facilitate compliance, with applicable laws, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
applicable securities laws or as may, consistently herewith, be determined by
the Authorized Officer of the Depositor executing such Certificates, as
evidenced by his execution thereof.
Section 5.03 Execution, Authentication and Delivery.
Each Certificate shall be executed on behalf of the Trust, by the manual or
facsimile signature of one of the Depositor's Authorized Officers and shall be
authenticated by the manual or facsimile signature of one of the Trustee's
Authorized Officers.
Certificates bearing the manual signature of individuals who were at any
time the proper officers of the Depositor shall, upon proper authentication by
the Trustee, bind the Trust, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution and delivery of
such Certificates or did not hold such offices at the date of authentication of
such Certificates.
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The initial Certificates shall be dated as of the Startup Day and delivered
at the Closing to the parties specified in Section 4.02 hereof. Subsequently
issued Certificates will be dated as of the issuance of the Certificate.
No Certificate shall be valid until executed and authenticated as set forth
above.
Section 5.04 Registration and Transfer of Certificates.
(a) The Trustee shall cause to be kept a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and the registration of
transfer of Certificates. The Trustee is hereby initially appointed Registrar
for the purpose of registering Certificates and transfers of Certificates as
herein provided. The Owners and the Trustee shall have the right to inspect the
Register during the Trustee's normal hours and to obtain copies thereof, and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Registrar by an Authorized Officer thereof as to the names and addresses of
the Owners of the Certificates and the principal amounts and numbers of such
Certificates.
If a Person other than the Trustee is appointed as Registrar by the Owners
of a majority of the aggregate Percentage Interests represented by the Offered
Certificates then Outstanding, or if there are no longer any Offered
Certificates then Outstanding, by such majority of the Percentage Interests
represented by the Class R Certificates, the Trustee will give the Owners prompt
written notice of the appointment of such Registrar and of the location, and any
change in the location, of the Register. In connection with any such appointment
the annual fees of the bank then serving as Trustee and Registrar shall
thenceforth be reduced by the amount to be agreed upon by the Trustee and the
Depositor at such time and the reasonable fees of the Registrar shall be paid,
as expenses of the Trust, pursuant to Section 7.05 hereof.
(b) Subject to the provisions of Section 5.08 hereof, upon surrender for
registration of transfer of any Certificate at the office designated as the
location of the Register, upon the direction of the Registrar the Depositor
shall execute and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of a like
Class and in the aggregate principal amount or percentage interest of the
Certificate so surrendered.
(c) At the option of any Owner, Certificates of any Class owned by such
Owner may be exchanged for other Certificates authorized of like Class and tenor
and a like aggregate original principal amount or percentage interest and
bearing numbers not contemporaneously outstanding, upon surrender of the
Certificates to be exchanged at the office designated as the location of the
Register. Whenever any Certificate is so surrendered for exchange, upon the
direction of the Registrar, the Depositor and the Trustee shall execute,
authenticate and deliver the Certificate or Certificates which the Owner making
the exchange is entitled to receive.
(d) All Certificates issued upon any registration of transfer or exchange
of Certificates shall be valid evidence of the same ownership interests in the
Trust and entitled to the same benefits under this Agreement as the Certificates
surrendered upon such registration of transfer or exchange.
(e) Every Certificate presented or surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Owner
thereof or his attorney duly authorized in writing.
(f) No service charge shall be made to an Owner for any registration of
transfer or exchange of Certificates, but the Registrar or Trustee may require
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payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Certificates; any other expenses in connection with such transfer or exchange
shall be an expense of the Trust.
(g) It is intended that the Offered Certificates be registered so as to
participate in a global book-entry system with the Depository, as set forth
herein. Each Class of Offered Certificates shall, except as otherwise provided
in Subsection (h), be initially issued in the form of a single fully registered
Certificate of such Class. Upon initial issuance, the ownership of each such
Certificate shall be registered in the Register in the name of Cede & Co., or
any successor thereto, as nominee for the Depository.
On the Startup Day, the Offered Certificates (other than the Class A-11IO
Certificates) shall be issued in denominations of no less than $1,000 and
integral multiples thereof. On the Startup Day, the Class A-11IO Certificates
shall be issued in denominations of no less than $1,000 (based on the Class
A-11IO Notional Principal Amount thereof) and integral multiples thereof.
The Depositor and the Trustee are hereby authorized to execute and deliver
the Representation Letter with the Depository.
With respect to the Offered Certificates registered in the Register in the
name of Cede & Co., as nominee of the Depository, the Depositor, the Servicer,
the Sellers and the Trustee shall have no responsibility or obligation to Direct
or Indirect Participants or beneficial owners for which the Depository holds
Offered Certificates from time to time as a Depository. Without limiting the
immediately preceding sentence, the Depositor, the Servicer, the Sellers and the
Trustee shall have no responsibility or obligation with respect to (i) the
accuracy of the records of the Depository, Cede & Co., or any Direct or Indirect
Participant with respect to the ownership interest in the Offered Certificates,
(ii) the delivery to any Direct or Indirect Participant or any other Person,
other than a registered Owner of an Offered Certificate as shown in the
Register, of any notice with respect to the Offered Certificates or (iii) the
payment to any Direct or Indirect Participant or any other Person, other than a
registered Owner of a Offered Certificate as shown in the Register, of any
amount with respect to any distribution of principal or interest on the Offered
Certificates. No Person other than a registered Owner of a Offered Certificate
as shown in the Register shall receive a certificate evidencing such Offered
Certificate.
Upon delivery by the Depository to the Trustee of written notice to the
effect that the Depository has determined to substitute a new nominee in place
of Cede & Co., and subject to the provisions hereof with respect to the payment
of interest by the mailing of checks or drafts to the registered Owners of
Offered Certificates appearing as registered Owners in the registration books
maintained by the Trustee at the close of business on a Record Date, the name
"Cede & Co." in this Agreement shall refer to such new nominee of the
Depository.
(h) In the event that (i) the Depository or the Depositor 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
Offered Certificates and the Depositor or the Trustee is unable to locate a
qualified successor or (ii) the Depositor at its sole option elects to terminate
the book-entry system through the Depository, the Offered Certificates shall no
longer be restricted to being registered in the Register in the name of Cede &
Co. (or a successor nominee) as nominee of the Depository. At that time, the
Depositor may determine that the Offered Certificates shall be registered in the
name of and deposited with a successor depository operating a global book-entry
system, as may be acceptable to the Depositor and at the Depositor's expense, or
such depository's agent or designee but, if the Depositor does not select such
alternative global book-entry system, then the Offered Certificates may be
registered in whatever name or names registered Owners of Offered Certificates
transferring the Offered Certificates shall designate, in accordance with the
provisions hereof.
(i) Notwithstanding any other provision of this Agreement to the contrary,
so long as any of the Offered Certificates is registered in the name of Cede &
Co., as nominee of the Depository, all distributions of
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principal or interest on such Offered Certificates and all notices with respect
to such Offered Certificates shall be made and given, respectively, in the
manner provided in the Representation Letter.
Section 5.05 Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) in the case of any mutilated Certificate, such
mutilated Certificate shall first be surrendered to the Trustee, and in the case
of any destroyed, lost or stolen Certificate, there shall be first delivered to
the Trustee such security or indemnity as may be reasonably required by it to
hold the Trustee harmless, then, in the absence of notice to the Trustee or the
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Depositor shall execute and the Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and aggregate principal
amount, bearing a number not contemporaneously outstanding.
Upon the issuance of any new Certificate under this Section, the Registrar
or Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto; any other expenses
in connection with such issuance shall be an expense of the Trust.
Every new Certificate issued pursuant to this Section in exchange for or in
lieu of any mutilated, destroyed, lost or stolen Certificate shall constitute
evidence of a substitute interest in the Trust, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any and all other
Certificates of the same Class duly issued hereunder and such mutilated,
destroyed, lost or stolen Certificate shall not be valid for any purpose.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
Section 5.06 Persons Deemed Owners.
The Trustee and any agent of the Trustee may treat the Person in whose name
any Certificate is registered as the Owner of such Certificate for the purpose
of receiving distributions with respect to such Certificate and for all other
purposes whatsoever and the Trustee or any agent of the Trustee shall not be
affected by notice to the contrary.
Section 5.07 Cancellation.
All Certificates surrendered for registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by it. No Certificate shall be
authenticated in lieu of or in exchange for any Certificate canceled as provided
in this Section, except as expressly permitted by this Agreement. All canceled
Certificates may be held by the Trustee in accordance with its standard
retention policy.
Section 5.08 Limitation on Transfer of Ownership Rights.
(a) No sale or other transfer of record or beneficial ownership of a Class
R Certificate or assignment of an interest in the Lower-Tier REMIC Residual
Class (whether pursuant to a purchase, a transfer resulting from a default under
a secured lending agreement or otherwise) shall be made to a Disqualified
Organization or an agent of a Disqualified Organization. The transfer, sale or
other disposition of a Class R Certificate or assignment of an interest in the
Lower-Tier REMIC Residual Class (whether pursuant to a purchase, a transfer
resulting from
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a default under a secured lending agreement or otherwise) to a Disqualified
Organization shall be deemed to be of no legal force or effect whatsoever and
such transferee shall not be deemed to be an Owner for any purpose hereunder,
including, but not limited to, the receipt of distributions on such Class R
Certificate or Lower-Tier REMIC Residual Class. Furthermore, in no event shall
the Trustee accept surrender for transfer, registration of transfer, or register
the transfer, of any Class R Certificate nor authenticate and make available any
new Class R Certificate unless the Trustee has received an affidavit from the
proposed transferee in the form attached hereto as Exhibit I. Each holder of a
Class R Certificate by his acceptance thereof, shall be deemed for all purposes
to have consented to the provisions of this Section 5.08(a). The Lower-Tier
REMIC Residual Class is not transferable except that the Owner of the Tax
Matters Person Residual Interest in the Lower-Tier REMIC may assign its interest
to another Person who accepts such assignment and the designation as Tax Matters
Person pursuant to Section 11.18 hereof.
(b) No other sale or other transfer of record or beneficial ownership of a
Class C Certificate or a Class R Certificate shall be made unless such transfer
is exempt from the registration requirements of the Securities Act and any
applicable state securities laws or is made in accordance with said Act and
laws. In the event such a transfer is to be made within three years from the
Startup Day, (i) the Trustee or the Depositor shall require a written opinion of
counsel acceptable to and in form and substance satisfactory to the Depositor in
the event that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from said Act and laws or is
being made pursuant to said Act and laws, which opinion of counsel shall not be
an expense of the Trustee or the Trust Estate, and (ii) the Trustee shall
require the Transferee to execute an investment letter acceptable to and in form
and substance satisfactory to each of the Sellers certifying to the Trustee and
each of the Sellers the facts surrounding such transfer, which investment letter
shall not be an expense of the Trustee, the Trust Estate, or either of the
Sellers. The Owner of a Class C Certificate or a Class R Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor and each of the Sellers against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
(c) No transfer of a Mezzanine Certificate, Class B Certificate, Class C
Certificate or Class R Certificate shall be made unless the Trustee shall have
received a representation letter from the transferee of such Mezzanine
Certificate, Class B Certificate, Class C Certificate or Class R Certificate,
acceptable to and in form and substance satisfactory to the Trustee, to the
effect that such transferee is not an employee benefit plan subject to Section
406 of ERISA nor a plan or other arrangement subject to Section 406 of ERISA nor
a plan or other arrangement subject to Section 4975 of the Code (collectively, a
"Plan"), nor is acting on behalf of any Plan nor using the assets of any Plan to
effect such transfer. Notwithstanding anything else to the contrary herein, any
purported transfer of a Certificate to or on behalf of any Plan without the
delivery to the Trustee a representation letter as described above shall be null
and void and of no effect.
(d) No sale or other transfer of any Offered Certificate may be made to the
Depositor, the Sellers or the Servicer. No sale or other transfer of any Offered
Certificate may be made to an affiliate of either Seller unless the Trustee
shall have been furnished with an opinion of counsel acceptable to the Trustee
experienced in federal bankruptcy matters to the effect that such sale or
transfer would not adversely affect the character of the conveyance of the Home
Equity Loans to the Trust as a sale. No sale or other transfer of the Class R
Certificate issued to ContiFunding Corporation on the Startup Day may be
transferred or sold to any Person, except to a person who accepts the
appointment of Tax Matters Person pursuant to Section 11.18 hereof.
Section 5.09 Assignment of Rights.
An Owner may pledge, encumber, hypothecate or assign all or any part of its
right to receive distributions hereunder, but such pledge, encumbrance,
hypothecation or assignment shall not constitute a transfer of an ownership
interest sufficient to render the transferee an Owner of the Trust without
compliance with the provisions of Section 5.04 and Section 5.08 hereof.
END OF ARTICLE V
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ARTICLE VI
COVENANTS
Section 6.01 Distributions.
On each Payment Date, the Trustee will withdraw amounts from the related
Account(s) and make the distributions with respect to the Certificates in
accordance with the terms of the Certificates and this Agreement. Such
distributions shall be made (i) by check or draft mailed on each Payment Date or
(ii) if requested by any Owner of (A) an Offered Certificate (other than the
Class A-11IO Certificates) having an original principal balance of not less than
$1,000,000, (B) a Class A-11IO Certificate having an original Notional Principal
Amount of not less than $1,000,000 or (C) a Class C Certificate or Class R
Certificate having a Percentage Interest of not less than 10% in writing not
later than one Business Day prior to the applicable Record Date (which request
does not have to be repeated unless it has been withdrawn), to such Owner by
wire transfer to an account within the United States designated no later than
five Business Days prior to the related Record Date, made on each Payment Date,
in each case to each Owner of record on the immediately preceding Record Date.
Section 6.02 Money for Distributions to be Held in Trust; Withholding.
(a) All payments of amounts due and payable with respect to any Certificate
that are to be made from amounts withdrawn from the Certificate Account, shall
be made by and on behalf of the Trustee, and no amounts so withdrawn from the
Certificate Account, for payments of Certificates except as provided in this
Section.
(b) Whenever the Depositor has appointed one or more Paying Agents pursuant
to Section 11.15 hereof, the Trustee will, on the Business Day immediately
preceding each Payment Date, deposit with such Paying Agents in immediately
available funds an aggregate sum sufficient to pay the amounts then becoming due
(to the extent funds are then available for such purpose in the Certificate
Account for the Class to which such amounts are due) such sum to be held in
trust for the benefit of the Owners entitled thereto.
(c) The Depositor may at any time direct any Paying Agent to pay to the
Trustee all sums held in trust by such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
(d) The Depositor shall require each Paying Agent, including the Trustee on
behalf of the Trust to comply with all requirements of the Code and applicable
state and local law with respect to the withholding from any distributions made
by it to any Owner of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.
(e) Any money held by the Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Offered Certificate and remaining
unclaimed by the Owner of such Certificate for the period then specified in the
escheat laws of the State of New York after such amount has become due and
payable shall be discharged from such trust and be paid to the Owners of the
Class R Certificates; and the Owner of such Offered Certificate shall
thereafter, as an unsecured general creditor, look only to the Owners of the
Class R Certificates for payment thereof (but only to the extent of the amounts
so paid to the Owners of the Class R Certificates) and all liability of the
Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Trustee or such Paying Agent before being
required to make any such payment, may, at the expense of the Trust, cause to be
published once, in the eastern edition of The Wall Street Journal, notice that
such money remains unclaimed and that, after a date specified therein, which
shall be not fewer than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be paid to the Owners of the Class R
Certificates. The Trustee shall, at the direction of the Depositor, also adopt
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and employ, at the expense of the Trust, any other reasonable means of
notification of such payment (including but not limited to mailing notice of
such payment to Owners whose right to or interest in moneys due and payable but
not claimed is determinable from the records of the Registrar, the Trustee or
any Paying Agent, at the last address of record for each such Owner).
Section 6.03 Protection of Trust Estate.
(a) The Trustee will hold the Trust Estate in trust for the benefit of the
Owners and, at the request of the Depositor, will from time to time execute and
deliver all such supplements and amendments hereto pursuant to Section 11.14
hereof and all instruments of further assurance and other instruments, and will
take such other action upon such request from the Depositor, to:
(i) more effectively hold in trust all or any portion of the Trust
Estate;
(ii) perfect, publish notice of, or protect the validity of any grant
made or to be made by this Agreement;
(iii) enforce any of the Home Equity Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Trustee, and the ownership interests of the Owners represented thereby,
in such Trust Estate against the claims of all Persons and parties.
The Trustee shall send copies of any request received from the Depositor to
take any action pursuant to this Section 6.03 to the other parties hereto.
(b) The Trustee shall have the power to enforce, and shall enforce the
obligations and rights of the other parties to this Agreement or the Owners, by
action, suit or proceeding at law or equity, provided, however, that nothing in
this Section shall require any action by the Trustee unless the Trustee shall
first (i) have been furnished indemnity satisfactory to it and (ii) when
required by this Agreement, have been requested by the Owners of a majority of
the Percentage Interests represented by the Offered Certificates then
Outstanding or, if there are no longer any Offered Certificates then
outstanding, by such majority of the Percentage Interests represented by the
Class R Certificates.
(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, or adversely affect its rights and immunities
hereunder.
Section 6.04 Performance of Obligations.
The Trustee will not take any action that would release any Person from any
of such Person's covenants or obligations under any instrument or document
relating to the Certificates or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or document, except as
expressly provided in this Agreement or such other instrument or document.
The Trustee may contract with other Persons to assist it in performing its
duties hereunder pursuant to Section 10.03(g).
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Section 6.05 Negative Covenants.
The Trustee will not permit the Trust to:
(i) sell, transfer, exchange or otherwise dispose of any of the Trust
Estate except as expressly permitted by this Agreement;
(ii) claim any credit on or make any deduction from the distributions
payable in respect of, the Certificates (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Owner by reason of the payment of any taxes levied or
assessed upon any of the Trust Estate;
(iii) incur, assume or guaranty any indebtedness of any Person except
pursuant to this Agreement;
(iv) dissolve or liquidate in whole or in part, except pursuant to
Article IX hereof; or
(v)(A) permit the validity or effectiveness of this Agreement to be
impaired, or permit any Person to be released from any covenants or
obligations with respect to the Trust or to the Certificates under this
Agreement, except as may be expressly permitted hereby or (B) permit any
lien, charge, adverse claim, security interest, mortgage or other
encumbrance to be created on or extend to or otherwise arise upon or burden
the Trust Estate or any part thereof or any interest therein or the
proceeds thereof.
Section 6.06 No Other Powers.
The Trustee will not permit the Trust to engage in any business activity or
transaction other than those activities permitted by Section 2.03 hereof.
Section 6.07 Limitation of Suits.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Agreement or for the appointment of a receiver
or trustee of the Trust, or for any other remedy with respect to an event of
default hereunder, unless:
(1) such Owner has previously given written notice to the Depositor and
the Trustee of such Owner's intention to institute such proceeding;
(2) the Owners of not less than 25% of the Percentage Interests
represented by the Offered Certificates then Outstanding or, if there
are no Offered Certificates then Outstanding, by such percentage of
the Percentage Interests represented by the Class C Certificates and
the Class R Certificates, shall have made written request to the
Trustee to institute such proceeding in its own name as Trustee
establishing the Trust;
(3) such Owner or Owners have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute such proceeding;
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(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Owners of a majority of
the Percentage Interests represented by the Offered Certificates or,
if there are no Offered Certificates then Outstanding, by such
majority of the Percentage Interests represented by the Class C
Certificates and the Class R Certificates;
it being understood and intended that no one or more Owners shall have any right
in any manner whatever by virtue of, or by availing themselves of, any provision
of this Agreement to affect, disturb or prejudice the rights of any other Owner
of the same Class or to obtain or to seek to obtain priority or preference over
any other Owner of the same Class or to enforce any right under this Agreement,
except in the manner herein provided and for the equal and ratable benefit of
all the Owners of the same Class.
In the event the Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Owners, each representing less than a
majority of the applicable Class of Certificates and each conforming to
paragraphs (1)-(5) of this Section 6.07, the Trustee in its sole discretion may
determine what action, if any, shall be taken, notwithstanding any other
provision of this Agreement.
Section 6.08 Unconditional Rights of Owners to Receive Distributions.
Notwithstanding any other provision in this Agreement, the Owner of any
Certificate shall have the right, which is absolute and unconditional, to
receive distributions to the extent provided herein and therein with respect to
such Certificate or to institute suit for the enforcement of any such
distribution, and such right shall not be impaired without the consent of such
Owner.
Section 6.09 Rights and Remedies Cumulative.
Except as otherwise provided herein, no right or remedy herein conferred
upon or reserved to the Trustee or the Owners is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. Except
as otherwise provided herein, the assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.10 Delay or Omission Not Waiver.
No delay of the Trustee or any Owner of any Certificate to exercise any
right or remedy under this Agreement with respect to any event described in
Section 8.20(a) or (b) shall impair any such right or remedy or constitute a
waiver of any such event or an acquiescence therein. Every right and remedy
given by this Article VI or by law to the Trustee or the Owners may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
the Owners, as the case may be.
Section 6.11 Control by Owners.
The Owners of a majority of the Percentage Interests represented by the
Offered Certificates then Outstanding or if there are no longer any Offered
Certificates then Outstanding, by such majority of the Percentage Interests
represented by the Class R Certificates then Outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee with respect to the Certificates or exercising any trust or power
conferred on the Trustee with respect to the Certificates or the Trust Estate,
including, but not limited to, those powers set forth in Section 6.03 and
Section 8.20 hereof, provided that:
(1) such direction shall not be in conflict with any rule of law or with
this Agreement;
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(2) the Trustee shall have been provided with indemnity satisfactory to
it; and
(3) the Trustee may take any other action deemed proper by the Trustee, as
the case may be, which is not inconsistent with such direction;
provided, however, that neither of the Sellers nor the Trustee, as the
case may be, need take any action which it determines might involve it
in liability or may be unjustly prejudicial to the Owners not so
directing.
Section 6.12 Indemnification.
The Depositor agrees to indemnify and hold the Trustee and each Owner
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Trustee and any Owner may sustain in any way related to the failure of
the Depositor to perform its duties in compliance with the terms of this
Agreement. The Depositor shall immediately notify the Trustee and each Owner if
such a claim is made by a third party with respect to this Agreement, and the
Depositor shall assume (with the consent of the Trustee) the defense of any such
claim and pay all expenses in connection therewith, including reasonable counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against the Servicer, either of the Sellers, the Trustee and/or any
Owner in respect of such claim. The Trustee may, if necessary, reimburse the
Depositor from amounts otherwise distributable on the Class C or Class R
Certificates for all amounts advanced by it pursuant to the preceding sentence,
except when the claim relates directly to the failure of the Depositor to
perform its duties in compliance with the terms of this Agreement. In addition
to the foregoing, ContiMortgage agrees to indemnify and hold the Trustee and
each Owner harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and other costs, fees and
expenses that the Trustee and any Owner may sustain in any way related to the
breach by ContiMortgage of its representations and warranties set forth in
Section 3.04(b)(xiii) or (xv) hereof with respect to a Home Equity Loan if such
Home Equity Loan qualifies as a "high cost mortgage" pursuant to Section 226.32
of the Truth-in-Lending Act, as amended. The provisions of this Section 6.12
shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
Section 6.13 Access to Owners of Certificates' Names and Addresses.
(a) If any Owner (for purposes of this Section 6.13, an "Applicant")
applies in writing to the Trustee, and such application states that the
Applicant desires to communicate with other Owners with respect to their rights
under this Agreement or under the Certificates and is accompanied by a copy of
the communication which such Applicant proposes to transmit, then the Trustee
shall, at the expense of such Applicant, within ten (10) Business Days after the
receipt of such application, furnish or cause to be furnished to such Applicant
a list of the names and addresses of the Owners of record as of the most recent
Payment Date.
(b) Every Owner, by receiving and holding such list, agrees with the
Trustee that the Trustee shall not be held accountable in any way by reason of
the disclosure of any information as to the names and addresses of the Owners
hereunder, regardless of the source from which such information was derived.
END OF ARTICLE VI
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ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 7.01 Collection of Money.
Except as otherwise expressly provided herein, the Trustee shall demand
payment or delivery of all money and other property payable to or receivable by
the Trustee pursuant to this Agreement, including all payments due on the Home
Equity Loans in accordance with the respective terms and conditions of such Home
Equity Loans and required to be paid over to the Trustee by the Servicer or by
any Sub-Servicer. The Trustee shall hold all such money and property received by
it, other than pursuant to or as contemplated by Section 6.02(e) hereof, as part
of the Trust Estate and shall apply it as provided in this Agreement.
Section 7.02 Establishment of Accounts.
The Depositor shall cause to be established on the Startup Day, and the
Trustee shall maintain, at the Corporate Trust Office, the Certificate Account,
the Upper-Tier Group I Distribution Account, the Upper-Tier Group II
Distribution Account, each of which is to be held by the Trustee on behalf of
the Owners of the Certificates and the Trustee.
Section 7.03 Flow of Funds.
(a)(i) The Trustee shall deposit to the Certificate Account with respect to
each Home Equity Loan Group, without duplication, upon receipt, the proceeds of
any liquidation of the assets of the Trust, all remittances made to the Trustee
pursuant to Section 8.08(d)(ii) and the Monthly Remittance Amount remitted by
the Servicer.
(ii) On each Payment Date, the Trustee shall transfer the Lower-Tier Group
I Distribution Amount from the Certificate Account to the Upper-Tier Group I
Distribution Account.
(iii) On each Payment Date, the Trustee shall transfer the Lower-Tier Group
II Distribution Amount from the Certificate Account to the Upper-Tier Group II
Distribution Account.
(b) With respect to the Upper-Tier Group I Distribution Account on each
Payment Date, the Trustee shall make the following disbursements from the Group
I Interest Remittance Amount transferred thereto pursuant to subsection (a)(ii),
in the following order of priority, and each such disbursement shall be treated
as having occurred only after all preceding disbursements have occurred:
(i) First, to the Trustee, the portion of the Trustee Fee relating to
Group I;
(ii) Second, to the Owners of the Class A Certificates related to Group I
(including the Class A-11IO Certificates), the related Class A
Current Interest plus the related Class A Interest Carry Forward
Amount with respect to each such Class of Class A Certificates
without any priority among such Class A Certificates; provided, that
if the Interest Amount Available is not sufficient to make a full
distribution of interest with respect to all Classes of the Class A
Certificates related to Group I, the Group I Interest Amount
Available will be distributed among the outstanding Classes of Class
A Certificates related to Group I pro rata based on the aggregate
amount of interest due on each such Class, and the amount of the
shortfall will be carried forward as the Class A Interest Carry
Forward Amount;
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(iii) Third, to the extent of the Group I Interest Amount Available then
remaining, to the Owners of the Class M-1F Certificates, the Class
M-1F Current Interest;
(iv) Fourth, to the extent of the Group I Interest Amount Available then
remaining, to the Owners of the Class M-2F Certificates, the Class
M-2F Current Interest;
(v) Fifth, to the extent of the Group I Interest Amount Available then
remaining, to the Owners of the Class B-1F Certificates, the Class
B-1F Current Interest; and
(vi) Sixth, the Group I Monthly Excess Interest Amount shall be applied or
distributed as provided in subsection (f) of this Section 7.03.
(c) With respect to the Upper-Tier Group II Distribution Account on each
Payment Date, the Trustee shall make the following disbursements from the Group
II Interest Remittance Amount transferred thereto pursuant to subsection
(a)(ii), in the following order of priority, and each such disbursement shall be
treated as having occurred only after all preceding disbursements have occurred:
(i) First, to the Trustee, the portion of the Trustee Fee relating to
Group II;
(ii) Second, to the Owners of the Class A-10 Certificates, the Class A-10
Current Interest plus the Class A-10 Interest Carry Forward Amount;
(iii) Third, to the extent of the Group II Interest Amount Available then
remaining, to the Owners of the Class M-1A Certificates, the Class
M-1A Current Interest;
(iv) Fourth, to the extent of the Group II Interest Amount Available then
remaining, to the Owners of the Class M-2A Certificates, the Class
M-2A Current Interest;
(v) Fifth, to the extent of the Group II Interest Amount Available then
remaining, to the Owners of the Class B-1A Certificates, the Class
B-1A Current Interest; and
(vi) Sixth, the Group II Monthly Excess Interest Amount shall be applied
or distributed as provided in subsection (g) of this Section 7.03.
(d) With respect to the Upper-Tier Group I Distribution Account, on each
Payment Date, the Trustee shall make the following disbursements from amounts
relating to principal transferred thereto pursuant to subsection (a)(ii), in the
following order of priority and each such disbursement shall be treated as
having occurred only after all preceding disbursements have occurred:
(i) On each Payment Date (a) before the Group I Stepdown Date or (b) with
respect to which a Group I Trigger Event is in effect, Owners of the
Class A Certificates related to Group I (other than the Class A-11IO
Certificates) will be entitled to receive payment of 100% of the
Group I Principal Distribution Amount as follows: (I) to the Owners
of the Class A-9 Certificates, the Class A-9 Lockout Distribution
Amount and (II) the remainder paid to the Owners of the Class A
Certificates related to Group I (other than the Class A-11IO
Certificates), as follows: first, to the Owners of the Class A-1
Certificates, until the Class A-1 Certificate Principal Balance is
reduced to zero; second, to the Owners of the Class A-2 Certificates,
until the Class A-2 Certificate Principal Balance is reduced to zero;
third, to the Owners of the Class A-3 Certificates, until the Class
A-3 Certificate Principal Balance is reduced to zero; fourth, to the
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Owners of the Class A-4 Certificates, until the Class A-4 Certificate
Principal Balance is reduced to zero; fifth, to the Owners of the
Class A-5 Certificates, until the Class A-5 Certificate Principal
Balance is reduced to zero; sixth, to the Owners of the Class A-6
Certificates, until the Class A-6 Certificate Principal Balance is
reduced to zero; seventh, to the Owners of the Class A-7
Certificates, until the Class A-7 Certificate Principal Balance is
reduced to zero; eighth to the Owners of the Class A-8 Certificates,
until the Class A-8 Certificate Principal Balance is reduced to zero;
and, ninth, to the Owners of the Class A-9 Certificates, until the
Class A-9 Certificate Principal Balance is reduced to zero.
Notwithstanding the foregoing, on any Payment Date on which the sum
of the Certificate Principal Balance of the Subordinate Certificates
related to Group I and the Group I Overcollateralization Amount is
zero, any amounts of principal payable to the Owners of the Class A
Certificates related to Group I on such Payment Date shall be
distributed pro rata.
(ii) Notwithstanding the provisions of Section 7.03(d)(i) in the event
that on any Payment Date on or after the Group I Stepdown Date in
which a Group I Trigger Event is in effect, the Owners of the Class A
Certificates related to Group I will be entitled to receive payment
of 100% of the Group I Principal Distribution Amount until the Group
I Stepped Up Enhancement Level is met. Thereafter, if the Certificate
Principal Balance of the Class A Certificate related to Group I is
reduced to zero, the Owners of the Class M-1F Certificates will be
entitled to receive payment of 100% of the Group I Principal
Distribution Amount until the Group I Stepped Up Enhancement Level is
met. Thereafter, if the Class M-1F Certificate Principal Balance is
reduced to zero, the Owners of the Class M-2F Certificates will be
entitled to receive payments of 100% of the Group I Principal
Distribution Amount until the Group I Stepped Up Enhancement Level is
met. Finally, if the class M-2F Certificate Principal Balance is
reduced to zero, the Owners of the Class B-1F Certificates will be
entitled to receive 100% of the Group I Principal Distribution Amount
until the Group Stepped Up Enhancement Level is met.
(iii) On each Payment Date (a) on or after the Group I Stepdown Date and
(b) as long as a Group I Trigger Event is not in effect, the Owners
of the Group I Certificates (other than the Class A-11IO
Certificates) will be entitled to receive payments of principal, in
the order of priority, in the amounts set forth below and to the
extent of the Group I Principal Distribution Amount as follows:
(A) First, the lesser of (x) the Group I Principal Distribution
Amount and (y) the Group I Class A Principal Distribution Amount
shall be distributed (I) to the Owners of the Class A-9
Certificates, in an amount equal to the Class A-9 Lockout
Distribution Amount and (II) the remainder paid to the Owners of
the Class A Certificates related to Group I (other than the
Class A-11IO Certificates) as follows: first, to the Owners of
the Class A-1 Certificates, until the Class A-1 Certificate
Principal Balance is reduced to zero; second, to the Owners of
the Class A-2 Certificates, until the Class A-2 Certificate
Principal Balance is reduced to zero; third, to the Owners of
the Class A-3 Certificates, until the Class A-3 Certificate
Principal Balance is reduced to zero; fourth, to the Owners of
the Class A-4 Certificates, until the Class A-4 Certificate
Principal Balance is reduced to zero; fifth, to the Owners of
the Class A-5 Certificates, until the Class A-5 Certificate
Principal Balance is reduced to zero; sixth, to the Owners of
the Class A-6 Certificates, until the Class A-6 Certificate
Principal Balance is reduced to zero; seventh, to the Owners of
the Class A-7 Certificates, until the Class A-7 Certificate
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Principal Balance is reduced to zero; eighth to the Owners of
the Class A-8 Certificates, until the Class A-8 Certificate
Principal Balance is reduced to zero; and, ninth, to the Owners
of the Class A-9 Certificates, until the Class A-9 Certificate
Principal Balance is reduced to zero. Notwithstanding the
foregoing, on any Payment Date on which the sum of the
Certificate Principal Balance of the Subordinate Certificates
related to Group I and the Group I Overcollateralization Amount
is zero, any amounts of principal payable to the Owners of the
Class A Certificates related to Group I on such Payment Date
shall be distributed pro rata.
(B) Second, the lesser of (x) the excess of (i) the Group I
Principal Distribution Amount over (ii) the amount distributed
to the Owners of the Class A Certificates related to Group I in
clause (A) above and (y) the Class M-1F Principal Distribution
Amount shall be distributed to the Owners of the Class M-1F
Certificates, until the Class M-1F Certificate Principal Balance
has been reduced to zero;
(C) Third, the lesser of (x) the excess of (i) the Group I Principal
Distribution Amount over (ii) the sum of the amount distributed
to the Owners of the Class A Certificates related to Group I in
clause (A) above and the amount distributed to the Owners of the
Class M-1F Certificates in clause (B) above and (y) the Class
M-2F Principal Distribution Amount shall be distributed to the
Owners of the Class M-2F Certificates, until the Class M- 2F
Certificate Principal Balance has been reduced to zero;
(D) Fourth, the lesser of (x) the excess of (i) the Group I
Principal Distribution Amount over (ii) the sum of the amount
distributed to the Owners of the Class A Certificates related to
Group I pursuant to clause (A) above, the amount distributed to
the Owners of the Class M-1F Certificates pursuant to clause (B)
above and the amount distributed to the Owners of the Class M-2F
Certificates pursuant to clause (C) above and (y) the Class B-1F
Principal Distribution Amount shall be delivered to the Owners
of the Class B-1F Certificates, until the Class B-1F Certificate
Principal Balance has been reduced to zero; and
(E) Fifth, any portion of the Group I Principal Remittance Amount
remaining after making all of the distributions in clauses (A),
(B), (C) and (D) above shall be distributed as provided in
subsection (f) of this Section 7.03.
(e) With respect to the Upper-Tier Group II Distribution Account, on each
Payment Date, the Trustee shall make the following disbursements from amounts
relating to principal transferred thereto pursuant to subsection (a)(iii), in
the following order of priority and each such disbursement shall be treated as
having occurred only after all preceding disbursements have occurred:
(i) On each Payment Date (a) before the Group II Stepdown Date or (b) with
respect to which a Group II Trigger Event is in effect, Owners of the
Class A-10 Certificates will be entitled to receive payment of 100% of
the Group II Principal Distribution Amount.
(ii) Notwithstanding the provisions of Section 7.03(e)(i) in the event that
on any Payment Date on or after the Group II Stepdown Date in which a
Group II Trigger Event is in effect, the Owners of the Class A-10
Certificates will be entitled to receive payment of
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100% of the Group II Principal Distribution Amount until the Group II
Stepped Up Enhancement Level is met. Thereafter, if the Class A-10
Certificate Principal Balance is reduced to zero, the Owners of the
Class M-1A Certificates will be entitled to receive payment of 100% of
the Group II Principal Distribution Amount until the Group II Stepped
Up Enhancement Level is met. Thereafter, if the Class M-1A Certificate
Principal Balance is reduced to zero, the Owners of the Class M-2A
Certificates will be entitled to receive payment of 100% of the Group
II Principal Distribution Amount until the Group II Stepped Up
Enhancement Level is met. Finally, if the Class M-2A Certificate
Principal Balance is reduced to zero, the Owners of the Class B-1A
Certificates will be entitled to receive 100% of the Group II
Principal Distribution Amount until the Grouip II Stepped Up
Enhancement Level is met.
(iii) On each Payment Date (a) on or after the Group II Stepdown Date and
(b) as long as a Group II Trigger Event is not in effect, the Owners
of the Group II Certificates will be entitled to receive payments of
principal, in the order of priority, in the amounts set forth below
and to the extent of the Group II Principal Distribution Amount as
follows:
(A) First, the lesser of (x) the Group II Principal Distribution
Amount and (y) the Group II Class A Principal Distribution
Amount shall be distributed to the Owners of the Class A-10
Certificates;
(B) Second, the lesser of (x) the excess of (i) the Group II
Principal Distribution Amount over (ii) the amount distributed
to the Owners of the Class A-10 Certificates in clause (A) above
and (y) the Class M-1A Principal Distribution Amount shall be
distributed to the Owners of the Class M-1A Certificates, until
the Class M-1A Certificate Principal Balance has been reduced to
zero;
(C) Third, the lesser of (x) the excess of (i) the Group II
Principal Distribution Amount over (ii) the sum of the amount
distributed to the Owners of the Class A-10 Certificates in
clause (A) above and the amount distributed to the Owners of the
Class M-1A Certificates in clause (B) above and (y) the Class
M-2A Principal Distribution Amount shall be distributed to the
Owners of the Class M-2A Certificates, until the Class M-2A
Certificate Principal Balance has been reduced to zero;
(D) Fourth, the lesser of (x) the excess of (i) the Group II
Principal Distribution Amount over (ii) the sum of the amount
distributed to the Owners of the Class A-10 Certificates
pursuant to clause (A) above, the amount distributed to the
Owners of the Class M-1A Certificates pursuant to clause (B)
above and the amount distributed to the Owners of the Class M-2A
Certificates pursuant to clause (C) above and (y) the Class B-1A
Principal Distribution Amount shall be delivered to the Owners
of the Class B-1A Certificates, until the Class B-1A Certificate
Principal Balance has been reduced to zero; and
(E) Fifth, any portion of the Group II Principal Remittance Amount
remaining after making all of the distributions in clauses (A),
(B), (C) and (D) above shall be distributed as provided in
subsection (g) of this Section 7.03.
(f) On any Payment Date, the Group I Monthly Excess Cashflow Amount is
required to be applied in the following order of priority on such Payment Date:
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(1) to fund the Class A Interest Carry Forward Amount, if any, with
respect to Group I;
(2) to fund the Group I Extra Principal Distribution Amount for such
Payment Date;
(3) to fund the Class M-1F Interest Carry Forward Amount, if any;
(4) to fund the Class M-1F Realized Loss Amortization Amount for
such Payment Date;
(5) to fund the Class M-2F Interest Carry Forward Amount, if any;
(6) to fund the Class M-2F Realized Loss Amortization Amount for
such Payment Date;
(7) to fund the Class B-1F Interest Carry Forward Amount, if any;
(8) to fund the Class B-1F Realized Loss Amortization Amount for
such Payment Date;
(9) to fund any amounts listed in clauses (1) through (8) of Section
7.03(g) to the extent such amounts have not been funded in full
through the application of Group II Monthly Excess Cashflow
Amounts; and
(10) as provided in Section 7.03(h) hereof.
(g) On any Payment Date, the Group II Monthly Excess Cashflow Amount is
required to be applied in the following order of priority on such Payment Date:
(1) to fund the Class A-10 Interest Carry Forward Amount, if any;
(2) to fund the Group II Extra Principal Distribution Amount for
such Payment Date;
(3) to fund the Class M-1A Interest Carry Forward Amount, if any;
(4) to fund the Class M-1A Realized Loss Amortization Amount for
such Payment Date;
(5) to fund the Class M-2A Interest Carry Forward Amount, if any;
(6) to fund the Class M-2A Realized Loss Amortization Amount for
such Payment Date;
(7) to fund the Class B-1A Interest Carry Forward Amount, if any;
(8) to fund the Class B-1A Realized Loss Amortization Amount for
such Payment Date;
(9) to fund any amounts listed in clauses (1) through (8) of Section
7.03(f) to the extent such amounts have not been funded in full
through the application of Group I Monthly Excess Cashflow
Amounts; and
(10) as provided in Section 7.03(h) hereof.
(h) On any Payment Date, any Group I Monthly Excess Cashflow Amount
remaining after the application of Section 7.03(f)(1)-(9) and any Group II
Monthly Excess Cashflow Amount remaining after the application of Section
7.03(g)(1)-(9) shall be distributed as follows:
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(1) to the Servicer to the extent of any unreimbursed Delinquency
Advances or Servicing Advances;
(2) to fund a distribution to Owners of the Class C Certificates,
the lesser of (x) the amount of the Monthly Excess Cashflow
Amount then remaining and (y) the Class C Distribution Amount;
and
(3) to fund a distribution to the Owners of the Class R
Certificates, the remainder.
(i) On each Payment Date, the Trustee shall allocate the excess of the
Group I Certificate Principal Balance over the Loan Balance of the Home Equity
Loans in Group I to reduce the Certificate Principal Balances of the Subordinate
Certificates related to Group I in the following order of priority:
(i) to the Class B-1F Certificates until the Class B-1F Certificate
Principal Balance is reduced to zero;
(ii) to the Class M-2F Certificates until the Class M-2F Certificate
Principal Balance is reduced to zero; and
(iii) to the Class M-1F Certificates until the Class M-1F Certificate
Principal Balance is reduced to zero.
(j) On each Payment Date, the Trustee shall allocate the excess of the
Group II Certificate Principal Balance over the Loan Balance of the Home Equity
Loans in Group II to reduce the Certificate Principal Balances of the
Subordinate Certificates related to Group II in the following order of priority:
(i) to the Class B-1A Certificates until the Class B-1A Certificate
Principal Balance is reduced to zero;
(ii) to the Class M-2A Certificates until the Class M-2A Certificate
Principal Balance is reduced to zero; and
(iii) to the Class M-1A Certificates until the Class M-1A Certificate
Principal Balance is reduced to zero.
(k) Notwithstanding anything above, the aggregate amounts distributed on
all Payment Dates to the Owners of the Certificates on account of principal
pursuant to clauses (d) and (e) shall not exceed the original Certificate
Principal Balance of the related Certificates.
(l) The rights of the Owners to receive distributions from the proceeds of
the Trust Estate and all ownership interests of the Owners in such
distributions, shall be as set forth in this Agreement. In this regard, all
rights of the Owners of the Class C Certificates and the Class R Certificates to
receive distributions in respect of the Class C Certificates and the Class R
Certificates, and all ownership interests of the Owners of the Class C
Certificates and the Class R Certificates in and to such distributions, shall be
subject and subordinate to the preferential rights of the holders of the Offered
Certificates to receive distributions thereon and the ownership interests of
such Owners in such distributions, as described herein. In accordance with the
foregoing, the ownership interests of the Owners of the Class C Certificates and
the Class R Certificates in amounts deposited in the Accounts from time to time
shall not vest unless and until such amounts are distributed in respect of the
Class C Certificates and the Class R Certificates in accordance with the terms
of this Agreement. Notwithstanding anything contained in this Agreement to the
contrary, the Owners of the Class C Certificates
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and the Class R Certificates shall not be required to refund any amount properly
distributed on the Class C Certificates and the Class R Certificates pursuant to
this Section 7.03.
Section 7.04 Reserved.
Section 7.05 Investment of Accounts.
(a) Consistent with any requirements of the Code, all or a portion of any
Account held by the Trustee for the benefit of the Owners shall be invested and
reinvested by the Trustee in the name of the Trustee for the benefit of the
Owners, as directed in writing by the Depositor, in one or more Eligible
Investments bearing interest or sold at a discount. The bank serving as Trustee
or any affiliate thereof may be the obligor on any investment which otherwise
qualifies as an Eligible Investment. No investment in any Account shall mature
later than the Business Day immediately preceding the next Payment Date.
(b) If any amounts are needed for disbursement from any Account held by the
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. No investments will be
liquidated prior to maturity unless the proceeds thereof are needed for
disbursement.
(c) Subject to Section 10.01 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 loss on any Eligible Investment included therein (except to
the extent that the bank serving as Trustee is the obligor thereon).
(d) The Trustee shall invest and reinvest funds in the Accounts held by the
Trustee, in accordance with the written instructions delivered to the Trustee on
the Startup Day, but only in one or more Eligible Investments bearing interest
or sold at a discount.
If the Depositor shall have failed to give investment directions to the
Trustee then the Trustee shall invest in money market funds described in Section
7.07(h); to be redeemable without penalty no later than the Business Day
immediately preceding the next Payment Date.
(e) All income or other gain from investments in any Account held by the
Trustee shall be deposited in such Account immediately on receipt, and any loss
resulting from such investments shall be charged to such Account, as
appropriate, subject to the requirement of Section 8.08(b) that the Servicer
contribute funds in an amount equal to such loss in the case of the Principal
and Interest Account.
Section 7.06 Payment of Trust Expenses.
(a) The Trustee shall make demand on ContiMortgage to pay the amount of the
expenses of the Trust (including Trustee's fees and expenses not covered by
Section 7.03(b)(i) or (c)(i)) and ContiMortgage shall promptly pay such expenses
directly to the Persons to whom such amounts are due.
(b) The Depositor shall pay directly the reasonable fees and expenses of
counsel to the Trustee.
Section 7.07 Eligible Investments.
The following are Eligible Investments:
(a) direct general obligations of, or obligations fully and unconditionally
guaranteed as to the timely payment of principal and interest by, the United
States or any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
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(b) Federal Housing Administration debentures; FHLMC senior debt
obligations, and FannieMae senior debt obligations, but excluding any of such
securities whose terms do not provide for payment of a fixed dollar amount upon
maturity or call for redemption; and consolidated senior debt obligations of any
Federal Home Loan Banks; provided, that any such investment shall be rated in
one of the two highest ratings categories by each Rating Agency.
(c) Federal funds, certificates of deposit, time deposits, and bankers'
acceptances (having original maturities of not more than 365 days) of any
domestic bank, the short-term debt obligations of which have been rated F-1+ or
better by Fitch, A-1+ or better by Standard & Poor's and P-1 by Moody's;
(d) Deposits of any bank or savings and loan association (the long-term
deposit rating of which is Baa3 or better by Moody's and BBB by each of Standard
& Poor's and Fitch) which has combined capital, surplus and undivided profits of
at least $50,000,000 which deposits are insured by the FDIC and held up to the
limits insured by the FDIC;
(e) Investment agreements provided:
1. The agreement is with a bank or insurance company which has
unsecured, uninsured and unguaranteed senior debt obligations rated Aa2 or
better by Moody's and AA or better by each of Standard & Poor's and Fitch,
and
2. Moneys invested thereunder may be withdrawn without any penalty,
premium or charge upon not more than one day's notice (provided such notice
may be amended or canceled at any time prior to the withdrawal date), and
3. The agreement is not subordinated to any other obligations of such
insurance company or bank, and
4. The same guaranteed interest rate will be paid on any future
deposits made pursuant to such agreement, and
5. The Trustee receives an opinion of counsel that such agreement is
an enforceable obligation of such insurance company or bank;
(f) Repurchase agreements collateralized by securities described in (a)
above with any registered broker/dealer subject to the Securities Investors
Protection Corporation's jurisdiction and subject to applicable limits therein
promulgated by Securities Investors Protection Corporation or any commercial
bank, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed
short-term or long-term obligation rated P-1 or Aa2, respectively, or better by
Moody's A-1+ or AA, respectively or better by Standard & Poor's and F-1+ or AA,
respectively, or better by Fitch, provided:
a. A master repurchase agreement or specific written repurchase
agreement governs the transaction, and
b. The securities are held free and clear of any lien by the Trustee
or an independent third party acting solely as agent for the Trustee, and
such third party is (a) a Federal Reserve Bank or (b) a bank which is a
member of the FDIC and which has combined capital, surplus and undivided
profits of not less than $125 million and the Trustee shall have received
written confirmation from such third party that it holds such securities,
free and clear of any lien, as agent for the Trustee, and
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c. A perfected first security interest under the Uniform Commercial
Code, or book entry procedures prescribed at 31 CFR 306.1 et seq. or 31 CFR
350.0 et seq., in such securities is created for the benefit of the
Trustee, and
d. The repurchase agreement has a term of thirty days or less and the
Trustee will value the collateral securities no less frequently than weekly
and will liquidate the collateral securities if any deficiency in the
required collateral percentage is not restored within two business days of
such valuation, and
e. The fair market value of the collateral securities in relation to
the amount of the repurchase obligation, including principal and interest,
is equal to at least 106% and such collateral securities must be valued
weekly and market-to-market at current market price plus accrued interest.
(g) Commercial paper (having original maturities of not more than 270 days)
rated in the highest short-term rating categories of each Rating Agency; and
(h) Investments in no load money market funds registered under the
Investment Company Act of 1940 whose shares are registered under the Securities
Act and rated AAAm or AAAm-G by Standard & Poor's, Aaa by Moody's, and AAA, if
rated by Fitch;
provided that no instrument described above shall evidence either the right to
receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that all instruments described hereunder shall mature at par on or prior to the
next succeeding Payment Date unless otherwise provided in this Agreement and
that no instrument described hereunder may be purchased at a price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price prior to stated maturity.
Section 7.08 Accounting and Directions by Trustee.
(a) By 12:00 noon New York time, on the Business Day preceding each Payment
Date (or such earlier period as shall be agreed by the Depositor and the
Trustee), the Trustee shall notify (subject to the terms of Section 10.03(j)
hereof, based solely on information provided to the Trustee by the Servicer) the
Depositor, each of the Sellers and each Owner of the following information with
respect to the next Payment Date (which notification may be given by facsimile
or by telephone promptly confirmed in writing):
(1) The aggregate amount then on deposit in the Certificate Account;
(2) The Class A Distribution Amount, with respect to each Class
individually and all Classes of the Class A Certificates in the aggregate,
on the next Payment Date the related Class M-1 Distribution Amount, the
related Class M-2 Distribution Amount and the related Class B Distribution
Amount;
(3) The application of the amounts described in clause (1) preceding
to the allocation and distribution of the related Class A Distribution
Amount, the related Class M-1 Distribution Amount, the related Class M-2
Distribution Amount and the related Class B Distribution Amount, on such
Payment Date in accordance with Section 7.03 hereof;
(4) The Certificate Principal Balance of each Class of the Offered
Certificates, the Class A-11IO Notional Principal Amount, the aggregate
amount of the principal of each Class of Certificates to
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be paid on such Payment Date and the remaining Certificate Principal
Balance (or Class A-11IO Notional Principal Amount) of each Class of
Certificates following any such payment;
(5) The amount, if any, of any Realized Losses relating to each Group
for the related Remittance Period and the amount of Cumulative Realized
Losses as of the last day of the related Remittance Period; and
(6) The amount of 60+ Day Delinquent Loans relating to each Group and
the Three-Month Rolling Average of 60+ Day Delinquent Loans relating to
each Group
Section 7.09 Reports by Trustee to Owners.
(a) On each Payment Date the Trustee shall report in writing to the
Depositor, each Owner, the Underwriters and the Rating Agencies:
(i) the amount of the distribution with respect to such Owners'
Certificates (based on a Certificate in the original principal amount of
$1,000);
(ii) the amount of such Owner's distributions allocable to principal,
separately identifying the aggregate amount of any Prepayments or other
recoveries of principal included therein;
(iii) the amount of such Owner's distributions allocable to interest
(based on a Certificate in the original principal amount of $1,000);
(iv) the Interest Carry Forward Amount for each Class;
(v) the principal amount (or notional principal amount) of each Class
of Offered Certificates (based on a Certificate in the original principal
amount of $1,000) which will be Outstanding after giving effect to any
payment of principal on such Payment Date;
(vi) the aggregate Loan Balance of all Home Equity Loans after giving
effect to any payment of principal on such Payment Date both in the
aggregate and in each of the Home Equity Loan Groups;
(vii) based upon information furnished by the Depositor, such
information as may be required by Section 6049(d)(7)(C) of the Code and the
regulations promulgated thereunder to assist the Owners in computing their
market discount;
(viii) the total of any Substitution Amounts and any Loan Purchase
Price amounts included in such distribution with respect to each Group;
(ix) the weighted average Coupon Rate of the Home Equity Loans with
respect to each Group;
(x) whether a Group I Trigger Event or a Group II Trigger Event has
occurred and whether a Cumulative Realized Loss Trigger Event has occurred;
(xi) the amount of any Group I Extra Principal Distribution Amount or
any Group II Extra Principal Distribution Amount;
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(xii) the Group I Senior Enhancement Percentage and the Group II
Senior Enhancement Percentage;
(xiii) the Group I Overcollateralization Amount, the Group II
Overcollateralization Amount and the Certificate Principal Balance of each
Class of the Offered Certificates then outstanding after giving effect to
any payment of principal on such Payment Date; and
(xiv) the amount of any Group I or Group II Applied Realized Loss
Amount, Group I or Group II Realized Loss Amortization Amount and Unpaid
Realized Loss Amount for each Class as of the close of such Payment Date.
The Servicer shall provide to the Trustee the information described in
Section 8.08(d)(iii) and in clause (b) below to enable the Trustee to perform
its reporting obligations under this Section, and such obligations of the
Trustee under this Section are conditioned upon such information being received
and the information provided in clauses (ii), (vii), (viii), (ix), (xi), (xii),
(xiii) and (xiv) shall be based solely upon information contained in the monthly
servicing report provided by the Servicer to the Trustee pursuant to Section
8.01 hereof.
(b) In addition, on each Payment Date the Trustee will distribute to the
Depositor, each Owner, the Underwriters and the Rating Agencies, together with
the information described in Subsection (a) preceding, the following information
with respect to each Home Equity Loan Group which is hereby required to be
prepared by the Servicer and furnished to the Trustee for such purpose on or
prior to the related Monthly Remittance Date:
(i) the number and aggregate Loan Balances of Home Equity Loans in
each Group (and in the aggregate) (a) 30-59 days Delinquent, (b) 60-89 days
Delinquent and (c) 90 or more days Delinquent, as of the close of business
on the last Business Day of the calendar month next preceding such Payment
Date,
(ii) the status and the number and dollar amounts of all Home Equity
Loans in each Group (and in the aggregate) in foreclosure proceedings as of
the close of business on the last Business Day of the calendar month next
preceding such Payment Date, separately stating, for this purpose, all Home
Equity Loans in each Group with respect to which foreclosure proceedings
were commenced in the immediately preceding calendar month;
(iii) the number of Mortgagors and the Loan Balances of Home Equity
Loans of (a) the related Mortgages involved in bankruptcy proceedings as of
the close of business on the last Business Day of the calendar month next
preceding such Payment Date and (b) Home Equity Loans in each Group that
are "balloon" loans;
(iv) the existence and status of any REO Properties in each Group, as
of the close of business of the last Business Day of the month next
preceding the Payment Date;
(v) the book value of any REO Property in each Group as of the close
of business on the last Business Day of the calendar month next preceding
the Payment Date;
(vi) the amount of Group I Cumulative Realized Losses, Group II
Cumulative Realized Losses; and the aggregate Cumulative Realized Losses
for both Groups.
(vii) the aggregate Loan Balance of 60+ Day Delinquent Loans with
respect to each Group; and
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(viii) the Three-Month Rolling Average of 60+ Day Delinquent Loans
with respect to each Group and whether a Group I Trigger Event or a Group
II Trigger Event is in effect.
(c) The Servicer shall furnish to the Trustee during the term of this
Agreement, such periodic, special, or other reports or information not
specifically provided for herein, as may be necessary, reasonable, or
appropriate with respect to the Trustee, 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
Trustee may reasonably require; provided, that the Servicer shall be entitled to
be reimbursed by the requesting party for the fees and actual expenses
associated with providing such reports, if such reports are not generally
produced in the ordinary course of business.
Section 7.10 Reports by Trustee.
(a) The Trustee shall report to the Depositor, each of the Sellers, the
Underwriters and each Owner, with respect to the amount on deposit in the
Certificate Account and the identity of the investments included therein, as the
Depositor or the Seller may from time to time request. Without limiting the
generality of the foregoing, the Trustee shall, at the request of the Depositor
or either of the Sellers transmit promptly to the Depositor and each of the
Sellers copies of all accounting of receipts in respect of the Home Equity Loans
furnished to it by the Servicer and shall notify each of the Sellers if any
Monthly Remittance Amount has not been received by the Trustee when due.
(b) The Trustee shall report to each Owner with respect to any written
notices it may from time to time receive which provide an Authorized Officer
with actual knowledge that any of the statements set forth in Section 3.04(b)
hereof are inaccurate.
END OF ARTICLE VII
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ARTICLE VIII
SERVICING AND ADMINISTRATION
OF HOME EQUITY LOANS
Section 8.01 Servicer and Sub-Servicers.
Acting directly or through one or more Sub-Servicers as provided in Section
8.03, the Servicer shall service and administer the Home Equity Loans in
accordance with this Agreement and the servicing standards set forth in the
FannieMae Guide and shall have full power and authority, acting alone, to do or
cause to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable. It is the intent of the
parties hereto that the Servicer shall have all of the servicing obligations
hereunder which a lender would have under the FannieMae Guide (as such
provisions relate to second lien mortgages); provided, however, that to the
extent that such standards, such obligations or the FannieMae Guide are amended
by FannieMae after the date hereof and the effect of such amendment would be to
impose upon the Servicer any material additional costs or other burdens relating
to such servicing obligations, the Servicer may, at its option, determine not to
comply with such amendment.
Subject to Section 8.03 hereof, the Servicer may, and is hereby authorized
to, perform any of its servicing responsibilities with respect to all or certain
of the Home Equity Loans through a Sub-Servicer as it may from time to time
designate, but no such designation of a Sub-Servicer shall serve to release the
Servicer from any of its obligations under this Agreement. Such Sub-Servicer
shall have all the rights and powers of the Servicer with respect to such Home
Equity Loans under this Agreement.
Without limiting the generality of the foregoing, but subject to Sections
8.13 and 8.14, the Servicer in its own name or in the name of a Sub-Servicer may
be authorized and empowered pursuant to a power of attorney executed and
delivered by the Trustee to execute and deliver, and may be authorized and
empowered by the Trustee, to execute and deliver, on behalf of itself, the
Owners and the Trustee or any of them, (i) any and all instruments of
satisfaction or cancellation or of partial or full release or discharge and all
other comparable instruments with respect to the Home Equity Loans and with
respect to the Properties, (ii) to institute foreclosure proceedings or obtain a
deed in lieu of foreclosure so as to effect ownership of any Property in the
name of the Servicer on behalf of the Trustee, and (iii) to hold title to any
Property upon such foreclosure or deed in lieu of foreclosure on behalf of the
Trustee; provided, however, that Section 8.14(a) shall constitute an
authorization from the Trustee to the Servicer to execute an instrument of
satisfaction (or assignment of mortgage without recourse) with respect to any
Home Equity Loan paid in full (or with respect to which payment in full has been
escrowed). The Trustee shall execute any documentation furnished to it by the
Servicer for recordation by the Servicer in the appropriate jurisdictions as
shall be necessary to effectuate the foregoing. Subject to Sections 8.13 and
8.14, the Trustee shall execute any authorizations and other documents as the
Servicer or such Sub-Servicer shall reasonably request that are furnished to the
Trustee to enable the Servicer and such Sub-Servicer to carry out their
respective servicing and administrative duties hereunder.
The Servicer shall give prompt notice to the Trustee of any action, of
which the Servicer has actual knowledge, to (i) assert a claim against the Trust
or (ii) assert jurisdiction over the Trust.
Servicing Advances incurred by the Servicer or any Sub-Servicer in
connection with the servicing of the Home Equity Loans (including any penalties
in connection with the payment of any taxes and assessments or other charges) on
any Property shall be recoverable by the Servicer or such Sub-Servicer to the
extent described in Section 8.09(b) hereof.
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Section 8.02 Collection of Certain Home Equity Loan Payments.
The Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Home Equity Loans, and shall, to the
extent such procedures shall be consistent with this Agreement and the terms and
provisions of any applicable Insurance Policy, follow collection procedures for
all Home Equity Loans at least as rigorous as those described in the FannieMae
Guide. 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 Home Equity
Loan or any other fee or charge which the Servicer would be entitled to retain
hereunder as servicing compensation. In the event the Servicer shall consent to
the deferment of the due dates for payments due on a Note, the Servicer shall
nonetheless make payment of any required Delinquency Advance with respect to the
payments so extended to the same extent as if such installment were due, owing
and Delinquent and had not been deferred, and shall be entitled to reimbursement
therefor in accordance with Section 8.09(a) hereof.
Section 8.03 Sub-Servicing Agreements Between Servicer and Sub-Servicers.
The Servicer may enter into Sub-Servicing Agreements for any servicing and
administration of Home Equity Loans with any institution that is in compliance
with the laws of each state necessary to enable it to perform its obligations
under such Sub-Servicing Agreement and (x) has (i) been designated an approved
seller-servicer by FHLMC or FannieMae for second mortgage loans and (ii) has
equity of at least $5,000,000, as determined in accordance with generally
accepted accounting principles or (y) is a Servicer Affiliate. The Servicer
shall give notice to the Trustee and the Rating Agencies of the appointment of
any Sub-Servicer. For purposes of this Agreement, the Servicer shall be deemed
to have received payments on Home Equity Loans when any Sub-Servicer has
received such payments. Each Sub-Servicer shall be required to service the Home
Equity Loans in accordance with this Agreement and any such Sub-Servicing
Agreement shall be consistent with and not violate the provisions of this
Agreement. Each Sub-Servicing Agreement shall provide that a successor Servicer
shall have the option to terminate such agreement without payment of any fees if
the original Servicer is terminated or resigns.
Section 8.04 Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement and to
either itself directly service the related Home Equity Loans or enter into a
Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under
Section 8.03.
Section 8.05 Liability of Servicer; Indemnification .
(a) The Servicer shall not be relieved of its obligations under this
Agreement notwithstanding any Sub-Servicing Agreement or any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Sub-Servicer and the Servicer shall be obligated to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Home Equity Loans. The Servicer shall be entitled to enter
into any agreement with a Sub-Servicer for indemnification of the Servicer by
such Sub-Servicer and nothing contained in such Sub-Servicing Agreement shall be
deemed to limit or modify this Agreement.
(b) The Servicer (except Manufacturers and Traders Trust Company if it is
required to succeed the Servicer hereunder) agrees to indemnify and hold the
Trustee and each Owner harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that the Trustee and any Owner may sustain in any way
related to the failure of the Servicer to perform its duties and service the
Home Equity Loans in compliance with the terms of this Agreement. The Servicer
shall immediately notify the Trustee and each Owner if a claim is made by a
third party with respect to this Agreement, and the Servicer shall assume (with
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the consent of the Trustee) the defense of any such claim and pay all expenses
in connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Servicer, the Trustee and/or Owner in respect of such claim. The Trustee may, if
necessary, reimburse the Servicer from amounts otherwise distributable on the
Class R Certificates for all amounts advanced by it pursuant to the preceding
sentence except when the claim relates directly to the failure of the Servicer
to service and administer the Home Equity Loans in compliance with the terms of
this Agreement. The provisions of this Section 8.05 shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
Section 8.06 No Contractual Relationship Between Sub-Servicer, Trustee or
the Owners.
Any Sub-Servicing Agreement and any other transactions or services relating
to the Home Equity Loans involving a Sub-Servicer shall be deemed to be between
the Sub-Servicer and the Servicer alone and the Trustee and the Owners shall not
be deemed parties thereto and shall have no claims, rights, obligations, duties
or liabilities with respect to any Sub-Servicer except as set forth in Section
8.07.
Section 8.07 Assumption or Termination of Sub-Servicing Agreement by
Trustee.
In connection with the assumption of the responsibilities, duties and
liabilities and of the authority, power and rights of the Servicer hereunder by
the Trustee pursuant to Section 8.20, it is understood and agreed that the
Servicer's rights and obligations under any Sub-Servicing Agreement then in
force between the Servicer and a Sub-Servicer shall be assumed simultaneously by
the Trustee without act or deed on the part of the Trustee; provided, however,
that the successor Servicer may terminate the Sub-Servicer as provided in
Section 8.03.
The Servicer shall, upon the reasonable request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party documents and records
relating to each Sub-Servicing Agreement and an accounting of amounts collected
and held by it and otherwise use its best reasonable efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements to the assuming
party.
Section 8.08 Principal and Interest Account.
(a) The Servicer shall establish and maintain at one or more Designated
Depository Institutions the Principal and Interest Account to be held as a trust
account. Each Principal and Interest Account shall be identified on the records
of the Designated Depository Institution as follows: Manufacturers and Traders
Trust Company, as Trustee under the Pooling and Servicing Agreement dated as of
June 1, 1997. If the institution at any time holding the Principal and Interest
Account ceases to be eligible as a Designated Depository Institution hereunder,
then the Servicer shall, within 30 days, be required to name a successor
institution meeting the requirements for a Designated Depository Institution
hereunder. If the Servicer fails to name such a successor institution, then the
Principal and Interest Account shall thenceforth be held as a trust account with
a qualifying Designated Depository Institution. The Servicer shall notify the
Trustee and the Owners if there is a change in the name, account number or
institution holding the Principal and Interest Account.
Subject to Subsection (c) below, the Servicer shall deposit all receipts
required pursuant to Subsection (c) below and related to the Home Equity Loans
to the Principal and Interest Account on a daily basis (but no later than the
first Business Day after receipt).
(b) All funds in the Principal and Interest Account shall be held (i)
uninvested (up to the limits insured by the FDIC) or (ii) invested in Eligible
Investments. Any investments of funds in the Principal and Interest Account
shall mature or be withdrawable at par on or prior to the immediately succeeding
Monthly Remittance Date. The Principal and Interest Account shall be held in
trust in the name of the Trustee for the benefit of the Owners. Any investment
earnings on funds held in the Principal and Interest Account shall be for the
account of the Servicer and may only be withdrawn from the Principal and
Interest Account by the Servicer immediately following the remittance of the
Monthly Remittance Amount (and the Monthly Excess Interest Amount included
therein) by the Servicer. Any investment losses on funds held in the Principal
and Interest Account shall be for the account of the Servicer and promptly upon
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the realization of such loss shall be contributed by the Servicer to the
Principal and Interest Account. Any references herein to amounts on deposit in
the Principal and Interest Account shall refer to amounts net of such investment
earnings.
(c) The Servicer shall deposit to the Principal and Interest Account on the
Business Day after receipt all principal collections on the Home Equity Loans
received, and interest collections on the Home Equity Loans accrued after the
Cut-Off Date including any Prepayments and Net Liquidation Proceeds, other
recoveries or amounts related to the Home Equity Loans received by the Servicer
and any income from REO Properties, but net of (i) the Servicing Fee with
respect to each Home Equity Loan and other servicing compensation to the
Servicer as permitted by Section 8.15 hereof, (ii) principal collected and
interest accrued on any Home Equity Loan on or prior to the Cut-Off Date, (iii)
Net Liquidation Proceeds to the extent such Net Liquidation Proceeds exceed the
sum of (I) the Loan Balance of the related Home Equity Loan immediately prior to
liquidation, (II) accrued and unpaid interest on such Home Equity Loan (net of
the Servicing Fee) to the date of such liquidation, and (III) any Realized
Losses incurred during the related Remittance Period, (iv) reimbursements for
Delinquency Advances and (v) reimbursements for amounts deposited in the
Principal and Interest Account representing payments of principal and/or
interest on a Note by a Mortgagor which are subsequently returned by a
depository institution as unpaid (all such net amount herein referred to as
"Daily Collections").
(d)(i) The Servicer may make withdrawals for its own account from the
amounts on deposit in the Principal and Interest Account, with respect to each
Home Equity Loan Group, only in the following priority and for the following
purposes:
(A) to withdraw interest paid with respect to any Home Equity Loans that
had accrued for periods prior to the Cut-Off Date;
(B) to withdraw investment earnings on amounts on deposit in the Principal
and Interest Account;
(C) to reimburse itself pursuant to Section 8.09(a) for unrecovered
Delinquency Advances and Servicing Advances;
(D) to withdraw amounts that have been deposited to the Principal and
Interest Account in error; and
(E) to clear and terminate the Principal and Interest Account following the
termination of the Trust pursuant to Article IX.
(ii) The Servicer shall (a) remit to the Trustee for deposit in the
Certificate Account by wire transfer, or otherwise make funds available in
immediately available funds, without duplication, the Daily Collections
allocable to a Remittance Period not later than the related Monthly Remittance
Date and Loan Purchase Prices and Substitution Amounts two Business Days
following the related purchase or substitution, and (b) on each Monthly
Remittance Date, deliver to the Trustee a monthly servicing report, with respect
to each Home Equity Loan Group, containing the following information: principal
and interest collected, scheduled interest, Liquidated Loans, summary and
detailed delinquency reports, Liquidation Proceeds and other similar information
concerning the servicing of the Home Equity Loans. In addition, the Servicer
shall inform the Trustee on each Monthly Remittance Date with respect to each
Home Equity Loan Group of the amounts of any Loan Purchase Prices or
Substitution Amounts so remitted during the related Remittance Period.
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(iii) The Servicer shall provide to the Trustee the information described
in Section 8.08(d)(ii)(b) and in Section 7.09(c) to enable the Trustee to
perform its reporting requirements under Section 7.09 and the Trustee shall
forward such information to the Underwriters within five Business Days of
receipt thereof.
Section 8.09 Delinquency Advances and Servicing Advances.
(a) If the amount on deposit in the Certificate Account as of any Monthly
Remittance Date is less than the sum of (I) the Interest Remittance Amount on
such Monthly Remittance Date and (II) the Principal Remittance Amount on such
Monthly Remittance Date, the Servicer shall remit to the Trustee for deposit
into the Certificate Account a sufficient amount of its own funds to make the
total amount remitted to the Trustee equal to such sum. Such amounts of the
Servicer's own funds so deposited are "Delinquency Advances", including but not
limited to any amount advanced due to the invocation by a Mortgagor of the
relief provisions provided by the Soldiers' and Sailors' Civil Relief Act of
1940.
The Servicer shall be permitted to fund its payment of Delinquency Advances
on any Business Day and to reimburse itself for any Delinquency Advances paid
from the Servicer's own funds from collections on any Home Equity Loan in the
related Home Equity Loan Group deposited to the Principal and Interest Account
subsequent to the related Remittance Period and shall deposit into the Principal
and Interest Account with respect thereto (i) collections from the Mortgagor
whose Delinquency gave rise to the shortfall which resulted in such Delinquency
Advance and (ii) Net Liquidation Proceeds recovered on account of the related
Mortgage Loan to the extent of the amount of aggregate Delinquency Advances
related thereto. If not recovered from the related Mortgagor or the related Net
Liquidation Proceeds, the Servicer shall recover Delinquency Advances pursuant
to Section 7.03(h).
Notwithstanding the foregoing, in the event that the Servicer determines
that the aggregate unreimbursed Delinquency Advances exceed the aggregate
remaining Scheduled Payments due on the Home Equity Loans, the Servicer shall
not be required to make any future Delinquency Advances, and shall be entitled
to reimbursement for such aggregate unreimbursed Delinquency Advances as
provided above. The Servicer shall give written notice of such determination to
the Trustee; and the Trustee shall promptly furnish a copy of such notice to the
Owners of the Class R Certificates; provided, that the Servicer shall be
entitled to recover any unreimbursed Delinquency Advances from the aforesaid
Liquidation Proceeds prior to the payment of the Liquidation Proceeds to any
other party to this Agreement.
(b) The Servicer will pay all "out-of-pocket" costs and expenses incurred
in the performance of its servicing obligations, including, but not limited to,
the cost of (i) Preservation Expenses, (ii) any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation of REO
Property and (iv) advances required by Section 8.13(a), but the Servicer is only
required to pay such costs and expenses to the extent the Servicer reasonably
believes such costs and expenses will be recoverable from the related Home
Equity Loan. Each such expenditure will constitute a "Servicing Advance". The
Servicer may recover Servicing Advances (x) from the Mortgagors to the extent
permitted by the Home Equity Loans or, if not recovered from the Mortgagor on
whose behalf such Servicing Advance was made, from Liquidation Proceeds realized
upon the liquidation of the related Home Equity Loan and (y) as provided in
Section 7.03(h). The Servicer shall be entitled to recover the Servicing
Advances from the aforesaid Liquidation Proceeds prior to the payment of the
Liquidation Proceeds to any other party to this Agreement. Except as provided in
the previous sentence, in no case may the Servicer recover Servicing Advances
from the principal and interest payments on any Home Equity Loan or from any
amounts relating to any other Home Equity Loan except as provided in Section
7.03(h).
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Section 8.10 Compensating Interest; Repurchase of Home Equity Loans.
(a) If a Prepayment of a Home Equity Loan occurs during any calendar month
or if the amount received with respect to a date-of-payment or simple interest
Home Equity Loan represents less than a full month's interest, any difference
between the interest collected from the Mortgagor and the full month's interest
at the Coupon Rate less the Servicing Fee ("Compensating Interest") that is due
shall be deposited by the Servicer (but not in excess of the aggregate Servicing
Fee for the related Remittance Period) to the Principal and Interest Account on
the next succeeding Monthly Remittance Date and shall be included in the Monthly
Remittance to be made available to the Trustee on such Monthly Remittance Date.
(b) The Servicer has the right and the option, but not the obligation, for
administrative convenience, to purchase for its own account any Home Equity Loan
which becomes Delinquent, in whole or in part, as to four consecutive monthly
installments or any Home Equity Loan as to which enforcement proceedings have
been brought by the Servicer pursuant to Section 8.13; provided, however, that
the Servicer may not purchase any such Home Equity Loan unless the Servicer has
delivered to the Trustee an opinion of counsel experienced in federal income tax
matters acceptable to the Trustee to the effect that such a purchase would not
constitute a Prohibited Transaction for the Trust or otherwise subject the Trust
to tax and would not jeopardize the status of either the Upper-Tier REMIC or the
Lower-Tier REMIC as a REMIC. Any such Loan so purchased shall be purchased by
the Servicer on a Monthly Remittance Date at a purchase price equal to the Loan
Purchase Price thereof, which purchase price shall be deposited in the Principal
and Interest Account.
(c) The Net Liquidation Proceeds from the disposition of any REO Property
shall be deposited in the Principal and Interest Account and remitted to the
Trustee as part of the Daily Collections remitted by the Servicer to the
Trustee.
Section 8.11 Maintenance of Insurance.
(a) The Servicer shall cause to be maintained with respect to each Home
Equity Loan a hazard insurance policy with a generally acceptable carrier that
provides for fire and extended coverage, and which provides for a recovery by
the Trust of insurance proceeds relating to such Home Equity Loan in an amount
not less than the least of (i) the outstanding principal balance of the Home
Equity Loan (plus the related senior lien loan, if any), (ii) the minimum amount
required to compensate for damage or loss on a replacement cost basis and (iii)
the full insurable value of the premises. The Servicer shall maintain the
insurance policies required hereunder in the name of the mortgagee, its
successors and assigns, as loss payee. The policies shall require the insurer to
provide the mortgagee with 30 days' notice prior to any cancellation or as
otherwise required by law. The Servicer may also maintain a blanket hazard
insurance policy or policies if the insurer or insurers of such policies are
rated investment grade by each Rating Agency. Upon the request of the Trustee,
the Servicer will cause to be delivered to such requesting Person a certified
true copy of such blanket policy.
(b) If the Home Equity Loan at the time of origination relates to a
Property in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, the Servicer will cause to be
maintained with respect thereto a flood insurance policy in a form meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable carrier in an amount representing coverage, and
which provides for a recovery by the Trust of insurance proceeds relating to
such Home Equity Loan of not less than the least of (i) the outstanding
principal balance of the Home Equity Loan (plus the related senior lien loan, if
any), (ii) the minimum amount required to compensate for damage or loss on a
replacement cost basis and (iii) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973. The Servicer shall
indemnify the Trust out of the Servicer's own funds for any loss to the Trust
resulting from the Servicer's failure to maintain premiums for such insurance
required by this Section when so permitted by the terms of the Mortgage as to
which such loss relates.
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Section 8.12 Due-on-Sale Clauses; Assumption and Substitution Agreements.
When a 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 Home
Equity Loan under any "due-on-sale" clause contained in the related Mortgage or
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. An opinion of counsel to the foregoing effect
shall conclusively establish the reasonableness of such belief. 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 Note and, unless prohibited by
applicable law or the Mortgage Documents, the Mortgagor remains liable thereon.
If the foregoing is not permitted under applicable law, the Servicer is
authorized 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 Note. The Home
Equity Loan, as assumed, shall conform in all respects to the requirements,
representations and warranties of this Agreement. The Servicer shall notify the
Trustee that any such assumption or substitution agreement has been completed by
forwarding to the Trustee the original copy of such assumption or substitution
agreement (indicating the File to which it relates) which copy shall be added by
the Trustee to the related File and which shall, for all purposes, be considered
a part of such File to the same extent as all other documents and instruments
constituting a part thereof. The Servicer shall be responsible for recording any
such assumption or substitution agreements. In connection with any such
assumption or substitution agreement, the required monthly payment on the
related Home Equity Loan shall not be changed but shall remain as in effect
immediately prior to the assumption or substitution, the stated maturity or
outstanding principal amount of such Home Equity Loan shall not be changed nor
shall any required monthly payments of principal or interest be deferred or
forgiven. Any fee collected by the Servicer or the Sub-Servicer for consenting
to any such conveyance or entering into an assumption or substitution agreement
shall be retained by or paid to the Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Home Equity Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 8.13 Realization Upon Defaulted Home Equity Loans; Modification.
(a) The Servicer shall foreclose upon or otherwise comparably effect the
ownership in the name of the Servicer on behalf of the Trust of Properties
relating to defaulted Home Equity Loans as to which no satisfactory arrangements
can be made for collection of Delinquent payments and which the Servicer has not
purchased pursuant to Section 8.10(b). In connection with such foreclosure or
other conversion, the Servicer shall exercise such of the rights and powers
vested in it hereunder, and use the same degree of care and skill in their
exercise or use, as prudent mortgage lenders would exercise or use under the
circumstances in the conduct of their own affairs and consistent with the
servicing standards set forth in the FannieMae Guide, including, but not limited
to, advancing funds for the payment of taxes, amounts due with respect to Senior
Liens, and insurance premiums. Any amounts so advanced shall constitute
"Servicing Advances" within the meaning of Section 8.09(b) hereof. The Servicer
shall sell any REO Property within 23 months of its acquisition by the Trust, at
such price as the Servicer deems necessary to comply with this covenant unless
the Seller which delivered the related Home Equity Loan obtains for the Trustee
and the Servicer an opinion of counsel experienced in federal income tax matters
acceptable to the Trustee, addressed to the Trustee and the Servicer, to the
effect that the holding by the Trust of such REO Property for any greater period
will not result in the imposition of taxes on "Prohibited Transactions" of the
Trust or any REMIC therein as defined in Section 860F of the Code or cause
either the Lower-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a
REMIC under the REMIC Provisions at any time that any Certificates are
outstanding. Notwithstanding the generality of the foregoing provisions, the
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Servicer shall manage, conserve, protect and operate each REO Property for the
Owners solely for the purpose of its prompt disposition and sale in a manner
which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result in the
receipt by the Lower-Tier REMIC or the Upper Tier REMIC of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code or
any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions. Pursuant to its efforts to sell such REO Property, the
Servicer shall either itself or through an agent selected by the Servicer
protect and conserve such REO Property in the same manner and to such extent as
is customary in the locality where such REO Property is located and may,
incident to its conservation and protection of the interests of the Owners, rent
the same, or any part thereof, as the Servicer deems to be in the best interest
of the Owners for the period prior to the sale of such REO Property. 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 Property in determining whether to foreclose upon or otherwise
comparably convert the ownership of such Property. With respect to any Home
Equity Loan secured by a mixed use Property, the Servicer shall, prior to
foreclosing upon or otherwise comparably effecting the ownership in the name of
the Servicer on behalf of the Trust, either (x) perform a "phase one
environmental study" of such Property or (y) repurchase such Property at the
Loan Purchase Price.
(b) The Servicer shall determine, with respect to each defaulted Home
Equity Loan and in accordance with the procedures set forth in the FannieMae
Guide, when it has recovered, whether through trustee's sale, foreclosure sale
or otherwise, all amounts it expects to recover from or on account of such
defaulted Home Equity Loan, whereupon such Home Equity Loan shall become a
"Liquidated Loan". After a Home Equity Loan has become a Liquidated Loan, the
Servicer shall promptly prepare and forward to the Depositor and the Trustee a
report detailing the Liquidation Proceeds received from the Liquidated Loan,
expenses incurred with respect thereto, and any loss incurred in connection
therewith.
(c) The Servicer shall not agree to any modification, waiver or amendment
of any provision of any Home Equity Loan unless, in the Servicer's good faith
judgment, such modification, waiver or amendment would minimize the loss that
might otherwise be experienced with respect to such Home Equity Loan and only in
the event of a payment default with respect to such Home Equity Loan or in the
event that a payment default with respect to such Home Equity Loan is reasonably
foreseeable by the Servicer; provided, however, that no such modification,
waiver or amendment shall extend the maturity date of such Home Equity Loan
beyond the Remittance Period related to the Final Scheduled Payment Date of the
latest Class of Certificates remaining in the Trust. Notwithstanding anything
set out in this Section 8.13(c) or elsewhere in this Agreement to the contrary,
the Servicer shall be permitted to modify, waive or amend any provision of a
Home Equity Loan if required by statute or a court of competent jurisdiction to
do so.
(d) The Servicer shall deliver to the Trustee for deposit in the related
File, an original counterpart of any agreement relating to such modification,
waiver or amendment, promptly following the execution thereof.
Section 8.14 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Home Equity Loan (including any
liquidation of such Home Equity Loan through foreclosure or otherwise), 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 shall deliver to the
Trustee the FannieMae "Request for Release of Documents" (FannieMae Form 2009).
Upon receipt of such Request for Release of Documents, the Trustee shall
promptly release the related File, in trust, in its reasonable discretion to (i)
the Servicer, (ii) an escrow agent or (iii) any employee, agent or attorney of
the Trustee. Upon any such payment in full, or the receipt of such notification
that such funds have been placed in escrow, the Servicer is authorized to give,
as attorney-in-fact for the Trustee and the mortgagee under the Mortgage which
secured the Note, an instrument of satisfaction (or assignment of Mortgage
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without recourse) regarding the Property relating to such Mortgage, which
instrument of satisfaction or assignment, as the case may be, shall be delivered
to the Person or Persons entitled thereto against receipt therefor of payment in
full, it being understood and agreed that no expense incurred in connection with
such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Principal and Interest Account. In lieu of executing any such
satisfaction or assignment, as the case may be, the Servicer may prepare and
submit to the Trustee a satisfaction (or assignment without recourse, if
requested by the Person or Persons entitled thereto) in form for execution by
the Trustee with all requisite information completed by the Servicer; in such
event, the Trustee shall execute and acknowledge such satisfaction or
assignment, as the case may be, and deliver the same with the related File, as
aforesaid.
(b) From time to time and as appropriate in the servicing of any Home
Equity Loan, including, without limitation, foreclosure or other comparable
conversion of a Home Equity Loan or collection under any applicable Insurance
Policy, the Trustee shall (except in the case of the payment or liquidation
pursuant to which the related File is released to an escrow agent or an
employee, agent or attorney of the Trustee), upon request of the Servicer and
delivery to the Trustee of a receipt signed by an Authorized Officer of the
Servicer, release the related File to the Servicer and shall execute such
documents as shall be necessary to the prosecution of any such proceedings,
including, without limitation, an assignment without recourse of the related
Mortgage to the Servicer; provided that there shall not be released and
unreturned at any one time more than 10% of the entire number of Files. Such
receipt shall obligate the Servicer to return the File to the Trustee when the
need therefor by the Servicer no longer exists unless the Home Equity Loan shall
be liquidated, in which case, upon receipt of the FannieMae "Liquidation
Schedule" relating to such liquidation, the receipt shall be released by the
Trustee to the Servicer.
(c) The Servicer shall have the right to accept applications of Mortgagors
for consent to (i) partial releases of Mortgages, (ii) alterations and (iii)
removal, demolition or division of properties subject to Mortgages. No
application for approval shall be considered by the Servicer unless: (x) the
provisions of the related Note and Mortgage have been complied with; (y) the
Loan-to-Value Ratio after any release does not exceed the Loan-to-Value Ratio of
such Home Equity Loan as of the date of origination thereof; and (z) the lien
priority of the related Mortgage is not affected. Upon receipt by the Trustee of
an Officer's Certificate executed on behalf of the Servicer setting forth the
action proposed to be taken in respect of a particular Home Equity Loan and
certifying that the criteria set forth in the immediately preceding sentence
have been satisfied, the Trustee shall execute and deliver to the Servicer the
consent or partial release so requested by the Servicer. A proposed form of
consent or partial release, as the case may be, shall accompany any Officer's
Certificate delivered by the Servicer pursuant to this paragraph. The Servicer
shall notify the Rating Agencies if an application is approved under clause (y)
above.
Section 8.15 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to each Home
Equity Loan. Additional servicing compensation in the form of prepayment
charges, release fees, bad check charges, assumption fees, late payment charges,
prepayment penalties, or any other servicing-related fees, Net Liquidation
Proceeds not required to be deposited in the Principal and Interest Account
pursuant to Section 8.08(c)(ii) and similar items may, to the extent collected
from Mortgagors, be retained by the Servicer.
Section 8.16 Annual Statement as to Compliance.
The Servicer, at its own expense, will deliver to the Trustee, the
Depositor and the Rating Agencies, on or before March 31 of each year,
commencing in 1998, an Officer's Certificate stating, as to each signer thereof,
that (i) a review of the activities of the Servicer during such preceding
calendar year and of performance under this Agreement has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
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all such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Servicer to
remedy such default.
Section 8.17 Annual Independent Certified Public Accountants' Reports.
On or before June 30 of any year, commencing in 1998, the Servicer, at its
own expense (or if the Trustee is then acting as Servicer, at the expense of the
Depositor, which in no event shall exceed $1,000 per annum), shall cause to be
delivered to the Trustee and the Rating Agencies a letter or letters of a firm
of independent, nationally recognized certified public accountants, dated as of
the date of the Servicer's fiscal audit for subsequent letters, stating that
such firm has examined the Servicer's overall servicing operations in accordance
with the requirements of the Uniform Single Attestation Program for Mortgage
Bankers, and stating such firm's conclusions relating thereto.
Section 8.18 Access to Certain Documentation and Information Regarding the
Home Equity Loans.
The Servicer shall provide to the Trustee the FDIC and the supervisory
agents and examiners of each of the foregoing (which, in the case of supervisory
agents and examiners, may be required by applicable state and federal
regulations) access to the documentation regarding the Home Equity Loans, 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 8.19 Assignment of Agreement.
The Servicer may not assign its obligations under this Agreement, in whole
or in part, unless it shall have first obtained the written consent of the
Trustee, which consent shall not be unreasonably withheld; provided, however,
that any assignee must meet the eligibility requirements set forth in Section
8.20(i) hereof for a successor servicer.
Section 8.20 Removal of Servicer; Resignation of Servicer.
(a) The Trustee acting upon the request of a majority of the Percentage
Interests of the Offered Certificates then Outstanding, may remove the Servicer
upon the occurrence of any of the following events:
(i) The Servicer shall (I) apply for or consent to the appointment of
a receiver, trustee, liquidator or custodian or similar entity with respect
to itself or its property, (II) admit in writing its inability to pay its
debts generally as they become due, (III) make a general assignment for the
benefit of creditors, (IV) be adjudicated a bankrupt or insolvent, (V)
commence a voluntary case under the federal bankruptcy laws of the United
States of America or file a voluntary petition or answer seeking
reorganization, an arrangement with creditors or an order for relief or
seeking to take advantage of any insolvency law or file an answer admitting
the material allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding or (VI) take corporate action for
the purpose of effecting any of the foregoing; or
(ii) If without the application, approval or consent of the Servicer,
a proceeding shall be instituted in any court of competent jurisdiction,
under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking in respect of the Servicer an order for relief or an
adjudication in bankruptcy, reorganization, dissolution, winding up,
liquidation, a composition or arrangement with creditors, a readjustment of
debts, the appointment of a trustee, receiver, liquidator or custodian or
similar entity with respect to the Servicer or of all or any substantial
part of its assets, or other like relief in respect thereof under any
bankruptcy or insolvency law, and, if such proceeding is being contested by
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the Servicer in good faith, the same shall (A) result in the entry of an
order for relief or any such adjudication or appointment or (B) continue
undismissed or pending and unstayed for any period of seventy-five (75)
consecutive days; or
(iii) The Servicer shall fail to perform any one or more of its
obligations hereunder and shall continue in default thereof for a period of
thirty (30) days (one (1) Business Day in the case of a delay in making a
required payment to the Trustee under Section 8.08(d)(ii)(a)) after the
earlier of (a) actual knowledge of an officer of the Servicer or (b)
receipt of notice from the Trustee of said failure; or
(iv) The Servicer shall fail to cure any breach of any of its
representations and warranties set forth in Section 3.02 which materially
and adversely affects the interests of the Owners for a period of sixty
(60) days after the earlier of the Servicer's discovery or receipt of
notice thereof; or
(v) The merger, consolidation or other combination of the Servicer
with or into any other entity, unless (1) the Servicer is the surviving
entity of such combination or (2) the surviving entity is a corporation or
a state-chartered or national bank (acceptable to the Owners of the Class R
Certificates as provided below) organized and doing business under the laws
of any state or the United States; or
(vi) The occurrence of a Cumulative Realized Loss Termination Trigger.
(b) Reserved.
(c) Each party hereto agrees to use its best efforts to inform the Trustee
of any materially adverse information regarding the Servicer's servicing
activities that comes to the attention of such party from time to time.
(d) Reserved.
(e) The Servicer shall not resign from the obligations and duties hereby
imposed on it, except upon determination that its duties hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it, the other activities
of the Servicer so causing such a conflict being of a type and nature carried on
by the Servicer at the date of this Agreement. Any such determination permitting
the resignation of the Servicer shall be evidenced by an opinion of counsel to
such effect which shall be delivered to the Trustee.
(f) No removal or resignation of the Servicer shall become effective until
the Trustee or a successor Servicer shall have assumed the Servicer's
responsibilities and obligations in accordance with this Section.
(g) Upon removal or resignation of the Servicer, the Servicer at its own
expense also shall promptly deliver or cause to be delivered to a successor
servicer or the Trustee all the books and records (including, without
limitation, records kept in electronic form) that the Servicer has maintained
for the Home Equity Loans, including all tax bills, assessment notices,
insurance premium notices and all other documents as well as all original
documents then in the Servicer's possession.
(h) Any collections then being held by the Servicer prior to its removal
and any collections received by the Servicer after removal or resignation shall
be endorsed by it to the Trustee and remitted directly and immediately to the
Trustee or the successor Servicer.
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(i) Upon removal or resignation of the Servicer, the Trustee (x) may
solicit bids for a successor servicer as described below, and (y) pending the
appointment of a successor servicer as a result of soliciting such bids, shall
serve as Servicer. The Trustee shall, if it is unable to obtain a qualifying bid
and is prevented by law from acting as Servicer, appoint, or petition a court of
competent jurisdiction to appoint, any housing and home finance institution,
bank or mortgage servicing institution which has been designated as an approved
seller-servicer by FannieMae or FHLMC for first and second mortgage loans and
having equity of not less than $10,000,000, as determined in accordance with
generally accepted accounting principles and acceptable to the Owners of the
Class R Certificates as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder. The compensation of any successor Servicer (including,
without limitation, the Trustee) so appointed shall be the aggregate Servicing
Fee, together with the other servicing compensation in the form of assumption
fees, late payment charges or otherwise as provided in Sections 8.08 and 8.15;
provided, however, that if the Trustee acts as successor Servicer then
ContiMortgage agrees to pay to the Trustee at such time that the Trustee becomes
such successor Servicer a set-up fee of twenty-five dollars ($25.00) for each
Home Equity Loan then included in the Trust Estate. The Trustee shall be
obligated to serve as successor Servicer whether or not the fee described in the
preceding sentence is paid by ContiMortgage, but shall in any event be entitled
to receive, and to enforce payment of, such fee from ContiMortgage.
(j) In the event the Trustee solicits bids as provided above, the Trustee
shall solicit, by public announcement, bids from housing and home finance
institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor Servicer shall be entitled to the full amount of the aggregate
Servicing Fees as servicing compensation, together with the other servicing
compensation in the form of assumption fees, late payment charges or otherwise
as provided in Sections 8.08 and 8.15. Within thirty days after any such public
announcement, the Trustee shall negotiate and effect the sale, transfer and
assignment of the servicing rights and responsibilities hereunder to the
qualified party submitting the highest satisfactory bid as to the price they
will pay to obtain servicing. The Trustee shall deduct from any sum received by
the Trustee from the successor Servicer in respect of such sale, transfer and
assignment all costs and expenses of any public announcement and of any sale,
transfer and assignment of the servicing rights and responsibilities hereunder.
After such deductions, the remainder of such sum less any amounts due the
Trustee or the Trust from the Servicer shall be paid by the Trustee to the
Servicer at the time of such sale, transfer and assignment to the successor
Servicer.
(k) The Trustee and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession,
including the notification to all Mortgagors of the transfer of servicing. The
Servicer agrees to cooperate with the Trustee and any successor Servicer in
effecting the termination of the Servicer's servicing responsibilities and
rights hereunder and shall promptly provide the Trustee or such successor
Servicer, as applicable, all documents and records reasonably requested by it to
enable it to assume the Servicer's functions hereunder and shall promptly also
transfer to the Trustee or such successor Servicer, as applicable, all amounts
which then have been or should have been deposited in the Principal and Interest
Account by the Servicer or which are thereafter received with respect to the
Home Equity Loans. Neither the Trustee nor any other successor Servicer shall be
held liable by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Servicer. If the Servicer resigns or is replaced hereunder, the Seller
agrees to reimburse the Trust and the Owners for the costs and expenses
associated with the transfer of servicing to the replacement Servicer, but
subject to a maximum reimbursement to all such parties in the amount of
twenty-five dollars ($25.00) for each Home Equity Loan then included in the
Trust Estate.
(l) The Trustee or any other successor Servicer, upon assuming the duties
of Servicer hereunder, shall immediately make all Delinquency Advances and
deposit them to the Principal and Interest Account which the Servicer has
theretofore failed to remit with respect to the Home Equity Loans; provided,
however, that
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if the Trustee is acting as successor Servicer, the Trustee shall only be
required to make Delinquency Advances (including the Delinquency Advances
described in this clause (l)) if, in the Trustee's reasonable good faith
judgment, such Delinquency Advances will ultimately be recoverable from the Home
Equity Loans.
(m) The Servicer which is being removed or is resigning shall give notice
to the Mortgagors and the Rating Agencies of the transfer of the servicing to
the successor Servicer.
(n) The Trustee shall give notice to the Owners, the Trustee, the Seller,
and the Rating Agencies of the occurrence of any event described in paragraphs
(a) or (b) above of which the Trustee is aware.
Section 8.21 Inspections; Errors and Omissions Insurance.
(a) At any reasonable time and from time to time upon reasonable notice,
the Trustee or any agents thereof may inspect the Servicer's servicing
operations and discuss the servicing operations of the Servicer during the
Servicer's normal business hours with any of its officers or directors;
provided, however, that the costs and expenses incurred by the Servicer or its
agents or representatives in connection with any such examinations or
discussions shall be paid by the Servicer;
(b) The Servicer agrees to maintain errors and omissions coverage and a
fidelity bond, each at least to the extent required by Section 305 of Part I of
the FannieMae Guide or any successor provision thereof; provided, however, that
if the Trustee shall become the Servicer, any customary insurance coverage that
the Trustee maintains shall be deemed sufficient hereunder; provided, further,
that in the event that the fidelity bond or the errors and omissions coverage is
no longer in effect, the Trustee shall promptly give such notice to the Owners.
Upon the request of the Trustee, the Servicer shall cause to be delivered to
such requesting Person a certified true copy of such fidelity bond or errors and
omission policy.
END OF ARTICLE VIII
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ARTICLE IX
TERMINATION OF TRUST
Section 9.01 Termination of Trust.
The Trust created hereunder and all obligations created by this Agreement
will terminate upon the payment to the Owners of all Certificates of all amounts
held by the Trustee and required to be paid to such Owners pursuant to this
Agreement upon the latest to occur of (a) the final payment or other liquidation
(or any advance made with respect thereto) of the last Home Equity Loan in the
Trust Estate, (b) the disposition of all property acquired in respect of any
Home Equity Loan remaining in the Trust Estate and (c) at any time when a
Qualified Liquidation of both Home Equity Loan Groups included within the Trust
is effected as described below. To effect a termination of this Agreement
pursuant to clause (c) above, the Owners of all Certificates then Outstanding
shall (i) unanimously direct the Trustee on behalf of the Lower-Tier REMIC and
the Upper-Tier REMIC to adopt a plan of complete liquidation for each of the
Home Equity Loan Groups as contemplated by Section 860F(a)(4) of the Code and
(ii) provide to the Trustee an opinion of counsel experienced in federal income
tax matters acceptable to the Trustee to the effect that each such liquidation
constitutes a Qualified Liquidation, and the Trustee either shall sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust Estate,
or shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates each in accordance with such plan, so
that the liquidation or distribution of the Trust Estate, the distribution of
any proceeds of the liquidation and the termination of this Agreement occur no
later than the close of the 90th day after the date of adoption of the plan of
liquidation and such liquidation qualifies as a Qualified Liquidation. In no
event, however, will the Trust created by this Agreement continue beyond the
expiration of twenty-one (21) years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of Saint James, living on the date hereof. The Trustee shall give
written notice of termination of the Agreement to each Owner in the manner set
forth in Section 11.05.
Section 9.02 Termination Upon Option of Owners of Class R Certificates.
(a) On any Monthly Remittance Date on or after the Clean-Up Call Date, the
Owners of a majority of the Percentage Interests represented by the Class R
Certificates then outstanding may determine to purchase and may cause the
purchase from the Trust of all (but not fewer than all) Home Equity Loans and
all property theretofore acquired in respect of any Home Equity Loan by
foreclosure, deed in lieu of foreclosure, or otherwise then remaining in the
Trust Estate at a price equal to 100% of the aggregate Loan Balances of the
related Home Equity Loans as of the day of purchase minus amounts remitted from
the Principal and Interest Account to the Certificate Account representing
collections of principal on the Home Equity Loans during the current Remittance
Period, plus one month's interest on such amount computed at the Termination
Date Pass-Through Rate, plus all accrued and unpaid Servicing Fees plus the
aggregate amount of any unreimbursed Delinquency Advances and Servicing Advances
and any Delinquency Advances which the Servicer has theretofore failed to remit.
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.
(b) In connection with any such purchase, such Owners of the Class R
Certificates shall unanimously direct the Trustee to adopt and the Trustee shall
adopt, as to the Lower-Tier REMIC and the Upper-Tier REMIC, a plan of complete
liquidation of both Home Equity Loan Groups included within the Trust as
contemplated by Section 860F(a)(4) of the Code and shall provide to the Trustee
an opinion of counsel experienced in federal income tax matters acceptable to
the Trustee to the effect that such purchase and liquidations constitutes, as to
the Lower-Tier REMIC and the Upper-Tier REMIC, a Qualified Liquidation. In
addition, such Owners of the Class R Certificates shall provide to the Trustee
an opinion of counsel acceptable to the Trustee to the effect that such purchase
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and liquidation does not constitute a preference payment pursuant to the United
States Bankruptcy Code.
(c) Promptly following any purchase described in this Section 9.02, the
Trustee will release the Files to the Owners of such Class R Certificates or
otherwise upon their order, in a manner similar to that described in Section
8.14 hereof.
Section 9.03 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 the Lower-Tier REMIC or the Upper-Tier REMIC 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 the Owners of a majority in Percentage
Interests represented by the Offered Certificates then Outstanding may direct
the Trustee on behalf of the Trust to adopt a plan of complete liquidation, as
contemplated by Section 860F(a)(4) of the Code.
The Trustee shall notify the Owners of the Class R Certificates of such
election to liquidate or such determination to purchase, as the case may be (the
"Termination Notice"). The Owners of a majority of the Percentage Interests 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 the Trust all (but not fewer than all) Home Equity Loans
and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure, or otherwise then remaining in the Trust Estate at a purchase price
equal to the aggregate Loan Balances of all Home Equity Loans as of the date of
such purchase, plus (a) one month's interest on such amount at the Termination
Date Pass-Through Rate, (b) the aggregate amount of any unreimbursed Delinquency
Advances and Servicing Advances and (c) any Delinquency Advances which the
Servicer has theretofore failed to remit. If, during the Purchase Option Period,
the Owners of the Class R Certificates have not exercised the option described
in the immediately preceding paragraph, then upon the expiration of the Purchase
Option Period in the event that the Owners of the Offered Certificates have
given the Trustee the direction described in clause (a)(i) above, the Trustee
shall sell the Home Equity Loans and distribute the proceeds of the liquidation
of the Trust Estate, each in accordance with the plan of complete liquidation,
such that, if so directed, the liquidation of the Trust Estate, 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 Owners of the
Offered Certificates shall permit or direct in writing, 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.
(b) Following a Final Determination, the Owners of a majority of the
Percentage Interests of the Class R Certificates then Outstanding may, at their
option and upon delivery to the Trustee of an opinion of counsel experienced in
federal income tax matters acceptable to the Trustee selected by the Owners of
the Class R Certificates, which opinion shall be reasonably satisfactory in form
and substance to Trustee, to the effect that the effect of the Final
Determination is to increase substantially the probability that the gross income
of the Trust will be subject to federal taxation, purchase from the Trust all
(but not fewer than all) Home Equity Loans and all property theretofore acquired
by foreclosure, deed in lieu of foreclosure, or otherwise then remaining in the
Trust Estate at a purchase price equal to the aggregate Loan Balances of all
Home Equity Loans as of the date of such purchase, plus (a) one month's interest
on such amount computed at the Termination Date Pass-Through Rate, (b) the
aggregate amount of unreimbursed Delinquency Advances and (c) any Delinquency
Advances which the Servicer has theretofore failed to remit. 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. The foregoing opinion shall be deemed satisfactory unless the
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Trustee gives the Owners of a majority of the Percentage Interests of the Class
R Certificates notice that such opinion is not satisfactory within thirty days
after receipt of such opinion. In connection with any such purchase, such Owners
shall direct the Trustee to adopt a plan of complete liquidation as contemplated
by Section 860F(a)(4) of the Code and shall provide to the Trustee an opinion of
counsel experienced in federal income tax matters to the effect that such
purchase constitutes a Qualified Liquidation.
Section 9.04 Disposition of Proceeds.
The Trustee shall, upon receipt thereof, deposit the proceeds of any
liquidation of the Trust Estate pursuant to this Article IX to the Certificate
Account; provided, however, that any amounts representing unreimbursed
Delinquency Advances and Servicing Advances theretofore funded by the Servicer
from the Servicer's own funds shall be paid by the Trustee to the Servicer from
the proceeds of the Trust Estate.
END OF ARTICLE IX
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ARTICLE X
THE TRUSTEE
Section 10.01 Certain Duties and Responsibilities.
(a) The Trustee (i) (A) undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Trustee and (B) the
banking institution that is the Trustee shall serve as the Trustee at all times
under this Agreement, and (ii) in the absence of bad faith on its part, may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished pursuant to
and conforming to the requirements of this Agreement; but in the case of any
such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Agreement.
(b) Notwithstanding the appointment of the Servicer hereunder, the Trustee
is hereby empowered to perform the duties of the Servicer it being expressly
understood, however, that the foregoing describes a power and not an obligation
of the Trustee, and that all parties hereto agree that, prior to any termination
of the Servicer, the Servicer and, thereafter, the Trustee or any other
successor servicer shall perform such duties. Specifically, and not in
limitation of the foregoing, the Trustee shall upon termination or resignation
of the Servicer, and pending the appointment of any other Person as successor
Servicer, have the power and duty during its performance as successor Servicer:
(i) to collect Mortgagor payments;
(ii) to foreclose on defaulted Home Equity Loans;
(iii) to enforce due-on-sale clauses and to enter into assumption and
substitution agreements as permitted by Section 8.12 hereof;
(iv) to deliver instruments of satisfaction pursuant to Section 8.14;
(v) to enforce the Home Equity Loans; and
(vi) to make Delinquency Advances and Servicing Advances and to pay
Compensating Interest.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(ii) the Trustee shall not be personally liable for any error of judgment
made in good faith by an Authorized Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the
direction of the Owners of a majority in Percentage Interest of the
Certificates of the affected Class or Classes relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement relating to such Certificates.
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(d) Whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
(e) No provision of this Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. None of the provisions contained in this Agreement shall in any
event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement,
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement.
(f) The permissive right of the Trustee to take actions enumerated in this
Agreement shall not be construed as a duty and the Trustee shall not be
answerable for other than its own negligence or willful misconduct.
(g) The Trustee shall be under no obligation to institute any suit, or to
take any remedial proceeding under this Agreement, or to take any steps in the
execution of the trusts hereby created or in the enforcement of any rights and
powers hereunder until it shall be indemnified to its satisfaction against any
and all costs and expenses, outlays and counsel fees and other reasonable
disbursements and against all liability, except liability which is adjudicated
to have resulted from its negligence or willful misconduct, in connection with
any action so taken.
(h) Neither the Servicer, the Seller nor the Trustee knowingly shall take
any action that would cause the Class A-10 Certificates or the Class M-1A
Certificates to fail to qualify as "mortgage related securities" within the
meaning of the Securities Exchange Act of 1934, as amended.
Section 10.02 Removal of Trustee for Cause.
(a) The Trustee may be removed pursuant to paragraph (b) hereof upon the
occurrence of any of the following events (whatever the reason for such event
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(1) the Trustee shall fail to distribute to the Owners entitled hereto
on any Payment Date amounts available for distribution in accordance with
the terms hereof; (provided, however, that any such failure which is due to
circumstances beyond the control of the Trustee shall not be a cause for
removal hereunder); or
(2) the Trustee shall fail in the performance of, or breach, any
covenant or agreement of the Trustee in this Agreement, or if any
representation or warranty of the Trustee made in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection
herewith shall prove to be incorrect in any material respect as of the time
when the same shall have been made, and such failure or breach shall
continue or not be cured for a period of 30 days after there shall have
been given, by registered or certified mail, to the Trustee by the Sellers,
or by the Owners of at least 25% of the aggregate Percentage Interests in
the Trust Estate represented by the Offered Certificates then Outstanding,
or, if there are no Offered Certificates then Outstanding, by such
Percentage Interests represented by the Class R Certificates, a written
notice specifying such failure or breach and requiring it to be remedied;
or
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(3) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Trustee,
and such decree or order shall have remained in force undischarged or
unstayed for a period of 75 days; or
(4) a conservator or receiver or liquidator or sequestrator or
custodian of the property of the Trustee is appointed in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Trustee or relating to all or
substantially all of its property; or
(5) the Trustee shall become insolvent (however insolvency is
evidenced), generally fail to pay its debts as they come due, file or
consent to the filing of a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of
its creditors, voluntarily suspend payment of its obligations, or take
corporate action for the purpose of any of the foregoing.
The Depositor shall give notice to the Rating Agencies of the occurrence of
any such event of which the Depositor is aware.
(b) If any event described in paragraph (a) occurs and is continuing, then
and in every such case the Depositor and the Owners of a majority of the
Percentage Interests represented by the Offered Certificates or if there are no
Offered Certificates then outstanding by such majority of the Percentage
Interests represented by the Retained Certificates, may, whether or not the
Trustee resigns pursuant to Section 10.09(b) hereof, immediately, concurrently
with the giving of notice to the Trustee, and without delaying the 30 days
required for notice therein, appoint a successor Trustee pursuant to the terms
of Section 10.09 hereof.
(c) The Servicer shall not be liable for any costs relating to the removal
of the Trustee or the appointment of a new Trustee.
Section 10.03 Certain Rights of the Trustee.
Except as otherwise provided in Section 10.01 hereof:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, note or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Depositor, either of the Sellers or the
Owners of any Class of Certificates mentioned herein shall be sufficiently
evidenced in writing;
(c) whenever in the administration of this Agreement the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer's Certificate;
(d) the Trustee may consult with counsel, and the written advice of such
counsel (selected in good faith by the Trustee) shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reasonable reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Agreement at the request or direction of any of
the Owners pursuant to this Agreement, unless such Owners shall have offered to
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the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document, but the Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys
or custodians;
(h) the Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized by the
Authorized Officer of any Person or within its rights or powers under this
Agreement other than as to validity and sufficiency of its authentication of the
Certificates;
(i) 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;
(j) pursuant to the terms of this Agreement, the Servicer is required to
furnish to the Trustee from time to time certain information and to make various
calculations which are relevant to the performance of the Trustee's duties under
this Agreement. The Trustee shall be entitled to rely in good faith on any such
information and calculations in the performance of its duties hereunder, (i)
unless and until an Authorized Officer of the Trustee has actual knowledge, or
is advised by any Owner of a Certificate (either in writing or orally with
prompt written or telecopies confirmation), that such information or
calculations is or are incorrect, or (ii) unless there is a manifest error in
any such information; and
(k) the Trustee shall not be required to give any bond or surety in respect
of the execution of the Trust Estate created hereby or the powers granted
hereunder.
Section 10.04 Not Responsible for Recitals or Issuance of Certificates.
The recitals and representations contained herein and in the Certificates,
except any such recitals and representations relating to the Trustee, shall be
taken as the statements of the Depositor and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of this Agreement, of the Certificates, or any Home
Equity Loan or document related thereto other than as to validity and
sufficiency of its authentication of the Certificates. The Trustee shall not be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor, either of the Sellers or the
Servicer in respect of the Home Equity Loans or deposited into or withdrawn from
the Principal and Interest Account or the Certificate Account by the Depositor,
the Servicer or either of the Sellers, and shall have no responsibility for
filing any financing or continuation statement in any public office at any time
or otherwise to perfect or maintain the perfection of any security interest or
lien or to prepare or file any tax returns or Securities and Exchange Commission
filings for the Trust or to record this Agreement. The Trustee shall not be
required to take notice or be deemed to have notice or knowledge of any default
unless an Authorized Officer of the Trustee shall have received written notice
thereof or an Authorized Officer has actual knowledge thereof. In the absence of
receipt of such notice, the Trustee may conclusively assume that no default has
occurred.
Section 10.05 May Hold Certificates.
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The Trustee, any Paying Agent, Registrar or any other agent of the Trust,
in its individual or any other capacity, may become an Owner or pledgee of
Certificates and may otherwise deal with the Trust with the same rights it would
have if it were not Trustee, any Paying Agent, Registrar or such other agent.
Section 10.06 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other trust funds except to the extent required herein or required by law. The
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Seller and except to the extent of
income or other gain on investments which are deposits in or certificates of
deposit of the Trustee in its commercial capacity.
Section 10.07 Compensation and Reimbursement; No Lien for Fees.
The Trustee shall receive compensation for fees and reimbursement for
expenses pursuant to Section 2.05, Section 7.03(b)(i) or (c)(i) and Section 7.06
hereof. The Trustee shall have no lien on either the Trust Estate for the
payment of such fees and expenses.
Section 10.08 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation or association organized and doing business under the laws of the
United States of America or of any State authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 subject to supervision or examination by the United States of
America, and having a deposit rating of at least A2 by Moody's (or such lower
rating as may be acceptable to Moody's), and deposit rating of A- by Standard &
Poor's (or such lower rating as may be acceptable to Standard & Poor's) and, if
rated by Fitch, having a rating of at least A- from Fitch (or such lower rating
as may be acceptable to Fitch). If such Trustee publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall, upon the request of
ContiMortgage resign immediately in the manner and with the effect hereinafter
specified in this Article X.
Section 10.09 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article X shall become effective until the
acceptance of appointment by the successor trustee under Section 10.10 hereof.
(b) The Trustee, or any trustee or trustees hereafter appointed, may resign
at any time by giving written notice of resignation to the Depositor and by
mailing notice of resignation by first-class mail, postage prepaid, to the
Owners at their addresses appearing on the Register; provided, that the Trustee
cannot resign solely for the failure to receive the Trustee Fee. A copy of such
notice shall be sent by the resigning Trustee to the Rating Agencies. Upon
receiving notice of resignation, the Depositor shall promptly appoint a
successor trustee or trustees by written instrument, in duplicate, executed on
behalf of the Trust by an Authorized Officer of ContiMortgage, one copy of which
instrument shall be delivered to the Trustee so resigning and one copy to the
successor trustee or trustees. If no successor trustee shall have been appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Owner may, on
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behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and appropriate, appoint a successor
trustee.
(c) If at any time the Trustee shall cease to be eligible under Section
10.08 hereof and shall fail to resign after written request therefor by the
Depositor, the Depositor may remove the Trustee and appoint a successor trustee
by written instrument, in duplicate, executed on behalf of the Trust by an
Authorized Officer of the Depositor, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
(d) The Owners of a majority of the Percentage Interests represented by the
Offered Certificates or, if there are no Offered Certificates then Outstanding,
by such majority of the Percentage Interests represented by the Class R
Certificates, may at any time remove the Trustee and appoint a successor trustee
by delivering to the Trustee to be removed, to the successor trustee so
appointed, to the Depositor and to the Servicer copies of the record of the act
taken by the Owners, as provided for in Section 11.03 hereof.
(e) If the Trustee fails to perform its duties in accordance with the terms
of this Agreement, or becomes ineligible pursuant to Section 10.08 to serve as
Trustee, ContiMortgage may remove the Trustee and appoint a successor trustee by
written instrument, in triplicate, signed by ContiMortgage duly authorized, one
complete set of which instruments shall be delivered to the Depositor, one
complete set to the Trustee so removed and one complete set to the successor
Trustee so appointed.
(f) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of the Trustee for any cause,
ContiMortgage shall promptly appoint a successor trustee. If within one year
after such resignation, removal or incapability or the occurrence of such
vacancy, a successor trustee shall be appointed by act of ContiMortgage or the
Owners of a majority of the Percentage Interests represented by the Offered
Certificates then Outstanding, the successor trustee so appointed shall
forthwith upon its acceptance of such appointment become the successor trustee
and supersede the successor trustee appointed by the Depositor. If no successor
trustee shall have been so appointed by the Depositor or the Owners and shall
have accepted appointment in the manner hereinafter provided, any Owner may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(g) The Depositor shall give notice of any removal of the Trustee by
mailing notice of such event by first-class mail, postage prepaid, to the Rating
Agencies and to the Owners as their names and addresses appear in the Register.
Each notice shall include the name of the successor Trustee and the address of
its corporate trust office.
Section 10.10 Acceptance of Appointment by Successor Trustee.
Every successor trustee appointed hereunder shall execute, acknowledge and
deliver to the Depositor on behalf of the Trust and to its predecessor Trustee
an instrument accepting such appointment hereunder and stating its eligibility
to serve as Trustee hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties and obligations of its predecessor hereunder; but, on
request of the Depositor or the successor Trustee, such predecessor Trustee
shall, upon payment of its charges then unpaid, execute and deliver an
instrument transferring to such successor trustee all of the rights, powers and
trusts of the Trustee so ceasing to act, and shall duly assign, transfer and
deliver to such successor trustee all property and money held by such Trustee so
ceasing to act hereunder. Upon request of any such successor trustee, the
Depositor on behalf of the Trust shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor trustee all such
rights, powers and trusts.
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Upon acceptance of appointment by a successor Trustee as provided in this
Section, the Depositor shall mail notice thereof by first-class mail, postage
prepaid, to the Owners at their last addresses appearing upon the Register. The
Depositor shall send a copy of such notice to the Rating Agencies. If the
Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor Trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Trust.
No successor trustee shall accept its appointment unless at the time of
such acceptance such successor shall be qualified and eligible under this
Article X.
Section 10.11 Merger, Conversion, Consolidation or Succession to Business
of the Trustee.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, however,
that such corporation or association shall be otherwise qualified and eligible
under this Article X. In case any Certificates have been executed, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such Trustee may adopt such execution and deliver the
Certificates so executed with the same effect as if such successor Trustee had
itself executed such Certificates.
Section 10.12 Reporting; Withholding.
(a) The Trustee shall timely provide to the Owners the Internal Revenue
Service's Form 1099 and any other statement required by applicable Treasury
regulations as determined by the Tax Matters Person, and shall withhold, as
required by applicable law, federal, state or local taxes, if any, applicable to
distributions to the Owners, including but not limited to backup withholding
under Section 3406 of the Code and the withholding tax on distributions to
foreign investors under Sections 1441 and 1442 of the Code.
(b) As required by law or upon request of the Tax Matters Person and except
as otherwise specifically set forth in subsection (a) above, the Trustee shall
timely file all reports prepared by the Depositor and required to be filed by
the Trust with any federal, state or local governmental authority having
jurisdiction over the Trust, including other reports that must be filed with the
Owners, such as the Internal Revenue Service's Form 1066 and Schedule Q and the
form required under Section 6050K of the Code, if applicable to REMICs.
Furthermore, the Trustee shall report to Owners, if required, with respect to
the allocation of expenses pursuant to Section 212 of the Code in accordance
with the specific instructions to the Trustee by the Depositor with respect to
such allocation of expenses. The Trustee shall, upon request of the Depositor,
collect any forms or reports from the Owners determined by the Depositor to be
required under applicable federal, state and local tax laws.
(c) The Depositor covenants and agrees that it shall provide to the Trustee
any information necessary to enable the Trustee to meet its obligations under
subsections (a) and (b) above.
(d) Except as otherwise provided, the Depositor shall have the
responsibility for preparation of all returns, forms, reports and other
documents referred to in this Section and the Trustee's responsibility shall be
to execute such documents.
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Section 10.13 Liability of the Trustee.
The Trustee shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Trustee herein.
Neither the Trustee nor any of the directors, officers, employees or agents of
the Trustee shall be under any liability on any Certificate or otherwise to the
Depositor, either of the Sellers, the Servicer or any Owner for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Trustee, its directors, officers, employees or agents or
any such Person against any liability which would otherwise be imposed by reason
of negligent action, negligent failure to act or willful misconduct in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. Subject to the foregoing sentence, the Trustee shall not be
liable for losses on investments of amounts in the Certificate Account (except
for any losses on obligations on which the bank serving as Trustee is the
obligor). In addition, the Depositor, each of the Sellers and Servicer covenant
and agree to indemnify the Trustee, and when the Trustee is acting as Servicer,
the Servicer, from, and hold it harmless against, any and all losses,
liabilities, damages, claims or expenses (including legal fees and expenses) of
whatsoever kind arising out of or in connection with the performance of its
duties hereunder other than those resulting from the negligence or bad faith of
the Trustee, and the Depositor shall pay all amounts not otherwise paid pursuant
to Sections 2.05 and 7.06 hereof. The Trustee and any director, officer,
employee or agent of the Trustee may rely and shall be protected in acting or
refraining from acting in good faith on any certificate, notice or other
document of any kind prima facie properly executed and submitted by the
Authorized Officer of any Person respecting any matters arising hereunder. The
provisions of this Section 10.13 shall survive the termination of this Agreement
and the payment of the outstanding Certificates.
Section 10.14 Appointment of Co-Trustee or Separate Trustee .
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Estate or Property may at the time be located, the Servicer and the
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-Trustee or co-Trustees, jointly with the Trustee, of all or any part of the
Trust Estate or separate Trustee or separate Trustees of any part of the Trust
Estate, and to vest in such Person or Persons, in such capacity and for the
benefit of the Owners, such title to the Trust Estate, or any part thereof, and,
subject to the other provisions of this Section 10.14, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case any event indicated in Section 8.20(a) shall have occurred and be
continuing, the 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 10.08 and no notice to Owners
of the appointment of any co-Trustee or separate Trustee shall be required under
Section 10.09.
Every separate Trustee and co-Trustee shall, to the extent permitted, be
appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate Trustee or co-Trustee jointly
(it being understood that such separate Trustee or co-Trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the 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
Estate or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate Trustee or co-Trustee, but solely at
the direction of the Trustee;
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(ii) No co-Trustee hereunder shall be held personally liable by reason
of any act or omission of any other co-Trustee hereunder; and
(iii) The Servicer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate Trustee or co-Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate Trustees and co-Trustees, as
effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to this Agreement and the conditions
of this Section 10.14. Each separate Trustee and co-Trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
Any separate Trustee or co-Trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate Trustee or co-Trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
The Servicer and the Trustee hereby appoint First Union National Bank (the
"Initial Co-Trustee") as co-trustee with respect to the Mortgage Loans secured
by Mortgaged Properties situated in New Jersey and any other part of the Trust
Estate or property securing the same that at any time may be situated in New
Jersey.
END OF ARTICLE X
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ARTICLE XI
MISCELLANEOUS
Section 11.01 Compliance Certificates and Opinions.
Upon any application or request by the Depositor, the Seller or the Owners
to the Trustee to take any action under any provision of this Agreement, the
Depositor, either of the Sellers or the Owners, as the case may be, shall
furnish to the Trustee a certificate stating that all conditions precedent, if
any, provided for in this Agreement relating to the proposed action have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate need be furnished.
Except as otherwise specifically provided herein, each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Agreement (including one furnished pursuant to specific requirements of
this Agreement relating to a particular application or request) shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; and
(c) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 11.02 Form of Documents Delivered to the Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Trustee may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such Authorized Officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of an Authorized
Officer of the Trustee or any opinion of counsel may be based, insofar as it
relates to factual matters upon a certificate or opinion of, or representations
by, one or more Authorized Officers of the Depositor, either of the Sellers or
the Servicer, stating that the information with respect to such factual matters
is in the possession of the Depositor, such Seller or the Servicer, unless such
Authorized Officer or counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous. Any opinion of counsel may also be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an Authorized Officer of the Trustee, stating that the
information with respect to such matters is in the possession of the Trustee,
unless such counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous. Any opinion of counsel may be based on the written opinion of
other counsel, in which event such opinion of counsel shall be accompanied by a
copy of such other counsel's opinion and shall include a statement to the effect
that such counsel believes that such counsel and the Trustee may reasonably rely
upon the opinion of such other counsel.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 11.03 Acts of Owners.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by the Owners
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Owners in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee, and, where it is hereby expressly required, to one or both of the
Sellers. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the Owners
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Whenever such execution is
by an officer of a corporation or a member of a partnership on behalf of such
corporation or partnership, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) The ownership of Certificates shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Owner of any Certificate shall bind the Owner of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Trustee or the Trust in reliance thereon, whether or not notation
of such action is made upon such Certificates.
Section 11.04 Notices, etc. to Trustee.
Any request, demand, authorization, direction, notice, consent, waiver or
act of the Owners or other documents provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with the Trustee by any Owner the
Depositor or either of the Sellers shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with and received
by the Trustee at the Corporate Trust Office.
Section 11.05 Notices and Reports to Owners; Waiver of Notices.
Where this Agreement provides for notice to Owners of any event or the
mailing of any report to Owners, such notice or report shall be sufficiently
given (unless otherwise herein expressly provided) if mailed, first-class
postage prepaid, to each Owner affected by such event or to whom such report is
required to be mailed, at the address of such Owner as it appears on the
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice or the mailing of such report. In
any case where a notice or report to Owners is mailed in the manner provided
above, neither the failure to mail such notice or report nor any defect in any
notice or report so mailed to any particular Owner shall affect the sufficiency
of such notice or report with respect to other Owners, and any notice or report
which is mailed in the manner herein provided shall be conclusively presumed to
have been duly given or provided. Notwithstanding the foregoing, if the Servicer
is removed or resigns or the Trust is terminated, notice of any such events
shall be made by overnight courier, registered mail or telecopy followed by a
telephone call.
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Where this Agreement provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Owners shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Owners when such notice is required to be given pursuant
to any provision of this Agreement, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice.
Where this Agreement provides for notice to any rating agency that rated
any Certificates, failure to give such notice shall not affect any other rights
or obligations created hereunder.
Section 11.06 Rules by Trustee.
The Trustee may make reasonable rules for any meeting of Owners.
Section 11.07 Successors and Assigns.
All covenants and agreements in this Agreement by any party hereto shall
bind its successors and assigns, whether so expressed or not.
Section 11.08 Severability.
In case any provision in this Agreement or in the Certificates shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.09 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Owners and the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under this Agreement.
Section 11.10 Legal Holidays.
In any case where the date of any Monthly Remittance Date, any Payment
Date, any other date on which any distribution to any Owner is proposed to be
paid, or any date on which a notice is required to be sent to any Person
pursuant to the terms of this Agreement shall not be a Business Day, then
(notwithstanding any other provision of the Certificates or this Agreement)
payment or mailing need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made or mailed on
the nominal date of any such Monthly Remittance Date, such Payment Date, or such
other date for the payment of any distribution to any Owner or the mailing of
such notice, as the case may be, and no interest shall accrue for the period
from and after any such nominal date, provided such payment is made in full on
such next succeeding Business Day.
Section 11.11 Governing Law; Submission to Jurisdiction.
(a) In view of the fact that Owners are expected to reside in many states
and outside the United States and the desire to establish with certainty that
this Agreement will be governed by and construed and interpreted in accordance
with the law of a state having a well-developed body of commercial and financial
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law relevant to transactions of the type contemplated herein, this Agreement and
each Certificate shall be construed in accordance with and governed by the laws
of the State of New York applicable to agreements made and to be performed
therein, without giving effect to the conflicts of law principles thereof.
(b) The parties hereto hereby irrevocably submit to the jurisdiction of the
United States District Court for the Southern District of New York and any court
in the State of New York located in the City and County of New York, and any
appellate court from any thereof, in any action, suit or proceeding brought
against it or in connection with this Agreement or any of the related documents
or the transactions contemplated hereunder or for recognition or enforcement of
any judgment, and the parties hereto hereby irrevocably and unconditionally
agree that all claims in respect of any such action or proceeding may be heard
or determined in such New York State court or, to the extent permitted by law,
in such federal court. The parties hereto agree that a final judgment in any
such action, suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. To
the extent permitted by applicable law, the parties hereto hereby waive and
agree not to assert by way of motion, as a defense or otherwise in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such courts, that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that the related documents or the subject matter thereof may not be
litigated in or by such courts.
(c) Each of the Depositor, the Sellers and the Servicer hereby irrevocably
appoints and designates the Trustee as its true and lawful attorney and duly
authorized agent for acceptance of service of legal process with respect to any
action, suit or proceeding set forth in paragraph (b) hereof. Each of the
Sellers and the Servicer agrees that service of such process upon the Trustee
shall constitute personal service of such process upon it.
(d) Nothing contained in this Agreement shall limit or affect the right of
the Depositor, the Seller or the Servicer or any third-party beneficiary
hereunder, as the case may be, to serve process in any other manner permitted by
law or to start legal proceedings relating to any of the Home Equity Loans
against any Mortgagor in the courts of any jurisdiction.
Section 11.12 Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 11.13 Usury.
The amount of interest payable or paid on any Certificate under the terms
of this Agreement shall be limited to an amount which shall not exceed the
maximum nonusurious rate of interest allowed by the applicable laws of the State
of New York or any applicable law of the United States permitting a higher
maximum nonusurious rate that preempts such applicable New York laws, which
could lawfully be contracted for, charged or received (the "Highest Lawful
Rate"). In the event any payment of interest on any Certificate exceeds the
Highest Lawful Rate, the Trust stipulates that such excess amount will be deemed
to have been paid to the Owner of such Certificate as a result of an error on
the part of the Trustee acting on behalf of the Trust and the Owner receiving
such excess payment shall promptly, upon discovery of such error or upon notice
thereof from the Trustee on behalf of the Trust, refund the amount of such
excess or, at the option of such Owner, apply the excess to the payment of
principal of such Certificate, if any, remaining unpaid. In addition, all sums
paid or agreed to be paid to the Trustee for the benefit of Owners of
Certificates for the use, forbearance or detention of money shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such Certificates.
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Section 11.14 Amendment.
(a) The Trustee, the Depositor, either of the Sellers and the Servicer may,
at any time and from time to time, and without notice to or the consent of the
Owners amend this Agreement, subject to the provisions of Section 11.16 and
11.17 and the Trustee shall consent to such amendment, for the purpose of (i)
curing any ambiguity, correcting or supplementing any provision hereof which may
be inconsistent with any other provision hereof, or adding provisions hereto
which are not inconsistent with the provisions hereof; (ii) upon receipt of an
opinion of counsel experienced in federal income tax matters to the effect that
no entity-level tax will be imposed on the Trust or upon the transferor of a
Class R Certificate as a result of the ownership of any Class R Certificate by a
Disqualified Organization, removing the restriction on transfer set forth in
Section 5.08(b) hereof or (iii) complying with the requirements of the Code and
the regulations proposed or promulgated thereunder including any amendments
necessary to maintain REMIC status or (iv) for any other purpose, provided that
in the case of this clause (iv) such amendment shall not adversely affect in any
material respect any Owner. Any such amendment shall be deemed not to adversely
affect in any material respect any Owner if there is delivered to the Trustee
written notification from each Rating Agency that such amendment will not cause
such Rating Agency to reduce its then current rating assigned to any Class of
the Certificates. Notwithstanding anything to the contrary herein, no such
amendment shall change in any manner the amount of, or change the timing of,
payments which are required to be distributed to any Owner without the consent
of the Owner of such Certificate.
(b) Promptly after the execution of any such amendment, the Trustee shall
furnish written notification of the substance of such amendment to each Owner in
the manner set forth in Section 11.05, and to the Rating Agencies.
(c) The Rating Agencies shall be provided with copies of any amendments to
this Agreement, together with copies of any opinions or other documents or
instruments executed in connection therewith.
Section 11.15 Paying Agent; Appointment and Acceptance of Duties.
The Trustee is hereby appointed Paying Agent. The Depositor may, subject to
the eligibility requirements for the Trustee set forth in Section 10.08 hereof,
appoint one or more other Paying Agents or successor Paying Agents.
Each Paying Agent, immediately upon such appointment, shall signify its
acceptance of the duties and obligations imposed upon it by this Agreement by
written instrument of acceptance deposited with the 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 6.02, that such Paying Agent will:
(a) allocate all sums received for distribution to the Owners of
Certificates of each Class for which it is acting as Paying Agent on each
Payment Date among such Owners in the proportion specified by the Trustee;
and
(b) hold all sums held by it for the distribution of amounts due with
respect to the Certificates in trust for the benefit of the Owners entitled
thereto until such sums shall be paid to such Owners or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided.
Any Paying Agent other than the 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 and signed
by the Trustee.
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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 Owners by mailing notice thereof at their addresses
appearing on the Register.
Section 11.16 REMIC Status.
(a) The parties hereto intend that the Lower-Tier REMIC and the Upper-Tier
REMIC shall each constitute, and that the affairs of the Lower-Tier REMIC and
the Upper-Tier REMIC shall each be conducted so as to qualify it as a REMIC in
accordance with the REMIC Provisions. In furtherance of such intention,
ContiFunding Corporation or such other person designated pursuant to Section
11.18 hereof shall act as agent for the Trust and as "tax matters person" (as
defined in the REMIC Provisions) for the Trust and in such capacity it shall:
(i) prepare or cause to be prepared and filed, in a timely manner, annual tax
returns and any other tax return required to be filed by the Lower-Tier REMIC
and the Upper-Tier REMIC established hereunder using a calendar year as the
taxable year for the Lower-Tier REMIC and the Upper-Tier REMIC established
hereunder; (ii) in the related first such tax return, make (or cause to be made)
an election satisfying the requirements of the REMIC Provisions, on behalf of
the Lower-Tier REMIC and the Upper-Tier REMIC, for it to be treated as a REMIC;
(iii) prepare and forward, or cause to be prepared and forwarded, to the Owners
all information, reports or tax returns required with respect to the Lower-Tier
REMIC and the Upper-Tier REMIC as, when and in the form required to be provided
to the Owners, and to the Internal Revenue Service and any other relevant
governmental taxing authority in accordance with the REMIC Provisions and any
other applicable federal, state or local laws, 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"
(within the meaning of Section 1273 of the Code) of the Certificates of the
related Class; (iv) not take any action or omit to take any action that would
cause the termination of the REMIC status of either the Lower-Tier REMIC or the
Upper-Tier REMIC, except as provided under this Agreement; (v) represent the
Trust of the Lower-Tier REMIC or the Upper-Tier REMIC in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to a taxable year of
the Trust or the Lower-Tier REMIC or the Upper-Tier REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of the Trust or the Lower-Tier REMIC or the
Upper-Tier REMIC, and otherwise act on behalf of the Trust or any REMIC therein
in relation to any tax matter involving the Trust or any REMIC therein; (vi)
comply with all statutory or regulatory requirements with regard to its conduct
of activities pursuant to the foregoing clauses of this Section 11.16,
including, without limitation, providing all notices and other information to
the Internal Revenue Service and Owners of Class R Certificates required of a
"tax matters person" pursuant to subtitle F of the Code and the Treasury
Regulations thereunder; (vii) make available information necessary for the
computation of any tax imposed (A) on transferors of residual interests to
certain Disqualified Organizations or (B) on pass-through entities, any interest
in which is held by a Disqualified Organization; and (viii) acquire and hold the
Tax Matters Person Residual Interest. The obligations of ContiFunding
Corporation or such other designated Tax Matters Person pursuant to this Section
11.16 shall survive the termination or discharge of this Agreement.
(b) Each of the Sellers, the Depositor, the Trustee and the Servicer
covenant and agree for the benefit of the Owners (i) to take no action which
would result in the termination of "REMIC" status for the Lower-Tier REMIC or
the Upper-Tier REMIC, (ii) not to engage in any "prohibited transaction", as
such term is defined in Section 860F(a)(2) of the Code, (iii) not to engage in
any other action which may result in the imposition on the Trust of any other
taxes under the Code and (iv) to cause the Servicer not to take or engage in any
such action, to the extent the Sellers are aware of any such proposed action by
the Servicer.
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(c) The Lower-Tier REMIC and the Upper-Tier REMIC shall, for federal income
tax purposes, maintain books on a calendar year basis and report income on an
accrual basis.
(d) Except as otherwise permitted by Section 7.05(b), no Eligible
Investment shall be sold prior to its stated maturity (unless sold pursuant to a
plan of liquidation in accordance with Article IX hereof).
(e) Neither the Depositor, either of the Sellers nor the Trustee shall
enter into any arrangement by which the Trustee will receive a fee or other
compensation for services rendered pursuant to this Agreement, other than as
expressly contemplated by this Agreement.
(f) Notwithstanding the foregoing clauses (d) and (e), neither the Trustee
nor either of the Sellers may engage in any of the transactions prohibited by
such clauses, unless the Trustee shall have received an opinion of counsel
experienced in federal income tax matters acceptable to the Trustee to the
effect that such transaction does not result in a tax imposed on the Trustee or
cause a termination of REMIC status for the Lower-Tier REMIC or the Upper-Tier
REMIC; provided, however, that such transaction is otherwise permitted under
this Agreement.
(g) The Servicer and Tax Matters Person agree to indemnify the Trust for
any tax imposed on the Trust or the Lower-Tier REMIC or the Upper-Tier REMIC as
a result of their negligence.
Section 11.17 Additional Limitation on Action and Imposition of Tax.
Any provision of this Agreement to the contrary notwithstanding, the
Trustee shall not, without having obtained an opinion of counsel experienced in
federal income tax matters acceptable to the effect that such transaction does
not result in a tax imposed on the Trust or the Lower-Tier REMIC or the
Upper-Tier REMIC or cause a termination of REMIC status for the Lower-Tier REMIC
or the Upper-Tier REMIC, (i) sell any assets in the Trust Estate, (ii) accept
any contribution of assets after the Startup Day or (iii) agree to any
modification of this Agreement. To the extent that sufficient amounts cannot be
so retained to pay or provide for the payment of such tax, the Trustee is hereby
authorized to and shall segregate, into a separate non-interest bearing account,
the net income from any such Prohibited Transactions of the Lower-Tier REMIC and
the Upper-Tier REMIC and use such income, to the extent necessary, to pay such
tax; provided that, to the extent that any such income is paid to the Internal
Revenue Service, the Trustee shall retain an equal amount from future amounts
otherwise distributable to the Owners of Class R Certificates and shall
distribute such retained amounts to the Owners of Offered Certificates to the
extent they are fully reimbursed and then to the Owners of the Class R
Certificates. If any tax, including interest penalties or assessments,
additional amounts or additions to tax, is imposed on the Trust, such tax shall
be charged against amounts otherwise distributable to the owners of the Class R
Certificates on a pro rata basis. The Trustee is hereby authorized to and shall
retain from amounts otherwise distributable to the Owners of the Class R
Certificates sufficient funds to pay or provide for the payment of, and to
actually pay, such tax as is legally owed by the Trust (but such authorization
shall not prevent the Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings).
Section 11.18 Appointment of Tax Matters Person.
A Tax Matters Person will be appointed for the Lower-Tier REMIC and the
Upper-Tier REMIC for all purposes of the Code and such Tax Matters Person will
perform, or cause to be performed, such duties and take, or cause to be taken,
such actions as are required to be performed or taken by the Tax Matters Person
under the Code. The Tax Matters Person for the Lower-Tier REMIC and the
Upper-Tier REMIC shall be ContiFunding Corporation as long as it owns a Class R
Certificate. If ContiFunding Corporation does not own a Class R Certificate, the
Tax Matters Person may be any other entity that owns a Class R Certificate and
accepts a designation hereunder as Tax Matters person by delivering an affidavit
in the form of Exhibit I. ContiFunding Corporation shall notify the Trustee in
123
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writing of the name and address of another person who accepts a designation as
Tax Matters Person hereunder.
Section 11.19 Notices.
All notices hereunder shall be given as follows, until any superseding
instructions are given to all other Persons listed below:
The Trustee: Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203-2399
Tel: (716) 842-5589
Fax: (716) 842-4474
Attention: Corporate Trust Administration
The Depositor: ContiSecurities Asset Funding Corp.
277 Park Avenue, 38th Floor
New York, New York 10172
Attention: Chief Counsel
Tel: (212) 207-2822
Fax: (212) 207-5251
The Sellers: ContiMortgage Corporation
500 Enterprise Road
Horsham, PA 19044
Attention: President and Chief Counsel
Tel: (215) 957-3700
Fax: (215) 957-2897
ContiWest Corporation
3811 West Charleston Boulevard
Suite 104
Las Vegas, Nevada 89102
Tel: (702) 822-5836
Fax: (702) 822-5839
The Servicer: ContiMortgage Corporation
500 Enterprise Road
Horsham, PA 19044
Attention: Senior Vice President and Chief Counsel
Tel: (215) 957-3700
Fax: (215) 957-2897
Moody's: Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: The Home Equity Monitoring Department
Tel: (212) 553-0300
Fax: (212) 553-4773
124
<PAGE>
Fitch: Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
Tel: (800) 753-4824
Fax: (212) 376-6964
Standard & Poor's: Standard & Poor's
20 Broadway, 15th Floor
New York, New York 10004
Tel: (212) 208-8000
Fax: (212) 412-0224
Underwriters: Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Tel: (212) 761-4000
Fax: (212) 761-0782
Bear, Stearns & Co.
245 Park Avenue, 4th Floor
New York, New York 10167
Tel: (212) 272-3311
Fax: (212) 272-7294
ContiFinancial Services Corporation
277 Park Avenue, 38th Floor
New York, New York 10172
Attention: Chief Counsel, Chief Financial Officer
and Chief Operating Officer
Tel: (212) 207-2822
Fax: (212) 207-5251
Credit Suisse First Boston
11 Madison Avenue
New York, New York 10010
Attention: Asset Finance
Tel: (212) 325-2000
Fax: (212) 325-8261
Greenwich Capital Markets, Inc.
600 Steamboat Rd.
Greenwich, CT 06830
Tel: (203) 622-5693
Fax: (203) 622-3650
Lehman Brothers Inc.
Three World Financial Center
New York, New York 10283
Tel: (212) 526-7000
Fax: (212) 528-6049
125
<PAGE>
Merrill Lynch, Pierce, Fenner & Smith, Inc.
26th Floor
World Financial Center, North Tower
New York, New York 10281-1326
Tel: (212) 449-1000
Fax: (212) 449-9015
Owners: As set forth in the Register.
Others: Any notice to the Depositor, either Seller or the
Servicer shall also be furnished to:
ContiTrade Services L.L.C.
Chief Counsel
277 Park Avenue, 38th Floor
New York, New York 10172
Tel: (212) 207-2822
Fax: (212) 207-5251
END OF ARTICLE XI
126
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Seller, the Servicer and the Trustee
have caused this Agreement to be duly executed by their respective officers
thereunto duly authorized, all as of the day and year first above written.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: /s/ A. John Banu
-------------------------------------
Title: Authorized Signatory
----------------------------------
By: /s/ Susan C. Valenti
-------------------------------------
Title: Authorized Signatory
----------------------------------
CONTIMORTGAGE CORPORATION, as Seller
By: /s/ Robert J. Babjak
-------------------------------------
Title: Executive Vice President & COO
----------------------------------
By: /s/ Daniel J. Egan
-------------------------------------
Title: Senior Vice President and CFO
----------------------------------
CONTIWEST CORPORATION, as Seller
By: /s/ Peter Abeles
-------------------------------------
Title: President
----------------------------------
By: /s/ Robert E. Riedl
-------------------------------------
Title: Secretary
----------------------------------
CONTIMORTGAGE CORPORATION, as Servicer
By: /s/ Robert J. Babjak
-------------------------------------
Title: Executive Vice President & COO
----------------------------------
By: /s/ Daniel J. Egan
-------------------------------------
Title: Senior Vice Presient & CFO
----------------------------------
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By: /s/ Neil B. Witoff
-------------------------------------
Title: Assistant Vice President
----------------------------------
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 9th day of June 1997, before me personally came A. John Banu and
Susan C. Valenti, to me known, who, being by me duly sworn, did depose and say
that he/she resides at 5 Surrey Lane, Mahwah, NJ 07430 and 171 Hoyt Street,
Darien, CT 06820, respectively; that he/she is an Authorized Signatory of
ContiSecurities Asset Funding Corp., a Delaware Corporation; and that he/she
signed his/her name thereto by order of the respective Boards of Directors of
said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ JoAnn Leible
------------------------
Notary Public
<PAGE>
STATE OF PENNSYLVANIA
: ss.:
COUNTY OF MONTGOMERY
On the 10 day of June, 1997, before me personally came Robert J. Babjak, to
me known, who, being by me duly sworn, did depose and say that he/she resides at
Bucks County; that he/she is a Executive VP of ContiMortgage Corporation, a
Delaware Corporation; and that he signed his name thereto by order of the
respective Boards of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ Ursula M. Hiller
-------------------------------
Notary Public
<PAGE>
STATE OF PENNSYLVANIA )
: ss.:
COUNTY OF MONTGOMERY )
On the 10 day of June, 1997, before me personally came Daniel J. Egan, to
me known, who, being by me duly sworn, did depose and say that he/she resides at
Montgomery County; that he/she is a Sr. Vice President of ContiMortgage
Corporation, a Delaware corporation; and that he signed his name thereto by
order of the respective Boards of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ Ursula M. Hiller
-------------------------------
Notary Public
<PAGE>
STATE OF NEW YORK
: ss.:
COUNTY OF NEW YORK
On the 9th day of June, 1997, before me personally came Peter Abeles and
Robert E. Riedl, to me known, who, being by me duly sworn, did depose and say
that he resides at 10244 Ojai-Santa Paula Road, Ojai, CA 93023 and 9430 Gregory
Way, Beverly Hills, CA 90212 respectively; that he is a President and Secretary,
respectively, of ContiWest Corporation, a Nevada corporation; and that he signed
his name thereto by order of the respective Boards of Directors of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ Victoria Thiel
-------------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On the 12th day of June, 1997, before me personally came Neil B. Witoff,
to me known, who, being by me duly sworn did depose and say that he resides at
Clarence, New York; that he is an Assistant Vice President of Manufacturers and
Traders Trust Company, the New York banking corporation described in and that
executed the above instrument as Trustee; and that he signed his name thereto by
order of the Board of Directors of said New York banking corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ Mary Jane Constant
-------------------------------
Notary Public
<PAGE>
SCHEDULE I-A
SCHEDULE OF GROUP I HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Seller at its principal office.
<PAGE>
SCHEDULE I-B
SCHEDULE OF GROUP II HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Seller at its principal office.
<PAGE>
SCHEDULE II
RESERVED
<PAGE>
SCHEDULE III
HOME EQUITY LOANS WITH DELINQUENCY CHARACTERISTICS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Seller at its principal office.
<PAGE>
SCHEDULE IV
HOME EQUITY LOANS WITH 15-YEAR "BALLOON" PAYMENTS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Seller at its principal office.
<PAGE>
SCHEDULE V
HOME EQUITY LOANS WITH 5-YEAR "BALLOON" PAYMENTS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Seller at its principal office.
<PAGE>
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-1
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repre sentative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: A-1-
---------------------
CUSIP
$ June __, 1997
- - --------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-1-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-1 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-1 (the "Class A-1 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
A-1-2
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home Equity
Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, 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-11IO (collectively, including the Class A-1 Certificates, the
"Class A Certificates"), Class M-1A, Class M-1F (the "Class M-1 Certificates"),
Class M-2A, Class M-2F (the "Class M-2 Certificates" and collectively with the
Class M-1 Certificates, the "Mezzanine Certificates"), Class B-1A, Class B-1F
(the "Class B Ce rtificates" and collectively with the Class A Certificates and
the Mezzanine Certificates, the "Offered Certificates"), the Class C
Certificates (the "Class C Certificates") and Class R (Residual Interest) (the
"Class R Certificates"). The Offered Certificates, the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-1 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-1 Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class A-1
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-1 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Payment Date to the
Owners of the Class A-1 Certificates. The Percentage Interest of each Class A-1
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-1 Certificate on the Startup Day by the aggregate Class A-1 Certificate
Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise pro vided in the Pooling and Servicing Agreement).
A-1-3
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accor dance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
A-1-4
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration
of Transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-1 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-1 Certificates are exchangeable for new
Class A-1 Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-1-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-1-6
<PAGE>
EXHIBIT A-2
FORM OF CLASS A-2 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-2
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repre sentative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: A-2-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-2-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group I Distribution Account together
with investment earnings on such amounts and such amounts as may be held in the
name of the Trustee in the Principal and Interest Account, if any, exclusive of
investment earnings thereon (except as otherwise provided herein), whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, hazard insurance and title insurance policy relating to the Home
Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-2 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
A-2-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-2 (the "Class A-2 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking corporation, in its capacity as
the Trustee (the "Trustee"), to which Pooling and Servicing Agreement the Owner
of this Certificate by virtue of acceptance hereof assents and by which such
Owner is bound. Also issued under the Pooling and Servicing Agreement are
Certificates designated as ContiMortgage Home Equity Loan Trust 1997-3 Home
Equity Loan Pass-Through Certificates, Class A-1, 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-11IO
(collectively, including the Class A-2 Certificates, the "Class A
Certificates"), Class M-1A, Class M-1F (the "Class M-1 Certificates"), Class
M-2A, Class M-2F (the "Class M-2 Certificates" and collectively with the Class
M-1 Certificates, the "Mezzanine Certificates"), Class B (the "Class B
Certificates" and collectively with the Class A Certificates and the Mezzanine
Certificates, the "Offered Certificates"), the Class C Certificates (the "Class
C Certificates") and Class R (Residual Interest) (the "Class R Certificates").
The Offered Certificates, the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-2 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-2 Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class A-2
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-2 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Payment Date to the
Owners of the Class A-2 Certificates. The Percentage Interest of each Class A-2
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-2 Certificate on the Startup Day by the aggregate Class A-2 Certificate
Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
A-2-3
<PAGE>
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the P ooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accor dance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
A-2-4
<PAGE>
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by t he Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future Owners of the Certificate and of any Certificate issued upon the
registration of Transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-2 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-2 Certificates are exchangeable for new
Class A-2 Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-2-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-2-6
<PAGE>
EXHIBIT A-3
FORM OF CLASS A-3 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-3
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repre sentative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: A-3-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-3-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home
Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-3 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-3 (the "Class A-3 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
A-3-2
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home Equity
Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, Class A-1, Class
A-2, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class
A-10, Class A-11IO (collectively, including the Class A-3 Certificates, the
"Class A Certificates"), Class M-1A, Class M-1F (the "Class M-1 Certificates"),
Class M-2A, Class M-2F (the "Class M-2 Certificates" and collectively with the
Class M-1 Certificates, the "Mezzanine Certificates"), Class B (the "Class B
Certificates" and collectively with the Class A Certificates and the Mezzanine
Certificates, the "Offered Certificates"), the Class C Certificates (the "Class
C Certificates") and Class R (Residual Interest) (the "Class R Certificates").
The Offered Certificates, the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-3 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-3 Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class A-3
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-3 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Payment Date to the
Owners of the Class A-3 Certificates. The Percentage Interest of each Class A-3
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-3 Certificate on the Startup Day by the aggregate Class A-3 Certificate
Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
A-3-3
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accordance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
A-3-4
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration of
Transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-3 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-3 Certificates are exchangeable for new
Class A-3 Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-3-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-3-6
<PAGE>
EXHIBIT A-4
FORM OF CLASS A-4 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-4
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: A-4-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-4-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home
Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-4 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-4 (the "Class A-4 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
A-4-2
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home Equity
Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, Class A-1, Class
A-2, Class A-3, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class
A-10, Class A-11IO (collectively, including the Class A-4 Certificates, the
"Class A Certificates"), Class M-1A, Class M-1F (the "Class M-1 Certificates"),
Class M-2A, Class M-2F (the "Class M-2 Certificates" and collectively with the
Class M-1 Certificates, the "Mezzanine Certificates"), Class B (the "Class B
Certificates" and collectively with the Class A Certificates and the Mezzanine
Certificates, the "Offered Certificates"), the Class C Certificates (the "Class
C Certificates") and Class R (Residual Interest) (the "Class R Certificates").
The Offered Certificates, the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-4 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-4 Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class A-4
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-4 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Payment Date to the
Owners of the Class A-4 Certificates. The Percentage Interest of each Class A-4
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-4 Certificate on the Startup Day by the aggregate Class A-4 Certificate
Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
A-4-3
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accordance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
A-4-4
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration
of Transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-4 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-4 Certificates are exchangeable for new
Class A-4 Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-4-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-4-6
<PAGE>
EXHIBIT A-5
FORM OF CLASS A-5 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-5
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repre sentative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: A-5-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-5-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home
Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-5 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth a bove.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-5 (the "Class A-5 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
A-5-2
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home Equity
Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, 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-10, Class A-11IO (collectively, including the Class A-5 Certificates, the
"Class A Certificates"), Class M-1A, Class M-1F (the "Class M-1 Certificates"),
Class M-2A, Class M-2F (the "Class M-2 Certificates" and collectively with the
Class M-1 Certificates, the "Mezzanine Certificates"), Class B (the "Class B
Certificates" and collectively with the Class A Certificates and the Mezzanine
Certificates, the "Offered Certificates"), the Class C Certificates (the "Class
C Certificates") and Class R (Residual Interest) (the "Class R Certificates").
The Offered Certificates, the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-5 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-5 Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class A-5
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-5 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Payment Date to the
Owners of the Class A-5 Certificates. The Percentage Interest of each Class A-5
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-5 Certificate on the Startup Day by the aggregate Class A-5 Certificate
Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
A-5-3
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accor dance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
A-5-4
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration of
Transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-5 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-5 Certificates are exchangeable for new
Class A-5 Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-5-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-5-6
<PAGE>
EXHIBIT A-6
FORM OF CLASS A-6 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-6
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repres entative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: A-6-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-6-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and eac h Sellers' interest in any Property which secured a Home
Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-6 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth ab ove.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-6 (the "Class A-6 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
A-6-2
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home
Equity Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-7, Class A-8, Class A-9,
Class A-10, Class A-11IO (collectively, including the Class A-6 Certificates,
the "Class A Certificates"), Class M-1A, Class M-1F (the "Class M-1
Certificates"), Class M-2A, Class M-2F (the "Class M-2 Certificates" and
collectively with the Class M-1 Certificates, the "Mezzanine Certificates"),
Class B (the "Class B Certificates" and collectively with the Class A
Certificates and the Mezzanine Certificates, the "Offered Certificates"), the
Class C Certificates (the "Class C Certificates") and Class R (Residual
Interest) (the "Class R Certificates"). The Offered Certificates, the Class C
Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-6 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-6 Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class A-6
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-6 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Payment Date to the
Owners of the Class A-6 Certificates. The Percentage Interest of each Class A-6
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-6 Certificate on the Startup Day by the aggregate Class A-6 Certificate
Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
A-6-3
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accord ance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
A-6-4
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration
of Transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-6 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-6 Certificates are exchangeable for new
Class A-6 Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-6-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-6-6
<PAGE>
EXHIBIT A-7
FORM OF CLASS A-7 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-7
(_____% Pass-Through Rate)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repres entative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
- - ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-7-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-7-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and eac h Sellers' interest in any Property which secured a Home
Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-7 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-7 (the "Class A-7 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
A-7-3
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home
Equity Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-8, Class A-9,
Class A-10, Class A-11IO (collectively, including the Class A-7 Certificates,
the "Class A Certificates"), Class M-1A, Class M-1F (the "Class M-1
Certificates"), Class M-2A, Class M-2F (the "Class M-2 Certificates" and
collectively with the Class M-1 Certificates, the "Mezzanine Certificates"),
Class B (the "Class B Certificates" and collectively with the Class A
Certificates and the Mezzanine Certificates, the "Offered Certificates"), the
Class C Certificates (the "Class C Certificates") and Class R (Residual
Interest) (the "Class R Certificates"). The Offered Certificates, the Class C
Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-7 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-7 Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class A-7
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-7 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Payment Date to the
Owners of the Class A-7 Certificates. The Percentage Interest of each Class A-7
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-7 Certificate on the Startup Day by the aggregate Class A-7 Certificate
Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
A-7-4
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accord ance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
A-7-5
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration of
Transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-7 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-7 Certificates are exchangeable for new
Class A-7 Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-7-6
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-7-7
<PAGE>
EXHIBIT A-8
FORM OF CLASS A-8 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
Class A-8
(_____% Pass-Through Rate)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repres entative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
- - ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-8-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-8-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and eac h Sellers' interest in any Property which secured a Home
Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper , checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-8 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth ab ove.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-8 (the "Class A-8 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
A-8-2
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as C ontiMortgage Home
Equity Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-9,
Class A-10, Class A-11IO (collectively, including the Class A-8 Certificates,
the "Class A Certificates"), Class M-1A, Class M-1F (the "Class M-1
Certificates"), Class M-2A, Class M-2F (the "Class M-2 Certificates" and
collectively with the Class M-1 Certificates, the "Mezzanine Certificates"),
Class B (the "Class B Certificates" and collectively with the Class A
Certificates and the Mezzanine Certificates, the "Offered Certificates"), the
Class C Certificates (the "Class C Certificates") and Class R (Residual
Interest) (the "Class R Certificates"). The Offered Certificates, the Class C
Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-8 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-8 Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class A-8
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-8 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Payment Date to the
Owners of the Class A-8 Certificates. The Percentage Interest of each Class A-8
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-8 Certificate on the Startup Day by the aggregate Class A-8 Certificate
Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
A-8-3
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accordance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
A-8-4
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration of
Transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-8 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-8 Certificates are exchangeable for new
Class A-8 Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-8-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-8-6
<PAGE>
EXHIBIT A-9
FORM OF CLASS A-9 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
Class A-9
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repres entative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: A-9-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-9-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-9 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-9 (the "Class A-9 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
A-9-2
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home
Equity Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, 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-10, Class A-11IO (collectively, including the Class A-9 Certificates,
the "Class A Certificates"), Class M-1A, Class M-1F (the "Class M-1
Certificates"), Class M-2A, Class M-2F (the "Class M-2 Certificates" and
collectively with the Class M-1 Certificates, the "Mezzanine Certificates"),
Class B (the "Class B Certificates" and collectively with the Class A
Certificates and the Mezzanine Certificates, the "Offered Certificates"), the
Class C Certificates (the "Class C Certificates") and Class R (Residual
Interest) (the "Class R Certificates"). The Offered Certificates, the Class C
Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-9 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-9 Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class A-9
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-9 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Payment Date to the
Owners of the Class A-9 Certificates. The Percentage Interest of each Class A-9
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-9 Certificate on the Startup Day by the aggregate Class A-9 Certificate
Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
A-9-3
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accord ance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
A-9-4
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration of
Transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-9 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-9 Certificates are exchangeable for new
Class A-9 Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-9-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
<PAGE>
EXHIBIT A-10
FORM OF CLASS A-10 CERTIFICATE
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-10
(Adjustable Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repres entative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: A-10-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-10-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-B to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and the Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group II Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); (c) proceeds of all
the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class A-1 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
A-10-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-10 (the "Class A-10 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking corporation, in its capacity as
the Trustee (the "Trustee"), to which Pooling and Servicing Agreement the Owner
of this Certificate by virtue of acceptance hereof assents and by which such
Owner is bound. Also issued under the Pooling and Servicing Agreement are
Certificates designated as ContiMortgage Home Equity Loan Trust 1997-3 Home
Equity Loan Pass-Through Certificates, Class A-1 (the "Class A-1 Certificates"),
Class A-2 (the "Class A-2 Certificates"), Class A-3 (the "Class A-3
Certificates"), Class A-4 (the "Class A-4 Certificates"), Class A-5 (the "Class
A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"), Class A-7 (the
"Class A-7 Certificates"), Class A-8 (the "Class A-8 Certificates"), Class A-9
(the "Class A-9 Certificates"), Class A-11IO (collectively, including the Cl ass
A-10 Certificates, the "Class A Certificates"), Class M-1A, Class M-1F (the
"Class M-1 Certificates"), Class M-2A, Class M-2F (the "Class M-2 Certificates
and collectively with the Class M-1 Certificates, the "Mezzanine Certificates"),
Class B-1A, Class B-1F (the "Class B Certificates" and collectively with the
Class A Certificates and the Mezzanine Certificates, the "Offered
Certificates"), Class C (the "Class C Certificates") and Class R (Residual
Interest) (the "Class R Certificates"). Offered Cert ificates, the Class C
Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-10 Certificates as of the
close of business on the day immediately preceding such Payment Date (the
"Record Date") will be entitled to receive the Class A-10 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made in
immediately available funds to Owners of Certifi cates having an aggregate
original Class A-10 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class A-10 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class A-10 Certificates. The Percentage Interest of each
Class A-10 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-10 Certificate on the Startup Day by the aggregate Class A-10
Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
A-10-3
<PAGE>
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation, as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accordance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
A-10-4
<PAGE>
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future Owners of the Certificate and of any Certificate issued upon the
registration of Transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-10 Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-10 Certificates are exchangeable for new
Class A-10 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-10-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-10-6
<PAGE>
EXHIBIT A-11IO
FORM OF CLASS A-11IO CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-11IO
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.
No: A-11IO-
$0 June __, 1997
- - -------------------- --------------- ---------------------
Original Principal Date Final Scheduled
Amount Payment Date
CONTISECURITIES ASSET FUNDING II, L.L.C.
-------------------
Registered Holder
$
- - --------------------
Original Notional
Principal Amount
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
A-11IO-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home
Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CLASS A-11IO CERTIFICATE IS
_____%. ASSUMING THAT THE HOME EQUITY LOANS PREPAY AT A RATE BASED ON 100% OF
THE PREPAYMENT ASSUMPTION DESCRIBED IN THE PROSPECTUS SUPPLEMENT, THIS
CERTIFICATE HAS BEEN ISSUED WITH APPROXIMATELY $___________ OF OID PER
$1,000,000 OF CLASS A-11IO NOTIONAL PRINCIPAL AMOUNT AND THE ANNUAL YIELD TO
MATURITY WILL BE _____% (COMPOUNDED MONTHLY); THE AMOUNT OF OID ALLOCABLE TO THE
LONG FIRST ACCRUAL PERIOD IS $____ PER $1,000,000 OF CLASS A-11IO NOTIONAL
PRINCIPAL AMOUNT COMPUTED USING DAILY COMPOUNDING.
THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE HOME EQUITY LOANS.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class A-11IO (the "Class A-11IO Certificates") and
issued under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the
A-11IO-2
<PAGE>
"Servicer"), ContiWest Corporation, in its capacity as a Seller (a "Seller"),
ContiSecurities Asset Funding Corp., in its capacity as Depositor, (the
"Depositor") and Manufacturers and Traders Trust Company, a New York banking
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designate d as ContiMortgage Home
Equity Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, 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 (collectively, including the Class A-11IO Certificates,
the "Class A Certificates"), Class M-1A, Class M-1F (the "Class M-1
Certificates"), Class M-2A, Class M-2F (the "Class M-2 Certificates" and
collectively with the Class M-1 Certificates, the "Mezzanine Certificates"),
Class B-1A, Class B-1F (the "Class B Certificates" and collectively with the
Class A Certificates and the Mezzanine Certificates, the "Offered
Certificates"), the Class C Certificates (the "Class C Certificates") and Class
R (Residual Interest) (the "Class R Certificates"). The Offered Certificates,
the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class A-11IO Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class A-11IO Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class
A-11IO Notional Principal Amount of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-11IO Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class A-11IO Certificates. The Percentage Interest of each
Class A-11IO Certificate as of any date of determination will be equal to the
portion of the Class stated or the Percentage Interest on the face thereof.
"Class A-11IO Notional Principal Amount": As of the time of determination,
the aggregate outstanding Loan Balance of the Home Equity Loans in Group I.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
A-11IO-3
<PAGE>
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise prov ided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accordance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
A-11IO-4
<PAGE>
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future Owners of the Certificate and of any Certificate issued upon the
registration of Transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-11IO Certificates are issuable only as registered Certificates
in minimum denominations of $1,000 based on the Class A-11IO Notional Principal
Amount. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-11IO Certificates are
exchangeable for new Class A-11IO Certificates of authorized denominations
evidencing the same aggregate notional principal amount.
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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
A-11IO-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-11IO-6
<PAGE>
EXHIBIT B-1
FORM OF CLASS M-1F CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE 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 AND
CLASS A-11IO CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS M-1F
(_____% Pass-Through Rate)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized repres entative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
- - ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: M-1F-
---------------------
CUSIP
$ June __, 1997
- - -------------------- --------------- ---------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By: __________________________
Name: ________________________
Title: _______________________
Date of Authentication: ______
M-1F-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class M-1F Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed cancelled
for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class M-1F (the "Class M-1F Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
M-1F-2
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home Equity
Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, 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-11IO (collectively, the "Class A Certificates"), Class
M-1A (the "Class M-1A Certificates" and collectively with the Class M-1F
Certificates, the "Class M-1 Certificates") Class M-2A, Class M-2F (the "Class
M-2 Certificates" and collectively with the Class M-1 Certificates, the
"Mezzanine Certificates" ), Class B (the "Class B Certificates" and collectively
with the Class A Certificates and the Mezzanine Certificates, the "Offered
Certificates"), the Class C Certificates (the "Class C Certificates") and Class
R (Residual Interest) (the "Class R Certificates"). The Offered Certificates,
the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class M-1F Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class M-1F Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class
M-1F Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class M-1F Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class M-1F Certificates. The Percentage Interest of each
Class M-1F Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class M-1F Certificate on the Startup Day by the aggregate Class M-1F
Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise prov ided in the Pooling and Servicing Agreement).
M-1F-3
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accordance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
M-1F-4
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration of
Transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class M-1F Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-1F Certificates are exchangeable for new
Class M-1F Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
M-1F-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
M-1F-6
<PAGE>
EXHIBIT B-2
FORM OF CLASS M-1A CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE 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 AND
CLASS A-11IO CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS M-1A
(Adjustable Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: M-1A
-------------------
CUSIP
$ June __, 1997
- - ------------------- ------------- --------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:____________________________
Name:__________________________
Title:_________________________
Date of Authentication:________
M-1A-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-B to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group II Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class M-1A Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class M-1A (the "Class M-1A Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking
M-1A-2
<PAGE>
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home Equity
Loan Trust 1997-3 Home Equity Loan Pass-Through Certificates, 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-11IO (collectively, the "Class A Certificates"), the
Class M-1F (the "Class M-1F Certificates" and collectively with the Class M-1A
Certificates, the "Class M-1 Certificates") the Class M-2A, Class M-2F (the
"Class M-2 Certificates" and collectively with the Class M-1 Certificates, the
"Mezzanine Certi ficates"), Class B-1A, Class B-1F (the "Class B Certificates"
and collectively with the Class A Certificates and the Mezzanine Certificates,
the "Offered Certificates"), the Class C Certificates (the "Class C
Certificates") and Class R (Residual Interest) (the "Class R Certificates"). The
Offered Certificates, the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class M-1A Certificates as of the
close of business on the day immediately preceding such Payment Date (the
"Record Date") will be entitled to receive the Class M-1A Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made in
immediately available funds to Owners of Certificates having an aggregate
original Class M-1A Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class M-1A Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class M-1A Certificates. The Percentage Interest of each
Class M-1A Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class M-1A Certificate on the Startup Day by the aggregate Class M-1A
Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
M-1A-3
<PAGE>
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accord ance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future
M-1A-4
<PAGE>
Owners of the Certificate and of any Certificate issued upon the registration of
Transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class M-1A Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-1A Certificates are exchangeable for new
Class M-1A Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
M-1A-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
M-1A-6
<PAGE>
EXHIBIT B-3
FORM OF CLASS M-2F CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE 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-11IO, CLASS M-1F AND CLASS M-1A CERTIFICATES OF THIS SERIES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS M-2F
(_____% Pass-Through Rate)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
- - ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: M-2F
-----------------
CUSIP
$ June __, 1997
- - ------------------ ------------- -----------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
----------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:___________________________
Name:_________________________
Title:________________________
Date of Authentication:_______
M-2F-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class M-2F Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
M-2F-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class M-2F (the "Class M-2F Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking corporation, in its capacity as
the Trustee (the "Trustee"), to which Pooling and Servicing Agreement the Owner
of this Certificate by virtue of acceptance hereof assents and by which such
Owner is bound. Also issued under the Pooling and Servicing Agreement are
Certificates designated as ContiMortgage Home Equity Loan Trust 1997-3 Home
Equity Loan Pass-Through Certificates, 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-11IO (collectively, the "Class A Certificates"), Class M-1A, Class M-1F (the
"Class M-1 Certificates") Class M-2A (the "Class M-2A Certificates" and
collectively with the Class M-2F Certificates, the "Class M-2 Certificates") and
collectively with the Class M-1 Certificates, the "Mezzanine Certificates "),
Class B (the "Class B Certificates" and collectively with the Class A
Certificates and the Mezzanine Certificates, the "Offered Certificates"), the
Class C Certificates (the "Class C Certificates") and Class R (Residual
Interest) (the "Class R Certificates"). The Offered Certificates, the Class C
Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class M-2F Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class M-2F Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class
M-2F Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class M-2F Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class M-2F Certificates. The Percentage Interest of each
Class M-2F Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class M-2F Certificate on the Startup Day by the aggregate Class M-2F
Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
M-2F-3
<PAGE>
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accord ance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
M-2F-4
<PAGE>
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future Owners of the Certificate and of any Certificate issued upon the
registration of Transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class M-2F Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-2F Certificates are exchangeable for new
Class M-2F Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
M-2F-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
M-2F-6
<PAGE>
EXHIBIT B-4
FORM OF CLASS M-2A CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE 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-11IO, CLASS M-1F AND CLASS M-1A CERTIFICATES OF THIS SERIES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS M-2A
(Adjustable Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: M-2A ---------------
CUSIP
$ June __, 1997
- - -------------------- ------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
-------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:___________________________
Name:_________________________
Title:________________________
Date of Authentication:_______
M-2A-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-B to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group II Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class M-2A Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
M-2A-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class M-2A (the "Class M-2A Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking corporation, in its capacity as
the Trustee (the "Trustee"), to which Pooling and Servicing Agreement the Owner
of this Certificate by virtue of acceptance hereof assents and by which such
Owner is bound. Also issued under the Pooling and Servicing Agreement are
Certificates designated as ContiMortgage Home Equity Loan Trust 1997-3 Home
Equity Loan Pass-Through Certificates, 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-11IO (collectively, the "Class A Certificates"), Class M-1A, Class M-1F
(collectively the "Class M-1 Certificates") Class M-2F (the "Class M-2F
Certificates" and collectively with the Class M-2A Certificates, the "Class M-2
Certificates") and collectively with the Class M-1 Certificates, the "Mezzanine
Certificates"), Class B (the "Class B Certificates" and collectively with the
Class A Certificates and the Mezzanine Certificates, the "Offered
Certificates"), the Class C Certificates (the "Class C Certificates") and Class
R (Residual Interest) (the "Class R Certificates"). The Offered Certificates,
the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class M-2A Certificates as of the
close of business on the day immediately preceding such Payment Date (the
"Record Date") will be entitled to receive the Class M-2A Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made in
immediately available funds to Owners of Certificates having an aggregate
original Class M-2A Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class M-2A Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class M-2A Certificates. The Percentage Interest of each
Class M-2A Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class M-2A Certificate on the Startup Day by the aggregate Class M-2A
Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
M-2A-3
<PAGE>
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accord ance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
M-2A-4
<PAGE>
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future Owners of the Certificate and of any Certificate issued upon the
registration of Transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class M-2A Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class M-2A Certificates are exchangeable for new
Class M-2A Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
M-2A-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
M-2A-6
<PAGE>
EXHIBIT B-5
FORM OF CLASS B-1F CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE 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-11IO, CLASS M-1F, CLASS M-1A, CLASS M-2F AND CLASS M-2A CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS B-1F
(_____% Pass-Through Rate)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
- - ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: B-1F ---------------
CUSIP
$ June __, 1997
- - ------------------ ------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
--------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:___________________________
Name:_________________________
Title:________________________
Date of Authentication:_______
B-1F-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-A to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group I Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class B-1F Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
B-1F-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class B-1F (the "Class B-1F Certificates") and
issued under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking corporation, in its capacity as
the Trustee (the "Trustee"), to which Pooling and Servicing Agreement the Owner
of this Certificate by virtue of acceptance hereof assents and by which such
Owner is bound. Also issued under the Pooling and Servicing Agreement are
Certificates designated a s ContiMortgage Home Equity Loan Trust 1997-3 Home
Equity Loan Pass-Through Certificates, 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-11IO (collectively, the "Class A Certificates"), Class M-1A, Class M-1F
(collectively the "Class M-1 Certificates"), Class M-2A, Class M-2F (the "Class
M-2 Certificates" and collectively with the Class M-1 Certificates, the
"Mezzanine Certificates") Class B-1A (the "Class B-1A Certificates" and collec
tively with the Class B-1F, the "Class B Certificates and collectively with the
Class A Certificates and the Mezzanine Certificates, the "Offered
Certificates"), the Class C Certificates (the "Class C Certificates") and Class
R (Residual Interest) (the "Class R Certificates"). The Offered Certificates,
the Class C Certificates 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class B-1F Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Payment Date occurs (the "Record Date") will be
entitled to receive the Class B-1F Distribution Amount relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Certificates having an aggregate original Class
B-1F Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class B-1F Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class B-1F Certificates. The Percentage Interest of each
Class B-1F Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class B-1F Certificate on the Startup Day by the aggregate Class B-1F
Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
B-1F-3
<PAGE>
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accordance with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
M-1F-4
<PAGE>
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future Owners of the Certificate and of any Certificate issued upon the
registration of Transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class B-1F Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class B-1F Certificates are exchangeable for new
Class B-1F Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
B-1F-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
B-1F-6
<PAGE>
EXHIBIT B-6
FORM OF CLASS B-1A CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE 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-11IO, CLASS M-1A, CLASS M-1F, CLASS M-2A AND CLASS M-2F CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS B-1A
(Adjustable Pass-Through Rate)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in the
Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
("ContiMortgage Home Equity Loan Trust 1997-3") or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: B-1A ---------------
CUSIP
$ June __, 1997
- - ------------------ ------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
------------------
Registered Owner
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:___________________________
Name:_________________________
Title:________________________
Date of Authentication:_______
B-1A-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedule I-B to the
Pooling and Servicing Agreement which each Seller has caused to be delivered to
the Depositor and the Depositor has caused to be delivered to the Trustee (and
all substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the
Pooling and Servicing Agreement), together with the related Home Equity Loan
documents and each Sellers' interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account and the Upper-Tier Group II Distribution Account
together with investment earnings on such amounts and such amounts as may be
held in the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided herein),
whether in the form of cash, instruments, securities or other properties
(including any Eligible Investments held by the Servicer); and (c) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to the
Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each Payment Date, as
hereinafter described, which will fully amortize such original Certificate
Principal Balance over the period from the date of initial issuance of the
Certificates to the final Payment Date for the Class B-1A Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to July 15, 1997 (the first Payment Date) be less than the
original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement (as
defined below) provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO July 15, 1997 (THE FIRST PAYMENT DATE) BE LESS THAN ITS ORIGINAL
CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
B-1A-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class B-1A (the "Class B-1A Certificates") and
issued under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 1997 (the "Pooling and
Servicing Agreement") by and among ContiMortgage Corporation, in its capacity as
a Seller (a "Seller") and as the Servicer (the "Servicer"), ContiWest
Corporation, in its capacity as a Seller (a "Seller"), ContiSecurities Asset
Funding Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers
and Traders Trust Company, a New York banking corporation, in its capacity as
the Trustee (the "Trustee"), to which Pooling and Servicing Agreement the Owner
of this Certificate by virtue of acceptance hereof assents and by which such
Owner is bound. Also issued under the Pooling and Servicing Agreement are
Certificates designated a s ContiMortgage Home Equity Loan Trust 1997-3 Home
Equity Loan Pass-Through Certificates, 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-11IO (collectively, the "Class A Certificates"), Class M-1A, Class M-1F (the
"Class M-1 Certificates"), Class M-2A, Class M-2F (the "Class M-2 Certificates")
and collectively with the Class M-1 Certificates, the "Mezzanine Certificates")
and Class B-1F (the "Class B-1F Certificates" and collectively w ith the Class
B-1A Certificates, the "Class B Certificates, collectively with the Class A
Certificates and the Mezzanine Certificates, the "Offered Certificates"), the
Class C Certificates (the "Class C Certificates") and Class R (Residual
Interest) (the "Class R Certificates"). The Offered Certificates, the Class C
Certificates 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 s et 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 "Payment Date")
commencing July 15, 1997, the Owners of the Class B-1A Certificates as of the
close of business on the day immediately preceding such Payment Date (the
"Record Date") will be entitled to receive the Class B-1A Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made in
immediately available funds to Owners of Certif icates having an aggregate
original Class B-1A Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class B-1A Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class B-1A Certificates. The Percentage Interest of each
Class B-1A Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class B-1A Certificate on the Startup Day by the aggregate Class B-1A
Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
B-1A-3
<PAGE>
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans
and amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Trust Estate or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code and the
Trustee shall either sell the Home Equity Loans and distribute the proceeds of
the liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each in
accorda nce with such plan, so that the liquidation or distribution of the Trust
Estate, the distribution of any proceeds of the liquidation and the termination
of the Pooling and Servicing Agreement occur no later than the close of the 90th
day after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Lower-Tier REMIC or the
Upper-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
B-1A-4
<PAGE>
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be required
prior to amendments. Any such consent by the Owner at the time of the giving
thereof, of this Certificate shall be conclusive and binding upon such Owner and
upon all future Owners of the Certificate and of any Certificate issued upon the
registration of Transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class B-1A Certificates are issuable only as registered Certificates in
minimum denominations of $1,000 original Certificate Principal Balance. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class B-1A Certificates are exchangeable for new
Class B-1A Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the 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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
B-1A-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
B-1A-6
<PAGE>
EXHIBIT C-1
FORM OF CLASS C CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE 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-11IO, CLASS M-1A, CLASS M-1F, CLASS M-2A, CLASS M-2F, CLASS B-1A AND
CLASS B-1F CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
ContiMortgage Home Equity Loan Trust 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
INTEREST-ONLY CLASS C CERTIFICATE
Representing Certain Interests Relating to a Pool of
Home Equity Loans formed by ContiSecurities Asset Funding Corp.
and Serviced by
CONTIMORTGAGE CORPORATION
as Servicer
This certificate does not represent an interest in, or an obligation
of, nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This certificate represents a fractional ownership interest in the
Home Equity Loans as described herein, moneys in certain Accounts created
pursuant to the Pooling and Servicing Agreement and certain other rights
relating thereto and is payable only from amounts received by the Trustee
relating to the Home Equity Loans held by the Trust.
No.: C-1
June __, 1997
-------------
Date
100%
- - -------------------- ---------------
Percentage Interest Final Scheduled
Payment Date
CONTISECURITIES ASSET FUNDING II, L.L.C.
----------------------------------------
Registered Holder
Trustee Authentication
Manufacturers and Traders Trust Company,
as Trustee
By:________________________________
Name:______________________________
Title:_____________________________
Date of Authentication:____________
C-1-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedules I-A and
I-B to the Pooling and Servicing Agreement which each Seller has caused to be
delivered to the Depositor and the Depositor has caused to be delivered to the
Trustee (and all substitutions therefor as provided by Section 3.03, 3.04 and
3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and each Sellers' interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account the Upper-Tier Group I Distribution Account and the
Upper-Tier Group II Distribution Account together with investment earnings on
such amounts and such amounts as may be held in the name of the Trustee in the
Principal and Interest Account, if any, exclusive of investment earnings thereon
(except as otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts , acceptances, chattel paper, checks, deposit
accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
Upon receiving the final distribution hereon, the Owner hereof is
required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement provides that, in any event, upon the making of the final distribution
due on this Certificate, this Certificate shall be deemed cancelled for all
purposes under the Pooling and Servicing Agreement.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY
STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DO ES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
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 HOME EQUITY LOANS ARE
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
C-1-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class C (the "Class C Certificates") and issued under
and subject to the terms, provisions and conditions of that certain Pooling and
Servicing Agreement dated as of June 1, 1997 (the "Pooling and Servicing
Agreement") by and among ContiMortgage Corporation, in its capacity as a Seller
(a "Seller") and as the Servicer (the "Servicer"), ContiWest Corporation, in its
capacity as a Seller (a "Seller"), ContiSecurities Asset Funding Corp., in its
capacity as Depositor, (the "Depositor") and Manufacturers and Traders Trust
Company, a New York banking corporation, in its capacity as the Trustee (the
"Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Conti Mortgage Home Equity Loan Trust 1997-3 Home Equity Loan
Pass-Through Certificates, 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-11IO,
(collectively, the "Class A Certificates"), Class M-1A, Class M-1F, Class M-2A,
Class M-2F (together, the "Mezzanine Certificates"), Class B-1A, Class B-1F
(the "Class B Certificates" and together with the Class A Certificates and the
Mezzanine Certificates, the "Offered Certificates") and Class R (the "Class R
Certificates"). The Offered Certificates, the Class C Certificates 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.
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 "Payment Date")
commencing July 15, 1997, the Holders of the Class C Certificates as of the
close of business on the last business day of the calendar month immediately
preceding the calendar month in which such Payment Date occurs (the "Record
Date") may be entitled to receive the Class C Distribution Amount (as defined in
the Pooling and Servicing Agreement) relating to such Payment Date.
Distributions will be made in immediately available funds to such Owners, by
wire transfer or otherwise, to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee at least 5 business days prior to the related record date,
or by check mailed to the address of the person entitled thereto as it appears
on the Register.
Each Owner of record of a Class C Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class C Certificates. The Percentage Interest of each Class
C Certificate as of any date of determination will be equal to the percentage
interest set forth on such Class C Certificate.
The Trustee or any duly appointed Paying Agent will duly and punctually
pay distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code or applicable to any Owner shall be considered as hav ing been paid by
the Trustee to such Owner for all purposes of the Pooling and Servicing
Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-servicer 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 Home Equity Loans insured or
guaranteed by, the Depositor or ContiMortgage or any of their
C-1-3
<PAGE>
subsidiaries and affiliates and are not insured or guaranteed by the Federal
Deposit Insuran ce 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 Home Equity Loans and
amounts on deposit in the Accounts (except as otherwise provided in the Pooling
and Servicing Agreement), all as more specifically set forth hereinabove and in
the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms hereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Lower-Tier REMIC or (b) the disposition of all property
acquired in respect of any Home Equity Loan remaining in the Lower-Tier REMIC or
(c) at any time when a Qualified Liquidation of the Lower-Tier REMIC is effected
as described below. To effect a terminati on of the Pooling and Servicing
Agreement pursuant to clause (c) above, the Owners of all Certificates then
Outstanding shall unanimously direct the Trustee on behalf of the Trust to adopt
a plan of complete liquidation as contemplated by Section 860F(a)(4) of the
Code, and the Trustee shall either sell the Home Equity Loans and distribute the
proceeds of the liquidation of the Trust, or shall distribute equitably in kind
all of the assets of the Lower-Tier REMIC to the remaining Owners of the
Certificates , each in accordance with such plan, so that the liquidation or
distribution of the Lower-Tier REMIC, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur no
later than the close of the 90th day after the date of adoption of the plan of
liquidation and such liquidation qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the
Lower-Tier REMIC and the Upper-Tier REMIC, and thereby effect early retirement
of the Certificates, on any Monthly Remittance Date after the Clean-Up Call Date
and (ii) under certain circumstances relating to the qualification of the
Lower-Tier REMIC and the Upper-Tier REMIC as a REMIC under the Code the Home
Equity Loans may be sold, thereby effecting the early retirement of the
Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
C-1-4
<PAGE>
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Trustee, the Sellers and the
Servicer at any time and from time to time, without the consent of the Owners;
provided that in certain circumstances provided for in the Pooling and Servicing
Agreement, such consent of the Owners will be required prior to amendments. Any
such consent by the Owner at the time of the giving thereof, of this Certificate
shall be conclusive and binding upon such Owner and upon all future Owners of
the Certificate and of any Certificate issued upon the registration of Transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class C Certificates are issuable only as registered Certificates in
minimum percentage interests of all interests in the Class C Certificates. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class C Certificates are exchangeable for new
Class C Certificates of the same percentage interest as the Class C Certificates
exchanged.
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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
C-1-5
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
C-1-6
<PAGE>
EXHIBIT C-2
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS
OF "RESIDUAL INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC")
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH
THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.08 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (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 FARMER'S 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
TRANSFERE E 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-THROUGH ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
1T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
C-2-1
<PAGE>
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS R
(Residual Interest)
Representing Certain Interests Relating to a Pool of
Conventional Home Equity Loans
Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional residual ownership inte
rest in the Trust Estate.)
No: R-1 June __, 1997
-------------
Date
Percentage Interest 99.999 %
--------- ----------------------------
Final Scheduled Payment Date
ContiSecurities Asset Funding II, L.L.C.
----------------------------------------
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in Schedules I-A and I-B
to the Pooling and Servicing Agreement which each Seller has caused to be
delivered to the Depositor and the Depositor has caused to be delivered to the
Trustee (and all substitutions therefor as provided by Section 3.03, 3.04 and
3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and each Sellers' interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, Upper-Tier Group I Distribution Account and the
Upper-Tier Group II Distribution Account together with investment earnings on
such amounts and such amounts as may be held in the name of the Trustee in the
Pr incipal and Interest Account, if any, exclusive of investment earnings
thereon (except as otherwise provided herein), whether in the form of cash,
instruments, securities or other properties (including any Eligible Investments
held by the Servicer); and (c) proceeds of all the foregoing (including, but not
by way of limitation, all proceeds of any mortgage insurance, hazard insurance
and title insurance policy relating to the Home Equity Loans, cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, rights to payment of any and every kind, and other
forms of obligations and receivables which at any time constitute all or part of
or are included in the proceeds of any of the foregoing) to pay the Certificates
as specified in the Pooling and Servicing Agreement.
C-2-2
<PAGE>
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:___________________________
Name:_________________________
Title:________________________
Date of Authentication:_______
C-2-3
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class R (the "Class R Certificates") and issued under
and subject to the terms, provisions and conditions of that certain Pooling and
Servicing Agreement dated as of June 1, 1997 (the "Pooling and Servicing
Agreement") by and among ContiMortgage Corporation, in its capacity as a Seller
(a "Seller") and as the Servicer (the "Servicer"), ContiWest Corporation, in its
capacity as a Seller (a "Seller"), ContiSecurities Asset Funding Corp., in its
capacity as Depositor, (the "Depositor") and Manufacturers and Traders Trust
Company, a New York banking corporation, in its capacity as the Trustee (the
"Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3 Home Equity Loan
Pass-Through Certificates, 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-11IO
(collectively, the "Class A Certificates"), Class M-1A, Class M-1F, Class M-2A,
Class M-2F (the "Mezzanine Certificates"), Class B-1A, Class B-1F (the "Class B
Certificates" and collectively with the Class A Certificates and the Mezzanine
Certificates, the "Offered Certificates") and the Class C (the "Class C
Certificates"). The Offered Certificates, the Class C Certificates 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.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans,
all as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the latest to occur of (a) the final payment or
other liquidation (or any advance made with respect thereto) of the last Home
Equity Loan in the Upper-Tier REMIC and the Lower-Tier REMIC or (b) the
disposition of all property acquired in respect of any Home Equity Loan
remaining in the Trust Estate or (c) at any time when a Qualified Liquidation of
the Trust Estate is effected as described below. To effect a termination of the
Pooling and Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf of
the Trust to adopt a plan of complete liquidation as contemplated by Section
860F(a)(4) of the Code, and the Trustee shall either sell the Home Equity Loans
and distribute the proceeds of the liquidation of the Trust, or shall distribute
equitably in kind all of the assets of the Trust Estate to the remaining Owners
of the Certificates, each in accordance with such plan, so that the
C-2-4
<PAGE>
liquidation or distribution of the Trust Estate, the distribution of any
proceeds of the liquidation and the termination of the Pooling and Servicing
Agreement occur no later than the close of the 90th day after the date of
adoption of the plan of liquidation and such liquidation qualifies as a
Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Upper-Tier REMIC and the
Lower-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests represented by the
Offered Certificates, or if there are no longer any Offered Certificates then
outstanding, the Owners of a majority of the Percentage Interests represented by
the Class R Certificates then outstanding, have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the Upper-Tier REMIC will be issued to the
designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
Consent of the Owners; provided that in certain other circumstances provided for
in the Pooling and Servicing Agreement, such consent of the Owners will be
required prior to amendments. Any such consent by the Owner at the time of the
giving thereof, of this Certificate shall be conclusive and binding upon such
Owner and upon all future Owners of the Certificate and of any Certificate
issued upon the registration of Transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class R Certificates are issuable only as registered Certificates. 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 Percentage Interest as the Class R
Certificates exchanged.
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
C-2-5
<PAGE>
notice to the contrary, except as may otherwise be specifically provided in the
Pooling and Servicing Agreement.
C-2-6
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
C-2-7
<PAGE>
EXHIBIT C-2
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS
OF "RESIDUAL INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC")
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH
THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.08 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (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 FARMER'S 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
TRANSFERE E 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-THROUGH ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
1T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
C-2-1
<PAGE>
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1997-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS R
(Residual Interest)
Representing Certain Interests Relating to a Pool of
Conventional Home Equity Loans
Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional residual ownership inte
rest in the Trust Estate.)
No: R-2 June __, 1997
-------------
Date
Percentage Interest 0.001 % ----------------------------
--------
Final Scheduled Payment Date
ContiFunding Corporation
------------------------
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Initial Home Equity Loans (other than the
Retained Yield indicated in Schedule II to the Pooling and Servicing Agreement
(as defined below) and any principal and interest payments received thereon
prior to the Cut-Off Date) listed in Schedules I-A and I-B to the Pooling and
Servicing Agreement which each Seller has caused to be delivered to the
Depositor and the Depositor has caused to be delivered to the Trustee (and all
substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the Pooling
and Servicing Agreement), together with the related Home Equity Loan documents
and each Sellers' interest in any Property which secured a Home Equity Loan but
which has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the Certificate
Account Upp er-Tier Group I Distribution Account and the Upper-Tier Group II
Distribution Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and Interest
Account, if any, exclusive of investment earnings thereon (except as otherwise
provided herein), whether in the form of cash, instruments, securities or other
properties (including any Eligible Investments held by the Servicer); and (c)
proceeds of all the foregoing (including, but not by way of limitation, all
proceeds of any mortgage insurance, hazard insurance and title insurance policy
relating to the Home Equity Loans, cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations and receivables
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing) to pay the Certificates as specified in the Pooling and
Servicing Agreement.
C-2-2
<PAGE>
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:___________________________
Name:_________________________
Title:________________________
Date of Authentication: ______
C-2-3
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3, Home Equity Loan
Pass-Through Certificates, Class R (the "Class R Certificates") and issued under
and subject to the terms, provisions and conditions of that certain Pooling and
Servicing Agreement dated as of June 1, 1997 (the "Pooling and Servicing
Agreement") by and among ContiMortgage Corporation, in its capacity as a Seller
(a "Seller") and as the Servicer (the "Servicer"), ContiWest Corporation, in its
capacity as a Seller (a "Seller"), ContiSecurities Asset Funding Corp., in its
capacity as Depositor, (the "Depositor") and Manufacturers and Traders Trust
Company, a New York banking corporation, in its capacity as the Trustee (the
"Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as ContiMortgage Home Equity Loan Trust 1997-3 Home Equity Loan
Pass-Through Certificates, 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-11IO
(collectively, the "Class A Certificates"), Class M-1A, Class M-1F, Class M-2A,
Class M-2F (together, the "Mezzanine Certificates"), Class B-1A, Class B-1F
(the "Class B Certificates" and, collectively with the Class A Certificates and
the Mezzanine Cer tificates, the "Offered Certificates") and Class C (the Class
C Certificates"). The Offered Certificates, the Class C Certificates 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.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer 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 Home Equity Loans insured or guaranteed by,
ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation or any of their affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans,
all as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates from amounts other than those available under the Certificate
Insurance Policy of all amounts held by the Trustee and required to be paid to
such Owners pursuant to the Pooling and Servicing Agreement upon the later to
occur of (a) the final payment or other liquidation (or any advance made with
respect thereto) of the last Home Equity Loan in the Upper-Tier REMIC and the
Lower-Tier REMIC or (b) the disposition of all property acquired in respect of
any Home Equity Loan remaining in the Trust Estate or (c) at any time when a
Qualified Liquidation of the Trust Estate is effected as described below. To
effect a termination of the Pooling and Servicing Agreement pursuant to clause
(c) above, the Owners of all Certificates then Outstanding shall unanimously
direct the Trustee on behalf of the Trust to adopt a plan of complete
liquidation, as contemplated by Section 860F(a)(4) of the Code and
C-2-4
<PAGE>
the Trustee shall either sell the Home Equity Loans and distribute the proceeds
of the liquidation of the Trust, or shall distribute equitably in kind all of
the assets of the Trust Estate to the remaining Owners of the Certificates, each
in accordance with such plan, so that the liquidation or distribution of the
Trust Estate, the distribution of any proceeds of the liquidation and the
termination of the Pooling and Servicing Agreement occur no later tha n the
close of the 90th day after the date of adoption of the plan of liquidation and
such liquidation qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean-Up Call Date and (ii) under certain
circumstances relating to the qualification of the Upper-Tier REMIC and the
Lower-Tier REMIC as a REMIC under the Code the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests represented by the
Offered Certificates, or if there are no longer any Offered Certificates then
outstanding, the Owners of a majority of the Percentage Interests represented by
the Class R Certificates then outstanding, have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the Upper-Tier REMIC will be issued to the
designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Sellers and the Servicer at any time and from time to time, and without the
consent of the Owners; provided, that in certain other circumstances provided
for in the Pooling and Servicing Agreement, such consent of the Owners will be
required prior to amendments. Any such consent by the Owner at the time of the
giving thereof, of this Certificate shall be conclusive and binding upon such
Owner and upon all future Owners of the Certificate and of any Certificate
issued upon the registration of Transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Certificate.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class R Certificates are issuable only as registered Certificates. 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 Percentage Interest as the Class R
Certificates exchanged.
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,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement.
C-2-6
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed on behalf of the Trust.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
C-2-7
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE RE: HOME EQUITY LOANS
PREPAID IN FULL AFTER CUT-OFF DATE
CERTIFICATE RE: PREPAID LOANS
I, __________________________, _______________ of ContiMortgage Corporation
("ContiMortgage"), hereby certify that between the "Cut-Off Date" (as defined in
the Pooling and Servicing Agreement dated as of June 1, 1997 among
ContiSecurities Asset Funding Corp., as Depositor, ContiMortgage, as a Seller
and the Servicer, ContiWest Corporation, as a Seller, and Manufacturers and
Traders Trust Company, as Trustee) and the "Startup Day," the following schedule
of "Home Equity Loans" (each as defined in the Pooling and Servicing Agreement)
have been prepaid in full.
Account Original Current Date Paid
Number Name Amount Balance Off
------ ---- ------ ------- ---
Dated: March __, 1997
By:_____________________
Title:__________________
D-1
<PAGE>
EXHIBIT E
FORM OF TRUSTEE'S RECEIPT
TRUSTEE'S ACKNOWLEDGEMENT OF RECEIPT
Manufacturers and Traders Trust Company, a New York banking corporation, in
its capacity as trustee (the "Trustee") under that certain Pooling and Servicing
Agreement dated as of June 1, 1997 (the "Pooling and Servicing Agreement") among
ContiSecurities Asset Funding Corp., as Depositor, ContiMortgage Corporation, a
Delaware corporation, as a Seller (a "Seller") and the Servicer, ContiWest
Corporation, as a Seller, and Manufacturers and Traders Trust Company, as
Trustee, hereby acknowledges receipt (subject to review as required by Section
3.06(a) of the Pooling and Servicing Agreement) of the items delivered to it by
the Sellers and the Depositor with respect to the Home Equity Loans pursuant to
Section 3.05(b)(i) of the Pooling and Servicing Agreement.
The Schedule of Home Equity Loans is attached to this Receipt.
The Trustee hereby additionally acknowledges that it shall review such
items as required by Section 3.06(a) of the Pooling and Servicing Agreement and
shall otherwise comply with Section 3.06(b) of the Pooling and Servicing
Agreement as required thereby.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:_____________________________
Title:__________________________
Dated: March __, 1997
E-1
<PAGE>
EXHIBIT F
FORM OF POOL CERTIFICATION
POOL CERTIFICATION
WHEREAS, the undersigned is an Authorized Officer of Manufacturers and
Traders Trust Company, a New York banking corporation, acting in its capacity as
trustee (the "Trustee") of a certain pool of mortgage loans (the "Pool")
heretofore conveyed in trust to the Trustee, pursuant to that certain Pooling
and Servicing Agreement dated as of June 1, 1997 (the "Pooling and Servicing
Agreement") among ContiSecurities Asset Funding Corp., as Depositor,
ContiMortgage Corporation, as a Seller and the Servicer, ContiWest Corporation,
as a Seller, and Manufacturers and Traders Trust Company, as Trustee; and
WHEREAS, the Trustee is required, pursuant to Section 3.06(a) of the
Pooling and Servicing Agreement, to review the Mortgage Files relating to the
Pool within a specified period following the Startup Day and to notify the
related Seller promptly of any defects with respect to the Pool, and such Seller
is required to remedy such defects or take certain other action, all as set
forth in Section 3.06(b) of the Pooling and Servicing Agreement; and
WHEREAS, Section 3.06(a) of the Pooling and Servicing Agreement requires
the Trustee to deliver this Pool Certification upon the satisfaction of certain
conditions set forth therein.
NOW, THEREFORE, the Trustee hereby certifies that it has determined that
all required documents (or certified copies of documents listed in Section 3.05
of the Pooling and Servicing Agreement) have been executed or received, and that
such documents relate to the Home Equity Loans identified in the Schedule of
Home Equity Loans pursuant to Section 3.06(a) of the Pooling and Servicing
Agreement or, in the event that such documents have not been executed and
received or do not so relate to such Home Equity Loans, any remedial action by
the Sellers pursuant to Section 3.06(b) of the Pooling and Servicing Agreement
has been completed. The Trustee makes no certification hereby, however, with
respect to any intervening assignments or assumption and modification
agreements.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:______________________________
Title:___________________________
Dated: March __, 1997
F-1
<PAGE>
EXHIBIT G
FORM OF DELIVERY ORDER
DELIVERY ORDER
Manufacturers and Traders Trust Company, as Trustee
One M&T Plaza
Buffalo, New York 14240
Attention: Corporate Trustee Department
Dear Sirs:
Pursuant to Section 4.01 of the Pooling and Servicing Agreement, dated as
of June 1, 1997 (the "Pooling and Servicing Agreement") among ContiSecurities
Asset Funding Corp., as Depositor, ContiMortgage Corporation, a Delaware
Corporation ("ContiMortgage"), as a Seller and the Servicer, ContiWest
Corporation, as a Seller, and Manufacturers and Traders Trust Company, a New
York banking corporation, as Trustee (the "Trustee"), ContiMortgage HEREBY
CERTIFIES that all conditions precedent to the issuance of the ContiMortgage
Home Equity Loan Trust 1997-3, Home Equity Loan Pass-Through Certificates, Class
A, Class M-1, Class M-2, Class B, Class C and Class R (the "Certificates"), HAVE
BEEN SATISFIED, and HEREBY REQUESTS YOU TO AUTHENTICATE AND DELIVER said
Certificates, and to RELEASE said Certificates to the owners thereof, or
otherwise upon their order.
Very truly yours,
CONTISECURITIES ASSET FUNDING CORP.,
By:___________________________
Title:________________________
Dated: March __, 1997
G-1
<PAGE>
EXHIBIT H
[RESERVED]
H-1
<PAGE>
EXHIBIT I
FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
AFFIDAVIT PURSUANT TO SECTION
860E(e) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the "Investor"), a
[savings institution] [corporation] duly organized and existing under the laws
of [the State of ] [the United States], on behalf of which he makes this
affidavit.
2. That (i) the Investor is not a "disqualified organization" and will not
be a "disqualified organization" as of [date of transfer] (For this purpose, a
"disqualified organization" means the United States, any state or political
subdivision thereof, any foreign government, any international organization, any
agency or instrumentality of any of the foregoing (other than certain taxable
instrumentalities), any cooperative organization furnishing electric energy or
providing telephone service to persons in rural areas, or any organization
(other than a farmers' cooperative) that is exempt from federal income tax
unless such organization is subject to the tax on unrelated business income.);
(ii) it is not acquiring the Class R Certificate for the account of a
disqualified organization; (iii) it consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by the Trustee (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the Class R
Certificate s will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Class R Certificate unless (a)
it has received from the transferee an affidavit in substantially the same form
as this affidavit containing these same four representations and (b) as of the
time of the transfer, it does not have actual knowledge that such affidavit is
false.
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to authority of its Board of Directors, by its [Title of
Officer] and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this day of , .
[NAME OF INVESTOR]
By:_______________
[Name of Officer]
[Title of Officer]
I-1
<PAGE>
[Corporate Seal]
Attest:
- - ---------------------
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known or
proved to be the same person who executed the foregoing instrument and to be the
[Title of Officer] of the Investor, and acknowledged to me that he executed the
same as his free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this____day of___________,_____
- - ----------------------------
NOTARY PUBLIC
COUNTY OF______________
STATE OF_______________
My commission expires the____day of___________,___.
I-2
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION - FIXED RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
Arizona 133 0.83% $ 8865763.89 0.94%
Arkansas 101 0.63 4548802.96 0.48
California 239 1.49 23191306.41 2.45
Colorado 170 1.06 12194105.01 1.29
Connecticut 99 0.62 8113742.93 0.86
Delaware 41 0.26 3111410.38 0.33
District of Columbia 54 0.34 3480827.64 0.37
Florida 1091 6.81 61148347.39 6.47
Georgia 509 3.18 31232717.47 3.30
Hawaii 7 0.04 1242914.07 0.13
Idaho 37 0.23 1652701.46 0.17
Illinois 991 6.18 59870227.78 6.34
Indiana 1119 6.98 55757196.07 5.90
Iowa 114 0.71 4590019.31 0.49
Kansas 95 0.59 4669465.74 0.49
Kentucky 287 1.79 15220735.05 1.61
Louisiana 89 0.56 3981004.12 0.42
Maine 13 0.08 741524.33 0.08
Maryland 454 2.83 31498355.31 3.33
Massachusetts 302 1.88 24207367.59 2.56
Michigan 2031 12.67 94371233.50 9.99
Minnesota 153 0.95 9728963.92 1.03
Mississippi 65 0.41 2464945.91 0.26
Missouri 393 2.45 19549204.47 2.07
Montana 26 0.16 1433521.75 0.15
Nebraska 53 0.33 2276352.63 0.24
Nevada 28 0.17 2373067.05 0.25
New Hampshire 32 0.20 2275923.11 0.24
New Jersey 508 3.17 42268795.80 4.47
New Mexico 159 0.99 10155098.76 1.07
New York 931 5.81 72527901.01 7.67
North Carolina 1217 7.59 65061426.15 6.88
North Dakota 1 0.01 34284.22 0.00
Ohio 1442 9.00 79505638.71 8.41
Oklahoma 97 0.61 3895902.96 0.41
Oregon 85 0.53 6990408.12 0.74
Pennsylvania 942 5.88 56039072.97 5.93
Rhode Island 103 0.64 7787552.81 0.82
South Carolina 546 3.41 27348743.83 2.89
South Dakota 4 0.02 188993.61 0.02
Tennessee 260 1.62 15685782.83 1.66
Texas 141 0.88 8808885.45 0.93
Utah 190 1.19 14545965.81 1.54
Virginia 362 2.26 20705187.20 2.19
Washington 105 0.66 8952137.40 0.95
West Virginia 14 0.09 569904.91 0.06
Wisconson 184 1.15 9457019.71 1.00
Wyoming 12 0.07 742290.62 0.08
----- ---- -------------- ----
Total 16029 $ 945062740.13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL LTV (CALC) - FIXED RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
0.000 * x *= 5.000% 1 0.01% $ 24899.32 0.00%
5.000 * x *= 10.000 71 0.44 1281110.49 0.14
10.000 * x *= 15.000 392 2.45 8538851.58 0.90
15.000 * x *= 20.000 513 3.20 13127163.74 1.39
20.000 * x *= 25.000 441 2.75 13431975.73 1.42
25.000 * x *= 30.000 420 2.62 14683448.62 1.55
30.000 * x *= 35.000 345 2.15 11638441.10 1.23
35.000 * x *= 40.000 348 2.17 13272739.79 1.40
40.000 * x *= 45.000 311 1.94 12123044.46 1.28
45.000 * x *= 50.000 592 3.69 22756199.42 2.41
50.000 * x *= 55.000 400 2.50 17898352.34 1.89
55.000 * x *= 60.000 740 4.62 33761764.81 3.57
60.000 * x *= 65.000 946 5.90 52362143.55 5.54
65.000 * x *= 70.000 1375 8.58 77530187.32 8.20
70.000 * x *= 75.000 1850 11.54 114362691.92 12.10
75.000 * x *= 80.000 3856 24.06 254704049.16 26.95
80.000 * x *= 85.000 2104 13.13 163524284.39 17.30
85.000 * x *= 90.000 1301 8.12 117422368.89 12.42
90.000 * x *= 95.000 22 0.14 2523893.17 0.27
95.000 * x *= 100.000 1 0.01 95130.33 0.01
----- ---- -------------- ----
Total 16029 $ 945062740.13
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
COMBINED ORIGINAL LTV (CALC) - FIXED RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
5.000 * x *= 10.000% 5 0.03% $ 82837.76 0.01%
10.000 * x *= 15.000 22 0.14 425146.29 0.04
15.000 * x *= 20.000 44 0.27 983900.60 0.10
20.000 * x *= 25.000 85 0.53 2315954.30 0.25
25.000 * x *= 30.000 135 0.84 3811230.73 0.40
30.000 * x *= 35.000 185 1.15 5097555.93 0.54
35.000 * x *= 40.000 239 1.49 7747324.92 0.82
40.000 * x *= 45.000 258 1.61 9338285.38 0.99
45.000 * x *= 50.000 579 3.61 21438533.48 2.27
50.000 * x *= 55.000 413 2.58 17913435.66 1.90
55.000 * x *= 60.000 775 4.83 34037276.38 3.60
60.000 * x *= 65.000 1039 6.48 55652090.98 5.89
65.000 * x *= 70.000 1532 9.56 82666676.53 8.75
70.000 * x *= 75.000 2126 13.26 123690804.63 13.09
75.000 * x *= 80.000 4420 27.58 272358269.20 28.82
80.000 * x *= 85.000 2747 17.14 184698257.27 19.54
85.000 * x *= 90.000 1391 8.68 120060304.53 12.70
90.000 * x *= 95.000 26 0.16 2581568.44 0.27
95.000 * x *= 100.000 7 0.04 154791.31 0.02
100.000 * x *= 190.000 1 0.01 8495.81 0.00
----- ---- -------------- ----
Total 16029 $ 945062740.13
</TABLE>
- - ----------
* less than
<PAGE>
<TABLE>
<CAPTION>
COUPON RATE - FIXED RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
7.000 * x *= 8.000% 5 0.03% $ 467311.68 0.05%
8.000 * x *= 9.000 325 2.03 25707696.24 2.72
9.000 * x *= 10.000 1921 11.98 141708947.46 14.99
10.000 * x *= 11.000 3580 22.33 244843970.11 25.91
11.000 * x *= 12.000 3687 23.00 227062893.76 24.03
12.000 * x *= 13.000 3093 19.30 162989746.99 17.25
13.000 * x *= 14.000 1788 11.15 82826272.68 8.76
14.000 * x *= 15.000 942 5.88 36175081.47 3.83
15.000 * x *= 16.000 388 2.42 14387883.21 1.52
16.000 * x *= 17.000 181 1.13 5492887.43 0.58
17.000 * x *= 18.000 104 0.65 2934215.25 0.31
18.000 * x *= 19.000 15 0.09 465833.85 0.05
----- ------- -------------- ---------
Total 16029 $ 945062740.13
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
LOAN BALANCES - FIXED RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
$ 0.00 * x *= 25,000.00 2433 15.18% $ 46139392.75 4.88%
25,000.00 * x *= 50,000.00 5742 35.82 215763743.84 22.83
50,000.00 * x *= 75,000.00 4145 25.86 255065251.15 26.99
75,000.00 * x *= 100,000.00 1798 11.22 155548368.24 16.46
100,000.00 * x *= 125,000.00 919 5.73 102584160.28 10.85
125,000.00 * x *= 150,000.00 460 2.87 62690476.21 6.63
150,000.00 * x *= 175,000.00 211 1.32 34047990.93 3.60
175,000.00 * x *= 200,000.00 132 0.82 24650059.44 2.61
200,000.00 * x *= 225,000.00 65 0.41 13826134.99 1.46
225,000.00 * x *= 250,000.00 45 0.28 10766188.60 1.14
250,000.00 * x *= 275,000.00 23 0.14 6008340.17 0.64
275,000.00 * x *= 300,000.00 21 0.13 6080688.69 0.64
300,000.00 * x *= 325,000.00 17 0.11 5360848.42 0.57
325,000.00 * x *= 350,000.00 8 0.05 2710342.93 0.29
350,000.00 * x *= 400,000.00 8 0.05 2999973.42 0.32
400,000.00 * x *= 450,000.00 2 0.01 820780.07 0.09
----- ---- -------------- ----
Total 16029 $ 945062740.13
</TABLE>
- - ----------
* less than
<PAGE>
<TABLE>
<CAPTION>
PROPERTY TYPE - FIXED RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
2 - 4 Family 894 5.58% $ 64439948.79 6.82%
Condo 116 0.72 5628800.11 0.60
Mixed Use-Commercial 16 0.10 1952635.66 0.21
Mixed Use-Consumer 25 0.16 3548203.14 0.38
Manufactured Housing 454 2.83 21860038.89 2.31
PUD 98 0.61 8882775.25 0.94
Single Family Attached 510 3.18 25075293.50 2.65
Single Family Detched 13916 86.82 813675044.79 86.10
----- ----- -------------- -----
Total 16029 $ 945062740.13
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
MONTHS OF SEASONING - FIXED RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
- - -1 * x *= 1 8903 55.54% $ 525949150.81 55.65%
1 * x *= 12 7119 44.41 418771024.28 44.31
12 * x *= 24 7 0.04 342565.04 0.04
----- ---- -------------- -----
Total 16029 $ 945062740.13
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
MONTHS REMAINING TO MATURITY - FIXED RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
0 * x *= 120 809 5.05% $ 21537394.42 2.28%
120 * x *= 180 10255 63.98 601073142.48 63.60
180 * x *= 240 2421 15.10 132518367.18 14.02
240 * x *= 300 196 1.22 11754717.52 1.24
300 * x *= 360 2348 14.65 178179118.53 18.85
----- ----- --------------- -----
Total 16029 $ 945062740.13
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
OCCUPANCY STATUS - FIXED RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
Investor Owned 882 5.50% $ 39853930.85 4.22%
Owner Occupied 15147 94.50 905208809.28 95.78
----- ----- -------------- -----
Total 16029 $ 945062740.13
</TABLE>
- - ----------
* less than
<PAGE>
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
Arizona 131 3.38% $ 11238923.16 3.51%
Arkansas 8 0.21 495494.38 0.15
California 332 8.57 42626704.31 13.32
Colorado 165 4.26 15615884.57 4.88
Connecticut 43 1.11 4241341.19 1.33
Delaware 1 0.03 71939.34 0.02
District of Columbia 3 0.08 278341.62 0.09
Florida 89 2.30 8565755.46 2.68
Georgia 32 0.83 3346224.87 1.05
Hawaii 13 0.34 2160537.81 0.68
Idaho 43 1.11 3397039.73 1.06
Illinois 128 3.30 11613055.48 3.63
Indiana 103 2.66 6677661.49 2.09
Iowa 105 2.71 5279982.91 1.65
Kansas 45 1.16 2678761.38 0.84
Kentucky 61 1.57 4344698.21 1.36
Louisiana 1 0.03 112446.95 0.04
Maine 1 0.03 155905.49 0.05
Maryland 51 1.32 5455168.43 1.71
Massachusetts 32 0.83 3858476.72 1.21
Michigan 1137 29.34 70698666.83 22.10
Minnesota 37 0.95 3306083.02 1.03
Mississippi 1 0.03 44800.00 0.01
Missouri 85 2.19 5743460.49 1.80
Montana 13 0.34 1528269.43 0.48
Nebraska 24 0.62 1363466.07 0.43
Nevada 35 0.90 4152690.52 1.30
New Hampshire 4 0.10 332114.25 0.10
New Jersey 20 0.52 2082506.15 0.65
New Mexico 95 2.45 9294523.63 2.91
New York 30 0.77 3298507.83 1.03
North Carolina 47 1.21 3270104.64 1.02
Ohio 262 6.76 18586681.76 5.81
Oklahoma 12 0.31 882527.06 0.28
Oregon 65 1.68 5970628.33 1.87
Pennsylvania 44 1.14 3943925.11 1.23
Rhode Island 11 0.28 1266662.62 0.40
South Carolina 10 0.26 620622.67 0.19
South Dakota 1 0.03 25977.14 0.01
Tennessee 26 0.67 2683986.21 0.84
Texas 124 3.20 11531661.57 3.60
Utah 148 3.82 15368083.26 4.80
Virginia 12 0.31 1076482.53 0.34
Washington 150 3.87 15114040.48 4.72
West Virginia 10 0.26 495096.37 0.15
Wisconson 80 2.06 4702629.60 1.47
Wyoming 5 0.13 342799.76 0.11
---- ---- -------------- ----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL LTV (CALC) - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
5.000 * x *= 10.000% 1 0.03% $ 10986.35 0.00%
10.000 * x *= 15.000 2 0.05 41967.13 0.01
15.000 * x *= 20.000 2 0.05 51969.35 0.02
20.000 * x *= 25.000 11 0.28 478557.84 0.15
25.000 * x *= 30.000 22 0.57 1051030.20 0.33
30.000 * x *= 35.000 20 0.52 782774.20 0.24
35.000 * x *= 40.000 32 0.83 1418181.27 0.44
40.000 * x *= 45.000 55 1.42 2252158.57 0.70
45.000 * x *= 50.000 111 2.86 5232177.14 1.64
50.000 * x *= 55.000 84 2.17 4617716.41 1.44
55.000 * x *= 60.000 179 4.62 10502895.80 3.28
60.000 * x *= 65.000 302 7.79 20851822.27 6.52
65.000 * x *= 70.000 439 11.33 34563761.70 10.80
70.000 * x *= 75.000 742 19.15 60313007.91 18.85
75.000 * x *= 80.000 1220 31.48 110081732.75 34.41
80.000 * x *= 85.000 529 13.65 52913667.14 16.54
85.000 * x *= 90.000 122 3.15 14489715.49 4.53
90.000 * x *= 95.000 1 0.03 229619.31 0.07
95.000 * x *= 100.000 1 0.03 57600.00 0.02
---- ---- -------------- ----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
COUPON RATE - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
5.000 * x *= 6.000% 2 0.05% $ 151123.20 0.05%
6.000 * x *= 7.000 12 0.31 1639683.75 0.51
7.000 * x *= 8.000 67 1.73 7836368.43 2.45
8.000 * x *= 9.000 424 10.94 46016946.72 14.38
9.000 * x *= 10.000 1025 26.45 95908850.96 29.98
10.000 * x *= 11.000 1276 32.93 101674200.56 31.78
11.000 * x *= 12.000 763 19.69 50574068.77 15.81
12.000 * x *= 13.000 209 5.39 11499615.18 3.59
13.000 * x *= 14.000 54 1.39 2788987.13 0.87
14.000 * x *= 15.000 42 1.08 1804702.74 0.56
15.000 * x *= 16.000 1 0.03 46793.39 0.01
---- ---- -------------- ----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
COMBINED ORIGINAL LTV (CALC) - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
5.000 * x *= 10.000% 1 0.03% $ 10986.35 0.00%
10.000 * x *= 15.000 2 0.05 41967.13 0.01
15.000 * x *= 20.000 2 0.05 51969.35 0.02
20.000 * x *= 25.000 11 0.28 478557.84 0.15
25.000 * x *= 30.000 22 0.57 1051030.20 0.33
30.000 * x *= 35.000 20 0.52 782774.20 0.24
35.000 * x *= 40.000 32 0.83 1418181.27 0.44
40.000 * x *= 45.000 55 1.42 2252158.57 0.70
45.000 * x *= 50.000 111 2.86 5232177.14 1.64
50.000 * x *= 55.000 84 2.17 4617716.41 1.44
55.000 * x *= 60.000 179 4.62 10502895.80 3.28
60.000 * x *= 65.000 302 7.79 20851822.27 6.52
65.000 * x *= 70.000 439 11.33 34563761.70 10.80
70.000 * x *= 75.000 742 19.15 60313007.91 18.85
75.000 * x *= 80.000 1220 31.48 110081732.75 34.41
80.000 * x *= 85.000 529 13.65 52913667.14 16.54
85.000 * x *= 90.000 122 3.15 14489715.49 4.53
90.000 * x *= 95.000 1 0.03 229619.31 0.07
95.000 * x *= 100.000 1 0.03 57600.00 0.02
---- ---- -------------- -----
Total 3875 $ 313853715.92
</TABLE>
- - ----------
* less than
<PAGE>
<TABLE>
<CAPTION>
CURRENT BALANCE - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
$ 0.00 * x *= 25,000.00 131 3.38% $ 2694721.98 0.84%
25,000.00 * x *= 50,000.00 1008 26.01 39094200.59 12.22
50,000.00 * x *= 75,000.00 1035 26.71 64157491.18 20.05
75,000.00 * x *= 100,000.00 698 18.01 60898052.97 19.03
100,000.00 * x *= 125,000.00 406 10.48 45222018.73 14.13
125,000.00 * x *= 150,000.00 236 6.09 32443616.89 10.14
150,000.00 * x *= 175,000.00 117 3.02 19044754.63 5.95
175,000.00 * x *= 200,000.00 89 2.30 16620897.57 5.19
200,000.00 * x *= 225,000.00 58 1.50 12326835.22 3.85
225,000.00 * x *= 250,000.00 30 0.77 7060776.14 2.21
250,000.00 * x *= 275,000.00 22 0.57 5708551.49 1.78
275,000.00 * x *= 300,000.00 17 0.44 4922580.96 1.54
300,000.00 * x *= 325,000.00 12 0.31 3728776.99 1.17
325,000.00 * x *= 350,000.00 5 0.13 1707274.49 0.53
350,000.00 * x *= 400,000.00 8 0.21 3054440.47 0.95
400,000.00 * x *= 450,000.00 3 0.08 1256350.53 0.39
---- ---- -------------- ----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
PROPERTY TYPE - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
2 - 4 Family 152 3.92% $ 13942824.90 4.36%
Condo 55 1.42 4377375.14 1.37
MIXED USE-CONSUM 1 0.03 109863.33 0.03
Manufactured Housing 117 3.02 7197704.68 2.25
PUD 84 2.17 10666484.06 3.33
Single Family Attached 31 0.80 2361629.52 0.74
Single Family Detched 3435 88.65 281285459.20 87.92
---- ----- -------------- -----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
MONTHS OF SEASONING - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
- - -1 * x *= 1 2458 63.43% $ 206189864.11 64.45%
1 * x *= 12 1417 36.57 113751476.72 35.55
---- ----- -------------- -----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<PAGE>
<TABLE>
<CAPTION>
MONTHS REMAINING TO MATURITY - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
0 * x *= 120 2 0.05% $ 49534.70 0.02%
120 * x *= 180 15 0.39 765303.46 0.24
180 * x *= 240 11 0.28 592030.34 0.19
300 * x *= 400 3847 99.28 318534472.33 99.56
---- ----- -------------- -----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
OCCUPANCY STATUS - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
Investor Owned 215 5.55% $ 13470129.28 4.21%
Owner Occupied 3660 94.45 306471211.55 95.79
---- ----- -------------- -----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
ARM MARGIN - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
0.000 =* x * 4.000% 9 0.23% $ 1394266.24 0.44%
4.000 =* x * 5.000 121 3.12 13175077.12 4.12
5.000 =* x * 6.000 979 25.26 101038144.70 31.58
6.000 =* x * 7.000 1358 35.05 113500380.21 35.48
7.000 =* x * 8.000 975 25.16 65802297.47 20.57
8.000 =* x * 9.000 360 9.29 20981002.89 6.56
9.000 =* x * 10.000 69 1.78 3871859.07 1.21
10.000 =* x * 11.000 4 0.10 178313.13 0.06
---- ----- -------------- ----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<PAGE>
<TABLE>
<CAPTION>
MAXIMUM INTEREST RATE - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
12.000 * x *= 13.000% 5 0.13% $ 512051.11 0.16%
13.000 * x *= 14.000 37 0.95 4892277.14 1.53
14.000 * x *= 15.000 249 6.43 27461626.27 8.58
15.000 * x *= 16.000 939 24.23 89649694.38 28.02
16.000 * x *= 17.000 1341 34.61 109998223.53 34.38
17.000 * x *= 18.000 890 22.97 62621531.48 19.57
18.000 * x *= 19.000 281 7.25 18003746.39 5.63
19.000 * x *= 20.000 77 1.99 4413726.65 1.38
20.000 * x *= 21.000 46 1.19 1961929.24 0.61
21.000 * x *= 22.000 9 0.23 379741.25 0.12
22.000 * x *= 23.000 1 0.03 46793.39 0.01
---- ---- -------------- ----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
<TABLE>
<CAPTION>
NEXT RATE ADJUSTMENT DATE - ADJUSTABLE RATE LOAN GROUP
rangename count pctcnt sumbalance pctbal
<S> <C> <C> <C> <C>
May 1997 1 0.03% $ 97446.74 0.03%
July 1997 4 0.10 269136.24 0.08
August 1997 396 10.22 32020050.01 10.01
September 1997 427 11.02 30715751.90 9.60
October 1997 540 13.94 42897814.14 13.41
November 1997 290 7.48 25753620.21 8.05
December 1997 116 2.99 10483872.86 3.28
January 1998 71 1.83 5950138.73 1.86
April 1998 1 0.03 101043.66 0.03
September 1998 1 0.03 126292.70 0.04
November 1998 4 0.10 199118.70 0.06
December 1998 8 0.21 400296.36 0.13
January 1999 23 0.59 1772472.04 0.55
February 1999 113 2.92 10363437.93 3.24
March 1999 225 5.81 18733655.25 5.86
April 1999 471 12.15 39166013.16 12.24
May 1999 623 16.08 52374319.46 16.37
June 1999 314 8.10 23241220.46 7.26
July 1999 1 0.03 96600.00 0.03
September 1999 1 0.03 123786.29 0.04
December 1999 3 0.08 389296.33 0.12
January 2000 5 0.13 430091.53 0.13
February 2000 15 0.39 1118486.44 0.35
March 2000 44 1.14 4641289.50 1.45
April 2000 58 1.50 5737402.01 1.79
May 2000 81 2.09 8700913.18 2.72
June 2000 39 1.01 4037775.00 1.26
---- ---- -------------- ----
Total 3875 $ 319941340.83
</TABLE>
- - ----------
* less than
