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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): August 26, 1999
GREEN TREE FINANCIAL CORPORATION
as originator of
Home Equity Loan Trust 1999-D
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(Exact name of registrant as specified in its charter)
Delaware 333-75623 41-1859796
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(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification No.)
1100 Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639
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(Address of principal executive offices)
Registrant's telephone number, including area code: (651) 293-3400
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant.
--------------------------------
Not applicable.
Item 2. Acquisition or Disposition of Assets.
------------------------------------
Not applicable.
Item 3. Bankruptcy or Receivership.
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Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
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Not applicable.
Item 5. Other Events.
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On August 26, 1999, the Registrant sold approximately $465,000,000 of
Certificates for Home Equity Loans, Series 1999-D (the
"Certificates"), evidencing beneficial ownership interests in Home
Equity Loan Trust 1999-D (the "Trust"). The Trust property consists
primarily of a pool comprised of closed-end home equity loans (the
"Home Equity Loans"), including the right to receive payments due on
the Contracts on and after the applicable Cut-off Date as described in
the Pooling and Servicing Agreement dated as of August 1, 1999.
Item 6. Resignations of Registrant's Directors.
--------------------------------------
Not applicable.
Item 7. Financial Statements and Exhibits.
---------------------------------
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
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(c) Exhibits.
The following is filed herewith. The exhibit numbers correspond
with Item 601(b) of Regulation S-K.
Exhibit No. Description
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4.1 Pooling and Servicing Agreement between Green Tree
Financial Corporation, as Seller and Servicer, and
U.S. Bank Trust National Association, as Trustee,
dated as of August 1, 1999 (without Exhibits L)
creating a trust entitled Home Equity Loan Trust
1999-D.
5.1 Opinion of Dorsey & Whitney LLP with respect to
legality
8.1 Opinion and Consent of Dorsey & Whitney LLP with
respect to tax matters.
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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.
GREEN TREE FINANCIAL CORPORATION
as originator of Home Improvement
and Home Equity Loan Trust 1999-D
By: /s/ Phyllis A. Knight
-----------------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
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INDEX TO EXHIBITS
Exhibit Number Page
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4.1 Pooling and Servicing Agreement between Filed Electronically
Green Tree Financial Corporation, as
Seller and Servicer, and U.S. Bank Trust
National Association, as Trustee, dated as
of August 1, 1999 (without Exhibits L)
creating a trust entitled Home Equity Loan
Trust 1999-D
5.1 Opinion of Dorsey & Whitney LLP with Filed Electronically
respect to legality
8.1 Opinion and Consent of Dorsey & Whitney LLP Filed Electronically
with respect to tax matters.
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<PAGE>
EXHIBIT 4.1
Certificates for Home Equity Loans
Series 1999-D
POOLING AND SERVICING AGREEMENT
between
GREEN TREE FINANCIAL CORPORATION
Seller and Servicer
and
U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
of
HOME EQUITY LOAN TRUST 1999-D
Dated as of August 1, 1999
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................. 1-1
Section 1.01. General............................................. 1-1
Section 1.02. Specific Terms...................................... 1-1
Section 1.03. Calculation of Interest on the Certificates and
Subsidiary REMIC Regular Interests.................. 1-39
ARTICLE II ESTABLISHMENT OF TRUST; TRANSFER OF LOANS................... 2-1
Section 2.01. Closing............................................. 2-1
Section 2.02. Conditions to the Closing........................... 2-1
Section 2.03. Conveyance of the Subsequent Loans.................. 2-3
Section 2.04. Acceptance by Trustee............................... 2-5
Section 2.05. REMIC Provisions.................................... 2-6
Section 2.06. Company Option to Substitute for Prepaid Loans...... 2-9
ARTICLE III REPRESENTATIONS AND WARRANTIES............................. 3-1
Section 3.01. Representations and Warranties Regarding
the Company......................................... 3-1
Section 3.02. Representations and Warranties Regarding
Each Loan........................................... 3-2
Section 3.03. Representations and Warranties Regarding
the Loans in the Aggregate.......................... 3-5
Section 3.04. Representations and Warranties Regarding
the Loan Files...................................... 3-9
Section 3.05. Repurchases of Loans for Breach of
Representations and Warranties...................... 3-9
Section 3.06. No Repurchase Under Certain Circumstances........... 3-11
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION
OF SECURITY INTERESTS....................................... 4-1
Section 4.01. Transfer of Loans................................... 4-1
Section 4.02. Costs and Expenses.................................. 4-1
ARTICLE V SERVICING OF LOANS........................................... 5-1
Section 5.01. Responsibility for Loan Administration.............. 5-1
Section 5.02. Standard of Care.................................... 5-1
Section 5.03. Records............................................. 5-1
Section 5.04. Inspection.......................................... 5-1
Section 5.05. Certificate Account................................. 5-2
Section 5.06. Enforcement......................................... 5-4
Section 5.07. Trustee to Cooperate................................ 5-6
Section 5.08. Costs and Expenses.................................. 5-6
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Section 5.09. Maintenance of Insurance............................ 5-7
Section 5.10. Merger or Consolidation of Servicer................. 5-7
ARTICLE VI REPORTS AND TAX MATTERS..................................... 6-1
Section 6.01. Monthly Reports..................................... 6-1
Section 6.02. Officer's Certificate............................... 6-1
Section 6.03. Other Data.......................................... 6-1
Section 6.04. Annual Report of Accountants........................ 6-1
Section 6.05. Statements to Certificateholders and the Class C
Certificateholders.................................. 6-1
Section 6.06. Payment Of Taxes.................................... 6-8
ARTICLE VII SERVICE TRANSFER........................................... 7-1
Section 7.01. Events of Termination............................... 7-1
Section 7.02. Transfer............................................ 7-1
Section 7.03. Trustee to Act; Appointment of Successor............ 7-2
Section 7.04. Notification to Certificateholders and Class C
Certificateholders.................................. 7-3
Section 7.05. Effect of Transfer.................................. 7-3
Section 7.06. Transfer of Certificate Account..................... 7-3
ARTICLE VIII PAYMENTS.................................................. 8-1
Section 8.01. Monthly Payments.................................... 8-1
Section 8.02. Advances............................................ 8-2
Section 8.03. Class B-2 Limited Guaranty.......................... 8-2
Section 8.04. Permitted Withdrawals from the Certificate
Account; Payments................................... 8-3
Section 8.05. Reassignment of Repurchased and Replaced Loans...... 8-9
Section 8.06. Servicer's Purchase Option.......................... 8-10
Section 8.07. Capitalized Interest Account........................ 8-11
Section 8.08. Pre-Funding Account................................. 8-12
Section 8.09. Distributions on the Subsidiary REMIC
Regular Interests................................... 8-13
ARTICLE IX THE CERTIFICATES AND THE CLASS C CERTIFICATES............... 9-1
Section 9.01. The Certificates and the Class C Certificates....... 9-1
Section 9.02. Registration of Transfer and Exchange of
Certificates and the Class C Certificates........... 9-2
Section 9.03. No Charge; Disposition of Void Certificates
or Class C Certificates............................. 9-5
Section 9.04. Mutilated, Destroyed, Lost or Stolen Certificates
or Class Certificates............................... 9-6
Section 9.05. Persons Deemed Owners............................... 9-6
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Section 9.06. Access to List of Certificateholders' and Class C
Certificateholders' Names and Addresses............. 9-6
Section 9.07. Authenticating Agents............................... 9-7
ARTICLE X INDEMNITIES.................................................. 10-1
Section 10.01. Real Estate......................................... 10-1
Section 10.02. Liabilities to Obligors............................. 10-1
Section 10.03. Tax Indemnification................................. 10-1
Section 10.04. Servicer's Indemnities.............................. 10-1
Section 10.05. Operation of Indemnities............................ 10-2
Section 10.06. REMIC Tax Matters................................... 10-2
ARTICLE XI THE TRUSTEE................................................. 11-1
Section 11.01. Duties of Trustee................................... 11-1
Section 11.02. Certain Matters Affecting the Trustee............... 11-2
Section 11.03. Trustee Not Liable for Certificates, Class C
Certificates or Loans............................... 11-3
Section 11.04. Trustee May Own Certificates........................ 11-3
Section 11.05. Rights of Certificateholders to Direct Trustee and
to Waive Events of Termination...................... 11-3
Section 11.06. The Servicer to Pay Trustee's Fees and Expenses..... 11-4
Section 11.07. Eligibility Requirements for Trustee................ 11-4
Section 11.08. Resignation or Removal of Trustee................... 11-5
Section 11.09. Successor Trustee................................... 11-5
Section 11.10. Merger or Consolidation of Trustee.................. 11-6
Section 11.11. Tax Returns......................................... 11-6
Section 11.12. Obligor Claims...................................... 11-6
Section 11.13. Appointment of Co-Trustee or Separate Trustee....... 11-7
Section 11.14. Trustee and U.S. Bancorp............................ 11-8
Section 11.15. Trustee Advances.................................... 11-8
ARTICLE XII MISCELLANEOUS.............................................. 12-1
Section 12.01. Servicer Not to Resign; Delegation of Servicing
Duties.............................................. 12-1
Section 12.02. Company Not to Engage in Certain Transactions with
Respect to the Trust................................ 12-1
Section 12.03. Maintenance of Office or Agency..................... 12-1
Section 12.04. Termination......................................... 12-1
Section 12.05. Acts of Certificateholders and Class C
Certificateholders.................................. 12-4
Section 12.06. Calculations........................................ 12-5
Section 12.07. Assignment or Delegation by Company................. 12-5
Section 12.08. Amendment........................................... 12-5
Section 12.09. Notices............................................. 12-7
Section 12.10. Merger and Integration.............................. 12-8
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Section 12.11. Headings............................................ 12-8
Section 12.12. Governing Law....................................... 12-8
Exhibit A-1 -- Form of Class A Certificate
Exhibit A-2 -- Form of Class A-7 IO Certificate
Exhibit B -- Form of Class M Certificate
Exhibit C -- Form of Class B Certificate
Exhibit D -- Form of Assignment
Exhibit E -- Form of Certificate of Officer
Exhibit F -- Form of Opinion of Counsel for the Company
Exhibit G -- Form of Trustee's Acknowledgment
Exhibit H -- Form of Certificate of Servicing Officer
Exhibit I -- Form of Class C Certificate [Master] [Subsidiary]
Exhibit J-1 -- Form of Certificate Regarding Repurchased Loans
Exhibit J-2 -- Form of Certificate Regarding Substitute Loans
Exhibit J-3 -- Form of Certificate Regarding Substitution for Prepaid Loans
Exhibit K -- Form of Representation Letter
Exhibit L -- List of Initial Loans
Exhibit M -- Form of Monthly Report
Exhibit N -- Form of Addition Notice
Exhibit O -- Form of Subsequent Transfer Instrument
Exhibit P -- Form of Officer's Certificate (Subsequent Transfer)
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AGREEMENT, dated as of August 1, 1999, between Green Tree Financial
Corporation, a corporation organized and existing under the laws of the State of
Delaware, as Seller and Servicer (the "Company"), and U.S. Bank Trust National
Association, a national banking association organized and existing under the
laws of the United States, not in its individual capacity but solely as Trustee
(the "Trustee") of Home Equity Loan Trust 1999-D (the "Trust").
WHEREAS, in the regular course of its business, the Company purchases,
originates and services home equity loans, which loans provide for installment
payments by or on behalf of the borrowers and grants mortgages, deeds of trust
or security deeds on certain real estate securing such loans;
WHEREAS, the Company intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in thirteen classes
(each, a "Class"), which in the aggregate will evidence the entire beneficial
ownership interest in the Trust Fund (as defined herein), consisting primarily
of the Loans (as defined herein);
WHEREAS, as provided herein, the Trustee will make an election to treat the
entire segregated pool of assets comprising the Subsidiary REMIC (as defined
herein) and subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes and such segregated pool of
assets will be designated as the "Subsidiary REMIC";
WHEREAS, the Subsidiary REMIC Regular Interests (as defined herein) will be
"regular interests" in the Subsidiary REMIC and the Class C Subsidiary
Certificate (as defined herein) will be the sole class of "residual interests"
in the Subsidiary REMIC for purposes of the REMIC Provisions (as defined herein)
under the federal income tax law;
WHEREAS, a segregated pool of assets consisting of the Subsidiary REMIC
Regular Interests will be designated as the "Master REMIC," and the Trustee will
make a separate REMIC election with respect thereto;
WHEREAS, the Certificates will be "regular interests" in the Master REMIC,
and the Class C Master Certificate (as defined herein) will be the sole class of
"residual interests" in the Master REMIC for purposes of the REMIC Provisions
(as defined herein) under federal income tax law; and
WHEREAS, the Company and the Trustee wish to set forth the terms and
conditions on which the Trustee, on behalf of the Certificateholders and Class C
Certificateholders (as defined herein) will acquire the Loans and the Company
will service the Loans;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the Company and the Trustee agree as provided herein:
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ARTICLE I
DEFINITIONS
SECTION 1.01. General. For the purpose of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article include the plural as well as the singular, the words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular article, section or other
subdivision, and Section references refer to Sections of this Agreement.
SECTION 1.02. Specific Terms.
"Addition Notice" means, with respect to the transfer of Subsequent Loans
to the Trust pursuant to Section 2.03 of this Agreement, a notice, substantially
in the form of Exhibit N, which shall be given not later than five Business Days
prior to the related Subsequent Transfer Date, of the Company's designation of
Subsequent Loans, as applicable, to be sold to the Trust and the aggregate
Cut-off Date Principal Balances of such Subsequent Loans.
"Adjusted Weighted Average Loan Rate" means (a) for the first 20 Payment
Dates, a rate equal to the weighted average of (x) the Weighted Average Loan
Rate, weighted on the basis of Subsidiary REMIC Regular Interests S-1 and S-3
and (y) the Weighted Average Loan Rate less 6.50%, weighted on the basis of
Subsidiary REMIC Regular Interest S-2 and (b) for each Payment Date thereafter,
a rate equal to the Weighted Average Loan Rate.
"Advance" means, with respect to any Payment Date, the amounts, if any,
deposited by the Servicer or the Trustee, as applicable, in the Certificate
Account for such Payment Date pursuant to Section 8.02.
"Advance Payment" means any payment by an Obligor in advance of the Due
Period in which it would be due under such Loan and which payment is not a
Principal Prepayment.
"Affiliate" of any specified Person means any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Aggregate Certificate Principal Balance" means the sum of the Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class M-1, Class M-2,
Class B-1 and Class B-2 Principal Balances.
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"Aggregate Liquidation Loss Principal Amount" means, for any Payment Date,
the excess, if any, of (a) the Aggregate Certificate Principal Balance (after
giving effect to all distributions of principal on the Certificates on such
Payment Date) over (b) the sum of the Pool Scheduled Principal Balance plus the
Pre-Funded Amount.
"Agreement" means this Pooling and Servicing Agreement, as it may be
amended from time to time.
"Amount Available" means, for any Payment Date, an amount equal to:
(a) the sum of
(i) the amount on deposit in the Certificate Account as of the
close of business on the last day of the related Due Period,
(ii) any Advances deposited in the Certificate Account with
respect to such Payment Date, and
(iii) any amount withdrawn from the Capitalized Interest Account
pursuant to Section 8.07 or the Pre-Funding Account pursuant to
Section 8.08 and deposited in the Certificate Account, minus
(b) the sum of
(i) the Amount Held for Future Distribution,
(ii) amounts permitted to be withdrawn by the Trustee from the
Certificate Account pursuant to clauses (ii) through (v) of Section
8.04(a), and
(iii) any amounts on deposit in the Certificate Account as of the
close of business on the last day of the related Due Period
representing collections in respect of Principal Prepayments in Full
(other than any amounts referred to in Section 2.06(vii)) on Loans for
which a substitution has been made in accordance with Section 2.06.
"Amount Held for Future Distribution" means, for any Payment Date, the
total of the amounts held in the Certificate Account in respect of the Loans on
the last day of the preceding Due Period on account of Advance Payments in
respect of such Due Period.
"Applicants" has the meaning assigned in Section 9.06.
"Authenticating Agent" means any authenticating agent appointed pursuant to
Section 9.07.
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"Average Sixty-Day Delinquency Ratio Test" means, to be considered
"satisfied" for any Payment Date, that the arithmetic average of the Sixty-Day
Delinquency Ratios for such Payment Date and for the two immediately preceding
Payment Dates is less than or equal to 20% of the Senior Subordination
Percentage.
"Average Thirty-Day Delinquency Ratio Test" means, to be considered
"satisfied" for any Payment Date, that the arithmetic average of the Thirty-Day
Delinquency Ratios for such Payment Date and for the two immediately preceding
Payment Dates is less than or equal to 12% of the Senior Subordination
Percentage.
"Balloon Loan" means a Loan that provides for the payment of the
unamortized principal balance of such Loan in a single payment at the maturity
of such Loan that is greater than the preceding monthly payment.
"Book-Entry Certificate" means any Certificate registered in the name of
the Depository or its nominee, ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day other than (a) a Saturday or a Sunday, or (b)
another day on which banking institutions in the city in which the Person taking
action hereunder are authorized or obligated by law, executive order, or
governmental decree to be closed.
"Capitalized Interest Account" means a separate trust account created and
maintained pursuant to Section 8.07 in the name of the Trust in an Eligible
Institution.
"Certificate" means a Certificate for Home Equity Loans, Series 1999-D,
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7 IO,
Class M-1, Class M-2, Class B-1 or Class B-2, executed and delivered by the
Trustee substantially in the form of Exhibit A-1, A-2, B or C, as applicable,
but does not include the Class C Certificates.
"Certificate Account" means a separate trust account created and maintained
pursuant to Section 5.05 in the name of the Trust in an Eligible Institution.
"Certificate Owner" means the person who is the beneficial owner of a
Book-Entry Certificate or, if Definitive Certificates have been issued,
Certificateholders.
"Certificate Register" means the register maintained pursuant to Section
9.02.
"Certificate Registrar" or "Registrar" means the registrar appointed
pursuant to Section 9.02.
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"Certificateholder" or "Holder" means the person in whose name a
Certificate or Class C Certificate is registered on the Certificate Register,
except that, solely for the purposes of giving any consent, waiver, request or
demand pursuant to this Agreement, any Certificate or Class C Certificate
registered in the name of the Company or any Affiliate shall be deemed not to be
outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite Percentage Interest necessary
to effect any such consent, request, waiver or demand has been obtained;
provided, however, that, solely for the purpose of determining whether the
Trustee is entitled to rely upon any such consent, waiver, request or demand,
only Certificates or Class C Certificates which the Trustee knows to be so owned
shall be so disregarded.
"Class," "Class A," "Class M," "Class B," or "Class C" means pertaining to
Class A Certificates, Class M Certificates, Class B Certificates, and/or Class C
Certificates, as the case may be.
"Class A Certificates" means the Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6 and Class A-7 IO Certificates, collectively.
"Class A Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class A Formula Distribution Amount and (b) that portion of the Amount
Available eligible for distribution in respect of such amount in accordance with
the priorities set forth in Section 8.04(b), provided that, after the Class A-6
Cross-over Date, the Class A Distribution Amount shall be zero.
"Class A Formula Distribution Amount" means, for any Payment Date, an
amount equal to the sum of (a) one month's interest (or, as to the first Payment
Date, interest from and including the Closing Date to but excluding September
15, 1999) at (1) the Class A-1 Pass-Through Rate on the Class A-1 Principal
Balance, (2) the Class A-2 Pass-Through Rate on the Class A-2 Principal Balance,
(3) the Class A-3 Pass-Through Rate on the Class A-3 Principal Balance, (4) the
Class A-4 Pass-Through Rate on the Class A-4 Principal Balance, (5) the Class
A-5 Pass-Through Rate on the Class A-5 Principal Balance, (6) the Class A-6
Pass-Through Rate on the Class A-6 Principal Balance, and (7) the Class A-7 IO
Pass-Through Rate on the Class A-7 IO Notional Principal Amount, in each case to
be calculated immediately prior to such Payment Date, (b) the aggregate of the
Unpaid Class A Interest Shortfalls, if any, with respect to each Class of Class
A Certificates, and (c)(i) if there is no Class A Principal Deficiency Amount
for such Payment Date, the Class A Formula Principal Distribution Amount, or
(ii) if there is a Class A Principal Deficiency Amount for such Payment Date,
the amount determined in accordance with Section 8.04(b)(6)(i); provided,
however, that the aggregate of all amounts distributed for all Payment Dates
pursuant to clause (c) shall not exceed the aggregate of the Original Class
Principal Balances of the Class A Certificates.
"Class A Formula Interest Distribution Amount" means, as to each Class of
Class A Certificates and any Payment Date, the sum of (1) the amount specified
in clause (a)(1), (2), (3),
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(4), (5), (6) or (7), as appropriate, of the definition of the term "Class A
Formula Distribution Amount" and (2) the Unpaid Class A Interest Shortfall, if
any, with respect to such Class.
"Class A Formula Principal Distribution Amount" means, for any Payment
Date, the Senior Percentage of the Formula Principal Distribution Amount.
"Class A Interest Shortfall" means, as to each Class of Class A
Certificates and any Payment Date, the amount, if any, by which the Class A
Formula Interest Distribution Amount for such Class exceeds the amount
distributed to Holders of such Class on such Payment Date pursuant to Section
8.04(b)(2).
"Class A Principal Balance" means, for any Payment Date, the sum of the
Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class A-3
Principal Balance, the Class A-4 Principal Balance, the Class A-5 Principal
Balance and the Class A-6 Principal Balance.
"Class A Principal Deficiency Amount" means, for any Payment Date, the
excess, if any, of (a) the Class A Principal Balance for such Payment Date over
(b) the sum of the Pool Scheduled Principal Balance plus the Pre-Funded Amount
for the immediately preceding Payment Date.
"Class A-1 Certificate" means any one of the Class A-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-1 Cross-over Date" means the Payment Date on which the Class A-1
Principal Balance (after giving effect to the distributions of principal on the
Class A-1 Certificates on such Payment Date) is reduced to zero.
"Class A-1 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-1
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-1 Principal Balance" means, for any Payment Date, the Original
Class A-1 Principal Balance less all amounts previously distributed to Holders
of Class A-1 Certificates in respect of principal.
"Class A-2 Certificate" means any one of the Class A-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
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"Class A-2 Cross-over Date" means the Payment Date on which the Class A-2
Principal Balance (after giving effect to the distributions of principal on the
Class A-2 Certificates on such Payment Date) is reduced to zero.
"Class A-2 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-2
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-2 Principal Balance" means, for any Payment Date, the Original
Class A-2 Principal Balance less all amounts previously distributed to Holders
of Class A-2 Certificates in respect of principal.
"Class A-3 Certificate" means any one of the Class A-3 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-3 Cross-over Date" means the Payment Date on which the Class A-3
Principal Balance (after giving effect to the distributions of principal on the
Class A-3 Certificates on such Payment Date) is reduced to zero.
"Class A-3 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-3
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-3 Principal Balance" means, for any Payment Date, the Original
Class A-3 Principal Balance less all amounts previously distributed to Holders
of Class A-3 Certificates in respect of principal.
"Class A-4 Certificate" means any one of the Class A-4 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-4 Cross-over Date" means the Payment Date on which the Class A-4
Principal Balance (after giving effect to the distributions of principal on the
Class A-4 Certificates on such Payment Date) is reduced to zero.
"Class A-4 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-4
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
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"Class A-4 Principal Balance" means, for any Payment Date, the Original
Class A-4 Principal Balance less all amounts previously distributed to Holders
of Class A-4 Certificates in respect of principal.
"Class A-5 Certificate" means any one of the Class A-5 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-5 Cross-over Date" means the Payment Date on which the Class A-5
Principal Balance (after giving effect to the distributions of principal on the
Class A-5 Certificates on such Payment Date) is reduced to zero.
"Class A-5 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-5
Certificateholders pursuant to Section 8.05(b) on such Payment Date.
"Class A-5 Principal Balance" means, for any Payment Date, the Original
Class A-5 Principal Balance less all amounts previously distributed to Holders
of Class A-5 Certificates in respect of principal.
"Class A-6 Certificate" means any one of the Class A-6 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-6 Cross-over Date" means the latest to occur of (a) the Class A-5
Cross-over Date or (b) the Payment Date on which the Class A-6 Principal Balance
(after giving effect to the distributions of principal on the Class A-6
Certificates on such Payment Date) is reduced to zero.
"Class A-6 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-6
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-6 Lockout Percentage" means, for any Payment Date occurring during
the periods set forth below, the percentage designated as such as follows:
Class A-6
Period (dates inclusive) Lockout Percentage
---------------------------------- ------------------
September 1999 through August 2001 0%
September 2001 through August 2003 20%
September 2003 through August 2004 80%
September 2004 through August 2005 100%
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September 2005 and thereafter 300%
"Class A-6 Lockout Pro Rata Distribution Amount" means, for any Payment
Date, an amount equal to the lesser of:
(a) the product of (1) the applicable Class A-6 Lockout Percentage,
and (2) the product of (A) a fraction, the numerator of which is the Class
A-6 Principal Balance for such Payment Date and the denominator of which is
the Class A Principal Balance, and (B) the Senior Percentage of the Formula
Principal Distribution Amount for such Payment Date, and
(b) the Class A-6 Principal Balance for such Payment Date.
"Class A-6 Principal Balance" means, for any Payment Date, the Original
Class A-6 Principal Balance less all amounts previously distributed to Holders
of Class A-6 Certificates in respect of principal.
"Class A-7 IO Certificate" means any one of the Class A-7 IO Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-2 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-7 IO Distribution Amount" means, for any Payment Date, that
portion of the Class A Distribution Amount to be distributed to the Class A-7 IO
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-7 IO Notional Principal Amount" means, for any Payment Date, an
amount equal to (a) for the first 20 Payment Dates, the lesser of (i) the Class
A-7 IO Original Notional Principal Amount or (ii) the Class A Principal Balance
for such Payment Date, and (b) thereafter, zero.
"Class A-7 IO Original Notional Principal Amount" means $50,000,000.
"Class B Certificates" means the Class B-1 and Class B-2 Certificates,
collectively.
"Class B Cross-over Date" means the earlier of:
(a) the Class M-2 Cross-over Date, and
(b) the Payment Date occurring in September 2002.
"Class B Percentage" means 100% minus the Senior Percentage.
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"Class B Principal Balance" means, for any Payment Date, the sum of the
Class B-1 Principal Balance and the Class B-2 Principal Balance.
"Class B Principal Balance Test" means, to be considered "satisfied" for
any Payment Date, that the fraction, expressed as a percentage, the numerator of
which is the Class B Principal Balance for such Payment Date and the denominator
of which is the Pool Scheduled Principal Balance for the immediately preceding
Payment Date, is equal to or greater than 14.0%.
"Class B Principal Distribution Test" means, for any Payment Date, each of
the Average Sixty-Day Delinquency Ratio Test, the Average Thirty-Day Delinquency
Ratio Test, the Class B Principal Balance Test, the Cumulative Realized Losses
Test and the Current Realized Losses Test.
"Class B-1 Adjusted Principal Balance" means, for any Payment Date, the
Class B-1 Principal Balance for that Payment Date minus the Class B-1
Liquidation Loss Principal Amount (if any) for the immediately preceding Payment
Date.
"Class B-1 Certificate" means any one of the Class B-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class B-1 Cross-over Date" means the Payment Date on which the Class B-1
Principal Balance (after giving effect to the distributions of principal on the
Class B-1 Certificates on such Payment Date) is reduced to zero.
"Class B-1 Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class B-1 Formula Distribution Amount and (b) that portion of the Amount
Available eligible for distribution in respect of such amount in accordance with
the priorities set forth in Section 8.04(b); provided that after the Class B-1
Cross-over Date the Class B-1 Distribution Amount shall be zero.
"Class B-1 Formula Distribution Amount" means, for any Payment Date, an
amount equal to the sum of (a) one month's interest (or, as to the first Payment
Date, interest from and including the Closing Date to but excluding September
15, 1999) at the Class B-1 Pass-Through Rate on the Class B-1 Adjusted Principal
Balance for such Payment Date, (b) any Unpaid Class B-1 Interest Shortfall, (c)
if such Payment Date is on or prior to the Class B-1 Cross-over Date, the Class
B Percentage of the Formula Principal Distribution Amount and (d) any Class B-1
Formula Liquidation Loss Interest Distribution Amount; provided, however, that
on the Class M-2 Cross-over Date, the balance of any amounts that would have
been distributable on such date pursuant to clause (c) of the definition of the
term "Class M-2 Formula Distribution Amount" (assuming a sufficient Amount
Available) but for the operation of the second proviso in such definition shall
instead be included in clause (c) of this definition; and provided, further,
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that the aggregate of all amounts distributed pursuant to clause (c) of this
definition shall not exceed the Original Class B-1 Principal Balance.
"Class B-1 Formula Interest Distribution Amount" means, for any Payment
Date, the sum of the amounts specified in clauses (a) and (b) of the definition
of the term "Class B-1 Formula Distribution Amount".
"Class B-1 Formula Liquidation Loss Interest Distribution Amount" means,
for any Payment Date, the sum of (a) the Class B-1 Liquidation Loss Interest
Amount, if any, and (b) the Unpaid Class B-1 Liquidation Loss Interest
Shortfall, if any.
"Class B-1 Interest Shortfall" means, for any Payment Date, the amount, if
any, by which (a) the Class B-1 Formula Interest Distribution Amount exceeds (b)
the amount distributed to Class B-1 Certificateholders on such Payment Date
pursuant to Section 8.04(b)(5).
"Class B-1 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding September 15,
1999) at the Class B-1 Pass-Through Rate on the Class B-1 Liquidation Loss
Principal Amount (if any) for the immediately preceding Payment Date.
"Class B-1 Liquidation Loss Interest Shortfall" means, for any Payment
Date, the amount, if any, by which (a) the Class B-1 Formula Liquidation Loss
Interest Distribution Amount exceeds (b) the amount distributed to Class B-1
Certificateholders on such Payment Date pursuant to Section 8.04(b)(12).
"Class B-1 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (a) the Class B-1 Principal Balance (after giving effect to all
distributions of principal on the Class B-1 Certificates on such Payment Date)
and (b) the excess, if any, of the Aggregate Liquidation Loss Principal Amount
over the Class B-2 Principal Balance (after giving effect to all distributions
of principal on the Class B-2 Certificates on such Payment Date).
"Class B-1 Principal Balance" means, for any Payment Date, the Original
Class B-1 Principal Balance less all amounts previously distributed to Holders
of Class B-1 Certificates in respect of principal.
"Class B-2 Certificate" means any one of the Class B-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class B-2 Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class B-2 Formula Distribution Amount and (b) that portion of the Amount
Available eligible
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for distribution in respect of such amount in accordance with the priorities set
forth in Section 8.04(b).
"Class B-2 Formula Distribution Amount" means, for any Payment Date, an
amount equal to the sum of (a) one month's interest (or, as to the first Payment
Date, interest from and including the Closing Date to but excluding September
15, 1999) at the Class B-2 Pass-Through Rate on the Class B-2 Principal Balance,
(b) any Unpaid Class B-2 Interest Shortfall, and (c) if such Payment Date is
after the Class B-1 Cross-over Date, the Class B Percentage of the Formula
Principal Distribution Amount; provided, however, that on the Class B-1
Cross-over Date, the balance of any amounts that would have been distributable
on such date pursuant to clause (c) of the definition of the term "Class B-1
Formula Distribution Amount" (assuming a sufficient Amount Available) but for
the operation of the second proviso in such definition shall instead be included
in clause (c) of this definition; and provided, further, that the aggregate of
all amounts distributed pursuant to clause (c) of this definition shall not
exceed the Original Class B-2 Principal Balance.
"Class B-2 Formula Interest Distribution Amount" means, for any Payment
Date, the sum of the amounts specified in clauses (a) and (b) of the definition
of the term "Class B-2 Formula Distribution Amount".
"Class B-2 Guaranty Fee" means, for any Payment Date, the lesser of (a)
one-twelfth of the product of 3.00% and the sum of the Pool Scheduled Principal
Balance and the Pre-Funded Amount for the immediately preceding Payment Date
(or, in the case of the September 1999 Payment Date, the Cut-off Date), or (b)
that portion of the Amount Available eligible for distribution in respect of
such amount in accordance with the priorities set forth in Section 8.04(b).
"Class B-2 Guaranty Payment" means, for any Payment Date, the amount, if
any, by which (a) the sum of the Class B-2 Formula Distribution Amount and the
Class B-2 Liquidation Loss Principal Amount exceeds (b) the Class B-2
Distribution Amount; provided that the Class B-2 Guaranty Payment shall not
exceed the amount necessary to reduce the Class B-2 Principal Balance to zero.
"Class B-2 Interest Shortfall" means, for any Payment Date, the amount, if
any, by which (a) the Class B-2 Formula Interest Distribution Amount exceeds (b)
the sum of the amounts distributed to Class B-2 Certificateholders on such
Payment Date pursuant to clauses (i) and (ii) of Section 8.04(b)(13) and any
Class B-2 Guaranty Payment.
"Class B-2 Limited Guaranty" means the limited guaranty of the Company
provided pursuant to Section 8.03.
"Class B-2 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (a) the Class B-2 Principal Balance (after giving effect to all
distributions of principal on the
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Class B-2 Certificates on such Payment Date) and (b) the Aggregate Liquidation
Loss Principal Amount.
"Class B-2 Principal Balance" means, for any Payment Date, the Original
Class B-2 Principal Balance less all amounts previously distributed to Holders
of Class B-2 Certificates in respect of principal.
"Class C Certificateholder" means the person in whose name a Class C
Certificate is registered on the Certificate Register.
"Class C Certificates" means any one of the Class C Master Certificates or
Class C Subsidiary Certificates.
"Class C Master Certificate" means a Certificate for Home Equity Loans,
Series 1999-D, bearing the designation Class C Master, executed and delivered by
the Trustee substantially in the form of Exhibit I, and evidencing an interest
designated as a "residual interest" in the Master REMIC for purposes of the
REMIC Provisions.
"Class C Master Distribution Amount" means, for any Payment Date, the
amount, if any, distributable in respect of the Class C Master Certificates
pursuant to Section 8.04(b).
"Class C Subsidiary Certificate" means a Certificate for Home Equity Loans,
Series 1999-D, bearing the designation Class C Subsidiary, executed and
delivered by the Trustee substantially in the form attached hereto as Exhibit I,
and evidencing an interest designated as a "residual interest" in the Subsidiary
REMIC for purposes of the REMIC Provisions.
"Class C Subsidiary Distribution Amount" means, for any Payment Date, the
amounts, if any, distributable in respect of the Class C Subsidiary Certificate
pursuant to Section 8.04(b).
"Class M Certificates" means the Class M-1 and Class M-2 Certificates,
collectively.
"Class M Principal Balance" means, for any Payment Date, the sum of the
Class M-1 Principal Balance and the Class M-2 Principal Balance.
"Class M-1 Adjusted Principal Balance" means, for any Payment Date, the
Class M-1 Principal Balance for that Payment Date minus the Class M-1
Liquidation Loss Principal Amount (if any) for the immediately preceding Payment
Date.
"Class M-1 Certificate" means any one of the Class M-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
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<PAGE>
"Class M-1 Cross-over Date" means the Payment Date on which the Class M-1
Principal Balance (after giving effect to the distributions of principal on the
Class M-1 Certificates on such Payment Date) is reduced to zero.
"Class M-1 Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class M-1 Formula Distribution Amount and (b) that portion of the Amount
Available eligible for distribution in respect of such amount in accordance with
the priorities set forth in Section 8.04(b); provided that after the Class M-1
Cross-over Date the Class M-1 Distribution Amount shall be zero.
"Class M-1 Formula Distribution Amount" means, for any Payment Date, an
amount equal to the sum of (a) one month's interest (or, as to the first Payment
Date, interest from and including the Closing Date to but excluding September
15, 1999) at the Class M-1 Pass-Through Rate on the Class M-1 Adjusted Principal
Balance for such Payment Date, (b) any Unpaid Class M-1 Interest Shortfall, (c)
if such Payment Date is after the Class A-6 Cross-over Date, but on or prior to
the Class M-1 Cross-over Date, the Senior Percentage of the Formula Principal
Distribution Amount and (d) any Class M-1 Formula Liquidation Loss Interest
Distribution Amount; provided, however, that on the Class A-6 Cross-over Date,
the balance of any amounts that would have been distributable on such date
pursuant to clause (c) of the definition of the term "Class A Formula
Distribution Amount" (assuming a sufficient Amount Available) but for the
operation of the proviso in such definition shall instead be included in clause
(c) of this definition; and provided, further, that the aggregate of all amounts
distributed for all Payment Dates pursuant to clause (c) of this definition
shall not exceed the Original Class M-1 Principal Balance.
"Class M-1 Formula Interest Distribution Amount" means, for any Payment
Date, the sum of the amounts specified in clauses (a) and (b) of the definition
of the term "Class M-1 Formula Distribution Amount."
"Class M-1 Formula Liquidation Loss Interest Distribution Amount" means,
for any Payment Date, the sum of (a) the Class M-1 Liquidation Loss Interest
Amount, if any, and (b) the Unpaid Class M-1 Liquidation Loss Interest
Shortfall, if any.
"Class M-1 Interest Shortfall" means, for any Payment Date, the amount, if
any, by which (a) the Class M-1 Formula Interest Distribution Amount exceeds (b)
the amount distributed to Class M-1 Certificateholders on such Payment Date
pursuant to Section 8.04(b)(3).
"Class M-1 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding September 15,
1999) at the Class M-1 Pass-Through Rate on the Class M-1 Liquidation Loss
Principal Amount (if any) for the immediately preceding Payment Date.
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<PAGE>
"Class M-1 Liquidation Loss Interest Shortfall" means, for any Payment
Date, the amount, if any, by which (a) the Class M-1 Formula Liquidation Loss
Interest Distribution Amount exceeds (b) any amount distributed to Class M-1
Certificateholders on such Payment Date pursuant to Section 8.04(b)(10).
"Class M-1 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (a) the Class M-1 Principal Balance (after giving effect to all
distributions of principal on the Class M-1 Certificates on such Payment Date)
and (b) the excess, if any, of the Aggregate Liquidation Loss Principal Amount
over the aggregate of the Class M-2 Principal Balance and the Class B Principal
Balance (after giving effect to all distributions of principal on the Class M-2
and Class B Certificates on such Payment Date).
"Class M-1 Principal Balance" means, for any Payment Date, the Original
Class M-1 Principal Balance less all amounts previously distributed to Holders
of Class M-1 Certificates in respect of principal.
"Class M-2 Adjusted Principal Balance" means, for any Payment Date, the
Class M-2 Principal Balance for that Payment Date minus the Class M-2
Liquidation Loss Principal Amount (if any) for the immediately preceding Payment
Date.
"Class M-2 Certificate" means any one of the Class M-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class M-2 Cross-over Date" means the Payment Date on which the Class M-2
Principal Balance (after giving effect to the distributions of principal on the
Class M-2 Certificates on such Payment Date) is reduced to zero.
"Class M-2 Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class M-2 Formula Distribution Amount and (b) that portion of the Amount
Available eligible for distribution in respect of such amount in accordance with
the priorities set forth in Section 8.04(b); provided that after the Class M-2
Cross-over Date the Class M-2 Distribution Amount shall be zero.
"Class M-2 Formula Distribution Amount" means, for any Payment Date, an
amount equal to the sum of (a) one month's interest (or, as to the first Payment
Date, interest from and including the Closing Date to but excluding September
15, 1999) at the Class M-2 Pass-Through Rate on the Class M-2 Adjusted Principal
Balance for such Payment Date, (b) any Unpaid Class M-2 Interest Shortfall, (c)
if such Payment Date is after the Class M-1 Cross-over Date, but on or prior to
the Class M-2 Cross-over Date, the Senior Percentage of the Formula Principal
Distribution Amount and (d) any Class M-2 Formula Liquidation Loss Interest
Distribution Amount; provided, however, that on the Class M-1 Cross-over Date,
the balance of any amounts
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that would have been distributable on such date pursuant to clause (c) of the
definition of the term "Class M-1 Formula Distribution Amount" (assuming a
sufficient Amount Available) but for the operation of the second proviso in such
definition shall instead be included in clause (c) of this definition; and
provided, further, that the aggregate of all amounts distributed for all Payment
Dates pursuant to clause (c) of this definition shall not exceed the Original
Class M-2 Principal Balance.
"Class M-2 Formula Interest Distribution Amount" means, for any Payment
Date, the sum of the amounts specified in clauses (a) and (b) of the definition
of the term "Class M-2 Formula Distribution Amount."
"Class M-2 Formula Liquidation Loss Interest Distribution Amount" means,
for any Payment Date, the sum of (a) the Class M-2 Liquidation Loss Interest
Amount, if any, and (b) the Unpaid Class M-2 Liquidation Loss Interest
Shortfall, if any.
"Class M-2 Interest Shortfall" means, for any Payment Date, the amount, if
any, by which (a) the Class M-2 Formula Interest Distribution Amount, exceeds
(b) the amount distributed to Class M-2 Certificateholders on such Payment Date
pursuant to Section 8.04(b)(4).
"Class M-2 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding September 15,
1999) at the Class M-2 Pass-Through Rate on the Class M-2 Liquidation Loss
Principal Amount (if any) for the immediately preceding Payment Date.
"Class M-2 Liquidation Loss Interest Shortfall" means, for any Payment
Date, the amount, if any, by which the Class M-2 Formula Liquidation Loss
Interest Distribution Amount exceeds any amount distributed to Class M-2
Certificateholders on such Payment Date pursuant to Section 8.04(b)(11).
"Class M-2 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (a) the Class M-2 Principal Balance (after giving effect to all
distributions of principal on the Class M-2 Certificates on such Payment Date)
and (b) the excess, if any, of the Aggregate Liquidation Loss Principal Amount
over the Class B Principal Balance (after giving effect to all distributions of
principal on the Class B Certificates on such Payment Date).
"Class M-2 Principal Balance" means, for any Payment Date, the Original
Class M-2 Principal Balance less all amounts previously distributed to Holders
of Class M-2 Certificates in respect of principal.
"Class Principal Balance" means any of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class M-1, Class M-2, Class B-1 or Class B-2
Principal Balances.
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"Closing Date" means August 26, 1999.
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined LTV" means, with respect to any Loan, the percentage obtained by
dividing (i) the sum of (a) the original principal balance of such Loan, plus
(b) the outstanding principal balance, as of the date of origination of such
Loan, of any loan secured by a prior lien on the property which secures the Loan
(the "Collateral"), by (ii) the lesser of (a) the appraised value of the
Collateral based on an appraisal made for the originator of the Loan by an
independent fee appraiser (or by an employee of the Company who is a licensed
appraiser) at the time of origination of the Loan, and (b) the sales price of
the Collateral at the time of origination of the Loan; provided that, in the
case of a Loan the proceeds of which were used to refinance an existing mortgage
loan, the amount described in clause (ii)(a) shall be the amount to be used for
purposes of clause (ii).
"Computer Tape" means the computer tape generated by the Company which
provides information relating to the Loans and which was used by the Company in
selecting the Loans, and includes the master file and the history file.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of this Agreement is located at the
address set forth in Section 12.09.
"Counsel for the Company" means Dorsey & Whitney LLP, or other legal
counsel for the Company.
"Cumulative Realized Loss Ratio" means, for any Payment Date, a fraction,
expressed as a percentage, the numerator of which is the Cumulative Realized
Losses for that Payment Date, and the denominator of which is the Cut-off Date
Pool Principal Balance.
"Cumulative Realized Losses" means, for any Payment Date, the sum of the
Realized Losses for that Payment Date and each preceding Payment Date since the
Cut-off Date.
"Cumulative Realized Losses Test" means, to be considered "satisfied" for
any Payment Date, that the Cumulative Realized Loss Ratio for such Payment Date
is less than or equal to 7.5%.
"Current Realized Loss Ratio" means, for any Payment Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate Realized
Losses for such Payment Date and each of the five immediately preceding Payment
Dates, multiplied by two, and the denominator of which is the arithmetic average
of the Pool Scheduled Principal Balance as of the sixth preceding Payment Date
and the Pool Scheduled Principal Balance for such Payment Date.
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<PAGE>
"Current Realized Losses Test" means, to be considered "satisfied" for any
Payment Date, that the Current Realized Loss Ratio for such Payment Date is less
than or equal to 2%.
"Custodian" means at any time an Eligible Institution, or a financial
institution organized under the laws of the United States or any State, which is
not an Affiliate of the Company, which is subject to supervision and examination
by Federal or State authorities and whose commercial paper or unsecured
long-term debt (or, in the case of a member of a bank holding company system,
the commercial paper or unsecured long-term debt of such bank holding company)
has been rated A-1 by S&P and F-1 by Fitch in the case of commercial paper, or
BBB+ or higher by both S&P and Fitch in the case of unsecured long-term debt, as
is acting at such time as Custodian of the Loan Files pursuant to Section 4.01.
"Cut-off Date" means with respect to each Loan (other than a Subsequent
Loan), July 1, 1999 (or the date of origination, if later).
"Cut-off Date Pool Principal Balance" means the aggregate of the Cut-off
Date Principal Balances of all Loans.
"Cut-off Date Principal Balance" means, (i) as to any Initial Loan, the
unpaid principal balance thereof at the Cut-off Date after giving effect to all
installments of principal due prior thereto, and (ii) as to any Subsequent Loan,
the unpaid principal balance thereof at the related Subsequent Cut-off Date,
after giving effect to all installments of principal due prior thereto.
"Defaulted Loan" means a Loan with respect to which the Servicer commenced
foreclosure proceedings, made a sale of such Loan to a third party for
foreclosure or enforcement, or as to which there was a Delinquent Payment 180 or
more days past due.
"Definitive Certificates" has the meaning assigned in Section 9.02(e).
"Delinquent Payment" means, as to any Loan, with respect to any Due Period,
any payment or portion of a payment that was originally scheduled to be made
during such Due Period under such Loan (after giving effect to any reduction in
the principal amount deemed owed on such Loan by the Obligor) and was not
received or applied during such Due Period and deposited in the Certificate
Account, whether or not any payment extension has been granted by the Servicer;
provided, however, that with respect to any Liquidated Loan, the payment
scheduled to be made in the Due Period in which such Loan became a Liquidated
Loan shall not be deemed a Delinquent Payment.
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is Cede & Co., as the registered Holder of (i) one Class
A-1 Certificate evidencing $160,000,000 in Original Class A-1 Principal Balance,
(ii) one Class A-2 Certificate evidencing $90,000,000 in Original Class A-2
Principal Balance, (iii) one Class A-3 Certificate evidencing $56,000,000 in
Original Class A-3 Principal Balance, (iv) one Class A-4 Certificate evidencing
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$32,000,000 in Original Class A-4 Principal Balance, (v) one Class A-5
Certificate evidencing $36,000,000 in Original Class A-5 Principal Balance, (vi)
one Class A-6 Certificate evidencing $35,000,000 in Original Class A-6 Principal
Balance, (vii) one Class A-7 IO Certificate evidencing a Class A-7 IO Original
Notional Principal Amount of $50,000,000, (viii) one Class M-1 Certificate
evidencing $28,000,000 in Original Class M-1 Principal Balance, (ix) one Class
M-2 Certificate evidencing $28,000,000 in Original Class M-2 Principal Balance,
(x) one Class B-1 Certificate evidencing $16,250,000 in Original Class B-1
Principal Balance and (xi) one Class B-2 Certificate evidencing $18,750,000 in
Original Class B-2 Principal Balance, and any permitted successor depository.
The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(5) of the Uniform Commercial Code of the State of New York.
"Depository Participant" means a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date" means the second Business Day preceding each Payment
Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section 9.02(b)(3).
"Due Period" means a calendar month during the term of this Agreement.
"Electronic Ledger" means the electronic master record of promissory notes
of the Company.
"Eligible Account" means, at any time, an account which is any of the
following: (i) an account maintained with an Eligible Institution; (ii) an
account or accounts the deposits in which are fully insured by either the Bank
Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit
Insurance Corporation; (iii) a trust account (which shall be a "segregated trust
account") maintained with the corporate trust department of a federal or state
chartered depository institution subject to regulations regarding fiduciary
funds on deposit similar to federal regulations or trust company with trust
powers and acting in its fiduciary capacity for the benefit of the Trustee
hereunder, which depository institution or trust company shall have capital and
surplus of not less than $50,000,000; or (iv) an account that will not cause S&P
or Fitch to downgrade or withdraw its then-current rating assigned to the
Certificates, as evidenced in writing by S&P and Fitch.
"Eligible Institution" means any depository institution (which may be the
Trustee or an Affiliate of the Trustee) organized under the laws of the United
States or any State, the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation, which is subject
to supervision and examination by Federal or State authorities and whose
short-term deposits have been rated A-1+ by S&P and F-1+ by Fitch (if rated by
Fitch) or
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whose unsecured long-term debt has been rated in one of the two
highest rating categories by both S&P and Fitch (if rated by Fitch).
"Eligible Investments" has the meaning assigned in Section 5.05(b).
"Eligible Servicer" means the Company or any Person qualified to act as
Servicer of the Loans under applicable federal and state laws and regulations,
which Person services not less than an aggregate of $100,000,000 in outstanding
principal amount of manufactured housing conditional sales contracts and
installment loan agreements and home equity loans.
"Eligible Substitute Loan" means, as to (1) any Replaced Loan for which an
Eligible Substitute Loan is being substituted pursuant to Section 3.05(b), and
(2) any Prepaid Loan for which an Eligible Substitute Loan is being substituted
pursuant to Section 2.06, a Loan that (a) as of the date of its substitution,
satisfies all of the representations and warranties (which, except when
expressly stated to be as of origination, shall be deemed to be made as of the
date of its substitution rather than as of the Cut-off Date or the Closing Date)
in Section 3.02 and does not cause any of the representations and warranties in
Section 3.03, after giving effect to such substitution, to be incorrect, (b)
after giving effect to the scheduled payment due in the month of such
substitution, has a Scheduled Principal Balance that is not greater than the
Scheduled Principal Balance of such Replaced Loan or, but for such Principal
Prepayment in Full, the Scheduled Principal Balance of such Prepaid Loan, as the
case may be, (c) has a Loan Interest Rate that is at least equal to the Loan
Interest Rate of such Replaced Loan or Prepaid Loan, as the case may be, (d) has
a remaining term to scheduled maturity that is not greater than the remaining
term to scheduled maturity of the Replaced Loan or Prepaid Loan, as the case may
be, (e) is of the same type of fixed loan rate as the Replaced Loan or Prepaid
Loan, as the case may be, (f) as of the date of its origination, was identified
by the Company under its standard underwriting criteria as the same credit grade
as the Replaced Loan or Prepaid Loan, as the case may be, (g) the mortgage
securing such Loan is in a lien position that is the same or better than the
mortgage securing the Replaced Loan or Prepaid Loan, as the case may be, and (h)
the loan to value ratio of such Loan is not more than 100 basis points higher
than the loan to value ratio of the Replaced Loan or Prepaid Loan, as the case
may be.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Errors and Omissions Protection Policy" means the employee errors and
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, and meeting the
requirements of Section 5.09, all as such policy relates to Loans comprising a
portion of the corpus of the Trust.
"Event of Termination" has the meaning assigned in Section 7.01.
"Federal Bankruptcy Code" means 11 U.S.C. Section 101 et seq.
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"FICO Score" means a credit score derived on the basis of a methodology
developed by Fair Isaac and Company, a consulting firm specializing in creating
default predictive models through scoring mechanisms. The credit scores, which
are based on information obtained from national credit reporting organizations,
are numerical representations of borrowers' estimated default probability, and
can range from a low of 250 to a high of 900.
"Fidelity Bond" means the fidelity bond maintained by the Servicer or any
similar replacement bond, meeting the requirements of Section 5.09, as such bond
relates to Loans comprising a portion of the corpus of the Trust.
"Final Payment Date" means the Payment Date on which the final distribution
in respect of Certificates will be made pursuant to Section 12.04.
"Fitch" means Fitch IBCA, Inc., or any successor thereto; provided that, if
Fitch no longer has a rating outstanding on any Class of the Certificates, then
references herein to "Fitch" shall be deemed to refer to the NRSRO then rating
any Class of the Certificates (or, if more than one such NRSRO is then rating
any Class of the Certificates, to such NRSRO as may be designated by the
Servicer), and references herein to ratings by or requirements of Fitch shall be
deemed to have the equivalent meanings with respect to ratings by or
requirements of such NRSRO.
"Formula Principal Distribution Amount" means, for any Payment Date, the
sum of:
(a) all scheduled payments of principal due on each outstanding Loan
during the prior Due Period as specified in the amortization schedule at
the time applicable thereto (after adjustments for previous Partial
Principal Prepayments and after any adjustment to such amortization
schedule by reason of any bankruptcy of an Obligor or similar proceeding or
any moratorium or similar waiver or grace period); plus
(b) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the prior Due Period with respect to
the Loans; plus
(c) the aggregate Scheduled Principal Balance of all Loans that became
Liquidated Loans during the prior Due Period plus the amount of any
reduction in principal balance of any Loan during the prior Due Period
pursuant to bankruptcy proceedings involving the related Obligor; plus
(d) the aggregate Scheduled Principal Balance of all Loans
repurchased, and all amounts deposited in lieu of the repurchase of any
Loan, during the prior Due Period pursuant to Section 3.05(a) or, in the
event of a substitution of a Loan in accordance with Section 3.05(b), any
amount required to be deposited by the Company in the Certificate Account
during the prior Due Period pursuant to Section 3.05(b)(vi); plus
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(e) any amount described in clauses (a) through (d) above that was not
previously distributed because of an insufficient amount of funds available
in the Certificate Account if (1) the Payment Date occurs on or after the
Payment Date on which the Class B-2 Principal Balance has been reduced to
zero, or (2) such amount was not covered by a Class B-2 Guaranty Payment
and corresponding reduction in the Class B-2 Principal Balance; plus
(f) on the Payment Date on or after the last day of the Pre-Funding
Period, the Pre-Funded Amount.
"GNMA" means the Government National Mortgage Association, or any successor
thereto.
"HUD" means the United States Department of Housing and Urban Development,
or any successor thereto.
"Independent" means, when used with respect to any specified Person, any
Person who (i) is in fact independent of the Company and the Servicer, (ii) does
not have any direct financial interest or any material indirect financial
interest in the Company or the Servicer or in an Affiliate of either, and (iii)
is not connected with the Company or the Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions. Whenever it is provided herein that any Independent Person's opinion
or certificate shall be furnished to the Trustee, such opinion or certificate
shall state that the signatory has read this definition and is Independent
within the meaning set forth herein.
"Initial Loan" means a Loan identified on the List of Loans attached hereto
as of the Closing Date.
"Liquidated Loan" means, with respect to any Due Period, either
(1) a Defaulted Loan as to which the Servicer has received from the
Obligor, or a third party purchaser of the Loan, all amounts which the
Servicer reasonably and in good faith expects to recover from or on account
of such Loan, or
(2) a Loan (a) upon which all or a portion of the first payment of
interest due by the Obligor was added to principal, and (b) on which the
Obligor failed to pay the full amount of principal due on the Loan, as
computed by the Servicer;
provided, however, that any Loan which the Company is obligated to repurchase
pursuant to Section 3.05, and did so repurchase or substitute therefor an
Eligible Substitute Loan in accordance with Section 3.05, shall be deemed not to
be a Liquidated Loan; and provided, further, that with respect to Due Periods
beginning on or after August 2028, a Liquidated Loan
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also means any Loan as to which the Servicer has commenced foreclosure
proceedings, or made a sale of the Loan to a third party for foreclosure or
enforcement.
"Liquidation Expenses" means out-of-pocket expenses (exclusive of any
overhead expenses) which are incurred by the Servicer in connection with the
liquidation of any Defaulted Loan, including, without limitation, legal fees and
expenses, and any related and unreimbursed expenditures for property taxes,
property preservation or restoration of the property to marketable condition.
"Liquidation Proceeds" means cash (including insurance proceeds) received
in connection with the liquidation of Defaulted Loans, whether through
repossession, foreclosure sale or otherwise.
"List of Loans" means the lists identifying each Loan constituting part of
the Trust Fund and attached either to this Agreement as Exhibit L or to a
Subsequent Transfer Instrument, as such lists may be amended from time to time
pursuant to Section 2.06 or Section 3.05(b) to add Eligible Substitute Loans and
delete Replaced Loans or Prepaid Loans, as the case may be. Each List of Loans
shall set forth as to each Loan identified on it (i) the Cut-off Date Principal
Balance, (ii) the amount of monthly payments due from the Obligor, (iii) the
Loan Interest Rate and (iv) the maturity date.
"Loan" means each closed-end home equity loan identified as such in the
List of Loans, which Loan is to be assigned and conveyed by the Company to the
Trust, and includes, without limitation, all related mortgages, deeds of trust
and security deeds and any and all rights to receive payments due pursuant
thereto after the Cut-off Date, or Subsequent Cut-off Date with respect to a
Subsequent Loan.
"Loan File" means, as to each Loan, (a) the original promissory note, (b)
the original or a copy of the mortgage, deed of trust or security deed or
similar evidence of a lien on the related improved property and evidence of due
recording of such mortgage, deed of trust or security deed, if available, (c) if
such Loan was originated by a lender other than the Company, the original or a
copy of an assignment of the mortgage, deed of trust or security deed by such
lender to the Company, (d) an assignment of the mortgage, deed of trust or
security deed to the Trustee or in blank, and (e) any extension, modification or
waiver agreements.
"Loan Interest Rate" means, as to any Loan, the annual rate of interest
specified in the Loan.
"Master REMIC" means the segregated pool of assets consisting of the
Subsidiary REMIC Regular Interests, with respect to which a separate REMIC
election is to be made.
"Monthly Report" has the meaning assigned in Section 6.01.
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"Monthly Servicing Fee" means, for any Payment Date, with respect to the
Loans, one-twelfth of the product of .50% and the Pool Scheduled Principal
Balance for the preceding Payment Date (or, in the case of the first Payment
Date, the Cut-off Date).
"Net Liquidation Loss" means, as to a Liquidated Loan, the difference
between (a) the Repurchase Price of such Loan, and (b) the Net Liquidation
Proceeds with respect to such Liquidated Loan, where such difference is a
positive number.
"Net Liquidation Proceeds" means, as to a Liquidated Loan, the proceeds
received, or, for Loans which become Liquidated Loans pursuant to the last
proviso in the definition of "Liquidated Loan," the estimated proceeds to be
received, as of the last day of the Due Period in which such Loan became a
Liquidated Loan, from the Obligor, from a third party purchaser of the Loan,
under insurance, or otherwise, net of Liquidation Expenses.
"NRSRO" means any nationally recognized statistical rating organization.
"Obligor" means the person who owes payments under a Loan.
"Officer's Certificate" means a certificate signed by the Chairman of the
Board, President or any Vice President of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may, except as
expressly provided herein, be salaried counsel for the Company or the Servicer,
as applicable, acceptable to the Trustee and the Company.
"Original Aggregate Certificate Principal Balance" means $500,000,000.
"Original Class Principal Balance" means as to each Class of Certificates,
the amount set forth with respect to such Class in Section 2.05(b).
"Original Pre-Funded Amount" means the sum of the amounts deposited in the
Pre-Funding Account pursuant to Section 2.02(l) and (m).
"Original Principal Balance" means as to each Subsidiary REMIC Regular
Interest, the amount set forth with respect to such interest in Section 2.05(c).
"Partial Principal Prepayment" means (a) any Principal Prepayment other
than a Principal Prepayment in Full and (b) any cash amount deposited in the
Certificate Account pursuant to the proviso in Section 3.05(a) or pursuant to
Section 3.05(b).
"Pass-Through Rate" means (i) with respect to each Class of Certificates,
the rate set forth for such Class in Section 2.05(b) and (ii) with respect to
each Subsidiary REMIC Regular Interest, the rate set forth for such interest in
Section 2.05(c).
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"Paying Agent" has the meaning assigned in Section 8.01(c).
"Payment Date" means the fifteenth day of each calendar month during the
term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, commencing in September 1999.
"Percentage Interest" means, as to any Certificate or the Class C
Certificates, the percentage interest evidenced thereby in distributions made on
the related Class, such percentage interest being equal to: (i) as to any
Certificate, the percentage (carried to eight places) obtained from dividing the
denomination of such Certificate by the Original Principal Balance of the
related Class or, in the case of a Class A-7 IO Certificate, by the Class A-7 IO
Original Notional Principal Amount, and (ii) as to any Class C Certificate, the
percentage specified on the face of such Certificate. The aggregate Percentage
Interests for each Class of Certificates, the Class C Master Certificates and
Class C Subsidiary Certificates shall equal 100%, respectively.
"Permitted Transferee" means, in the case of a transfer of the Class C
Certificates, a Person that is not a Plan or a Disqualified Organization, except
as permitted by Sections 9.02(b)(2) and (3), respectively.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Plan" has the meaning assigned in Section 9.02(b)(2).
"Pool Factor" means, at any time, the percentage derived from a fraction,
the numerator of which is the Aggregate Certificate Principal Balance at such
time and the denominator of which is the Original Aggregate Certificate
Principal Balance.
"Pool Scheduled Principal Balance" means, for any Payment Date, the
aggregate Scheduled Principal Balance for such Payment Date of all Loans that
were outstanding during the immediately preceding Due Period.
"Post-Funding Payment Date" means the Payment Date on, or the first Payment
Date after, the last day of the Pre-Funding Period.
"Pre-Funded Amount" means, with respect to any date of determination, the
amount then on deposit in the Pre-Funding Account, after giving effect to any
sale of Subsequent Loans to the Trust on such date.
"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.08.
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"Pre-Funding Period" means the period beginning on the Closing Date and
ending on the earliest of (a) the date on which the amount on deposit in the
Pre-Funding Account is less than $10,000.00, or (b) the Business Day immediately
preceding the Payment Date occurring in the calendar month that is the third
calendar month following the calendar month of the Closing Date, or November 14,
1999, or (c) the date on which an Event of Termination occurs.
"Prepaid Loan" has the meaning assigned in Section 2.06.
"Principal Prepayment" means a payment or other recovery of principal on a
Loan (exclusive of Liquidation Proceeds) which is received in advance of its
scheduled due date and applied upon receipt (or, in the case of a partial
prepayment, upon the next scheduled payment date on such Loan) to reduce the
outstanding principal amount due on such Loan prior to the date or dates on
which such principal amount is due.
"Principal Prepayment in Full" means any Principal Prepayment of the entire
principal balance of a Loan.
"Realized Losses" means, for any Payment Date, the aggregate Net
Liquidation Losses for all Loans that became Liquidated Loans during the
immediately preceding Due Period.
"Record Date" means, with respect to any Payment Date, the Business Day
immediately preceding such Payment Date.
"REMIC" means a "real estate mortgage investment conduit" as defined in
Section 860D of the Code.
"REMIC Provisions" means the provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and any temporary, proposed or final regulations promulgated
thereunder, as the foregoing may be in effect from time to time.
"Replaced Loan" has the meaning assigned in Section 3.05(b).
"Repurchase Price" means, with respect to a Loan to be repurchased pursuant
to Section 3.05 or which becomes a Liquidated Loan, an amount equal to (a) the
remaining principal amount outstanding on such Loan (without giving effect to
any Advances paid by the Servicer or the Trustee, as applicable, with respect to
such Loan pursuant to Section 8.02), plus (b) interest at the Weighted Average
Pass-Through Rate on such Loan from the end of the Due Period with respect to
which the Obligor last made a scheduled payment (without giving effect to any
Advances paid by the Servicer or the Trustee, as applicable, with respect to
such Loan pursuant to Section 8.02) through the date of such repurchase or
liquidation.
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"Responsible Officer" means, with respect to the Trustee, the chairman and
any vice chairman of the board of directors, the president, the chairman and
vice chairman of any executive committee of the board of directors, every vice
president, assistant vice president, the secretary, every assistant secretary,
cashier or any assistant cashier, controller or assistant controller, the
treasurer, every assistant treasurer, every trust officer, assistant trust
officer and every other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by persons who at the time shall
be such officers, respectively, or to whom a corporate trust matter is referred
because of knowledge of, familiarity with, and authority to act with respect to
a particular matter.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto; provided that, if S&P no
longer has a rating outstanding on any Class of the Certificates, then
references herein to "S&P" shall be deemed to refer to the NRSRO then rating any
Class of the Certificates (or, if more than one such NRSRO is then rating any
Class of the Certificates, to such NRSRO as may be designated by the Servicer),
and references herein to ratings by or requirements of S&P shall be deemed to
have the equivalent meanings with respect to ratings by or requirements of such
NRSRO.
"Scheduled Principal Balance" means, with respect to any Loan and any
Payment Date, the Cut-off Date or any Subsequent Cut-off Date, the principal
balance of such Loan as of the due date in the Due Period immediately preceding
such Payment Date, Cut-off Date or Subsequent Cut-off Date, as the case may be,
as specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any bankruptcy of an
Obligor or similar proceeding or any moratorium or similar waiver or grace
period) after giving effect to any previous partial Principal Prepayments and to
the payment of principal due on such due date and irrespective of any
delinquency in payment by, or extension granted to, the related Obligor. If for
any Loan the Cut-off Date is the date of origination of the Loan, its Scheduled
Principal Balance as of the Cut-off Date is the principal balance of the Loan on
its date of origination.
"Senior Percentage" means, with respect to the Certificates:
(a) for any Payment Date prior to the Class B Cross-over Date, 100%;
(b) for any Payment Date on or after the Class B Cross-over Date but
on or prior to the Class M-2 Cross-over Date, and on which any Class B
Principal Distribution Test is not satisfied, 100%;
(c) for any Payment Date on or after the Class B Cross-over Date but
on or prior to the Class M-2 Cross-over Date, and on which each Class B
Principal Distribution Test is satisfied, a fraction, expressed as a
percentage, the numerator of which is the sum of the Class A Principal
Balance and the Class M Principal Balance for such Payment
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Date, and the denominator of which is the Pool Scheduled Principal Balance
for the immediately preceding Payment Date; and
(d) for any Payment Date after the Class M-2 Cross-over Date, 0%.
"Senior Subordination Percentage" means (a) on any Payment Date on which
the Class A Principal Balance has not been reduced to zero, a fraction,
expressed as a percentage, the numerator of which is the sum of (i) the Class
M-1 Adjusted Principal Balance, if any, (ii) the Class M-2 Adjusted Principal
Balance, if any, (iii) the Class B-1 Adjusted Principal Balance, if any, and
(iv) the Class B-2 Principal Balance, if any, and the denomination of which is
the Pool Scheduled Principal Balance, (b) on any Payment Date on which the Class
A Principal Balance has been reduced to zero and the Class M-1 Principal Balance
has not been reduced to zero, a fraction, expressed as a percentage, the
numerator of which is the sum of (i) the Class M-2 Adjusted Principal Balance,
if any, (ii) the Class B-1 Adjusted Principal Balance, if any, and (iii) the
Class B-2 Principal Balance, if any, and the dominator of which is the Pool
Scheduled Principal Balance, (c) on any Payment Date on which the Class M-1
Principal Balance has been reduced to zero and the Class M-2 Principal Balance
has not been reduced to zero, a fraction, expressed as a percentage, the
numerator of which is the sum of (i) the Class B-1 Adjusted Principal Balance,
if any, and (ii) the Class B-2 Principal Balance, if any, and the denominator of
which is the Pool Scheduled Principal Balance or (d) on any Payment Date on
which the Class M-2 Principal Balance has been reduced to zero and the Class B-1
Principal Balance has not been reduced to zero, a fraction, expressed as a
percentage, the numerator of which is the Class B-2 Principal Balance, if any,
and the denominator of which is the Pool Scheduled Principal Balance.
"Service Transfer" has the meaning assigned in Section 7.02.
"Servicer" means the Company until any Service Transfer hereunder and
thereafter means the new servicer appointed pursuant to Article VII.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Loans whose name appears on
a list of servicing officers appearing in a letter furnished to the Trustee by
the Company, as the same may be amended from time to time.
"Sixty-Day Delinquency Ratio" means, for any Payment Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate of the
outstanding balances of all Loans that were delinquent 60 days or more as of the
end of the prior Due Period (including Loans in respect of which the related
real estate has been foreclosed upon but is still in inventory), and the
denominator of which is the Pool Scheduled Principal Balance for such Payment
Date.
"Step-up Rate Loan" means any Loan bearing interest during an initial
period or periods at a fixed rate or fixed rates that are lower than the fixed
rate borne thereafter.
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"Subsequent Cut-off Date" means, with respect to a Subsequent Loan, the
related Subsequent Transfer Date.
"Subsequent Loan" means a Loan sold by the Company to the Trust pursuant to
Section 2.03, such Loan being identified as such in the Subsequent Transfer
Instrument.
"Subsequent Transfer Date" means, with respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Loans are sold to the
Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer Instrument
dated as of a Subsequent Transfer Date executed by the Trustee and the Company
substantially in the form of Exhibit O, by which the Company sells Subsequent
Loans to the Trust.
"Subsidiary REMIC" means the segregated pool of assets comprising the Trust
Fund, but excluding the Pre-Funding Account, the Capitalized Interest Account
and the Subsidiary REMIC Regular Interests.
"Subsidiary REMIC Accrued Interest" means with respect to each Payment Date
and each Subsidiary REMIC Regular Interest, an amount equal to one month's
interest (or, with respect to the first Payment Date, interest accrued from and
including the Closing Date to but excluding September 15, 1999) on the related
Subsidiary REMIC Principal Balance at the related Subsidiary REMIC Pass-Through
Rate.
"Subsidiary REMIC Pass-Through Rate" means, with respect to a Subsidiary
REMIC Regular Interest, the applicable rates set forth in Section 2.05(c).
"Subsidiary REMIC Principal Balance" means with respect to each Subsidiary
REMIC Regular Interest on any date of determination, the related Original
Principal Balance minus the aggregate of all amounts previously deemed
distributed with respect to principal thereof pursuant to Section 8.09.
"Subsidiary REMIC Regular Interest Designation" means the designations set
forth in Section 2.05(c).
"Subsidiary REMIC Regular Interest Distribution Amounts" means the
Subsidiary REMIC Regular Interest S-1 Distribution Amount, Subsidiary REMIC
Regular Interest S-2 Distribution Amount and Subsidiary REMIC Regular Interest
S-3 Distribution Amount.
"Subsidiary REMIC Regular Interest S-1" means an uncertificated partial
undivided beneficial ownership interest designated as a "regular interest" in
the Subsidiary REMIC having the related Subsidiary REMIC Principal Balance and
bearing interest at the related Subsidiary REMIC Pass-Through Rate.
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"Subsidiary REMIC Regular Interest S-1 Distribution Amount" means with
respect to any Payment Date, the sum of the amounts deemed to be distributed on
the Subsidiary REMIC Regular Interest S-1 for such Payment Date pursuant to
Section 8.09.
"Subsidiary REMIC Regular Interest S-2" means an uncertificated partial
undivided beneficial ownership interest designated as a "regular interest" in
the Subsidiary REMIC having the related Subsidiary REMIC Principal Balance and
bearing interest at the related Subsidiary REMIC Pass-Through Rate.
"Subsidiary REMIC Regular Interest S-2 Distribution Amount" means with
respect to any Payment Date, the sum of the amounts deemed to be distributed on
the Subsidiary REMIC Regular Interest S-2 for such Payment Date pursuant to
Section 8.09.
"Subsidiary REMIC Regular Interest S-3" means an uncertificated partial
undivided beneficial ownership interest designated as a "regular interest" in
the Subsidiary REMIC having the related Subsidiary REMIC Principal Balance and
bearing interest at the related Subsidiary REMIC Pass-Through Rate.
"Subsidiary REMIC Regular Interest S-3 Distribution Amount" means with
respect to any Payment Date, the sum of the amounts deemed to be distributed on
the Subsidiary REMIC Regular Interest S-3 for such Payment Date pursuant to
Section 8.09.
"Subsidiary REMIC Regular Interests" means Subsidiary REMIC Regular
Interest S-1, Subsidiary REMIC Regular Interest S-2 and Subsidiary REMIC Regular
Interest S-3.
"Thirty-Day Delinquency Ratio" means, for any Payment Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate of the
outstanding balances of all Loans that were delinquent 30 days or more as of the
end of the prior Due Period (including Loans in respect of which the related
real estate has been foreclosed upon but is still in inventory), and the
denominator of which is the Pool Scheduled Principal Balance for such Payment
Date.
"Trust" means Home Equity Loan Trust 1999-D.
"Trust Fund" means the corpus of the Trust created by this Agreement which
consists of (i) all the rights, benefits and obligations arising from and in
connection with the Loans, including without limitation all related mortgages,
deeds of trust and security deeds and any and all rights to receive payments on
or with respect to the Loans due after the Cut-off Date, or Subsequent Cut-off
Date with respect to Subsequent Loans, (ii) all rights under any hazard, flood
or other individual insurance policy on the real estate securing a Loan for the
benefit of the creditor of such Loan, (iii) all rights the Company may have
against the originating lender with respect to Loans originated by a lender
other than the Company, (iv) all rights under the Errors and Omissions
Protection Policy and the Fidelity Bond as such policy and bond relate to the
Loans, (v) all rights under any title insurance policies, if applicable, on any
of the properties
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securing Loans, (vi) all documents contained in the Loan Files, (vii) the Class
B-2 Limited Guaranty, (viii) amounts in the Certificate Account, the Capitalized
Interest Account and the Pre-Funding Account (including all proceeds of
investments of funds in the Certificate Account) and (ix) all proceeds and
products of the foregoing.
"Trustee Advance" has the meaning assigned in Section 11.15.
"Underwriters" means J.P. Morgan Securities Inc., Chase Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
"Unpaid Class A Interest Shortfall" means, as to each Class of Class A
Certificates and any Payment Date, the amount, if any, of the Class A Interest
Shortfall applicable to such Class for the prior Payment Date, plus one month's
interest thereon (to the extent payment thereof is legally permissible) at the
related Pass-Through Rate.
"Unpaid Class B-1 Interest Shortfall" means, with respect to the Class B-1
Certificates and any Payment Date, the amount, if any, of the Class B-1 Interest
Shortfall for the prior Payment Date, plus one month's interest thereon (to the
extent payment thereof is legally permissible) at the Class B-1 Pass-Through
Rate.
"Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, with respect
to the Class B-1 Certificates and any Payment Date, the amount, if any, of the
Class B-1 Liquidation Loss Interest Shortfall for the prior Payment Date, plus
one month's interest thereon (to the extent payment thereof is legally
permissible) at the Class B-1 Pass-Through Rate.
"Unpaid Class B-2 Interest Shortfall" means, with respect to the Class B-2
Certificates and any Payment Date, the amount, if any, of the Class B-2 Interest
Shortfall for the prior Payment Date, plus one month's interest thereon (to the
extent payment thereof is legally permissible) at the Class B-2 Pass-Through
Rate.
"Unpaid Class M-1 Interest Shortfall" means, with respect to the Class M-1
Certificates and any Payment Date, the amount, if any, of the Class M-1 Interest
Shortfall for the prior Payment Date, plus one month's interest thereon (to the
extent payment thereof is legally permissible) at the Class M-1 Pass-Through
Rate.
"Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, with respect
to the Class M-1 Certificates and any Payment Date, the amount, if any, of the
Class M-1 Liquidation Loss Interest Shortfall for the prior Payment Date, plus
one month's interest thereon (to the extent payment thereof is legally
permissible) at the Class M-1 Pass-Through Rate.
"Unpaid Class M-2 Interest Shortfall" means, with respect to the Class M-2
Certificates and any Payment Date, the amount, if any, of the Class M-2 Interest
Shortfall for the prior
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<PAGE>
Payment Date, plus one month's interest thereon (to the extent payment thereof
is legally permissible) at the Class M-2 Pass-Through Rate.
"Unpaid Class M-2 Liquidation Loss Interest Shortfall" means, with respect
to the Class M-2 Certificates and any Payment Date, the amount, if any, of the
Class M-2 Liquidation Loss Interest Shortfall for the prior Payment Date, plus
one month's interest thereon (to the extent payment thereof is legally
permissible) at the Class M-2 Pass-Through Rate.
"Weighted Average Debt Consolidation Percentage" means, the weighted
average, by principal balance, of Loans that were used by borrowers for the
purpose of debt consolidation.
"Weighted Average Loan Rate" means, for any Payment Date, the weighted
average (determined by Scheduled Principal Balance) of the Loan Interest Rates
for all Loans that were outstanding during the immediately preceding month.
"Weighted Average Pass-Through Rate" means, for any Payment Date, with
respect to any Loan, the sum of (i) the weighted average (expressed as a
percentage and rounded to four decimal places) of the Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class M-1, Class M-2, Class B-1 and
Class B-2 Pass-Through Rates, weighted on the basis of the respective Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class M-1, Class M-2,
Class B-1 and Class B-2 Principal Balances immediately prior to such Payment
Date, plus (ii) if such Payment Date occurs prior to May 1, 2001, a rate,
expressed as a percentage, equal to (A) one year's interest (or, if less,
interest for such number of months as remain prior to the Payment Date occurring
in May 2001) on the Class A-7 IO Notional Principal Amount at the Class A-7 IO
Pass-Through Rate, by (B) the Aggregate Certificate Principal Balance.
SECTION 1.03. Calculation of Interest on the Certificates and Subsidiary
REMIC Regular Interests. Interest on each Class of Certificates and each
Subsidiary REMIC Regular Interest shall be computed on the basis of a 360-day
year of twelve 30-day months.
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<PAGE>
ARTICLE II
ESTABLISHMENT OF TRUST; TRANSFER OF LOANS
SECTION 2.01. Closing.
a. There is hereby created, by the Company as settlor, a separate trust
which shall be known as Home Equity Loan Trust 1999-D. The Trust shall be
administered pursuant to the provisions of this Agreement for the benefit of the
Certificateholders and the Class C Certificateholders.
b. The Company hereby transfers, assigns, sets over and otherwise conveys
to the Trustee on behalf of the Trust, by execution and delivery of an
assignment substantially in the form of Exhibit D hereto, all the right, title
and interest of the Company in and to the Loans, including all rights to receive
payments on or with respect to the Loans due after the Cut-off Date, or
Subsequent Cut-off Date in respect of the Subsequent Loans, and all other assets
now or hereafter included in the Trust Fund. The Company concurrently hereby
assigns without recourse all the right, title and interest of the Company in and
to the Subsidiary REMIC Regular Interests to the Trustee for the benefit of the
Certificateholders. Each such transfer and assignment is intended by the Company
to be a sale of such assets for all purposes, including, without limitation, the
Federal Bankruptcy Code, to the end that all such assets will hereafter cease to
be the property of the Company and would not be includable in the estate of the
Company for purposes of Section 541 of the Federal Bankruptcy Code.
c. Although the parties intend that each conveyance pursuant to this
Agreement of the Company's right, title and interest in and to the Loans
(including the Subsequent Loans) and in the Subsidiary REMIC Regular Interests
shall constitute a purchase and sale and not a loan, if such conveyances are
deemed to be loans, the parties intend that the rights and obligations of the
parties to such loans shall be established pursuant to the terms of this
Agreement. If the conveyances are deemed to be loans, the parties further intend
and agree that the Company shall be deemed to have granted to the Trustee, and
the Company does hereby grant to the Trustee, a perfected first-priority
security interest in the Trust Fund and in the Subsidiary REMIC Regular
Interests, and that this Agreement shall constitute a security agreement under
applicable law. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person under any Certificate or Class C
Certificate, the security interest created hereby shall continue in full force
and effect and the Trustee shall be deemed to be the collateral agent for the
benefit of such Person.
SECTION 2.02. Conditions to the Closing. On or before the Closing Date, the
Company shall deliver or cause to be delivered the following documents to the
Trustee:
a. The List of Loans attached to this Agreement as Exhibit L,
certified by the Chairman of the Board, President or any Vice President of
the Company.
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<PAGE>
b. A certificate of an officer of the Company substantially in the
form of Exhibit E hereto.
c. An Opinion of Counsel for the Company substantially in the form of
Exhibit F hereto.
d. A letter acceptable to the Underwriters from PriceWaterhouseCoopers
LLP or another nationally recognized accounting firm, stating that such
firm has reviewed the Initial Loans on a statistical sampling basis and,
based on such sampling, concluding that the Initial Loans conform in all
material respects to the List of Loans attached hereto as Exhibit L, to a
confidence level of 97.5%, with an error rate not in excess of 1.8%,
specifying those Loans which do not so conform.
e. Copies of resolutions of the board of directors of the Company or
of the executive committee of the board of directors of the Company
approving the execution, delivery and performance of this Agreement and the
transactions contemplated hereunder, certified in each case by the
secretary or an assistant secretary of the Company.
f. Officially certified recent evidence of due incorporation and good
standing of the Company under the laws of the State of Delaware.
g. An Officer's Certificate listing the Servicer's Servicing Officers.
h. Evidence of continued coverage of the Company under the Errors and
Omissions Protection Policy.
i. Evidence of deposit in the Certificate Account of all funds
received with respect to the Loans from the Cut-off Date to the Closing
Date, other than principal due on or before the Cut-off Date, together with
an Officer's Certificate to the effect that such amount is correct.
j. An Officer's Certificate confirming that the Company has reviewed
the original or a copy of each Initial Loan and each related Loan File,
that each such Loan and Loan File conforms in all material respects with
the List of Loans and that each such Loan File is complete and has been
delivered to the Trustee (or its custodian).
k. Assignments in recordable form to the Trustee of the mortgages,
deeds of trust and security deeds relating to the Initial Loans.
l. Evidence of the deposit of $-0- in the Pre-Funding Account.
m. Evidence of the deposit of $-0- in the Capitalized Interest
Account.
n. The original mortgage note, endorsed without recourse to the order
of the Trustee and showing an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee.
"Undelivered" means, with respect to a Contract and any date of
determination, a Contract identified on the exception report attached to the
Acknowledgment delivered by the Indenture Trustee under Section 6.01(k) of the
Indenture on the Closing Date as a Contract as to which the Indenture Trustee
(a) did not receive the related contract or promissory note as of the Closing
Date and (b) has not received the related contract or promissory note and
remitted payment for it to the Company pursuant to Section 6.12.
"Undelivered Contract Account" means the account so designated, established
and maintained pursuant to Section 6.01(d).
2-2
<PAGE>
SECTION 2.03. Conveyance of the Subsequent Loans.
a. Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Company of all or a portion of the balance of funds
in the Pre-Funding Account, the Company shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey to the Trust by execution and
delivery of a Subsequent Transfer Instrument, all the right, title and interest
of the Company in and to the Subsequent Loans identified on the List of Loans
attached to the Subsequent Transfer Instrument, including all rights to receive
payments on or with respect to the Subsequent Loans due after the related
Subsequent Cut-off Date, and all items with respect to such Subsequent Loans in
the related Loan Files. The transfer to the Trustee by the Company of the
Subsequent Loans shall be absolute and is intended by the Company, the Trustee,
the Certificateholders and the Class C Certificateholders to constitute and to
be treated as a sale of the Subsequent Loans by the Company to the Trust.
The purchase price paid by the Trustee shall be one hundred percent (100%)
of the aggregate Cut-off Date Principal Balances of such Subsequent Loans. The
purchase price of Subsequent Loans shall be paid solely with amounts in the
Pre-Funding Account. This Agreement shall constitute a fixed price contract in
accordance with Section 860G(a)(3)(A)(ii) of the Code.
b. The Company shall transfer to the Trustee the Subsequent Loans, and the
Trustee shall release funds from the Pre-Funding Account only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:
(i) the Company shall have provided the Trustee with an Addition
Notice at least five Business Days prior to the Subsequent Transfer Date
and shall have provided any information reasonably requested by the Trustee
with respect to the Subsequent Loans;
(ii) the Company shall have delivered the related Loan File for each
Subsequent Loan to the Trustee at least two Business Days prior to the
Subsequent Transfer Date;
(iii) the Company shall have delivered to the Trustee a duly executed
Subsequent Transfer Instrument substantially in the form of Exhibit O,
which shall include a List of Loans identifying the related Subsequent
Loans;
(iv) as of each Subsequent Transfer Date, as evidenced by delivery of
the Subsequent Transfer Instrument, the Company shall not be insolvent nor
shall it have been made insolvent by such transfer nor shall it be aware of
any pending insolvency;
2-3
<PAGE>
(v) such sale and transfer shall not result in a material adverse tax
consequence to the Trust (including the Master REMIC and the Subsidiary
REMIC) or the Certificateholders or Class C Certificateholders;
(vi) the Pre-Funding Period shall not have ended;
(vii) the Company shall have delivered to the Trustee an Officer's
Certificate, substantially in the form attached hereto as Exhibit P,
confirming the satisfaction of each condition precedent and the
representations specified in this Section 2.03 and in Sections 3.01, 3.02,
3.03 and 3.04;
(viii) the Company shall have delivered to the Trustee Opinions of
Counsel addressed to S&P, Fitch and the Trustee with respect to the
transfer of the Subsequent Loans substantially in the form of the Opinions
of Counsel delivered to the Trustee on the Closing Date regarding certain
bankruptcy, corporate and tax matters;
(ix) No Subsequent Loan will have a Loan Interest Rate less than
6.50%;
(x) the Company shall have delivered assignments in recordable form to
the Trustee of the mortgages, deeds of trust and security deeds relating to
the Subsequent Loans; and
(xi) no Subsequent Loan shall be more than 31 days delinquent.
c. Before the last day of the Pre-Funding Period, the Company shall deliver
to the Trustee:
(i) A letter from PriceWaterhouseCoopers LLP or another nationally
recognized accounting firm retained by the Company (with copies provided to
S&P and Fitch, the Underwriters and the Trustee) that is in form, substance
and methodology the same as that dated August 13, 1999 and delivered under
Section 2.02(d) of this Agreement, except that it shall address the
Subsequent Loans and their conformity in all material respects to the
characteristics described in Sections 2.03 (b)(ix) and 3.03(b) of this
Agreement.
(ii) Evidence that, as a result of the purchase by the Trust of the
Subsequent Loans, none of the ratings assigned to the Class A Certificates
as of the Closing Date by S&P or Fitch will be reduced, withdrawn or
qualified.
(iii) Evidence that the aggregate Cut-off Date Principal Balances of
the Subsequent Loans, not specifically identified as Subsequent Loans as of
the Closing Date, do not exceed 25% of the Original Aggregate Certificate
Principal Balance.
2-4
<PAGE>
SECTION 2.04. Acceptance by Trustee.
a. On the Closing Date and each Subsequent Transfer Date, if the conditions
set forth in Section 2.02 and 2.03, respectively, have been satisfied, the
Trustee shall deliver a certificate to the Company substantially in the form of
Exhibit G hereto (an "Acknowledgment") acknowledging conveyance of the Loans
identified on the applicable List of Loans and the related Loan Files to the
Trustee and declaring that the Trustee, directly or through a Custodian, will
hold all Loans that have been delivered in trust, upon the trusts herein set
forth, for the use and benefit of all Certificateholders and the Class C
Certificateholders. The Trustee acknowledges the assignment to it of the
Subsidiary REMIC Regular Interests and declares that it holds and will hold the
Subsidiary REMIC Regular Interests in trust for the exclusive use and benefit of
the Certificateholders. In consideration of the assignment to it of the
Subsidiary REMIC Regular Interests, the Trustee has issued on the Closing Date,
to or upon the order of the Company, the Certificates and the Class C
Certificates representing, in the aggregate, ownership of the entire beneficial
interest in the Master REMIC.
b. The Trustee or a Custodian shall review each Loan File, as described in
Exhibit G, within 60 days of the Closing Date or later receipt by it of the Loan
File. If, in its review of the Loan Files as described in Exhibit G, the Trustee
or a Custodian discovers a breach of the representations or warranties set forth
in Sections 2.03, 3.02, 3.03 or 3.04 of this Agreement, or in the Officer's
Certificates delivered pursuant to Section 2.02(j) or 2.03(b)(vii) of this
Agreement, the Trustee or Custodian, as the case may be, shall notify the
Company and the Company shall cure such breach or repurchase or replace such
Loan pursuant to Section 3.05.
SECTION 2.05. REMIC Provisions.
a. The Company, as Servicer, and the Class C Certificateholders, by
acceptance thereof, each agrees that, in accordance with the requirements of
Section 860D(b)(1) of the Code, the federal tax return of the Trust for its
first taxable year shall provide that the segregated pools of assets comprising
the Master REMIC and the Subsidiary REMIC, respectively, each elect to be
treated as a REMIC under the Code for such taxable year and all subsequent
taxable years, and the Trustee shall sign such return. In furtherance of the
foregoing, the Trustee (at the direction of the Company or the Servicer), the
Company and the Servicer shall take, or refrain from taking, all such action as
is necessary to maintain the status of each of the Master REMIC and Subsidiary
REMIC as a REMIC under the REMIC Provisions of the Code, including, but not
limited to, the taking of such action as is necessary to cure any inadvertent
termination of REMIC status. For purposes of the REMIC election in respect of
the Subsidiary REMIC, (i) the Subsidiary REMIC Regular Interests shall be
designated as the "regular interests" in the Subsidiary REMIC and (ii) the Class
C Subsidiary Certificate shall be designated as the sole class of "residual
interests" in the Subsidiary REMIC. For purposes of the REMIC election in
respect of the Master REMIC, (i) the Certificates shall be designated as the
"regular interests" in the Master REMIC and (ii) the Class C Master Certificate
shall be designated as the sole Class of "residual interests" in the Master
REMIC. The Trustee shall not permit the creation of any
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<PAGE>
"interests" in the Master REMIC or Subsidiary REMIC (within the meaning of
Section 860G of the Code) other than the Subsidiary REMIC Regular Interests and
the interests represented by the Certificates and the Class C Certificates.
b. The Certificates are being issued in thirteen classes. The following
terms of the Certificates are irrevocably established as of the Closing Date:
<TABLE>
<CAPTION>
Class Pass-Through Rate Per Annum Original Class
Principal Balance (or
Notional Principal
Amount
- --------------------------- ------------------------------------------------------ ---------------------
<S> <C> <C>
Class A-1 6.29% $160,000,000
Class A-2 7.05% $90,000,000
Class A-3 7.30% $56,000,000
Class A-4 7.56% $32,000,000
Class A-5 7.88% $36,000,000
Class A-6 7.61% $35,000,000
Class A-7 IO 6.50% Original Notional
Principal Amount:
$50,000,000
Class M-1 a floating rate equal to the Adjusted Weighted Average $28,000,000
Loan Rate, but in no event greater than 8.35%
Class M-2 a floating rate equal to the Adjusted Weighted Average $28,000,000
Loan Rate, but in no event greater than 8.88%
Class B-1 a floating rate equal to the Adjusted Weighted Average $16,250,000
Loan Rate, but in no event greater than 10.374%
Class B-2 a floating rate equal to the Adjusted Weighted Average $18,750,000
Loan Rate, but in no event greater than 11.361%
</TABLE>
c. The following terms of the Subsidiary REMIC Regular Interests are
irrevocably established as of the Closing Date:
<TABLE>
<CAPTION>
Subsidiary REMIC Regular Subsidiary REMIC Pass-Through Rate: Original Class
Interest Designation: Principal Balance:
------------------------ ----------------------------------- ------------------
<S> <C> <C>
S-1 Weighted Average Loan Rate $359,000,000
S-2 Weighted Average Loan Rate $50,000,000
S-3 Weighted Average Loan Rate $91,000,000
</TABLE>
The latest possible maturity of the Subsidiary REMIC Regular Interests is in
September, 2030 (calculated using a prepayment assumption of 0% and assuming no
defaults or delinquencies on the Loans).
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<PAGE>
d. The Closing Date, which is the day on which each of the Master REMIC and
Subsidiary REMIC will issue all of their respective regular and residual
interests, is hereby designated as the "startup day" of the Master REMIC and
Subsidiary REMIC within the meaning of Section 860G(a)(9) of the Code.
e. After the Closing Date, neither the Trustee, the Company nor any
Servicer shall (i) accept any contribution of assets to the Trust, (ii) dispose
of any portion of the Trust other than as provided in Sections 3.05, 3.06 and
8.06, (iii) engage in any transaction that would result in the imposition of tax
on "prohibited transactions," as defined in Section 860F(a)(1) of the Code, (iv)
accept any contribution after the Closing Date that is subject to the tax
imposed by Section 860G(d) of the Code or (v) engage in any activity or enter
into any agreement that would result in the receipt by the Trust of any "net
income from foreclosure property" as defined in Section 860G(c)(2) of the Code,
unless, prior to any such action set forth in clauses (i), (ii), (iii), (iv) or
(v), the Trustee shall have received an unqualified Opinion of Counsel, which
opinion shall not be an expense of the Trust, stating that such action will not,
directly or indirectly, (A) adversely affect the status of the Master REMIC or
Subsidiary REMIC as a REMIC, the status of the Certificates and Class C Master
Certificate as "regular interests" and the sole class of "residual interests,"
respectively, in the Master REMIC, or of the Subsidiary REMIC Regular Interests
or Class C Subsidiary Certificate as the "regular interests" and the sole class
of "residual interests," respectively, in the Subsidiary REMIC, in each case for
federal income tax purposes, (B) affect the distributions payable hereunder to
the Certificateholders or the Class C Certificateholders or (C) result in the
imposition of any lien, charge or encumbrance upon the Trust.
f. Upon the acquisition of any real property (including interests in real
property), or any personal property incident thereto, in connection with the
default of a Loan, the Servicer and the Trustee (at the direction of the
Servicer) shall take, or cause to be taken, such action as is necessary to sell
or otherwise dispose of such property within such period as is then required by
the Code in order for such property to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code, unless the Servicer and the
Trustee receive an Opinion of Counsel to the effect that the holding by the
Trust of such property subsequent to the period then permitted by the Code will
not result in the imposition of any taxes on "prohibited transactions" of the
Trust, as defined in Section 860F of the Code, or cause the Master REMIC or
Subsidiary REMIC to fail to qualify as a REMIC at any time that the Certificates
or Class C Certificates are outstanding. The Servicer shall manage, conserve,
protect and operate such real property, or any personal property incident
thereto, so that such property will not fail to qualify as "foreclosure
property," as defined in Section 860G(a)(8) of the Code, and that the
management, conservation, protection and operation of such property will not
result in the receipt by the Master REMIC or Subsidiary REMIC of any income
attributable to any asset which is neither a qualified mortgage nor a permitted
investment within the meaning of the REMIC Provisions.
SECTION 2.06. Company Option to Substitute for Prepaid Loans. The Company
may, at its option, substitute new loans for Loans as to which a Principal
Prepayment in Full has been
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<PAGE>
received by the Servicer prior to November 25, 1999 ("Prepaid Loans"), up to a
maximum of 5% of the Cut-Off Date Pool Principal Balance, upon satisfaction of
the following conditions:
(i) the Company shall have conveyed to the Trustee the Loan to be
substituted for the Prepaid Loan and the Loan File related to such Loan and
the Company shall have marked the Electronic Ledger indicating that such
Loan constitutes part of the Trust;
(ii) the Loan to be substituted is an Eligible Substitute Loan and the
Company delivers an Officers' Certificate, substantially in the form of
Exhibit J-3 hereto, to the Trustee certifying that such Loan is an Eligible
Substitute Loan;
(iii) the Company shall have delivered to the Trustee evidence of
filing of a UCC-1 financing statement executed by the Company as debtor,
naming the Trustee as secured party and filed in Minnesota, listing such
Loan to be substituted as collateral;
(iv) the Company shall have delivered to the Trustee an executed
assignment to the Trustee on behalf of the Trust in recordable form for the
mortgage securing such Loan to be substituted;
(v) such substitution shall be accomplished prior to the Determination
Date immediately following the calendar month in which the Principal
Prepayment in Full was received by the Servicer, and no such substitution
shall take place after December 14, 1999;
(vi) the Company shall have delivered to the Trustee an Opinion of
Counsel (a) to the effect that the substitution of such Loan for such
Prepaid Loan will not cause the Master REMIC or Subsidiary REMIC to fail to
qualify as a REMIC at any time under then applicable REMIC Provisions or
cause any "prohibited transaction" that will result in the imposition of a
tax under such REMIC Provisions and (b) to the effect of paragraph 9 of
Exhibit F hereto; and
(vii) if the Principal Prepayment received in respect of such Prepaid
Loan is greater than the Scheduled Principal Balance of the Loan to be
substituted, such excess shall be distributed to Certificateholders on the
related Payment Date as a prepayment of principal.
Upon satisfaction of such conditions, the Trustee shall add to the List of
Loans such Loan to be substituted and delete from the List of Loans the Prepaid
Loan.
Any substitutions pursuant to this Section 2.06 may be accomplished on a
loan-by-loan basis or on an aggregate basis as to all Prepaid Loans with respect
to a given calendar month.
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<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company makes the following representations and warranties. The Trustee
will rely on the representations and warranties in accepting the Loans in trust
and issuing the Certificates and the Class C Certificates on behalf of the
Trust. The repurchase or substitution and indemnification obligations of the
Company set forth in Section 3.05 constitute the sole remedies available to the
Trust, the Certificateholders or the Class C Certificateholders for a breach of
a representation or warranty of the Company set forth in Sections 2.03, 3.02,
3.03 or 3.04 of this Agreement, or in the Officer's Certificates delivered
pursuant to Sections 2.02(j) or 2.03(b)(vii) of this Agreement.
SECTION 3.01. Representations and Warranties Regarding the Company. The
Company represents and warrants to the Certificateholders and the Class C
Certificateholders, effective on the Closing Date and each Subsequent Transfer
Date, that:
a. Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. The
Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Company.
b. Authorization; Binding Obligations. The Company has the power and
authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and to create the Trust
and cause it to make, execute, deliver and perform its obligations under
this Agreement and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement and to cause the
Trust to be created. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
c. No Consent Required. The Company is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
3-1
<PAGE>
d. No Violations. The execution, delivery and performance of this
Agreement by the Company will not violate any provision of any existing law
or regulation or any order or decree of any court or the Certificate of
Incorporation or Bylaws of the Company, or constitute a material breach of
any mortgage, indenture, contract or other agreement to which the Company
is a party or by which the Company may be bound.
e. Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Company threatened, against the Company or any of its
properties or with respect to this Agreement, the Certificates or the Class
C Certificates which, if adversely determined, would in the opinion of the
Company have a material adverse effect on the transactions contemplated by
this Agreement.
f. Licensing. The Company is duly licensed in each state in which
Loans were originated to the extent the Company is required to be licensed
by applicable law in connection with the origination and servicing of the
Loans.
SECTION 3.02. Representations and Warranties Regarding Each Loan. The
Company represents and warrants to the Certificateholders and the Class C
Certificateholders, as of the Closing Date with respect to each Loan identified
on the List of Loans attached to this Agreement as Exhibit L and as of each
Subsequent Transfer Date with respect to each Subsequent Loan identified on the
List of Loans attached to the related Subsequent Transfer Instrument:
a. List of Loans. The information set forth in the List of Loans is
true and correct as of its date.
b. Payments. No scheduled payment due under the Loan was delinquent
over 31 days as of the Cut-off Date or as of the related Subsequent Cut-off
Date if a Subsequent Loan.
c. Costs Paid and No Waivers. The terms of the Loan have not been
waived, altered or modified in any respect, except by instruments or
documents identified in the Loan File. All costs, fees and expenses
incurred in making, closing and perfecting the lien of the Loan have been
paid. The subject real property has not been released from the lien of such
Loan.
d. Binding Obligation. The Loan is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with
its terms, except as such enforceability may be limited by laws affecting
the enforcement of creditors' rights generally.
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<PAGE>
e. No Defenses. The Loan is not subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of the Loan or the exercise of any right
thereunder will not render the Loan unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and no such right of rescission, setoff,
counterclaim or defense has been asserted with respect thereto.
f. Insurance Coverage. The Company has been named as an additional
insured party under any hazard insurance on the property described in the
Loan, to the extent required by the Company's underwriting guidelines. If
upon origination of the Loan, the property securing the Loan was in an area
identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards (and if flood insurance was required
by federal regulation and such flood insurance has been made available in
the locale where the property is located), the property is covered by a
flood insurance policy of the nature and in an amount which is consistent
with the servicing standard set forth in Section 5.02.
g. Combined LTV. The Combined LTV for the Loan is not greater than
100%.
h. Lawful Assignment. The Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer
of the Loan under this Agreement or pursuant to transfers of the
Certificates or Class C Certificates unlawful or render the Loan
unenforceable. The Company has duly executed a valid blanket assignment of
the Loans transferred to the Trust, and has transferred all its right,
title and interest in such Loans, including all rights the Company may have
against the originating lender with respect to Loans originated by a lender
other than the Company, to the Trust. The blanket assignment, any and all
documents executed and delivered by the Company pursuant to Sections
2.01(b) and 2.03(b), and this Agreement each constitutes the legal, valid
and binding obligation of the Company enforceable in accordance with its
respective terms.
i. Compliance with Law. At the date of origination of the Loan, all
requirements of any federal and state laws, rules and regulations
applicable to the Loan, including, without limitation, usury and truth in
lending laws, have been complied with and the Company shall for at least
the period of this Agreement, maintain in its possession, available for the
Trustee's inspection, and shall deliver to the Trustee upon demand,
evidence of compliance with all such requirements.
j. Loan in Force. The Loan has not been satisfied or subordinated in
whole or in part or rescinded, and the real estate securing such Loan has
not been released from the lien of such Loan in whole or in part.
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k. Valid Lien. The Loan has been duly executed and delivered by the
Obligor, and the lien created thereby has been duly recorded, or has been
delivered to the appropriate governmental authority for recording and will
be duly recorded within 180 days, and constitutes a valid and perfected
first, second, third or fourth priority lien on the real estate described
in such Loan.
l. Capacity of Parties. The signature(s) of the Obligor(s) on the Loan
are genuine and all parties to the Loan had full legal capacity to execute
the Loan.
m. Good Title. The Company is the sole owner of the Loan and has the
authority to sell, transfer and assign such Loan to the Trust under the
terms of this Agreement. There has been no assignment, sale or
hypothecation of the Loan by the Company except the usual past
hypothecation of the Loan in connection with the Company's normal banking
transactions in the conduct of its business, which hypothecation terminates
upon sale of the Loan to the Trust. The Company has good and marketable
title to the Loan, free and clear of any encumbrance, equity, loan, pledge,
charge, claim, lien or encumbrance of any type and has full right to
transfer the Loan to the Trust.
n. No Defaults. As of the Cut-off Date or Subsequent Cut-off Date, as
applicable, there was no default, breach, violation or event permitting
acceleration existing under the Loan and no event which, with notice and
the expiration of any grace or cure period, would constitute such a
default, breach, violation or event permitting acceleration under such Loan
(except payment delinquencies permitted by clause (b) above). The Company
has not waived any such default, breach, violation or event permitting
acceleration except payment delinquencies permitted by clause (b) above.
o. Equal Installments. The Loan, unless it is a Step-up Rate Loan, has
a fixed Loan Interest Rate and provides for monthly payments (except, in
the case of a Balloon Loan, for the final monthly payment of such loan)
which fully amortize the loan over its term.
p. Enforceability. Each Loan contains customary and enforceable
provisions so as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
lien provided thereby.
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q. One Original. There is only one original executed Loan, which Loan
has been delivered to the Trustee or its Custodian on or before the Closing
Date or Subsequent Transfer Date if a Subsequent Loan.
r. Genuine Documents. All documents submitted are genuine, and all
other representations as to each Loan, including the List of Loans, are
true and correct. Any copies of documents provided by the Company are
accurate and complete (except that, with respect to each Loan that was
originated by a lender other than the Company, the Company makes such
representation and warranty only to the best of the Company's knowledge).
s. Origination. Each Loan was originated by a home equity lender in
the ordinary course of such lender's business or was originated by the
Company directly.
t. Underwriting Guidelines. Each Loan was originated or purchased in
accordance with the Company's then-current underwriting guidelines.
u. Good Repair. The property described in the Loan is, to the best of
the Company's knowledge, free of damage and in good repair.
v. Qualified Mortgage. The Loan represents a "qualified mortgage"
within the meaning of the REMIC Provisions. The Company represents and
warrants that, either as of (i) the date of origination (within the meaning
of the REMIC Provisions) or (ii) the Closing Date or, if a Subsequent Loan,
the Subsequent Transfer Date, the fair market value of the interest in real
property securing each Loan was not less than 80% of the "adjusted issue
price" (in each case within the meaning of the REMIC Provisions) of such
Loan.
w. Term to Maturity. No Loan shall have an original stated term to
maturity exceeding 360 months.
x. No Adverse Selection. No adverse selection procedures have
been employed in selecting the Loans.
SECTION 3.03. Representations and Warranties Regarding the Loans in the
Aggregate. The Company represents and warrants to the Certificateholders and the
Class C Certificateholders, as of the Closing Date with respect to the Initial
Loans, and as of each Subsequent Transfer Date with respect to the related
Subsequent Loans, that:
a. Amounts. As of the Closing Date, the sum of the Cut-off Date Pool
Principal Balance, plus the Original Pre-Funded Amount, equals at least the
Original Aggregate Certificate Principal Balance. By Cut-off Date Principal
Balance, the Initial
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Loans plus the Subsequent Loans specifically identified as of the Closing
Date represent at least 75% of the Original Aggregate Certificate Principal
Balance.
b. Characteristics.
The Loans have the following characteristics: (i) 100% are secured by
a mortgage, deed of trust or security deed on the related real estate; (ii)
none has a remaining maturity of more than 360 months; (iii) none has a
final scheduled payment date later than August 2029; and (iv) none of the
Initial Loans has a Loan Interest Rate less than 6.789%.
The weighted average (by Scheduled Principal Balance) loan to value
ratio of the Loans as of the Post-Funding Payment Date will not be more
than 100 basis points more than such ratio with respect to the Initial
Loans.
The weighted average (by Scheduled Principal Balance) of the Loan
Interest Rates of the Loans as of the Post-Funding Payment Date will not be
more than 5 basis points less than the weighted average of the Loan
Interest Rates of the Initial Loans. None of the Subsequent Loans will have
a Loan Interest Rate less than 6.50%.
The percentage (by Scheduled Principal Balance) of the Loans as of the
Post-Funding Payment Date which are identified by the Company under its
standard underwriting criteria as "B," "C," and "D" credits will not be
more than 300 basis points, 200 basis points, and 100 basis points,
respectively, more than the percentage of Initial Loans identified as B, C,
and D credits.
The weighted average FICO Score on the Closing Date shall be 612. The
Subsequent Loans will have a weighted average FICO Score of not less than
600. As a result of the purchase of the Subsequent Loans, the percentage of
Loans in the loan pool, by aggregate principal balance, with a FICO Score
less than 620 will not increase by more than 2%.
80% of the Initial Loans will be secured by a first mortgage on the
related real estate, 20% of the Initial Loans will be secured by a second
mortgage on the related real estate and 0.34% of the Initial Loans will be
secured by a third mortgage on the related real estate. As a result of the
purchase of the Subsequent Loans, the percentages of Loans secured by
first, second and third mortgages on the related real estate referred to in
the immediately preceding sentence will not increase by more than 1%.
The Weighted Average Debt Consolidation Percentage with respect to the
Initial Loans as of the Closing Date shall be 31%. The addition of the
Subsequent Loans as of each Subsequent Transfer Date shall not cause the
Weighted Average Debt Consolidation Percentage to increase by more than 2%.
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c. Geographic Concentrations.
By Cut-off Date Principal Balance, 10.30% of the Initial Loans are
secured by property located in California, 6.38% in Ohio, 6.13% in
Michigan, 4.94% in Florida and 4.80% in Illinois. No other state represents
more than 5% of the aggregate Cut-off Date Principal Balances of the
Initial Loans. As a result of the purchase of the Subsequent Loans, the
percentages referred to immediately above in each of California, Ohio,
Michigan, Florida and Illinois will not increase by more than 1%.
No more than 1% of the Loans by Cut-off Date Principal Balance are
secured by property located in an area with the same five-digit zip code.
d. Marking Records. The Company has caused the portions of the
Electronic Ledger relating to the Loans to be clearly and unambiguously
marked to indicate that such Loans constitute part of the Trust and are
owned by the Trust in accordance with the terms of the Trust created
hereunder.
e. [Reserved.]
f. Lender Concentration. No more than 5.0% of the Loans, by Cut-off
Date Principal Balance, were originated by any one lender (other than the
Company).
SECTION 3.04. Representations and Warranties Regarding the Loan Files. The
Company represents and warrants to the Certificateholders and the Class C
Certificateholders that:
a. Possession. On the Closing Date, the Trustee or a Custodian will
have possession of each original Initial Loan and the related Loan File. On
each Subsequent Transfer Date, the Company will have possession of each
original Subsequent Loan being transferred to the Trust on that Subsequent
Transfer Date and the related Loan File. There are and there will be no
custodial agreements or servicing contracts in effect materially and
adversely affecting the rights of the Company to make, or cause to be made,
any delivery required hereunder.
b. Bulk Transfer Laws. The transfer, assignment and conveyance of the
Loans and the Loan Files by the Company pursuant to this Agreement is not
subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction.
SECTION 3.05. Repurchases of Loans for Breach of Representations and
Warranties.
a. Subject to Section 3.06, the Company shall repurchase a Loan, at its
Repurchase Price, not later than 90 days after the day on which the Company, the
Servicer or the Trustee first discovers or should have discovered a breach of a
representation or warranty of the Company set
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forth in Sections 2.03, 3.02, 3.03 or 3.04, or in the Officer's Certificates
delivered pursuant to Sections 2.02(j) or 2.03(b) (vii), that materially and
adversely affects the Trust's, the Certificateholders' or the Class C
Certificateholders' interest in such Loan and which breach has not been cured
within such time; provided, however, that (i) in the event that a party other
than the Company first becomes aware of such breach, such discovering party
shall notify the Company in writing within 5 Business Days of the date of such
discovery and (ii) with respect to any Loan incorrectly described on the List of
Loans with respect to Cut-off Date Principal Balance, which the Company would
otherwise be required to repurchase pursuant to this Section, the Company may,
in lieu of repurchasing such Loan, deposit in the Certificate Account within 90
days from the date of such discovery cash in an amount sufficient to cure such
deficiency or discrepancy. Any such cash so deposited shall be distributed to
Certificateholders and the Class C Certificateholders on the immediately
following Payment Date as a collection of principal or interest on such Loan,
according to the nature of the deficiency or discrepancy. Notwithstanding any
other provision of this Agreement, the obligation of the Company under this
Section shall not terminate upon a Service Transfer pursuant to Article VII.
b. On or prior to the date that is the second anniversary of the Closing
Date, the Company may, at its election, substitute an Eligible Substitute Loan
for a Loan that it is obligated to repurchase pursuant to Section 3.05(a) (such
Loan being referred to as the "Replaced Loan") upon satisfaction of the
following conditions:
(i) the Company shall have conveyed to the Trustee the Loan to be
substituted for the Replaced Loan and the Loan File related to such Loan
and the Company shall have marked the Electronic Ledger indicating that
such Loan constitutes part of the Trust;
(ii) the Loan to be substituted is an Eligible Substitute Loan and the
Company delivers an Officers' Certificate, substantially in the form of
Exhibit J-2 hereto, to the Trustee certifying that such Loan is an Eligible
Substitute Loan;
(iii) the Company shall have delivered to the Trustee evidence of
filing of a UCC-1 financing statement executed by the Company as debtor,
naming the Trustee as secured party and filed in Minnesota, listing such
Loan to be substituted as collateral;
(iv) the Company shall have delivered to the Trustee an executed
assignment to the Trustee on behalf of the Trust in recordable form for the
mortgage securing such Loan to be substituted;
(v) the Company shall have delivered to the Trustee an Opinion of
Counsel (a) to the effect that the substitution of such Loan for such
Replaced Loan will not cause the Master REMIC or Subsidiary REMIC to fail
to qualify as a REMIC at any time under then applicable REMIC Provisions or
cause any "prohibited transaction" that will result in the imposition of a
tax under such REMIC Provisions and (b) to the effect of paragraph 9 of
Exhibit F hereto; and
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<PAGE>
(vi) if the Scheduled Principal Balance of such Replaced Loan is
greater than the Scheduled Principal Balance of the Loan to be substituted,
the Company shall have deposited in the Certificate Account the amount of
such excess and shall have included in the Officers' Certificate required
by clause (ii) above a certification that such deposit has been made.
Upon satisfaction of such conditions, the Trustee shall add such Loan to be
substituted to, and delete such Replaced Loan from, the List of Loans. Such
substitution shall be effected prior to the first Determination Date that occurs
more than 90 days after the Company becomes aware, or should have become aware,
or receives written notice from the Trustee, of the breach referred to in
Section 3.05(a). Promptly after any such substitution of a Loan, the Company
shall give written notice of such substitution to S&P and Fitch.
c. If the Company is required to repurchase a Loan under Section 3.05(a) or
has elected to substitute an Eligible Substitute Loan for a Loan under Section
3.05(b), and if the reason for such repurchase or substitution is that the
Company has failed to deliver to the Trustee the Loan File for the Loan to be
repurchased or substituted for (except in the case of a failure to deliver
evidence of the lien on the related improved property and evidence of due
recording of such mortgage, deed of trust or security deed, if available), then,
notwithstanding the time periods set out in Sections 3.05(a) and 3.05(b), the
Company shall either (i) repurchase such Loan, at its respective Repurchase
Price, within 30 days of the Closing Date, or (ii) substitute an Eligible
Substitute Loan for the Loan within 90 days of the Closing Date.
d. The Company shall defend and indemnify the Trustee, the
Certificateholders, and the Class C Certificateholders against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of any third-party action arising out of any breach of any such
representation and warranty.
SECTION 3.06. No Repurchase Under Certain Circumstances. Notwithstanding
any provision of this Agreement to the contrary, no repurchase or substitution
pursuant to Section 3.05 shall be made unless the Company (at its own expense)
obtains for the Trustee an Opinion of Counsel addressed to the Trustee that any
such repurchase or substitution would not, under the REMIC Provisions, (i) cause
the Master REMIC or Subsidiary REMIC to fail to qualify as a REMIC while any
regular interest in such REMIC is outstanding, (ii) result in a tax on
prohibited transactions within the meaning of Section 860F(a)(2) of the Code or
(iii) constitute a contribution after the startup day subject to tax under
Section 860G(d) of the Code. The Company diligently shall attempt to obtain such
Opinion of Counsel. In the case of a repurchase or deposit pursuant to Section
3.05(a) or 3.05(b), the Company shall, notwithstanding the absence of such
opinion as to the imposition of any tax as the result of such purchase or
deposit, repurchase such Loan or make such deposit and shall guarantee the
payment of such tax by paying to the Trustee the amount of such tax not later
than five Business Days before such tax shall be due and payable to the extent
that amounts previously paid over to and then held by the
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Trustee pursuant to Section 6.06 are insufficient to pay such tax and all other
taxes chargeable under Section 6.06. Pursuant to Section 6.06, the Servicer is
hereby directed to withhold, and shall withhold and pay over to the Trustee, an
amount sufficient to pay such tax and any other taxes imposed on "prohibited
transactions" under Section 860F(a)(i) of the Code or imposed on "contributions
after startup date" under Section 860G(d) of the Code from amounts otherwise
distributable to the Class C Certificateholders. The Servicer shall give notice
to the Trustee at the time of such repurchase of the amounts due from the
Company pursuant to the guarantee of the Company described above and give notice
as to who should receive such payment.
The Trustee shall have no obligation to pay any such amounts pursuant to
this Section other than from moneys provided to it by the Company or from moneys
held in the funds and accounts created under this Agreement. The Trustee shall
be deemed conclusively to have complied with this Section if it follows the
directions of the Company.
In the event any tax that is guaranteed by the Company pursuant to this
Section 3.06 is refunded to the Trust or otherwise is determined not to be
payable, the Company shall be repaid the amount of such refund or that portion
of any guarantee payment made by the Company that is not applied to the payment
of such tax.
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ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
SECTION 4.01. Transfer of Loans.
a. On or prior to the Closing Date, or the Subsequent Transfer Date in the
case of Subsequent Loans, the Company shall deliver the Loan Files to the
Trustee. The Trustee shall maintain the Loan Files at its office or with a duly
appointed Custodian, who shall act as the agent of the Trustee on behalf of the
Certificateholders. The Trustee may release a Loan File to the Servicer pursuant
to Section 5.07. The Company has filed a form UCC-1 financing statement
regarding the sale of the Loans to the Trustee, and shall file continuation
statements in respect of such UCC-1 financing statement as if such financing
statement were necessary to perfect the security interest granted pursuant to
Section 2.01. The Company shall take any other actions necessary to maintain the
perfection of such security interest.
b. If at any time during the term of this Agreement the Company does not
have a long-term senior debt rating of A- or higher from both S&P and Fitch (if
rated by Fitch), (i) the Company shall within 30 days execute and deliver to the
Trustee (if it has not previously done so) endorsements of each Loan and
assignments in recordable form of each mortgage, deed of trust or security deed
securing a Loan, and (ii) the Trustee, at the Company's expense, shall within 60
days file in the appropriate recording offices the assignments to the Trustee on
behalf of the Trust of each mortgage, deed of trust or security deed securing a
Loan; provided, however, that the recording of such assignments shall not be
required if the Trustee receives written confirmation from both S&P and Fitch
that the ratings of the Certificates would not be reduced or withdrawn by the
failure to execute and file such assignments; provided, however, that the
recording of such assignments shall not be required if the Company delivers an
Opinion of Counsel to the effect that such assignment and recordation is not
necessary to effect the assignment to the Trustee of the Company's lien on the
real property securing each Loan.
c. If, as of the Post-Funding Payment Date, the aggregate Scheduled
Principal Balance of Loans secured by real property located in Maryland
("Maryland Loans") exceeds 10% of the Pool Scheduled Principal Balance, the
Company shall, within sixty (60) days, submit to the appropriate recording
offices the assignments to the Trustee on behalf of the Trust of the number of
mortgages, deeds of trust or security deeds required to reduce to less than 10%
of the Pool Scheduled Principal Balance the aggregate Scheduled Principal
Balance of Maryland Loans as to which such assignments are not recorded.
SECTION 4.02. Costs and Expenses. The Servicer agrees to pay all reasonable
costs and disbursements in connection with the vesting (including the perfection
and the maintenance of perfection, as against all third parties) in the Trust of
all right, title and interest in and to the
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Loans (including, without limitation, the mortgage or deed of trust on the
related real estate granted thereby).
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ARTICLE V
SERVICING OF LOANS
SECTION 5.01. Responsibility for Loan Administration. The Servicer will
have the sole obligation to manage, administer, service and make collections on
the Loans and perform or cause to be performed all contractual and customary
undertakings of the holder of the Loans to the Obligor. The Company, if it is
the Servicer, may delegate some or all of its servicing duties to a wholly owned
subsidiary of the Company, for so long as such subsidiary remains, directly or
indirectly, a wholly owned subsidiary of the Company. Notwithstanding any such
delegation the Company shall retain all of the rights and obligations of the
Servicer hereunder. The Trustee, at the request of a Servicing Officer, shall
furnish the Servicer with any powers of attorney or other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. The Company is hereby appointed the Servicer until such time
as any Service Transfer shall be effected under Article VII.
SECTION 5.02. Standard of Care. In managing, administering, servicing and
making collections on the Loans pursuant to this Agreement, the Servicer will
exercise that degree of skill and care consistent with the highest degree of
skill and care that the Servicer exercises with respect to similar loans
(including manufactured housing contracts) serviced by the Servicer; provided,
however, that such degree of skill and care shall be at least as favorable as
the degree of skill and care generally applied by prudent servicers of home
equity loans for prudent institutional investors.
SECTION 5.03. Records. The Servicer shall, during the period it is servicer
hereunder, maintain such books of account and other records as will enable the
Trustee to determine the status of each Loan.
SECTION 5.04. Inspection.
a. At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business hours
to the Servicer's records relating to the Loans, which have not previously been
provided to the Trust, and will cause its personnel to assist in any examination
of such records by the Trustee. The examination referred to in this Section will
be conducted in a manner which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations. Without
otherwise limiting the scope of the examination the Trustee may make, the
Trustee may, using generally accepted audit procedures, verify the status of
each Loan and review the Electronic Ledger and records relating thereto for
conformity to Monthly Reports prepared pursuant to Article VI and compliance
with the standards represented to exist as to each Loan in this Agreement.
b. At all times during the term hereof, the Servicer shall keep available a
copy of the List of Loans at its principal executive office for inspection by
Certificateholders.
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c. A Certificateholder holding Certificates representing in the aggregate
at least 5% of the Aggregate Certificate Principal Balance shall have the rights
of inspection afforded to the Trustee pursuant to this Section 5.04.
SECTION 5.05. Certificate Account.
a. On or before the Closing Date, the Company shall establish the
Certificate Account on behalf of the Trust, which shall be an Eligible Account.
The Servicer shall pay into the Certificate Account, as promptly as practicable
(but not later than the next Business Day) following receipt thereof, all
amounts received with respect to the Loans, other than extension fees and
assumption fees, which fees shall be retained by the Servicer as compensation
for servicing the Loans, and other than Liquidation Expenses permitted by
Section 5.08. The Trustee shall hold all amounts paid into the Certificate
Account under this Agreement in trust for the Trustee, the Certificateholders
and the Class C Certificateholders until payment of any such amounts is
authorized under this Agreement. Only the Trustee may withdraw funds from the
Certificate Account.
b. If the Servicer so directs, the institution maintaining the Certificate
Account shall, in the name of the Trustee in its capacity as such, invest the
amounts in the Certificate Account in Eligible Investments that mature not later
than one Business Day prior to the next succeeding Payment Date. Any investment
of funds in the Certificate Account shall be made in Eligible Investments held
by a financial institution in accordance with the following requirements: (1)
all Eligible Investments shall be held in an account with such financial
institution in the name of the Trustee, and the agreement governing such account
shall be governed by the laws of the State of Minnesota, (2) with respect to
securities held in such account, such securities shall be (i) certificated
securities (as such term is used in N.Y. U.C.C. ss. 8-102(4)(i)), securities
deemed to be certificated securities under applicable regulations of the United
States government, or uncertificated securities issued by an issuer organized
under the laws of the State of New York or the State of Delaware, (ii) either
(A) in the possession of such institution, (B) in the possession of a clearing
corporation (as such term is used in Minn. Stat. ss. 8-102(5)) in the State of
New York, registered in the name of such clearing corporation or its nominee,
not endorsed for collection or surrender or any other purpose not involving
transfer, not containing any evidence of a right or interest inconsistent with
the Trustee's security interest therein, and held by such clearing corporation
in an account of such institution, (C) held in an account of such institution
with the Federal Reserve Bank of New York or the Federal Reserve Bank of
Minneapolis, or (D) in the case of uncertificated securities, issued in the name
of such institution, and (iii) identified, by book entry or otherwise, as held
for the account of, or pledged to, the Trustee on the records of such
institution, and such institution shall have sent the Trustee a confirmation
thereof, and (3) with respect to repurchase obligations held in such account,
such repurchase obligations shall be identified by such institution, by book
entry or otherwise, as held for the account of, or pledged to, the Trustee on
the records of such institution, and the related securities shall be held in
accordance with the requirements of clause (2) above. Once such funds are
invested, such institution shall not change the investment of such funds. All
income and gain from such
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investments shall be added to the Certificate Account and distributed on such
Payment Date pursuant to Section 8.04(b). Losses, if any, realized on amounts in
the Certificate Account invested pursuant to this paragraph shall first be
credited against undistributed investment earnings on amounts in the Certificate
Account invested pursuant to this paragraph, and shall thereafter be deemed to
reduce the amount on deposit in the Certificate Account and otherwise available
for distribution to Certificateholders and the Class C Certificateholders
pursuant to Section 8.01. The Company, the Servicer and the Trustee shall in no
way be liable for losses on amounts invested in accordance with the provisions
hereof. Funds in the Certificate Account not so invested must be insured to the
extent permitted by law by the Federal Deposit Insurance Corporation. "Eligible
Investments" are any of the following:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Trustee or any Affiliate of the
Trustee, acting in its commercial capacity) incorporated under the laws of
the United States of America or any state thereof and subject to
supervision and examination by federal and/or state authorities, so long
as, at the time of such investment or contractual commitment providing for
such investment, the commercial paper or other short-term debt obligations
of such depository institution or trust company are rated at least A-1+ by
S&P and F-1+ by Fitch (if rated by Fitch) and (B) any other demand or time
deposit or certificate of deposit which is fully insured by the Federal
Deposit Insurance Corporation;
(iii) shares of an investment company registered under the Investment
Company Act of 1940, whose shares are registered under the Securities Act
of 1933 and have a rating of AAA by both S&P and Fitch, and whose only
investments are in securities described in clauses (i) and (ii) above;
(iv) repurchase obligations with respect to (A) any security described
in clause (i) above or (B) any other security issued or guaranteed by an
agency or instrumentality of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which have a credit rating of at least AA from both S&P
and Fitch (if rated by Fitch) at the time of such investment; provided,
however, that securities issued by any particular corporation will not be
Eligible Investments to the extent that investment therein will cause the
then outstanding principal amount of securities issued by such corporation
and
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held as part of the corpus of the Trust to exceed 10% of amounts held in
the Certificate Account;
(vi) commercial paper having a rating of at least A-1+ from S&P and at
least F-1+ from Fitch (if rated by Fitch) at the time of such investment;
and
(vii) other obligations or securities that are acceptable to both S&P
and Fitch as an Eligible Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by both S&P and Fitch below
the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by both S&P and Fitch, as evidenced in
writing;
provided that any such investment must constitute a "cash flow investment"
within the meaning of the REMIC Provisions.
The Trustee may trade with itself or an Affiliate in the purchase or sale
of such Eligible Investments.
c. If at any time the Trustee receives notice (from S&P, Fitch, the
Servicer or otherwise) that the Certificate Account has ceased to be an Eligible
Account, the Trustee shall, as soon as practicable but in no event later than
five Business Days of the Trustee's receipt of such notice, transfer the
Certificate Account and all funds and Eligible Investments therein to an
Eligible Account. Following any such transfer, the Trustee shall notify S&P,
Fitch and the Servicer of the location of the Certificate Account.
SECTION 5.06. Enforcement.
a. The Servicer shall, consistent with customary servicing procedures, act
with respect to the Loans in such manner as will maximize the receipt of
principal and interest on such Loans and Liquidation Proceeds with respect to
Liquidated Loans.
b. In accordance with the standard of care specified in Section 5.02, the
Servicer may, in its own name, if possible, or as agent for the Trust, commence
proceedings for the foreclosure of any subject real estate, or may take such
other steps that in the Servicer's reasonable judgment will maximize Liquidation
Proceeds with respect to the Loan, including, for example, the sale of the Loan
to a third party for foreclosure or enforcement and, in the case of any default
on a related prior mortgage loan, the advancing of funds to correct such default
and the advancing of funds to pay off a related prior mortgage loan, which
advances are Liquidation Expenses that will be reimbursed to the Servicer out of
related Liquidation Proceeds before the related Net Liquidation Proceeds are
paid to Certificateholders and the Class C Certificateholders. The Servicer
shall also deposit in the Certificate Account any Net Liquidation Proceeds
received in connection with any Loan which became a Liquidated Loan in a prior
Due Period.
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c. The Servicer may sue to enforce or collect upon Loans, in its own name,
if possible, or as agent for the Trust. If the Servicer elects to commence a
legal proceeding to enforce a Loan, the act of commencement shall be deemed to
be an automatic assignment of the Loan to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Loan on the ground that it is not a
real party in interest or a holder entitled to enforce the Loan, the Trustee on
behalf of the Trust shall, at the Servicer's expense, take such steps as the
Servicer deems necessary to enforce the Loan, including bringing suit in its
name or the names of the Certificateholders and the Class C Certificateholders.
d. The Servicer may grant to the Obligor on any Loan any rebate, refund or
adjustment out of the Certificate Account that the Servicer in good faith
believes is required because of the Principal Prepayment in Full of the Loan.
The Servicer will not permit any rescission or cancellation of any Loan.
e. The Servicer shall enforce any due-on-sale clause in a Loan if such
enforcement is called for under its then current servicing policies for
obligations similar to the Loans, provided that such enforcement is permitted by
applicable law and will not adversely affect any applicable insurance policy. If
an assumption of a Loan is permitted by the Servicer, upon conveyance of the
related property the Servicer shall use its best efforts to obtain an assumption
agreement in connection therewith.
f. Any provision of this Agreement to the contrary notwithstanding, the
Servicer shall not agree to the modification or waiver of any provision of a
Loan at a time when such Loan is not in default or such default is not
reasonably foreseeable, if such modification or waiver would both (i) be treated
as a taxable exchange under Section 1001 of the Code or any proposed, temporary
or final Treasury Regulations promulgated thereunder and (ii) cause the Trust to
fail to qualify as a REMIC or cause the imposition of any tax on "prohibited
transactions" or "contributions after the startup date" under the REMIC
Provisions.
SECTION 5.07. Trustee to Cooperate.
a. Upon payment in full on any Loan, the Servicer will notify the Trustee
and the Company (if the Company is not the Servicer) on the next succeeding
Payment Date by certification of a Servicing Officer (which certification shall
include a statement to the effect that all amounts received in connection with
such payments which are required to be deposited in the Certificate Account
pursuant to Section 5.05 have been so deposited) and shall request delivery of
the Loan and Loan File to the Servicer. Upon receipt of such delivery and
request, the Trustee shall promptly release or cause to be released such Loan
and Loan File to the Servicer. Upon receipt of such Loan and Loan File, each of
the Company (if different from the Servicer) and the Servicer is authorized to
execute an instrument in satisfaction of such Loan and to do such other acts and
execute such other documents as the Servicer deems necessary to discharge the
Obligor thereunder and eliminate any lien on the related real estate. The
Servicer shall determine when a
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Loan has been paid in full; provided that, to the extent that insufficient
payments are received on a Loan credited by the Servicer as prepaid or paid in
full and satisfied, the shortfall shall be paid by the Servicer out of its own
funds, without any right of reimbursement therefor (except from additional
amounts recovered from the related Obligor or otherwise in respect of such
Loan), and deposited in the Certificate Account.
b. From time to time as appropriate for servicing and foreclosing in
connection with a Loan, the Trustee shall, upon written request of a Servicing
Officer and delivery to the Trustee of a receipt signed by such Servicing
Officer, cause the original Loan and the related Loan File to be released to the
Servicer and shall execute such documents as the Servicer shall deem necessary
to the prosecution of any such proceedings. The Trustee shall stamp the face of
each such Loan to be released to the Servicer with a notation that the Loan has
been assigned to the Trustee. Upon request of a Servicing Officer, the Trustee
shall perform such other acts as reasonably requested by the Servicer and
otherwise cooperate with the Servicer in enforcement of the Certificateholders'
and Class C Certificateholders' rights and remedies with respect to Loans.
c. The Servicer's receipt of a Loan and/or Loan File shall obligate the
Servicer to return the original Loan and the related Loan File to the Trustee
when its need by the Servicer has ceased unless the Loan shall be liquidated or
repurchased or replaced as described in Section 3.05 or 8.06.
SECTION 5.08. Costs and Expenses. Except as provided in Section 8.04(b) for
the reimbursement of Advances, all costs and expenses incurred by the Servicer
in carrying out its duties hereunder (including payment of the Trustee's fees
pursuant to Section 11.06, fees and expenses of accountants and payments of all
fees and expenses incurred in connection with the enforcement of Loans
(including enforcement of Loans and foreclosures upon real estate securing any
such Loans) and all other fees and expenses not expressly stated hereunder to be
for the account of the Trust) shall be paid by the Servicer and the Servicer
shall not be entitled to reimbursement hereunder, except that the Servicer shall
be reimbursed out of the Liquidation Proceeds of a Liquidated Loan for customary
out-of-pocket Liquidation Expenses incurred by it. The Servicer shall not incur
such Liquidation Expenses unless it determines in its good faith business
judgment that incurring such expenses will increase the Net Liquidation Proceeds
on the related Loan.
SECTION 5.09. Maintenance of Insurance. The Servicer shall at all times
keep in force a policy or policies of insurance covering errors and omissions
for failure to maintain insurance as required by this Agreement, and a fidelity
bond. Such policy or policies and such fidelity bond shall be in such form and
amount as is generally customary among persons who service a portfolio of home
equity loans having an aggregate principal amount of $10,000,000 or more, and
which are generally regarded as servicers acceptable to institutional investors.
The Servicer shall cause to be maintained with respect to the real property
securing a Loan hazard insurance (excluding flood insurance coverage) if such
Loan is secured by a first priority mortgage, deed of trust or security deed or
the initial principal balance of such Loan exceeds $30,000.
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SECTION 5.10. Merger or Consolidation of Servicer. Any Person into which
the Servicer may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Servicer shall be a party shall be the successor of the Servicer hereunder,
provided such Person shall be an Eligible Servicer, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. The Servicer shall promptly
notify S&P and Fitch in the event it is a party to any merger, conversion or
consolidation.
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ARTICLE VI
REPORTS AND TAX MATTERS
SECTION 6.01. Monthly Reports. No later than one Business Day following
each Determination Date, the Servicer shall deliver to the Trustee, S&P and
Fitch a Monthly Report, substantially in the form of Exhibit M hereto.
SECTION 6.02. Officer's Certificate. Each Monthly Report pursuant to
Section 6.01 shall be accompanied by a certificate of a Servicing Officer
substantially in the form of Exhibit H, certifying the accuracy of the Monthly
Report and that no Event of Termination or event that with notice or lapse of
time or both would become an Event of Termination has occurred, or if such event
has occurred and is continuing, specifying the event and its status.
SECTION 6.03. Other Data. In addition, the Company and (if different from
the Company) the Servicer shall, on request of the Trustee, S&P or Fitch,
furnish the Trustee, S&P and/or Fitch such underlying data as may be reasonably
requested.
SECTION 6.04. Annual Report of Accountants. On or before May 1 of each
year, commencing May 1, 2000, the Servicer at its expense shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to issue to the Servicer a report that such firm
has examined selected documents, records and management's assertions relating to
loans serviced by the Servicer and stating that, on the basis of such
examination, such servicing has been conducted in compliance with the minimum
servicing standards identified in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers, or any successor
uniform program, except for such significant exceptions or errors in records
that, in the opinion of such firm, generally accepted attestation standards
requires it to report.
SECTION 6.05. Statements to Certificateholders and the Class C
Certificateholders.
a. The Servicer shall prepare and furnish to the Trustee the statements
specified below relating to the Class A Certificates, the Class M Certificates
and the Class B Certificates on or before the third Business Day next preceding
each Payment Date.
b. Concurrently with each distribution to Certificateholders, the Trustee
shall, so long as it has received the Monthly Report from the Servicer, forward
or cause to be forwarded by mail to each Holder of a Class A Certificate and (if
the Company is not the Servicer) the Company a statement setting forth the
following:
(i) the amount of such distribution to Holders of each Class of Class
A Certificates allocable to interest, separately identifying any Unpaid
Class A Interest
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Shortfall included in such distribution and any remaining Unpaid Class A
Interest Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of each Class of Class
A Certificates allocable to principal, separately identifying (A) the
aggregate amount of any Principal Prepayments included therein, and (B)
that portion of any such distribution to Class A-6 Certificateholders
constituting Class A-6 Lockout Pro Rata Distribution Amount;
(iii) the amount, if any, by which the Class A Formula Distribution
Amount for such Payment Date exceeds the Class A Distribution Amount for
such Payment Date;
(iv) the Class A-1 Principal Balance, the Class A-2 Principal Balance,
the Class A-3 Principal Balance, the Class A-4 Principal Balance, the Class
A-5 Principal Balance, the Class A-6 Principal Balance, and the Class A-7
IO Notional Principal Amount after giving effect to the distribution of
principal on such Payment Date;
(v) the Pool Scheduled Principal Balance for such Payment Date;
(vi) the Senior Percentage and the Class A-6 Lockout Percentage for
such Payment Date;
(vii) the Pool Factor;
(viii) the number and aggregate principal balances of the Loans,
identifying separately the Loans delinquent (a) 30-59 days and (b) 60 or
more days;
(ix) the Class B Principal Balance Test (as set forth in Exhibit M
hereto);
(x) the Class B Principal Distribution Test (as set forth in Exhibit M
hereto);
(xi) the number of Liquidated Loans, identifying such Loans and the
Net Liquidation Loss on such Loans; and
(xii) the Pre-Funded Amount for such Payment Date.
The Trustee and the Servicer shall, if any Certificateholder, Class C
Certificateholder or Underwriter inquires by telephone, provide the information
contained in the most recent Monthly Report.
In the case of information furnished pursuant to clauses (i) through (iv)
above, the amounts shall be expressed as a dollar amount per Class A Certificate
with a 1% Percentage Interest or per $1,000 denomination of Class A Certificate.
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Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class A Certificate a statement
containing the information with respect to interest accrued and principal paid
on its Class A Certificates during such calendar year. Such obligation of the
Certificate Registrar shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Certificate
Registrar pursuant to any requirements of the Code as from time to time in
force.
c. On each Payment Date, the Trustee shall forward or cause to be forwarded
by mail to each Holder of a Class M-1 Certificate a copy of the monthly
statement forwarded to the Holders of Class A Certificates on such Payment Date.
The Servicer shall also furnish to the Trustee, which shall forward such
information to the Class M-1 Certificateholders as part of their monthly
statement, the following information:
(i) the amount of such distribution to Holders of Class M-1
Certificates allocable to interest, separately identifying any Unpaid Class
M-1 Interest Shortfall included in such distribution and any remaining
Unpaid Class M-1 Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class M-1
Certificates allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the Class M-1 Formula Distribution
Amount for such Payment Date exceeds the Class M-1 Distribution Amount for
such Payment Date;
(iv) the Class M-1 Principal Balance after giving effect to the
distribution of principal on such Payment Date;
(v) the Unpaid Class M-1 Liquidation Loss Interest Shortfall after
giving effect to any distribution on such Payment Date pursuant to Section
8.04(b)(10); and
(vi) the information set forth in clauses (v) through (xii) of Section
6.05(c).
In the case of the information in clauses (i) through (v) above, the
amounts shall be expressed as a dollar amount per Class M-1 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class M-1 Certificate.
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class M-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof
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during which such Person was the Holder of a Class M-1 Certificate. Such
obligation of the Certificate Registrar shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Certificate Registrar pursuant to any requirements of the Code as from time to
time in force.
d. On each Payment Date, the Trustee shall forward or cause to be forwarded
by mail to each Holder of a Class M-2 Certificate a copy of the monthly
statements forwarded to the Holders of Class A and Class M-1 Certificates on
such Payment Date. The Servicer shall also furnish to the Trustee, which shall
forward such information to the Class M-2 Certificateholders as part of their
monthly statement, the following information:
(i) the amount of such distribution to Holders of Class M-2
Certificates allocable to interest, separately identifying any Unpaid Class
M-2 Interest Shortfall included in such distribution and any remaining
Unpaid Class M-2 Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class M-2
Certificates allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the Class M-2 Formula Distribution
Amount for such Payment Date exceeds the Class M-2 Distribution Amount for
such Payment Date;
(iv) the Class M-2 Principal Balance after giving effect to the
distribution of principal on such Payment Date;
(v) the Unpaid Class M-2 Liquidation Loss Interest Shortfall, after
giving effect to any distribution on such Payment Date pursuant to Section
8.04(b)(11); and
(vi) the information set forth in clauses (v) through (xii) of Section
6.05(c).
In the case of the information in clauses (i) through (v) above, the
amounts shall be expressed as a dollar amount per Class M-2 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class M-2 Certificate.
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class M-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class M-2 Certificate. Such obligation of
the Certificate Registrar shall be deemed to have been satisfied to the extent
that substantially
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comparable information shall be provided by the Certificate Registrar pursuant
to any requirements of the Code as from time to time in force.
e. On each Payment Date, the Trustee shall forward or cause to be forwarded
by mail to each Holder of a Class B-1 Certificate a copy of the monthly
statements forwarded to the Holders of Class A and Class M Certificates on such
Payment Date. The Servicer shall also furnish to the Trustee, which shall
forward such information to the Class B-1 Certificateholders as part of their
monthly statement, the following information:
(i) the amount of such distribution to Holders of Class B-1
Certificates allocable to interest, separately identifying any Unpaid Class
B-1 Interest Shortfall included in such distribution and any remaining
Unpaid Class B-1 Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class B-1
Certificates allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the Class B-1 Formula Distribution
Amount for such Payment Date exceeds the Class B-1 Distribution Amount for
such Payment Date;
(iv) the Class B-1 Principal Balance after giving effect to the
distribution of principal on such Payment Date;
(v) the Unpaid Class B-1 Liquidation Loss Interest Shortfall, after
giving effect to any distribution on such Payment Date pursuant to Section
8.04(b)(12);
(vi) the Class B Percentage for such Payment Date; and
(vii) the information set forth in clauses (v) through (xii) of
Section 6.05(c).
In the case of the information in clauses (i) through (v) above, the
amounts shall be expressed as a dollar amount per Class B-1 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class B-1 Certificate.
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class B-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class B-1 Certificate. Such obligation of
the Certificate Registrar shall be deemed to have been satisfied to the extent
that substantially comparable
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information shall be provided by the Certificate Registrar pursuant to any
requirements of the Code as from time to time in force.
f. On each Payment Date, the Trustee shall forward or cause to be forwarded
by mail to each Holder of a Class B-2 Certificate a copy of the monthly
statements forwarded to the Holders of Class A, Class M and Class B-1
Certificates on such Payment Date. The Servicer shall also furnish to the
Trustee, which shall forward such information to the Class B-2
Certificateholders as part of their monthly statement, the following
information:
(i) the amount of such distribution to Holders of Class B-2
Certificates allocable to interest, separately identifying any Unpaid Class
B-2 Interest Shortfall included in such distribution and any remaining
Unpaid Class B-2 Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class B-2
Certificates allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the sum of the Class B-2 Formula
Distribution Amount and the Class B-2 Liquidation Loss Principal Amount, if
any, for such Payment Date exceeds the Class B-2 Distribution Amount for
such Payment Date;
(iv) the Class B-2 Principal Balance after giving effect to the
distribution of principal on such Payment Date;
(v) the Class B Percentage for such Payment Date; and
(vi) the information set forth in clauses (v) through (xii) of Section
6.05(c).
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class B-2 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class B-2 Certificate.
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class B-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class B-2 Certificate. Such obligation of
the Certificate Registrar shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Certificate
Registrar pursuant to any requirements of the Code as from time to time in
force.
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g. Copies of all reports and statements provided to the Trustee for the
Certificateholders shall also be provided to S&P, Fitch and the Class C
Certificateholders.
SECTION 6.06. Payment of Taxes. The Servicer shall be responsible for and
agrees to prepare, make and timely file all federal, state, local or other tax
returns, information statements and other returns and documents of every kind
and nature whatsoever required to be made or filed by or on behalf of the Trust
pursuant to the Code and other applicable tax laws and regulations. Each such
return, statement and document shall, to the extent required by the Code or
other applicable law and at the request of the Servicer, be signed on behalf of
the Trust by the Trustee. The Trustee shall have no responsibility whatsoever
for the accuracy or completeness of any such return, statement or document. The
Servicer agrees to indemnify the Trustee and hold it harmless for, from, against
and in respect to any and all liability, loss, damage and expense which may be
incurred by the Trustee based upon or as a result of the Trustee's execution of
any and all such tax returns, statements and documents. The Servicer, if and for
so long as it is a Class C Certificateholder, shall be designated the "tax
matters person" on behalf of the Trust in the same manner as a partnership may
designate a "tax matters partner," as such term is defined in Section 6231(a)(7)
of the Code. To the extent permitted by the REMIC Provisions, any subsequent
holder of the Class C Certificate, by acceptance thereof, irrevocably designates
and appoints the Servicer as its agent to perform the responsibilities of the
"tax matters person" on behalf of the Trust if, and during such time as, the
Servicer is not the holder of the Class C Certificates. The Servicer may, at its
expense, retain such outside assistance as it deems necessary in the performance
of its obligations under this paragraph. The Servicer shall provide to the
Internal Revenue Service the name, title, address and telephone number of the
person who will serve as the representative of the REMIC.
Each of the Holders of the Certificates or the Class C Certificates, by
acceptance thereof, agrees to file tax returns consistent with and in accordance
with any elections, decisions or other reports made or filed with regard to
federal, state or local taxes on behalf of the Trust. The Servicer, as tax
matters person or as agent for the tax matters person, shall represent the Trust
in connection with all examinations of the Trust's affairs by tax authorities,
including resulting administrative and judicial proceedings. Each of the Holders
of the Certificates and Class C Certificates, by acceptance thereof, agrees to
cooperate with the Servicer in such matters and to do or refrain from doing any
or all things reasonably required by the Servicer to conduct such proceedings,
provided that no such action shall be required by the Servicer of any
Certificateholder that would entail unnecessary or unreasonable expenses for
such Certificateholder in the performance of such action.
The Class C Master Certificateholders and Class C Subsidiary
Certificateholders shall pay, on behalf of the Trust, any foreign, federal,
state or local income, property, excise, sales, receipts or any other similar or
related taxes or charges which may be imposed upon the Master REMIC or
Subsidiary REMIC, respectively, as a REMIC or otherwise and shall, to the extent
provided in Section 10.06, be entitled to be reimbursed out of the Certificate
Account or, if such tax or charge results from a failure by the Trustee, the
Company or any Servicer to comply with the provisions of Section 2.04 or 3.06,
or a failure by any Servicer to comply with
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the provisions of this Section 6.06, the Trustee, the Company or such Servicer,
as the case may be, shall indemnify the Class C Certificateholders for the
payment of any such tax or charge. The Trustee shall be entitled to withhold
from amounts otherwise distributable to the Class C Certificateholders any taxes
or charges payable by the Class C Certificateholders hereunder.
In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the Company shall provide to the Internal
Revenue Service and the persons specified in Sections 860(E)(e)(5) and (6) of
the Code all information necessary for the application of Section 860E(e) and
any other applicable provision of the Code with respect to the transfer of the
Class C Certificate to such disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class C Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent required
by the REMIC Provisions, the Company shall, upon the written request of persons
designated in Section 860E(e)(5) of the Code, furnish to such requesting party
and the Internal Revenue Service information sufficient to compute the present
value of anticipated excess inclusions within 60 days of the receipt of such
written request.
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ARTICLE VII
SERVICE TRANSFER
SECTION 7.01. Events of Termination. "Event of Termination" means the
occurrence of any of the following:
a. Any failure by the Servicer to make any payment or deposit required
to be made hereunder (including an Advance) and the continuance of such
failure for a period of four Business Days;
b. Failure on the Servicer's part to observe or perform in any
material respect any covenant or agreement in this Agreement (other than a
covenant or agreement which is elsewhere in this Section specifically dealt
with) which continues unremedied for 30 days;
c. Any assignment by the Servicer of its duties or rights hereunder
except as specifically permitted hereunder, or any attempt to make such an
assignment;
d. A court having jurisdiction in the premises shall have entered a
decree or order for relief in respect of the Servicer in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Servicer, as
the case may be, or for any substantial liquidation of its affairs;
e. The Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian or sequestrator (or other similar official) of the
Servicer or for any substantial part of its property, or shall have made
any general assignment for the benefit of its creditors, or shall have
failed to, or admitted in writing its inability to, pay its debts as they
become due, or shall have taken any corporate action in furtherance of the
foregoing;
f. The failure of the Servicer to be an Eligible Servicer; or
g. If the Company is the Servicer, the Company's servicing rights
under its master seller-servicer agreement with GNMA are terminated by
GNMA.
SECTION 7.02. Transfer. If an Event of Termination has occurred and is
continuing, either the Trustee or Certificateholders, in the aggregate,
representing 25% or more of the Aggregate Certificate Principal Balance, by
notice in writing to the Servicer (and to the Trustee if
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given by the Certificateholders) may terminate all (but not less than all) of
the Servicer's management, administrative, servicing and collection functions
(such termination being herein called a "Service Transfer"). On receipt of such
notice (or, if later, on a date designated therein), all authority and power of
the Servicer under this Agreement, whether with respect to the Loans, the Loan
Files or otherwise (except with respect to the Certificate Account, the transfer
of which shall be governed by Section 7.06), shall pass to and be vested in the
Trustee pursuant to and under this Section 7.02; and, without limitation, the
Trustee is authorized and empowered to execute and deliver on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do any and all acts or things necessary or appropriate to
effect the purposes of such notice of termination. The Trustee shall cause all
assignments of mortgages, deeds of trust or security deeds securing the Loans to
be duly recorded. Each of the Company and the Servicer agrees to cooperate with
the Trustee in effecting the termination of the responsibilities and rights of
the Servicer hereunder, including, without limitation, the transfer to the
Trustee for administration by it of all cash amounts which shall at the time be
held by the Servicer for deposit, or have been deposited by the Servicer, in the
Certificate Account, or for its own account in connection with its services
hereafter or thereafter received with respect to the Loans. The Servicer shall
transfer to the new servicer (i) the Servicer's records relating to the Loans in
such electronic form as the new servicer may reasonably request and (ii) any
Loan Files in the Servicer's possession.
SECTION 7.03. Trustee to Act; Appointment of Successor. On and after the
time the Servicer receives a notice of termination pursuant to Section 7.02, the
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof, and
the Servicer shall be relieved of such responsibilities, duties and liabilities
arising after such Service Transfer; provided, however, that (i) the Trustee
will not assume any obligations of the Company pursuant to Section 3.05, and
(ii) the Trustee shall not be liable for any acts or omissions of the Servicer
occurring prior to such Service Transfer or for any breach by the Servicer of
any of its obligations contained herein or in any related document or agreement.
As compensation therefor, the Trustee shall be entitled to receive reasonable
compensation out of the Monthly Servicing Fee. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint, or petition a court of competent jurisdiction to
appoint, an Eligible Servicer 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. Pending appointment of a successor to the Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Loans as it and such successor
shall agree; provided, however, that no such monthly compensation shall, without
the written consent of 100% of the Certificateholders, exceed the Monthly
Servicing Fee. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
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SECTION 7.04. Notification to Certificateholders and Class C
Certificateholders.
a. Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, to S&P, to Fitch, to
the Certificateholders and to the Class C Certificateholders at their respective
addresses appearing on the Certificate Register.
b. Within 10 days following any termination or appointment of a successor
to the Servicer pursuant to this Article VII, the Trustee shall give written
notice thereof to S&P, to Fitch, to the Certificateholders and to the Class C
Certificateholders at their respective addresses appearing on the Certificate
Register.
SECTION 7.05. Effect of Transfer.
a. After the Service Transfer, the Trustee or new Servicer shall notify
Obligors to make payments directly to the new Servicer that are due under the
Loans after the effective date of the Service Transfer.
b. After the Service Transfer, the replaced Servicer shall have no further
obligations with respect to the management, administration, servicing or
collection of the Loans and the new Servicer shall have all of such obligations,
except that the replaced Servicer will transmit or cause to be transmitted
directly to the new Servicer for its own account, promptly on receipt and in the
same form in which received, any amounts (properly endorsed where required for
the new Servicer to collect them) received as payments upon or otherwise in
connection with the Loans.
c. A Service Transfer shall not affect the rights and duties of the parties
hereunder (including but not limited to the indemnities of the Servicer and the
Company pursuant to Article X and Sections 3.05, 11.06 and 11.12(f)) other than
those relating to the management, administration, servicing or collection of the
Loans after the Service Transfer.
SECTION 7.06. Transfer of Certificate Account. Notwithstanding the
provisions of Section 7.02, if the Certificate Account shall be maintained with
the Servicer and an Event of Termination shall occur and be continuing, the
Servicer shall, after five days' written notice from the Trustee, or in any
event within ten days after the occurrence of the Event of Termination,
establish a new account or accounts in trust for the Certificateholders and the
Class C Certificateholders conforming with the requirements of this Agreement at
the corporate trust department of the Trustee or with an institution other than
the Servicer and promptly cause the Trustee to transfer all funds in the
Certificate Account to such new account, which shall thereafter be deemed the
Certificate Account for the purposes hereof.
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ARTICLE VIII
PAYMENTS
SECTION 8.01. Monthly Payments.
a. Subject to the terms of this Article VIII, each Holder of a Certificate
or Class C Certificate as of a Record Date shall be paid on the next succeeding
Payment Date by check mailed to such Certificateholder or Class C
Certificateholder at the address for such Certificateholder or Class C
Certificateholder appearing on the Certificate Register (or, if such
Certificateholder holds Certificates of a Class with an aggregate Percentage
Interest of at least 5% of such Class and so requests, by wire transfer pursuant
to instructions delivered to the Trustee at least 10 days prior to such Payment
Date), the sum equal to such Certificateholder's or Class C Certificateholder's
Percentage Interest 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 IO Distribution Amount, the Class M-1
Distribution Amount, the Class M-2 Distribution Amount, the Class B-1
Distribution Amount, the Class B-2 Distribution Amount, any Class B-2 Guaranty
Payment or the Class C Master Distribution Amount, as applicable. Final payment
of any Certificate or a Class C Certificate shall be made only upon presentation
and surrender of such Certificate or Class C Certificate at the office or agency
of the Paying Agent.
b. Each distribution with respect to a Book-Entry Certificate shall be paid
to the Depository, which shall credit the amount of such distribution to the
accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Book-Entry Certificates. Neither the Trustee, the Certificate Registrar nor
the Company shall have any responsibility therefor except as otherwise provided
by applicable law. To the extent applicable and not contrary to the rules of the
Depository, the Trustee shall comply with the provisions of the form of the
Certificates as set forth in Exhibits A through C hereto, and the Class C
Certificates as set forth in Exhibit I hereto.
c. The Trustee shall either act as the paying agent or appoint an Eligible
Institution to be the paying agent (in either such case, the "Paying Agent") to
make the payments to the Certificateholders and the Class C Certificateholders
required hereunder. The Trustee's corporate trust operations department, with an
office at 180 East Fifth Street, Third Floor, St. Paul, Minnesota 55101,
Attention: Tamara Schultz-Fugh, shall initially act as Paying Agent. The Trustee
shall require the Paying Agent (if other than the Trustee) to agree in writing
that all amounts held by the Paying Agent for payment hereunder will be held in
trust for the benefit of
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the Certificateholders and the Class C Certificateholders and that it will
notify the Trustee of any failure by the Servicer to make funds available to the
Paying Agent for the payment of amounts due on the Certificates and the Class C
Certificates.
SECTION 8.02. Advances.
a. Not later than one Business Day following the Determination Date, the
Servicer shall advance all Delinquent Payments for the immediately preceding Due
Period by depositing the aggregate amount of such Delinquent Payments in the
Certificate Account; provided, however, that the Servicer shall be obligated to
advance Delinquent Payments only to the extent that the Servicer, in its sole
discretion, expects to be able to recover such Advances from funds subsequently
available therefor in the Certificate Account in accordance with Section
8.04(b). If the Servicer fails to advance all Delinquent Payments required under
this Section 8.02, the Trustee shall be obligated to advance such Delinquent
Payments pursuant to Section 11.15.
b. The Servicer shall be entitled to reimbursement of an Advance from
subsequent funds available therefor in the Certificate Account in accordance
with Section 8.04(b).
SECTION 8.03. Class B-2 Limited Guaranty.
(i) No later than the Determination Date, the Servicer (if other than the
Company) shall notify the Company of the amount of the Class B-2 Guaranty
Payment (if any) for the related Payment Date. Not later than the Business Day
preceding each Payment Date, the Company shall deposit the Class B-2 Guaranty
Payment, if any, for such Payment Date into the Certificate Account. Any Class
B-2 Guaranty Payment shall be distributable to Class B-2 Certificateholders
pursuant to Section 8.01.
(ii) The obligations of the Company under this Section 8.03 shall not
terminate upon or otherwise be affected by a Service Transfer pursuant to
Article VII of this Agreement.
(iii) The obligation of the Company to provide the Class B-2 Limited
Guaranty under this Agreement shall terminate on the Final Payment Date.
(iv) The obligation of the Company to make the Class B-2 Guaranty Payments
described in subsection (i) above shall be unconditional and irrevocable. The
Company acknowledges that its obligation to make the Class B-2 Guaranty Payments
described in subsection (i) above shall be deemed a guaranty by the Company of
indebtedness of the Trust for money borrowed from the Class B-2
Certificateholders.
(v) If the Company fails to make a Class B-2 Guaranty Payment in whole or
in part, the Company shall promptly notify the Trustee, and the Trustee shall
promptly notify S&P and Fitch.
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(vi) In consideration of providing the Class B-2 Limited Guaranty, the
Company shall be entitled to the Class B-2 Guaranty Fee payable in accordance
with Section 8.04(b)(18).
SECTION 8.04. Permitted Withdrawals from the Certificate Account; Payments.
a. The Trustee shall, from time to time as provided herein, make
withdrawals from the Certificate Account of amounts deposited in said account
pursuant to Section 5.05 that are attributable to the Loans for the following
purposes:
(i) to make payments in the amounts and in the manner provided for in
Section 8.04(b);
(ii) to pay to the Company with respect to each Loan or property
acquired in respect thereof that has been repurchased or replaced pursuant
to Section 3.05, all amounts received thereon and not required to be
distributed to Certificateholders as of the date on which the related
Scheduled Principal Balance or Repurchase Price is determined;
(iii) to reimburse the Servicer out of Liquidation Proceeds for
Liquidation Expenses incurred by it and not otherwise reimbursed, to the
extent such reimbursement is permitted pursuant to Section 5.08;
(iv) to withdraw any amount deposited in the Certificate Account that
was not required to be deposited therein; or
(v) to make any rebates or adjustments deemed necessary by the
Servicer pursuant to Section 5.06(d).
Since, in connection with withdrawals pursuant to clause (iii), the
Company's entitlement thereto is limited to collections or other recoveries on
the related Loan, the Servicer shall keep and maintain separate accounting, on a
Loan by Loan basis, for the purpose of justifying any withdrawal from the
Certificate Account pursuant to such clause.
b. On each Payment Date, the Trustee shall apply the Amount Available for
such Payment Date to make payment in the following order of priority, subject to
Section 8.04(c) and the last sentence of this Section 8.04(b):
(1) if neither the Company nor a wholly owned subsidiary of the
Company is the Servicer, to pay, with respect to the Loans, the Monthly
Servicing Fee and any other compensation owed to the Servicer pursuant to
Section 7.03;
(2) to pay the Class A Formula Interest Distribution Amount as follows
(and in the following order of priority):
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(i) the amount in clause (a)(1) of the definition of Class A
Formula Distribution Amount to the Class A-1 Certificateholders; the
amount in clause (a)(2) of the definition of Class A Formula
Distribution Amount to the Class A-2 Certificateholders; the amount in
clause (a)(3) of the definition of Class A Formula Distribution Amount
to the Class A-3 Certificateholders; the amount in clause (a)(4) of
the definition of Class A Formula Distribution Amount to the Class A-4
Certificateholders; the amount in clause (a)(5) of the definition of
Class A Formula Distribution Amount to the Class A-5
Certificateholders; the amount in clause (a)(6) of the definition of
Class A Formula Distribution Amount to the Class A-6
Certificateholders; and the amount in clause (a)(7) of the definition
of Class A Formula Distribution Amount to the Class A-7 IO
Certificateholders; or, if the Amount Available is less than the
amount necessary to pay all Class A Formula Interest Distribution
Amounts, pro rata to each Class of Class A Certificates in accordance
with their respective entitlements to interest; and
(ii) to each Class of Class A Certificates the amount, if any, of
the Unpaid Class A Interest Shortfall of such Class or, if the
remaining Amount Available is less than the amount necessary to pay
all Unpaid Class A Interest Shortfalls, pro rata to each Class of
Class A Certificates based on the Unpaid Class A Interest Shortfall of
each such Class;
(3) after payment of the amounts specified in clauses (1) and (2)
above, to the Class M-1 Certificateholders as follows (and in the following
order of priority):
(i) the amount in clause (a) of the definition of Class M-1
Formula Distribution Amount; and
(ii) any Unpaid Class M-1 Interest Shortfall;
(4) after payment of the amounts specified in clauses (1) through (3)
above, to the Class M-2 Certificateholders as follows (and in the following
order of priority):
(i) the amount in clause (a) of the definition of Class M-2
Formula Distribution Amount; and
(ii) any Unpaid Class M-2 Interest Shortfall;
(5) after payment of the amounts specified in clauses (1) through (4)
above, to the Class B-1 Certificateholders as follows (and in the following
order of priority):
(i) the amount in clause (a) of the definition of Class B-1
Formula Distribution Amount; and
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(ii) any Unpaid Class B-1 Interest Shortfall;
(6) after payment of the amounts specified in clauses (1) through (5)
above, to pay principal in respect of the Class A Certificates as follows:
(i) if there is a Class A Principal Deficiency Amount for such
Payment Date, the remaining Amount Available, pro rata to each Class
of Class A Certificates (other than the Class A-7 IO Certificates)
based on the Class Principal Balance of each Class (but in no event
shall such amount for any Class exceed the Class Principal Balance of
any such Class); and
(ii) if there is no Class A Principal Deficiency Amount for such
Payment Date, and if such Payment Date is on or prior to the Class A-6
Cross-over Date, the remaining Amount Available up to the Class A
Formula Principal Distribution Amount as follows:
(A) if the remaining Amount Available is less than the Class
A Formula Principal Distribution Amount, then pro rata to each
Class of Class A Certificates (other than the Class A-7 IO
Certificates) based upon the amounts that would have been
distributed pursuant to clause (B), below, had the remaining
Amount Available been equal to the Class A Formula Principal
Distribution Amount;
(B) if the remaining Amount Available is not less than the
Class A Formula Principal Distribution Amount, then
(a) to the Class A-6 Certificateholders, the Class A-6
Lockout Pro Rata Distribution Amount, if any, but in no
event more than is necessary to reduce the Class A-6
Principal Balance to zero;
(b) if such Payment Date is on or prior to the Class
A-1 Cross-over Date, to the Class A-1 Certificateholders,
the Senior Percentage of the Formula Principal Distribution
Amount minus the Class A-6 Lockout Pro Rata Distribution
Amount, but in no event more than is necessary to reduce the
Class A-1 Principal Balance to zero;
(c) if such Payment Date is on or after the Class A-1
Cross-over Date, but on or prior to the Class A-2 Cross-over
Date, to the Class A-2 Certificateholders, the Senior
Percentage of the Formula Principal Distribution Amount
minus the Class A-6 Lockout Pro Rata Distribution Amount,
and minus any amounts
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paid to the Class A-1 Certificateholders on such Payment
Date pursuant to clause (b) above, but in no event more than
is necessary to reduce the Class A-2 Principal Balance to
zero;
(d) if such Payment Date is on or after the Class A-2
Cross-over Date, but on or prior to the Class A-3 Cross-over
Date, to the Class A-3 Certificateholders, the Senior
Percentage of the Formula Principal Distribution Amount
minus the Class A-6 Lockout Pro Rata Distribution Amount,
and minus any amounts paid to the Class A-1 and Class A-2
Certificateholders on such Payment Date pursuant to clauses
(b) and (c) above, but in no event more than is necessary to
reduce the Class A-3 Principal Balance to zero;
(e) if such Payment Date is on or after the Class A-3
Cross-over Date, but on or prior to the Class A-4 Cross-over
Date, to the Class A-4 Certificateholders, the Senior
Percentage of the Formula Principal Distribution Amount
minus the Class A-6 Lockout Pro Rata Distribution Amount,
and minus any amounts paid to the Class A-1, Class A-2 and
Class A-3 Certificateholders on such Payment Date pursuant
to clauses (b), (c) and (d) above, but in no event more than
is necessary to reduce the Class A-4 Principal Balance to
zero;
(f) if such Payment Date is on or after the Class A-4
Cross-over Date, but on or prior to the Class A-5 Cross-over
Date, to the Class A-5 Certificateholders, the Senior
Percentage of the Formula Principal Distribution Amount
minus the Class A-6 Lockout Pro Rata Distribution Amount,
and minus any amounts paid to the Class A-1, Class A-2,
Class A-3 and Class A-4 Certificateholders on such Payment
Date pursuant to clauses (b), (c), (d) and (e) above, but in
no event more than is necessary to reduce the Class A-5
Principal Balance to zero; and
(g) if such Payment Date is on or after the Class A-5
Cross-over Date, but on or prior to the Class A-6 Cross-over
Date, to the Class A-6 Certificateholders, the Senior
Percentage of the Formula Principal Distribution Amount
minus the Class A-6 Lockout Pro Rata Distribution Amount,
and minus any amounts paid to the Class A-1, Class A-2,
Class A-3, Class A-4 and Class A-5 Certificateholders on
such Payment Date pursuant to clauses (b), (c), (d), (e) and
(f) above, but in no event more than is necessary (after
taking into account any distribution to the Class
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A-6 Certificateholders pursuant to clause (a) above) to
reduce the Class A-6 Principal Balance to zero;
(7) after payment of the amounts specified in clauses (1) through (6)
above, to the Class M-1 Certificateholders, the amount in clause (c) of the
definition of Class M-1 Formula Distribution Amount;
(8) after payment of the amounts specified in clauses (1) through (7)
above, to the Class M-2 Certificateholders, the amount in clause (c) of the
definition of Class M-2 Formula Distribution Amount;
(9) after payment of the amounts specified in clauses (1) through (8)
above, to the Class B-1 Certificateholders, the amount in clause (c) of the
definition of Class B-1 Formula Distribution Amount;
(10) after payment of the amounts specified in clauses (1) through (9)
above, to the Class M-1 Certificateholders as follows (and in the following
order of priority):
(i) any Class M-1 Liquidation Loss Interest Amount; and
(ii) any Unpaid Class M-1 Liquidation Loss Interest Shortfall;
(11) after payment of the amounts specified in clauses (1) through
(10) above, to the Class M-2 Certificateholders as follows (and in the
following order of priority):
(i) any Class M-2 Liquidation Loss Interest Amount; and
(ii) any Unpaid Class M-2 Liquidation Loss Interest Shortfall;
(12) after payment of the amounts specified in clauses (1) through
(11) above, to the Class B-1 Certificateholders as follows (and in the
following order of priority):
(i) any Class B-1 Liquidation Loss Interest Amount; and
(ii) any Unpaid Class B -1 Liquidation Loss Interest Shortfall;
(13) after payment of the amounts specified in clauses (1) through
(12) above, to the Class B-2 Certificateholders as follows (and in the
following order of priority):
(i) the amount in clause (a) of the definition of Class B-2
Formula Distribution Amount;
(ii) any Unpaid Class B-2 Interest Shortfall; and
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(iii) the amount in clause (c) of the definition of Class B-2
Formula Distribution Amount;
(14) if the Company or a wholly owned subsidiary of the Company is the
Servicer, after payment of the amounts specified in clauses (1) through
(13) above, to pay the Servicer the Monthly Servicing Fee with respect to
the Loans;
(15) after payment of the amounts specified in clauses (1) through
(14) above, to reimburse the Servicer or the Trustee, as applicable, for
any unreimbursed Advances made with respect to the Loans in respect of
current or prior Payment Dates and to reimburse the Company for any
unreimbursed Advances made pursuant to Section 8.02;
(16) after payment of the amounts specified in clauses (1) through
(15) above, to reimburse the Class C Certificateholders for expenses
incurred by and reimbursable to them pursuant to Section 10.06;
(17) after payment of the amounts specified in clauses (1) through
(16) above, to reimburse the Company for any prior unreimbursed Class B-2
Guaranty Payments;
(18) after payment of the amounts specified in clauses (1) through
(17) above, to pay the Class B-2 Guaranty Fee to the Company; and
(19) after payment of the amounts specified in clauses (1) through
(18) above, to pay the remainder, if any, of the Amount Available to the
Class C Master Certificateholder.
If the Trustee shall not have received the applicable Monthly Report by any
Payment Date, the Trustee shall, in accordance with this Section 8.04(b),
distribute all funds then in the Certificate Account to Certificateholders, to
the extent of such funds, on such Payment Date.
c. Notwithstanding the priorities set forth above, any Pre-Funded Amount
deposited in the Certificate Account shall be applied solely to pay principal of
the Class A-1 Certificates, and any amount withdrawn from the Capitalized
Interest Account and deposited in the Certificate Account shall be applied
solely as described in Section 8.07.
SECTION 8.05. Reassignment of Repurchased and Replaced Loans. Upon receipt
by the Trust, by deposit in the Certificate Account, of the Repurchase Price
under Section 3.05(a), or upon receipt by the Trust of an Eligible Substitute
Loan under Section 3.05(b) and receipt by the Trust, by deposit in the
Certificate Account, of any additional amount under Section 3.05(b)(vi), and
upon receipt of a certificate of a Servicing Officer in the form attached hereto
as Exhibit J-1 or J-2, as applicable, the Trustee shall convey and assign to the
Company all of the Certificateholders' right, title and interest in the
repurchased Loan or Replaced Loan without recourse, representation or warranty,
except as to the absence of liens, charges or encumbrances
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created by or arising as a result of actions of the Trustee. Upon such deposit
of the Repurchase Price or receipt of such Eligible Substitute Loan and related
deposit of any additional amount under Section 3.05(b)(vi), the Servicer shall
be deemed to have released any claims to such Loan as a result of Advances with
respect to such Loan.
SECTION 8.06. Servicer's Purchase Option.
a. The Servicer shall, subject to subsection (b) hereof, have the option to
purchase all of the Loans and all property acquired in respect of any Loan
remaining in the Trust at a price equal to the greatest of:
(i) the sum of (x) 100% of the principal balance of each Loan (other
than any Loan as to which title to the underlying property has been
acquired and whose fair market value is included pursuant to clause (y)
below), together with accrued and unpaid interest on each such Loan at a
rate per annum equal to the Weighted Average Pass-Through Rate, plus (y)
the fair market value of such acquired property (as reasonably determined
by the Servicer as of the close of business on the third Business Day
preceding the date of such purchase),
(ii) the aggregate fair market value (as reasonably determined by the
Servicer as of the close of business on such third Business Day) of all of
the assets of the Trust, and
(iii) the Aggregate Certificate Principal Balance as of the date of
such purchase (less any amounts on deposit in the Certificate Account on
such purchase date and representing payments of principal in respect of the
Loans) plus an amount necessary to pay the Class A Formula Interest
Distribution Amount, the Class M-1 Formula Interest Distribution Amount,
the Class M-1 Formula Liquidation Loss Interest Distribution Amount, the
Class M-2 Formula Interest Distribution Amount, the Class M-2 Formula
Liquidation Loss Interest Distribution Amount, the Class B-1 Formula
Interest Distribution Amount, the Class B-1 Formula Liquidation Loss
Interest Distribution Amount, and the Class B-2 Formula Interest
Distribution Amount due on the Payment Date occurring in the calendar month
following such purchase date (less any amounts on deposit in the
Certificate Account on such purchase date and representing payments of
interest in respect of the Loans at a rate per annum equal to the Weighted
Average Pass-Through Rate).
b. The purchase by the Servicer of all of the Loans pursuant to this
Section 8.06 shall be conditioned upon (1) the Pool Scheduled Principal Balance
of all Loans, at the time of any such purchase, aggregating less than 10% of the
Original Aggregate Certificate Principal Balance, (2) such purchase constituting
a plan of complete liquidation in accordance with Section 860F of the Code, and
(3) the Servicer having provided the Trustee and the Depository (if any) with at
least 30 days' written notice. If such option is exercised, the Servicer shall
provide to the
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Trustee (at the Servicer's expense) the certification required by Section 12.04,
which certificate shall constitute a plan of complete liquidation within the
meaning of Section 860F of the Code, and the Trustee shall promptly sign such
certification and release to the Servicer the Loan Files pertaining to the Loans
being purchased.
SECTION 8.07. Capitalized Interest Account.
a. On or before the Closing Date, the Trustee shall establish the
Capitalized Interest Account on behalf of the Trust, which must be an Eligible
Account, and shall deposit therein $0.00 received from the Company pursuant to
Section 2.02(m). The Capitalized Interest Account shall be entitled "Capitalized
Interest Account, U.S. Bank Trust National Association as Trustee for the
benefit of holders of Home Equity Loan Certificates, Series 1999-D." On the
Payment Date occurring in each of September, October and November 1999, if the
Monthly Report for such Payment Date indicates that the Amount Available (after
payment of the amount specified in clause (1) of Section 8.04(b) and including
in the Amount Available only payments in respect of interest on the Loans) is
not sufficient to pay the Class A Formula Interest Distribution Amount, plus the
Class M-1 Formula Interest Distribution Amount, plus the Class M-2 Formula
Interest Distribution Amount, plus the Class B-1 Formula Interest Distribution
Amount, the Trustee shall withdraw the amount of such deficiency, or the amount
of funds in the Capitalized Interest Account (net of any investment earnings
thereon), if less, and shall deposit such funds in the Certificate Account for
distribution on such Payment Date in order first to pay any deficiency in the
Amount Available to pay the Class A Formula Interest Distribution Amount, second
to pay any deficiency in the Amount Available to pay the Class M-1 Formula
Interest Distribution Amount, third to pay any deficiency in the Amount
Available to pay the Class M-2 Formula Interest Distribution Amount, and fourth
to pay any deficiency in the Amount Available to pay the Class B-1 Formula
Interest Distribution Amount.
b. The Capitalized Interest Account shall be part of the Trust but not part
of the Subsidiary REMIC or the Master REMIC. The Trustee on behalf of the Trust
shall be the legal owner of the Capitalized Interest Account. The Company shall
be the beneficial owner of the Capitalized Interest Account, subject to the
foregoing power of the Trustee to transfer amounts in the Capitalized Interest
Account to the Certificate Account. Funds in the Capitalized Interest Account
shall, at the direction of the Company, be invested in Eligible Investments that
mature no later than the Business Day prior to the next succeeding Payment Date.
All net income and gain from such investments shall be distributed to the
Company on such Payment Date. All amounts earned on amounts on deposit in the
Capitalized Interest Account shall be taxable to the Company.
c. Any funds remaining in the Capitalized Interest Account after the
Payment Date in November 1999 shall be distributed to the Company. After such
date no further amounts shall be deposited in or withdrawn from the Capitalized
Interest Account. Any losses on such investments shall be deposited in the
Capitalized Interest Account by the Company out of its own funds immediately as
realized.
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SECTION 8.08. Pre-Funding Account.
a. On or before the Closing Date, the Trustee shall establish the
Pre-Funding Account on behalf of the Trust, which must be an Eligible Account,
and shall deposit therein the amounts received from the Company pursuant to
Section 2.02(l). The Pre-Funding Account shall be entitled "Pre-Funding Account,
U.S. Bank Trust National Association as Trustee for the benefit of holders of
Home Equity Loan Certificates, Series 1999-D." The Trustee shall maintain within
the Pre-Funding Account two subaccounts as follows: The "Pre-Funding Subaccount"
which pertains to the pre-funded Subsequent Loans, and the "Undelivered Loan
Subaccount, which pertains to Loans identified on the exception report but not
delivered to the trustee as of the Closing Date. Funds deposited in the Pre-
Funding Account shall be held in trust by the Trustee for the Holders of the
Certificates and the Class C Certificates for the uses and purposes set forth
herein.
b. On or before the Closing Date the Company shall deposit in the
Pre-Funding Account, the respective amounts specified in Section 2.02(l).
Amounts on deposit in such Pre-Funding Account shall be withdrawn by the Trustee
as follows:
(i) On any Subsequent Transfer Date, the Trustee shall withdraw from
the Pre-Funding Account an amount equal to 100% of the Cut-off Date
Principal Balance of each Subsequent Loan transferred and assigned to the
Trustee on such Subsequent Transfer Date and pay such amount to or upon the
order of the Company upon satisfaction of the conditions set forth in
Section 2.03(b) with respect to such transfer and assignment.
(ii) On the Business Day immediately preceding the Post-Funding
Payment Date, the Trustee shall deposit into the Certificate Account any
amounts remaining in the Pre-Funding Account, net of investment earnings.
c. The Pre-Funding Account shall be part of the Trust but not part of the
Master REMIC or Subsidiary REMIC. The Trustee on behalf of the Trust shall be
the legal owner of the Pre-Funding Account. The Company shall be the beneficial
owner of the Pre-Funding Account, subject to the foregoing power of the Trustee
to transfer amounts in the Pre-Funding Account to the Certificate Account. Funds
in the Pre-Funding Account shall, at the direction of the Servicer, be invested
in Eligible Investments of the kind described in clauses (i) and (ii)(A) of the
definition of "Eligible Investments" and that mature no later than the Business
Day prior to the next succeeding Payment Date. All amounts earned on deposits in
the Pre-Funding Account shall be taxable to the Company. The Trustee shall
release to the Company all investment earnings in the Pre-Funding Account on the
first Payment Date after the end of the Pre-Funding Period.
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SECTION 8.09. Distributions on the Subsidiary REMIC Regular Interests.
a. On each Payment Date the Trustee shall be deemed to distribute to
itself, as the holder of the Subsidiary REMIC Regular Interests, the Subsidiary
REMIC Regular Interest Distribution Amounts in the following order of priority
to the extent of the Amount Available:
(i) Subsidiary REMIC Accrued Interest on the Subsidiary REMIC Regular
Interests S-1 and S-2 for such Payment Date, plus any Subsidiary REMIC
Accrued Interest thereon remaining unpaid from any previous Payment Date;
(ii) Subsidiary REMIC Accrued Interest on the Subsidiary REMIC Regular
Interest S-3 for such Payment Date, plus any Subsidiary REMIC Accrued
Interest thereon remaining unpaid from any previous Payment Date;
(iii) Principal equal to the Class A Formula Principal Distribution
Amount, first on the Subsidiary REMIC Regular Interest S-1 until the
related Subsidiary REMIC Principal Balance is reduced to zero, and then on
the Subsidiary REMIC Regular Interest S-2 until the related Subsidiary
REMIC Principal Balance is reduced to zero; and
(iv) Principal equal to the Class M Formula Principal Distribution
Amount and the Class B Formula Principal Distribution Amount on the
Subsidiary REMIC Regular Interest S-3 until the related Subsidiary REMIC
Principal Balance is reduced to zero.
b. On each Payment Date the Trustee shall be deemed to distribute from the
Master REMIC, to the holders of the Certificates in the priority set forth in
Section 8.04(b), the Subsidiary REMIC Regular Interest Distribution Amounts
deemed to have been received by the Master REMIC from the Subsidiary REMIC under
this Section 8.09.
c. Notwithstanding the deemed distributions on the Subsidiary REMIC Regular
Interests described in this Section 8.09, distributions of funds from the
Certificate Account shall be made only in accordance with Section 8.04.
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ARTICLE IX
THE CERTIFICATES AND THE CLASS C CERTIFICATES
SECTION 9.01. The Certificates and the Class C Certificates. The Class A,
the Class M, the Class B and the Class C Certificates shall be substantially in
the forms set forth in Exhibits A-1, A-2, B, C and I, as applicable, and shall,
on original issue, be executed by the Trustee on behalf of the Trust to or upon
the order of the Company. The Class A, the Class M and the Class B Certificates
shall be evidenced by (i) one or more Class A-1 Certificates evidencing
$160,000,000 in Original Class A-1 Principal Balance, (ii) one or more Class A-2
Certificates evidencing $90,000,000 in Original Class A-2 Principal Balance,
(iii) one or more Class A-3 Certificates evidencing $56,000,000 in Original
Class A-3 Principal Balance, (iv) one or more Class A-4 Certificates evidencing
$32,000,000 in Original Class A-4 Principal Balance, (v) one or more Class A-5
Certificates evidencing $36,000,000 in Original Class A-5 Principal Balance,
(vi) one or more Class A-6 Certificates evidencing $35,000,000 in Original Class
A-6 Principal Balance, (vii) one or more Class A-7 IO Certificates evidencing a
Class A-7 IO Original Notional Principal Amount of $50,000,000, (viii) one or
more Class M-1 Certificates evidencing $28,000,000 in Original Class M-1
Principal Balance, (ix) one or more Class M-2 Certificates evidencing
$28,000,000 in Original Class M-2 Principal Balance, (x) one or more Class B-1
Certificates evidencing $16,250,000 in Original Class B-1 Principal Balance, and
(xi) one or more Class B-2 Certificates evidencing $18,750,000 in Original Class
B-2 Principal Balance, beneficial ownership of such Classes of Certificates to
be held through Book-Entry Certificates in minimum dollar denominations of
$1,000. The Class C Subsidiary Certificate shall be evidenced by a single Class
C Certificate issued on the Closing Date to the Company and shall represent 100%
of the Percentage Interest of the Class C Subsidiary Certificates. The Class C
Master Certificate shall be evidenced by a single Class C Certificate issued on
the Closing Date to the Company and shall represent 100% of the Percentage
Interest of the Class C Master Certificates.
The Certificates and the Class C Certificates shall be executed by manual
signature on behalf of the Trustee by a duly authorized Responsible Officer or
authorized signatory. Certificates or the Class C Certificates bearing the
signatures of individuals who were at any time the proper officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution and delivery of
such Certificate or Class C Certificates, or did not hold such offices at the
date of such Certificates or Class C Certificates. No Certificate or Class C
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless such Certificate or Class C Certificate has been
executed by manual signature in accordance with this Section, and such signature
upon any Certificate or Class C Certificate shall be conclusive evidence, and
the only evidence, that such Certificates or Class C Certificate has been duly
executed and delivered hereunder. All Certificates and the Class C Certificates
shall be dated the date of their execution, except for those Certificates and
the Class C Certificates executed on the Closing Date, which shall be dated the
Closing Date.
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SECTION 9.02. Registration of Transfer and Exchange of Certificates and the
Class C Certificates.
a. The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.03 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and the Class C Certificates
and of transfers and exchanges of Certificates and the Class C Certificates as
herein provided. The Trustee initially appoints itself to be the "Certificate
Registrar" and transfer agent for the purpose of registering Certificates and
the Class C Certificates and transfers and exchanges of Certificates and the
Class C Certificates as provided herein. The Trustee will give prompt written
notice to Certificateholders, the Class C Certificateholders and the Servicer of
any change in the Certificate Registrar.
b. (1) Subject to clauses (2) and (3) below, no transfer of a Class C
Certificate shall be made by the Company or any other Person unless such
transfer is exempt from the registration requirements of the Securities Act of
1933 (the "Act"), as amended, and any applicable state securities laws or is
made in accordance with the Act and laws. In the event that any such transfer is
to be made, (A) the Company may require a written Opinion of Counsel acceptable
to and in form and substance satisfactory to the Company that such transfer may
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from the Act and laws or is being made pursuant to the Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee or the
Company, and (B) the Trustee shall require the transferee to execute an
investment letter substantially in the form of Exhibit K attached hereto, which
investment letter shall not be an expense of the Trustee or the Company. The
Class C Certificateholder desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Company and the Certificate
Registrar 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.
(2) No transfer of a Class M, Class B or Class C Certificate or any
interest therein shall be made to any employee benefit plan within the meaning
of Section 3(3) of ERISA, or that is described in Section 4975(e)(1) of the Code
or to any person or entity purchasing on behalf of, or with assets of, or with
assets of, such an employee benefit plan (each, a "Plan"), unless the Plan
delivers to the Company and the Trustee, at its own expense, an Opinion of
Counsel in form satisfactory to the Company and the Trustee that the purchase
and holding of such Certificate or Class C Certificate by such Plan will not
result in the assets of the Trust being deemed to be "plan assets" and subject
to the prohibited transaction provisions of ERISA and the Code and will not
subject the Trustee, the Company or the Servicer to any obligation or liability
in addition to those undertaken in this Agreement. Unless such opinion is
delivered, each person acquiring such a Certificate or Class C Certificate will
be deemed to represent to the Trustee, the Company and the Servicer either (i)
that such person is neither a Plan, nor acting on behalf of a Plan, subject to
ERISA or to Section 4975 of the Code, or (ii) that the purchase and holding of
the Certificate by such Plan will not result in the assets of the Trust being
deemed to be Plan assets and subject to the prohibited transaction provisions of
ERISA and the Code and will not
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subject the Trustee, the Company or the Servicer to any obligation or liability
in addition to those undertaken in this Agreement.
(3) Notwithstanding anything to the contrary contained herein, (A) no Class
C Certificate, nor any interest therein, shall be transferred, sold or otherwise
disposed of to a "disqualified organization," within the meaning of Section
860E(e)(5) of the Code (a "Disqualified Organization"), including, but not
limited to, (i) the United States, a state or political subdivision thereof, a
foreign government, an international organization or an agency or
instrumentality of any of the foregoing, (ii) an organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the taxes
imposed by Chapter 1 of the Code and not subject to the tax imposed on unrelated
business income by Section 511 of the Code, or (iii) a cooperative described in
Section 1381(a)(2)(C) of the Code, and (B) prior to any registration of any
transfer, sale or other disposition of a Class C Certificate, the proposed
transferee shall deliver to the Trustee, under penalties of perjury, an
affidavit that such transferee is not a Disqualified Organization, with respect
to which the Trustee shall have no actual knowledge that such affidavit is
false, and the transferor and the proposed transferee shall each deliver to the
Trustee an affidavit with respect to any other information reasonably required
by the Trustee pursuant to the REMIC Provisions, including, without limitation,
information regarding the transfer of noneconomic residual interests and
transfers of any residual interest to or by a foreign person; provided, however,
that, upon the delivery to the Trustee of an Opinion of Counsel, in form and
substance satisfactory to the Trustee and rendered by Independent counsel, to
the effect that the beneficial ownership of a Class C Certificate by any
Disqualified Organization will not result in the imposition of federal income
tax upon the Trust or any Certificateholder or Class C Certificateholder or any
other person or otherwise adversely affect the status of the Trust as a REMIC,
the foregoing prohibition on transfers, sales and other dispositions, as well as
the foregoing requirement to deliver a certificate prior to any registration
thereof, shall, with respect to such Disqualified Organization, terminate.
Notwithstanding any transfer, sale or other disposition of a Class C
Certificate, or any interest therein, to a Disqualified Organization or the
registration thereof in the Certificate Register, such transfer, sale or other
disposition and any registration thereof, unless accompanied by the Opinion of
Counsel described in the preceding sentence, shall be deemed to be void and of
no legal force or effect whatsoever and such Disqualified Organization shall be
deemed not to be a Class C Certificateholder for any purpose hereunder,
including, but not limited to, the receipt of distributions on a Class C
Certificate, and shall be deemed to have no interest whatsoever in a Class C
Certificate. Each Class C Certificateholder, by his acceptance thereof, shall be
deemed for all purposes to have consented to the provisions of this Section
9.02(b)(3).
(4) Any transfer, sale or other disposition not in compliance with the
provisions of this Section 9.02(b) shall be deemed to be void and of no legal
force or effect whatsoever and such transferee shall be deemed not to be the
Certificateholder or Class C Certificateholder, as applicable, for any purpose
hereunder, including, but not limited to, the receipt of distributions on the
Certificate or Class C Certificate, and shall be deemed to have no interest
whatsoever in the Certificate or Class C Certificate.
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(5) The Trustee shall give notice to S&P and Fitch promptly following any
transfer, sale or other disposition of a Class C Certificate.
c. At the option of a Certificateholder or a Class C Certificateholder,
Certificates and the Class C Certificates may be exchanged for other
Certificates or Class C Certificates of authorized denominations of a like
aggregate original denomination, upon surrender of such Certificates or the
Class C Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates or the Class C Certificates are so surrendered for exchange, the
Trustee shall execute and deliver the Certificates or Class C Certificates which
the Certificateholder or Class C Certificateholders making the exchange is
entitled to receive. Every Certificate or Class C Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the holder thereof or
his or her attorney duly authorized in writing.
d. Except as provided in paragraph (e) below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of the Certificates on the books of the Depository
shall be governed by applicable rules established by the Depository; (iv) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants; (v) the Trustee shall deal with the Depository,
Depository Participants and indirect participating firms as representatives of
the Certificate Owners of the Certificates for purposes of exercising the rights
of Holders under this Agreement, and requests and directions for and votes of
such representatives shall not be deemed to be inconsistent if they are made
with respect to different Certificate Owners; and (vi) the Trustee may rely and
shall be fully protected in relying upon information furnished by the Depository
with respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and persons shown on
the books of such indirect participating firms as direct or indirect Certificate
Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
e. If (x)(i) the Company or the Depository advises the Trustee in writing
that the Depository is no longer willing or able properly to discharge its
responsibilities as Depository and (ii) the Trustee or the Company is unable to
locate a qualified successor or (y) the Company at its sole option advises the
Trustee in writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository,
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of the occurrence of any such event and of the availability of definitive, fully
registered Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Trustee of the Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Company nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
f. On or prior to the Closing Date, there shall be delivered to the
Depository one Class A-1 Certificate, one Class A-2 Certificate, one Class A-3
Certificate, one Class A-4 Certificate, one Class A-5 Certificate, one Class A-6
Certificate, one Class A-7 IO Certificate, one Class M-1 Certificate, one Class
M-2 Certificate, one Class B-1 Certificate and one Class B-2 Certificate, each
in registered form registered in the name of the Depository's nominee, Cede &
Co., the total face amount of which represents 100% of the Original Class
Principal Balance (or, in the case of the Class A-7 IO Certificates, the Class
A-7 IO Original Notional Principal Amount) of each Class, respectively. Each
such Certificate registered in the name of the Depositary's nominee shall bear
the following legend:
"Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
SECTION 9.03. No Charge; Disposition of Void Certificates or Class C
Certificates. No service charge shall be made to a Certificateholder or Class C
Certificateholder for any transfer or exchange of a Certificate or a Class C
Certificate, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of a Certificate or a Class C
Certificate. All Certificates and Class C Certificates surrendered for transfer
and exchange shall be disposed of in a manner approved by the Trustee.
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates or Class C
Certificates. If (a) any mutilated Certificate or Class C Certificate is
surrendered to the Certificate Registrar, or the Certificate Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate or Class C Certificate, and (b) there is delivered to the
Certificate Registrar and
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the Trustee such security or indemnity as may be required by each to save it
harmless, then in the absence of notice to the Certificate Registrar or the
Trustee that such Certificate or Class C Certificate has been acquired by a bona
fide purchaser, the Trustee shall execute and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate or Class C
Certificate, a new Certificate or Class C Certificate of like tenor and original
denomination. Upon the issuance of any new Certificate or Class C Certificate
under this Section 9.04, the Trustee may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses connected therewith. Any duplicate Certificate or
Class C Certificate issued pursuant to this Section 9.04 shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest, as
if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate or Class C Certificate shall be found at any time.
SECTION 9.05. Persons Deemed Owners. Prior to due presentation of a
Certificate or Class C Certificate for registration of transfer, the Servicer,
the Company, the Trustee, the Paying Agent and the Certificate Registrar may
treat the person in whose name any Certificate or Class C Certificate is
registered as the owner of such Certificate or Class C Certificate for the
purpose of receiving remittances pursuant to Section 8.01 and for all other
purposes whatsoever, and none of the Servicer, the Company, the Trustee, the
Certificate Registrar, the Paying Agent or any agent of the Servicer, the
Company, the Trustee, the Paying Agent or the Certificate Registrar shall be
affected by notice to the contrary.
SECTION 9.06. Access to List of Certificateholders' and Class C
Certificateholders' Names and Addresses. The Certificate Registrar will furnish
to the Trustee and the Servicer, within five days after receipt by the
Certificate Registrar of a request therefor from the Trustee in writing, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Certificateholders and the Class C Certificateholders as of the most
recent Record Date. If Holders of Certificates representing, in the aggregate,
25% or more of the Aggregate Certificate Principal Balance apply in writing to
the Trustee (hereinafter referred to as "Applicants"), and such application
states that the Applicants desire to communicate with other Certificateholders
or the Class C Certificateholders with respect to their rights under this
Agreement or under the Certificates or the Class C Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders and the Class C Certificateholders
held by the Trustee. If such list is as of a date more than 90 days prior to the
date of receipt of such Applicants' request, the Trustee shall promptly request
from the Certificate Registrar a current list as provided above, and shall
afford such Applicants access to such list promptly upon receipt. Every
Certificateholder and the Class C Certificateholders, by receiving and holding a
Certificate or a Class C Certificate, agrees with the Certificate Registrar and
the Trustee that none of the Company, the Certificate Registrar or the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Certificateholders or the
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Class C Certificateholders hereunder, regardless of the source from which such
information was derived.
SECTION 9.07. Authenticating Agents. The Trustee may appoint one or more
Authenticating Agents with power to act on its behalf and subject to its
direction in the execution and delivery of the Certificates or the Class C
Certificates. For all purposes of this Agreement, the execution and delivery of
Certificates or the Class C Certificates by the Authenticating Agent pursuant to
this Section shall be deemed to be the execution and delivery of Certificates or
the Class C Certificates "by the Trustee."
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ARTICLE X
INDEMNITIES
SECTION 10.01. Real Estate. The Company will defend and indemnify the
Trust, the Trustee (including the Custodian and any other agents of the Trustee)
and the Certificateholders and the Class C Certificateholders against any and
all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation arising out
of or resulting from the use or ownership of any real estate related to a Loan
by the Company or the Servicer or any Affiliate of either. Notwithstanding any
other provision of this Agreement, the obligation of the Company under this
Section shall not terminate upon a Service Transfer pursuant to Article VII,
except that the obligation of the Company under this Section shall not relate to
the actions of any subsequent Servicer after a Service Transfer.
SECTION 10.02. Liabilities to Obligors. No obligation or liability to any
Obligor under any of the Loans is intended to be assumed by the Trust, the
Certificateholders or the Class C Certificateholders under or as a result of
this Agreement and the transactions contemplated hereby and, to the maximum
extent permitted and valid under mandatory provisions of law, the Trust, the
Certificateholders and the Class C Certificateholders expressly disclaim such
assumption.
SECTION 10.03. Tax Indemnification. The Company agrees to pay, and to
indemnify, defend and hold harmless the Trust, the Trustee (including the
Custodian and any other agents of the Trustee), the Certificateholders and the
Class C Certificateholders from, any taxes which may at any time be asserted
with respect to, and as of the date of, the transfer of the Loans to the Trust,
including, without limitation, any sales, gross receipts, general corporation,
personal property, privilege or license taxes (but not including any federal,
state or other taxes arising out of the creation of the Trust and the issuance
of the Certificates and the Class C Certificates) and costs, expenses and
reasonable counsel fees in defending against the same, whether arising by reason
of the acts to be performed by the Company, the Servicer or the Trustee under
this Agreement or imposed against the Trust, a Certificateholder, the Class C
Certificateholders or otherwise.
SECTION 10.04. Servicer's Indemnities. The Servicer shall defend and
indemnify the Trust, the Trustee (including the Custodian and any other agents
of the Trustee), the Certificateholders and the Class C Certificateholders
against any and all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel and expenses of litigation, in
respect of any action taken or omitted to be taken by the Servicer with respect
to any Loan. This indemnity shall survive any Service Transfer (but the original
Servicer's obligations under this Section 10.04 shall not relate to any actions
of any subsequent Servicer after a Service Transfer) and any payment of the
amount owing under, or any repurchase by the Company of, any such Loan.
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SECTION 10.05. Operation of Indemnities. Indemnification under this Article
shall include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Company or the Servicer has made any indemnity
payments to the Trustee pursuant to this Article and the Trustee thereafter
collects any of such amounts from others, the Trust will repay such amounts
collected to the Company or the Servicer, as the case may be, without interest.
SECTION 10.06. REMIC Tax Matters. If a Class C Certificateholder, pursuant
to Section 6.06, pays any taxes or charges imposed upon the Trust, the Master
REMIC or the Subsidiary REMIC as a REMIC or otherwise, such taxes or charges,
except to the extent set forth in the following proviso, shall be expenses and
costs of the Trust and the Class C Certificateholders shall be entitled to be
reimbursed therefor out of the Certificate Account as provided in Section 8.04;
provided, however, that any such taxes or charges shall not be expenses or costs
of the Trust, nor will the Class C Certificateholders be entitled to
reimbursement therefor out of the Certificate Account, if and to the extent that
such taxes or charges resulted from a failure (i) by the Company, the Trustee or
any Servicer to comply with the provisions of Section 2.05, (ii) by any Servicer
to comply with the provisions of Section 6.06, or (iii) by the Trustee to
execute any tax returns pursuant to Section 11.11.
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ARTICLE XI
THE TRUSTEE
SECTION 11.01. Duties of Trustee. The Trustee, prior to the occurrence of
an Event of Termination and after the curing of all Events of Termination which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Termination has
occurred (which has not been cured), the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
Subject to Section 11.03, no provision of this Agreement shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however, that:
a. Prior to the occurrence of an Event of Termination, and after the
curing of all such Events of Termination which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement;
b. The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
c. The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders representing, in
the aggregate, 25% or more of the Aggregate Certificate Principal Balance
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement; and
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d. The Trustee shall not be charged with knowledge of any event
referred to in Section 7.01 unless a Responsible Officer of the Trustee at
the Corporate Trust Office obtains actual knowledge of such event or the
Trustee receives written notice of such event from the Servicer or the
Certificateholders representing, in the aggregate, 25% or more of the
Aggregate Certificate Principal Balance.
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 Company or 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. The Trustee shall not be required
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 11.02. Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 11.01:
a. The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of a
Servicing Officer, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
b. The Trustee may consult with counsel and any opinion of any counsel
for the Company or the Servicer shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by the
Trustee hereunder in good faith and in accordance with such Opinion of
Counsel;
c. The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation hereunder or in relation hereto, at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby;
provided, however, that nothing contained herein shall relieve the Trustee
of the obligations, upon the occurrence of an Event of Termination (which
has not been cured), to exercise such of the rights and powers vested in it
by this Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs;
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d. Prior to the occurrence of an Event of Termination and after the
curing of all Events of Termination which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing so to do by Certificateholders
representing, in the aggregate, 25% or more of the Aggregate Certificate
Principal Balance; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a condition
to so proceeding. The reasonable expense of every such examination shall be
paid by the Servicer or, if paid by the Trustee, shall be reimbursed by the
Servicer upon demand; and
e. The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and shall not be liable for any acts or omissions
of such agents, attorneys or custodians if appointed by it with due care
hereunder.
SECTION 11.03. Trustee Not Liable for Certificates, Class C Certificates or
Loans. The Trustee assumes no responsibility for the correctness of the recitals
contained herein, in the Certificates or in the Class C Certificates (other than
the Trustee's execution thereof). The Trustee makes no representations as to the
validity or sufficiency of this Agreement, of the Certificates or of the Class C
Certificates (other than its execution thereof) or of any Loan, Loan File or
related document. The Trustee shall not be accountable for the use or
application by the Servicer or the Company of funds paid to the Company in
consideration of conveyance of the Loans to the Trust by the Company or
deposited in or withdrawn from the Certificate Account by the Servicer.
SECTION 11.04. Trustee May Own Certificates. The Trustee in its individual
or other capacity may become the owner or pledgee of Certificates representing
less than all the beneficial interest in the Trust with the same rights as it
would have if it were not Trustee.
SECTION 11.05. Rights of Certificateholders to Direct Trustee and to Waive
Events of Termination. Holders of Certificates representing, in the aggregate,
25% or more of the Aggregate Certificate Principal Balance shall have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee; provided, however, that, subject to Section 11.01, the Trustee shall
have the right to decline to follow any such direction if the Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of the Certificateholders not parties to such direction; and provided,
further that nothing in this
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Agreement shall impair the right of the Trustee to take any action deemed proper
by the Trustee and which is not inconsistent with such direction by the
Certificateholders. Holders of the Certificates representing, in the aggregate,
51% or more of the Aggregate Certificate Principal Balance may on behalf of all
Certificateholders waive any past Event of Termination hereunder and its
consequences, except a default in respect of a covenant or provision hereof
which under Section 12.08 cannot be modified or amended without the consent of
all Certificateholders, and upon any such waiver, such Event of Termination
shall cease to exist and shall be deemed to have been cured for every purpose of
this Agreement; but no such waiver shall extend to any subsequent or other Event
of Termination or impair any right consequent thereon.
SECTION 11.06. The Servicer to Pay Trustee's Fees and Expenses. The
Servicer agrees:
a. to pay to the Trustee reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
b. except as otherwise expressly provided herein, to reimburse the
Trustee, to the extent requested by the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
c. to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the Trust and its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The covenants in this Section 11.06 shall be for the benefit of the Trustee
in its capacities as Trustee, Paying Agent and Certificate Registrar hereunder,
and shall survive the termination of this Agreement.
SECTION 11.07. Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be a financial institution organized and doing business under
the laws of the United States of America or any State, authorized under such
laws to exercise corporate trust powers, and shall have a combined capital and
surplus of at least $50,000,000 or shall be a member of a bank holding system
the aggregate combined capital and surplus of which is $50,000,000, provided
that the Trustee's separate capital and surplus shall at all times be at least
the amount required by Section 310(a)(2) of the Trust Indenture Act of 1939, as
amended. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of a supervising or examining authority,
then for the purposes of this Section 11.07, the combined
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capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
addition, the Trustee (or, if the Trustee is U.S. Bank Trust National
Association, the parent company of U.S. Bank Trust National Association) shall
at all times have a long-term deposit rating from S&P of at least BBB or as
shall be otherwise acceptable to S&P and have a long-term deposit rating from
Fitch of at least BBB or as shall be otherwise acceptable to Fitch. In case at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.08.
SECTION 11.08. Resignation or Removal of Trustee. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Servicer and the Company. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
each of the Servicer and the Company and one copy to the successor Trustee. If
no successor Trustee shall have been so appointed and shall 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.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 11.07 and shall fail to resign after written request
therefor by the Company, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Company may remove the
Trustee. If the Company shall have removed the Trustee under the authority of
the immediately preceding sentence, the Company shall promptly appoint a
successor Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 11.08 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 11.09.
SECTION 11.09. Successor Trustee. Any successor Trustee appointed as
provided in Section 11.08 shall execute, acknowledge and deliver to the
Servicer, the Company and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee. The predecessor Trustee shall deliver
or cause to be delivered to the successor Trustee the Loans and the Loan Files
and any related documents and statements held by it hereunder; and, if the Loans
are then held by a Custodian pursuant to a custodial agreement, the predecessor
Trustee and the Custodian shall amend such custodial agreement to make the
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successor Trustee the successor to the predecessor Trustee thereunder; and the
Servicer, the Company and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section
11.09 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 11.07.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 11.09, the Servicer shall cause notice of the succession of such Trustee
hereunder to be mailed to S&P, to Fitch and to each Certificateholder and the
Class C Certificateholders at their addresses as shown in the Certificate
Register. If the Servicer 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 Servicer.
SECTION 11.10. Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be eligible under the provisions of Section 11.07,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Trustee shall promptly notify S&P and Fitch in the event it is a party to any
merger, conversion or consolidation.
SECTION 11.11. Tax Returns. Upon the Servicer's request, the Trustee will
furnish the Servicer with all such information as the Servicer may reasonably
require in connection with preparing all tax returns of the Trust and the
Trustee shall execute such returns.
SECTION 11.12. Obligor Claims. In connection with any offset defenses, or
affirmative claims for recovery, asserted in legal actions brought by Obligors
under one or more Loans based upon provisions therein complying with, or upon
other rights or remedies arising from, any legal requirements applicable to the
Loans, including, without limitation, the Federal Trade Commission's Trade
Regulation Rule Concerning Preservation of Consumers' Claims and Defenses (16
C.F.R. ss. 433) as amended from time to time:
a. The Trustee is not, and shall not be deemed to be, either in any
individual capacity, as trustee hereunder or otherwise, a creditor, or a
joint venturer with or an Affiliate of, or acting in concert or cooperation
with, any home equity lender, in the arrangement, origination or making of
Loans. The Trustee is the holder of the Loans only as trustee on behalf of
the Certificateholders and the Class C Certificateholders, and not as a
principal or in any individual or personal capacity;
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b. The Trustee shall not be personally liable for or obligated to pay
Obligors any affirmative claims asserted thereby, or responsible to
Certificateholders or the Class C Certificateholders for any offset defense
amounts applied against Loan payments, pursuant to such legal actions;
c. The Trustee will pay, solely from available Trust monies,
affirmative claims for recovery by Obligors only pursuant to final judicial
orders or judgments, or judicially approved settlement agreements,
resulting from such legal actions;
d. The Trustee will comply with judicial orders and judgments which
require its actions or cooperation in connection with Obligors' legal
actions to recover affirmative claims against Certificateholders and the
Class C Certificateholders;
e. The Trustee will cooperate with and assist Certificateholders and
the Class C Certificateholders in their defense of legal actions by
Obligors to recover affirmative claims if such cooperation and assistance
is not contrary to the interests of the Trustee as a party to such legal
actions and if the Trustee is satisfactorily indemnified for all liability,
costs and expenses arising therefrom; and
f. The Company hereby agrees to indemnify, hold harmless and defend
the Trustee, Certificateholders and the Class C Certificateholders from and
against any and all liability, loss, costs and expenses of the Trustee,
Certificateholders and the Class C Certificateholders resulting from any
affirmative claims for recovery asserted or collected by Obligors under the
Loans. Notwithstanding any other provision of this Agreement, the
obligation of the Company under this Section 11.12(f) shall not terminate
upon a Service Transfer pursuant to Article VII.
SECTION 11.13. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction having authority over the
Trust, the Loans or the Obligors, the Company and the Trustee acting jointly
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the Trustee to act as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section 11.13, such powers, duties, obligations, rights and
trusts as the Company and the Trustee may consider necessary or desirable. If
the Company shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in case an Event of Termination 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 11.07
hereunder and no notice to Certificateholders or the Class C Certificateholders
of the appointment of co-trustee(s) or separate trustee(s) shall be required
under Section 11.09.
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In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 11.13 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 co-trustee or separate trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such co-trustee or separate
trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then co-trustees and separate trustees, as
effectively as if given to each of them. Every instrument appointing any
co-trustee or separate trustee shall refer to this Agreement and the conditions
of this Article XI. Each co-trustee and separate trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any co-trustee or separate 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 co-trustee or separate trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 11.14. Trustee and U.S. Bancorp. In the event the Trustee ceases to
be a direct, wholly owned subsidiary of U.S. Bancorp, the Trustee shall promptly
notify S&P and Fitch.
SECTION 11.15. Trustee Advances.
a. If the Servicer fails to deposit into the Certificate Account Advances
as required by Section 8.02, then the Trustee shall, subject to the provisions
of paragraph (b) below, from its own funds, deposit into the Certificate Account
the amount not so deposited by the Servicer on or before the Business Day
preceding the related Payment Date (a "Trustee Advance").
b. The Trustee shall not be required to make any Trustee Advance if and to
the extent that it determines in good faith that the funds, if advanced, would
not be recoverable by it from subsequent amounts available in the Certificate
Account in accordance with Section 8.04(b).
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c. The Trustee shall be entitled to reimbursement of a Trustee Advance from
funds subsequently available therefor in the Certificate Account in accordance
with Section 8.04(b).
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ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Servicer Not to Resign; Delegation of Servicing Duties. The
Servicer shall not resign from the obligations and duties hereby imposed on it
except upon determination that the performance of its duties hereunder is no
longer permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel for the
Servicer to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor servicer shall have assumed
the responsibilities and obligations of the Servicer in accordance with Section
7.03.
Notwithstanding the foregoing, the Company, if it is the Servicer, may
delegate some or all of its servicing duties to a wholly owned subsidiary of the
Company, for so long as said subsidiary remains, directly or indirectly, a
wholly owned subsidiary of the Company. Notwithstanding any such delegation, the
Company shall retain all of the rights and obligations of the Servicer
hereunder.
SECTION 12.02. Company Not to Engage in Certain Transactions with Respect
to the Trust. The Company shall not:
a. Provide credit to any Certificateholder for the purpose of enabling
such Certificateholder to purchase Certificates;
b. Purchase any Certificates in an agency or trustee capacity; or
c. Loan any money to the Trust (other than Advances pursuant to
Section 8.02).
SECTION 12.03. Maintenance of Office or Agency. The Trustee will maintain
in Minneapolis or St. Paul, Minnesota, an office or agency where Certificates or
the Class C Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Trustee in respect of the
Certificates, the Class C Certificates and this Agreement may be served. On the
date hereof the Trustee's office for such purposes is located at 180 East 5th
Street, Second Floor, St. Paul, Minnesota 55101. The Trustee will give prompt
written notice to the Company, the Servicer, the Certificateholders and the
Class C Certificateholders of any change in the location of the Certificate
Register or any such office or agency.
SECTION 12.04. Termination.
a. The Trust created hereby and the respective obligations and
responsibilities of the Company, the Servicer and the Trustee created hereby
(other than the responsibility of the
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Trustee to make any final distributions to Certificateholders and the Class C
Certificateholders as set forth below) shall terminate on the earlier of (a) the
Payment Date on which the principal balance of all of the Loans is reduced to
zero; or (b) the Payment Date occurring in the month following the Servicer's
purchase of the Loans pursuant to Section 8.06; provided, that in no event shall
the trust created hereby continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof, and provided, further, that the Servicer's and the Company's
representations and warranties and indemnities by the Company and the Servicer
shall survive termination. Any termination of the Trust must be conducted so as
to qualify as a "qualified liquidation" of the Master REMIC and Subsidiary REMIC
within the meaning of the REMIC Provisions.
b. Notice of any termination, specifying the Final Payment Date (which
shall be a date that would otherwise be a Payment Date) upon which all
Certificateholders or the Class C Certificateholders may surrender their
Certificates or the Class C Certificates to the Servicer for payment of the
final distribution and cancellation, shall be given promptly by the Trustee
(upon direction by the Servicer ten days prior to the date such notice is to be
mailed) by letter to S&P, Fitch, the Certificateholders and the Class C
Certificateholders mailed no later than the fifth Business Day of the month of
the Final Payment Date specifying (1) the Final Payment Date upon which final
payment on the Certificates and the Class C Certificates will be made upon
presentation and surrender of Certificates and the Class C Certificates at the
office or agency of the Servicer therein designated; (2) the amount of any such
final payment; and (3) that the Record Date otherwise applicable to such Payment
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates and the Class C Certificates at the office or agency of the
Servicer therein specified. Any notice of purchase of Loans by the Servicer
pursuant to Section 8.06 shall constitute the adoption by the Trustee on behalf
of the Certificateholders and the Class C Certificateholders of a plan of
complete liquidation within the meaning of Section 860F of the Code on the date
such notice is given when signed by the Trustee. Each such notice shall, to the
extent required by the REMIC Provisions or other applicable law, be signed on
behalf of the Trust by the Trustee. The Trustee shall give such notice to the
Certificate Registrar at the time such notice is given to the Certificateholders
and the Class C Certificateholders. In the event such notice is given in
connection with the Servicer's election to purchase the Loans, the Servicer
shall deposit in the Certificate Account on the Final Payment Date in
immediately available funds an amount equal to the purchase price specified in
Section 8.06 and upon such deposit the Certificateholders and the Class C
Certificateholders will be entitled to the amount of such purchase price but not
amounts in excess thereof, all as provided herein. Upon certification to the
Trustee by a Servicing Officer following such final deposit, the Trustee shall
promptly release to the Servicer the Loan Files for the remaining Loans, and the
Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer.
c. Upon presentation and surrender of the Certificates and the Class C
Certificates, the Trustee shall cause to be distributed from the Certificate
Account, in the following order of
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priority, to the Certificateholders and the Class C Certificateholders on the
Final Payment Date in proportion to their respective Percentage Interests: (1)
to the extent the Amount Available is sufficient therefor, and in the order of
priority provided for in Section 8.04(b), an amount equal to (i) as to Class A
Certificates, the Class A-1 Principal Balance, the Class A-2 Principal Balance,
the Class A-3 Principal Balance, the Class A-4 Principal Balance, the Class A-5
Principal Balance, the Class A-6 Principal Balance and, together with any Unpaid
Class A Interest Shortfall, 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 and
(unless such Payment Date occurs after April 2001) the Class A-7 IO Pass-Through
Rate, on the Class A-l Principal Balance, the Class A-2 Principal Balance, the
Class A-3 Principal Balance, the Class A-4 Principal Balance, the Class A-5
Principal Balance, the Class A-6 Principal Balance and (unless such Payment Date
occurs after April 2001) the Class A-7 IO Notional Principal Amount,
respectively, (ii) as to Class M-1 Certificates, the Class M-1 Principal
Balance, together with any Unpaid Class M-1 Interest Shortfall, any Unpaid Class
M-1 Liquidation Loss Interest Shortfall and one month's interest at the Class M-
1 Pass-Through Rate on the Class M-1 Principal Balance, (iii) as to Class M-2
Certificates, the Class M-2 Principal Balance, together with any Unpaid Class M-
2 Interest Shortfall, any Unpaid Class M-2 Liquidation Loss Interest Shortfall
and one month's interest at the Class M-2 Pass-Through Rate on the Class M-2
Principal Balance, (iv) as to Class B-1 Certificates, the Class B-1 Principal
Balance, together with any Unpaid Class B-1 Interest Shortfall, any Unpaid Class
B-1 Liquidation Loss Interest Shortfall and one month's interest at the Class B-
1 Pass-Through Rate on the Class B-1 Principal Balance, and (v) as to Class B-2
Certificates, the Class B-2 Principal Balance, together with any Unpaid Class B-
2 Interest Shortfall and one month's interest at the Class B-2 Pass-Through Rate
on the Class B-2 Principal Balance; and (2) as to the Class C Certificates, the
amount which remains on deposit in the Certificate Account (other than amounts
retained to meet claims) after application pursuant to clause (1) above;
provided, that, any Class B-2 Guaranty Payment deposited in the Certificate
Account shall be distributed only to the Class B-2 Certificateholders. The
distribution on the Final Payment Date pursuant to this Section 12.04 shall be
in lieu of the distribution otherwise required to be made on such Payment Date
in respect of each Class of Certificates and the Class C Certificates.
d. In the event that all of the Certificateholders and the Class C
Certificateholders do not surrender their Certificates and the Class C
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Company shall give a second written
notice to the remaining Certificateholders and the Class C Certificateholders to
surrender their Certificates and the Class C Certificates for cancellation and
receive the final distribution with respect thereto. If within three months
after the second notice all the Certificates and the Class C Certificates shall
not have been surrendered for cancellation, the Company shall transfer to itself
all amounts remaining on deposit in the Certificate Account, to hold in trust
for Certificateholders and the Class C Certificateholders who have not
surrendered their Certificates or the Class C Certificates, as the case may be,
for cancellation, together with the final record list of Certificateholders and
the Class C Certificateholders, and the Company shall take appropriate
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steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates and to
contact the Class C Certificateholders concerning their surrender of their Class
C Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain in trust hereunder.
SECTION 12.05. Acts of Certificateholders and Class C Certificateholders.
a. Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver,
or other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates representing, in the aggregate, 51% or more of the
Aggregate Certificate Principal Balance.
b. Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders or the Class C Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders or the Class C Certificateholders in person or by an
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 required, to the Servicer. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and (subject to Section 11.01)
conclusive in favor of the Trustee, the Servicer and the Company if made in the
manner provided in this Section.
c. The fact and date of the execution by any Certificateholder or the Class
C Certificateholders of any such instrument or writing may be proved in any
reasonable manner which the Trustee deems sufficient.
d. The ownership of Certificates and the Class C Certificates shall be
proved by the Certificate Register.
e. Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder or the Class C Certificateholders shall bind
every holder of every Certificate or the Class C Certificates, as applicable,
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, or omitted to be done by the Trustee,
the Servicer or the Company in reliance thereon, whether or not notation of such
action is made upon such Certificates or Class C Certificates.
f. The Trustee may require such additional proof of any matter referred to
in this Section as it shall deem necessary.
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SECTION 12.06. Calculations. Except as otherwise provided in this
Agreement, all interest rate and basis point calculations under this Agreement
will be made on the basis of a 360-day year and twelve 30-day months and will be
carried out to at least three decimal places.
SECTION 12.07. Assignment or Delegation by Company. Except as specifically
authorized hereunder, and except for its obligations as Servicer which are dealt
with under Article V and Article VII, the Company may not convey and assign or
delegate any of its rights or obligations hereunder absent the prior written
consent of Holders of Certificates representing, in the aggregate, 66-2/3% or
more of the Aggregate Certificate Principal Balance, and any attempt to do so
without such consent shall be void. Notwithstanding the foregoing, the Company
may not delegate its obligations under Section 8.03 absent (a) the prior written
consent of Holders of Certificates representing, in the aggregate, 66-2/3% or
more of the Aggregate Certificate Principal Balance, and the prior written
confirmation of S&P and Fitch that the rating of the Certificates will not be
lowered or withdrawn following such delegation, or (b) the prior written consent
of all of the Certificateholders, and any attempt to do so without such consent
shall be void. It is understood that the foregoing does not prohibit the pledge
or assignment by the Company of any right to payment pursuant to Article VIII.
SECTION 12.08. Amendment.
a. This Agreement may be amended from time to time by the Company, the
Servicer and the Trustee, without the consent of any of the Certificateholders
or the Class C Certificateholders, to correct manifest error, to cure any
ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, as the case may be, to make such
changes as are necessary to maintain the status of the Trust as a "real estate
mortgage investment conduit" under the REMIC Provisions of the Code or to
otherwise effectuate the benefits of such status to the Trust, the
Certificateholders or the Class C Certificateholders, including, without
limitation, to implement any provision permitted by law that would enable a
REMIC to avoid the imposition of any tax, or to make any other provisions with
respect to matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel for the Servicer,
adversely affect in any material respect the interests of any Certificateholder.
b. This Agreement may also be amended from time to time by the Servicer,
the Company and the Trustee, with the consent of Holders of Certificates
representing, in the aggregate, 66-2/3% or more of the Aggregate Certificate
Principal Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of such Certificateholders; provided,
however, that no such amendment shall (a) reduce in any manner the amount of, or
delay the timing of, collections of payments on the Loans or distributions which
are required to be made on any Certificate, (b) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the holders of
all Certificates then outstanding, (c) result in the
12-5
<PAGE>
disqualification of the Trust as a REMIC under the Code, (d) adversely affect
the status of either of the Master REMIC or the Subsidiary REMIC as a REMIC or
the status of the Certificates or the Subsidiary REMIC Regular Interests as
"regular interests" in the Master REMIC or Subsidiary REMIC, respectively, or
(e) cause any tax (other than any tax imposed on "net income from foreclosure
property" under Section 860G(c)(1) of the Code that would be imposed without
regard to such amendment) to be imposed on the Trust, including, without
limitation, any tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code. This Agreement may not be amended without the
consent of the Class C Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement which would modify in any manner the rights of the Class C
Certificateholders.
c. This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class C Certificateholders if
such amendment would result in the disqualification of the Trust as a REMIC
under the Code.
d. Concurrently with the solicitation of any consent pursuant to this
Section 12.08, the Trustee shall furnish written notification to S&P and Fitch.
Promptly after the execution of any amendment or consent pursuant to this
Section 12.08, the Trustee shall furnish written notification of the substance
of such amendment to S&P, Fitch, each Certificateholder and the Class C
Certificateholders.
e. It shall not be necessary for the consent of Certificateholders and the
Class C Certificateholders under this Section 12.08 to approve the particular
form of any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders and
the Class C Certificateholders shall be subject to such reasonable requirements
as the Trustee may prescribe.
f. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise.
g. In connection with any amendment pursuant to this Section, the Trustee
shall be entitled to receive an Opinion of Counsel to the Servicer to the effect
that such amendment is authorized or permitted by this Agreement.
h. Upon the execution of any amendment or consent pursuant to this Section
12.08, this Agreement shall be modified in accordance therewith, and such
amendment or consent shall form a part of this Agreement for all purposes, and
every Certificateholder or the Class C Certificateholders hereunder shall be
bound thereby.
i. In the absence of the consent described in subsection (d) of this
Section, in connection with any amendment pursuant to this Section, the Trustee
shall have received an
12-6
<PAGE>
unqualified Opinion of Counsel, the expense of which shall not be an expense of
the Trust, stating that any such amendment (i) will not adversely affect the
status of either of the Master REMIC or the Subsidiary REMIC as a REMIC or the
status of the Certificates or the Subsidiary REMIC Regular Interests as "regular
interests" therein, and (ii) will not cause any tax (other than any tax imposed
on "net income from foreclosure property" under Section 860G(c)(1) of the Code
that would be imposed without regard to such amendment) to be imposed on the
Trust, including, without limitation, any tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code.
SECTION 12.09. Notices. All communications and notices pursuant hereto to
the Servicer, the Company, the Trustee, S&P and Fitch shall be in writing and
delivered or mailed to it at the appropriate following address:
If to the Company or the Servicer:
Green Tree Financial Corporation
11825 North Pennsylvania Street
Carmel, Indiana 46032
Attention: Chief Financial Officer
Telecopier Number: (317) 817-6100
If to the Trustee:
U.S. Bank Trust National Association
Corporate Trust Department
180 East Fifth Street
Second Floor
St. Paul, Minnesota 55101
Attention: Laurie A. Howard
Telecopier Number: (651) 244-0714
If to S&P:
Standard & Poor's
55 Water Street
New York, New York 10041
Attention: Mortgage Surveillance
12-7
<PAGE>
If to Fitch:
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
Attention: Stephen Lei
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder or
the Class C Certificateholders shall be in writing and delivered or mailed at
the address shown in the Certificate Register.
SECTION 12.10. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 12.11. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 12.12. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Minnesota.
12-8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized this 26th day of
August, 1999.
GREEN TREE FINANCIAL CORPORATION
By: /s/ Phyllis A. Knight
-----------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
Attest:
/s/ James S. Adams
- ----------------------------
James S. Adams
Senior Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By: /s/ Laurie A. Howard
-----------------------------------
Laurie A. Howard
Vice President
Attest:
/s/ Joel J. Geist
- ----------------------------
Its Assistant Vice President
------------------------
12-9
<PAGE>
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this 26th day of
August, 1999, by Phyllis A. Knight, of Green Tree Financial Corporation, a
Delaware corporation, on behalf of the corporation.
/s/ Sharon R. Hinkle
-----------------------------------
Notary Public
[SEAL]
Sharon R. Hinkle
Notary Public Indiana
My Commission Expires Jan. 22, 2003
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this 26th day of
August, 1999, by Laurie A. Howard, of U.S. Bank Trust National Association, a
national banking association, on behalf of the national banking association.
/s/ Gina M. Vittori
-----------------------------------
Notary Public
[SEAL]
Gina M. Vittori
Notary Public Minnesota
My Commission Expires Jan. 31, 2005
12-10
<PAGE>
EXHIBIT A-1
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
Class A-[1][2][3][4][5][6] No.
(Senior)
Cut-off Date: as defined in the Pass-Through Rate: ____%
Pooling and Servicing Agreement
dated August 1, 1999 Denomination: $_______
First Payment Date: Aggregate Denomination of
____________, 1999 all Class A-[1][2][3][4][5][6]
Certificates: $_______
Servicer: Final Scheduled Payment Date:
Green Tree Financial Corporation ______________ (or if such day is
not a Business Day, then the next
succeeding Business Day)
CUSIP:________
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 1999-D, CLASS A-[1][2][3][4][5][6] (SENIOR)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT
SET FORTH IN THE AGREEMENT.
This certifies that is the registered owner of the undivided Percentage
Interest represented by the original principal amount set forth above in the
Certificates for Home Equity Loans, Series 1999-D, Class A-[1][2][3][4][5][6]
issued by Home Equity Loan Trust 1999-D (the "Trust"), which includes among its
asset a pool of closed-end home equity loans (the "Loans") (including, without
limitation, all mortgages, deeds of trust and security deeds relating to such
Loans and any and all rights to receive payments due on the Loans after the
applicable Cut-off Date or Subsequent Cut-off Date). The Trust has been created
pursuant to a Pooling and Servicing
A-1-1
<PAGE>
Agreement (the "Agreement"), dated as of August 1, 1999, between Green Tree
Financial Corporation, as Seller and Servicer (the "Company"), and U.S. Bank
Trust National Association, as Trustee of the Trust (the "Trustee"). This
Certificate is one of the Certificates described in the Agreement and is issued
pursuant and subject to the Agreement. By acceptance of this Certificate the
holder assents to and becomes bound by the Agreement. To the extent not defined
herein, all capitalized terms have the meanings assigned to such terms in the
Agreement.
The Agreement contemplates, subject to its terms, payment on the fifteenth
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Payment Date") of each calendar month commencing in ____________ 1999, so
long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-[1][2][3][4][5][6] Certificates with an
aggregate Percentage Interest of at least 5% of the Class A-[1][2][3][4][5][6]
Certificates and so desires, by wire transfer pursuant to instructions delivered
to the Trustee at least 10 days prior to such Payment Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Payment Date, in an amount equal to the
Certificateholder's Percentage Interest of the Class A-[1][2][3][4][5][6]
Distribution Amount for such Payment Date. Distributions of interest and
principal on the Class A-[1][2][3][4][5][6] Certificates will be made primarily
from amounts available in respect of the Loans. The final scheduled Payment Date
of this Certificate is _______________________ or the next succeeding Business
Day if such _____________________ is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Paul, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new Certificates evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
A-1-2
<PAGE>
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.]
The Company, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Company, the Servicer, the Trustee,
the Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Company, the Servicer, the Trustee, the Paying Agent, the Certificate
Registrar nor any such agent shall be affected by any notice to the contrary.
A-1-3
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-D has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated:_______________ HOME EQUITY LOAN TRUST 1999-D
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
A-1-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the within Certificate for Home Equity Loans, Series 1999-D, and does
hereby irrevocably constitute and appoint _________________________ Attorney to
transfer the said certificate on the Certificate Register maintained by the
Trustee, with full power of substitution in the premises.
Dated:________________ By:
----------------------------------
Signature
A-1-5
<PAGE>
EXHIBIT A-2
FORM OF CLASS A-7 IO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
Class A-7 IO No.
(Senior)
Cut-off Date: Pass-Through Rate: _____%
Denomination: $______
First Payment Date: Aggregate Class A-7 IO Original Notional
____________, 1999 Principal Amount: $50,000,000
Servicer: Final Scheduled Payment Date:
Green Tree Financial Corporation _____________________ (or if such day
is not a Business Day, then the next
succeeding Business Day)
CUSIP: ______________
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 1999-D, CLASS A-7 IO (SENIOR)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT
SET FORTH IN THE AGREEMENT.
This certifies that ___________________ is the registered owner of the
undivided Percentage Interest represented by the Class A-7 IO Original Notional
Principal Amount set forth above in the Certificates for Home Equity Loans,
Series 1999-D, Class A-7 IO issued by Home Equity Loan Trust 1999-D (the
"Trust"), which includes among its assets a pool of closed-end home equity loans
(the "Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date or Subsequent Cut-off Date).
The Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of August 1, 1999, between Green Tree Financial
A-2-1
<PAGE>
Corporation, as Seller and Servicer (the "Company"), and U.S. Bank Trust
National Association, as Trustee of the Trust (the "Trustee"). This Certificate
is one of the Certificates described in the Agreement and is issued pursuant and
subject to the Agreement. By acceptance of this Certificate the holder assents
to and becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the fifteenth
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Payment Date") of each calendar month commencing in ____________ 1999, so
long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-7 IO Certificates with an aggregate Percentage
Interest of at least 5% of the Class A-7 IO Certificates and so desires, by wire
transfer pursuant to instructions delivered to the Trustee at least 10 days
prior to such Payment Date) to the registered Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Payment Date, in an amount equal to the Certificateholder's
Percentage Interest of the Class A-7 IO Distribution Amount for such Payment
Date. Distributions of interest on the Class A-7 IO Certificates will be made
primarily from amounts available in respect of the Loans. The final scheduled
Payment Date of this Certificate is _______________________ or the next
succeeding Business Day if such ___________________ is not a Business Day.
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 LOANS.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Paul, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or his or
A-2-2
<PAGE>
her attorney duly authorized in writing, and thereupon one or more new
Certificates evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.]
The Company, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Company, the Servicer, the Trustee,
the Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Company, the Servicer, the Trustee, the Paying Agent, the Certificate
Registrar nor any such agent shall be affected by any notice to the contrary.
A-2-3
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-D has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated:________________ HOME EQUITY LOAN TRUST 1999-D
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
---------------------------------
Authorized Officer
A-2-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________ the within Certificate for Home Equity Loans,
Series 1999-D, and does hereby irrevocably constitute and appoint Attorney to
transfer the said certificate on the Certificate Register maintained by the
Trustee, with full power of substitution in the premises.
Dated:__________________ By:
----------------------------------
Signature
A-2-5
<PAGE>
EXHIBIT B
FORM OF CLASS M CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND CLASS M-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Class M-[1][2] No.
(Subordinate)
Cut-off Date: as defined in the Pass-Through Rate: ________%
Pooling and Servicing Agreement (or, the Adjusted Weighted Average
dated August 1, 1999 Loan Rate, if less)
First Payment Date:
____________, 1999 Denomination: $_______
Servicer: Aggregate Denomination of
Green Tree Financial Corporation all Class M-[1][2] Certificates:
$_________
Final Scheduled Payment Date:
(or if such day is not a Business
Day, then the next succeeding
Business Day)
CUSIP: ______________
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 1999-D, CLASS M-[1][2] (SUBORDINATE)
BY ACCEPTANCE OF THIS CERTIFICATE, THE PURCHASER OF THE CERTIFICATE OR ANY
INTEREST HEREIN BY, ON BEHALF OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT
PLAN, WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION
4975(e)(1) OF THE CODE (EACH, A "PLAN")
B-1
<PAGE>
ACKNOWLEDGES THAT EITHER THE CERTIFICATEHOLDER HAS DELIVERED TO THE COMPANY AND
THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF COUNSEL (SATISFACTORY TO THE
COMPANY AND THE TRUSTEE) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY
SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN
ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE COMPANY OR THE SERVICER TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF
NO SUCH OPINION IS DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE COMPANY
AND THE SERVICER EITHER (I) THAT THE PERSON ACQUIRING THE CERTIFICATE IS NEITHER
A PLAN, NOR ACTING ON BEHALF OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF
THE CODE, OR (II) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN
WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL
NOT SUBJECT THE TRUSTEE, THE COMPANY OR THE SERVICER TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT
SET FORTH IN THE AGREEMENT.
This certifies that ______________________ is the registered owner of the
undivided Percentage Interest represented by the original principal amount set
forth above in the Certificates for Home Equity Loans, Series 1999-D, Class
M-[1][2] issued by Home Equity Loan Trust 1999-D (the "Trust"), which includes
among its assets a pool of closed-end home equity loans (the "Loans")
(including, without limitation, all mortgages, deeds of trust and security deeds
relating to such Loans and any and all rights to receive payments due on the
Loans after the applicable Cut-off Date or Subsequent Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of August 1, 1999, between Green Tree Financial
Corporation, as Seller and Servicer (the "Company"), and U.S. Bank Trust
National Association, as Trustee of the Trust (the "Trustee"). This Certificate
is one of the Certificates described in the Agreement and is issued pursuant and
subject to the Agreement. By acceptance of this Certificate the holder assents
to and becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the fifteenth
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Payment Date") of each calendar month commencing in ____________ 1999, so
long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class M-[1][2] Certificates with an aggregate Percentage
Interest of at least 5% of the Class M-[1][2] Certificates and so desires, by
wire transfer pursuant to instructions delivered to the Trustee at least 10 days
prior to such Payment Date) to the registered Certificateholder at the address
appearing on the Certificate Register as of the Business Day
B-2
<PAGE>
immediately preceding such Payment Date, in an amount equal to the
Certificateholder's Percentage Interest of the Class M-[1][2] Distribution
Amount for such Payment Date. Distributions of interest and principal on the
Class M-[1][2] Certificates will be made primarily from amounts available in
respect of the Loans. The final scheduled Payment Date of this Certificate is
________________________ or the next succeeding Business Day if such
________________________ is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the
Agreement, for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
No transfer of this Certificate or any interest herein to any employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or that is described in
Section 4975(e)(1) of the Code or to any person or entity purchasing on behalf
of, or with assets of, such an employee benefit plan (each, a "Plan") will be
registered unless the transferee, at its expense, delivers to the Company and
the Trustee at its own expense an opinion of counsel (satisfactory to the
Company and the Trustee) that the purchase and holding of this Certificate by
such Plan will not result in the assets of the Trust being deemed to be "plan
assets" and subject to the prohibited transaction provisions of ERISA and the
Code and will not subject the Trustee, the Company or the Servicer to any
obligation or liability in addition to those undertaken in the Agreement. Unless
such opinion is delivered, each person acquiring this Certificate will be deemed
to represent to the Trustee, the Company and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Company or the Servicer to
any obligation or liability in addition to those undertaken in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Paul, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or his or
B-3
<PAGE>
her attorney duly authorized in writing, and thereupon one or more new
Certificates evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.]
The Company, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Company, the Servicer, the Trustee,
the Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Company, the Servicer, the Trustee, the Paying Agent, the Certificate
Registrar nor any such agent shall be affected by any notice to the contrary.
B-4
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-D has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: __________________ HOME EQUITY LOAN TRUST 1999-D
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
B-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _________________ the within Certificate for Home Equity Loans, Series
1999-D, and does hereby irrevocably constitute and appoint ____________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
Dated: __________________ By:
-----------------------------------
Signature
B-6
<PAGE>
EXHIBIT C
FORM OF CLASS B-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND[,] THE CLASS M CERTIFICATES [AND] THE CLASS B-1 CERTIFICATES]
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Class B-[1][2] No.
(Subordinate)
Cut-off Date: as defined in the Pass-Through Rate: ______%
Pooling and Servicing Agreement (or, the Adjusted Weighted Average
dated August 1, 1999 Loan Rate, if less)
First Payment Date: Denomination: $________
____________, 1999
Servicer: Aggregate Denomination of
Green Tree Financial Corporation all Class B-[1][2] Certificates:
$___________
Final Scheduled Payment Date:
_______________ (or if such day
is not a Business Day, then the
next succeeding Business Day)
CUSIP: _____________
CERTIFICATES FOR HOME EQUITY LOANS
SERIES 1999-D, CLASS B-[1][2] (SUBORDINATE)
BY ACCEPTANCE OF THIS CERTIFICATE, THE PURCHASER OF THE CERTIFICATE OR ANY
INTEREST HEREIN BY, ON BEHALF OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT
PLAN, WITHIN THE MEANING OF SECTION 3(3) OF THE
C-1
<PAGE>
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THAT
IS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE (EACH, A "PLAN") ACKNOWLEDGES
THAT EITHER THE CERTIFICATEHOLDER HAS DELIVERED TO THE COMPANY AND THE TRUSTEE
AT ITS OWN EXPENSE AN OPINION OF COUNSEL (SATISFACTORY TO THE COMPANY AND THE
TRUSTEE) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT
RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT
TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT
SUBJECT THE TRUSTEE, THE COMPANY OR THE SERVICER TO ANY OBLIGATION OR LIABILITY
IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE COMPANY AND THE SERVICER
EITHER (I) THAT THE PERSON ACQUIRING THE CERTIFICATE IS NEITHER A PLAN, NOR
ACTING ON BEHALF OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE, OR
(II) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT
RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE COMPANY OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT
SET FORTH IN THE AGREEMENT.
This certifies that ___________________ is the registered owner of the
undivided Percentage Interest represented by the original principal amount set
forth above in the Certificates for Home Equity Loans, Series 1999-D, Class
B-[1][2], issued by Home Equity Loan Trust 1999-D (the "Trust"), which includes
among its assets a pool of closed-end home equity loans (the "Loans")
(including, without limitation, all mortgages, deeds of trust and security deeds
relating to such Loans and any and all rights to receive payments due on the
Loans after the applicable Cut-off Date or the Subsequent Cut-off Date [and
payments due under the Class B-2 Limited Guaranty]). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
August 1, 1999, between Green Tree Financial Corporation, as Seller and Servicer
(the "Company"), and U.S. Bank Trust National Association as Trustee of the
Trust (the "Trustee"). This Certificate is one of the Certificates described in
the Agreement and is issued pursuant and subject to the Agreement. By acceptance
of this Certificate the holder assents to and becomes bound by the Agreement. To
the extent not defined herein, all capitalized terms have the meanings assigned
to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the fifteenth
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Payment Date") of each calendar month commencing in ____________ 1999, so
long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class B-[1][2] Certificates with an aggregate Percentage
C-2
<PAGE>
Interest of at least 5% of the Class B-[1][2] Certificates and so desires,
by wire transfer pursuant to instructions delivered to the Trustee at least 10
days prior to such Payment Date) to the registered Certificateholder at the
address appearing on the Certificate Register as of the Business Day immediately
preceding such Payment Date, in an amount equal to the Certificateholder's
Percentage Interest of the Class B-[1][2] Distribution Amount [and any Class B-2
Guaranty Payment] for such Payment Date. Distributions of interest and principal
on the Class B-[1][2] Certificates will be made primarily from amounts available
in respect of the Loans. The final scheduled Payment Date of this Certificate is
_________________________ or the next succeeding Business Day if such
_____________________ is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account [and the Class B-2
Limited Guaranty of the Company], to the extent available for distribution to
the Certificateholder as provided in the Agreement, for payment hereunder and
that the Trustee in its individual capacity is not personally liable to the
Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
No transfer of this Certificate or any interest herein to any employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or that is described in
Section 4975(e)(1) of the Code or to any person or entity purchasing on behalf
of, or with assets of, such an employee benefit plan (each, a "Plan") will be
registered unless the transferee, at its expense, delivers to the Company and
the Trustee at its own expense an opinion of counsel (satisfactory to the
Company and the Trustee) that the purchase and holding of this Certificate by
such Plan will not result in the assets of the Trust being deemed to be "plan
assets" and subject to the prohibited transaction provisions of ERISA and the
Code and will not subject the Trustee, the Company or the Servicer to any
obligation or liability in addition to those undertaken in the Agreement. Unless
such opinion is delivered, each person acquiring this Certificate will be deemed
to represent to the Trustee, the Company and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Company or the Servicer to
any obligation or liability in addition to those undertaken in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
C-3
<PAGE>
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Paul, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.]
The Company, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Company, the Servicer, the Trustee,
the Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Company, the Servicer, the Trustee, the Paying Agent, the Certificate
Registrar nor any such agent shall be affected by any notice to the contrary.
C-4
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-D has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: _________________ HOME EQUITY LOAN TRUST 1999-D
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
C-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________________ the within Certificate for Home Equity Loans,
Series 1999-D, and does hereby irrevocably constitute and appoint
__________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated:____________________ By:
----------------------------------
Signature
C-6
<PAGE>
EXHIBIT D
FORM OF ASSIGNMENT
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of August 1, 1999, between the undersigned and U.S. Bank Trust National
Association as Trustee (the "Trustee"), the undersigned does hereby transfer,
convey and assign, set over and otherwise convey, without recourse, to Home
Equity Loan Trust 1999-D, created by the Agreement, to be held in trust as
provided in the Agreement, (i) all right, title and interest in the home equity
loans identified in the List of Loans attached to the Agreement (including,
without limitation, all related mortgages, deeds of trust and security deeds and
any and all rights to receive payments on or with respect to the Initial Loans
due after the applicable Cut-off Date), (ii) all rights under any hazard, flood
or other individual insurance policy on the real estate securing an Initial Loan
for the benefit of the creditor of such Initial Loan, (iii) all rights the
Company may have against the originating lender with respect to Initial Loans
originated by a lender other than the Company, (iv) all rights under the Errors
and Omissions Protection Policy and the Fidelity Bond as such policy and bond
relate to the Initial Loans, (v) all rights under any title insurance policies,
if applicable, on any of the properties securing Initial Loans, (vi) all
documents contained in the Loan Files relating to the Initial Loans, (vii)
amounts in the Certificate Account, the Capitalized Interest Account and the
Pre-Funding Account (including all proceeds of investments of the funds in
Certificate Account) and (viii) all proceeds and products of the foregoing.
This Assignment is made pursuant to and upon the representations and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others. All undefined capitalized terms used in this Assignment
have the meanings given to them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this ____ day of __________, 1999.
GREEN TREE FINANCIAL CORPORATION
[Seal] By:
-----------------------------------
[Name]
[Title]
D-1
<PAGE>
EXHIBIT E
FORM OF CERTIFICATE OF OFFICER
GREEN TREE FINANCIAL CORPORATION
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company in
connection with the Pooling and Servicing Agreement dated as of August 1, 1999
(the "Agreement") between the Company and U.S. Bank Trust National Association
as Trustee (all capitalized terms used herein without definition having the
respective meanings specified in the Agreement), and further certifies that:
(i) attached hereto as Exhibit I is a true and correct copy of the
Restated Certificate of Incorporation of the Company, together with all
amendments thereto as in effect on the date hereof;
(ii) attached hereto as Exhibit II is a true and correct copy of the
Bylaws of the Company, as amended, as in effect on the date hereof;
(iii) the representations and warranties of the Company contained in
Sections 3.01 and 3.04 of the Agreement are true and correct on and as of
the date hereof and, to the best of his knowledge, the representations and
warranties of the Company contained in Sections 3.02 and 3.03 of the
Agreement are true and correct on and as of the date hereof;
(iv) no event with respect to the Company has occurred and is
continuing which would constitute an Event of Termination or an event that
with notice or lapse of time or both would become an Event of Termination
under the Agreement; and
(v) each of the agreements and conditions of the Company to be
performed on or before the date hereof pursuant to the Agreement have been
performed in all material respects.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day of
_________________, 1999.
--------------------------------------
[Name]
[Title]
E-1
<PAGE>
EXHIBIT F
FORM OF OPINION OF COUNSEL FOR THE COMPANY
The opinion of Dorsey & Whitney LLP shall be to the effect that
(capitalized terms have the meanings set forth in the Pooling and Servicing
Agreement):
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, with corporate power to
execute, deliver and perform its obligations under the Pooling and Servicing
Agreement (including the Class B-2 Limited Guaranty contained therein), the
Certificates and the Class C Certificates.
2. The Pooling and Servicing Agreement (including the Class B-2 Limited
Guaranty contained therein) has been duly authorized by all requisite corporate
action, duly executed and delivered by the Company, and constitutes the valid
and binding obligation of the Company enforceable in accordance with its terms.
The Certificates have been duly authorized by all requisite corporate action
and, when duly and validly executed by the Trustee in accordance with the
Pooling and Servicing Agreement, will be validly issued and outstanding and
entitled to the benefits of the Pooling and Servicing Agreement.
3. No consent, approval, authorization or order of any state or federal
court or governmental agency or body is required to be obtained by the Company
for the consummation of the transactions contemplated by the Pooling and
Servicing Agreement, except such as may be required under blue sky laws under
any jurisdiction in connection with the offering of the Certificates by the
Underwriters pursuant to the Underwriting Agreement.
4. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as now in effect, and the Trust is not
required to be registered as an investment company under the Investment Company
Act of 1940.
5. Neither the transfer of the Loans to the Trustee acting on behalf of the
Trust, nor the assignment of the Company's lien on the related real estate which
is the subject of a home equity loan, nor the issuance or sale of the
Certificates and the Class C Certificates, nor the execution and delivery of the
Pooling and Servicing Agreement, nor the consummation of any other of the
transactions contemplated in the Pooling and Servicing Agreement, nor the
fulfillment of the terms of the Certificates, the Class C Certificates or the
Pooling and Servicing Agreement by the Company will conflict with, or result in
a breach, violation or acceleration of, or constitute a default under, any term
or provision of the Restated Certificate of Incorporation or Bylaws of the
Company or of any indenture or other agreement or instrument known to us to
which the Company is a party or by which it is bound, or result in a violation
of, or contravene the terms of any statute, order or regulation, applicable to
the Company, of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it.
F-1
<PAGE>
6. There are no actions or proceedings pending, nor to the best of our
knowledge, are there any investigations pending or overtly threatened against
the Company before any court, administrative agency or other tribunal (A)
asserting the invalidity of the Pooling and Servicing Agreement, the
Certificates, the Class C Certificates, the hazard or flood insurance policies
applicable to any Loans or the Errors and Omissions Protection Policy, (B)
seeking to prevent the issuance of the Certificates or the Class C Certificates
or the consummation of any of the transactions contemplated by the Pooling and
Servicing Agreement, (C) which is likely materially and adversely to affect the
performance by the Company of its obligations under, or the validity or
enforceability of the Pooling and Servicing Agreement, the Certificates or the
Class C Certificates, or (D) seeking adversely to affect the federal income tax
attributes of the Certificates or the Class C Certificates described in the
Prospectus and the Prospectus Supplement under the heading "Certain Federal
Income Tax Consequences."
7. The transfer of the Loans to the Trust in accordance with Section 2.01
of the Pooling and Servicing Agreement would not be avoidable as a preferential
transfer under Section 547 of the United States Bankruptcy Code (11 U.S.C. ss.
547), as in effect on the date hereof, in the event that the Company became a
debtor under the United States Bankruptcy Code.
8. Pursuant to the Pooling and Servicing Agreement the Company has
transferred to the Trustee acting on behalf of the Trust all of the Company's
right, title and interest in the Loans, free and clear of any and all other
assignments, encumbrances, options, rights, claims, liens or security interests
(except tax or possessory liens) that may affect the right of the Trustee in and
to such Loans, and has delivered the Loan Files to the Trustee or its custodian.
No filing or other action, other than the filing of a financing statement on
Form UCC-1 with the Secretary of State of the State of Minnesota identifying the
Loans as collateral and naming the Company as debtor and the Trust as secured
party, and the filing of continuation statements as required by Section 4.01 of
the Pooling and Servicing Agreement, is necessary to perfect as against third
parties the assignment of the Loans by the Company to the Trust. We have
separately provided you with our opinion concerning whether such assignment
could be recharacterized as a pledge rather than a sale in the event the Company
became a debtor under the United States Bankruptcy Code. However, in the event
such assignment were characterized as a pledge securing a loan from the
Certificateholders to the Company, it is our opinion that the Trustee would be
deemed to have a valid and perfected security interest in the Loans and the
proceeds thereof, which security interest would be prior to any other security
interest that may be perfected under the Uniform Commercial Code as in effect in
the State of Minnesota and over any "lien creditor" (as defined in Minn. Stat.
ss.336.9-301(3)) who becomes such after the Closing Date, except that a
subsequent purchaser of any Loan who gives new value and takes possession
thereof in the ordinary course of his business would have priority over the
Trustee's security interest in such Loan, if such purchaser acts without
knowledge that such Loan was subject to a security interest. We have assumed for
the purposes of this opinion that during the term of the Pooling and Servicing
Agreement the Trustee, or its custodian, shall maintain possession of the Loan
Files for the purpose of perfecting the assignment to the Trustee of the Loans.
We express no opinion with respect to the enforceability of any individual Loan
or the existence of any claims, rights or other matters in favor of any Obligor
or the owner of any financed home improvement.
F-2
<PAGE>
9. In reliance upon certain representations and warranties set forth in the
Pooling and Servicing Agreement and assuming that the Company and the Trustee
comply with the requirements of the Pooling and Servicing Agreement, including
the filing on behalf of each of the Master REMIC and Subsidiary REMIC of a
proper election to be taxed as a REMIC, as of the date hereof the Master REMIC
and Subsidiary REMIC created pursuant to the Pooling and Servicing Agreement
will each qualify as a REMIC. Further, the Certificates will evidence ownership
of the "regular interests" in the Master REMIC and the Class C Master
Certificates and Class C Subsidiary Certificates will evidence ownership of the
single class of "residual interest" in the Master REMIC and Subsidiary REMIC
respectively. For Minnesota income tax purposes, and subject to the foregoing
assumptions, and the provisions of Minnesota law as of the date hereof, the
Trust (excluding the Capitalized Interest Account and the Pre-Funding Account)
will not be subject to tax and the income of the Trust will be taxable to the
holders of interests therein, all in accordance with the provisions of the Code
concerning REMICs. Moreover, ownership of Certificates will not be a factor in
determining whether such owner is subject to Minnesota income taxes. Therefore,
if the owner of Certificates is not otherwise subject to Minnesota income or
franchise taxes in the State of Minnesota, such owner will not become subject to
such Minnesota taxes solely by virtue of owning Certificates.
10. The transfer of the Loans and the proceeds thereof by the Company to
the Trustee on the date hereof pursuant to the Pooling and Servicing Agreement
would not be avoidable as a fraudulent transfer under the Uniform Fraudulent
Transfer Act as in effect in Minnesota on the date hereof (Minn. Stat. ss.ss.
513.41 through 513.51), nor, should the Company become a debtor under the United
States Bankruptcy Code, as a fraudulent transfer under Section 548 of the United
States Bankruptcy Code (11 U.S.C. ss. 548) as in effect on the date hereof.
F-3
<PAGE>
EXHIBIT G
FORM OF TRUSTEE'S ACKNOWLEDGMENT
U.S. Bank Trust National Association, a national banking association
organized under the laws of the United States, acting as trustee (the "Trustee")
of Home Equity Loan Trust 1999-D (the "Trust") created pursuant to the Pooling
and Servicing Agreement dated as of August 1, 1999 between Green Tree Financial
Corporation and the Trustee (the "Agreement") (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement)
acknowledges, pursuant to Section 2.04 of the Agreement, that the Trustee has
received the following: (i) all right, title and interest in the home equity
[Initial/Subsequent] loans identified in the List of Loans attached to the
[Agreement] [Subsequent Transfer Instrument of even date herewith] (the
["Initial Loans"] ["Subsequent Loans"]) (the "Loans") (including, without
limitation, all mortgages, deeds of trust and security deeds relating to the
Loans and any and all rights to receive payments on or with respect to the Loans
due after the Cut-off Date, identified in the List of Loans delivered pursuant
to Section 2.02 of the [Agreement] [Subsequent Transfer Instrument of even date
herewith] (the ["Initial Loans"] ["Subsequent Loans"]), (ii) all rights under
hazard, flood or other individual insurance policy on the properties described
in the [Initial/Subsequent] Loans and, as to [Initial/Subsequent] Loans
pertaining to properties located in special flood areas designated by HUD, all
rights under flood insurance policies as such insurance relates to the
[Initial/Subsequent] Loans, (iii) all rights the Company may have against the
originating lender with respect to [Initial/Subsequent] Loans originated by a
lender other than the Company, (iv) all rights under the Errors and Omissions
Protection Policy, as such policy relates to the [Initial/Subsequent] Loans, (v)
all rights under any title insurance policies, if applicable, on any of the
Properties securing [Initial/Subsequent] Loans, [(vi) amounts in the Certificate
Account, the Capitalized Interest Account and the Pre-Funding Account (including
all proceeds of investments of funds in the Certificate Account)] [(vi)/(vii)]
the Limited Guaranty, all documents contained in the Loan Files (as defined in
Section 1.02 of the Agreement), [(vii)/(viii)] the Limited Guaranty and rights
to receive certain payments pursuant to the Limited Guaranty and [(viii)/(ix)]
all proceeds and products of the foregoing; and declares that, directly or
through a Custodian, it will hold all Loan Files that have been delivered in
trust upon the trusts set forth in the Agreement for the use and benefit of all
Certificateholders and the holder of the Class C Certificate. The Trustee
acknowledges that it has conducted a cursory review of the Loan Files and hereby
confirms that, except as noted on the document exception listing attached
hereto, each Loan File contained (a) an original contract or promissory note and
(b) a sale control document. The Trustee has not otherwise reviewed the Loans
and Loan Files for compliance with the terms of the Pooling and Servicing
Agreement.
[From Trustee or Custodian as applicable.] The Trustee acknowledges that it
has conducted a cursory review of the Loan Files and hereby confirms that except
as noted on the document exception listing attached hereto, each Loan File
contained (a) an original contract or promissory note, (b) with respect to each
Loan, an original or a copy of the mortgage or deed of trust or similar evidence
of a lien on the related improved real estate, (c) in the case of Loans
originated by a lender other than the Company, an original or a copy of an
assignment of the mortgage, deed of trust or security deed by the lender to the
Company, and (d) any extension, modification or waiver agreement(s). The Trustee
has not otherwise reviewed the Loans and Loan Files for compliance with the
terms of the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, U.S. Bank Trust National Association as Trustee has
caused this acknowledgment to be executed by its duly authorized officer and its
corporate seal affixed hereto as of this 26th day of August, 1999.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By:
-----------------------------------
Laurie A. Howard
Vice President
G-1
<PAGE>
EXHIBIT H
FORM OF CERTIFICATE OF SERVICING OFFICER
GREEN TREE FINANCIAL CORPORATION
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 6.02 of the Pooling and Servicing Agreement (the
"Agreement") dated as of August 1, 1999 between the Company and U.S. Bank Trust
National Association, as Trustee of Home Equity Loan Trust 1999-D (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. The Monthly Report for the period from __________ to __________ attached
to this certificate is complete and accurate in accordance with the requirements
of Sections 6.01 and 6.02 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with notice
or lapse of time or both would become an Event of Termination has occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day of
_______________________ , 1999.
GREEN TREE FINANCIAL CORPORATION
By:
-----------------------------------
[Name]
[Title]
H-1
<PAGE>
EXHIBIT I
FORM OF CLASS C CERTIFICATE
[MASTER] [SUBSIDIARY]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
B-1 CERTIFICATES AND THE CLASS B-2 CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED TRANSFEREE
(AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH
TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH
POOLING AND SERVICING AGREEMENT.
BY ACCEPTANCE OF THIS CERTIFICATE, THE PURCHASER OF THE CERTIFICATE OR ANY
INTEREST HEREIN BY, ON BEHALF OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT
PLAN WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION
4975(e)(1) OF THE CODE (EACH, A "PLAN") ACKNOWLEDGES THAT EITHER THE
CERTIFICATEHOLDER HAS DELIVERED TO THE COMPANY AND THE TRUSTEE AT ITS OWN
EXPENSE AN OPINION OF COUNSEL (SATISFACTORY TO THE COMPANY AND THE TRUSTEE) THAT
THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE
TRUSTEE, THE COMPANY OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN ADDITION
TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS DELIVERED, IS
DEEMED TO REPRESENT TO THE TRUSTEE, THE
I-1
<PAGE>
COMPANY AND THE SERVICER EITHER (I) THAT THE PERSON ACQUIRING THE CERTIFICATE IS
NEITHER A PLAN, NOR ACTING ON BEHALF OF A PLAN, SUBJECT TO ERISA OR TO SECTION
4975 OF THE CODE, OR (II) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY
SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE PLAN
ASSETS AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE COMPANY OR THE SERVICER TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Class C [Master] [Subsidiary] No.
(Subordinate)
Cut-off Date: Percentage Interest:
As defined in the Pooling
and Servicing Agreement
First Payment Date:
September 15, 1999
CERTIFICATE FOR HOME EQUITY LOANS, SERIES 1999-D
Original Aggregate Certificate Principal Balance of the Trust: $________
This certifies that Green Tree Finance Corp.--Two is the registered owner
of the Residual Interest represented by this Certificate, and entitled to
certain distributions out of Home Equity Loan Trust 1999-D (the "Trust"), which
includes among its assets a pool of closed-end home equity loans (the "Loans")
(including, without limitation, all mortgages, deeds of trust and security deeds
relating to such Loans and any and all rights to receive payments due on the
Loans after the applicable Cut-off Date or the Subsequent Cut-off Date. The
Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of August 1, 1999, between Green Tree Financial
Corporation, as Seller and Servicer (the "Company"), and U.S. Bank Trust
National Association, as Trustee of the Trust (the "Trustee"). This Class C
[Master] [Subsidiary] Certificate is described in the Agreement and is issued
pursuant and subject to the Agreement. By acceptance of this Class C [Master]
[Subsidiary] Certificate the holder assents to and becomes bound by the
Agreement. To the extent not defined herein, all capitalized terms have the
meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the fifteenth
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Payment Date") of each calendar month commencing in ____________ 1999, so
long as the Agreement has not been terminated, by check to the registered Class
C [Master] [Subsidiary] Certificateholder at the address appearing on the
Certificate Register as of the Business Day immediately preceding such Payment
Date, in an
I-2
<PAGE>
amount equal to the difference between (A) the Amount Available, and (B) the sum
of (i) the Class A Distribution Amount, (ii) the Class M-1 Distribution Amount,
(iii) the Class M-2 Distribution Amount, (iv) the Class B-1 Distribution Amount,
(v) the Class B-2 Distribution Amount, (vi) the Monthly Servicing Fee with
respect to the Loans, (vii) amounts to reimburse the Servicer or the Trustee, as
applicable, for prior Advances with respect to the Loans, and (viii) amounts
necessary to reimburse the Company for any previous unreimbursed Class B-2
Guaranty Payments. The final scheduled Payment Date of this Class C [Master]
[Subsidiary] Certificate is [_____________________] or the next succeeding
Business Day if such [___________________] is not a Business Day.
The Class C [Master] [Subsidiary] Certificateholder, by its acceptance of
this Certificate, agrees that it will look solely to the funds in the
Certificate Account to the extent available for distribution to the Class C
[Master] [Subsidiary] Certificateholder as provided in the Agreement for payment
hereunder and that the Trustee in its individual capacity is not personally
liable to the Class C [Master] [Subsidiary] Certificateholder for any amounts
payable under this Certificate or the Agreement or, except as expressly provided
in the Agreement, subject to any liability under the Agreement. By acceptance of
this Certificate, the Class C [Master] [Subsidiary] Certificateholders agrees to
disclosure of his, her or its name and address to other Certificateholders under
the conditions specified in the Agreement.
No transfer of this Certificate or any interest herein to any employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or that is described in
Section 4975(e)(1) of the Code or to any person or entity purchasing on behalf
or, or with assets of, such an employee benefit plan (each, a "Plan") will be
registered unless the transferee, at its expense, delivers to the Company and
the Trustee at its own expense an opinion of counsel (satisfactory to the
Company and the Trustee) that the purchase and holding of this Certificate by
such Plan will not result in the assets of the Trust being deemed to be "plan
assets" and subject to the prohibited transaction provisions of ERISA and the
Code and will not subject the Trustee, the Company or the Servicer to any
obligation or liability in addition to those undertaken in the Agreement. Unless
such opinion is delivered, each person acquiring this Certificate will be deemed
to represent to the Trustee, the Company and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Company or the Servicer to
any obligation or liability in addition to those undertaken in the Agreement.
This Class C [Master] [Subsidiary] Certificate does not purport to
summarize the Agreement and reference is made to the Agreement for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and immunities of the Trustee.
Copies of the Agreement and all amendments thereto will be provided to any Class
C [Master] [Subsidiary] Certificateholders free of charge upon a written request
to the Trustee.
I-13
<PAGE>
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C [Master] [Subsidiary] Certificate is
registrable in the Certificate Register of the Certificate Registrar upon
surrender of this Class C [Master] [Subsidiary] Certificate for registration of
transfer at the office or agency maintained by the Trustee in Minneapolis or St.
Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
a new Class C [Master] [Subsidiary] Certificate evidencing the same Class C
[Master] [Subsidiary] Certificate will be issued to the designated transferee or
transferees.
The Company, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Company, the Servicer, the Trustee,
the Paying Agent or the Certificate Registrar may treat the person in whose name
this Class C [Master] [Subsidiary] Certificate is registered as the owner hereof
for all purposes, and neither the Company, the Servicer, the Trustee, the Paying
Agent, the Certificate Registrar nor any such agent shall be affected by any
notice to the contrary.
The holder of this Class C [Master] [Subsidiary] Certificate, by acceptance
hereof, agrees that, in accordance with the requirements of Section 860D(b)(1)
of the Code, the federal tax return of the Trust for its first taxable year
shall provide that the Trust elects to be treated as a "real estate mortgage
investment conduit" (a "REMIC") under the Code for such taxable year and all
subsequent taxable years. The Certificates shall be "regular interests" in the
REMIC and the Class C [Master] [Subsidiary] Certificate shall be the "residual
interest" in the REMIC. In addition, the holder of this Class C [Master]
[Subsidiary] Certificate, by acceptance hereof, (i) agrees to file tax returns
consistent with and in accordance with any elections, decisions or other reports
made or filed with regard to federal, state or local taxes on behalf of the
Trust, and (ii) agrees to cooperate with the Company in connection with
examinations of the Trust's affairs by tax authorities, including administrative
and judicial proceedings, and (iii) makes the additional agreements,
designations and appointments, and undertakes the responsibilities, set forth in
Section 6.06 of the Agreement.
I-4
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-D has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated:_________________ HOME EQUITY LOAN TRUST 1999-D
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
-----------------------------------
Authorized Officer
I-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________________ the within Certificate for Home Equity Loans,
Series 1999-D, and does hereby irrevocably constitute and appoint
______________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated:___________________ By:
---------------------------------
Signature
I-6
<PAGE>
EXHIBIT J-1
FORM OF CERTIFICATE REGARDING SUBSTITUTE LOANS
GREEN TREE FINANCIAL CORPORATION
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company
pursuant to Sections 3.05 and 8.05 of the Pooling and Servicing Agreement (the
"Agreement") dated as of August 1, 1999 between the Company and U.S. Bank Trust
National Association, as Trustee of Home Equity Loan Trust 1999-D (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. The Loans on the attached schedule are to be repurchased by the Company
on the date hereof pursuant to Section 3.05 of the Agreement.
2. Upon deposit of the Repurchase Price for such Loans, such Loans may,
pursuant to Section 8.05 of the Agreement, be assigned by the Trustee to the
Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day of
_________________, 1999.
GREEN TREE FINANCIAL CORPORATION
By:
-----------------------------------
[Name]
[Title]
J-1-1
<PAGE>
EXHIBIT J-2
FORM OF CERTIFICATE REGARDING REPURCHASED LOANS
GREEN TREE FINANCIAL CORPORATION
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company
pursuant to Sections 3.05(b) and 8.05 of the Pooling and Servicing Agreement
(the "Agreement") dated as of August 1, 1999 between the Company and U.S. Bank
Trust National Association, as Trustee of Home Equity Loan Trust 1999-D (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have been
delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the date
hereof pursuant to Section 3.05(b) of the Agreement and each such Loan is an
Eligible Substitute Loan [description, as to each Loan, as to how it satisfies
the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 3.05 (b)(iii) of the Agreement,
have been filed with the appropriate offices.
4. The Company has delivered to the Trustee an executed assignment to the
Trustee on behalf of the Trust in recordable form for each mortgage securing
such Eligible Substitute Loans.
5. The requirements of Section 3.05(b) of the Agreement have been met with
respect to each such Eligible Substitute Loan.
[6. There has been deposited in the Certificate Account the amounts listed
on the schedule attached hereto as the amount by which the Scheduled Principal
Balance of each Replaced Loan exceeds the Scheduled Principal Balance of each
Loan being substituted therefor.]
J-2-1
<PAGE>
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day of
__________________, 1999.
GREEN TREE FINANCIAL CORPORATION
By:
------------------------------------
[Name]
[Title]
J-2-2
<PAGE>
EXHIBIT J-3
FORM OF CERTIFICATE REGARDING SUBSTITUTION FOR PREPAID LOANS
GREEN TREE FINANCIAL CORPORATION
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 2.06 of the Pooling and Servicing Agreement (the
"Agreement") dated as of August 1, 1999 between the Company and U.S. Bank Trust
National Association, as Trustee of Home Equity Loan Trust 1999-D (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have been
delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the date
hereof pursuant to Section 2.06 of the Agreement and each such Loan is an
Eligible Substitute Loan [description, as to each Loan, as to how it satisfies
the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 2.06(iii) of the Agreement, have
been filed with the appropriate offices.
4. The Company has delivered to the Trustee an executed assignment to the
Trustee on behalf of the Trust in recordable form for each mortgage securing
such Eligible Substitute Loans.
5. The requirements of Section 2.06 of the Agreement have been met with
respect to each such Eligible Substitute Loan.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day of
_______________, 1999.
GREEN TREE FINANCIAL CORPORATION
By:
-----------------------------------
[Name]
[Title]
J-3-1
<PAGE>
EXHIBIT K
FORM OF REPRESENTATION LETTER
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Green Tree Financial Corporation
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Re: Certificates for Home Equity Loans, Series 1999-D, Class C
The undersigned purchaser (the "Purchaser") understands that the purchase
of the above-referenced certificates (the "Certificates") may be made only by
institutions which are "Accredited Investors" under Regulation D, as promulgated
under the Securities Act of 1933, as amended (the "1933 Act"), which includes
banks, savings and loan associations, registered brokers and dealers, insurance
companies, investment companies, and organizations described in Section
501(c)(3) of the Internal Revenue Code, corporations, business trusts and
partnerships, not formed for the specific purpose of acquiring the Certificates
offered, with total assets in excess of $5,000,000. The undersigned represents
on behalf of the Purchaser that the Purchaser is an "Accredited Investor" within
the meaning of such definition. The Purchaser is urged to review carefully the
responses, representations and warranties it is making herein.
Representations and Warranties
The Purchaser makes the following representations and warranties in order
to permit the Trustee, Green Tree Financial Corporation, and ________________ to
determine its suitability as a purchaser of Certificates and to determine that
the exemption from registration relied upon by Green Tree Financial Corporation
under Section 4(2) of the 1933 Act is available to it.
1. The Purchaser understands that the Certificates have not been and will
not be registered under the 1933 Act and may be resold (which resale is not
currently contemplated) only if registered pursuant to the provisions of the
1933 Act or if an exemption from registration is available, that Green Tree
Financial Corporation is not required to register the Certificates and that any
transfer must comply with Section 9.02 of the Pooling and Servicing Agreement
relating to the Certificates.
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificates.
K-1
<PAGE>
3. The Purchaser is a sophisticated institutional investor and has
knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of its investment in the Certificates and is
able to bear the economic risk of such investment. The Purchaser has reviewed
the Prospectus Supplement dated August 13, 1999, to the Prospectus dated August
13, 1999 (the "Prospectus") with respect to the Certificates, and has been given
such information concerning the Certificates, the underlying home equity loans
and Green Tree Financial Corporation as it has requested.
4. The Purchaser is acquiring the Certificates as principal for its own
account (or for the account of one or more other institutional investors for
which it is acting as duly authorized fiduciary or agent) for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
5. The Purchaser either (check one box):
o is not an employee benefit plan within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended or that is described in Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended or a person or entity
purchasing on behalf of, or with assets of, such a plan, or
o has provided the Trustee and Servicer with the opinion of counsel
described in Section 9.02(b)(2) of the Pooling and Servicing
Agreement, or
o acknowledges that it is deemed to make the representation set
forth in Section 9.02(b)(2) of the Pooling and Servicing
Agreement.
6. The Purchaser understands that such Certificate will bear a legend
substantially as set forth in the form of Certificate included in the Pooling
and Servicing Agreement.
7. The Purchaser, as holder of the Class C Certificate, acknowledges (i) it
may incur tax liabilities in excess of any cash flows generated by the interest
and (ii) it intends to pay the taxes associated with holding the Class C
Certificate as they become due.
8. The Purchaser agrees that it will obtain from any purchaser of the
Certificates from it the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 7 and in this paragraph 8.
K-2
<PAGE>
The representations and warranties contained herein shall be binding upon
the heirs, executors, administrators and other successors of the undersigned. If
there is more than one signatory hereto, the obligations, representations,
warranties and agreements of the undersigned are made jointly and severally.
K-3
<PAGE>
Executed at ______________, _________________, this _____ day of
__________________.
Purchaser's Name (Print)
By:
-----------------------------------
Signature
Its:
-------------------------------
Address of Purchaser
Purchaser's Taxpayer
Identification Number
K-4
<PAGE>
EXHIBIT L
LIST OF INITIAL LOANS
[To Be Supplied]
L-1
<PAGE>
EXHIBIT M
FORM OF MONTHLY REPORT
CERTIFICATES FOR HOME EQUITY LOANS, SERIES 1999-D
Payment Date:____________________
1. Amount Available (including Monthly Servicing Fee)
2. Formula Principal Distribution Amount: __________
(a) Scheduled principal __________
(b) Principal Prepayments __________
(c) Liquidated Loans __________
(d) Repurchases __________
(e) Previously undistributed (a)-(d) amounts __________
(f) Pre-Funded Amount, if any
(Post-Funding Payment Date) __________
3. Senior Percentage __________
4. Class B Percentage __________
5. Class A-7 IO Notional Principal Amount __________
Class A Certificates
- --------------------
Interest
6. Aggregate current interest
(a) Class A-1 Pass-Through Rate (6.290%) __________
(b) Class A-l Interest __________
(c) Class A-2 Pass-Through Rate (7.050%) __________
(d) Class A-2 Interest __________
(e) Class A-3 Pass-Through Rate (7.300%) __________
(f) Class A-3 Interest __________
M-1
<PAGE>
(g) Class A-4 Pass-Through Rate (7.560%) __________
(h) Class A-4 Interest __________
(i) Class A-5 Pass-Through Rate (7.880%) __________
(j) Class A-5 Interest __________
(k) Class A-6 Pass-Through Rate (7.610%) __________
(l) Class A-6 Interest __________
(m) Class A-7 IO Pass-Through Rate (6.500%) __________
(n) Class A-7 IO Interest __________
7. Amount applied to Unpaid Class A Interest Shortfall __________
8. Remaining Unpaid Class A Interest Shortfall __________
Class M-1 Certificates
- ----------------------
9. Amount Available less all preceding
distributions __________
Interest on Class M-1 Adjusted Principal Balance
10. Class M-1 Adjusted Principal Balance __________
11. Current Interest
(a) Class M-1 Pass-Through Rate (8.358%) (or the
Adjusted Weighted Average Loan Rate, if less) __________
(b) Class M-1 Interest __________
12. Amount applied to Unpaid Class M-1
Interest Shortfall __________
13. Remaining Unpaid Class M-1
Interest Shortfall __________
Class M-2 Certificates
- ----------------------
14. Amount Available less all preceding
distributions __________
Interest on Class M-2 Adjusted Principal Balance
15. Class M-2 Adjusted Principal Balance __________
M-2
<PAGE>
16. Current Interest
(a) Class M-2 Pass-Through Rate (8.888%) (or the
Adjusted Weighted Average Loan Rate, if less)
(b) Class M-2 Interest __________
17. Amount applied to Unpaid Class M-2
Interest Shortfall __________
18. Remaining Unpaid Class M-2
Interest Shortfall __________
Class B-1 Certificates
- ----------------------
19. Amount Available less all preceding
distributions __________
Interest on Class B-1 Adjusted Principal Balance
20. Class B-1 Adjusted Principal Balance __________
21. Current Interest
(a) Class B-1 Pass-Through Rate (10.374%) (or the
Adjusted Weighted Average Loan Rate, if less) __________
(b) Class B-1 Interest __________
22. Amount applied to Unpaid Class B-1
Interest Shortfall __________
23. Remaining Unpaid Class B-1
Interest Shortfall __________
Class A Certificates
- --------------------
24. Amount Available less all preceding
distributions __________
Principal
M-3
<PAGE>
26. Class A-6 Lockout Percentage for such
Payment Date __________
27. Class A principal distribution:(1)
(a) Class A-6 Lockout Pro Rata Distribution Amount __________
(b) Balance of Senior Percentage of Formula Principal
Distribution Amount:
(i) Class A-1 __________
(ii) Class A-2 __________
(iii) Class A-3 __________
(iv) Class A-4 __________
(v) Class A-5 __________
(vi) Class A-6 __________
28. (a) Class A-1 Principal Balance __________
(b) Class A-2 Principal Balance __________
(c) Class A-3 Principal Balance __________
(d) Class A-4 Principal Balance __________
(e) Class A-5 Principal Balance __________
(f) Class A-6 Principal Balance __________
29. Amount, if any, by which Class A Formula Principal
Distribution Amount exceeds amounts distributed
pursuant to item (27) __________
Class M-1 Certificates
- ----------------------
30. Amount Available less all preceding
distributions __________
Principal
- --------
(1) If a Class A Principal Deficiency Amount exists, the remaining Amount
Available is to be distributed pro rata to each Class of Class A
Certificates (other than the Class A-7 IO Certificates) based on the Class
Principal Balance of each such Class. If no Class A Principal Deficiency
Amount exists, but the remaining Amount Available is less than the Class A
Formula Principal Distribution Amount, then such remaining Amount Available
is to be distributed pro rata to each Class of Class A Certificates (other
than the Class A-7 IO Certificates) based on the amount distributable had
such remaining Amount Available not been less than the Class A Formula
Principal Distribution Amount. Otherwise, the Formula Principal
Distribution Amount and the Senior Percentage of the Formula Principal
Distribution Amount are to be distributed sequentially as described in this
item 30.
M-4
<PAGE>
31. Class M-1 principal distribution __________
32. Class M-1 Principal Balance __________
33. Amount, if any, by which the amount in clause (c)
of the Class M-1 Formula Distribution Amount
exceeds the amount distributed pursuant to item (31) __________
Class M-2 Certificates
- ----------------------
34. Amount Available less all preceding
distributions __________
Principal
35. Class M-2 principal distribution __________
36. Class M-2 Principal Balance __________
37. Amount, if any, by which the amount in clause (c)
of the Class M-2 Formula Distribution Amount (the
"Class M-2 Formula Principal Distribution Amount")
exceeds the amount distributed pursuant to item (35)
Class B Principal Distribution Tests
- ------------------------------------
(tests must be satisfied on and after the
Payment Date occurring in April 2002)
38. Average Sixty-Day Delinquency Ratio Test
(a) Sixty-Day Delinquency Ratio for
current Payment Date __________
(b) Average Sixty-Day Delinquency
Ratio Test (arithmetic average of
ratios for this month and two
preceding months; may not exceed
20.0%) __________
39. Average Thirty-Day Delinquency Ratio Test
(a) Thirty-Day Delinquency Ratio for
current Payment Date __________
(b) Average Thirty-Day Delinquency Ratio
Test (arithmetic average of ratios
M-5
<PAGE>
for this month and two preceding
months; may not exceed 12%) __________
40. Cumulative Realized Losses Test
Cumulative Realized Losses
for current Payment Date
(as a percentage of Cut-off Date
Pool Principal Balance may not
exceed 7.5%) __________
41. Current Realized Losses Test
(a) Current Realized Losses
for current Payment Date __________
(b) Current Realized Loss Ratio (total
Realized Losses for most recent
six months, multiplied by 2, divided by
arithmetic average of Pool Scheduled
Principal Balance for sixth preceding
Payment Date and for current Payment
Date; may not exceed 2.0%) __________
42. Class B Principal Balance Test
Class B Principal Balance plus
Over-collateralization Adjustment Amount
divided by Pool Scheduled Principal Balance
for prior Payment Date (must equal or
exceed ________%) __________
Class B-1 Certificates
- ----------------------
43. Amount Available less all preceding
distributions __________
Principal
44. Class B-1 principal distribution __________
45. Class B-1 Principal Balance __________
M-6
<PAGE>
46. Amount, if any, by which the amount in clause (c)
of the Class B-1 Formula Distribution Amount
exceeds the amount distributed pursuant to item (44) __________
Class M-1 Certificates
- ----------------------
47. Amount Available less all preceding
distributions __________
Liquidation Loss Interest
48. Class M-1 Formula Liquidation Loss Interest
Distribution Amount __________
49. Amount applied to Unpaid Class M-1 Liquidation
Loss Interest Shortfall __________
50. Remaining Unpaid Class M-1 Liquidation Loss
Interest Shortfall __________
Class M-2 Certificates
- ----------------------
51. Amount Available less all preceding
distributions __________
Liquidation Loss Interest
52. Class M-2 Formula Liquidation Loss Interest
Distribution Amount __________
53. Amount applied to Unpaid Class M-2 Liquidation
Loss Interest Shortfall __________
54. Remaining Unpaid Class M-2 Liquidation Loss
Interest Shortfall __________
Class B-1 Certificates
- ----------------------
55. Amount Available less all preceding
distributions __________
Liquidation Loss Interest
56. Class B-1 Formula Liquidation Loss Interest
Distribution Amount __________
M-7
<PAGE>
57. Amount applied to Unpaid Class B-1 Liquidation
Loss Interest Shortfall __________
58. Remaining Unpaid Class B -1 Liquidation Loss
Interest Shortfall
Class B-2 Certificates
- ----------------------
59. Amount Available less all preceding
distributions __________
Interest
60. Current interest
(a) Class B-2 Pass-Through Rate (11.361%) (or the
Adjusted Weighted Average Loan Rate, if less)
(b) Class B-2 Interest __________
61. Amount applied to Unpaid Class
B-2 Interest Shortfall __________
62. Remaining Unpaid Class B-2
Interest Shortfall __________
Principal
63. Class B-2 principal distribution __________
64. Class B-2 Guaranty Payment __________
65. Class B-2 Principal Balance __________
66. Amount, if any, by which Class B-2
Formula Distribution Amount plus Class B-2
Liquidation Loss Principal Amount exceeds
Class B-2 Distribution Amount __________
Class A, Class M and Class B Certificates
- -----------------------------------------
67. Pool Scheduled Principal Balance __________
68. Pool Factor __________
M-8
<PAGE>
69. Loans Delinquent:
30 - 59 days __________
60 or more days __________
70. Principal Balance of Defaulted Loans __________
71. Number of Liquidated Loans and
Net Liquidation Loss __________
72. Number of Loans Remaining __________
73. Pre-Funded Amount __________
Company
- -------
74. Monthly Servicing Fee __________
Class B-2 Certificates
- ----------------------
75. Class B-2 Additional Principal Distribution Amount __________
Company
- -------
76. B-2 Guaranty Fee __________
Class C Subsidiary Certificates
- -------------------------------
77. Class C Subsidiary residual payment __________
Class C Master Certificates
- ---------------------------
78. Class C Master Distribution Amount __________
Please contact the Bondholder Relations Department of U.S. Bank Trust
National Association at (612) 224-0444 with any questions regarding this
Statement or your Distribution.
M-9
<PAGE>
EXHIBIT N
FORM OF ADDITION NOTICE
__________________, 1999
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, MN 55101
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of August
1, 1999, between Green Tree Financial Corporation (the "Company") and
U.S. Bank Trust National Association as Trustee (the "Trustee")
relating to Certificates for Home Equity Loans, Series 1999-D
Ladies and Gentlemen:
Capitalized terms not otherwise defined in this Notice have the meanings
given them in the Agreement. The Company hereby notifies the Trustee of an
assignment to the Trust of Subsequent Loans on the date and in the amounts set
forth below:
Subsequent Transfer Date:____________________
Cut-off Date Principal Balance of Subsequent Loans to be assigned to Trust on
Subsequent Transfer Date:
$_____________________
N-1
<PAGE>
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
GREEN TREE FINANCIAL CORPORATION
By:
-----------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
---------------------------------
Name:
Title:
N-2
<PAGE>
EXHIBIT O
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of August 1, 1999, between the undersigned and U.S. Bank Trust National
Association as Trustee (the "Trustee"), the undersigned does hereby transfer,
assign, set over and otherwise convey, without recourse, to Home Equity Loan
Trust 1999-D, created by the Agreement, to be held in trust as provided in the
Agreement, (i) all right, title and interest in the home equity loans identified
in the List of Loans attached hereto (each a "Subsequent Loan"), including,
without limitation, all related mortgages, deeds of trust, security deeds and
any and all rights to receive payments on or with respect to the Subsequent
Loans (excluding principal due before the Subsequent Cut-off Date), (ii) all
rights under any hazard, flood or other individual insurance policy on the real
estate securing a Subsequent Loan for the benefit of the creditor of such Loan,
(iii) all rights the Company may have against the originating lender with
respect to the Subsequent Loans originated by a lender other than the Company,
(iv) all rights under the Errors and Omissions Protection Policy and the
Fidelity Bond as such policy and bond relate to the Subsequent Loans, (v) all
rights under any title insurance policies, if applicable, on any of the
properties securing Subsequent Loans, (vi) all documents contained in the
related Loan Files, and (vii) all proceeds and products of the foregoing.
Each of the Subsequent Loans constitutes a Subsequent Loan under the
Agreement.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Section 2.03 and Article
III of the Agreement and no others. All undefined capitalized terms used in this
Assignment have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this _____ day of _______________, 1999.
GREEN TREE FINANCIAL CORPORATION
[Seal] By:
---------------------------------
Name:
Title:
O-1
<PAGE>
EXHIBIT P
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company in
connection with the Pooling and Servicing Agreement dated as of August 1, 1999
(the "Agreement") between the Company and U.S. Bank Trust National Association
as Trustee. All capitalized terms used herein without definition have the
respective meanings specified in the Agreement. The undersigned further
certifies that:
1. This Certificate is delivered in connection with the sale to the Trust
on ___________________ (the "Subsequent Transfer Date") of Loans (the
"Subsequent Loans") identified in the List of Loans attached to the Subsequent
Transfer Instrument of even date herewith.
2. As of the Subsequent Transfer Date, all representations and warranties
in Section 3.01 of the Agreement are true and correct; all representations and
warranties in Sections 3.02 and 3.03 of the Agreement with respect to the
Subsequent Loans are true to the best of his knowledge; and all representations
in Section 3.04 of the Agreement with respect to the Subsequent Loans are true
and correct.
3. All conditions precedent to the sale of the Subsequent Loans to the
Trust under Section 2.03 of the Agreement have been satisfied.
4. Each of the Subsequent Loans constitutes a Subsequent Loan under the
Agreement.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day of
______________________, 1999.
By:
-----------------------------------
Name:
Title:
P-1
<PAGE>
DORSEY & WHITNEY LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
Telephone: (612) 340-2600
Fax: (612) 340-2868
EXHIBIT 5.1
-----------
Green Tree Financial Corporation
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Re: Registration Statements on Form S-3
File Nos. 333-75623
Ladies and Gentlemen:
We have acted as counsel to Green Tree Financial Corporation, a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") of a
Registration Statement on Form S-3 (File No. 333-75623) (hereinafter referred to
as the "Registration Statement") under the Securities Act of 1933, as amended,
relating to an aggregate of $4,000,000,000 of Certificates for Home Improvement
and Home Equity Loans to be issued from time to time in series under separate
Pooling and Servicing Agreements, and the preparation of a Prospectus Supplement
dated August 13, 1999, and the related Prospectus dated August 13, 1999
(together, the "Prospectus") relating to the offer and sale by the Company of
$465,000,000 (approximate) aggregate principal amount of Certificates for Home
Equity Loans, Series 1999-D (the "Certificates"), to be issued under a Pooling
and Servicing Agreement, dated as of August 1, 1999 (the "Pooling and Servicing
Agreement") between the Company and U.S. Bank Trust National Association, as
Trustee (the "Trustee"). Capitalized terms used herein and not defined have the
meanings assigned thereto in the Pooling and Servicing Agreement.
The Company will provide a Class B-2 Limited Guaranty with respect to
the Class B-2 Certificates.
We have examined the Registration Statement, the Prospectus, the
Pooling and Servicing Agreement, and such other related documents, and have
reviewed such questions of law, as we have considered necessary and appropriate
for the purposes of this opinion. Based on the foregoing, we are of the opinion
that:
1. The Pooling and Servicing Agreement has been duly authorized
by the Board of Directors of the Company and duly executed and delivered by the
Company and constitutes the valid and binding obligation of the Company, and the
Class B-2 Limited Guaranty of the Company provided for therein constitute the
valid and binding obligations of the Company.
2. The Certificates have been duly executed and delivered in
accordance with the terms of the Pooling and Servicing Agreement and are legally
and validly issued, and the holders of such Certificates are entitled to the
benefits of the Pooling and Servicing Agreement.
The opinions set forth above are subject to the following
qualifications and exceptions:
<PAGE>
Green Tree Financial Corporation
August 31, 1999
Page 2
(a) Our opinion in paragraph 1 above is subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar law of general application affecting creditors' rights.
(b) Our opinion in paragraph 1 above is subject to the effect of
general principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing, and other similar
doctrines affecting the enforceability of agreements generally (regardless
of whether considered in a proceeding in equity or at law).
(c) Minnesota Statutes (S) 290.371, Subd. 4, provides that any
corporation required to file a Notice of Business Activities Report does
not have a cause of action upon which it may bring suit under Minnesota law
unless the corporation has filed a Notice of Business Activities Report and
provides that the use of the courts of the State of Minnesota for all
contracts executed and all causes of action that arose before the end of
any period for which a corporation failed to file a required report is
precluded. Insofar as our opinion may relate to the valid, binding and
enforceable character of any agreement under Minnesota law or in a
Minnesota court, we have assumed that any party seeking to enforce such
agreement has at all times been, and will continue at all times to be,
exempt from the requirement of filing a Notice of Business Activities
Report or, if not exempt, has duly filed, and will continue to duly file,
all Notice of Business Activities Reports.
Our opinions expressed above are limited to the laws of the State of
Minnesota and the Delaware General Corporation Law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus comprising part of the Registration Statement.
Dated: August 31, 1999
Very truly yours,
/s/ Charles F. Sawyer
CFS
<PAGE>
DORSEY & WHITNEY LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
Telephone: (612) 340-2600
Fax: (612) 340-2868
EXHIBIT 8.1
-----------
Green Tree Financial Corporation
1100 Landmark Towers
345 St. Peter Street
St. Paul, MN 55102-1639
Re: Federal Income Tax Consequences of Certificates
for Home Improvement and Home Equity Loans
Ladies and Gentlemen:
We have acted as counsel to Green Tree Financial Corporation, a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") of a
Registration Statement on Form S-3 (File No.333-75623) (together, hereinafter
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended, relating to an aggregate of $4,000,000,000 of Certificates for Home
Equity Loans to be issued from time to time in series under separate Pooling and
Servicing Agreements, and the preparation of a Prospectus Supplement dated
August 13, 1999, and the related Prospectus dated August 13, 1999 (together, the
"Prospectus") relating to the offer and sale by the Company of $465,000,000
(approximate) aggregate principal amount of Certificates for Home Equity Loans
Series, 1999-D (the "Certificates"), to be issued under a Pooling and Servicing
Agreement, dated as of August 1, 1999 (the "Pooling and Servicing Agreement")
between the Company and U.S. Bank Trust National Association, as Trustee (the
"Trustee"). Capitalized terms used herein and not defined have the meanings
assigned thereto in the Pooling and Servicing Agreement.
You have requested our opinion with respect to certain federal income
tax consequences of the purchase, ownership and disposition of the Certificates.
For purposes of rendering our opinion we have examined the Registration
Statement, the Prospectus and the Pooling and Servicing Agreement.
Our opinion is based upon existing law and currently applicable
Treasury Department regulations, current published administrative positions of
the Internal Revenue Service contained in revenue rulings and revenue
procedures, and judicial decisions, all of which are subject to change, either
prospectively or retroactively, and to possibly differing interpretations. Our
opinion is also based on the representations and warranties set forth in the
Pooling and Servicing Agreement and the assumptions that the Company and the
Trustee will at all times comply with the requirements of the Pooling and
Servicing Agreement, including, without limitation, the requirement that a
proper election to be taxed as a real estate mortgage investment conduit
("REMIC") under the Internal Revenue Code of 1986, as amended (the "Code") is
made in accordance with the Pooling and Servicing Agreement and the Code and
that the Certificates will be issued as described in the Prospectus.
<PAGE>
Green Tree Financial Corporation
August 31, 1999
Page 2
Based upon the foregoing, as of the date hereof it is our opinion that
the Trust created pursuant to the Pooling and Servicing Agreement will qualify
as two separate REMICs under the Code and under the REMIC Regulations, and that
the Certificates will evidence ownership of the "regular interests" in the
Master REMIC, the Subsidiary Regular Interests will evidence ownership of the
"regular interests" in the Subsidiary REMIC and the Class C Master Certificate
and the Class C Subsidiary Certificate will evidence ownership of the single
class of "residual interests" in the Master REMIC and the Subsidiary REMIC,
respectively.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Certain
Federal Income Tax Consequences" in the Prospectus, and we hereby confirm that,
insofar as they constitute statements of law or legal conclusions as to the
likely outcome of material issues under the federal income tax laws, the
discussion under such heading accurately sets forth our advice.
Dated: August 31, 1999
Very truly yours,
/s/ Charles F. Sawyer
CFS
