<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) September 25, 1998
ContiMortgage Home Equity Loan Trust 1998-3
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 333-61863 Application Pending
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) ID Number)
3811 West Charleston Boulevard, Suite 104, Las Vegas, Nevada 89102
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (702) 822-5836
- -----------------------------------------------------------------------------
N/A
---------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
Description of the Certificates and the Mortgage Loans
ContiSecurities Asset Funding Corp. registered issuance of
up to $9,000,000,000 principal amount of Asset Backed Certificates on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1993, as amended (the "Act"), by a Registration Statement on Form S-3
(Registration File No. 333-61863) (as amended, the "Registration Statement").
Pursuant to the Registration Statement, ContiMortgage Home Equity Loan Trust
1998-3 (the "Registrant" or the "Trust") issued $2,100,000,000 in aggregate
principal amount of its Home Equity Pass-Through Certificates, Series 1998-3
(the "Offered Certificates"), on September 25, 1998. This Current Report on
Form 8-K is being filed to satisfy an undertaking to file copies of certain
agreements executed in connection with the issuance of the Offered
Certificates, the forms of which were filed as Exhibits to the Registration
Statement.
Certain certificates were issued pursuant to a Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") attached hereto as
Exhibit 4.2, dated as of September 1, 1998, among ContiSecurities Asset
Funding Corp., as the Depositor, (the "Depositor"), ContiMortgage Corporation,
as the Company, (the "Company"), as seller and servicer (the "Servicer") and
Manufacturers and Traders Trust Company, in its capacity as trustee and swap
trustee (the "Trustee" and "Swap Trustee"). The certificates issued pursuant
to the Pooling and Servicing Agreement consist of the following classes: the
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class A-13
Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal, Class
A-17, Class A-18, Class A-19, Class A-20, Class N-IO and Class P-IO
Certificates (the "Class A Certificates"), the Class B-I and Class B-II
Certificates (the "Class B Certificates"), the Class C Certificates (the
"Class C Certificates"), the Class R Certificates (the "Class R
Certificates"), the Class R-I Certificates (the "Class R-I Certificates"), the
Class R-II Certificates (the "Class R-II Certificates" and together with the
Class A Certificates, the Class B Certificates, the Class C Certificates, the
Class R Certificates and Class R-I Certificates, the "Certificates") and the
Class A-12, Class A-13, Class A-14, Class A-15 and Class A-16 Certificates
(the Class A-12, Class A-13, Class A-14, Class A-15 and Class A-16
Certificates; collectively, the "Swap Trust Certificates"). The Certificates
evidence, in the aggregate, 100% of the undivided beneficial ownership
interests in the Trust. The Swap Trust Certificates evidence, in the
aggregate, 100% of the undivided beneficial ownership interests in the Swap
Trust 1998-B created pursuant to the Pooling and Servicing Agreement.
The assets of the Trust initially include a pool of
closed-end home equity loans (the "Home Equity Loans") secured by mortgages or
deeds of trust primarily on one-to-four family residential properties.
Interest distributions on the Class A Certificates are based on the
Certificate Principal Balance (or, in the case of the Class N-IO and Class
P-IO Certificates, the Notional Principal Amount) thereof and the applicable
Pass-Through Rate thereof. The Pass-Through Rates for the Class A Certificates
are as follows: Class A-1, 5.512%; Class A-2, 6.02%; Class A-3, 5.77%;
2
<PAGE>
Class A-4, 5.76%; Class A-5, 5.99%, Class A-6, 6.08%; Class A-7, 6.34%; Class
A-8, 5.85%; Class A-10, 5.84%, Class A-11, 5.512%; Class A-12 Internal, 5.48%;
Class A-13 Internal, 5.53%; Class A-14 Internal, 5.595%; Class A-15 Internal,
5.70%; Class A-16 Internal, 5.84%; Class A-17, 6.22%; Class A-19, 6.04%; Class
A-20, 5.87%; Class N-IO, 6.50%; Class P-IO, 6.50%; Class A-9, Class A-12, Class
A-13, Class A-14, Class A-15, Class A-16 and Class A-18 as defined in the
Pooling and Servicing Agreement. The Pass-Through Rate for the Class B
Certificates are as follows: Class B-I, 8.10%; Class B-II, 8.25%. The Class A
Certificates have initial aggregate principal amounts as follows: Class A-1,
$80,000,000; Class A-2, $154,000,000 ; Class A-3, $188,000,000; Class A-4,
$64,000,000; Class A-5, $83,000,000; Class A-6, $56,000,000; Class A-7,
$65,000,000; Class A-8, $80,000,000; Class A-9, $231,725,000; Class A-10,
$78,000,000; Class A-11, $75,000,000; Class A-12 Internal $130,000,000; Class
A-13 Internal, $192,000,000; Class A-14 Internal, $42,000,000; Class A-15
Internal, $70,000,000; Class A-16 Internal, $25,000,000; Class A-17,
$66,602,000; Class A-18, $124,200,000; Class A-19, $77,946,000; Class A-20,
$126,427,000. The Class N-IO and P-IO Certificates are interest only and have no
Certificate Principal Balance. The Swap Trust Certificates have initial
aggregate principal amounts as follows: Class A-12, $130,000,000; Class A-13,
$192,000,000; Class A-14, $42,000,000; Class A-15, $70,000,000; Class A-16,
$25,000,000. The Class B Certificates have initial aggregate principal amounts
as follows: Class B-I, $30,000,000; Class B-II, $61,100,000.
As of the Cut-Off Date, the Home Equity Loans possessed the
characteristics described in the Prospectus dated September 17, 1998 and the
Prospectus Supplement (the "Prospectus Supplement") dated September 18, 1998
filed pursuant to Rule 424(b)(5) of the Act on September 28, 1998.
The Offered Certificates (the "Offered Certificates") as
defined in the Prospectus Supplement, are as follows: Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9,
Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class
A-16, Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
and the Class B-I and Class B-II Certificates.
3
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
4.1 Underwriting Agreement dated as of September 18, 1998
among ContiSecurities Asset Funding Corp., as Depositor,
ContiMortgage Corporation, as a seller and servicer,
ContiWest Corporation, as a seller and Morgan Stanley & Co.
Incorporated, as representative of the several underwriters.
4.2 Pooling and Servicing Agreement dated as of September 1,
1998, among ContiSecurities Asset Funding Corp., as
Depositor, ContiMortgage Corporation, as a seller and
servicer, ContiWest Corporation, as a seller and
Manufacturers and Traders Trust Company, as the Trustee and
Swap Trustee.
8.1 Opinion of Dewey Ballantine LLP regarding certain tax
matters.
23.1 Consent of Dewey Ballantine LLP (included in Exhibit
8.1).
23.2 Consent of PricewaterhouseCoopers LLP, independent
accountants.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CONTISECURITIES ASSET FUNDING CORP.
By: /s/ Mary Rapoport
-------------------------------------
Name: Mary Rapoport
Title: Authorized Signatory
By: /s/ John Banu
-------------------------------------
Name: John Banu
Title: Authorized Signatory
Dated: October 16, 1998
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
- ------- ----
<S> <C> <C>
4.1 Underwriting Agreement dated as of September 18, 1998 among
ContiSecurities Asset Funding Corp., as Depositor, ContiMortgage
Corporation, as a seller and servicer, ContiWest Corporation, as a
seller and Morgan Stanley & Co. Incorporated, as representative of
the several underwriters.
4.2 Pooling and Servicing Agreement dated as of September 1, 1998, among
ContiSecurities Asset Funding Corp., as Depositor, ContiMortgage
Corporation, as a seller and servicer, ContiWest Corporation, as a
seller and Manufacturers and Traders Trust Company, as the Trustee
and Swap Trustee.
8.1 Opinion of Dewey Ballantine LLP regarding certain tax matters.
23.1 Consent of Dewey Ballantine LLP (included in Exhibit 8.1).
23.2 Consent of PricewaterhouseCoopers LLP, independent accountants.
</TABLE>
<PAGE>
$2,100,000,000
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
Home Equity Loan Pass-Through Certificates
Series 1998-3
UNDERWRITING AGREEMENT
September 18, 1998
Morgan Stanley & Co. Incorporated
as Representative of the Several Underwriters
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
ContiSecurities Asset Funding Corp. (the "Depositor"), a
Delaware corporation, has authorized the issuance and sale of Home Equity Loan
Pass-Through Certificates, Series 1998-3, Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class
A-11, Class A-12 Internal, Class A-13 Internal, Class A-14 Internal, Class A-15
Internal, Class A-16 Internal, Class A-17, Class A-18, Class A-19, Class A-20,
Class N-IO and Class P-IO (collectively, the "Class A Certificates") Class B-I
and Class B-II (the "Subordinate Certificates") and the Swap Trust Pass-Through
Certificates, Series 1998-B, Class A-12, Class A-13, Class A-14, Class A-15,
Class A-16 (the "Swapped Certificates"). The Class A Certificates (other than
the Class A-12 Internal, Class A-13 Internal, Class A-14 Internal, Class A-15
Internal and Class A-16 Internal Certificates, collectively, the "Internal
Certificates"), the Subordinate Certificates, and the Swapped Certificates are
collectively referred to as the "Offered Certificates". Also issued are the
Class C, Class R, Class R-I and Class R-II Certificates (the "Retained
Certificates"). The Class A Certificates, the Swapped Certificates, the
Subordinate Certificates and the Retained Certificates shall be referred to as
the "Certificates".
Only the Offered Certificates are being purchased by the
Underwriters named in Schedule A hereto, and the Underwriters are purchasing,
severally, only the Offered Certificates set forth opposite their names in
Schedule A, except that the amounts purchased by the Underwriters may change in
accordance with Section X of this Agreement. Morgan Stanley & Co. Incorporated
("Morgan Stanley") is acting as representative of the several Underwriters and
in such capacity is hereinafter referred to as the "Representative."
The Class A Certificates, Subordinate Certificates and
Retained Certificates (collectively the "Trust Certificates") will be issued
under a pooling and servicing agreement (the "Pooling and Servicing Agreement"),
to be dated as of September 1, 1998 among the Depositor, ContiMortgage
Corporation ("ContiMortgage"), as the servicer and a seller (in such capacity,
the "Servicer" or a "Seller," as the case may be), ContiWest Corporation
("ContiWest"), as a seller (a "Seller," and collectively with ContiMortgage, the
"Sellers") and Manufacturers and Traders
<PAGE>
Trust Company, as the Trustee (in such capacity, the "Trustee"). Each of the
Depositor, ContiMortgage and ContiWest is a subsidiary of ContiFinancial
Corporation ("ContiFinancial").
The Trust Certificates will evidence fractional undivided
interests in the Trust (the "Trust") formed pursuant to the Pooling and
Servicing Agreement. The assets of the Trust will initially include, among other
things, two pools of home equity loans, one comprised of fixed rate loans and
one comprised of fixed and adjustable rate home equity loans, having a Cut-Off
Date as of the close of business on September 15, 1998 (the "Home Equity
Loans"), and such amounts as may be held by the Trustee in any accounts held by
the Trustee for the Trust. The Home Equity Loans are secured primarily by first
and second deeds of trust or mortgages on one- to four-family residential
properties. A form of the Pooling and Servicing Agreement has been filed as an
exhibit to the Registration Statement.
The Swapped Certificates will be issued pursuant to the
Pooling and Servicing Agreement and evidence interests in the ContiMortgage Swap
Trust 1998-B (the "Swap Trust"), which is comprised of: (i) the Internal
Certificates issued by the Trust, (ii) a swap agreement between the Swap Trust
and National Westminster Bank, Plc. (the "Swap Agreement") and (iii) the rights
of the Swap Trustee under the related Certificate Insurance Policy.
The Certificates are more fully described in a Registration
Statement which the Depositor has furnished to the Underwriters. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Pooling and Servicing Agreement.
The Class A Certificates and the Swapped Certificates will
each be entitled to the benefits of separate certificate guaranty insurance
policies (together, the "Policies") issued by MBIA Insurance Corporation
("MBIA"). The Depositor, ContiMortgage and ContiWest will also enter into an
Indemnification Agreement (the "Indemnification Agreement") dated as of
September 1, 1998 among the Underwriters, the Depositor, ContiMortgage,
ContiWest and MBIA, governing the liability of the several parties with respect
to the losses resulting from material misstatements or omissions contained in
the Prospectus Supplement.
Pursuant to Section 3.05 of the Pooling and Servicing
Agreement and concurrently with the execution thereof, ContiMortgage and
ContiWest will transfer to the Depositor all of their right, title and interest
in and to the unpaid principal balances of the Home Equity Loans as of the
Cut-Off Date and interest due after the Cut-Off Date and the collateral securing
each Home Equity Loan.
SECTION I. Representations and Warranties of the Depositor.
The Depositor represents and warrants to, and agrees with the Underwriters that
as of the date hereof and as of the Closing Date:
A. A Registration Statement on Form S-3 (No. 333-61863), has
(i) been prepared by the Depositor in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the United States Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective and is still
2
<PAGE>
effective as of the date hereof under the Securities Act; Copies of such
Registration Statement have been delivered by the Depositor to the Underwriters.
As used in this Agreement, "Effective Time" means the date and the time as of
which such Registration Statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Registration Statement" means such
registration statement, at the Effective Time, including any documents
incorporated by reference therein at such time; "Basic Prospectus" means such
final prospectus dated September 17, 1998; and "Prospectus Supplement" means the
final prospectus supplement relating to the Offered Certificates, to be filed
with the Commission pursuant to paragraphs (2), (3) or (5) of Rule 424(b) of the
Rules and Regulations. "Prospectus" means the Basic Prospectus together with the
Prospectus Supplement. Reference made herein to the Prospectus shall be deemed
to refer to and include any documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act, as of the date of the
Prospectus and any reference to any amendment or supplement to the Prospectus
shall be deemed to refer to and include any document filed under the Securities
Exchange Act of 1934 (the "Exchange Act") after the date of the Prospectus, and
incorporated by reference in the Prospectus and any reference to any amendment
to the Registration Statement shall be deemed to include any report of the
Depositor filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Time that is incorporated by reference in the
Registration Statement. The Commission has not issued any order preventing or
suspending the use of the Prospectus or the effectiveness of the Registration
Statement and no proceedings for such purpose are pending or, to the Depositor's
knowledge, threatened by the Commission. There are no contracts or documents of
the Depositor which are required to be filed as exhibits to the Registration
Statement pursuant to the Securities Act or the Rules and Regulations which have
not been so filed or incorporated by reference therein on or prior to the
Effective Date of the Registration Statement other than such documents or
materials, if any, as any Underwriter delivers to the Depositor pursuant to
Section VIII (D) hereof for filing on Form 8-K. The conditions for use of Form
S-3, as set forth in the General Instructions thereto, have been satisfied.
To the extent that any Underwriter has provided to the
Depositor Computational Materials that such Underwriter has provided to a
prospective investor, the Depositor will file or cause to be filed with the
Commission a report on Form 8-K containing such Computational Materials, as soon
as reasonably practicable after the date of this Agreement, but in any event,
not later than 11:00 a.m. New York time the date on which the Prospectus is made
available to the Underwriter and is filed with the Commission pursuant to Rule
424 of the Rules and Regulations.
B. The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, when they become effective or are filed with the
Commission, as the case may be, in all respects to the requirements of the
Securities Act and the Rules and Regulations. The Registration Statement, as of
the Effective Date thereof and of any amendment thereto, did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
The Prospectus as of its date, and as amended or supplemented as of the Closing
Date does not and will not contain any untrue
3
<PAGE>
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that no representation or warranty is
made as to information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon and in conformity with written information
furnished to the Depositor in writing by any Underwriters through the
Representative expressly for use therein.
C. The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus, when
such documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that no
representation is made as to documents deemed to be incorporated by reference in
the Prospectus as the result of filing a Form 8-K at the request of the
Underwriters except to the extent such documents reflect information furnished
by the Depositor to the Underwriters for the purpose of preparing such
documents.
D. Since the respective dates as of which information is given
in the Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition, or results of operations of the
Depositor, otherwise than as set forth or contemplated in the Prospectus as
supplemented or amended as of the Closing Date.
E. The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the conduct of its
business so requires such standing. The Depositor has all power and authority
necessary to own or hold its properties, to conduct the business in which it is
engaged and to enter into and perform its obligations under this Agreement and
the Pooling and Servicing Agreement and to cause the Certificates to be issued.
F. There are no actions, proceedings or investigations pending
with respect to which the Depositor has received service of process before or
threatened by any court, administrative agency or other tribunal to which the
Depositor is a party or of which any of its properties is the subject (a) which
if determined adversely to the Depositor would have a material adverse effect on
the business or financial condition of the Depositor, (b) asserting the
invalidity of this Agreement, the Pooling and Servicing Agreement or the
Certificates (c) seeking to prevent the issuance of the Certificates or the
consummation by the Depositor of any of the transactions contemplated by the
Pooling and Servicing Agreement or this Agreement, as the
4
<PAGE>
case may be, or (d) which might materially and adversely affect the performance
by the Depositor of its obligations under, or the validity or enforceability of,
the Pooling and Servicing Agreement, this Agreement or the Certificates.
G. This Agreement has been, and the Pooling and Servicing
Agreement when executed and delivered as contemplated hereby and thereby will
have been, duly authorized, executed and delivered by the Depositor, and this
Agreement constitutes, and the Pooling and Servicing Agreement when executed and
delivered as contemplated herein will constitute, legal, valid and binding
instruments enforceable against the Depositor in accordance with their
respective terms, subject as to enforceability to (x) applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights generally, (y) general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law), and (z) with
respect to rights of indemnity under this Agreement, limitations of public
policy under applicable securities laws.
H. The execution, delivery and performance of this Agreement,
and the Pooling and Servicing Agreement by the Depositor and the consummation of
the transactions contemplated hereby and thereby, and the issuance and delivery
of the Certificates do not and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party, by which the Depositor is bound or
to which any of the properties or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a material adverse
effect on the business, operations or financial condition of the Depositor or
its ability to perform its obligations under this Agreement or the Pooling and
Servicing Agreement, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the Depositor or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Depositor or any of its properties or assets,
which breach or violation would have a material adverse effect on the business,
operations or financial condition of the Depositor or its ability to perform its
obligations under this Agreement, or the Pooling and Servicing Agreement.
I. The Depositor has no reason to know that Arthur Andersen &
Co. are not independent public accountants with respect to the Depositor as
required by the Securities Act and the Rules and Regulations.
J. The direction by the Depositor to the Trustee and the Swap
Trustee to authenticate, issue and deliver the Certificates has been duly
authorized by the Depositor, and, assuming the Trustee and the Swap Trustee have
been duly authorized to undertake such actions, when executed, authenticated,
issued and delivered by the Trustee and the Swap Trustee, as applicable, in
accordance with the Pooling and Servicing Agreement, the Certificates will be
validly issued and outstanding and the holders of the Certificates will be
entitled to the rights and benefits of the Certificates as provided by the
Pooling and Servicing Agreement.
K. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the
5
<PAGE>
issuance of the Certificates and the sale of the Offered Certificates to the
Underwriters, or the consummation by the Depositor of the other transactions
contemplated by this Agreement or the Pooling and Servicing Agreement except
such consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Offered Certificates by the Underwriters or as
have been obtained.
L. The Depositor possesses all material licenses,
certificates, authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business now
conducted by it and as described in the Prospectus, and the Depositor has not
received notice of any proceedings relating to the revocation or modification of
any such license, certificate, authority or permit which if decided adversely to
the Depositor would, singly or in the aggregate, materially and adversely affect
the conduct of its business, operations or financial condition.
M. At the time of execution and delivery of the Pooling and
Servicing Agreement, the Depositor will: (i) have good title to the Home Equity
Loans conveyed by the Sellers, free and clear of any lien, mortgage, pledge,
charge, encumbrance, adverse claim or other security interest (collectively,
"Liens"); (ii) not have assigned to any person any of its right or title in the
Home Equity Loans contemplated in the Pooling and Servicing Agreement or in the
Certificates being issued pursuant thereto; and (iii) have the power and
authority to sell its interest in the Home Equity Loans to the Trustee and to
sell the Offered Certificates to the Underwriters. Upon execution and delivery
of the Pooling and Servicing Agreement by the Trustee, the Trustee will have
acquired beneficial ownership of all of the right, title and interest in and to
the Home Equity Loans, and the Swap Trustee will have acquired beneficial
ownership of all of the right, title and interest to the Internal Certificates,
in each case free of any Liens. Upon delivery to the Underwriters of the Offered
Certificates, the Underwriters will have good title to the Offered Certificates,
free of any Liens.
N. Reserved.
O. As of the Statistical Calculation Date, each of the Home
Equity Loans will meet the eligibility criteria described in the Prospectus and
will conform to the descriptions thereof contained in the Prospectus.
P. Reserved.
Q. Neither the Depositor nor the Trust or Swap Trust created
by the Pooling and Servicing Agreement is an "investment company" within the
meaning of such term under the Investment Company Act of 1940 (the "1940 Act")
and the rules and regulations of the Commission thereunder.
R. At the Closing Date, the Offered Certificates, and the
Pooling and Servicing Agreement will conform in all material respects to the
descriptions thereof contained in the Prospectus.
6
<PAGE>
S. At the Closing Date, the Offered Certificates (other than
the Subordinate Certificates) shall have been rated in the highest rating
category by Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's, a
division of the McGraw-Hill Companies, Inc. ("Standard & Poor's") and Fitch
IBCA, Inc. ("Fitch") and the Subordinate Certificates shall have been rated
"Baa3" by Moody's, "BBB-" by Standard & Poor's and "BBB" by Fitch.
T. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement and the
Pooling and Servicing Agreement and the Certificates have been paid or will be
paid at or prior to the Closing Date.
U. At the Closing Date, each of the representations and
warranties of the Depositor, ContiMortgage and ContiWest set forth herein and in
the Pooling and Servicing Agreement will be true and correct in all material
respects.
V. Any certificate signed by an officer of the Depositor and
delivered to the Representative or counsel for the Representative in connection
with an offering of the Offered Certificates shall be deemed, and shall state
that it is, a representation and warranty as to the matters covered thereby to
each person to whom the representations and warranties in this Section I are
made.
W. The transfer of the Internal Certificates from the
Depositor to the Swap Trust as set forth in the Pooling and Servicing Agreement
is not required to be registered under the Securities Act of 1933, as amended.
SECTION II. Purchase and Sale. The commitment of the
Underwriters to purchase the Offered Certificates pursuant to this Agreement
shall be deemed to have been made on the basis of the representations and
warranties herein contained and shall be subject to the terms and conditions
herein set forth. The Depositor agrees to instruct the Trustee to issue the
Offered Certificates and agrees to sell to the Underwriters, and the
Underwriters agree (except as provided in Sections X and XI hereof) severally
and not jointly to purchase from the Depositor, the aggregate initial principal
amounts or percentage interests of the Offered Certificates of each Class, as
set forth opposite their names on Schedule A, at the purchase price or prices
set forth on Schedule A.
SECTION III. Delivery and Payment. Delivery of and payment for
the Offered Certificates shall be made at the offices of Dewey Ballantine LLP,
1301 Avenue of the Americas, New York, New York 10019, or at such other place as
shall be agreed upon by the Representative and the Depositor at 10:00 A.M. New
York City time on September 25, 1998 or at such other time or date as shall be
agreed upon in writing by the Representative and the Depositor (such date being
referred to as the "Closing Date"). Payment shall be made to the Depositor by
wire transfer of same day funds payable to the account of the Depositor.
Delivery of the Offered Certificates shall be made to the Representative for the
accounts of the Underwriters against payment of the purchase price thereof. The
Certificates shall be in such authorized denominations and registered in such
names as the Representative may request in writing at least two business days
prior to the Closing Date. The Offered Certificates will be
7
<PAGE>
made available for examination by the Representative no later than 2:00 p.m. New
York City time on the first business day prior to the Closing Date.
SECTION IV. Offering by the Underwriters. It is understood
that, subject to the terms and conditions hereof, the Underwriters propose to
offer the Offered Certificates for sale to the public as set forth in the
Prospectus.
SECTION V. Covenants of the Depositor. The Depositor and, to
the extent the provisions of subsections H and I below relate to ContiMortgage
and ContiWest, respectively, ContiMortgage and ContiWest agree as follows:
A. To prepare the Prospectus in a form approved by the
Underwriters and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
business day following the availability of the Prospectus to the Underwriters;
to make no further amendment or any supplement to the Registration Statement or
to the Prospectus prior to the Closing Date except as permitted herein; to
advise the Underwriters, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective prior to the Closing Date or any supplement to the Prospectus or any
amended Prospectus has been filed prior to the Closing Date and to furnish the
Underwriters with copies thereof without charge; to file promptly all reports
and any definitive proxy or information statements required to be filed by the
Depositor with the Commission pursuant to Section 13(a), 13(c), 14 or l5(d) of
the Exchange Act subsequent to the date of the Prospectus and, for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Offered Certificates; to promptly advise the Underwriters of its receipt
of notice of the issuance by the Commission of any stop order or the institution
of or, to the knowledge of the Depositor, the threatening of any proceeding for
such purpose, or of: (i) any order preventing or suspending the use of the
Prospectus; (ii) the suspension of the qualification of the Offered Certificates
for offering or sale in any jurisdiction; (iii) the initiation of or threat of
any proceeding for any such purpose; or (iv) any request by the Commission for
the amending or supplementing of the Registration Statement or the Prospectus or
for additional information. In the event of the issuance of any stop order or of
any order preventing or suspending the use of the Prospectus or suspending any
such qualification, the Depositor promptly shall use its best efforts to obtain
the withdrawal of such order by the Commission.
B. To furnish promptly to the Underwriters and to counsel for
the Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriters without charge such
number of the following documents as the Underwriters shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case including exhibits); (ii)
the Prospectus and any amended or supplemented Prospectus; and (iii) any
document incorporated by reference in the Prospectus (including
8
<PAGE>
exhibits thereto). If the delivery of a prospectus is required at any time prior
to the expiration of nine months after the Closing Date in connection with the
offering or sale of the Offered Certificates, and if at such time any events
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Securities Act or the Exchange Act, the Depositor shall
notify the Underwriters and, upon any Underwriters' request, shall file such
document and prepare and furnish without charge to the Underwriters and to any
dealer in securities as many copies as the Underwriters may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which corrects such statement or omission or effects such compliance, and in
case the Underwriters are required to deliver a Prospectus in connection with
sales of any of the Offered Certificates at any time nine months or more after
the Effective Time, upon the request of the Underwriters but at their expense,
the Depositor shall prepare and deliver to the Underwriters as many copies as
the Underwriters may reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act.
D. To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Depositor or the Underwriters, be required by
the Securities Act or requested by the Commission. Neither the Underwriters'
consent to nor their distribution of any amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section VI.
E. To furnish the Underwriters and counsel for the
Underwriters, prior to filing with the Commission, and to obtain the consent of
the Underwriters for the filing of the following documents relating to the
Certificates: (i) any Post-Effective Amendment to the Registration Statement or
supplement to the Prospectus, or document incorporated by reference in the
Prospectus, or (ii) Prospectus pursuant to Rule 424 of the Rules and
Regulations.
F. To make generally available to holders of the Offered
Certificates as soon as practicable, but in any event not later than 90 days
after the close of the period covered thereby, a statement of earnings of the
Trust (which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the Depositor,
Rule 158) and covering a period of at least twelve consecutive months beginning
not later than the first day of the first fiscal quarter following the Closing
Date.
G. To use its best efforts, in cooperation with the
Underwriters, to qualify the Offered Certificates for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States or elsewhere as the Underwriters may designate, and maintain or
cause to be maintained such qualifications in effect for as long as may be
required for the distribution of the Offered Certificates. The Depositor will
file or cause the filing of such statements and reports as may be required by
the laws of each jurisdiction in which the Offered Certificates have been so
qualified.
9
<PAGE>
H. Unless the Underwriters shall otherwise have given their
written consent, no collateralized mortgage obligations or other similar
securities representing interests in or secured by other mortgage-related assets
originated or owned by ContiMortgage shall be publicly offered or sold, nor
shall ContiMortgage enter into any contractual arrangements that contemplate the
public offering or sale of such securities, until the earlier to occur of the
termination of the syndicate or the Closing Date.
I. Unless the Underwriters shall otherwise have given their
written consent, no collateralized mortgage obligations or other similar
securities representing interests in or secured by other mortgage-related assets
originated or owned by ContiWest shall be publicly offered or sold, nor shall
ContiWest enter into any contractual arrangements that contemplate the public
offering or sale of such securities, until the earlier to occur of the
termination of the syndicate or the Closing Date.
J. Unless the Underwriters shall otherwise have given their
written consent (such consent not to be unreasonably withheld), no
collateralized mortgage obligations or other similar securities representing
interests in or secured by other mortgage-related assets that are similar to the
Home Equity Loans originated or owned by the Depositor shall be publicly offered
or sold until the earlier to occur of the termination of the syndicate or the
Closing Date.
K. So long as the Offered Certificates shall be outstanding
the Depositor shall cause the Trustee, pursuant to the Pooling and Servicing
Agreement, to deliver to the Underwriters as soon as such statements are
furnished to the Trustee: (i) the annual statement as to compliance delivered to
the Trustee pursuant to Section 8.16 of the Pooling and Servicing Agreement;
(ii) the annual statement of a firm of independent public accountants furnished
to the Trustee pursuant to Section 8.17 of the Pooling and Servicing Agreement;
(iii) the monthly servicing report furnished to the Trustee pursuant to Section
7.08 of the Pooling and Servicing Agreement; and (iv) the monthly reports
furnished to the Certificateholders pursuant to Section 7.09 of the Pooling and
Servicing Agreement.
L. To apply the net proceeds from the sale of the Offered
Certificates in the manner set forth in the Prospectus.
SECTION VI. Conditions to the Underwriters' Obligation. The
obligations of the Underwriters hereunder to purchase the Offered Certificates
pursuant to the Agreement are subject to: (i) the accuracy on and as of the
Closing Date of the representations and warranties on the part of the Depositor
herein contained; (ii) the performance by the Depositor of all of its
obligations hereunder; and (iii) the following conditions as of the Closing
Date:
A. The Underwriters shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission. Any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus shall
have been complied with.
10
<PAGE>
B. The Underwriters shall not have discovered and disclosed to
the Depositor on or prior to the Closing Date that the Registration Statement or
the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact or omits to state a fact which, in the opinion of Stroock &
Stroock & Lavan LLP, counsel for the Underwriters, is material and is required
to be stated therein or is necessary to make the statements therein not
misleading.
C. All corporate proceedings and other legal matters relating
to the authorization, form and validity of this Agreement, the Pooling and
Servicing Agreement, the Certificates, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be satisfactory in all respects to
counsel for the Underwriters, and the Depositor shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.
D. Dewey Ballantine LLP shall have furnished to the
Underwriters and MBIA their written opinion, as counsel to the Depositor,
addressed to the Underwriters and MBIA and dated the Closing Date, in form and
substance satisfactory to the Underwriters and MBIA, to the effect that:
(i) The conditions to the use by the Depositor of a
registration statement on Form S-3 under the Securities Act, as set
forth in the General Instructions to Form S-3, have been satisfied with
respect to the Registration Statement and the Prospectus.
(ii) The Registration Statement and any amendments
thereto have become effective under the Securities Act; to the best of
such counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or threatened and not
terminated; and the Registration Statement, the Prospectus and each
amendment or supplement thereto, as of their respective effective or
issue dates (other than the financial and statistical information
contained therein, as to which such counsel need express no opinion),
complied as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations
thereunder.
(iii) To the best of such counsel's knowledge, there
are no material contracts, indentures or other documents of a character
required to be described or referred to in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(iv) The statements set forth in the Basic Prospectus
under the captions "Summary of Prospectus," "Description of The
Certificates," "The Trusts" and "The Pooling and Servicing Agreement"
and in the Prospectus Supplement under the captions "Description of The
Offered Certificates" and "The Pooling and Servicing Agreement," to the
extent such statements purport to summarize certain provisions of the
Certificates or of the Pooling and Servicing Agreement, are fair and
accurate in all material respects.
11
<PAGE>
(v) The statements set forth in the Basic Prospectus
and the Prospectus Supplement under the captions "ERISA
Considerations," "Certain Legal Aspects of the Mortgage Assets" and
"Certain Federal Income Tax Considerations" to the extent that they
constitute matters of federal law, provide a fair and accurate summary
of such law or conclusions.
(vi) The Pooling and Servicing Agreement conforms in
all material respects to the description thereof contained in the
Prospectus and is not required to be qualified under the Trust
Indenture Act of 1939, as amended, and the Trust is not required to be
registered under the Investment Company Act of 1940, as amended.
(vii) Neither the Depositor nor the Trust nor the
Swap Trust is an "investment company" or under the "control" of an
"investment company" as such terms are defined in the 1940 Act.
(viii)Assuming that (a) the Trustee causes certain
assets of the Trust Estate, as the Trustee has covenanted to do in the
Pooling and Servicing Agreement, to be treated as a "real estate
mortgage investment conduit" ("REMIC"), as such term is defined in the
Internal Revenue Code of 1986, as amended (the "Code"), and (b) the
parties to the Pooling and Servicing Agreement comply with the terms
thereof, REMIC I, REMIC II and REMIC III will each be treated as a
REMIC, each Class of the Class A Certificates and the Subordinate
Certificates will be treated as "regular interests" in REMIC III, the
Class R Certificates will be treated as the sole "residual interest" in
REMIC III, the Class R-I Certificates will be treated as the sole
"residual interest" in REMIC I and the Class R-II Certificates will be
treated as the sole "residual interest" in REMIC II. The Trust is not
subject to tax upon its income or assets by any taxing authority of the
State of New York.
(ix) To the best of such counsel's knowledge, there
are no actions, proceedings or investigations pending that would
adversely affect the status of REMIC I, REMIC II or REMIC III as a
REMIC.
(x) As a consequence of the qualifications of REMIC
I, REMIC II and REMIC III as REMICs, the Class A Certificates and the
Subordinate Certificates will be treated as "regular . . . interest(s)
in a REMIC" under Section 7701(a)(19)(C) of the Code and "real estate
assets" under Section 856(c) of the Code in the same proportion that
the assets in the Trust consist of qualifying assets under such
Sections. In addition, as a consequence of the qualification of REMIC
I, the REMIC II and REMIC III as REMICs, interest on the Offered
Certificates will be treated as "interest on obligations secured by
mortgages on real property" under Section 856(c) of the Code to the
extent that such Offered Certificates are treated as "real estate
assets" under Section 856(c) of the Code.
(xi) No election will be made to qualify the Swap
Trust as a REMIC for federal income tax purposes. For federal income
tax purposes, the Swap Trust will be classified as a grantor trust
under Subpart E, part I of Subchapter J of the Code, and not as an
association taxable as a corporation. The Swapped Certificates
represent an undivided ownership interest in the Swap Trust.
12
<PAGE>
(xii) The transfer of the Internal Certificates from
the Depositor to the Swap Trust as set forth in the Pooling and
Servicing Agreement is not required to be registered under the
Securities Act of 1933, as amended.
(xiii)The Certificates have been duly executed and
delivered by the Depositor to the Trustee for authentication.
Such counsel shall also have furnished to the Underwriters and MBIA a written
statement, addressed to the Underwriters and MBIA and dated the Closing Date, in
form and substance satisfactory to the Underwriters and MBIA to the effect that
nothing has come to the attention of such counsel which lead them to believe
that: (a) the Registration Statement, at the time such Registration Statement
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (except as to financial or statistical data
contained in the Registration Statement); (b) the Prospectus, as of its date and
as of the Closing Date, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (c) any document
incorporated by reference in the Prospectus or any further amendment or
supplement to any such incorporated document made by the Depositor prior to the
Closing Date (other than any document filed at the request of an Underwriter to
the extent such document relates to Computational Materials) contained, as of
the time it became effective or was filed with the Commission, as the case may
be, an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
E. The Underwriters shall have received the favorable opinion,
dated the Closing Date, of Dewey Ballantine LLP, special counsel to the
Depositor, addressed to the Depositor and satisfactory to Moody's, Standard &
Poor's, Fitch and the Underwriters, with respect to certain matters relating to
the transfer of the Home Equity Loans to the Depositor and from the Depositor to
the Trust, and such counsel shall have consented to reliance on such opinion by
Moody's, Standard & Poor's, Fitch and the Underwriters as though such opinion
had been addressed to each such party.
F. Dewey Ballantine LLP, counsel for ContiMortgage in its
capacity as both a Seller and the Servicer and ContiWest in its capacity as a
Seller, shall have furnished to the Underwriters and MBIA their written opinion,
as counsel to ContiMortgage and ContiWest, addressed to the Underwriters and
MBIA and the Depositor and dated the Closing Date, in form and substance
satisfactory to the Underwriters, to the effect that:
(i) ContiMortgage is duly organized, validly existing
in good standing as a corporation under the laws of the State of
Delaware.
(ii) ContiMortgage has full corporate power and
authority to serve in the capacity of a seller and the servicer of the
Home Equity Loans as contemplated in the
13
<PAGE>
Pooling and Servicing Agreement and to transfer the Home Equity Loans
to the Depositor as contemplated in the Pooling and Servicing
Agreement.
(iii) The Pooling and Servicing Agreement and this
Agreement have been duly authorized, executed and delivered by
ContiMortgage, and, assuming the due authorization, execution and
delivery of such agreements by the other parties thereto, constitute
the legal, valid and binding agreements of ContiMortgage, enforceable
against ContiMortgage in accordance with their respective terms,
subject as to enforceability to (x) bankruptcy, insolvency,
reorganization, moratorium, receivership or other similar laws now or
hereafter in effect relating to creditors' rights generally and (y) the
qualification that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable
defenses and to the discretion, with respect to such remedies, of the
court before which any proceedings with respect thereto may be brought
and (z) public policy considerations under the securities laws which
may limit the availability of indemnification as to securities law
liability.
(iv) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body having jurisdiction over ContiMortgage is required for
the consummation by ContiMortgage of the transactions contemplated by
the Pooling and Servicing Agreement except such consents, approvals,
authorizations, registrations and qualifications as have been obtained.
(v) Neither the sale and transfer of the Home Equity
Loans by ContiMortgage to the Depositor, nor the execution, delivery or
performance by ContiMortgage of the Pooling and Servicing Agreement and
the transactions contemplated thereby (A) conflict with or result in a
breach of, or constitute a default under, (i) any term or provision of
the certificate of incorporation or by-laws of ContiMortgage; (ii) any
term or provision of any material agreement, deed of trust, mortgage
loan agreement, contract, instrument or indenture, or other agreement
to which ContiMortgage is a party or is bound or to which any of the
property or assets of ContiMortgage or any of its subsidiaries is
subject; (iii) to the best of such firm's knowledge without independent
investigation any order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over ContiMortgage;
or (iv) any law, rule or regulation, applicable to ContiMortgage; or
(B) to the best of such firm's knowledge without independent
investigation, results in the creation or imposition of any lien,
charge or encumbrance upon the Trust Estate or upon the Certificates.
(vi) The execution of the Pooling and Servicing
Agreement is sufficient to convey all of ContiMortgage's, ContiWest's
and the Depositor's right, title and interest in the Home Equity Loans
to the Trust (except as otherwise specifically set forth in the Pooling
and Servicing Agreement) and following the consummation of the
transaction contemplated by Section 3.05 of the Pooling and Servicing
Agreement, the transfers of the Home Equity Loans by ContiMortgage and
ContiWest to the Depositor and by the Depositor to the Trust are
sufficient to vest in the Trust all of ContiMortgage's,
14
<PAGE>
ContiWest's and the Depositor's right, title and interest in the Home
Equity Loans (except as otherwise specifically set forth in the Pooling
and Servicing Agreement).
(vii) There are, to the best of such counsel's
knowledge without independent investigation, no actions, proceedings or
investigations pending with respect to which ContiMortgage has received
service of process or threatened against ContiMortgage before any
court, administrative agency or other tribunal (a) asserting the
invalidity of the Pooling and Servicing Agreement, the Underwriting
Agreement or the Certificates, (b) seeking to prevent the consummation
of any of the transactions contemplated by the Pooling and Servicing
Agreement or (c) which would materially and adversely affect the
performance by ContiMortgage of its obligations under, or the validity
or enforceability of, the Pooling and Servicing Agreement or the
Underwriting Agreement.
G. Michael R. Mayberry, Esq., Counsel for ContiWest, in its
capacity as a Seller, shall have furnished to the Underwriters and MBIA his
written opinion, addressed to the Underwriters and dated as of the Closing Date,
in form and substance satisfactory to the Underwriters, to the effect that:
(i) ContiWest is duly organized, validly existing in
good standing as a corporation under the laws of the State of Nevada.
(ii) ContiWest has full corporate power and authority
to serve in the capacity of a seller of the Home Equity Loans as
contemplated in the Pooling and Servicing Agreement and to transfer the
Home Equity Loans to the Depositor as contemplated in the Pooling and
Servicing Agreement.
(iii) The Pooling and Servicing Agreement and this
Agreement have been duly authorized, executed and delivered by
ContiWest, and, assuming the due authorization, execution and delivery
of such agreement by the other parties thereto, constitute the legal,
valid and binding agreements of ContiWest, enforceable against
ContiWest in accordance with its terms, subject as to enforceability to
(x) bankruptcy, insolvency, reorganization, moratorium, receivership or
other similar laws now or hereafter in effect relating to creditors'
rights generally and (y) the qualification that the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion, with respect to
such remedies, of the court before which any proceedings with respect
thereto may be brought and (z) public policy considerations under the
securities laws which may limit the availability of indemnification as
to securities law liability.
(iv) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body having jurisdiction over ContiWest is required for the
consummation by ContiWest of the transactions contemplated by the
Pooling and Servicing Agreement except such consents, approvals,
authorizations, registrations and qualifications as have been obtained.
15
<PAGE>
(v) Neither the sale and transfer of the Home Equity
Loans by ContiWest to the Depositor, nor the execution, delivery or
performance by ContiWest of the Pooling and Servicing Agreement and the
transactions contemplated thereby (A) conflict with or result in a
breach of, or constitute a default under, (i) any term or provision of
the articles of incorporation or by-laws of ContiWest; (ii) any term or
provision of any material agreement, deed of trust, mortgage loan
agreement, contract, instrument or indenture, or other agreement to
which ContiWest is a party or is bound or to which any of the property
or assets of ContiWest or any of its subsidiaries is subject; (iii) to
the best of such counsel's knowledge without independent investigation
any order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over ContiWest; or (iv) any
law, rule or regulation, applicable to ContiWest; or (B) to the best of
such counsel's knowledge without independent investigation, results in
the creation or imposition of any lien, charge or encumbrance upon the
Trust Estate or upon the Certificates.
(vi) There are, to the best of such counsel's
knowledge without independent investigation, no actions, proceedings or
investigations pending with respect to which ContiWest has received
service of process or threatened against ContiWest before any court,
administrative agency or other tribunal (a) asserting the invalidity of
the Pooling and Servicing Agreement, the Underwriting Agreement or the
Certificates, (b) seeking to prevent the consummation of any of the
transactions contemplated by the Pooling and Servicing Agreement or (c)
which would materially and adversely affect the performance by
ContiWest of its obligations under, or the validity or enforceability
of, the Pooling and Servicing Agreement or the Underwriting Agreement.
H. Michael R. Mayberry, Esq., Counsel for the Depositor, shall
have furnished to the Underwriters and MBIA his written opinion, addressed to
the Underwriters and MBIA and dated the Closing Date, in form and substance
satisfactory to the Underwriters and MBIA, to the effect that:
(i) The Depositor has been duly organized and is
validly existing as a corporation in good standing under the laws of
the State of Delaware and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the
conduct of its business so requires such standing except where the
failure to be in good standing would not result in a material adverse
change in the condition of the Depositor, whether or not arising in the
ordinary course of business. The Depositor has all power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged and to enter into and perform its obligations under
this Agreement and the Pooling and Servicing Agreement and to cause the
Certificates to be issued.
(ii) The Depositor is not in violation of its
articles of incorporation or by-laws or in default in the performance
or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Depositor is a
party or by which it
16
<PAGE>
or its properties may be bound, which default might result in any
material adverse changes in the financial condition, earnings, affairs
or business of the Depositor or which might materially and adversely
affect the properties or assets, taken as a whole, of the Depositor.
(iii) This Agreement and the Pooling and Servicing
Agreement have been duly authorized, executed and delivered by the
Depositor and, assuming the due authorization, execution and delivery
of such agreements by the other parties thereto, such agreements
constitute valid and binding obligations, enforceable against the
Depositor in accordance with their respective terms, subject as to
enforceability to (x) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, (y) general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law) and (z) with respect to rights of indemnity under this
Agreement, limitations of public policy under applicable securities
laws.
(iv) The execution, delivery and performance of this
Agreement and the Pooling and Servicing Agreement by the Depositor, the
consummation of the transactions contemplated hereby and thereby, and
the issuance and delivery of the Certificates do not and will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Depositor is a party or by which the Depositor is bound or to which
any of the property or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a
material adverse effect on the business, operations or financial
condition of the Depositor or its ability to perform its obligations
under this Agreement and the Pooling and Servicing Agreement nor will
such actions result in a violation of the provisions of the articles of
incorporation or by-laws of the Depositor or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Depositor or any of its properties or assets,
which breach or violation would have a material adverse effect on the
business, operations or financial condition of the Depositor or its
ability to perform its obligations under this Agreement and the Pooling
and Servicing Agreement.
(v) The direction by the Depositor to the Trustee and
the Swap Trustee, as applicable, to issue, authenticate and deliver the
Certificates has been duly authorized by the Depositor and, assuming
that the Trustee and the Swap Trustee have been duly authorized to do
so, when executed, authenticated and delivered by the Trustee and the
Swap Trustee, as applicable, in accordance with the Pooling and
Servicing Agreement, the Certificates will be validly issued and
outstanding and will be entitled to the benefits of the Pooling and
Servicing Agreement.
(vi) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body is required for the issuance of the Certificates, and
the sale of the Offered Certificates to the Underwriters,
17
<PAGE>
or the consummation by the Depositor of the other transactions
contemplated by this Agreement and the Pooling and Servicing Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Act or state
securities or Blue Sky laws in connection with the purchase and
distribution of the Offered Certificates by the Underwriters or as have
been previously obtained.
(vii) There are not, to the best of his knowledge
without independent investigation, any actions, proceedings or
investigations pending with respect to which the Depositor has received
service of process before or threatened by any court, administrative
agency or other tribunal to which the Depositor is a party or of which
any of its properties is the subject: (a) which if determined adversely
to the Depositor would have a material adverse effect on the business,
results of operations or financial condition of the Depositor; (b)
asserting the invalidity of the Pooling and Servicing Agreement or the
Certificates; (c) seeking to prevent the issuance of the Certificates
or the consummation by the Depositor of any of the transactions
contemplated by the Pooling and Servicing Agreement or this Agreement,
as the case may be; or (d) which might materially and adversely affect
the performance by the Depositor of its obligations under, or the
validity or enforceability of, the Pooling and Servicing Agreement,
this Agreement or the Certificates.
(viii) The Certificates have been duly and validly
authorized and issued and, immediately prior to the sale of the Offered
Certificates to the Underwriters, such Certificates are owned by the
Depositor, free and clear of all Liens.
I. The Underwriters and MBIA shall have received the favorable
opinion of counsel to the Trustee and the Swap Trustee (together, for purposes
of this section only, "MTT"), dated the Closing Date, addressed to the
Underwriters and in form and scope satisfactory to counsel to the Underwriters,
to the effect that:
(i) MTT is a banking corporation duly incorporated
and validly existing under the law of the State of New York.
(ii) MTT has the full corporate trust power to
execute, deliver and perform its obligations under the Pooling and
Servicing Agreement.
(iii) The execution and delivery by MTT of the
Pooling and Servicing Agreement, and the performance by MTT of its
obligations under the Pooling and Servicing Agreement, have been duly
authorized by all necessary corporate action of MTT.
(iv) The Pooling and Servicing Agreement is a valid
and legally binding obligation of MTT enforceable against MTT.
(v) The execution and delivery by MTT of the Pooling
and Servicing Agreement does not (a) violate the Organization
Certificate of MTT or the by-laws of the MTT, (b) to such counsel's
knowledge, violate any judgment, decree or order of any New
18
<PAGE>
York or United States federal court or other New York or United States
federal governmental authority by which MTT is bound or (c) assuming
the non-existence of any judgment, decree or order of any court or
other governmental authority that would be violated by such execution
and delivery, violate any New York or United States federal statute,
rule or regulation or require any consent, approval or authorization of
any New York or United States federal court or other New York or United
States federal governmental authority.
(vi) The Trust Certificates have been duly executed,
authenticated and delivered by the Trustee. The Swapped Certificates
have been duly executed, authenticated and delivered by the Swap
Trustee.
(vii) If the Trustee were acting as Servicer under
the Pooling and Servicing Agreement as of the date of such opinion, the
Trustee would have the full corporate trust power to perform the
obligations of the Servicer under the Pooling and Servicing Agreement;
and
(viii) To the best of such counsel's knowledge, there
are no actions, proceedings or investigations pending or threatened
against or affecting MTT before or by any court, arbitrator,
administrative agency or other governmental authority which, if decided
adversely to MTT, would materially and adversely affect the ability of
MTT to carry out the transactions contemplated in the Pooling and
Servicing Agreement.
J. The Underwriters and MBIA shall have received the favorable
opinion or opinions, dated the Closing Date, of counsel for the Underwriters,
with respect to the issue and sale of the Offered Certificates, the Registration
Statement, this Agreement, the Prospectus and such other related matters as the
Underwriters may reasonably require.
K. The Underwriters and MBIA shall have received an executed
copy of the Swap Agreement with respect to the Swapped Certificates.
L. The Depositor, ContiMortgage, ContiWest and ContiFinancial
shall each have furnished to the Underwriters and MBIA a certificate, dated the
Closing Date and signed by the Chairman of the Board, the President or a Vice
President of the Depositor, ContiMortgage, ContiWest and ContiFinancial,
respectively, stating as it relates to each, as of the Closing Date:
(i) The representations and warranties of the
Depositor, ContiMortgage and ContiWest in this Agreement are true and
correct as of the Closing Date; and the Depositor, ContiMortgage and
ContiWest have complied with each of their respective agreements
contained herein which are to have been complied with on or prior to
the Closing Date;
(ii) The information contained in the Prospectus
relating to the Depositor, ContiMortgage, ContiWest and the Home Equity
Loans is true and accurate in all material respects and nothing has
come to his or her attention that would lead such officer to believe
that the Registration Statement or the Prospectus includes any untrue
19
<PAGE>
statement of a material fact or omits to state a material fact
necessary to make the statements therein not misleading;
(iii) There has been no amendment or other document
filed affecting the certificate of incorporation or by-laws of the
Depositor since May 18, 1995 or the certificate of incorporation or
by-laws of ContiMortgage since October 19, 1990 or the Articles of
incorporation or by-laws of ContiWest since January 1, 1997 and no such
amendment has been authorized. No event has occurred since March 31,
1998 which has affected the good standing of the Depositor,
ContiMortgage or ContiWest under the laws of the States of Delaware and
Nevada, as applicable; and
(iv) There has not occurred any material adverse
change, or any development involving a prospective material adverse
change, in the condition, financial or otherwise, or in the earnings,
business or operations of the Depositor, ContiMortgage, ContiWest or
ContiFinancial from June 30, 1998. No publicly-held debt of
ContiFinancial shall have been downgraded or put on credit watch for
possible downgrade, nor is ContiFinancial aware of any anticipated
downgrading or credit watch situation regarding ContiFinancial, in each
case since June 30, 1998, other than as previously disclosed to the
underwriter on or prior to the date hereof; there has been no
suspension of trading in ContiFinancial's publicly-held common stock
since June 30, 1998.
M. The Trustee shall have furnished to the Underwriters and
MBIA a certificate of the Trustee, signed by one or more duly authorized
officers of the Trustee, dated the Closing Date, as to the due authorization,
execution and delivery of the Pooling and Servicing Agreement by the Trustee and
the acceptance by the Trustee of the Trusts created thereby and the due
execution, authentication and delivery of the Certificates by the Trustee
thereunder and such other matters as the Representative shall reasonably
request.
N. The Certificate Insurance Policies and the Insurance
Agreement shall have been issued by the Certificate Insurer and shall have been
duly authenticated by an authorized agent of the Certificate Insurer, if so
required under applicable state law or regulations.
O. The Offered Certificates (other than the Subordinate
Certificates) shall have been rated in the highest rating category by Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's Rating Services, a
division of the McGraw-Hill Companies, Inc. ("Standard & Poor's") and Fitch
IBCA, Inc. ("Fitch") and the Subordinate Certificates shall have been rated
"Baa3" by Moody's, "BBB-" by Standard & Poor's and "BBB" by Fitch; no Class of
Offered Certificates shall have been put on credit watch for possible downgrade.
P. The Depositor shall have furnished to the Underwriters such
further information, certificates and documents as the Underwriters may
reasonably have requested not less than three full business days prior to the
Closing Date.
Q. Prior to the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of
20
<PAGE>
enabling them to pass upon the issuance and sale of the Certificates as herein
contemplated and related proceedings or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the fulfillment of
any of the conditions, herein contained, and all proceedings taken by the
Depositor in connection with the issuance and sale of the Certificates as herein
contemplated shall be satisfactory in form and substance to the Underwriters and
counsel for the Underwriters.
R. Subsequent to the execution and delivery of this Agreement
none of the following shall have occurred: (i) trading in securities generally
on the New York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or minimum prices shall have
been established on either of such exchanges or such market by the Commission,
by such exchange or by any other regulatory body or governmental authority
having jurisdiction; (ii) a banking moratorium shall have been declared by
Federal or state authorities; (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation of hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States; or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets of the United States
shall be such) as to make it in each of the instances set forth in clauses (i),
(ii), (iii) and (iv) herein, in the reasonable judgment of the Underwriters,
impractical or inadvisable to proceed with the public offering or delivery of
the Certificates on the terms and in the manner contemplated in the Prospectus.
S. The Representative shall have received letters, including
bring-down letters, from Arthur Andersen LLP, dated on or before the Closing
Date, in form and substance satisfactory to the Representative and counsel for
the Underwriters, to the effect that they have performed certain specified
procedures requested by the Representative with respect to the information set
forth in the Prospectus and certain matters relating to ContiMortgage and
ContiWest.
T. The Underwriters shall have received any other opinions
delivered to the Ratings Agencies.
U. The Policies shall have been duly executed and issued at or
prior to the Closing Date and shall conform in all material respects to the
description thereof in the Prospectus. The Insurance Agreement and the
Indemnification Agreement shall each have been duly executed and delivered by
MBIA and the other parties thereto at or prior to the Closing Date.
V. The Underwriters shall have received a favorable opinion of
Kutak Rock, counsel to MBIA, dated the Closing Date and in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) MBIA is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of New
York. MBIA is validly licensed to do business in New York and is
authorized to issue the Policies and perform its obligations under the
Policies in accordance with the terms thereof.
21
<PAGE>
(ii) The execution and delivery by MBIA of the
Policies and the Indemnification Agreement are within the corporate
power of MBIA and have been authorized by all necessary corporate
action on the part of MBIA; the Policies have been duly executed and is
the valid and binding obligation of the Insurer enforceable in
accordance with its terms except that the enforcement of the Policies
may be limited by laws relating to bankruptcy, insolvency,
reorganization, moratorium, receivership and other similar laws
affecting creditors' rights generally and by general principles of
equity.
(iii) MBIA is authorized to deliver the
Indemnification Agreement, and such agreement has been duly executed
and delivered and constitutes the legal, valid and binding obligations
of MBIA enforceable in accordance with its terms except that the
enforcement of the Indemnification Agreement may be limited by laws
relating to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights
generally and by general principles of equity and by public policy
considerations relating to indemnification for securities law
violations.
In rendering this opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of MBIA and public
officials. Such opinion may assume the due authorization, execution and delivery
of the instruments and documents referred to therein by the parties thereto
other than MBIA.
W. The Underwriters shall have received from MBIA a
certificate, signed by the president, a senior vice president or a vice
president of MBIA, dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Policies, the Indemnification Agreement
and the related documents and that, to the best of his or her knowledge based on
reasonable investigation:
(i) There are no actions, suits or proceedings
pending or threatened against or affecting MBIA which, if adversely
determined, individually or in the aggregate, would adversely affect
the Insurer's performance under the Policies or the Indemnification
Agreement;
(ii) Each person who as an officer or representative
of MBIA, signed or signs the Policies, the Indemnification Agreement or
any other document delivered pursuant hereto, on the date thereof, or
on the Closing Date, in connection with the transactions described in
this Agreement was, at the respective times of such signing and
delivery, and is now, duly elected or appointed, qualified and acting
as such officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures;
(iii) The information contained in the Prospectus
Supplement under the captions "Credit Enhancement - The Certificate
Insurance Policies" and "The Certificate Insurer" is true and correct
in all material respects and does not omit to state a material fact
with respect to the description of the Policies or the ability of MBIA
to meet its payment obligations under the Policies;
22
<PAGE>
(iv) The tables regarding MBIA's capitalization set
forth under the caption "The Certificate Insurer" presents fairly the
capitalization of the Insurer as of June 30, 1998;
(v) On or prior to the Closing Date, there has been
no downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
the claims paying ability of MBIA by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of the Securities Act;
(vi) The audited balance sheet of MBIA as of December
31, 1997 and the related statement of income and retained earnings for
the fiscal year then ended, and the accompanying footnotes, together
with the related opinion of an independent certified public accountant,
copies of which are incorporated by reference in the Prospectus
Supplement, fairly present in all material respects the financial
condition of MBIA as of such date and for the period covered by such
statements in accordance with generally accepted accounting principles
consistently applied; the unaudited balance sheet of MBIA as of June
30, 1998 and the related statement of income and retained earnings for
the three-month period then ended, copies of which are included in the
Prospectus Supplement, fairly present in all material respects the
financial condition of MBIA as of such date and for the period covered
by such statements in accordance with generally accepted accounting
principles applied consistently with those principles applied in
preparing the December 31, 1997 audited statements.
(vii) to the best knowledge of such officer, since
June 30, 1998, no material adverse change has occurred in the financial
position of MBIA other than as set forth in the Prospectus Supplement.
The officer of MBIA certifying to items (v) - (vii) shall be
an officer in charge of a principal financial function.
MBIA shall attach to such certificate a true and correct copy
of its certificate or articles of incorporation, as appropriate, and its
by-laws, all of which are in full force and effect on the date of such
certificate.
If any condition specified in this Section VII shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Depositor at any time at or
prior to the Closing Date, and such termination shall be without liability of
any party to any other party except as provided in Section VII.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
23
<PAGE>
SECTION VII. Payment of Expenses. The Depositor agrees to pay:
A. the costs incident to the authorization, issuance, sale and
delivery of the Certificates and any taxes payable in connection therewith; (b)
the costs incident to the preparation, printing and filing under the Securities
Act of the Registration Statement and any amendments and exhibits thereto; (c)
the costs of distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective amendments thereof (including, in
each case, exhibits), the Prospectus and any amendment or supplement to the
Prospectus or any document incorporated by reference therein, all as provided in
this Agreement; (d) the costs of reproducing and distributing this Agreement;
(e) the fees and expenses of Stroock & Stroock & Lavan LLP in qualifying the
Certificates under the securities laws of the several jurisdictions as provided
in Section V (G) hereof and of preparing, printing and distributing a Blue Sky
Memorandum and a Legal Investment Survey (including related fees and expenses of
counsel to the Representative); (f) any fees charged by securities rating
services for rating the Offered Certificates; (g) the cost of the accountants
comfort letter relating to the Prospectus; and (h) all other costs and expenses
incidental to the performance of the obligations of the Depositor (including
costs and expenses of counsel to the Depositor); provided that, except as
provided in this Section VII, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Offered Certificates which they may sell and the expenses of advertising
any offering of the Offered Certificates made by the Underwriters, and the
Underwriters shall pay the cost of any accountant's comfort letters relating to
any Computational Materials (as defined herein).
If this Agreement is terminated by the Underwriters in
accordance with the provisions of Section VI or Section XI, the Depositor shall
cause the Underwriters to be reimbursed for all reasonable out-of-pocket
expenses, including fees and disbursements of Stroock & Stroock & Lavan LLP,
counsel for the Underwriters.
SECTION VIII. Indemnification and Contribution.
A. The Depositor agrees to indemnify and hold harmless each
Underwriter, each Underwriter's respective officers and directors and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Securities Act from and against any and all loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of the Offered Certificates), to which such Underwriter or
any such controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment thereof
or supplement thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus, or any amendment thereof or
supplement thereto, or (iv) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading and shall reimburse such
24
<PAGE>
Underwriter and each such controlling person promptly upon demand for any legal
or other expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Depositor shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in the Prospectus, or any amendment thereof or
supplement thereto, or the Registration Statement, or any amendment thereof or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Depositor by or on behalf of such Underwriter through the
Representative, specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Depositor may otherwise have
to any Underwriter or any such officer or director or any controlling person of
any such Underwriter.
B. Each Underwriter severally agrees to indemnify and hold
harmless the Depositor, each of its directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the Depositor
within the meaning of Section 15 of the Securities Act against any and all loss,
claim, damage or liability, or any action in respect thereof, to which the
Depositor or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereof or supplement thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (iii)
any untrue statement or alleged untrue statement of a material fact contained in
the Prospectus, or any amendment thereof or supplement thereto, or (iv) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Depositor by or on behalf of such Underwriter
specifically for inclusion therein, and shall reimburse the Depositor and any
such director, officer or controlling person for any legal or other expenses
reasonably incurred by the Depositor or any director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Underwriter may otherwise have to the Depositor or any such director,
officer or controlling person.
C. Promptly after receipt by any indemnified party under this
Section VIII of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section VIII, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section VIII except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not
25
<PAGE>
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section VIII.
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, except to
the extent provided in the next following paragraph, the indemnifying party
shall not be liable to the indemnified party under this Section VIII for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to one local counsel per jurisdiction) at any time for all such
indemnified parties, which firm shall be designated in writing by the related
Underwriter, if the indemnified parties under this Section VIII consist of one
or more Underwriters or any of its or their controlling persons, or the
Depositor, if the indemnified parties under this Section VIII consist of the
Depositor or any of the Depositor's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity
agreements contained in Section VIII (A) and (B), shall use its reasonable best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder
26
<PAGE>
by such indemnified party unless such settlement includes an unconditional
release of such indemnified party from all liability on any claims that are the
subject of such action.
Notwithstanding the foregoing paragraph, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
D. Each Underwriter agrees to provide the Depositor no later
than two Business Days prior to the day on which the Prospectus Supplement is
required to be filed pursuant to Section I (A) hereof with a copy of any
Computational Materials (defined below) produced by such Underwriter for filing
with the Commission on Form 8-K.
E. Each Underwriter severally agrees, to indemnify and hold
harmless the Depositor, each of the Depositor's officers and directors and each
person who controls the Depositor within the meaning of Section 15 of the
Securities Act against any and all losses, claims, damages or liabilities, to
which they may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement of a material fact contained
in the Computational Materials provided by such Underwriter, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading when read in conjunction with the
Prospectus, and agrees to reimburse each such indemnified party for any legal or
other expenses reasonably incurred by him, her or it in connection with
investigating or defending or preparing to defend any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that in no
event shall an Underwriter be liable to the Depositor under this paragraph E in
an amount in excess of the fees received by such Underwriter in connection with
the offering of the Offered Certificates. The obligations of an Underwriter
under this Section VIII (E) shall be in addition to any liability which such
Underwriter may otherwise have.
The procedures set forth in Section VIII (C) shall be equally
applicable to this Section VIII (E).
F. The Depositor agrees to indemnify and hold harmless each
Underwriter, each Underwriter's respective officers and directors and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of the Offered Certificates), to which they may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement of a material fact contained in the Seller
27
<PAGE>
Provided Information (as defined below) provided by the Company, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred by him, her or it in connection with investigating
or defending or preparing to defend any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which the Depositor may otherwise have to any
Underwriter or any such officer or director or any controlling person of any
such Underwriter.
The procedures set forth in Section VIII (C) shall be equally
applicable to this Section VIII (F).
G. If the indemnification provided for in this Section VIII
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section VIII (A), (B), (E) or (F) in respect of any
loss, claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Depositor on the one hand and the Underwriters on the
other from the offering of the relevant class of Offered Certificates or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law
or if the indemnified party failed to give the notice required under Section
VIII (C), in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Depositor on the one hand and the related Underwriter on the other with respect
to the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations.
The relative benefits of an Underwriter and the Depositor
shall be deemed to be in such proportion as the sum of the original principal
amount of the offering, plus the total proceeds to the Depositor from the sale
of the Class N-IO and P-IO Certificates (before deducting expenses) bears to the
total underwriting discounts and commissions received by the related Underwriter
from time to time in negotiated sales of the related Offered Certificates.
The relative fault of an Underwriter and the Depositor shall
be determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact relates
to information supplied by the Depositor or by such Underwriter, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission and other equitable
considerations.
The Depositor and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section VIII (G) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purposes) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The
28
<PAGE>
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section VIII (G) shall be deemed to include, for purposes of this Section VIII
(G), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
For purposes of this Section VIII, in no case shall any
Underwriter (except with respect to any document (other than the Computational
Materials) incorporated by reference into the Registration Statement or
Prospectus at the request of such Underwriter through the Representative and
except as may be provided in any agreement among the Underwriters relating to
the offering of the Offered Certificates) be responsible for any amount in
excess of the amount by which (x) the amount received by such Underwriter in
connection with its sale of the Offered Certificates exceeds (y) the amount paid
by such Underwriter to the Depositor for the Offered Certificates hereunder. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of fraudulent misrepresentation.
H. For purposes of this Section VIII, as to each Underwriter
the term "Computational Materials" means collectively, "Computational
Materials," "Collateral Term Sheets" and "Structural Term Sheets" as such terms
are defined in the No-Action Letter of May 20, 1994 issued by the Securities and
Exchange Commission (the "Commission") to Kidder, Peabody Acceptance Corporation
I, Kidder, Peabody & Co. Incorporated and Kidder Structured Asset Corporation,
as made applicable to other issuers and underwriters by the Commission in
response to the request of the Public Securities Association dated May 24, 1994,
and the No-Action Letter of February 17, 1995 issued by the Commission to the
Public Securities Association, provided, that the term Computational Materials
shall not include any Seller Provided Information. "Seller Provided Information"
means any computer tape (or other information) furnished to any Underwriter by
any Seller concerning the assets comprising the Trust.
I. The Underwriters confirm that the information set forth in
the last paragraph on the cover page of and under the caption "Underwriting" in
the Prospectus Supplement and the Computational Materials are correct and
constitute the only information furnished in writing to the Depositor by or on
behalf of any Underwriter specifically for inclusion in the Registration
Statement and the Prospectus.
SECTION IX. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or contained in certificates of officers of the Depositor
submitted pursuant hereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters or
controlling persons thereof, or by or on behalf of the Depositor, and shall
survive delivery of any Offered Certificates to the Underwriters.
SECTION X. Default by One or More of the Underwriters. If one
or more of the Underwriters participating in the public offering of the Offered
Certificates shall fail at the Closing Date to purchase the Offered Certificates
which it is (or they are) obligated to purchase
29
<PAGE>
hereunder (the "Defaulted Certificates"), then the non-defaulting Underwriters
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Certificates in such
amounts as may be agreed upon and upon the terms herein set forth. If, however,
the Underwriters have not completed such arrangements within such 24-hour
period, then
(i) if the aggregate principal amount of Defaulted
Certificates does not exceed 10% of the aggregate principal amount of
the Offered Certificates to be purchased pursuant to this Agreement,
the non-defaulting Underwriters named in this Agreement shall be
obligated to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all such non-defaulting Underwriters, or
(ii) if the aggregate principal amount of Defaulted
Certificates exceeds 10% of the aggregate principal amount of the
Offered Certificates to be purchased pursuant to this Agreement, this
Agreement shall terminate, without any liability on the part of any
non-defaulting Underwriters.
No action taken pursuant to this Section X shall relieve any
defaulting Underwriter from the liability with respect to any default of such
Underwriter under this Agreement.
In the event of a default by any Underwriter as set forth in
this Section X, each of the Underwriters and the Depositors shall have the right
to postpone the Closing Date for a period not exceeding five Business Days in
order that any required changes in the Registration Statement or Prospectus or
in any other documents or arrangements may be effected.
SECTION XI. Termination of Agreement. The Underwriters may
terminate this Agreement immediately upon notice to the Depositor, at any time
at or prior to the Closing Date if any of the events or conditions described in
Section VI (R) of this Agreement shall occur and be continuing, or if any other
closing condition set forth in Section VI shall not have been fulfilled when
required to be fulfilled. In the event of any such termination, the covenant set
forth in Section V (H), the provisions of Section VII, the indemnity and
contribution agreements set forth in Section VIII, and the provisions of
Sections IX, XIV and XVI shall remain in effect.
SECTION XII. Notices. All statements, requests, notices and
agreements hereunder shall be in writing, and:
A. if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Morgan Stanley & Co. Incorporated, 1585
Broadway, New York, New York 10036, Attention: Gregory Walker, Esq. ; and
B. if to the Depositor, shall be delivered or sent by mail,
telex or facsimile transmission to care of ContiSecurities Asset Funding Corp.,
3811 West Charleston Boulevard, Suite 104, Las Vegas Nevada 81092 (fax:
702-822-5839), with a copy to ContiFinancial
30
<PAGE>
Corporation, 277 Park Avenue, New York, New York 10172, Attention: Chief Counsel
(Fax: 212-207-2937).
SECTION XIII. Persons Entitled to the Benefit of this
Agreement. This Agreement shall inure to the benefit of and be binding upon the
Underwriters and the Depositor, and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that the representations, warranties, indemnities and agreements
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control any of the Underwriters within the
meaning of Section 15 of the Securities Act, and for the benefit of each
Underwriter's respective officers and directors and for the benefit of directors
of the Depositor, officers of the Depositor who have signed the Registration
Statement and any person controlling the Depositor within the meaning of Section
15 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
XIII, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
SECTION XIV. Survival. The respective indemnities,
representations, warranties and agreements of the Depositor and the Underwriters
contained in this Agreement, or made by or on behalf of them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Certificates and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
SECTION XV. Definition of the Term "Business Day". For
purposes of this Agreement, "Business Day" means any day on which the New York
Stock Exchange, Inc. is open for trading.
SECTION XVI. Governing Law: Submission to Jurisdiction; Waiver
of Jury Trial. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to the principles
of conflicts of law thereof.
The parties hereto hereby submit to the jurisdiction of the
United States District Court for the Southern District of New York and any court
in the State of New York located in the City and County of New York, and
appellate court from any thereof, in any action, suit or proceeding brought
against it or in connection with this Agreement or any of the related documents
or the transactions contemplated hereunder or for recognition or enforcement of
any judgment, and the parties hereto hereby agree that all claims in respect of
any such action or proceeding may be heard or determined in New York State court
or, to the extent permitted by law, in such federal court.
The parties hereto hereby irrevocably waive, to the fullest
extent permitted by law, any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
SECTION XVII. Counterparts. This Agreement may be executed in
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
31
<PAGE>
SECTION XVIII. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
SECTION XIX. Miscellaneous. Bear, Stearns & Co. Inc. will be
deemed to be the sole Selling Agent with respect to the A-18 Certificates.
Morgan Stanley will be deemed to be the sole Selling Agent with respect to the
Class N-IO and the Class P-IO Certificates.
32
<PAGE>
If the foregoing correctly sets forth the agreement between
the Depositor and the Underwriters, please indicate your acceptance in the space
provided for the purpose below.
Very truly yours,
CONTISECURITIES ASSET FUNDING CORP.
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
Acting on its own behalf and as
Representative of the Several
Underwriters referred to in the foregoing
Agreement
By:
--------------------------------
Name:
Title:
CONTIMORTGAGE CORPORATION CONTIWEST CORPORATION
Accepts and hereby agrees solely to the Accepts and hereby agrees solely to
provisions of Section V (H) the provisions of Section V (I)
By: By:
-------------------------------- --------------------------------
Name: Name:
Title: Title:
By: By:
-------------------------------- --------------------------------
Name: Name:
Title: Title:
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Class A-1 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $13,333,335 0.100%
Bear, Stearns & Co. Inc. $13,333,333 0.100%
Credit Suisse First Boston Corporation $13,333,333 0.100%
Greenwich Capital Markets, Inc. $13,333,333 0.100%
Merrill Lynch, Pierce, Fenner & Smith $13,333,333 0.100%
Incorporated
Nationsbanc Montgomery Securities $13,333,333 0.100%
LLC
<CAPTION>
Class A-2 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $25,666,670 0.150%
Bear, Stearns & Co. Inc. $25,666,666 0.150%
Credit Suisse First Boston Corporation $25,666,666 0.150%
Greenwich Capital Markets, Inc. $25,666,666 0.150%
Merrill Lynch, Pierce, Fenner & Smith $25,666,666 0.150%
Incorporated
Nationsbanc Montgomery Securities $25,666,666 0.150%
LLC
<CAPTION>
Class A-3 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $31,333,335 0.175%
Bear, Stearns & Co. Inc. $31,333,333 0.175%
Credit Suisse First Boston Corporation $31,333,333 0.175%
Greenwich Capital Markets, Inc. $31,333,333 0.175%
Merrill Lynch, Pierce, Fenner & Smith $31,333,333 0.175%
Incorporated
Nationsbanc Montgomery Securities $31,333,333 0.175%
LLC
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A-4 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $10,666,670 0.200%
Bear, Stearns & Co. Inc. $10,666,666 0.200%
Credit Suisse First Boston Corporation $10,666,666 0.200%
Greenwich Capital Markets, Inc. $10,666,666 0.200%
Merrill Lynch, Pierce, Fenner & Smith $10,666,666 0.200%
Incorporated
Nationsbanc Montgomery Securities $10,666,666 0.200%
LLC
<CAPTION>
Class A-5 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $13,833,335 0.225%
Bear, Stearns & Co. Inc. $13,833,333 0.225%
Credit Suisse First Boston Corporation $13,833,333 0.225%
Greenwich Capital Markets, Inc. $13,833,333 0.225%
Merrill Lynch, Pierce, Fenner & Smith $13,833,333 0.225%
Incorporated
Nationsbanc Montgomery Securities $13,833,333 0.225%
LLC
<CAPTION>
Class A-6 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $9,333,335 0.250%
Bear, Stearns & Co. Inc. $9,333,333 0.250%
Credit Suisse First Boston Corporation $9,333,333 0.250%
Greenwich Capital Markets, Inc. $9,333,333 0.250%
Merrill Lynch, Pierce, Fenner & Smith $9,333,333 0.250%
Incorporated
Nationsbanc Montgomery Securities $9,333,333 0.250%
LLC
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A-7 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $10,833,335 0.275%
Bear, Stearns & Co. Inc. $10,833,333 0.275%
Credit Suisse First Boston Corporation $10,833,333 0.275%
Greenwich Capital Markets, Inc. $10,833,333 0.275%
Merrill Lynch, Pierce, Fenner & Smith $10,833,333 0.275%
Incorporated
Nationsbanc Montgomery Securities $10,833,333 0.275%
LLC
<CAPTION>
Class A-8 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $13,333,335 0.250%
Bear, Stearns & Co. Inc. $13,333,333 0.250%
Credit Suisse First Boston Corporation $13,333,333 0.250%
Greenwich Capital Markets, Inc. $13,333,333 0.250%
Merrill Lynch, Pierce, Fenner & Smith $13,333,333 0.250%
Incorporated
Nationsbanc Montgomery Securities LLC $13,333,333 0.250%
<CAPTION>
Class A-9 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $38,620,835 0.200%
Bear, Stearns & Co. Inc. $38,620,833 0.200%
Credit Suisse First Boston Corporation $38,620,833 0.200%
Greenwich Capital Markets, Inc. $38,620,833 0.200%
Merrill Lynch, Pierce, Fenner & Smith $38,620,833 0.200%
Incorporated
Nationsbanc Montgomery Securities LLC $38,620,833 0.200%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A-10 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $13,000,000 0.200%
Bear, Stearns & Co. Inc. $13,000,000 0.200%
Credit Suisse First Boston Corporation $13,000,000 0.200%
Greenwich Capital Markets, Inc. $13,000,000 0.200%
Merrill Lynch, Pierce, Fenner & Smith $13,000,000 0.200%
Incorporated
Nationsbanc Montgomery Securities LLC $13,000,000 0.200%
<CAPTION>
Class A-11 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $12,500,000 0.100%
Bear, Stearns & Co. Inc. $12,500,000 0.100%
Credit Suisse First Boston Corporation $12,500,000 0.100%
Greenwich Capital Markets, Inc. $12,500,000 0.100%
Merrill Lynch, Pierce, Fenner & Smith $12,500,000 0.100%
Incorporated
Nationsbanc Montgomery Securities $12,500,000 0.100%
LLC
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A-12 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $21,666,670 0.100%
Bear, Stearns & Co. Inc. $21,666,666 0.100%
Credit Suisse First Boston Corporation $21,666,666 0.100%
Greenwich Capital Markets, Inc. $21,666,666 0.100%
Merrill Lynch, Pierce, Fenner & Smith $21,666,666 0.100%
Incorporated
Nationsbanc Montgomery Securities LLC $21,666,666 0.100%
<CAPTION>
Class A-13 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $32,000,000 0.125%
Bear, Stearns & Co. Inc. $32,000,000 0.125%
Credit Suisse First Boston Corporation $32,000,000 0.125%
Greenwich Capital Markets, Inc. $32,000,000 0.125%
Merrill Lynch, Pierce, Fenner & Smith $32,000,000 0.125%
Incorporated
Nationsbanc Montgomery Securities LLC $32,000,000 0.125%
<CAPTION>
Class A-14 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $7,000,000 0.150%
Bear, Stearns & Co. Inc. $7,000,000 0.150%
Credit Suisse First Boston Corporation $7,000,000 0.150%
Greenwich Capital Markets, Inc. $7,000,000 0.150%
Merrill Lynch, Pierce, Fenner & Smith $7,000,000 0.150%
Incorporated
Nationsbanc Montgomery Securities LLC $7,000,000 0.150%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A-15 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $11,666,670 0.175%
Bear, Stearns & Co. Inc. $11,666,666 0.175%
Credit Suisse First Boston Corporation $11,666,666 0.175%
Greenwich Capital Markets, Inc. $11,666,666 0.175%
Merrill Lynch, Pierce, Fenner & Smith $11,666,666 0.175%
Incorporated
Nationsbanc Montgomery Securities LLC $11,666,666 0.175%
<CAPTION>
Class A-16 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $4,166,670 0.200%
Bear, Stearns & Co. Inc. $4,166,666 0.200%
Credit Suisse First Boston Corporation $4,166,666 0.200%
Greenwich Capital Markets, Inc. $4,166,666 0.200%
Merrill Lynch, Pierce, Fenner & Smith $4,166,666 0.200%
Incorporated
Nationsbanc Montgomery Securities $4,166,666 0.200%
LLC
<CAPTION>
Class A-17 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $11,100,335 0.275%
Bear, Stearns & Co. Inc. $11,100,333 0.275%
Credit Suisse First Boston Corporation $11,100,333 0.275%
Greenwich Capital Markets, Inc. $11,100,333 0.275%
Merrill Lynch, Pierce, Fenner & Smith $11,100,333 0.275%
Incorporated
Nationsbanc Montgomery Securities $11,100,333 0.275%
LLC
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A-18 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Bear, Stearns & Co. Inc. $124,200,000 0.210%
<CAPTION>
Class A-19 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $12,991,000 0.120%
Bear, Stearns & Co. Inc. $12,991,000 0.120%
Credit Suisse First Boston Corporation $12,991,000 0.120%
Greenwich Capital Markets, Inc. $12,991,000 0.120%
Merrill Lynch, Pierce, Fenner & Smith $12,991,000 0.120%
Incorporated
Nationsbanc Montgomery Securities LLC $12,991,000 0.120%
<CAPTION>
Class A-20 Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $21,071,170 0.190%
Bear, Stearns & Co. Inc. $21,071,166 0.190%
Credit Suisse First Boston Corporation $21,071,166 0.190%
Greenwich Capital Markets, Inc. $21,071,166 0.190%
Merrill Lynch, Pierce, Fenner & Smith $21,071,166 0.190%
Incorporated
Nationsbanc Montgomery Securities LLC $21,071,166 0.190%
<CAPTION>
Class N-IO Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated 100% 0.0935%
<CAPTION>
Class P-IO Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated 100% 0.0816%
<CAPTION>
Class B-I Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $5,000,000 0.750%
Bear, Stearns & Co. Inc. $5,000,000 0.750%
Credit Suisse First Boston Corporation $5,000,000 0.750%
Greenwich Capital Markets, Inc. $5,000,000 0.750%
Merrill Lynch, Pierce, Fenner & Smith $5,000,000 0.750%
Incorporated
Nationsbanc Montgomery Securities $5,000,000 0.750%
LLC
<CAPTION>
Class B-II Certificates
Underwriting
Underwriters Principal Amount Discount
- ------------ ---------------- ------------
<S> <C> <C>
Morgan Stanley & Co. Incorporated $10,183,335 0.800%
Bear, Stearns & Co. Inc. $10,183,333 0.800%
Credit Suisse First Boston Corporation $10,183,333 0.800%
Greenwich Capital Markets, Inc. $10,183,333 0.800%
Merrill Lynch, Pierce, Fenner & Smith $10,183,333 0.800%
Incorporated
Nationsbanc Montgomery Securities $10,183,333 0.800%
LLC
</TABLE>
<PAGE>
EXHIBIT A
[LETTERHEAD OF CONTIFINANCIAL CORPORATION]
September [__], 1998
Morgan Stanley & Co. Incorporated
As Representative of the Several Underwriters
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
This Guaranty is made by ContiFinancial Corporation, a Delaware corporation with
its principal office at 277 Park Avenue, New York, New York 10172 ("CFC"), in
favor of Morgan Stanley & Co. Incorporated, as Representative of the Several
Underwriters, with its principal office at 1585 Broadway, New York, New York
10036.
As an inducement to you and in consideration of your entering into the
Underwriting Agreement referred to below, CFC hereby absolutely, unconditionally
and irrevocably guarantees the prompt performance of the obligations, including
any payment obligations, of ContiSecurities Asset Funding Corp., ("Depositor"),
a Delaware corporation with its principal office at 3811 West Charleston
Boulevard, Las Vegas, Nevada 81092, under Section VIII of the Underwriting
Agreement, dated as of September 18, 1998, between Depositor and Morgan Stanley
& Co. Incorporated, as Representative of the Several Underwriters. This Guaranty
is a guaranty of performance and payment and not of collection. The obligations
of CFC hereunder shall not be impaired by failure of Depositor to provide notice
to CFC of any modification or amendment of said contract agreed to by the
parties thereto. This Guaranty may be amended only by an instrument in writing
executed by the undersigned.
This Guaranty shall be governed by the laws of the State of New York
applicable to agreements made and to be performed in the State of New York
without giving effect to the conflict of law rules thereof.
<PAGE>
IN WITNESS WHEREOF, CFC has caused this Guaranty to be executed by duly
authorized corporate officers the day and year first above written.
CONTIFINANCIAL CORPORATION
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
ACCEPTED
as of September __, 1998
MORGAN STANLEY & CO. INCORPORATED
as representative of the Several Underwriters
By:
-------------------------------------
Name:
Title:
<PAGE>
EXECUTION COPY
===============================================================================
-----------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 1998
-----------------
among
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor,
CONTIMORTGAGE CORPORATION,
as Seller and Servicer,
CONTIWEST CORPORATION,
as Seller
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
Home Equity Loan Pass-Through Certificates
Series 1998-3
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
Article I DEFINITIONS; RULES OF CONSTRUCTION..................................3
Section 1.01 Definitions............................................3
Section 1.02 Use of Words and Phrases..............................44
Section 1.03 Captions; Table of Contents...........................44
Section 1.04 Opinions..............................................44
Article II ESTABLISHMENT AND ORGANIZATION OF THE TRUST.......................46
Section 2.01 Establishment of the Trust............................46
Section 2.02 Office................................................46
Section 2.03 Purposes and Powers...................................46
Section 2.04 Appointment of the Trustee; Declaration of Trust......46
Section 2.05 Expenses of the Trust.................................46
Section 2.06 Ownership of the Trust................................47
Section 2.07 Situs of the Trust....................................47
Section 2.08 Miscellaneous REMIC Provisions........................47
Article III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEPOSITOR, THE
SERVICER AND THE SELLERS; COVENANT OF SELLERS TO CONVEY
HOME EQUITY LOANS.............................................55
Section 3.01 Representations and Warranties of the Depositor.......55
Section 3.02 Representations and Warranties of the Servicer........57
Section 3.03 Representations and Warranties of the Sellers.........59
Section 3.04 Covenants of the Sellers to Take Certain Actions
with Respect to the Home Equity Loans In Certain
Situations............................................65
Section 3.05 Conveyance of the Home Equity Loans and Qualified
Replacement Mortgages.................................74
Section 3.06 Acceptance by Trustee; Certain Substitutions of Home
Equity Loans; Certification by Trustee................78
Article IV ISSUANCE AND SALE OF CERTIFICATES.................................80
Section 4.01 Issuance of Certificates..............................80
Section 4.02 Sale of Certificates..................................80
Article V CERTIFICATES AND TRANSFER OF INTERESTS.............................81
Section 5.01 Terms.................................................81
Section 5.02 Forms.................................................81
Section 5.03 Execution, Authentication and Delivery................82
Section 5.04 Registration and Transfer of Certificates.............82
-i-
<PAGE>
Section 5.05 Mutilated, Destroyed, Lost or Stolen Certificates.....84
Section 5.06 Persons Deemed Owners.................................85
Section 5.07 Cancellation..........................................85
Section 5.08 Limitation on Transfer of Ownership Rights............85
Section 5.09 Assignment of Rights..................................87
Article VI COVENANTS.........................................................88
Section 6.01 Distributions.........................................88
Section 6.02 Money for Distributions to be Held in Trust;
Withholding...........................................88
Section 6.03 Protection of Trust Estate............................89
Section 6.04 Performance of Obligations............................90
Section 6.05 Negative Covenants....................................90
Section 6.06 No Other Powers.......................................91
Section 6.07 Limitation of Suits...................................91
Section 6.08 Unconditional Rights of Owners to Receive
Distributions.........................................92
Section 6.09 Rights and Remedies Cumulative........................92
Section 6.10 Delay or Omission Not Waiver..........................92
Section 6.11 Control by Owners.....................................92
Section 6.12 Indemnification.......................................93
Section 6.13 Access to Names and Addresses of Owners of
Certificates..........................................93
Article VII ACCOUNTS, DISBURSEMENTS AND RELEASES.............................95
Section 7.01 Collection of Money...................................95
Section 7.02 Establishment of Accounts.............................95
Section 7.03 Flow of Funds.........................................95
Section 7.04 Auction Rate Certificates............................101
Section 7.05 Investment of Accounts...............................101
Section 7.06 Payment of Trust Expenses............................102
Section 7.07 Eligible Investments.................................102
Section 7.08 Accounting and Directions by Trustee.................104
Section 7.09 Reports by Trustee to Owners and the Certificate
Insurer..............................................105
Section 7.10 Reports by Trustee...................................111
Section 7.11 Preference Payments..................................111
Section 7.12 Swap Trust and Swap Mechanics........................112
Article VIII SERVICING AND ADMINISTRATION OF HOME EQUITY LOANS..............114
Section 8.01 Servicer and Sub-Servicers...........................114
Section 8.02 Collection of Certain Home Equity Loan Payments......115
Section 8.03 Sub-Servicing Agreements Between Servicer and
Sub-Servicers........................................115
Section 8.04 Successor Sub-Servicers..............................116
Section 8.05 Liability of Servicer; Indemnification...............116
Section 8.06 No Contractual Relationship Between Sub-Servicer,
Trustee or
-ii-
<PAGE>
the Owners...........................................116
Section 8.07 Assumption or Termination of Sub-Servicing Agreement
by Trustee...........................................117
Section 8.08 Principal and Interest Account.......................117
Section 8.09 Delinquency Advances and Servicing Advances..........119
Section 8.10 Compensating Interest; Repurchase of Home Equity
Loans................................................120
Section 8.11 Maintenance of Insurance.............................121
Section 8.12 Due-on-Sale Clauses; Assumption and Substitution
Agreements...........................................121
Section 8.13 Realization Upon Defaulted Home Equity Loans;
Modification.........................................122
Section 8.14 Trustee to Cooperate; Release of Files...............124
Section 8.15 Servicing Compensation...............................125
Section 8.16 Annual Statement as to Compliance....................125
Section 8.17 Annual Independent Certified Public Accountants'
Reports..............................................125
Section 8.18 Access to Certain Documentation and Information
Regarding the Home Equity Loans......................126
Section 8.19 Assignment of Agreement..............................126
Section 8.20 Removal of Servicer; Resignation of Servicer.........126
Section 8.21 Inspections by Certificate Insurer; Errors and
Omissions Insurance..................................131
Article IX TERMINATION OF TRUST.............................................132
Section 9.01 Termination of Trust.................................132
Section 9.02 Termination Upon Option of Owners of Class R-I
Certificates.........................................132
Section 9.03 Termination Upon Loss of REMIC Status................133
Section 9.04 Disposition of Proceeds..............................135
Article X THE TRUSTEE.......................................................136
Section 10.01 Certain Duties and Responsibilities..................136
Section 10.02 Removal of Trustee for Cause.........................137
Section 10.03 Certain Rights of the Trustee........................139
Section 10.04 Not Responsible for Recitals or Issuance of
Certificates.........................................140
Section 10.05 May Hold Certificates................................140
Section 10.06 Money Held in Trust..................................141
Section 10.07 Compensation and Reimbursement; No Lien for Fees.....141
Section 10.08 Corporate Trustee Required; Eligibility..............141
Section 10.09 Resignation and Removal; Appointment of Successor....141
Section 10.10 Acceptance of Appointment by Successor Trustee.......143
Section 10.11 Merger, Conversion, Consolidation or Succession to
Business of the Trustee..............................143
Section 10.12 Reporting; Withholding...............................144
Section 10.13 Liability of the Trustee.............................144
Section 10.14 Appointment of Co-Trustee or Separate Trustee........145
-iii-
<PAGE>
Article XI MISCELLANEOUS....................................................147
Section 11.01 Compliance Certificates and Opinions.................147
Section 11.02 Form of Documents Delivered to the Trustee...........147
Section 11.03 Acts of Owners.......................................148
Section 11.04 Notices, etc. to Trustee............................149
Section 11.05 Notices and Reports to Owners; Waiver of Notices.....149
Section 11.06 Rules by Trustee.....................................149
Section 11.07 Successors and Assigns...............................150
Section 11.08 Severability.........................................150
Section 11.09 Benefits of Agreement................................150
Section 11.10 Legal Holidays.......................................150
Section 11.11 Governing Law; Submission to Jurisdiction............150
Section 11.12 Counterparts.........................................151
Section 11.13 Usury................................................151
Section 11.14 Amendment............................................152
Section 11.15 Paying Agent; Appointment and Acceptance of Duties...152
Section 11.16 REMIC Status.........................................153
Section 11.17 Additional Limitation on Action and Imposition of
Tax..................................................155
Section 11.18 Appointment of Tax Matters Person....................155
Section 11.19 The Certificate Insurer..............................155
Section 11.20 Reserved.............................................156
Section 11.21 Third Party Rights...................................156
Section 11.22 Notices..............................................156
SCHEDULE I-A.......................................................I-A-1
SCHEDULE I-B.......................................................I-B-1
SCHEDULE I-C.......................................................I-C-1
SCHEDULE II........................................................II-1
SCHEDULE III.......................................................III-1
SCHEDULE IV........................................................IV-1
EXHIBIT A-1........................................................A-1-1
EXHIBIT A-2........................................................A-2-1
EXHIBIT A-3........................................................A-3-1
EXHIBIT A-4........................................................A-4-1
EXHIBIT A-5........................................................A-5-1
EXHIBIT A-6........................................................A-6-1
EXHIBIT A-7........................................................A-7-1
EXHIBIT A-8........................................................A-8-1
EXHIBIT A-9........................................................A-9-1
EXHIBIT A-10.......................................................A-10-1
EXHIBIT A-11.......................................................A-11-1
EXHIBIT A-12.......................................................A-12-1
EXHIBIT A-13.......................................................A-13-1
EXHIBIT A-14.......................................................A-14-1
-iv-
<PAGE>
EXHIBIT A-15.......................................................A-15-1
EXHIBIT A-16.......................................................A-16-1
EXHIBIT A-17.......................................................A-17-1
EXHIBIT A-18.......................................................A-18-1
EXHIBIT A-19.......................................................A-19-1
EXHIBIT A-20.......................................................A-20-1
EXHIBIT N-IO.......................................................N-IO-1
EXHIBIT P-IO.......................................................P-IO-1
EXHIBIT B-I........................................................B-I-1
EXHBIT B-II........................................................B-II-1
EXHIBIT A-12 INTERNAL..............................................A-12-1
EXHIBIT A-13 INTERNAL..............................................A-13-1
EXHIBIT A-14 INTERNAL..............................................A-14-1
EXHIBIT A-15 INTERNAL..............................................A-15-1
EXHIBIT A-16 INTERNAL..............................................A-16-1
EXHIBIT C..........................................................C-1
EXHIBIT RI.........................................................R-I-1
EXHIBIT RII........................................................R-II-1
EXHIBIT RIII.......................................................R-III-1
EXHIBIT D..........................................................D-1
EXHIBIT E..........................................................E-1
EXHIBIT F..........................................................F-1
EXHIBIT G..........................................................G-1
EXHIBIT H..........................................................H-1
EXHIBIT I..........................................................I-1
ANNEX I - Planned Principal Balances..............................A-I
ANNEX II - Specified Percentages...................................A-II
-v-
<PAGE>
POOLING AND SERVICING AGREEMENT, relating to CONTIMORTGAGE
HOME EQUITY LOAN TRUST 1998-3 and to CONTIMORTGAGE SWAP TRUST 1998-B, dated as
of September 1, 1998 by and among CONTISECURITIES ASSET FUNDING CORP., a
Delaware corporation, in its capacity as Depositor (the "Depositor"),
CONTIMORTGAGE CORPORATION, a Delaware corporation in its capacities as a
Seller (in such capacity, a "Seller") and as Servicer (in such capacity, the
"Servicer"), CONTIWEST CORPORATION, a Nevada corporation, in its capacity as a
Seller (a "Seller" and together with ContiMortgage Corporation, the "Sellers")
and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation,
in its capacity as the trustee (the "Trustee") of the Trust and of the Swap
Trust (in such capacity, the "Swap Trustee").
WHEREAS, the Depositor wishes to establish (i) the Trust and
three subtrusts thereof and (ii) the Swap Trust, and to provide for the
allocation and sale of the beneficial interests therein and the maintenance
and distribution thereof;
WHEREAS, the Servicer has agreed to service the Home Equity
Loans, which constitute the principal assets of the Trust Estate;
WHEREAS, all things necessary to make the Certificates, when
executed and authenticated by the Trustee, valid instruments, and to make this
Agreement a valid agreement, in accordance with their and its terms, have been
done;
WHEREAS, Manufacturers and Traders Trust Company is
willing to serve in the capacity of Trustee hereunder;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the Sellers, the Servicer, and the Trustee
hereby agree as follows:
CONVEYANCE
To provide for the distribution of the interest on and/or
principal of the Certificates in accordance with their terms, all of the sums
distributable under this Agreement with respect to the Certificates and the
performance of the covenants contained in this Agreement, each Seller hereby
bargains, sells, conveys, assigns and transfers to the Depositor and the
Depositor hereby bargains, sells, conveys, assigns and transfers to the Trust,
without recourse and for the exclusive benefit of the Owners of the
Certificates and the Certificate Insurer, all of its respective right, title
and interest in and to any and all benefits accruing to it from (a) the Home
Equity Loans (other than any principal and interest payments received thereon
on or prior to the Cut-Off Date) listed in Schedules I-A, I-B and I-C to this
Agreement which the Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee herewith (and all
substitutions therefor as provided by Sections 3.03, 3.04 and 3.06), together
with the related Home Equity Loan documents and each Seller's interest in any
Property which secured a Home Equity Loan but which has been acquired by
foreclosure or deed in lieu of foreclosure, and all payments thereon and
proceeds of the conversion, voluntary or involuntary, of the foregoing; (b)
such amounts as may be held by the Trustee in the Certificate Account together
with investment earnings on such amounts and such amounts as may be held in
<PAGE>
the name of the Trustee in the Principal and Interest Account, if any,
exclusive of investment earnings thereon (except as otherwise provided
herein), whether in the form of cash, instruments, securities or other
properties (including any Eligible Investments held by the Servicer); (c) the
Insurance Agreement; (d) the Certificate Insurance Policy; and (e) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of
any mortgage insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations and receivables
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing) to pay the Certificates as specified herein (a)-(e)
above shall be collectively referred to herein as the "Trust Estate").
The Trustee acknowledges such sale, accepts the Trust
hereunder in accordance with the provisions hereof and agrees to perform the
duties herein to the best of its ability to the end that the interests of the
Owners may be adequately and effectively protected.
-2-
<PAGE>
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01 Definitions.
For all purposes of this Agreement, the following terms
shall have the meanings set forth below, unless the context clearly indicates
otherwise:
"Account": Any account established in accordance with
Section 7.02 or 8.08 hereof.
"Accrual Period": With respect to the Fixed Rate
Certificates (other than the Class A-1 Certificates, the Class A-11
Certificates and the Internal Certificates) and any Payment Date, the calendar
month immediately preceding the month in which the Payment Date occurs (or the
period from the Cut-Off Date to the end of the calendar month in which the
Cut-Off Date occurs in the case of the first Payment Date). A "calendar month"
shall be deemed to be 30 days. With respect to the Floating Rate Certificates,
the Class A-1 Certificates, the Class A-11 Certificates and the Internal
Certificates and any Payment Date, the period commencing on the immediately
preceding Payment Date (or the Closing Date in the case of the first Payment
Date) to and including the day prior to the current Payment Date. All
calculations of interest on the Fixed Rate Certificates (other than the Class
A-1 and Class A-11 Certificates) will be made on the basis of a 360-day year
assumed to consist of twelve 30-day months and calculations of interest on the
Floating Rate, on the Class A-1 Certificates and on the Class A-11
Certificates will be made on the basis of the actual number of days elapsed in
the related Accrual Period and in a year of 360 days.
"Adjustable Rate Home Equity Loans": The Home Equity Loans
identified in Schedule IIa and Schedule IIb hereto as having adjustable Coupon
Rates, including any Qualified Replacement Mortgages delivered in replacement
thereof.
"Aggregate Class A Certificate Principal Balance": As of any
time of determination and with respect to either Loan Group, the sum of the
Class A Certificate Principal Balances of all Class A Certificates relating to
such Loan Group. Unless otherwise specified herein with respect to any
particular provision, with respect to a Payment Date, the "Aggregate Class A
Certificate Principal Balance" shall be calculated after taking into account
the Class A Principal Distribution Amount for the related Loan Group on such
Payment Date.
"Aggregate Group Class A Overcollateralization Deficit": As
of any Payment Date and with respect to a Loan Group, the excess of (x) the
Aggregate Class A Certificate Principal Balance with respect to such Loan
Group over (y) (i) the outstanding Group Loan Balance of such Loan Group,
calculated after taking into account the reduction on such Payment Date of the
Aggregate Class A Certificate Principal Balance with respect to such Loan
Group resulting from all sources other than the proceeds of any Insured
Payment, plus (ii) with respect to Loan Group II, the amount on deposit in the
Auction Remainder Account at the end of such Payment Date.
-3-
<PAGE>
"Aggregate Group Extra Principal Distribution Amount": As of
any Payment Date and with respect to a Loan Group, the excess, if any, of (x)
the Class A Principal Distribution Amount with respect to such Loan Group plus
the Class B Principal Distribution Amount with respect to such Loan Group over
(y) the Principal Remittance Amount with respect to such Loan Group, in each
case with respect to such Payment Date.
"Aggregate Group Total Available Funds": As of any Payment
Date and with respect to a Loan Group, the sum of (a) the Interest Amount
Available with respect to such Loan Group and (b) the Principal Remittance
Amounts with respect to such Loan Group, plus (c) the Monthly Excess CashFlow
Amount, if any, available from the other Loan Group on such Payment Date
allocated to such Loan Group pursuant to Section 7.03(b)(ix)(a) hereof less
any such amount that cannot be distributed to the Owners of the Class A
Certificates with respect to such Loan Group as a result of proceedings under
the United States Bankruptcy Code.
"Aggregate Group Certificate Principal Balance": As of any
time of determination thereof and with respect to a Loan Group, the sum of the
Aggregate Group Class A Certificate Principal Balance with respect to such
Loan Group and the Class B Certificate Principal Balance with respect to such
Loan Group, in each case as of such time.
"Agreement": This Pooling and Servicing Agreement, as it may
be amended from time to time, including the Exhibits and Schedules hereto.
"Amount Held for Future Distribution": As of any date of
determination, amounts on deposit in the Auction Remainder Account for future
distribution on the Auction Rate Certificates pursuant to Section 7.04.
"Applied Group Realized Loss Amount": As of any Payment Date
and with respect to a Loan Group, the excess of (x) the Aggregate Certificate
Principal Balance with respect to such Loan Group on such Payment Date, after
taking into account all distributions of principal of the Class A Certificates
with respect to such Loan Group and the Class B Certificates with respect to
such Loan Group on such Payment Date, but prior to the reduction of the Class
B Certificate Principal Balance with respect to such Loan Group pursuant to
Section 7.03(i), if any, on such Payment Date over (y) the Group Loan Balance
with respect to such Loan Group.
"Appraised Value": The appraised value of any Property based
upon the appraisal or other valuation made at the time of the origination of
the related Home Equity Loan, or, in the case of a Home Equity Loan which is a
purchase money mortgage, the sales price of the Property at such time of
origination, if such sales price is less than such appraised value.
"Auction Agent": The meaning set forth in the Auction
Procedures.
"Auction Agent Agreement": The meaning set forth in the
Auction Procedures.
"Auction Agent Fee": The meaning set forth in the Auction
Agent Agreement. The Auction Agent fee includes the Broker-Dealer Fee payable
to the Broker-Dealer (each as defined in the Auction Procedures).
-4-
<PAGE>
"Auction Procedures": The procedures set forth in Schedule
II hereof by which the Auction Rate is determined.
"Auction Rate": The rate of interest per annum that results
from implementation of the Auction Procedures and is determined as described
in Section 2.3 hereof.
"Auction Rate Certificates": The Class A-18 Certificates.
"Auction Remainder Account": The account established to hold
deposits of the Amount Held for Future Distribution.
"Auction Reporting Date": That day of each month which is
the fifth Business Day prior to the Payment Date occurring in such month.
"Authorized Officer": With respect to any Person, any
officer of such Person who is authorized to act for such Person in matters
relating to the Agreement, and whose action is binding upon such Person; with
respect to the Depositor, the Sellers and the Servicer, initially including
those individuals whose names appear on the lists of Authorized Officers
delivered at the Closing; with respect to the Trustee, any Vice President,
Assistant Vice President, Trust Officer or any Officer of the Trustee located
at the Corporate Trust Office.
"Available Funds": As defined in Section 7.03(b).
"Balloon Loans": Home Equity Loans having scheduled
amortization based on a longer remaining term than the actual remaining term,
with the result that a relatively large principal amount is due on the final
scheduled due date (i.e., "30 due in 10").
"Business Day": Any day that is not a Saturday, Sunday or
other day on which the Certificate Insurer or commercial banking institutions
in The City of New York, or in the city in which the principal corporate trust
office of the Trustee is located, are authorized or obligated by law or
executive order to be closed.
"Certificate": Any one of the Class A Certificates, Class B
Certificates, Class C Certificates, Class R-I Certificates, Class R-II
Certificates or Class R Certificates, each representing the interests and the
rights described in this Agreement.
"Certificates": The Offered Certificates and the Retained
Certificates.
"Certificate Account": The certificate account established
in accordance with Section 7.02 hereof and maintained in the corporate trust
department of the Trustee; provided that the funds in such account shall not
be commingled with other funds held by the Trustee.
"Certificate Insurance Policy": With respect to the Group I
Class A Certificates, the certificate guaranty insurance policy (number 27599)
dated September 25, 1998 issued by the Certificate Insurer for the benefit of
the Owners of the Group I Class A Certificates pursuant to which the
Certificate Insurer guarantees Group I Insured Payments; with respect to the
Group II Class A Certificates, the certificate guaranty insurance policy
(number 27600) dated September
-5-
<PAGE>
25, 1998 issued by the Certificate Insurer for the benefit of the Owners of the
Group II Class A Certificates pursuant to which the Certificate Insurer
guarantees Group II Insured Payments.
"Certificate Insurer": MBIA Insurance Corporation, a New
York stock insurance company, or any successor thereto, as issuer of the
Certificate Insurance Policy.
"Certificate Insurer Default": The existence and continuance
of any of the following:
(a) the Certificate Insurer fails to make a payment required
under a Certificate Insurance Policy in accordance with its terms; or
(b) (i) the entry by a court having jurisdiction in the
premises of (A) a final and nonappealable decree or order for relief in
respect of the Certificate Insurer in an involuntary case or proceeding under
any applicable United States federal or state bankruptcy, insolvency,
rehabilitation, reorganization or other similar law or (B) a final and
nonappealable decree or order adjudging the Certificate Insurer as bankrupt or
insolvent, or approving as properly filed a petition seeking reorganizing,
rehabilitation, arrangement, adjustment or composition of or in respect of the
Certificate Insurer under any applicable United States federal or state law,
or appointing a custodian, receiver, liquidator, rehabilitator, assignee,
trustee, sequestrator or other similar official of the Certificate Insurer or
of any substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
(ii) the commencement by the Certificate Insurer of a
voluntary case or proceeding under any applicable United States federal or
state bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated as bankrupt or insolvent, or the
consent of the Certificate Insurer to the entry of a decree or order for
relief in respect of the Certificate Insurer in an involuntary case or
proceeding under any applicable United States federal or state bankruptcy,
insolvency case or proceeding against the Certificate Insurer, or the
acquiescence by the Certificate Insurer to the filing of such petition or to
the appointment of or the taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Certificate Insurer or of any substantial part of its property, or the failure
of the Certificate Insurer to pay debts generally as they become due, or the
admission by the Certificate Insurer in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by the
Certificate Insurer in furtherance of any such action.
"Certificate Principal Balance": As of the Startup Day as to
each of the following Classes of Certificates, the Certificate Principal
Balances thereof, as follows:
Class Initial Certificate
--------------- Principal
Balance
--------------------
Class A-1 $ 80,000,000
Class A-2 $154,000,000
Class A-3 $188,000,000
Class A-4 $ 64,000,000
-6-
<PAGE>
Class A-5 $ 83,000,000
Class A-6 $ 56,000,000
Class A-7 $ 65,000,000
Class A-8 $ 80,000,000
Class A-9 $231,725,000
Class A-10 $ 78,000,000
Class A-11 $ 75,000,000
Class A-12 $130,000,000
Class A-13 $192,000,000
Class A-14 $ 42,000,000
Class A-15 $ 70,000,000
Class A-16 $ 25,000,000
Class A-17 $ 66,602,000
Class A-18 $124,200,000
Class A-19 $ 77,946,000
Class A-20 $126,427,000
Class N-IO N/A
Class P-IO N/A
Class B-I $ 30,000,000
Class B-II $ 61,100,000
The Class N-IO, Class P-IO, Class C, Class R-I, Class R-II
and the Class R Certificates do not have a Certificate Principal Balance.
As of any time of determination, the Certificate Principal
Balance of any Class of Certificates is the Certificate Principal Balance as
of the Startup Day of such Class less any amounts actually distributed on such
Class with respect to principal thereon on all prior Payment Dates (except,
for purposes of effecting the Certificate Insurer's subrogation rights, that
portion of Insured Payments made in respect of principal) and, additionally in
the case of either Class of Class B Certificates, less the amount of any
reduction in the related Class B Certificate Principal Balance on all prior
Payment Dates pursuant to Section 7.03(i).
"Chapter 13 Loan": A Home Equity Loan with a Mortgagor in
bankruptcy under a "Chapter 13" Plan.
"Class": Any Class of the Class A Certificates, the Class B
Certificates, the Class C Certificates, the Class R-I Certificates, Class R-II
Certificates or the Class R Certificates.
"Class A Certificates": The Group I Class A Certificates and
the Group II Class A Certificates.
"Class A Certificate Principal Balance": As of any time of
determination and with respect to any Class of Class A Certificates, the
Certificate Principal Balance as of the Startup Day of all Class A
Certificates of such Class less any amounts actually distributed to the Owners
of such Class of the Class A Certificates with respect to the related Class A
Principal Distribution Amount pursuant to Sections 7.03(a) and 7.03(d) hereof
on all prior Payment Dates (except, for purposes of effecting the Certificate
Insurer's subrogation rights, that portion of Insured Payments made in respect
of principal).
-7-
<PAGE>
"Class A Current Interest": With respect to any Payment Date
and with respect to any individual Class of Class A Certificates, the amount
of interest accrued on the Class A Certificate Principal Balance (or, with
respect to the Class N-IO or the Class P-IO Certificates the Class N-IO
Notional Principal Amount or the Class P-IO Notional Principal Amount,
respectively) immediately prior to such Payment Date during the related
Accrual Period at the related Class A Pass-Through Rate plus the Preference
Amount owed to the Owners of the Class A Certificates of such Class as it
relates to interest previously paid on the Class A Certificates of such Class.
"Class A Distribution Amount": With respect to any Payment
Date, and with respect to any individual Class of Class A Certificates, the
sum of (w) the related Class A Current Interest, (x) the related Class A
Interest Carry Forward Amount, (y) except for the Class N-IO and the Class
P-IO Certificates, the portion of Class A Principal Distribution Amount
payable to the Owners of the Class A Certificates of such Class pursuant to
Sections 7.03(c) and 7.03(d) hereof and (z) the related Class A Guaranteed
Payment if any.
"Class A Enhancement Percentage": As of any Payment Date and
with respect to a Loan Group, the percentage equivalent of a fraction, the
numerator of which is the excess of (x) the related Group Loan Balance for
such Payment Date over (y) the Aggregate Class A Certificate Principal Balance
with respect to such Loan Group after taking into account the payment of the
Class A Principal Distribution Amount for the related Loan Group on such
Payment Date, assuming that no Delinquency Trigger Event with respect to such
Loan Group is in effect, and the denominator of which is the related Group
Loan Balance for such Payment Date.
"Class A Guaranteed Payment": Only the Class A-1, Class A-9
and Class A-11 Certificates have "Class A Guaranteed Payments":
The Guaranteed Payment with respect to the Class
A-1 Certificates is equal to the excess, if any, on the September 15,
1999 Payment Date of (i) the Outstanding Certificate Principal
Balance of the Class A-1 Certificates over (ii) the Class A Principal
Distribution Amount for Loan Group I for such Payment Date.
The Guaranteed Payment with respect to the Class
A-9 Certificates is equal to the excess, if any, on the September
2028 Payment Date, of (i) the Outstanding Certificate Principal
Balance of the Class A-9 Certificates over the Group IIa Principal
Distribution Amount for such Payment Date.
The Guaranteed Payment with respect to the Class
A-11 Certificates is equal to the excess, if any, on the September
15, 1999 Payment Date, of (i) the Outstanding Certificate Principal
Balance of the Class A-11 Certificates over (ii) the Group IIb
Principal Distribution Amount for such Payment Date.
-8-
<PAGE>
"Class A Interest Carry Forward Amount": With respect to any
Payment Date and with respect to any Class of Class A Certificates, the sum of
(x) the amount, if any, by which (i) the sum of (A) the related Class A
Current Interest as of the immediately preceding Payment Date and (B) any
related unpaid Class A Interest Carry Forward Amount with respect to such
Class as of the immediately preceding Payment Date exceeds (ii) the amount of
the actual distribution with respect to interest made to the Owners of such
Class of Class A Certificates on such immediately preceding Payment Date and
(y) 30 days' interest on such amount at the related Class A Pass-Through Rate.
"Class A Pass-Through Rate": As applicable, the Class A-1
Pass-Through Rate, the Class A-2 Pass Through Rate, the Class A-2 Pass-Through
Rate, the Class A-3 Pass-Through Rate, the Class A-4 Pass-Through Rate, the
Class A-5 Pass-Through Rate, the Class A-6 Pass-Through Rate, the Class A-7
Pass-Through Rate, the Class A-8 Pass-Through Rate, the Class A-9 Pass-Through
Rate, the Class A-10 Pass-Through Rate, the Class A-11 Pass-Through Rate, the
Class A-12 Pass-Through Rate, the Class A-13 Pass-Through Rate, the Class A-14
Pass-Through Rate, the Class A-15 Pass-Through Rate, the Class A-16
Pass-Through Rate, the Class A-17 Pass-Through Rate, the Class A-18
Pass-Through Rate, the Class A-19 Pass-Through Rate, the A-20 Pass-Through
Rate, the Class N-IO Pass-Through Rate and the Class P-IO Pass-Through Rate.
"Class A Principal Distribution Amount": As of any Payment
Date and with respect to each Loan Group the actual amount distributed as
principal to the Owners of the related Class A Certificates related to such
Loan Group pursuant to Sections 7.03(b)(v) and 7.03(b)(ix)(a) on such Payment
Date.
"Class A-1 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-1 Certificate, substantially in
the form annexed hereto as Exhibit A-1, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-1 Pass-Through Rate": With respect to any Payment
Date, 5.512% per annum.
"Class A-2 Pass-Through Rate": With respect to any Payment
Date, 6.02% per annum.
"Class A-3 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-3 Certificate, substantially in
the form annexed hereto as Exhibit A-3, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-3 Pass-Through Rate": With respect to any Payment
Date, 5.77% per annum.
"Class A-4 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-4 Certificate, substantially in
the form annexed hereto as Exhibit A-4, executed,
-9-
<PAGE>
authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein.
"Class A-4 Pass-Through Rate": With respect to any Payment
Date, 5.76% per annum.
"Class A-5 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-5 Certificate, substantially in
the form annexed hereto as Exhibit A-5, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-5 Pass-Through Rate": With respect to any Payment
Date, 5.99% per annum.
"Class A-6 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-6 Certificate, substantially in
the form annexed hereto as Exhibit A-6, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-6 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) 6.08% per annum and (y) the Group I Available Funds Cap.
"Class A-7 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-7 Certificate, substantially in
the form annexed hereto as Exhibit A-7, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-7 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) 6.34% per annum and (y) the Group I Available Funds Cap.
"Class A-8 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-8 Certificate, substantially in
the form annexed hereto as Exhibit A-8, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-8 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) 5.85% per annum and (y) the Group I Available Funds Cap.
"Class A-8 Principal Distribution Amount": For any Payment
Date occurring during the periods set forth below is the "applicable
percentage" set forth below of the Class A-8 Pro Rata Principal Distribution
Amount with respect to such Payment Date:
Period Applicable
Percentage
-----------------------------------------------------------
October 1998 - September 2001: 0%
October 2001 - September 2003: 45%
October 2003 - September 2004: 80%
-10-
<PAGE>
October 2004 - September 2005: 100%
October 2005 and thereafter: 300%
"Class A-8 Pro Rata Principal Distribution Amount": For any
Payment Date is the product of (x) the Class A Principal Distribution Amount
for Loan Group I for such Payment Date and (y) a fraction, the numerator of
which is the Class A-8 Certificate Principal Balance immediately prior to such
Payment Date and the denominator of which is the Class A Certificate Principal
Balance for Loan Group I immediately prior to such Payment Date.
"Class A-9 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-9 Certificate, substantially in
the form annexed hereto as Exhibit A-9, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-10 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-10 Certificate, substantially in
the form annexed hereto as Exhibit A-10, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-11 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-11 Certificate, substantially in
the form annexed hereto as Exhibit A-11, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-12 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-12 Certificate, substantially in
the form annexed hereto as Exhibit A-12, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-13 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-13 Certificate, substantially in
the form annexed hereto as Exhibit A-13, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-14 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-14 Certificate, substantially in
the form annexed hereto as Exhibit A-14, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-15 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-15 Certificate, substantially in
the form annexed hereto as Exhibit A-15, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-16 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-16 Certificate, substantially in
the form annexed hereto as Exhibit A-16,
-11-
<PAGE>
executed, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-17 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-17 Certificate, substantially in
the form annexed hereto as Exhibit A-17, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-18 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-18 Certificate, substantially in
the form annexed hereto as Exhibit A-18, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-19 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-19 Certificate, substantially in
the form annexed hereto as Exhibit A-19, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-20 Certificate": Any one of the Certificates
designated on the face thereof as a Class A-20 Certificate, substantially in
the form annexed hereto as Exhibit A-20, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class A-9 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) (i) if such Payment Date occurs on or prior to the
Clean-Up Call Date, LIBOR plus 0.25% per annum and (ii) if such Payment Date
occurs after the Clean-Up Call Date, LIBOR plus 0.50% per annum and (y) the
Group IIa Available Funds Cap.
"Class A-10 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) 5.84% per annum and (y) the Group IIa Available Funds
Cap.
"Class A-10 Principal Distribution Amount": For any Payment
Date (i) occurring during the periods set forth below is the "applicable
percentage" set forth below of the Class A-10 Pro Rata Principal Distribution
Amount with respect to such Payment Date:
Period Applicable Percentage
------ ---------------------
October 1998 - July 2000: 0%
August 2000 - September 2003: 500%
(ii) occurring in October 2003 or thereafter, shall
be 100% of the Group IIa Principal Distribution Amount for such
Payment Date.
-12-
<PAGE>
"Class A-10 Pro Rata Principal Distribution Amount" for a
Payment Date is the product of (x) the Group IIa Principal Distribution Amount
for such Payment Date and (y) a fraction, the numerator of which is the Class
A-10 Certificate Principal Balance immediately prior to such Payment Date and
the denominator of which is the sum of the Class A-9 and Class A-10
Certificate Principal Balances immediately prior to such Payment Date.
"Class A-11 Pass-Through Rate": With respect to any Payment
Date, 5.512% per annum.
"Class A-12 Internal Certificate": Any one of the
Certificates designated on the face thereof as a Class A-12 Internal
Certificate substantially in the form annexed hereto as Exhibit A-12-I
executed, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-13 Internal Certificate": Any one of the
Certificates designated on the face thereof as a Class A-13 Internal
Certificate substantially in the form annexed hereto as Exhibit A-13-I
executed, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-14 Internal Certificate": Any one of the
Certificates designated on the face thereof as a Class A-14 Internal
Certificate substantially in the form annexed hereto as Exhibit A-14-I
executed, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-15 Internal Certificate": Any one of the
Certificates designated on the face thereof as a Class A-15 Internal
Certificate substantially in the form annexed hereto as Exhibit A-15-I
executed, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-16 Internal Certificate": Any one of the
Certificates designated on the face thereof as a Class A-16 Internal
Certificate substantially in the form annexed hereto as Exhibit A-16-I
executed, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein.
"Class A-12 Internal Pass-Through Rate": With respect to any
Payment Date, 5.48% per annum.
"Class A-12 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) LIBOR plus 0.16% per annum or (y) 11% per annum.
"Class A-13 Internal Pass-Through Rate": With respect to any
Payment Date, 5.53% per annum.
"Class A-13 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) LIBOR plus 0.24% per annum or (y) 12% per annum.
-13-
<PAGE>
"Class A-14 Internal Pass-Through Rate": With respect to any
Payment Date, 5.595% per annum.
"Class A-14 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) LIBOR plus 0.25% per annum or (y) 12% per annum.
"Class A-15 Internal Pass-Through Rate": With respect to any
Payment Date, the lesser of (x) 5.70% and (y) the Group IIb Available Funds
Cap Rate.
"Class A-15 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) LIBOR plus 0.27% per annum or (y) 13% per annum.
"Class A-16 Internal Pass-Through Rate": With respect to any
Payment Date, the lesser of (x) 5.84% and (y) the Group IIb Available Funds
Cap Rate.
"Class A-16 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) LIBOR plus 0.32% per annum or (y) 13% per annum.
"Class A-17 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) 6.22% and (y) the Group IIb Available Funds Cap Rate.
"Class A-18 Pass-Through Rate": With respect to the October
1998 Payment Date, 5.635% per annum. For each Payment Date thereafter, the
lesser of (x) the rate of interest determined in accordance with the Auction
Procedures and (y) the Group IIb Available Funds Cap.
"Class A-19 Pass-Through Rate": With respect to any Payment
Date, the lesser of (i) 6.04% per annum and (ii) the Group IIb Available Funds
Cap.
"Class A-20 Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) 5.87% per annum and (y) the Group IIb Available Funds
Cap.
"Class B Applied Realized Loss Amount": With respect to any
Payment Date and each Loan Group, the lesser of (x) the Class B Certificate
Principal Balance of the Class B Certificates related to such Loan Group
(after taking into account the distribution of the Class B Principal
Distribution Amount with respect to such Loan Group on such Payment Date, but
prior to the reduction of such Class B Certificate Principal Balance pursuant
to Section 7.03(i), if any, on such Payment Date) and (y) the Applied Group
Realized Loss Amount with respect to such Loan Group as of such Payment Date.
"Class B Certificates": Together, the Class B-I and the
Class B-II Certificates.
"Class B-I Certificate": Any one of the Certificates
designated on the face thereof as a Class B-I Certificate, substantially in
the form annexed hereto as Exhibit B-I, executed authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
-14-
<PAGE>
"Class B-II Certificate": Any one of the Certificates
designated on the face thereof as a Class B-II Certificate, substantially in
the form annexed hereto as Exhibit B-II, executed authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class B Certificate Principal Balance": As of any time of
determination and with respect to each Class of Class B Certificates, the
Certificate Principal Balance as of the Startup Day of all Class B
Certificates of such Class plus any amount previously distributed thereon with
respect to principal that is recovered as a voidable preference by a trustee
in bankruptcy pursuant to a final, nonappealable order, less the sum of (x)
any amounts of the Class B Principal Distribution Amount with respect to such
Class actually distributed to the Owners of such Class B Certificates pursuant
to Section 7.03(b)(vi) hereof on all prior Payment Dates and (y) the
aggregate, cumulative amount of the Class B Applied Realized Loss Amounts with
respect to such Class on all prior Payment Dates.
"Class B Current Interest": With respect to any Payment Date
and with respect to each Class of Class B Certificates, the amount of interest
accrued on the Class B Certificate Principal Balance of such Class immediately
prior to such Payment Date during the related Accrual Period at the Class B-I
Pass-Through Rate or the Class B-II Pass-Through Rate, as applicable plus the
Preference Amount owed to the Owners of the Class B Certificates of such Class
as it relates to interest previously paid on such Class B Certificates.
"Class B Distribution Amount": With respect to any Payment
Date and with respect to each Class of Class B Certificates, the sum of (w)
the Class B Current Interest with respect to such Class, (x) the Class B
Principal Distribution Amount with respect to such Class, if any, payable to
the Owners of the Class B Certificates pursuant to Section 7.03(b)(vi) hereof,
(y) the Class B Interest Carry Forward Amount with respect to such Class, if
any, and (z) the Class B Realized Loss Amortization Amount with respect to
such Class, if any.
"Class B Interest Carry Forward Amount": With respect to any
Payment Date and with respect to each Class of Class B Certificates, the sum
of (x) the amount, if any, by which (i) the sum of (A) the Class B Current
Interest with respect to such Class as of the immediately preceding Payment
Date and (B) any unpaid Class B Interest Carry Forward Amount with respect to
such Class as of the immediately preceding Payment Date exceeds (ii) the
amount of the actual distribution with respect to interest made to the Owners
of such Class of Class B Certificates on such immediately preceding Payment
Date and (y) 30 days' interest on such amount at the Class B-I Pass-Through
Rate or the Class B-II Pass-Through Rate, as applicable.
"Class B Principal Distribution Amount": With respect to a
Loan Group and any Payment Date, the actual amount distributed as principal to
the Owners of the related Class B Certificates in accordance with priorities
"Sixth" and "Ninth (a)" in Section 7.03(b) hereof on such Payment Date.
"Class B Realized Loss Amortization Amount": As of any
Payment Date and with respect to each Class of Class B Certificates, the
lesser of (x) the Unpaid Class B Realized Loss Amount for the related Loan
Group as of such Payment Date and (y) the amount of
-15-
<PAGE>
Available Funds with respect to the related Loan Group remaining after funding
priorities "First" through "Seventh" of Section 7.03(b) hereof plus the amount
of any Monthly Excess Cashflow Amount available from the other Loan Group and
available for such purpose.
"Class B-I Optimal Balance": As of any Payment Date:
I. Prior to the Stepdown Date for Loan Group I and if
the Group I Class A Certificate Principal Balance
is then greater than zero, the Class B-I Initial
Certificate Principal Balance; and
II. On and after the Stepdown Date with respect to Loan
Group I, or if the Group I Class A Certificate
Principal Balance then equals zero, the excess of
(a) the Group I Loan Balance over (b) the Group I
Class A Certificate Principal Balance (after taking
into account any reduction thereof on such Payment
Date) plus the Group I Targeted
Overcollateralization Amount.
"Class B-I Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) 8.10% per annum and (y) the Group I Available Funds Cap.
"Class B-II Optimal Balance": As of any Payment Date:
I. Prior to the Stepdown Date with respect to Loan
Group II and if the Group II Class A Certificate
Principal Balance is then greater than zero, the
Class B-II Initial Certificate Principal Balance;
and
II. On and after the Stepdown Date with respect to Loan
Group II, or if the Group II Class A Certificate
Principal Balance then equals zero, the excess of
(a) the Group II Loan Balance over (b) the Group II
Class A Certificate Principal Balance (after taking
into account any reduction thereof on such Payment
Date) plus the Group II Targeted
Overcollateralization Amount.
"Class B-II Pass-Through Rate": With respect to any Payment
Date, the lesser of (x) 8.25% per annum and (y) the lesser of (i) the Group
IIa Available Funds Cap and (ii) the Group IIb Available Funds Cap.
"Class C Carryforward Amount": With respect to any Payment
Date, the excess, if any, of the Class C Distribution Amount over the Monthly
Excess Cashflow Amount remaining immediately prior to distribution in
accordance with Section 7.03(e)(iv).
"Class C Certificate": Any one of the Certificates
designated on the face thereof as a Class C Certificate, substantially in the
form annexed hereto as Exhibit C, authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein. The Class C
Certificates represent a class of "regular interests" in REMIC III.
-16-
<PAGE>
"Class C Distribution Amount": With respect to any Payment
Date, the amount payable to Class C pursuant to footnotes (4), (5), and (6)
of Section 2.08(c).
"Class N-IO Certificate": Any one of the Certificates
designated on the face thereof as a Class N-IO Certificate, substantially in
the form annexed hereto as Exhibit N-IO, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class N-IO Notional Principal Amount": With respect to any
Payment Date occurring on or prior to the 30th Payment Date the Certificate
Principal Balance of the Class A-8 Certificates immediately prior to such
Payment Date; with respect to any Payment Date thereafter, zero.
"Class N-IO Pass-Through Rate": With respect to any Payment
Date, 6.50% per annum.
"Class P-IO Certificate": Any one of the Certificates
designated on the face thereof as a Class P-IO Certificate, substantially in
the form annexed hereto as Exhibit P-IO, executed, authenticated and delivered
by the Trustee, representing the right to distributions as set forth herein.
"Class P-IO Notional Principal Amount": With respect to any
Payment Date occurring on or prior to the 30th Payment Date, the sum of the
Certificate Principal Balances of the Class A-16 and the Class A-17
Certificates immediately prior to such Payment Date; with respect to any
Payment Date thereafter, zero.
"Class P-IO Pass-Through Rate": With respect to any Payment
Date, 6.50% per annum.
"Class R Certificate": Any one of the Certificates
designated on the face thereof as a Class R Certificate, substantially in the
form annexed hereto as Exhibit R-III, authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein, and
evidencing an interest designated as a "residual interest" in REMIC III for
the purposes of the REMIC Provisions.
"Class R-I Certificate": Any one of the Certificates
designated herein as a Class R-I Certificate, substantially in the form
annexed hereto as Exhibit R-I, authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein, and evidencing an
interest designated as a "residual interest" in REMIC I for the purposes of
the REMIC Provisions.
"Class R-II Certificate": Any one of the Certificates
designated herein as a Class R-II Certificate, substantially in the form
annexed hereto as Exhibit R-II, authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein, and evidencing an
interest designated as a "residual interest" in REMIC II for the purposes of
the REMIC Provisions.
-17-
<PAGE>
"Clean-Up Call Date": The first Monthly Remittance Date
immediately following the date on which the aggregate Loan Balances of the Home
Equity Loans has declined to $210,000,000 or less.
"Closing": As defined in Section 4.02 hereof.
"Code": The Internal Revenue Code of 1986, as amended.
"Compensating Interest": As defined in Section 8.10(a) hereof.
"ContiMortgage": ContiMortgage Corporation, a Delaware
corporation, and the originator of each Home Equity Loan, one of the Sellers
and the Servicer.
"ContiWest": ContiWest Corporation, a Nevada corporation,
and one of the Sellers.
"Corporate Trust Office": The principal office of the
Trustee at One M&T Plaza, Buffalo, New York 14203.
"Coupon Rate": The rate of interest borne by each Note.
"Cumulative Class C Carryforward Amount": With respect to
any Payment Date, the sum of the Class C Carryforward Amounts for all prior
Payment Dates, less distributions for each prior Payment Date under Section
7.03(e)(iv) in excess of the Class C Distribution Amount for each such prior
Payment Date.
"Cumulative Realized Loss Termination Trigger Event": A
Cumulative Realized Loss Termination Trigger Event occurs on any date of
determination if the amount of Cumulative Realized Losses with respect to both
Loan Groups expressed as a percentage of the Original Total Loan Balance on
any date of determination equals or exceeds the percentage for such date set
out below:
Date Percentage
---- ----------
October 1998- September 2000 1.575%
October 2000- September 2001 2.700%
October 2001- September 2002 3.600%
October 2002- September 2003 4.275%
October 2003 and thereafter 4.500%
"Cumulative Realized Loss Trigger Event": A Cumulative
Realized Loss Trigger Event occurs with respect to a Loan Group on any date of
determination if the amount of Cumulative Realized Losses with respect to such
Loan Group expressed as a percentage of the
-18-
<PAGE>
Original Group Loan Balance with respect to such Loan Group on any date of
determination equals or exceeds the percentage for such date set out below:
Date Percentage
---- ----------
October 1998- September 2000 1.05%
October 2000- September 2001 1.80%
October 2001- September 2002 2.40%
October 2002- September 2003 2.85%
October 2003 and thereafter 3.00%
"Cumulative Realized Losses": As of any date of
determination, the aggregate amount of Realized Losses with respect to the
Home Equity Loans (or the Home Equity Loans in the related, specified Loan
Group, if one is specified) since the Startup Day.
"Curtailment": Prepayment of principal by a Mortgagor which
does not satisfy the Note in full, and which is not intended as a Prepaid
Installment.
"Cut-Off Date": As of the close of business on September 15,
1998.
"Daily Collections": As defined in Section 8.08(c) hereof.
"Date-of-Payment Loans": Any Home Equity Loan as to which,
pursuant to the Note relating thereto, interest is computed and charged to the
Mortgagor at the Coupon Rate on the outstanding principal balance of such Note
based on the number of days elapsed between receipt of the Mortgagor's last
payment through receipt of the Mortgagor's most current payment.
"Deed in Lieu": The Servicer's acceptance of a deed in lieu
of foreclosure.
"Delinquent": A Home Equity Loan is "Delinquent" if any
payment due thereon is not made by the close of business on the day such
payment is scheduled to be due. A Home Equity Loan is "30 days Delinquent" if
such payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month) then on the last day of such immediately succeeding month.
Similarly for "60 days Delinquent," "90 days Delinquent" and so on.
"Delinquency Advance": As defined in Section 8.09(a) hereof.
"Delinquency Trigger Event": A Delinquency Trigger Event has
occurred with respect to Loan Group I will be deemed to have occurred with
respect to any Payment Date on or
-19-
<PAGE>
after the Stepdown Date with respect to Loan Group I if 62.25% of the
Three-Month Rolling Average 60+ Day Delinquency Rate with respect to such Loan
Group equals or exceeds the Class A Enhancement Percentage with respect to Loan
Group I for such Payment Date; a "Delinquency Trigger Event" with respect to
Loan Group II will be deemed to have occurred with respect to any Payment Date
on or after the Stepdown Date with respect to Loan Group II if 74% of the
Three-Month Rolling Average 60+ Day Delinquency Rate with respect to such Loan
Group equals or exceeds the Class A Enhancement Percentage with respect to Loan
Group II for such Payment Date.
"Delivery Order": Each delivery order in the form set forth
as Exhibit G hereto and delivered by the Depositor to the Trustee on the
Startup Day pursuant to Section 4.01 hereof.
"Depositor": ContiSecurities Asset Funding Corp., a Delaware
corporation, or any successor thereto.
"Depository": The Depository Trust Company, 7 Hanover
Square, New York, New York 10004, and any successor Depository hereafter named.
"Designated Depository Institution": With respect to the
Principal and Interest Account, a trust account maintained by the trust
department of a federal or state chartered depository institution acceptable
to the Certificate Insurer acting in its fiduciary capacity, having combined
capital and surplus of at least $50,000,000; provided, however, that if the
Principal and Interest Account is not maintained with the Trustee, (i) such
institution shall have a long-term debt rating of at least "A2" by Moody's,
and, if rated by Fitch, at least "A" by Fitch (ii) a short-term debt rating of
at least "A-1" by Standard & Poor's and (iii) if such Principal and Interest
Account is moved to a new institution, the Servicer shall provide the Trustee,
the Certificate Insurer and the Owners with a statement identifying the
location of the Principal and Interest Account.
"Determination Date": As to each Payment Date, the third
Business Day next preceding such Payment Date.
"Direct Participant" or "DTC Participant": Any
broker-dealer, bank or other financial institution for which the Depository
holds Offered Certificates from time to time as a securities depository.
"Disqualified Organization": The meaning set forth from time
to time in the definition thereof at Section 860E(e)(5) of the Code (or any
successor statute thereto) and applicable to the Trust.
"Eligible Investments": Those investments so designated
pursuant to Section 7.07 hereof.
"ERISA": The Employee Retirement Income Security Act of
1974, as amended.
-20-
<PAGE>
"FannieMae": FannieMae, a federally-chartered and
privately-owned corporation existing under the Federal National Mortgage
Association Charter Act, as amended, or any successor thereof.
"FannieMae Guide": FannieMae's Servicing Guide, as the same
may be amended by FannieMae from time to time, and the Servicer shall elect to
apply such amendments in accordance with Section 8.01 hereof.
"FDIC": The Federal Deposit Insurance Corporation, a
corporate instrumentality of the United States, or any successor thereto.
"File": The documents delivered to the Trustee pursuant to
Section 3.05 hereof pertaining to a particular Home Equity Loan and any
additional documents required to be added to the File pursuant to this
Agreement.
"Final Determination": As defined in Section 9.03 hereof.
"Final Scheduled Payment Date": For each Class of
Certificates, as set out in Section 2.08(f).
"First Mortgage Loan": A Home Equity Loan which constitutes
a first priority mortgage lien with respect to the related Property.
"Fiscal Agent": State Street Bank and Trust Company, N.A.,
as Fiscal Agent for the Certificate Insurer under the Certificate Insurer
Policy or any successor thereto appointed by the Certificate Insurer.
"Fitch": Fitch IBCA, Inc.
"Fixed Rate Loans": Home Equity Loans bearing interest at
fixed rate.
"Fixed Rate Certificates": The Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-10, Class
A-11, Class A-12 Internal, Class A-13 Internal, Class A-14 Internal, Class
A-15 Internal, Class A-16 Internal, Class A-17, Class A-19, Class A-20, Class
N-IO, Class P-IO, Class B-I and Class B-II Certificates.
"Floating Rate Certificates": The Class A-9, Class A-12,
Class A-13, Class A-14, Class A-15, Class A-16 and Class A-18 Certificates.
"Freddie Mac": The Federal Home Loan Mortgage Corporation,
a corporate instrumentality of the United States created pursuant to the
Emergency Home Finance Act of 1970, as amended, or any successor thereof.
"Group Loan Balance": As of any Payment Date, the aggregate
outstanding Loan Balance of the Home Equity Loans in the related Loan Group as
of the last day of the related Remittance Period.
-21-
<PAGE>
"Group I Available Funds Cap": With respect to any Payment
Date, the weighted average Coupon Rate of the Home Equity Loans in Loan Group
I as of the opening of business on the first day of the related Remittance
Period, less the sum of (i) the annualized percentage equivalent of a fraction
equal to (a) the sum of the related Premium Amount plus the related Trustee
Fee plus the related Servicing Fee divided by (b) the aggregate Loan Balance
of the Home Equity Loans in Loan Group I as of the opening of business on the
first day of the related Remittance Period, and (ii) during the period
commencing on the first Payment Date and ending on the 30th Payment Date, the
annualized percentage equivalent of the product of (a) the Class N-IO
Pass-Through Rate and (b) the Class N-IO Notional Principal Amount divided by
the outstanding aggregate Loan Balance of the Home Equity Loans in Loan Group
I as of the opening of business on the first day of the related Remittance
Period.
"Group I Certificates": The Group I Class A Certificates and
the Class B-I Certificates.
"Group I Class A Certificates": The Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8 and Class
N-IO Certificates.
"Group I Class A Optimal Balance": means, as of any Payment
Date, as follows, but in no event less than zero:
I. Prior to the Stepdown Date with respect to Loan Group I:
(a) if a Cumulative Realized Loss Trigger Event is not then in
effect with respect to Loan Group I, the excess of (x) the
Group I Loan Balance over (y) an amount equal to (i) prior
to the 7th Payment Date, 3.75% of the Original Group I Loan
(i.e., $30,000,000), and (ii) on and after the 7th Payment
Date, 4.75% of the Original Group I Loan Balance (i.e.,
$38,000,000); or
(b) if a Cumulative Realized Loss Trigger Event is in effect
with respect to Loan Group I, the excess of (x) the Group I
Loan Balance over (y) an amount equal to 6.05% of the
Original Group I Loan Balance (i.e., $48,400,000).
II. On and after the Stepdown Date with respect to Loan Group I:
(a) if neither a Delinquency Trigger Event nor a Cumulative
Realized Loss Trigger Event is then in effect with respect
to Loan Group I, the lesser of:
(i) the product of (x) 89.7875% and (y) the Group I
Loan Balance; and
(ii) the excess of (x) the Group I Loan Balance over (y)
an amount equal to 0.50% of the Original Group I
Loan Balance (i.e., $4,000,000); or
(b) if a Delinquency Trigger Event is then in effect with
respect to Loan Group I, but as to which a Cumulative
Realized Loss Trigger Event is not in effect, the lesser of:
-22-
<PAGE>
(i) the product of (x) 100% minus the product of 62.25%
and the Three-Month Rolling Average 60+ Delinquency
Rate with respect to Loan Group I and (y) the Group
I Loan Balance; and
(ii) the excess of (x) the Group I Loan Balance over (y)
an amount equal to 0.50% of the Original Group I
Loan Balance (i.e., $4,000,000); or
(c) if a Cumulative Realized Loss Trigger Event is in effect but
as to which a Delinquency Trigger Event is not in effect
with respect to Loan Group I, the product of (x) 91.9375%
minus the percentage equivalent of a fraction, the numerator
of which is 2.30% of the Original Group I Loan Balance and
the denominator of which is the Group I Loan Balance and (y)
the Group I Loan Balance;
(d) if both a Delinquency Trigger Event and a Cumulative
Realized Loss Trigger Event are then in effect with respect
to Loan Group I, the lesser of:
(i) the product of (x) 100% minus the product of 62.25%
and the Three-Month Rolling Average 60+ Delinquency
Rate with respect to Loan Group I and (y) the Group
I Loan Balance; and
(ii) the product of (x) 91.9375% minus the percentage
equivalent of a fraction, the numerator of which is
2.30% of the Original Group I Loan Balance (i.e.,
$18,400,000) and the denominator of which is the
Group I Loan Balance and (y) the Group I Loan
Balance.
"Group I Class A Overcollateralization Deficit": For any
Payment Date means the excess of the Aggregate Group I Class A Certificate
Principal Balance over the outstanding Group I Loan Balance.
"Group I Insured Payment": With respect to any Payment Date,
without duplication, (A) the excess, if any, of (i) the sum of the aggregate
Current Interest of the Group I Class A Certificates and the then existing
Group I Class A Overcollateralization Deficit, if any, over (ii) the Group I
Total Available Funds after taking into account the portion of any Class A
Principal Distribution Amount for Loan Group I to be actually distributed on
such Payment Date without regard to any Insured Payment to be made with
respect to such Payment Date, plus (B) an amount equal to the aggregate
Preference Amount with respect to the Group I Class A Certificates plus (C) on
the September 1999 Payment Date only, the excess, if any, of (i) the
Certificate Principal Balance of the Class A-1 Certificates over (ii) the
Class A Principal Distribution Amount for Loan Group I for such Payment Date.
"Group I Loan Balance": For any Payment Date, the aggregate
outstanding Loan Balance of the Home Equity Loans in Loan Group I as of the
last day of the related Remittance Period.
"Group I Loans": The Home Equity Loans in Loan Group I.
-23-
<PAGE>
"Group I Overcollateralization Amount": As of any Payment
Date means the positive difference, if any, between (x) the Group I Loan
Balance and (y) the Aggregate Group I Certificate Principal Balance (after
taking into account all distributions of principal on such Payment Date).
"Group I Overcollateralization Floor": An amount equal to
0.50% of the Original Group I Loan Balance ($4,000,000).
"Group I Targeted Overcollateralization Amount": As of any
Payment Date means:
(i) on or prior to the sixth Payment Date, zero;
(ii) after the sixth Payment Date, but prior to the
Stepdown Date with respect to Loan Group I:
(A) if no Cumulative Realized Loss Trigger
Event is in effect with respect to Loan
Group I, 1% of the Original Group I Loan
Balance (i.e., $8,000,000); or
(B) if a Cumulative Realized Loss Trigger Event
is in effect with respect to Loan Group I,
an amount equal to 2.30% of the Original
Group I Loan Balance (i.e., $18,400,000);
(iii) on and after the Stepdown Date with respect to Loan
Group I:
(A) if neither a Delinquency Trigger Event nor a
Cumulative Realized Loss Trigger Event is in effect
with respect to Loan Group I, the greater of (I)
2.15% of the Group I Loan Balance and (II) the
Group I Overcollateralization Floor; or
(B) if a Delinquency Trigger Event is in effect with
respect to Loan Group I but a Cumulative Realized
Loss Trigger Event is not in effect, the Group I
Targeted Overcollateralization Amount shall be
equal to the Group I Targeted Overcollateralization
Amount for the immediately preceding Payment Date;
or
(C) if a Cumulative Realized Loss Trigger Event is in
effect with respect to Loan Group I (whether or not
a Delinquency Trigger Event is in effect with
respect to Loan Group I), an amount equal to 2.30%
of the Original Group I Loan Balance (i.e.,
$18,400,000).
"Group I Total Available Funds": As of any Payment Date,
means in the aggregate, the Monthly Remittance Amounts for Loan Group I, plus
any Monthly Excess Cashflow available from Loan Group II less the sum of (i)
the aggregate amount applied to the payment of the Trustee Fee and the Premium
Amount with respect to Loan Group I and (ii) any
-24-
<PAGE>
such amount that cannot be distributed to the Owners of the Class A Certificates
as a result of proceedings under the United States Bankruptcy Code.
"Group II Certificates": The Group II Class A Certificates
and the Class B-II Certificates.
"Group II Class A Certificates": The Group IIa Class A
Certificates and the Group IIb Class A Certificates.
"Group IIa Class A Certificates": The Class A-9 and Class
A-10 Certificates.
"Group IIb Class A Certificates": The Class A-11, Class
A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17, Class A-18,
Class A-19, Class A-20 and Class P-IO Certificates.
"Group II Class A Optimal Balance": means, as of any
Payment Date, as follows, but in no event less than zero:
I. Prior to the Stepdown Date with respect to Loan Group II:
(a) if a Cumulative Realized Loss Trigger Event is not then in
effect with respect to Loan Group II, the excess of (x) the
Group II Loan Balance over (y) an amount equal to (i) prior
to the 7th Payment Date, 4.7% of the Original Group II Loan
Balance (i.e., $61,100,000), and (ii) on and after the 7th
Payment Date, 6.35% of the Original Group II Loan Balance
(i.e., $82, 550,000); or
(b) if a Cumulative Realized Loss Trigger Event is in effect
with respect to Loan Group II, the excess of (x) the Group
II Loan Balance over (y) the amount equal to 7.85% of the
Original Group II Loan Balance (i.e., $102,050,000).
II. On and after the Stepdown Date with respect to Loan Group II:
(a) if neither a Delinquency Trigger Event nor a Cumulative
Realized Loss Trigger Event is then in effect, the lesser
of:
(i) the product of (x) 86.3475% and (y) the Group II
Loan Balance; and
(ii) the excess of (x) the Group II Loan Balance over
(y) an amount equal to 0.50% of the Original Group
II Loan Balance (i.e., $6,500,000); or
-25-
<PAGE>
(b) if a Delinquency Trigger Event is then in effect, but as to
which a Cumulative Realized Loss Trigger Event is not in
effect, the lesser of:
(i) the product of (x) 100% minus the product of 74%
and the Three-Month Rolling Average 60+ Delinquency
Rate with respect to Loan Group II and (y) the
Group II Loan Balance; and
(ii) the excess of (x) the Group II Loan Balance over
(y) an amount equal to 0.50% of the Original Group
II Loan Balance (i.e., $6,500,000); or
(c) if a Cumulative Realized Loss Trigger Event is in effect
with respect to Loan Group II but as to which a Delinquency
Trigger Event is not in effect with respect to Loan Group
II, the product of (x) 89.895% minus the percentage
equivalent of a fraction, the numerator of which is 3.15% of
the Original Group II Loan Balance (i.e., $40,950,000) and
the denominator of which is the Group II Loan Balance and
(y) the Group II Loan Balance;
(d) if both a Delinquency Trigger Event and a Cumulative
Realized Loss Trigger Event are then in effect with respect
to Loan Group II, the lesser of:
(i) the product of (x) 100% minus the product of 74%
and the Three-Month Rolling Average 60+ Delinquency
Rate and (y) the Group II Loan Balance; and
(ii) the product of (x) 89.895% minus the percentage
equivalent of a fraction, the numerator of which is
3.15% of the Original Group II Loan Balance (i.e.,
$40,950,000) and the denominator of which is the
Group II Loan Balance and (y) the Group II Loan
Balance.
"Group II Class A Overcollateralization Deficit": For any
Payment Date means the excess of the Aggregate Group II Class A Certificate
Principal Balance over the sum of (i) the outstanding Group II Loan Balance
plus (ii) the amount on deposit in the Auction Remainder Account at the end of
such Payment Date.
"Group II Insured Payment": With respect to any Payment
Date, without duplication, (A) the excess, if any, of (i) the sum of the
aggregate Current Interest of the Group II Class A Certificates (calculated,
for this purpose with respect to the Swapped Certificates, using the Internal
Pass-Through Rates for the corresponding Internal Certificates) and the then
existing Group II Class A Overcollateralization Deficit, if any, over (ii) the
Group II Total Available Funds after taking into account the portion of any
Class A Principal Distribution Amount for Loan Group II to be actually
distributed on such Payment Date without regard to any Insured Payment to be
made with respect to such Payment Date, plus (B) an amount equal to the
aggregate Preference Amount with respect to the Group II Class A Certificates
plus (C) the Insured Swap Interest Payment, if any, for such Payment Date,
plus (D) on the September 2028 Payment Date only, the excess, if any, of (i)
the Certificate Principal Balance of the Class A-9 Certificates over (ii) the
Group IIa Principal Distribution Amount for such Payment Date plus (E)
-26-
<PAGE>
on the September 1999 Payment Date only, the excess, if any, of (i) the
Certificate Principal Balance of the Class A-11 Certificates over (ii) the
Group IIb Principal Distribution Amount for such Payment Date.
"Group II Loans": The Home Equity Loans in Loan Group II.
"Group II Loan Balance": For any Payment Date, the
aggregate outstanding Loan Balance of the Home Equity Loans in Loan Group II
as of the last day of the related Remittance Period.
"Group II Overcollateralization Amount": As of any Payment
Date means the positive difference, if any, between (x) the Group II Loan
Balance plus (ii) the amount on deposit in the Auction Remainder Account at
the end of such Payment Date and (y) the Aggregate Group II Certificate
Principal Balance (after taking into account all distributions of principal on
such Payment Date).
"Group II Overcollateralization Floor": 0.50% of the
Original Group II Loan Balance (i.e., $6,500,000).
"Group IIa Loans": The Home Equity Loans in Loan Group IIa.
"Group IIb Loans": The Home Equity Loans in Loan Group IIb.
"Group IIa Available Funds Cap": With respect to any Payment
Date, the weighted average Coupon Rate of the Home Equity Loans in Loan Group
IIa as of the opening of business on the first day of the related Remittance
Period, less the sum of (i) the annualized percentage equivalent of a fraction
equal to (a) the sum of the related Premium Amount plus the related Trustee
Fee plus the related Servicing Fee divided by (b) the aggregate Loan Balance
of the Home Equity Loans in Loan Group IIa as of the opening of business on
the first day of the related Remittance Period, and (ii) after the 6th Payment
Date, 0.50% per annum.
"Group IIb Available Funds Cap": With respect to any Payment
Date, the weighted average Coupon Rate of the Home Equity Loans in Loan Group
IIb as of the opening of business on the first day of the related Remittance
Period, less the sum of (i) the annualized percentage equivalent of a fraction
equal to (a) the sum of the related Premium Amount plus the related Trustee
Fee plus the related Servicing Fee divided by (b) the aggregate Loan Balance
of the Home Equity Loans in Group IIb as of the opening of business on the
first day of the related Remittance Period, (ii) after the 6th Payment Date,
0.50% per annum, (iii) an amount, expressed as an annual percentage equivalent
of the outstanding aggregate Loan Balance of Home Equity Loans in Loan Group
IIb as of the opening of business on the first day of the related Remittance
Period, equal to the Auction Agent Fee and the Broker-Dealer Fee for the Class
A-18 Certificates and (iv) during the period commencing on the first Payment
Date and ending on the 30th Payment Date, the annualized percentage equivalent
of the product of (a) the Class P-IO Pass-Through Rate and (b) the Class P-IO
Notional Principal Amount divided by the outstanding aggregate Loan Balance of
the Home Equity Loans in Loan Group IIb as of the opening of business on the
first day of the related Remittance Period.
-27-
<PAGE>
"Group II Stepdown Date": The later to occur of (x) the
Payment Date in October 2001 and (y) the first Payment Date on which the Group
II Class A Principal Balance is less than or equal to the Group II Class A
Optimal Balance for such Payment Date.
"Group II Targeted Overcollateralization Amount": As of any
Payment Date means:
(i) on or prior to the sixth Payment Date, zero;
(ii) after the sixth Payment Date, but prior to the
Stepdown Date with respect to Loan Group II:
(A) if no Cumulative Realized Loss Trigger Event is
in effect with respect to Loan Group II, 1.65% of
the Original Group II Loan Balance (i.e.,
$21,450,000); or
(B) if a Cumulative Realized Loss Trigger Event is
in effect with respect to Loan Group II, an amount
equal to 3.15% of the Original Group II Loan
Balance ($40,950,000).
(iii) on and after the Stepdown Date with respect to Loan
Group II:
(A) if neither a Delinquency Trigger Event nor a
Cumulative Realized Loss Trigger Event is in effect
with respect to Loan Group II, the greater of (I)
3.5475% of the Group II Loan Balance and (II) the
Group II Overcollateralization Floor; or
(B) if a Delinquency Trigger Event is in effect with
respect to Loan Group II but a Cumulative Realized
Loss Trigger Event is not in effect with respect to
Loan Group II, the Group II Targeted
Overcollateralization Amount shall be equal to the
Group II Targeted Overcollateralization Amount for
the immediately preceding Payment Date; or
(C) if a Cumulative Realized Loss Trigger Event is in
effect with respect to Loan Group II (whether or
not a Delinquency Trigger Event is in effect with
respect to Loan Group II), an amount equal to 3.15%
of the Original Group II Loan Balance
($40,950,000).
"Group II Total Available Funds": As of any Payment Date,
means in the aggregate, the Monthly Remittance Amounts for Loan Group II, plus
any Monthly Excess Cashflow available from Loan Group I less the sum of (i)
the aggregate amount applied to the payment of the Trustee Fee and the Premium
Amount with respect to Loan Group II, the Auction Agent's Fee and the Broker
Dealer's Fee and the Premium Amount with respect to Loan Group II, and (ii)
any such amount that cannot be distributed to the Owners of the Class A
Certificates as a result of proceedings under the United States Bankruptcy
Code.
-28-
<PAGE>
"Group IIa Optimal Balance": With respect to any
Payment Date is an amount equal to the product of:
(x) the aggregate Loan Balances of the Home
Equity Loans in Group IIa as of the
end of the related Remittance Period; and
(y) a fraction, the numerator of which is
equal to (i) the Group II Class A
Certificate Principal Balance immediately
prior to such Payment Date minus (ii) the
Class A Principal Distribution Amount for
Loan Group II on such Payment Date and the
denominator of which is (y) the aggregate
Loan Balances of the Home Equity Loans in
Loan Group II as of the end of the related
Remittance Period.
"Group IIa Principal Distribution Amount": For any
Payment Date is an amount equal to the lesser of:
(I) the excess of (x) the aggregate Certificate Principal
Balance of the Group IIa Class A Certificates
immediately prior to such Payment Date over (y) the
Group IIa Optimal Balance with respect to such Payment
Date; and
(II) the Class A Principal Distribution Amount for Loan Group
II with respect to such Payment Date;
provided, however, that in no event will the aggregate
Certificate Principal Balance of the Group IIa Class A
Certificates exceed the aggregate Loan Balances of the
Group IIa Home Equity Loans as of the last day of the
related Remittance Period.
"Group IIb Loans": The Home Equity Loans identified in
Schedule IIb hereto, including any Qualified Replacement Mortgages delivered
in replacement thereof.
Group IIb Optimal Balance": With respect to any Payment
Date is an amount equal to the product of:
(x) the aggregate Loan Balances of the Home
Equity Loans in Group IIb as of the
end of the related Remittance Period; and
(y) a fraction, the numerator of which is
equal to (i) the Group II Class A
Certificate Principal Balance immediately
prior to such Payment Date minus (ii) the
Class A Principal Distribution Amount with
respect to Loan Group II for such Payment
Date and the denominator of which is (y)
the aggregate Loan Balances of the Home
Equity Loans in Loan Group II as of the
end of the related Remittance Period.
"Group IIb Principal Distribution Amount": For any
Payment Date, an amount equal to the lesser of:
-29-
<PAGE>
(I) the excess of (x) the aggregate Certificate Principal
Balance of the Group IIb Class A Certificates
immediately prior to such Payment Date over (y) the
Group IIb Optimal Balance with respect to such Payment
Date; and
(II) the Class A Principal Distribution Amount for Loan Group
II with respect to such Payment Date;
provided, however, that in no event will the aggregate
Certificate Principal Balance of the Group IIb Class A
Certificates exceed the aggregate Loan Balances of the Group
IIb Home Equity Loans as of the last day of the related
Remittance Period.
"Highest Lawful Rate": As defined in Section 11.13.
"Home Equity Loans": Such of the home equity loans
transferred and assigned to the Trust pursuant to Section 3.05(a) hereof,
together with any Qualified Replacement Mortgages substituted therefor in
accordance with this Agreement, as from time to time are held as a part of the
Trust Estate, the Home Equity Loans originally so held being identified in the
Schedules of Home Equity Loans. The term "Home Equity Loan" includes the terms
"First Mortgage Loan" and "Second Mortgage Loan". The term "Home Equity Loan"
includes any Home Equity Loan which is Delinquent, which relates to a
foreclosure or which relates to a Property which is REO Property prior to such
Property's disposition by the Trust. Any home equity loan which, although
intended by the parties hereto to have been, and which purportedly was,
transferred and assigned to the Trust by the Depositor, in fact was not
transferred and assigned to the Trust for any reason whatsoever, including,
without limitation, the incorrectness of the statement set forth in Section
3.04(b)(x) hereof with respect to such home equity loan, shall nevertheless be
considered a "Home Equity Loan" for all purposes of this Agreement.
"Indemnification Agreement": The Indemnification Agreement
dated September 18, 1998 among the Certificate Insurer, the Depositor, the
Sellers, the Servicer, and the Underwriters.
"Indirect Participant": Any financial institution for whom
any Direct Participant holds an interest in a Offered Certificate.
"Insurance Agreement": The Insurance Agreement dated as of
September 1, 1998, among the Depositor, the Sellers, the Servicer, the
Certificate Insurer, the Grantor Trustee and the Trustee as it may be
amended from time to time.
"Insurance Commitment Letters": The letters dated September
25, 1998 from MBIA to ContiMortgage Corporation evidencing the commitment by
MBIA to issue the insurance policies with respect to the Class A Certificates.
"Insurance Policy": Any hazard, flood, title or primary
mortgage insurance policy relating to a Home Equity Loan plus any amount
remitted under Section 8.11 hereof.
-30-
<PAGE>
"Insurance Proceeds": Payments received with respect to any
Insurance Policy, except the Certificate Insurance Policy.
"Insured Payment": A Group I Insured Payment, a Group II
Insured Payment or any Insured Swap Interest Payment.
"Interest Amount Available": As defined in Section 7.03(b)
hereof.
"Interest Only Period": The period from the Startup Day
through and including the 30th Payment Date.
"Interest Remittance Amount": As of any Monthly Remittance
Date and with respect to a Loan Group, the sum, without duplication, of (i)
all interest due during the related Remittance Period with respect to the Home
Equity Loans in such Loan Group (less the Servicing Fee with respect to such
Home Equity Loans), (ii) all Compensating Interest paid by the Servicer on
such Monthly Remittance Date with respect to such Home Equity Loans, (iii) the
portion of the Substitution Amount relating to interest on such Home Equity
Loans substituted during the related Remittance Period, (iv) the portion of
any Loan Purchase Price relating to interest on any such Home Equity Loan
repurchased during the related Remittance Period and (v) the portion of Net
Liquidation Proceeds relating to interest in such in Home Equity Loans
liquidated during the related Remittance Period.
"Internal Fixed Interest Amount": With respect to any
Payment Date, the sum of the Current Interest received by the Swap Trust on
account of the Internal Certificates.
"Internal Certificates": Collectively, the Class A-12
Internal Certificate, the Class A-13 Internal Certificate, the Class A-14
Internal Certificate, the Class A-15 Internal Certificate and the Class A-16
Internal Certificate.
"Insured Swap Interest Payment": With respect to any Payment
Date, without duplication, with respect to the Swapped Certificates only, any
shortfall in the sum of (i) amounts received as interest on account of the
Internal Certificates, less amounts paid to the Swap Counterparty, if any, and
(ii) amounts received from the Swap Counterparty, if any (if the aggregate of
such amounts are insufficient to fund the aggregate Current Interest then due
and on the Swapped Certificates).
"Involuntary Payoff": The amount of Net Liquidation Proceeds
received with respect to a Liquidated Loan.
"Late Payment Rate": For any Payment Date, the fluctuating
rate of interest, as it is published from time to time in the New York, New
York edition of The Wall Street Journal under the caption "Money Rates" as the
"prime rate," to change when and as such published prime rate changes plus 2%.
The Late Payment Rate shall be computed on the basis of a year of 360 days
calculating the actual number of days elapsed. In no event shall the Late
Payment Rate exceed the maximum rate permissible under any applicable law
limiting interest rates.
-31-
<PAGE>
"LIBOR": (A) With respect to any Accrual Period for the
Floating Rate Certificates, the rate determined by the Trustee on the related
LIBOR Determination Date on the basis of the offered rate for one-month U.S.
dollar deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on such date; provided that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on the basis of
the rates at which one-month U.S. dollar deposits are offered by the Reference
Banks at approximately 11:00 a.m. (London time) on such date to prime banks in
the London interbank market. In such event, the Trustee will request the
principal London office of each of the Reference Banks to provide a quotation
of its rate. If at least two such quotations are provided, the rate for that
date will be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer than two
quotations are provided as requested, the rate for that date will be the
arithmetic mean of the rates quoted by major banks in New York City, selected
by the Servicer, at approximately 11:00 a.m. (New York City time) on such date
for one-month U.S. dollar loan to leading European banks. (B) With respect to
the Auction Rate Certificates, the rate calculated in accordance with the
Auction Rate Certificates.
"LIBOR Determination Date": With respect to any Accrual
Period for the Floating Rate Certificates, the first London Business Day
preceding the commencement of such Accrual Period.
"Liquidated Loan": As defined in Section 8.13(b) hereof.
"Liquidation Expenses": Expenses, not to exceed Liquidation
Proceeds, which are incurred by the Servicer in connection with the
liquidation of any defaulted Home Equity Loan, such expenses including,
without limitation, legal fees and expenses, and any unreimbursed Servicing
Advances expended by the Servicer pursuant to Section 8.09(b) with respect to
the related Home Equity Loan.
"Liquidation Proceeds": With respect to any Liquidated Loan,
any amounts (including the proceeds of any Insurance Policy) recovered by the
Servicer in connection with such Liquidated Loan, whether through trustee's
sale, foreclosure sale or otherwise.
"Loan Balance": With respect to each Home Equity Loan and as
of any date of determination, the outstanding principal balance thereof on the
Cut-Off Date, less any principal payments relating to such Home Equity Loan
included in previous Monthly Remittance Amounts; provided, however, that the
Loan Balance for any Home Equity Loan that has become a Liquidated Loan shall
be zero as of the first day of the Remittance Period following the Remittance
Period in which such Home Equity Loan becomes a Liquidated Loan, and at all
times thereafter.
"Loan Group" or "Group": Loan Group I or Loan Group II, as
applicable.
"Loan Group I": The Home Equity Loans identified in Schedule
I hereto, including any Qualified Replacement Mortgages delivered in
replacement thereof. Loan Group I will constitute a separate sub-trust of the
Trust.
-32-
<PAGE>
"Loan Group II": The Home Equity Loans contained in both
Loan Group IIa and Loan Group IIb. Loan Group II will constitute a separate
sub-trust of the Trust.
"Loan Group IIa": The Home Equity Loans identified in
Schedule IIa hereto, including any Qualified Replacement Mortgages delivered
in replacement thereof.
"Loan Group IIb": The Home Equity Loans identified in
Schedule IIb hereto, including any Qualified Replacement Mortgages delivered
in replacement thereof.
"Loan Purchase Price": With respect to any Home Equity Loan
purchased from the Trust on a Monthly Remittance Date pursuant to Section
3.03, 3.04, 3.06(b), 8.10(b) or 8.13(a) hereof, an amount equal to the Loan
Balance of such Home Equity Loan as of the date of purchase (assuming that the
Monthly Remittance Amount remitted by the Servicer on such Monthly Remittance
Date has already been remitted), plus one month's interest on the outstanding
Loan Balance thereof as of the beginning of the related Remittance Period
computed at the then applicable Coupon Rate, together with (without
duplication) the aggregate amounts of (i) all unreimbursed Delinquency
Advances and Servicing Advances theretofore made with respect to such Home
Equity Loan, (ii) all Delinquency Advances and Servicing Advances which the
Servicer has theretofore failed to remit with respect to such Home Equity Loan
and (iii) all reimbursed Delinquency Advances to the extent that reimbursement
is not made from the Mortgagor or from Liquidation Proceeds from the
respective Home Equity Loan.
"Loan-to-Value Ratio": As of any particular date (i) with
respect to any First Mortgage Loan, the percentage obtained by dividing the
Appraised Value into the original principal balance of the Note relating to
such First Mortgage Loan and (ii) with respect to any Second Mortgage Loan,
the percentage obtained by dividing the Appraised Value as of the date of
origination of such Second Mortgage Loan into an amount equal to the sum of
(a) the remaining principal balance of the Senior Lien note relating to such
First Mortgage Loan as of the date of origination of the related Second
Mortgage Loan and (b) the original principal balance of the Note relating to
such Second Mortgage Loan.
"London Business Day": Any day on which dealings in deposits
of United States dollars are transacted in the London interbank market.
"Maximum Insurer Current Reimbursement Amount" With respect
to a Loan Group and any Payment Date, equals the lesser of (x) the Available
Funds remaining in the Certificate Account with respect to the related Loan
Group after taking into account all distributions described in clauses "First"
through "Third" in Section 7.03(b) hereof and (y) the excess of (1) the sum of
(a) the aggregate Loan Balance with respect to such Loan Group plus (b) the
amount described in the immediately preceding clause (x) over (2) the
aggregate Class A Certificate Principal Balance prior to taking into account
any payment of principal on such Payment Date.
"Maximum Maturity Certificates": The Class A-19 and Class
A-20 Certificates.
-33-
<PAGE>
"Maximum Principal Balance": With respect to the Maximum
Maturity Certificates (considered together) for any Payment Date is the
product of (x) the Specified Percentage for such Payment Date and (y) the
excess of (i) the aggregate Certificate Principal Balance for the Group IIb
Certificates immediately prior to such Payment Date over (ii) the Group IIb
Principal Distribution Amount with respect to such Payment Date.
"Monthly Excess Cashflow Amount": As defined in Section
7.03(b)(ix) hereof.
"Monthly Remittance Amount": As of any Monthly Remittance
Date and with respect to a Loan Group, the sum of (i) the Interest Remittance
Amount and (ii) the Principal Remittance Amount, in each case with respect to
such Loan Group, for such Monthly Remittance Date.
"Monthly Remittance Date": The 10th day of each month or, if
such day is not a Business Day, the Business Day succeeding such day,
commencing in the month following the Startup Day.
"Moody's": Moody's Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on an estate in fee simple interest in real
property securing a Note.
"Mortgagor": The obligor on a Note.
"Net Liquidation Proceeds": As to any Liquidated Loan,
Liquidation Proceeds net of Liquidation Expenses and unreimbursed Delinquency
Advances relating to such Home Equity Loan. In no event shall Net
Liquidation Proceeds with respect to any Liquidated Loan be less than zero.
"Net Post-REMIC Recovery Proceeds": With respect to any
Optional Buyout Loan, Post-REMIC Recovery Proceeds less the costs and expenses
incurred by the Servicer in conducting its loss mitigation strategy with
respect thereto, including, without limitation, legal fees and expenses.
"No Equity Secured Mortgage": A Home Equity Loan in which no
material equity in the related Mortgaged Property secures the related Note.
"Note": The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Home Equity Loan.
"Offered Certificates": The Class A Certificates and the
Class B Certificates.
"Officer's Certificate": A certificate signed by any
Authorized Officer of any Person delivering such certificate and delivered to
the Trustee.
-34-
<PAGE>
"Operative Documents": Collectively, this Agreement, the
Underwriting Agreement, the Certificates, the Certificate Insurance Policies,
the Insurance Agreement, the Indemnification Agreement and the Auction Agent
Agreement.
"Optional Buyout Loan": A Home Equity Loan repurchased from
the Trust for the purpose of allowing the Servicer to use its loss mitigation
strategy in maximizing the Post-REMIC Recovery Proceeds thereof.
"Original Group I Loan Balance": The original aggregate Loan
Balance of the Home Equity Loans in Loan Group I as of the Cut-Off Date.
"Original Group II Loan Balance": The original aggregate
Loan Balance of the Home Equity Loans in Loan Group II as of the Cut-Off Date.
"Original Group Loan Balance": The applicable Original Group
I Loan Balance or Original Group II Loan Balance.
"Original Total Loan Balance": The sum of the Original Group
I Loan Balance and the Original Group II Loan Balance.
"Outstanding": With respect to all Certificates of a Class,
as of any date of determination, all such Certificates theretofore executed
and delivered hereunder except:
(i) Certificates theretofore canceled by the Registrar
or delivered to the Registrar for cancellation;
(ii) Certificates or portions thereof for which full and
final payment of money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent in trust for the
Owners of such Certificates;
(iii) Certificates in exchange for or in lieu of which
other Certificates have been executed and delivered pursuant to this
Agreement, unless proof satisfactory to the Trustee is presented that
any such Certificates are held by a bona fide purchaser;
(iv) Certificates alleged to have been destroyed, lost or
stolen for which replacement Certificates have been issued as
provided for in Section 5.05 hereof; and
(v) Certificates as to which the Trustee has made the
final distribution thereon, whether or not such Certificate is ever
returned to the Trustee.
"Owner": The Person in whose name a Certificate is
registered in the Register and the Certificate Insurer to the extent described
in Section 5.06 and Section 7.03 (n) hereof, respectively hereof; provided
that solely for the purposes of determining the exercise of any voting rights
hereunder, if any Offered Certificates are beneficially owned by a Seller or
any affiliate thereof, such Seller or such affiliate shall not be considered
an Owner hereunder.
-35-
<PAGE>
"PAC Certificates": The Class A-12, Class A-13, Class A-14,
Class A-15, Class A-16, and Class A-17 Certificates.
"Paying Agent": Initially, the Trustee, and thereafter, the
Trustee or any other Person that meets the eligibility standards for the
Paying Agent specified in Section 11.15 hereof and is authorized by the
Trustee and the Depositor to make payments on the Certificates on behalf of
the Trustee.
"Payment Date": Any date on which the Trustee is required to
make distributions to the Owners, which shall be the 15th day of each month or
if such day is not a Business Day, the next Business Day thereafter,
commencing in the month following the Startup Day.
"Percentage Interest": With respect to a Class of the
Offered Certificates, a fraction, expressed as a percentage, the numerator of
which is the initial Certificate Principal Balance represented by such
Certificate and the denominator of which is the aggregate initial Certificate
Principal Balance represented by all the Certificates in such Class. With
respect to the Class N-IO Certificates a fraction, expressed as a percentage,
the numerator of which is the initial Class P-IO Notional Principal Amount
represented by such Class P-IO Certificate and the denominator of which is the
aggregate initial Class P-IO Notional Principal Amount represented by all of
the Class P-IO Certificates. With respect to the Class P-IO Certificates a
fraction, expressed as a percentage, the numerator of which is the initial
Class N-IO Notional Principal Amount represented by such Class N-IO
Certificate and the denominator of which is the aggregate initial Class N-IO
Notional Principal Amount represented by all of the Class N-IO Certificates.
With respect to a Class C, Class R-I, Class R-II or Class R Certificate, the
portion of the Class evidenced thereby, expressed as a percentage, as stated
on the face of such Certificate, all of which shall total 100% with respect to
the related Class.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Planned Principal Balance": With respect to any Class of
PAC Certificates and any Payment Date, the respective balance for such Class
set forth opposite such Payment Date in the Planned Principal Balance Schedule
set forth as Schedule VI hereto.
"Planned Principal Balances": With respect to the PAC
Certificates for each Payment Date are listed in Annex I hereto.
"Post-REMIC Recovery Proceeds": With respect to any Optional
Buyout Loan, any amounts (including the proceeds of any Insurance Policy)
recovered by the Servicer in connection with such Optional Buyout Loan,
whether through trustee's sale, foreclosure sale, a "short sale", or
otherwise.
"Preference Amount": With respect to the Class A
Certificates and Class B Certificates, any amounts of Current Interest and
principal included in previous distributions to the Owners of such
Certificates which are recoverable and sought to be recovered from such
-36-
<PAGE>
Owners as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code in accordance with a final, nonappealable order
of a court having competent jurisdiction and which have not theretofore been
repaid to such Owners.
"Premium Amount": As of any Payment Date and with respect to
a Loan Group the product of (x) one-twelfth of the Premium Percentage and (y)
the Aggregate Group Class A Certificate Principal Balance of the related Class
A Certificates.
"Premium Percentage": As defined in the Insurance Commitment
Letter.
"Prepaid Installment": With respect to any Home Equity Loan,
any installment of principal thereof and interest thereon received by the
Servicer prior to the scheduled due date for such installment, intended by the
Mortgagor as an early payment thereof and not as a Prepayment with respect to
such Home Equity Loan.
"Prepayment": Any payment of principal of a Home Equity Loan
which is received by the Servicer in advance of the scheduled due date for the
payment of such principal (other than the principal portion of any Prepaid
Installment), Substitution Amounts, the portion of the purchase price of any
Home Equity Loan purchased from the Trust pursuant to Section 3.03, 3.04,
3.06(b), 8.10(b) or 8.13(a) hereof representing principal and the proceeds of
any Insurance Policy which are to be applied as a payment of principal on the
related Home Equity Loan shall be deemed to be Prepayments for all purposes of
this Agreement.
"Preservation Expenses": Expenditures made by the Servicer
in connection with a foreclosed Home Equity Loan prior to the liquidation
thereof, including, without limitation, expenditures for real estate property
taxes, hazard insurance premiums, property restoration or preservation.
"Principal and Interest Account": The principal and interest
account created by the Servicer pursuant to Section 8.08(a) hereof.
"Principal Remittance Amount": As of any Monthly Remittance
Date and with respect to a Loan Group, the sum, without duplication, of (i)
the principal actually collected by the Servicer on the Home Equity Loans in
the related Loan Group during the related Remittance Period, (ii) the Loan
Balance of each Home Equity Loan in the related Loan Group that was
repurchased from the Trust during the related Remittance Period, (iii) any
Substitution Amount relating to principal delivered by the Seller in
connection with a substitution of a Home Equity Loan in the related Loan Group
during the related Remittance Period, (iv) any Insurance Proceeds actually
collected by the Servicer during the related Remittance Period with respect to
a Home Equity Loan in the related Loan Group (to the extent such Insurance
Proceeds relate to principal) and (v) all Net Liquidation Proceeds actually
collected by the Servicer during the related Remittance Period with respect to
in the related Loan Group (to the extent such Net Liquidation Proceeds relate
to principal).
-37-
<PAGE>
"Prohibited Transaction": The meaning set forth from time to
time in the definition thereof at Section 860F(a)(2) of the Code (or any
successor statute thereto) and applicable to the Trust.
"Property": The underlying property (including all building
thereon) securing a Home Equity Loan.
"Prospectus": The Prospectus dated September 17, 1998
constituting part of the Registration Statement.
"Prospectus Supplement": The ContiMortgage Home Equity Loan
Trust 1998-3 Prospectus Supplement dated September 18, 1998 to the Prospectus.
"Purchase Option Period": As defined in Section 9.03 hereof.
"Qualified Liquidation": The meaning set forth from time to
time in the definition thereof at Section 860F(a)(4) of the Code (or any
successor statute thereto) and applicable to the Trust.
"Qualified Mortgage": The meaning set forth from time to
time in the definition thereof at Section 860G(a)(3) of the Code (or any
successor statute thereto) and applicable to the Trust.
"Qualified Replacement Mortgage": A Home Equity Loan
substituted for another pursuant to Section 3.03, 3.04 or 3.06(b) hereof,
which (i) has a Coupon Rate at least equal to the Coupon Rate of the Home
Equity Loan being replaced, (ii) is of the same property type or is a single
family dwelling and the same occupancy status or is a primary residence as the
replaced Home Equity Loan, (iii) shall mature no later than December 15, 2028,
(iv) has a Loan-to-Value Ratio as of the Replacement Cut-Off Date no higher
than the Loan-to-Value Ratio of the replaced Home Equity Loan at such time,
(v) shall be of the same or higher credit quality classification (determined
in accordance with ContiMortgage's credit underwriting guidelines set forth in
ContiMortgage's underwriting manual) as the Home Equity Loan which such
Qualified Replacement Mortgage replaces, (vi) has a Loan Balance as of the
related Replacement Cut-Off Date equal to or less than the Loan Balance of the
replaced Home Equity Loan as of such Replacement Cut-Off Date, (vii) shall not
provide for a "balloon" payment if the related Home Equity Loan did not
provide for a "balloon" payment (and if such related Home Equity Loan provided
for a "balloon" payment, such Qualified Replacement Mortgage shall have an
original maturity of not less than the original maturity of such related Home
Equity Loan), (viii) shall be a fixed rate Home Equity Loan if the Home Equity
Loan being replaced is a Fixed Rate Home Equity Loan and shall be a first lien
adjustable rate Home Equity Loan if the Home Equity Loan being replaced is an
Adjustable Rate Home Equity Loan and (ix) satisfies the criteria set forth
from time to time in the definition thereof at Section 860G(a)(4) of the Code
(or any successor statute thereto) and applicable to the Trust.
"Rating Agencies": Collectively, Moody's, Standard & Poor's
and Fitch or any successors thereto.
-38-
<PAGE>
"Realized Loss": As to any Liquidated Loan, the amount, if
any, by which the Loan Balance thereof as of the date of liquidation is in
excess of Net Liquidation Proceeds realized thereon applied in reduction of
such Loan Balance. As to any Optional Buyout Loan, the amount, if any, by
which the Loan Balance thereof as of the date of the Servicer's final loss
determination with respect thereto is in excess of the Net Post-REMIC Recovery
Proceeds realized thereon applied in reduction of such Loan Balance.
"Record Date": With respect to the Fixed Rate Certificates
(other than the Class A-1, the Class A-11 Certificates and the Internal
Certificates) and any Payment Date, the last day of the calendar month
immediately preceding the calendar month in which such Payment Date occurs and
with respect to the Floating Rate Certificates, the Class A-1, Class A-11,
Class A-18 Certificates and the Internal Certificates, the day immediately
preceding the related Payment Date.
"Reference Banks": Bankers Trust Company, Barclays Bank PLC,
The Bank of Tokyo and National Westminster Bank PLC; provided that if any of
the foregoing banks are not suitable to serve as a Reference Bank, then any
leading banks selected by the Trustee (or the Auction Agent in the case of the
Auction Rate Certificates) which are engaged in transactions in Eurodollar
deposits in the international Eurocurrency market (i) with an established
place of business in London, (ii) not controlling, under the control of or
under common control with either Seller or any affiliate thereof, (iii) whose
quotations appear on Telerate Page 3750 on the relevant LIBOR Determination
Date and (iv) which have been designated as such by the Trustee (or the
Auction Agent in the case of the Auction Rate Certificates).
"Register": The register maintained by the Registrar in
accordance with Section 5.04 hereof, in which the names of the Owners are set
forth.
"Registrar": The Trustee, acting in its capacity as Registrar
appointed pursuant to Section 5.04 hereof, or any duly appointed and eligible
successor thereto.
"Registration Statement": The Registration Statement filed
by the Depositor with the Securities and Exchange Commission (Registration
Number 333-39505), including all amendments thereto and including the
Prospectus relating to the Offered Certificates constituting a part thereof.
"Reimbursement Amount": As of any Payment Date and as to
each Certificate Insurance Policy, the sum of (x)(i) all Insured Payments
under each such policy previously paid to the Trustee by the Certificate
Insurer and not previously repaid to the Certificate Insurer pursuant to
Section 7.03(b)(v) hereof plus (ii) interest accrued on each such Insured
Payment not previously repaid calculated at the Reimbursement Late Payment
Rate and (y)(i) any amounts then due and owing to the Certificate Insurer
under the Insurance Agreement plus (ii) interest on such amounts at the Late
Payment Rate. The Certificate Insurer shall notify the Trustee, the Depositor
and the Sellers of the amount of any Reimbursement Amount.
"Reimbursement Late Payment Rate": For any Payment Date, the
rate of interest as it is publicly announced by Citibank, N.A. at its
principal office in New York, New York as
-39-
<PAGE>
its prime rate (any change in such prime rate of interest to be effective on
the date such change is announced by Citibank, N.A.) plus 3%. The
Reimbursement Late Payment Rate shall be computed on the basis of a year of
365 days elapsed. In no event shall the Reimbursement Late Payment Rate exceed
the maximum rate permissible under any applicable law limiting interest rates.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC I": A REMIC established pursuant to Section 2.08
hereof.
"REMIC II": A REMIC established pursuant to Section 2.08
hereof.
"REMIC III": A REMIC established pursuant to Section 2.08
hereof.
"REMIC Opinion": As defined in Section 3.03 hereof.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and revenue rulings promulgated thereunder, as the
foregoing may be in effect from time to time.
"Remittance Period": The calendar month immediately
preceding the month in which a Monthly Remittance Date occurs.
"REO Property": A Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Home Equity Loan.
"Replacement Cut-Off Date": With respect to any Qualified
Replacement Mortgage, the first day of the calendar month in which such
Qualified Replacement Mortgage is conveyed to the Trust.
"Representation Letter": Letters to, or agreements with, the
Depository to effectuate a book entry system with respect to the Offered
Certificates registered in the Register under the nominee name of the
Depository.
"Residual Certificates": Collectively, the Class R-I, Class
R-II and Class R Certificates.
"Retained Certificates": Collectively, the Class C, Class
R-I, Class R-II and Class R Certificates.
"Schedule of Home Equity Loans": Each of the schedules of
Home Equity Loans, segregated by Loan Group I, Loan Group IIa and Loan Group
IIb, listing each Home Equity Loan in such category to be conveyed on the
Startup Day. Such Schedules of Home Equity Loans shall identify each Home
Equity Loan by the Servicer's loan number and the borrower's name and
-40-
<PAGE>
address (including the state) of the Property and shall set forth as to each
Home Equity Loan the lien status thereof (and with respect to Adjustable Rate
Home Equity Loans, the margin), the Loan-to-Value Ratio and the Loan Balance
as of the Cut-Off Date, the Coupon Rate thereof, the current scheduled monthly
payment of principal and interest and the maturity of the related Note, the
property type, occupancy status, Appraised Value and original term-to-maturity
thereof, whether or not such Home Equity Loan (including the related Note) has
been modified and the aggregate Loan Balances of all Home Equity Loans. Such
Schedules shall also identify the Seller of each Home Equity Loan.
"Scheduled Payment": As of any date of calculation, with
respect to a Home Equity Loan, the then stated scheduled monthly installment
of principal and interest payable thereunder which, if timely paid, would
result in the full amortization of principal over the term thereof (or, in the
case of a "balloon" Note, the term to the nominal maturity date for
amortization purposes, without regard to the actual maturity date).
"Second Mortgage Loan": A Home Equity Loan which constitutes
a second priority mortgage lien with respect to the related Property.
"Securities Act": The Securities Act of 1933, as amended.
"Sellers": ContiMortgage and ContiWest.
"Senior Lien": With respect to any Second Mortgage Loan, the
mortgage loan relating to the corresponding Property having a first priority
lien.
"Servicer": ContiMortgage Corporation, a Delaware
corporation, and its permitted successors and assigns.
"Servicer Affiliate": A Person (i) controlling, controlled
by or under common control with the Servicer and (ii) which is qualified to
service residential mortgage loans.
"Servicing Advance": As defined in Section 8.09(b) and
Section 8.13(a) hereof.
"Servicing Fee": With respect to any Home Equity Loan, an
amount retained by the Servicer as compensation for servicing and
administration duties relating to such Home Equity Loan pursuant to Section
8.15 and equal to the Servicing Fee Rate times the then outstanding principal
amount of such Home Equity Loan as of the first day of each calendar month
payable on a monthly basis.
"Servicing Fee Rate": 0.50% per annum.
"60+ Day Delinquent Loan": With respect to any Determination
Date, all REO Properties, each Home Equity Loan with respect to which any
portion of a Monthly Payment is, as of the last day of the prior Remittance
Period, two months or more past due (without giving effect to any grace
period), each Home Equity Loan in Foreclosure and each Home Equity Loan for
which the mortgagor has filed for bankruptcy.
-41-
<PAGE>
"Short Sale": A sale of a Home Equity Loan at a price less
than the outstanding Loan Balance thereof.
"Six-Month LIBOR Loans": Home Equity Loans bearing interest
at an adjustable rate indexed to six-month LIBOR.
"Specified Percentages": are listed in Annex II hereto.
"Standard & Poor's": Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies, Inc.
"Startup Day": September 25, 1998.
"Stepdown Date": With respect to each Loan Group, the later
to occur of (x) the Payment Date in October 2001 and (y) the first Payment
Date on which the Aggregate Group Class A Certificate Principal Balance with
respect to such Loan Group is less than or equal to the Class A Optimal
Balance for such Loan Group for such Payment Date.
"Subordinate Certificates": The Class B-I and Class B-II
Certificates.
"Sub-Servicer": Any Person with whom the Servicer has
entered into a Sub-Servicing Agreement and who satisfies any requirements set
forth in Section 8.03 hereof in respect of the qualification of a Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the
Servicer and any Sub-Servicer relating to servicing and/or administration of
certain Home Equity Loans as permitted by Section 8.03.
"Substitution Amount": As defined in Section 3.03 hereof.
"Swap Agreement": The Swap Agreement dated as of September 1,
1998 between Counterparty and the Trustee on behalf of the Swap Trust,
together with any replacement swap agreement acceptable to the Depositor
and the Certificate Insurer.
"Swap Counterparty": National Westminster Bank, Plc., or any
counterparty to a replacement Swap Agreement.
"Swap Trust": The ContiMortgage Swap Trust 1998-B formed
pursuantto Section 7.12 hereof.
"Swap Trust Estate": Collectively, the Internal
Certificates, the Swap Agreement and the right of the Trustee on behalf of the
Swap Trust to receive Insured Swap Interest Payments from the Certificate
Insurer pursuant to the Certificate Insurance Policy relating to the Group II
Class A Certificates.
"Swapped Certificates": The Class A-12, Class A-13, Class
A-14, Class A-15 and Class A-16 Certificates.
-42-
<PAGE>
"Tax Matters Certificate": Each of the Class R-I, Class R-II
and Class R Certificates initially issued to ContiFunding Corporation as the
initial Tax Matters Person.
"Tax Matters Person": The Person appointed for the Trust
pursuant to Section 11.18 hereof to act as the Tax Matters Person under the
Code.
"Tax Matters Person Residual Interest": The 0.001% interest
in the Class R, Class R-I and Class R-II Certificates, each of which shall be
issued to and held by ContiFunding Corporation throughout the term hereof
unless another Person shall accept an assignment of such interest and the
designation of Tax Matters Person pursuant to Section 11.18 hereof.
"Telerate Page 3750": The display designated as page "3750"
on the Dow Jones Telerate Capital Markets Report (or such other page as may
replace page 3750 on that report for the purpose of displaying London
interbank offered rates of major banks).
"Termination Date Pass-Through Rate": A rate equal to the
sum of (a) Weighted Average Pass-Through Rate, (b) any portion of the Trustee
Fee (calculated as a percentage of the outstanding principal amount of the
Offered Certificates) then accrued and outstanding and (c) the Premium Amount
(calculated as a percentage of the outstanding principal amount of the Class A
Certificates) then accrued and outstanding.
"Termination Notice": As defined in Section 9.03 hereof.
"Three-Month Rolling Average 60+ Day Delinquency Rate": With
respect to a Payment Date and each Loan Group, the fraction, expressed as a
percentage (A) the numerator of which is the sum of the following three
percentages for each of the past three Remittance Periods (x) the aggregate
principal amount of 60+ Day Delinquent Loans in such Loan Group as of the last
day of the related Remittance Period divided by (y) the aggregate outstanding
Group Loan Balance of such Loan Group as of the last day of the related
Remittance Period for each of the past three Remittance Periods and (B) the
denominator of which is 3.
"3/27 Loans": Home Equity Loans which bear interest for the
first three years following origination at a fixed rate, and at an adjustable
rate thereafter.
"Total Loan Balance": As of any Payment Date, the aggregate
outstanding Loan Balance of the Home Equity Loans in Loan Group I and Loan
Group II as of the last day of the related Remittance Period.
"Trust": ContiMortgage Home Equity Loan Trust 1998-3, the
trust created under this Agreement.
"Trust Estate": As defined in the conveyance clause under
this Agreement.
"Trustee": Manufacturers and Traders Trust Company, a New
York banking corporation, the Corporate Trust Department of which is located
on the date of execution of this Agreement at One M&T Plaza, Buffalo, New York
14203, not in its individual capacity but solely as Trustee under this
Agreement, and any successor hereunder.
-43-
<PAGE>
"Trustee Fee": The fee payable monthly on each Payment Date
in an amount equal to one-twelfth of the sum of (i) 0.0010% multiplied by the
then-outstanding Aggregate Certificate Principal Balance and (ii) $5500.
"2/28 Loans": Home Equity Loans which bear interest for the
first two years following origination at a fixed rate, and at an adjustable
rate thereafter.
"Underwriters": Morgan Stanley & Co. Incorporated, Bear,
Stearns & Co. Inc., ContiFinancial Services Corporation, Credit Suisse First
Boston Corporation, Greenwich Capital Markets, Inc., Merrill Lynch, Pierce
Fenner & Smith, Incorporated, and NationsBanc Montgomery Securities LLC.
"Unpaid Class B Realized Loss Amount": With respect to any
Payment Date and each Loan Group, the excess of (x) the aggregate cumulative
amount of Class B Applied Realized Loss Amounts with respect to the Class B
Certificates related to such Loan Group for all prior Payment Dates over (y)
the aggregate, cumulative amount of Class B Realized Loss Amortization Amounts
with respect to the Class B Certificates related to such Loan Group for all
prior Payment Dates.
"Voluntary Payoff": A Prepayment which satisfies the related
Note in full, and did not result from a liquidation of the related Home Equity
Loan, or its repurchase from the Trust.
Section 1.02 Use of Words and Phrases.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter" and other equivalent words refer to this Agreement as a whole
and not solely to the particular section of this Agreement in which any such
word is used. The definitions set forth in Section 1.01 hereof include both
the singular and the plural. Whenever used in this Agreement, any pronoun
shall be deemed to include both singular and plural and to cover all genders.
Section 1.03 Captions; Table of Contents.
The captions or headings in this Agreement and the Table of
Contents are for convenience only and in no way define, limit or describe the
scope and intent of any provisions of this Agreement.
Section 1.04 Opinions.
Each opinion with respect to the validity, binding nature
and enforceability of documents or Certificates may be qualified to the extent
that the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law) and may state that
no opinion is expressed on the availability of the remedy of specific
enforcement, injunctive relief or any other equitable remedy. Any opinion
required to be furnished by any Person hereunder must be delivered by counsel
upon whose opinion the addressee of such opinion may reasonably rely, and such
-44-
<PAGE>
opinion may state that it is given in reasonable reliance upon an opinion of
another, a copy of which must be attached, concerning the laws of a foreign
jurisdiction.
END OF ARTICLE I
-45-
<PAGE>
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST
Section 2.01 Establishment of the Trust.
The parties hereto do hereby create and establish, pursuant
to the laws of the State of New York and this Agreement, the Trust, which, for
convenience, shall be known as "ContiMortgage Home Equity Loan Trust 1998-3."
Section 2.02 Office.
The office of the Trust shall be in care of the Trustee,
addressed to One M&T Plaza, Buffalo, New York 14203, Attention Corporate Trust
Administration, or at such other address as the Trustee may designate by
notice to the Depositor, the Seller, the Certificate Insurer and the Servicer.
Section 2.03 Purposes and Powers.
The purpose of the Trust is to engage in the following
activities and only such activities: (i) the issuance of the Certificates and
the acquiring, owning and holding of Home Equity Loans and the Trust Estate in
connection therewith; (ii) activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith, including the investment of moneys in accordance with this
Agreement; and (iii) such other activities as may be required in connection
with conservation of the Trust Estate and distributions to the Owners;
provided, however, that nothing contained herein shall permit the Trustee to
take any action which would adversely affect any of the REMIC I's, REMIC II's
or REMIC III's status as a REMIC.
Section 2.04 Appointment of the Trustee; Declaration of Trust.
The Depositor hereby appoints the Trustee as trustee of the
Trust effective as of the Startup Day, to have all the rights, powers and
duties set forth herein. The Trustee hereby acknowledges and accepts such
appointment, represents and warrants its eligibility as of the Startup Day to
serve as Trustee pursuant to Section 10.08 hereof and declares that it will
hold the Trust Estate in trust upon and subject to the conditions set forth
herein for the benefit of the Owners.
Section 2.05 Expenses of the Trust.
The expenses of the Trust, including (i) the fees of the
Trustee (including any portion of the Trustee Fee not paid pursuant to Section
7.03(b) hereof), (ii) any reasonable expenses of the Trustee, and (iii) any
other expenses of the Trust that have been reviewed by ContiMortgage, which
review shall not be required in connection with the enforcement of a remedy by
the Trustee resulting from a default under this Agreement, shall be paid
directly by ContiMortgage. ContiMortgage shall pay directly the reasonable
fees and expenses of counsel to the Trustee. The reasonable fees and expenses
of the Trustee's counsel in connection with the
-46-
<PAGE>
review and delivery of this Agreement and related documentation shall be paid
by ContiMortgage on the Startup Day.
Section 2.06 Ownership of the Trust.
On the Startup Day the ownership interests in the Trust
shall be transferred as set forth in Section 4.02 hereof, such transfer to be
evidenced by sale of the Certificates as described therein. Thereafter,
transfer of any ownership interest shall be governed by Sections 5.04 and 5.08
hereof.
Section 2.07 Situs of the Trust.
It is the intention of the parties hereto that the Trust
constitute a trust under the laws of the State of New York. The Trust will be
created and administered in, and all Accounts maintained by the Trustee on
behalf of the Trust will be located in, the State of New York. The Trust will
not have any employees and will not have any real or personal property (other
than property acquired pursuant to Section 8.13 hereof) located in any state
other than in the State of New York and payments will be received by the
Trustee only in the State of New York and payments from the Trustee will be
made only from the State of New York. The Trust's only office will be at the
office of the Trustee as set forth in Section 2.02 hereof.
Section 2.08 Miscellaneous REMIC Provisions.
(a) The Trustee shall elect that each of REMIC I, REMIC II
and REMIC III shall be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of
such REMIC elections. The assets of REMIC I shall include the Home Equity
Loans, the Accounts, any REO Property, and any proceeds of the foregoing. The
REMIC I Regular Interests (as defined below) shall constitute the assets of
REMIC II. The REMIC II Regular Interests shall constitute the assets of REMIC
III.
(b) REMIC I will be evidenced by (x) the Class IA, Class IB,
Class IC, Class ID, and Class IE Certificates (the "REMIC I Regular
Interests"), which will be uncertificated and non-transferable and are hereby
designated as the "regular interests" in the REMIC I and (y) the Class R-I
Certificates, which are hereby designated as the single "residual interest" in
the REMIC I (the REMIC I Regular Interests, together with the Class R-I
Certificates, the "REMIC I Certificates"). The REMIC I Regular Interests shall
be recorded on the records of the REMIC I as being issued to and held by the
Trustee on behalf of REMIC II.
The Class IA Certificates shall have an initial principal
balance equal to the initial principal balance of the Class A-8 Certificates
(that is, $80,000,000). The Class IB Certificates shall have an initial
principal balance equal to the excess of the Original Group I Loan Balance
over the initial principal balance of the Class IA Certificate (that is,
$720,000,000). The Class IC Certificates shall have an initial principal
balance equal to the Original Group IIa Loan Balance (that is, $325,000,000).
The Class ID Certificates shall have an initial principal balance equal to the
sum of the initial principal balances of the Class A-16 and A-17 Certificates
(that is,
-47-
<PAGE>
$91,602,000). The Class IE Certificates shall have an initial principal
balance equal to the excess of the Original Group IIb Loan Balance
over the initial principal balance of the Class ID Certificate (that is,
$883,398,000).
On each Payment Date, principal collections on the Group I
Home Equity Loans shall be allocated as follows: an amount equal to the
principal payable on the Class A-8 Certificates shall be payable on the Class
IA Certificates and the remaining principal collections shall be payable to
the Class IB Certificates. On each Payment Date, to the extent that any of the
Aggregate Group Extra Principal Distribution Amount is paid to the Class A-8
Certificates pursuant to Section 7.03(d)(i), an amount of interest otherwise
payable on the Class IB Certificates shall instead be paid as principal on the
Class IA Certificates (and will be accrued and added to principal on the Class
IB Certificates). Realized Losses on the Group I Home Equity Loans shall be
allocated as follows: an amount equal to the Realized Losses allocable to the
Class A-8 Certificates shall be allocable to the Class IA Certificates and the
remaining Realized Losses shall be allocable to the Class IB Certificates.
On each Payment Date, all principal collections and Realized
Losses on the Group IIa Home Equity Loans shall be allocated to the Class IC
Certificates.
On each Payment Date, principal collections on the Group IIb
Home Equity Loans shall be allocated as follows: an amount equal to the
principal payable on the Class A-16 and Class A-17 Certificates shall be
payable on the Class ID Certificates and the remaining principal collections
shall be payable to the Class IE Certificates. On each Payment Date, to the
extent that any of the Aggregate Group Extra Principal Distribution Amount is
paid to the Class A-16 and Class A-17 Certificates pursuant to Section
7.03(d)(i), an amount of interest otherwise payable on the Class IE
Certificates shall instead be paid as principal on the Class ID Certificates
(and will be accrued and added to principal on the Class IE Certificates).
Realized Losses on the Group IIb Home Equity Loans shall be allocated as
follows: an amount equal to the Realized Losses allocable to the Class A-16
and Class A-17 Certificates shall be allocable to the Class ID Certificates
and the remaining Realized Losses shall be allocable to the Class IE
Certificates.
The Class IA and Class IB Certificates shall each have
Pass-Through Rates equal to the weighted average Coupon Rate of the Group I
Home Equity Loans net of the sum of the Servicing Fee for Loan Group I, and
the Trustee Fee for Loan Group I and the Premium Amount for Loan Group I (the
sum expressed as a per annum rate on the Group Loan Balance for Loan Group I).
The Class IC shall have a Pass-Through Rate equal to the weighted average
Coupon Rate of the Group IIa Home Equity Loans net of the sum of the Servicing
Fee for Loan Group IIa, and the Trustee Fee for Loan Group IIa and the Premium
Amount for Loan Group IIa (the sum expressed as a per annum rate on the Group
Loan Balance for Loan Group IIa). The Class ID and Class IE Certificates shall
each have Pass-Through Rates equal to the weighted average Coupon Rate of the
Group IIb Home Equity Loans net of the sum of the Servicing Fee for Loan Group
IIb and the Trustee Fee, Auction Agent's Fee, Broker Dealer Fee and the
Premium Amount for Loan Group IIb (the sum expressed as a per annum rate on
the Group Loan Balance for Loan Group IIb). The Class R-I Certificates shall
have no principal balance and no Pass-Through Rate and shall be entitled to
only those distributable assets, if any, remaining in the REMIC I on each
Payment Date after all amounts required to be distributed to the Class IA,
-48-
<PAGE>
Class IB, Class IC, Class ID and Class IE Certificates and applicable Trust
expenses have been paid. It is expected that there shall not be any
distributions on the Class R-I Certificates.
(c) REMIC II will be evidenced by (x) the Class II-A-1,
Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6, Class
II-A-7, Class II-A-8, Class II-N-IO, Class II-B-I, Class II-A-9, Class
II-A-10, Class II-A-11, Class II-A-12, Class II-A-13, Class II-A-14, Class
II-A-15, Class II-A-16, Class II-A-17, Class II-A-18, Class II-A-19, Class
II-A-20, Class II-P-IO, Class II-B-II, Class II-M-1, Class II-M-2, Class
II-M-3 and Class II-M-4 Certificates (the "REMIC II Regular Interests"), which
will be uncertificated and non-transferable and are hereby designated as the
"regular interests" in the REMIC II and (y) the Class R-II Certificates, which
are hereby designated as the single "residual interest" in the REMIC II (the
REMIC II Regular Interests, together with the Class R-II Certificates, the
"REMIC II Certificates"). The REMIC II Regular Interests shall be recorded on
the records of the REMIC II as being issued to and held by the Trustee on
behalf of REMIC III.
Any Aggregate Group Extra Principal Distribution Amount will
not be paid as interest to the REMIC II Regular Interests, but instead to the
extent available, a portion of the interest payable with respect to the Class
II-M-4 Certificates which equals 1% of the Aggregate Extra Group Principal
Distribution Amount (and, to the extent 1% of the Aggregate Extra Group
Principal Distribution Amount exceeds the interest payable on the Class II-M-4
Certificates, a pro rata portion of the interest payable on the Class II-M-1,
Class II-M-2 and Class II-M-3 Certificates equal to such excess) will be
payable as a reduction of the principal balances of the Class II-A-1, Class
II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6, Class II-A-7,
Class II-A-8, Class II-B-I, Class II-A-9, Class II-A-10, Class II-A-11, Class
II-A-12, Class II-A-13, Class II-A-14, Class II-A-15, Class II-A-16, Class
II-A-17, Class II-A-18, Class II-A-19, Class II-A-20, and Class II-B-II
Certificates in the same manner in which the Aggregate Extra Group Principal
Distribution Amount is allocated among the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class B-I, Class A-9,
Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class
A-16, Class A-17, Class A-18, Class A-19, Class A-20, and Class B-II
Certificates, respectively (and will be accrued and added to principal on the
Class II-M-1, Class II-M-2 and Class II-M-3 Certificates in the same
proportion as interest payable on such Certificates is used to reduce
principal on other Certificates as just described).
Principal payments on the Home Equity Loans shall be
allocated 99% to the Class II-M-1, Class II-M-2, Class II-M-3, and Class
II-M-4 Certificates, and 1% to the Class II-A-1, Class II-A-2, Class II-A-3,
Class II-A-4, Class II-A-5, Class II-A-6, Class II-A-7, Class II-A-8, Class
II-B-I, Class II-A-9, Class II-A-10, Class II-A-11, Class II-A-12, Class
II-A-13, Class II-A-14, Class II-A-15, Class II-A-16, Class II-A-17, Class
II-A-18, Class II-A-19, Class II-A-20, and Class II-B-II Certificates until
paid in full. The aggregate amount of principal allocated to the Class II-A-1,
Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6, Class
II-A-7, Class II-A-8, Class II-B-I, Class II-A-9, Class II-A-10, Class
II-A-11, Class II-A-12, Class II-A-13, Class II-A-14, Class II-A-15, Class
II-A-16, Class II-A-17, Class II-A-18, Class II-A-19, Class II-A-20, and Class
II-B-II Certificates shall be apportioned among such Classes in the same
manner in which principal on the Home Equity Loans is payable with respect to
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class
A-7, Class A-8, Class B-I, Class
-49-
<PAGE>
A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15,
Class A-16, Class A-17, Class A-18, Class A-19, Class A-20, and Class B-II
Certificates, respectively. The aggregate amount of principal allocated to the
Class II-M-1, Class II-M-2, Class II-M-3, and Class II-M-4 Certificates shall be
allocated and apportioned among such Classes first, to the Class II-M-1, Class
II-M-2, and Class II-M-3 Certificates the least amount of principal necessary
which when applied to such Classes can be applied so that the ratio of the
principal balance of the Class II-M-1 Certificates to the principal balance of
the Class II-M-2 Certificates and to the principal balance of the Class II-M-3
Certificates equals the ratio of the Group I Loan Balance to the Group II-A Loan
Balance and to the Group II-B Loan Balance (the "Balance Ratio") and second, to
the Class II-M-4 Certificates.
Notwithstanding the above, principal payments on the Home
Equity Loans that are attributable to the Aggregate Overcollateralization
Release Amount shall be allocated to the Class II-M-1, Class II-M-2, Class
II-M-3 and Class II-M-4 Certificates (allocated first to the Class II-M-4
Certificates until such certificates are paid in full, and second to the Class
II-M-1, Class II-M-2, and Class II-M-3 Certificates and apportioned among the
Class II-M-1, Class II-M-2, and Class II-M-3 Certificates in such a manner
that the Balance Ratio is maintained until paid in full).
Realized Losses shall be applied such that after all
distributions have been made on such Payment Date the principal balances of
the Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5,
Class II-A-6, Class II-A-7, Class II-A-8, Class II-B-I, Class II-A-9, Class
II-A-10, Class II-A-11, Class II-A-12, Class II-A-13, Class II-A-14, Class
II-A-15, Class II-A-16, Class II-A-17, Class II-A-18, Class II-A-19, Class
II-A-20, and Class II-B-II Certificates are each 1% of the principal balances
of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class
A-7, Class A-8, Class B-I, Class A-9, Class A-10, Class A-11, Class A-12,
Class A-13, Class A-14, Class A-15, Class A-16, Class A-17, Class A-18, Class
A-19, Class A-20, and Class B-II Certificates, respectively, and the aggregate
principal balance of the Class II-M-1, Class II-M-2, Class II-M-3 and Class
II-M-4 Certificates is equal to the Total Loan Balances of the Home Equity
Loans less an amount equal to the sum of the principal balances of the Class
II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6,
Class II-A-7, Class II-A-8, Class II-B-I, Class II-A-9, Class II-A-10, Class
II-A-11, Class II-A-12, Class II-A-13, Class II-A-14, Class II-A-15, Class
II-A-16, Class II-A-17, Class II-A-18, Class II-A-19, Class II-A-20, and Class
II-B-II Certificates and is allocated and apportioned first, to the Class
II-M-1, Class II-M-2, Class II-M-3 Certificates the least amount of Realized
Losses necessary which when applied to such Classes can be applied in such a
manner that the Balance Ratio is maintained, and second, to the Class II-M-4
Certificates.
The REMIC II Certificates will have the following
designations and Pass-Through Rates, and distributions of principal and
interest thereon shall be allocated to the Certificates in the following
manner:
REMIC II Initial Pass- Allocation Allocation
Certificates Balance Through of of
- ------------------- ------------ Rate Principal Interest
-------- -------------- --------------
II-A-1 $800,000 (1) (7) (8)
-50-
<PAGE>
REMIC II Initial Pass- Allocation Allocation
Certificates Balance Through of of
- ------------------- ------------ Rate Principal Interest
-------- -------------- --------------
II-A-2 $1,540,000 (1) (7) (8)
II-A-3 $1,880,000 (1) (7) (8)
II-A-4 $640,000 (1) (7) (8)
II-A-5 $830,000 (1) (7) (8)
II-A-6 $560,000 (1) (7) (8)
II-A-7 $650,000 (1) (7) (8)
II-A-8 $800,000 (1) (7) (8)
II-A-N-IO (notional) (2) (notional) (9)
II-B-I $300,000 (1) (7) (8)
II-A-9 $2,317,250 (1) (7) (8)
II-A-10 $780,000 (1) (7) (8)
II-A-11 $750,000 (1) (7) (8)
II-A-12 $1,300,000 (1) (7) (8)
II-A-13 $1,920,000 (1) (7) (8)
II-A-14 $420,000 (1) (7) (8)
II-A-15 $700,000 (1) (7) (8)
II-A-16 $250,000 (1) (7) (8)
II-A-17 $666,020 (1) (7) (8)
II-A-18 $1,242,000 (1) (7) (8)
II-A-19 $779,460 (1) (7) (8)
II-A-20 $1,264,270 (1) (7) (8)
II-P-IO (notional) (3) (notional) (10)
II-B-II $611,000 (1) (7) (8)
II-M-1 $8,000,000 (4) (7) (8)
II-M-2 $3,250,000 (5) (7) (8)
II-M-3 $9,750,000 (6) (7) (8)
II-M-4 $2,058,000,000 (1) (7) (8)
R-II 0 (11) (11) (11)
- -----------------
(1) The Pass-Through Rate on these REMIC II Regular Interests shall at
any time of determination equal the weighted average of the Class IB
Pass-Through Rate, the Class IC Pass-Through Rate, the Class IE
Pass-Through Rate, the excess of the Class IA Pass-Through Rate over
(a) 6.5% for the first 30 Payment Dates and (b) 0.0% thereafter, and
the excess of the Class ID Pass-Through Rate over (a) 6.5% for the
first 30 Payment Dates and (b) 0.0% thereafter.
(2) Interest on the Class II-N-IO will equal 6.5% per annum on the
principal balance of the Class IA Certificate for the first 30
Payment Dates and 0.0% thereafter.
(3) Interest on the Class II-P-IO will equal 6.5% per annum on the
principal balance of the Class ID Certificate for the first 30
Payment Dates and 0.0% thereafter.
(4) The Pass-Through Rate on this REMIC II Regular Interest shall at any
time of determination equal the weighted average of the Class IB
Pass-Through Rate and the excess of the Class IA Pass-Through Rate
over (a) 6.5% for the first 30 Payment Dates and (b) 0.0% thereafter.
-51-
<PAGE>
(5) The Pass-Through Rate on this REMIC II Regular Interest shall at any
time of determination equal the Pass-Through Rate on the Class IC
Certificate.
(6) The Pass-Through Rate on this REMIC II Regular Interest shall at any
time of determination equal the weighted average of the Class IE
Pass-Through Rate and the excess of the Class ID Pass-Through Rate
over (a) 6.5% for the first 30 Payment Dates and (b) 0.0% thereafter.
(7) Principal will be allocated to and apportioned among the Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class B-I, Class A-9, Class A-10, Class A-11, Class A-12,
Class A-13, Class A-14, Class A-15, Class A-16, Class A-17, Class
A-18, Class A-19, Class A-20, and Class B-II Certificates in the same
proportion as principal from the Home Equity Loans is payable with
respect to such Certificates, except that a portion of such principal
in an amount equal to the Overcollateralization Stepdown Amount shall
first be allocated as a payment of interest to the Class C
Certificates, and all principal will be allocated as a payment of
interest to the Class C Certificates after the principal balances of
the Class A and Class B Certificates have been reduced to zero.
(8) Except as provided in the next sentence, interest will be allocated
among the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7, Class A-8, Class B-I, Class A-9, Class A-10,
Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class
A-16, Class A-17, Class A-18, Class A-19, Class A-20, and Class B-II
Certificates in the same proportion as interest is payable on such
Certificates.
Any interest with respect to each REMIC II Certificate in excess of
the product of (i) 100 times the weighted average coupon of the Class
II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class
II-A-6, Class II-A-7, Class II-A-8, Class II-N-IO, Class II-A-9,
Class II-A-10, Class II-A-11, Class II-A-12, Class II-A-13, Class
II-A-14, Class II-A-15, Class II-A-16, Class II-A-17, Class II-A-18,
Class II-A-19, Class II-A-20, Class II-P-IO, Class II-B-II, Class
II-M-1, Class II-M-2, Class II-M-3, and Class II-M-4 Certificates,
where each of such Classes, other than the Class II-M-1, Class
II-M-2, Class II-M-3, and Class II-M-4 Certificates, is first subject
to a cap and floor equal to the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class B-I,
Class N-IO, Class A-9, Class A-10, Class A-11, Class A-12, Class
A-13, Class A-14, Class A-15, Class A-16, Class A-17, Class A-18,
Class A-19, Class A-20, Class P-IO and Class B-II Pass-Through Rate,
respectively, and the Class II-M-1, Class II-M-2, Class II-M-3, and
Class II-M-4 Certificates are each subject to a cap equal to 0%, and
(ii) the principal balance of each such REMIC II Certificate, shall
not be allocated to the Class A and Class B Certificates but will be
allocated to the Class C Certificates. However, the Class C
Certificates shall be subordinated to the extent provided in Section
7.03.
(9) to Class N-IO
(10) to Class P-IO
(11) On each Distribution Date, available funds, if any, remaining in the
REMIC II after payments of interest and principal, as designated
above, will be distributed to the Class R-II Certificate. It is
expected that there shall not be any distributions on the Class R-II
Certificates.
(d) The Class A, Class B and Class C Certificates are hereby
designated as "regular interests" with respect to the REMIC III (the "REMIC
III Regular Interests") and the Class R Certificate is hereby designated as
the single "residual interest" with respect to the REMIC III. On each Payment
Date, available funds, if any, remaining in the REMIC III after payments of
interest and principal as designated herein shall be distributed to the Class
R Certificates.
(e) For federal income tax purposes, the "latest possible
maturity date" for each of the REMIC I Regular Interests, REMIC II Regular
-52-
<PAGE>
Interests and REMIC III Regular Interests (other than the Interest-Only
Certificates) is hereby set to be the Payment Date of July 15, 2029, and for
the Interest-Only Certificates is hereby set to be the Payment Date of March
15, 2001.
(f) The Final Scheduled Payment Date for each Class of
Certificates is hereby set to be the Payment Date indicated below:
Class Final Scheduled Payment Date
- ------------------------------- ---------------------------------
Class A-1 September 15, 1999
Class A-2 March 15, 2019
Class A-3 February 15, 2024
Class A-4 May 15, 2025
Class A-5 November 15, 2026
Class A-6 September 15, 2027
Class A-7 October 15, 2029
Class A-8 October 15, 2029
Class A-9 September 15, 2028
Class A-10 May 15, 2016
Class A-11 September 15, 1999
Class A-12 May 15, 2013
Class A-12 Internal May 15, 2013
Class A-13 May 15, 2013
Class A-13 Internal May 15, 2013
Class A-14 May 15, 2013
Class A-14 Internal May 15, 2013
Class A-15 May 15, 2013
Class A-15 Internal May 15, 2013
Class A-16 June 15, 2013
Class A-16 Internal June 15, 2013
Class A-17 October 15, 2029
Class A-18 October 15, 2029
Class A-19 September 15, 2003
Class A-20 September 15, 2008
Class N-IO March 15, 2001
Class P-IO March 15, 2001
Class B-I October 15, 2029
Class B-II October 15, 2029
(g) The Startup Day is hereby designated for each of REMIC
I, REMIC II and REMIC III as the "startup day" within the meaning of Section
860G(a)(9) of the Code.
(h) The Trustee shall provide to the Internal Revenue
Service and to the persons described in Section 860E(e)(3) and (6) of the
Code, the information described in Treasury regulations Section
1.860D-1(b)(5)(ii), or any successor regulation thereto, with respect to each
of REMIC I, REMIC II and REMIC III. Such information will be provided in the
manner described in Treasury regulations Section 1.860E-2(a)(5), or any
successor regulation thereto.
-53-
<PAGE>
END OF ARTICLE II
-54-
<PAGE>
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE DEPOSITOR, THE SERVICER AND THE SELLERS;
COVENANT OF SELLERS TO CONVEY HOME EQUITY LOANS
Section 3.01 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to
the Trustee, the Certificate Insurer and the Owners that as of the Startup
Day:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and is in good standing as a foreign corporation in each
jurisdiction in which the nature of its business, or the properties owned or
leased by it make such qualification necessary. The Depositor has all
requisite corporate power and authority to own and operate its properties, to
carry out its business as presently conducted and as proposed to be conducted
and to enter into and discharge its obligations under this Agreement and the
other Operative Documents to which it is a party.
(b) The execution and delivery of this Agreement by the
Depositor and its performance and compliance with the terms of this Agreement
and the other Operative Documents to which it is a party have been duly
authorized by all necessary corporate action on the part of the Depositor and
will not violate the Depositor's Certificate of Incorporation or Bylaws or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in a breach of, any
material contract, agreement or other instrument to which the Depositor is a
party or by which the Depositor is bound or violate any statute or any order,
rule or regulation of any court, governmental agency or body or other tribunal
having jurisdiction over the Depositor or any of its properties.
(c) This Agreement and the other Operative Documents to
which the Depositor is a party, assuming due authorization, execution and
delivery by the other parties hereto and thereto, each constitutes a valid,
legal and binding obligation of the Depositor, enforceable against it in
accordance with the terms hereof and thereof, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and by
general principles of equity (whether considered in a proceeding or action in
equity or at law).
(d) The Depositor is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default would
materially and adversely affect the condition (financial or other) or
operations of the Depositor or its properties or the consequences of which
would materially and adversely affect its performance hereunder or under the
other Operative Documents to which the Depositor is a party.
(e) No litigation is pending with respect to which the
Depositor has received service of process or, to the best of the Depositor's
knowledge, threatened against the Depositor
-55-
<PAGE>
which litigation might have consequences that would prohibit its entering into
this Agreement or any other Operative Documents to which it is a party or that
would materially and adversely affect the condition (financial or otherwise)
or operations of the Depositor or its properties or might have consequences
that would materially and adversely affect its performance hereunder and under
the other Operative Documents to which the Depositor is a party.
(f) No certificate of an officer, statement furnished in
writing or report delivered pursuant to the terms hereof by the Depositor
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the certificate, statement or report not
misleading.
(g) The statements contained in the Registration Statement
which describe the Depositor or matters or activities for which the Depositor
is responsible in accordance with the Operative Documents or which are
attributable to the Depositor therein are true and correct in all material
respects, and the Registration Statement does not contain any untrue statement
of a material fact with respect to the Depositor required to be stated therein
or necessary to make the statements contained therein with respect to the
Depositor, in light of the circumstances under which they were made, not
misleading. The Registration Statement does not contain any untrue statement
of a material fact required to be stated therein or omit to state any material
fact necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. There is no fact
known to the Depositor that materially adversely affects or in the future may
(so far as the Depositor can now reasonably foresee) materially adversely
affect the Depositor or the Home Equity Loans or the ownership interests
therein represented by the Certificates that has not been set forth in the
Registration Statement.
(h) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other than any such
actions, approvals, etc. under any state securities laws, real estate
syndication or "Blue Sky" statutes, as to which the Depositor makes no such
representation or warranty), that are necessary or advisable in connection
with the purchase and sale of the Certificates and the execution and delivery
by the Depositor of the Operative Documents to which it is a party, have been
duly taken, given or obtained, as the case may be, are in full force and
effect on the date hereof, are not subject to any pending proceedings or
appeals (administrative, judicial or otherwise) and either the time within
which any appeal therefrom may be taken or review thereof may be obtained has
expired or no review thereof may be obtained or appeal therefrom taken, and
are adequate to authorize the consummation of the transactions contemplated by
this Agreement and the other Operative Documents on the part of the Depositor
and the performance by the Depositor of its obligations under this Agreement
and such of the other Operative Documents to which it is a party.
(i) The transactions contemplated by this Agreement are in
the ordinary course of business of the Depositor.
(j) The Depositor is not insolvent, nor will it be made
insolvent by the transfer of the Home Equity Loans, nor is the Depositor aware
of any pending insolvency.
-56-
<PAGE>
(k) The transfer, assignment and conveyance of the Notes and
the Mortgages by the Depositor hereunder are not subject to the bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(l) The Depositor is not transferring the Home Equity Loans
to the Trustee with any intent to hinder, delay or defraud its creditors.
It is understood and agreed that the representations and
warranties set forth in this Section 3.01 shall survive delivery of the
respective Home Equity Loans to the Trustee.
Section 3.02 Representations and Warranties of the Servicer.
The Servicer hereby represents, warrants and covenants to
the Trustee, the Certificate Insurer and the Owners that as of the Startup
Day:
(a) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, is, and
each Sub-Servicer is, in compliance with the laws of each state in which any
Property is located to the extent necessary to enable it to perform its
obligations hereunder and is in good standing as a foreign corporation in each
jurisdiction in which the nature of its business, or the properties owned or
leased by it make such qualification necessary. The Servicer and each
Sub-Servicer has all requisite corporate power and authority to own and
operate its properties, to carry out its business as presently conducted and
as proposed to be conducted and to enter into and discharge its obligations
under this Agreement and the other Operative Documents to which it is a party.
The Servicer is designated as an approved seller-servicer by FannieMae for
first and second mortgage loans and has combined equity and subordinated debt
of at least $1,500,000, as determined in accordance with generally accepted
accounting principles.
(b) The execution and delivery of this Agreement by the
Servicer and its performance and compliance with the terms of this Agreement
have been duly authorized by all necessary corporate action on the part of the
Servicer and will not violate the Servicer's Certificate of Incorporation or
Bylaws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach of,
any material contract, agreement or other instrument to which the Servicer is
a party or by which the Servicer is bound or violate any statute or any order,
rule or regulation of any court, governmental agency or body or other tribunal
having jurisdiction over the Servicer or any of its properties.
(c) This Agreement and the Operative Documents to which the
Servicer is a party, assuming due authorization, execution and delivery by the
other parties hereto and thereto, each constitutes a valid, legal and binding
obligation of the Servicer, enforceable against it in accordance with the
terms hereof and thereof, except as the enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
-57-
<PAGE>
(d) The Servicer is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
otherwise) or operations of the Servicer or its properties or might have
consequences that would materially and adversely affect its performance
hereunder or under the other Operative Documents to which the Servicer is a
party.
(e) No litigation is pending with respect to which the
Servicer has received service of process or, to the best of the Servicer's
knowledge, threatened against the Servicer which litigation might have
consequences that would prohibit its entering into this Agreement or any other
Operative Documents to which the Servicer is a party or that would materially
and adversely affect the condition (financial or otherwise) or operations of
the Servicer or its properties or might have consequences that would
materially and adversely affect its performance hereunder and the other
Operative Documents to which the Servicer is a party.
(f) No certificate of an officer, statement furnished in
writing or report delivered pursuant to the terms hereof by the Servicer
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the certificate, statement or report not
misleading.
(g) The statements contained in the Registration Statement
which describe the Servicer or matters or activities for which the Servicer is
responsible in accordance with the Operative Document or which are attributed
to the Servicer therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement of a material
fact with respect to the Servicer or omit to state a material fact required to
be stated therein or necessary to make the statements contained therein with
respect to the Servicer, in light of the circumstances under which they were
made, not misleading.
(h) The Servicing Fee is a "current (normal) servicing fee
rate" as that term is used in Statement of Financial Accounting Standards No.
65 issued by the Financial Accounting Standards Board. Neither the Servicer
nor any affiliate thereof will report on any financial statements any part of
the Servicing Fee as an adjustment to the sales price of the Home Equity
Loans.
(i) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other than any such
actions, approvals, etc. under any state securities laws, real estate
syndication or "Blue Sky" statutes, as to which the Servicer makes no such
representation or warranty), that are necessary or advisable in connection
with the execution and delivery by the Servicer of the Operative Documents to
which it is a party, have been duly taken, given or obtained, as the case may
be, are in full force and effect on the date hereof, are not subject to any
pending proceedings or appeals (administrative, judicial or otherwise) and
either the time within which any appeal therefrom may be taken or review
thereof may be obtained has expired or no review thereof may be obtained or
appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative
-58-
<PAGE>
Documents on the part of the Servicer and the performance by the Servicer of its
obligations under this Agreement and such of the other Operative Documents to
which it is a party.
(j) The collection practices used by the Servicer with
respect to the Home Equity Loans have been, in all material respects, legal,
proper, prudent and customary in the mortgage servicing business and in
conformity with relevant FannieMae guidelines.
(k) The transactions contemplated by this Agreement are in
the ordinary course of business of the Servicer.
It is understood and agreed that the representations and
warranties set forth in this Section 3.02 shall survive delivery of the Home
Equity Loans to the Trustee.
Upon discovery by any of either Seller, the Servicer, any
Sub-Servicer, any Owner, the Certificate Insurer or the Trustee (each, for
purposes of this paragraph, a party) of a breach of any of the representations
and warranties set forth in this Section 3.02 which materially and adversely
affects the interests of the Owners or of the Certificate Insurer, the party
discovering such breach shall give prompt written notice to the other parties.
Within 60 days of its discovery or its receipt of notice of breach, the
Servicer shall cure such breach in all material respects and, upon the
Servicer's continued failure to cure such breach, may thereafter be removed by
the Trustee pursuant to Section 8.20 hereof; provided, however, that if any
party can establish to the reasonable satisfaction of the Certificate Insurer
that it is diligently pursuing remedial action, then the cure period may be
extended with the written approval of the Certificate Insurer.
Section 3.03 Representations and Warranties of the Sellers.
(1) ContiMortgage hereby represents, warrants and covenants
to the Trustee, the Certificate Insurer and the Owners that as of the Startup
Day:
(a) ContiMortgage is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and is in good standing as a foreign corporation in each
jurisdiction in which the nature of its business, or the properties owned or
leased by it, make such qualification necessary. ContiMortgage has all
requisite corporate power and authority to own and operate its properties, to
carry out its business as presently conducted and as proposed to be conducted
and to enter into and discharge its obligations under this Agreement and the
other Operative Documents to which it is a party.
(b) The execution and delivery of this Agreement by
ContiMortgage and its performance and compliance with the terms of this
Agreement and the other Operative Documents to which it is a party have been
duly authorized by all necessary corporate action on the part of ContiMortgage
and will not violate ContiMortgage's Certificate of Incorporation or Bylaws or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in a breach of, any
material contract, agreement or other instrument to which ContiMortgage is a
party or by which ContiMortgage is bound or violate any
-59-
<PAGE>
statute or any order, rule or regulation of any court, governmental agency or
body or other tribunal having jurisdiction over ContiMortgage or any of its
properties.
(c) This Agreement and the other Operative Documents to
which ContiMortgage is a party, assuming due authorization, execution and
delivery by the other parties hereto and thereto, each constitutes a valid,
legal and binding obligation of ContiMortgage, enforceable against it in
accordance with the terms hereof and thereof, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and by
general principles of equity (whether considered in a proceeding or action in
equity or at law).
(d) ContiMortgage is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default would
materially and adversely affect the condition (financial or other) or
operations of ContiMortgage or its properties or the consequences of which
would materially and adversely affect its performance hereunder and under the
other Operative Documents to which ContiMortgage is a party.
(e) No litigation is pending with respect to which
ContiMortgage has received service of process or, to the best of
ContiMortgage's knowledge, threatened against ContiMortgage which litigation
might have consequences that would prohibit its entering into this Agreement
or any other Operative Documents to which it is a party or that would
materially and adversely affect the condition (financial or otherwise) or
operations of ContiMortgage or its properties or might have consequences that
would materially and adversely affect its performance hereunder and under the
other Operative Documents to which ContiMortgage is a party.
(f) No certificate of an officer, statement furnished in
writing or report delivered pursuant to the terms hereof by ContiMortgage
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the certificate, statement or report not
misleading.
(g) The statements contained in the Registration Statement
which describe ContiMortgage or matters or activities for which ContiMortgage
is responsible in accordance with the Operative Documents or which are
attributable to ContiMortgage therein are true and correct in all material
respects, and the Registration Statement does not contain any untrue statement
of a material fact with respect to ContiMortgage required to be stated therein
or necessary to make the statements contained therein with respect to
ContiMortgage, in light of the circumstances under which they were made, not
misleading. The Registration Statement does not contain any untrue statement
of a material fact required to be stated therein or omit to state any material
fact necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. There is no fact
known to ContiMortgage that materially adversely affects or in the future may
(so far as ContiMortgage can now reasonably foresee) materially adversely
affect ContiMortgage or the Home Equity Loans or the ownership interests
therein represented by the Certificates that has not been set forth in the
Registration Statement.
-60-
<PAGE>
(h) Upon the receipt of each Home Equity Loan (including the
related Note) and other items of the Trust Estate delivered by ContiMortgage
to the Depositor and by the Depositor to the Trustee under this Agreement, the
Trust will have good title to such Home Equity Loan (including the related
Note) and such other items of the Trust Estate free and clear of any lien,
charge, mortgage, encumbrance or rights of others, except as set forth in
Section 3.04 (b) (ix) (other than liens which will be simultaneously
released).
(i) Neither ContiMortgage nor any affiliate thereof will
report on any financial statement any part of the Servicing Fee as an
adjustment to the sales price of the Home Equity Loans.
(j) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other than any such
actions, approvals, etc. under any state securities laws, real estate
syndication or "Blue Sky" statutes, as to which ContiMortgage makes no such
representation or warranty), that are necessary or advisable in connection
with the purchase and sale of the Certificates and the execution and delivery
by ContiMortgage of the Operative Documents to which it is a party, have been
duly taken, given or obtained, as the case may be, are in full force and
effect on the date hereof, are not subject to any pending proceedings or
appeals (administrative, judicial or otherwise) and either the time within
which any appeal therefrom may be taken or review thereof may be obtained has
expired or no review thereof may be obtained or appeal therefrom taken, and
are adequate to authorize the consummation of the transactions contemplated by
this Agreement and the other Operative Documents on the part of ContiMortgage
and the performance by ContiMortgage of its obligations under this Agreement
and such of the other Operative Documents to which it is a party.
(k) The origination practices used by ContiMortgage with
respect to the Home Equity Loans have been, in all material respects, legal,
proper, prudent and customary in the mortgage lending business.
(l) The transactions contemplated by this Agreement are in
the ordinary course of business of ContiMortgage.
(m) ContiMortgage is not insolvent, nor will it be made
insolvent by the transfer of the Home Equity Loans, nor is ContiMortgage aware
of any pending insolvency.
(n) The transfer, assignment and conveyance of the Notes and
the Mortgages by ContiMortgage hereunder are not subject to the bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(o) ContiMortgage is not transferring the Home Equity Loans
to the Depositor with any intent to hinder, delay or defraud its creditors.
It is understood and agreed that the representations and
warranties set forth in this Section 3.03(1) shall survive delivery of the
respective Home Equity Loans to the Trustee.
-61-
<PAGE>
Upon discovery by any of the Servicer, any Sub-Servicer,
either Seller, the Certificate Insurer or the Trustee (each, for purposes of
this paragraph, a "party") of a breach of any of the representations and
warranties set forth in this Section 3.03 which materially and adversely
affects the interests of the Owners or of the Certificate Insurer, the party
discovering such breach shall give prompt written notice to the other parties.
ContiMortgage hereby covenants and agrees that within 60 days of its discovery
or its receipt of notice of breach, it shall cure such breach in all material
respects or, with respect to a breach of clause (h) above, ContiMortgage may
(or may cause an affiliate of ContiMortgage to) on the Monthly Remittance Date
next succeeding such discovery or receipt of notice (i) if such monthly
Remittance Date is within two years following the Startup Day substitute in
lieu of any Home Equity Loan not in compliance with clause (h) a Qualified
Replacement Mortgage and, if the outstanding principal amount of such
Qualified Replacement Mortgage as of the applicable Replacement Cut-Off Date
is less than the Loan Balance of such Home Equity Loan as of such Replacement
Cut-Off Date, deliver an amount equal to such difference together with the
aggregate amount of (A) all Delinquency Advances and Servicing Advances
theretofore made with respect to such Home Equity Loan and (B) all Delinquency
Advances and Servicing Advances which the Servicer has theretofore failed to
remit with respect to such Home Equity Loan (a "Substitution Amount") to the
Servicer for deposit in the Principal and Interest Account or (ii) purchase
such Home Equity Loan from the Trust at the Loan Purchase Price, which
purchase price shall be delivered to the Servicer for deposit in the Principal
and Interest Account. Notwithstanding any provision of this Agreement to the
contrary, with respect to any Home Equity Loan which is not in default or as
to which no default is imminent, no repurchase or substitution pursuant to
Section 3.03, 3.04 or 3.06 shall be made unless ContiMortgage obtains for the
Trustee and the Certificate Insurer an opinion of counsel experienced in
federal income tax matters to the effect that such a repurchase or
substitution would not constitute a Prohibited Transaction for the Trust or
any REMIC therein or otherwise subject the Trust or any REMIC therein to tax
and would not jeopardize the status of any REMIC therein as a REMIC (a "REMIC
Opinion") addressed to the Trustee and the Certificate Insurer and acceptable
to the Trustee and the Certificate Insurer. Any Home Equity Loan as to which
repurchase or substitution was delayed pursuant to this Section shall be
repurchased or substituted for (subject to compliance with Sections 3.03, 3.04
or 3.06, as the case may be) upon the earlier of (a) the occurrence of a
default or imminent default with respect to such Home Equity Loan and (b)
receipt by the Trustee and the Certificate Insurer of a REMIC Opinion.
(2) ContiWest hereby represents, warrants and covenants to
the Trustee, the Certificate Insurer and the Owners that as of the Startup
Day:
(a) ContiWest is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and is in good standing as a foreign corporation in each
jurisdiction in which the nature of its business, or the properties owned or
leased by it, make such qualification necessary. ContiWest has all requisite
corporate power and authority to own and operate its properties, to carry out
its business as presently conducted and as proposed to be conducted and to
enter into and discharge its obligations under this Agreement and the other
Operative Documents to which it is a party.
-62-
<PAGE>
(b) The execution and delivery of this Agreement by
ContiWest and its performance and compliance with the terms of this Agreement
and the other Operative Documents to which it is a party have been duly
authorized by all necessary corporate action on the part of ContiWest and will
not violate ContiWest's Certificate of Incorporation or Bylaws or constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in a breach of, any material contract,
agreement or other instrument to which ContiWest is a party or by which
ContiWest is bound or violate any statute or any order, rule or regulation of
any court, governmental agency or body or other tribunal having jurisdiction
over ContiWest or any of its properties.
(c) Agreement and the other Operative Documents to which
ContiWest is a party, assuming due authorization, execution and delivery by
the other parties hereto and thereto, each constitutes a valid, legal and
binding obligation of ContiWest, enforceable against it in accordance with the
terms hereof and thereof, except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) ContiWest is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default would materially and adversely
affect the condition (financial or other) or operations of ContiWest or its
properties or the consequences of which would materially and adversely affect
its performance hereunder and under the other Operative Documents to which
ContiWest is a party.
(e) No litigation is pending with respect to which ContiWest
has received service of process or, to the best of ContiWest's knowledge,
threatened against ContiWest which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative
Documents to which it is a party or that would materially and adversely affect
the condition (financial or otherwise) or operations of ContiWest or its
properties or might have consequences that would materially and adversely
affect its performance hereunder and under the other Operative Documents to
which ContiWest is a party.
(f) No certificate of an officer, statement furnished in
writing or report delivered pursuant to the terms hereof by ContiWest contains
any untrue statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not misleading.
(g) The statements contained in the Registration Statement
which describe ContiWest or matters or activities for which ContiWest is
responsible in accordance with the Operative Documents or which are
attributable to ContiWest therein are true and correct in all material
respects, and the Registration Statement does not contain any untrue statement
of a material fact with respect to ContiWest required to be stated therein or
necessary to make the statements contained therein with respect to ContiWest,
in light of the circumstances under which they were made, not misleading. The
Registration Statement does not contain any untrue statement of a material
fact required to be stated therein or omit to state any material fact
-63-
<PAGE>
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. There is no fact
known to ContiWest that materially adversely affects or in the future may (so
far as ContiWest can now reasonably foresee) materially adversely affect
ContiWest or the Home Equity Loans or the ownership interests therein
represented by the Certificates that has not been set forth in the
Registration Statement.
(h) Upon the receipt of each Home Equity Loan (including the
related Note) and other items of the Trust Estate delivered by ContiWest to
the Depositor and by the Depositor to the Trustee under this Agreement, the
Trust will have good title to such Home Equity Loan (including the related
Note) and such other items of the Trust Estate free and clear of any lien,
charge, mortgage, encumbrance or rights of others, except as set forth in
Section 3.04 (b) (ix) (other than liens which will be simultaneously
released).
(i) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other than any such
actions, approvals, etc. under any state securities laws, real estate
syndication or "Blue Sky" statutes, as to which ContiWest makes no such
representation or warranty), that are necessary or advisable in connection
with the purchase and sale of the Certificates and the execution and delivery
by ContiWest of the Operative Documents to which it is a party, have been duly
taken, given or obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within which any
appeal therefrom may be taken or review thereof may be obtained has expired or
no review thereof may be obtained or appeal therefrom taken, and are adequate
to authorize the consummation of the transactions contemplated by this
Agreement and the other Operative Documents on the part of ContiWest and the
performance by ContiWest of its obligations under this Agreement and such of
the other Operative Documents to which it is a party.
(j) The transactions contemplated by this Agreement are in
the ordinary course of business of ContiWest.
(k) ContiWest is not insolvent, nor will it be made
insolvent by the transfer of the Home Equity Loans, nor is ContiWest aware of
any pending insolvency.
(l) The transfer, assignment and conveyance of the Notes and
the Mortgages by ContiWest hereunder are not subject to the bulk transfer laws
or any similar statutory provisions in effect in any applicable jurisdiction.
(m) ContiWest is not transferring the Home Equity Loans to
the Depositor with any intent to hinder, delay or defraud its creditors.
It is understood and agreed that the representations and
warranties set forth in this Section 3.03(2) shall survive delivery of the
respective Home Equity Loans to the Trustee.
-64-
<PAGE>
Upon discovery by any of the Servicer, any Sub-Servicer,
either Seller, the Certificate Insurer or the Trustee (each, for purposes of
this paragraph, a "party") of a breach of any of the representations and
warranties set forth in this Section 3.03 which materially and adversely
affects the interests of the Owners or of the Certificate Insurer, the party
discovering such breach shall give prompt written notice to the other parties.
ContiWest hereby covenants and agrees that within 60 days of its discovery or
its receipt of notice of breach, it shall cure such breach in all material
respects or, with respect to a breach of clause (h) above, ContiWest may (or
may cause an affiliate of ContiWest to) on the Monthly Remittance Date next
succeeding such discovery or receipt of notice (i) if such monthly Remittance
Date is within two years of the startup day substitute in lieu of any Home
Equity Loan not in compliance with clause (h) a Qualified Replacement Mortgage
and, if the outstanding principal amount of such Qualified Replacement
Mortgage as of the applicable Replacement Cut-Off Date is less than the Loan
Balance of such Home Equity Loan as of such Replacement Cut-Off Date, deliver
an amount equal to such difference together with the aggregate amount of (A)
all Delinquency Advances and Servicing Advances theretofore made with respect
to such Home Equity Loan and (B) all Delinquency Advances and Servicing
Advances which the Servicer has theretofore failed to remit with respect to
such Home Equity Loan (a "Substitution Amount") to the Servicer for deposit in
the Principal and Interest Account or (ii) purchase such Home Equity Loan from
the Trust at the Loan Purchase Price, which purchase price shall be delivered
to the Servicer for deposit in the Principal and Interest Account.
Notwithstanding any provision of this Agreement to the contrary, with respect
to any Home Equity Loan which is not in default or as to which no default is
imminent, no repurchase or substitution pursuant to Section 3.03, 3.04 or 3.06
shall be made unless ContiWest obtains for the Trustee and the Certificate
Insurer an opinion of counsel experienced in federal income tax matters to the
effect that such a repurchase or substitution would not constitute a
Prohibited Transaction for the Trust or any REMIC therein or otherwise subject
the Trust or any REMIC therein to tax and would not jeopardize the status of
any REMIC therein as a REMIC (a "REMIC Opinion") addressed to the Trustee and
the Certificate Insurer and acceptable to the Trustee and the Certificate
Insurer. Any Home Equity Loan as to which repurchase or substitution was
delayed pursuant to this Section shall be repurchased or substituted for
(subject to compliance with Sections 3.03, 3.04 or 3.06, as the case may be)
upon the earlier of (a) the occurrence of a default or imminent default with
respect to such Home Equity Loan and (b) receipt by the Trustee and the
Certificate Insurer of a REMIC Opinion.
Section 3.04 Covenants of the Sellers to Take Certain Actions with
Respect to the Home Equity Loans In Certain Situations.
(a) Upon the discovery by either Seller, the Servicer, any
Sub-Servicer, the Certificate Insurer or the Trustee (i) that any of the
statements set forth in subsection (b) below were untrue as of the Startup Day
with the result that the interests of the Owners or the Certificate Insurer
are materially and adversely affected or (ii) that statements set forth in
Clauses (ix), (x), (xiii), (xxxvi), (xl), or (xli) of subsection (b) below
were untrue in any material respect as of the Startup Day, the party
discovering such breach shall give prompt written notice to the other parties.
Upon the earliest to occur of such Seller's discovery, its receipt of notice
of breach from any one of the other parties or such time as a situation
resulting from an existing statement which is untrue materially and adversely
affects the interests of the Owners or of the Certificate Insurer, such Seller
hereby covenants and warrants that it shall promptly cure such breach in all
-65-
<PAGE>
material respects or subject to the last two sentences of Section 3.03 it
shall on the second Monthly Remittance Date next succeeding such discovery,
receipt of notice or such time (i) if such Monthly Remittance Date is within
two years of the Startup Day substitute in lieu of each Home Equity Loan which
has given rise to the requirement for action by such Seller a Qualified
Replacement Mortgage and deliver the Substitution Amount to the Servicer for
deposit in the Principal and Interest Account or (ii) purchase such Home
Equity Loan from the Trust at a purchase price equal to the Loan Purchase
Price thereof, which purchase price shall be delivered to the Servicer for
deposit in the Principal and Interest Account. Other than as specified in
Section 6.12 hereof, it is understood and agreed that the obligation of a
Seller so to substitute or purchase any Home Equity Loan as to which such a
statement set forth below is untrue in any material respect and has not been
remedied shall constitute the sole remedy under this Agreement respecting a
discovery of any such statement which is untrue in any material respect in
this Section 3.04 available to the Owners, the Certificate Insurer and the
Trustee, the Certificate Insurer.
(b) Unless otherwise specified, the information set out
below specifies as of the Startup Day:
(i) The information with respect to each Home Equity Loan
and the aggregate Loan Balance of all Home Equity Loans set forth in
the related Schedule of Home Equity Loans is true and correct as of
the Cut-Off Date;
(ii) All the original or certified documentation set forth
in Section 3.05 (including all material documents related thereto)
with respect to each Home Equity Loan has been or will be delivered
to the Trustee on the Startup Day or as otherwise provided in Section
3.05;
(iii) Each Home Equity Loan being transferred to the Trust
is a Qualified Mortgage;
(iv) Each Property is improved by a single (one-to-four)
family residential dwelling, which may include condominiums and
townhouses, manufactured housing or small multifamily or mixed-use
property but shall not include co-operatives or mobile homes;
provided, however, that not more than 0.02%, 0.15% and 0.08% of the
aggregate Loan Balance of the Home Equity Loans in Loan Group I, Loan
Group IIa and Loan Group IIb, respectively, are secured by
condominiums with more than four stories and no more than 0.97%,
1.63% and 0.69% of the Loan Balance of the Home Equity Loans in Loan
Group I, Loan Group IIa and Loan Group IIb, respectively, are secured
by condominiums of less than four stories;
(v) No Home Equity Loan in Loan Group I has a Loan-to-Value
Ratio in excess of 85%, except 22.29% of such Home Equity Loans which
have a Loan-to-Value Ratio not greater than 100%; no Home Equity Loan
in Loan Group IIa has a Loan-to-Value Ratio in excess of 85%, except
26.01% of such Home Equity Loans which have a Loan-to-Value Ratio not
greater than 100%; and no Home Equity Loan in Loan Group IIb
-66-
<PAGE>
has a Loan-to-Value Ratio in excess of 85% except 19.42% of such Home
Equity Loans which have a Loan-to-Value Ratio of not greater than
100%;
(vi) Each Home Equity Loan is being serviced by the Servicer;
(vii) The Note related to each Home Equity Loan in the Loan
Group I bears a fixed Coupon Rate of at least 6.99% per annum; the
Note related to each Home Equity Loan in Loan Group IIa bears a
current Coupon Rate of at least 7.25% per annum; and the Note related
to each Home Equity Loan in Loan Group IIb bears a current Coupon
Rate of at least 7.10% per annum. The weighted average Coupon Rate of
the Home Equity Loans in the Loan Group I is at least 10.07%; the
weighted average Coupon Rate of the Home Equity Loans in Loan Group
IIa is at least 10.06%; and the weighted average Coupon Rate of the
Home Equity Loans in Loan Group IIb is at least 10.57%;
(viii) Each Note with respect to the Home Equity Loans will
provide for a schedule of substantially level and equal monthly
Scheduled Payments which are sufficient to amortize fully the
principal balance of such Note on or before its maturity date (other
than Notes representing not more than 29.58% of the aggregate Loan
Balance of the fixed rate Home Equity Loans or 0.01% of the
adjustable rate Home Equity Loans, which may provide for a "balloon"
payment due at the end of the 15th year, which maturity date is not
more than 15 years from the date of origination);
(ix) As of the Startup Day, each Mortgage is a valid and
subsisting first or second lien of record on the Property subject in
the case of any Second Mortgage Loan only to a Senior Lien on such
Property and subject in all cases to the exceptions to title set
forth in the title insurance policy or attorney's opinion of title
with respect to the related Home Equity Loan, which exceptions are
generally acceptable to banking institutions in connection with their
regular mortgage lending activities, and such other exceptions to
which similar properties are commonly subject and which do not
individually, or in the aggregate, materially and adversely affect
the benefits of the security intended to be provided by such
Mortgage;
(x) Immediately prior to the transfer and assignment of the
Home Equity Loans by the related Seller to the Depositor and by the
Depositor to the Trust herein contemplated, such Seller and the
Depositor, as the case may be, held good and indefeasible title to,
and was the sole owner of, each Home Equity Loan (including the
related Note) conveyed by such Seller subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth in
clause (ix) or other liens which will be released simultaneously with
such transfer and assignment; and immediately upon the transfer and
assignment herein contemplated, the Trustee will hold good and
indefeasible title to, and be the sole owner of, each Home Equity
Loan subject to no liens, charges, mortgages, encumbrances or rights
of others except as set forth in paragraph (ix) or other liens which
will be released simultaneously with such transfer and assignment;
(xi) As of the Startup Day, (a) no more than 1.74%, 2.97%
and 2.35% of the Home Equity Loans in Loan Group I, Loan Group IIa
and Loan Group IIb,
-67-
<PAGE>
respectively, as a percentage of the outstanding
aggregate Loan Balance of such Home Equity Loans are 30-59 days
Delinquent, (b) no more than 0.00%, 0.06% and 0.01% of the Home
Equity Loans in Loan Group I, Loan Group IIa and Loan Group IIb,
respectively, as a percentage of the outstanding aggregate Loan
Balance of such Home Equity Loans, are 60-89 days Delinquent, (c)
none of the Home Equity Loans, is 90 or more days Delinquent, (d) no
Mortgagor of any Home Equity Loan has been 30 days or more Delinquent
more than once during the 12 months immediately preceding the Startup
Day except as indicated on Schedule III attached hereto and (e) no
Mortgagor of any Home Equity Loan has been 90 or more days Delinquent
during the 12 months immediately preceding the Startup Day except as
indicated on Schedule III attached hereto;
(xii) There is no delinquent tax or assessment lien on any
Property, and each Property is free of substantial damage and is
in good repair;
(xiii) There is no valid and enforceable offset, defense or
counterclaim to any Note or Mortgage, including the obligation of the
related Mortgagor to pay the unpaid principal of or interest on such
Note;
(xiv) There is no mechanics' lien or claim for work, labor
or material affecting any Property which is or may be a lien prior
to, or equal with, the lien of the related Mortgage except those
which are insured against by any title insurance policy referred to
in paragraph (xvi) below;
(xv) Each Home Equity Loan at the time it was made complied
in all material respects with applicable state and federal laws and
regulations, including, without limitation, the federal
Truth-in-Lending Act and other consumer protection laws, usury, equal
credit opportunity, disclosure and recording laws;
(xvi) With respect to each Home Equity Loan either (a) an
attorney's opinion of title has been obtained but no title policy has
been obtained (provided that no title policy has been obtained with
respect to not more than 1.0% of the Original Aggregate Loan Balance
of the Home Equity Loans), or (b) a lender's title insurance policy,
issued in standard American Land Title Association form by a title
insurance company authorized to transact business in the state in
which the related Property is situated, in an amount at least equal
to the original balance of such Home Equity Loan together, in the
case of a Second Mortgage Loan, with the then-current principal
balance of the mortgage note relating to the Senior Lien, insuring
the mortgagee's interest under the related Home Equity Loan as the
holder of a valid first or second mortgage lien of record on the real
property described in the related Mortgage, as the case may be,
subject only to exceptions of the character referred to in paragraph
(ix) above, was effective on the date of the origination of such Home
Equity Loan, and, as of the Startup Day, such policy is valid and
thereafter such policy shall continue in full force and effect;
(xvii) Each Sub-Servicer, if any, is a qualified servicer as
defined in Section 8.03 with respect to the Home Equity Loans
serviced by it;
-68-
<PAGE>
(xviii) The improvements upon each Property are covered by a
valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire and extended coverage
representing coverage not less than the least of (A) the outstanding
principal balance of the related Home Equity Loan (together, in the
case of a Second Mortgage Loan, with the outstanding principal
balance of the Senior Lien), (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis or (C) the
full insurable value of the Property;
(xix) If any Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Property with a
generally acceptable carrier in an amount representing coverage not
less than the least of (A) the outstanding principal balance of the
related Home Equity Loan (together, in the case of a Second Mortgage
Loan, with the outstanding principal balance of the Senior Lien), (B)
the minimum amount required to compensate for damage or loss on a
replacement cost basis or (C) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973;
(xx) Each Mortgage and Note is the legal, valid and binding
obligation of the maker thereof and is enforceable in accordance with
its terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether considered in a proceeding or
action in equity or at law), and all parties to each Home Equity Loan
had full legal capacity to execute all documents relating to such
Home Equity Loan and convey the estate therein purported to be
conveyed;
(xxi) Each Seller has caused and will cause to be performed
any and all acts required to be performed to preserve the rights and
remedies of the Trustee in any Insurance Policies applicable to any
Home Equity Loans delivered by such Seller including, without
limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of co-insured,
joint loss payee and mortgagee rights in favor of the Trustee;
(xxii) As of the Startup Day, no more than 0.16% of the
aggregate Loan Balance of the Home Equity Loans Loan Group I, 0.47%
in Loan Group IIa and 0.30% in Loan Group IIb, respectively, will be
secured by Properties located within any single zip code area;
(xxiii) Each original Mortgage was recorded or is in the
process of being recorded, and all subsequent assignments of the
original Mortgage have been delivered for recordation or have been
recorded in the appropriate jurisdictions wherein such recordation is
necessary to perfect the lien thereof as against creditors of or
purchasers from the Seller delivering the related Home Equity Loan
(or, subject to Section 3.05 hereof, are in the process of being
recorded);
-69-
<PAGE>
(xxiv) The terms of each Note and each Mortgage have not
been impaired, altered or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect
the interest of the Owners and the Certificate Insurer and which has
been delivered to the Trustee. The substance of any such alteration
or modification is reflected on the related Schedule of Home Equity
Loans;
(xxv) The proceeds of each Home Equity Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to
make future advances thereunder. Any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing or
recording such Home Equity Loans were paid;
(xxvi) The related Note is not and has not been secured by
any collateral, pledged account or other security except the lien of
the corresponding Mortgage;
(xxvii) No Home Equity Loan was originated under a buydown
plan;
(xxviii) No Home Equity Loan has a shared appreciation
feature, or other contingent interest feature;
(xxix) Each Property is located in the state identified in
the respective Schedule of Home Equity Loans and consists of one or
more parcels of real property with a residential dwelling erected
thereon;
(xxx) Each Mortgage contains a provision for the
acceleration of the payment of the unpaid principal balance of the
related Home Equity Loan in the event the related Property is sold
without the prior consent of the mortgagee thereunder;
(xxxi) Any advances made after the date of origination of a
Home Equity Loan but prior to the Cut-Off Date have been consolidated
with the outstanding principal amount secured by the related
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
respective Schedule of Home Equity Loans. The consolidated principal
amount does not exceed the original principal amount of the related
Home Equity Loan. No Note permits or obligates the Servicer to make
future advances to the related Mortgagor at the option of the
Mortgagor;
(xxxii) There is no proceeding pending or threatened for the
total or partial condemnation of any Property, nor is such a
proceeding currently occurring, and each Property is undamaged by
waste, fire, water, flood, earthquake or earth movement;
(xxxiii) All of the improvements which were included for the
purposes of determining the Appraised Value of any Property lie
wholly within the boundaries and building restriction lines of such
Property, and no improvements on adjoining properties encroach upon
such Property, and are stated in the title insurance policy and
affirmatively insured;
-70-
<PAGE>
(xxxiv) No improvement located on or being part of any
Property is in violation of any applicable zoning law or regulation.
All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of each Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities and such Property is lawfully occupied under the
applicable law;
(xxxv) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will become
payable by the Owners or the Trust to the trustee under the deed of
trust, except in connection with a trustee's sale after default by
the related Mortgagor;
(xxxvi) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Property of the
benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (B) otherwise by
judicial foreclosure. There is no homestead or other exemption
available to the related Mortgagor which would materially interfere
with the right to sell the related Property at a trustee's sale or
the right to foreclose the related Mortgage;
(xxxvii) There is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Note and no
event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration; and neither the Servicer
nor the related Seller has waived any default, breach, violation or
event of acceleration;
(xxxviii) No instrument of release or waiver has been
executed in connection with any Home Equity Loan, and no Mortgagor
has been released, in whole or in part, except in connection with an
assumption agreement which has been approved by the primary mortgage
guaranty insurer, if any, and which has been delivered to the
Trustee;
(xxxix) The maturity date of each Home Equity Loan is at
least twelve months prior to the maturity date of the related first
mortgage loan if such first mortgage loan provides for a balloon
payment;
(xl) Each Home Equity Loan conforms, and all such Home
Equity Loans in the aggregate conform, in all material respects to
the description thereof set forth in the Prospectus Supplement;
(xli) The credit underwriting guidelines applicable to each
Home Equity Loan conform in all material respects to the description
thereof set forth in the Prospectus Supplement;
-71-
<PAGE>
(xlii) Each Home Equity Loan was originated based upon a
full appraisal, which included an interior inspection of the subject
property;
(xliii) The Home Equity Loans were not selected for
inclusion in the Trust by the Sellers on any basis intended to
adversely affect the Trust;
(xliv) No more than 4.59%, 3.94% and 4.33% of the aggregate
Loan Balance of the Home Equity Loans in the Loan Group I, Loan Group
IIa and Loan Group IIb, respectively, are secured by Properties that
are non-owner occupied Properties (i.e., investor-owned and
vacation);
(xlv) No more than 4.43%, 7.81% and 3.89% of the aggregate
Loan Balance of the Home Equity Loans in Loan Group I, Loan Group IIa
and Loan Group IIb, respectively, are secured by Home Equity Loans
which were originated under ContiMortgage's non-income verification
program;
(xlvi) Neither Seller has any actual knowledge that there
exist any hazardous substances, hazardous wastes or solid wastes, as
such terms are defined in the Comprehensive Environmental Response
Compensation and Liability Act, the Resource Conservation and
Recovery Act of 1976, or other federal, state or local environmental
legislation on any Property;
(xlvii) Both Sellers were properly licensed or otherwise
authorized, to the extent required by applicable law, to originate or
purchase each Home Equity Loan; and the consummation of the
transactions herein contemplated, including, without limitation, the
receipt of interest by the Owners and the ownership of the Home
Equity Loans by the Trustee as trustee of the Trust will not involve
the violation of such laws;
(xlviii) With respect to each Property subject to a ground
lease (i) the current ground lessor has been identified and all
ground rents which have previously become due and owing have been
paid; (ii) the ground lease term extends, or is automatically
renewable, for at least five years beyond the maturity date of the
related Home Equity Loan; (iii) the ground lease has been duly
executed and recorded; (iv) the amount of the ground rent and any
increases therein are clearly identified in the lease and are for
predetermined amounts at predetermined times; (v) the ground rent
payment is included in the borrower's monthly payment as an expense
item; (vi) the Trust has the right to cure defaults on the ground
lease; and (vii) the terms and conditions of the leasehold do not
prevent the free and absolute marketability of the Property. As of
the Cut-Off Date, the Loan Balance of the Home Equity Loans with
related Properties subject to ground leases does not exceed 1% of the
Original Aggregate Loan Balance;
(xlix) All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or
an escrow of funds has been established in an amount sufficient to
pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable;
-72-
<PAGE>
(l) As of the Startup Day, neither Seller has received a
notice of default of any first mortgage loan secured by any Property
which has not been cured by a party other than such Seller;
(li) All of the Adjustable Rate Home Equity Loans are in a
first lien position;
(lii) As of the Cut-off Date, each Home Equity Loan has an
outstanding balance of less than $464,000;
(liii) Each Home Equity Loan is secured by a mortgage on
property which, at the time of origination of each Home Equity Loan,
has an appraised value of not more than $875,000;
(liv) No more than 6.27% of the Fixed Rate Home Equity Loans
and none of the Adjustable Rate Home Equity Loans are in a second
priority position; and
(lv) The weighted average margin of the Home Equity Loans in
Loan Group IIa is 6.28% and the weighted average margin of the
Adjustable Rate Home Equity Loans in Loan Group IIb is 6.47%.
(c) In the event that any such repurchase results in a
prohibited transaction tax, the Trustee shall immediately notify the related
Seller in writing thereof and such Seller will, within 10 days of receiving
notice thereof from the Trustee, deposit the amount due from the Trust with
the Trustee for the payment thereof, including any interest and penalties, in
immediately available funds. In the event that any Qualified Replacement
Mortgage is delivered by either Seller to the Trust pursuant to Section 3.03,
Section 3.04 or Section 3.06 hereof, such Seller shall be obligated to take
the actions described in Section 3.04(a) with respect to such Qualified
Replacement Mortgage upon the discovery by any of the Owners, the other
Seller, the Servicer, any Sub-Servicer, the Certificate Insurer or the Trustee
that the statements set forth in clause (ix), (x), (xiii), (xxxvi), (xl) or
(xli) of subsection (b) above are untrue in any material respect on the date
such Qualified Replacement Mortgage is conveyed to the Trust or that any of
the other statements set forth in subsection (b) above are untrue on the date
such Qualified Replacement Mortgage is conveyed to the Trust such that the
interests of the Owners or the Certificate Insurer in the related Qualified
Replacement Mortgage are materially and adversely affected; provided, however,
that for the purposes of this subsection (c) the statements in subsection (b)
above referring to items "as of the Cut-Off Date" or "as of the Startup Day"
shall be deemed to refer to such items as of the date such Qualified
Replacement Mortgage is conveyed to the Trust. Notwithstanding the fact that a
representation contained in subsection (b) above may be limited to a Seller's
knowledge, such limitation shall not relieve a Seller of its repurchase
obligation under this Section and Section 3.05 hereof.
(d) It is understood and agreed that the covenants set forth
in this Section 3.04 shall survive delivery of the respective Home Equity
Loans (including Qualified Replacement Mortgages) to the Trustee.
-73-
<PAGE>
(e) The Trustee shall have no duty to conduct any
affirmative investigation other than as specifically set forth in this
Agreement as to the occurrence of any condition requiring the repurchase or
substitution of any Home Equity Loan pursuant to this Article III or the
eligibility of any Home Equity Loan for the purpose of this Agreement.
Section 3.05 Conveyance of the Home Equity Loans and Qualified
Replacement Mortgages.
(a) On the Startup Day each Seller, concurrently with the
execution and delivery hereof, hereby transfers, assigns, sets over and
otherwise conveys to the Depositor and the Depositor, concurrently with the
execution and delivery hereof, transfers, assigns, sets over and otherwise
conveys, without recourse, to the Trust all of their respective right, title
and interest in and to the Trust Estate; provided, however, that each Seller
reserves and retains all of its right, title and interest in and to principal
(including Prepayments) collected and interest accrued on each Home Equity
Loan on or prior to the Cut-Off Date. The transfer by the Depositor of the
Home Equity Loans set forth on the Schedule of Home Equity Loans to the
Trustee is absolute and is intended by the Owners and all parties hereto to be
treated as a sale by the Depositor.
It is intended that the sale, transfer, assignment and
conveyance herein contemplated constitute a sale of the Home Equity Loans
conveying good title thereto free and clear of any liens and encumbrances from
each Seller to the Depositor and from the Depositor to the Trust and that the
Home Equity Loans not be part of the Depositor's or either Seller's estate in
the event of insolvency. In the event that such conveyance is deemed to be a
loan, the parties intend that each Seller shall be deemed to have granted to
the Depositor and the Depositor shall be deemed to have granted to the Trustee
a first priority perfected security interest in the Trust Estate, and that
this Agreement shall constitute a security agreement under applicable law.
In connection with such sale, transfer, assignment, and
conveyance from the Sellers to the Depositor, each Seller has filed, in the
appropriate office or offices in the States of Delaware, Pennsylvania and
Nevada, as the case may be, a UCC-1 financing statement executed by such
Seller as debtor, naming the Depositor as secured party and listing the Home
Equity Loans and the other property described above as collateral. The
characterization of a Seller as debtor and the Depositor as secured party on
such financing statements is solely for protective purposes and shall in no
way be construed as being contrary to the intent of the parties that this
transaction be treated as a sale of such Seller's entire right, title and
interest in and to the Trust Estate. In connection with such filing, each
Seller agrees that it shall cause to be filed all necessary continuation
statements thereof and to take or cause to be taken such actions and execute
such documents as are necessary to perfect and protect the Trustee's, the
Certificate Insurer's and the Owners' interest in the Trust Estate.
In connection with such sale, transfer, assignment, and
conveyance from the Depositor to the Trustee, the Depositor has filed, in the
appropriate office or offices in the States of New York, Nevada and Delaware,
a UCC-1 financing statement executed by the Depositor as debtor, naming the
Trustee as secured party and listing the Home Equity Loans and the other
property described above as collateral. The characterization of the Depositor
as debtor and the
-74-
<PAGE>
Trustee as secured party in such financing statements is solely for protective
purposes and shall in no way be construed as being contrary to the intent of the
parties that this transaction be treated as a sale of the Depositor's entire
right, title and interest in and to the Trust Estate. In connection with such
filing, the Depositor agrees that it shall cause to be filed all necessary
continuation statements thereof and to take or cause to be taken such actions
and execute such documents as are necessary to perfect and protect the
Trustee's, the Certificate Insurer's and the Owners' interest in the Trust
Estate.
(b) In connection with the transfer and assignment of the
Home Equity Loans, the Depositor agrees to:
(i) deliver without recourse to the Trustee on the Startup
Day with respect to each Home Equity Loan (A) the original Notes
endorsed in blank or to the order of the Trustee, (B) the original
title insurance policy or a copy certified by the issuer of the title
insurance policy, or the attorney's opinion of title, (C) originals
or certified copies of all intervening assignments, showing a
complete chain of title from origination to the Trustee, if any,
including warehousing assignments, with evidence of recording
thereon, (D) originals of all assumption and modification agreements,
if any and (E) either: (1) the original Mortgage, with evidence of
recording thereon (if such original Mortgage has been returned to the
related Seller from the applicable recording office or a certified
copy thereof if such original Mortgage has not been returned to the
related Seller from the applicable recording office), or (2) a copy
of the Mortgage certified by the public recording office in those
instances where the original recorded Mortgage has been lost;
(ii) cause, within 60 days following the Startup Day or 15
days following the receipt from the relevant state authorities,
assignments of the Mortgages to "Manufacturers and Traders Trust
Company, as Trustee of ContiMortgage Home Equity Loan Trust 1998-3
under the Pooling and Servicing Agreement dated as of September 1,
1998" to be submitted for recording in the appropriate jurisdictions;
provided, however, that the Depositor shall not be required to record
an assignment of a Mortgage if the Depositor furnishes to the Trustee
and the Certificate Insurer, on or before the Startup Day, at the
Depositor's expense an opinion of counsel with respect to the
relevant jurisdiction that such recording is not necessary to perfect
the Trustee's interest in the related Home Equity Loans (in form and
substance and from counsel satisfactory to the Rating Agencies and
the Certificate Insurer); notwithstanding the furnishing of such
opinion of counsel, however, the Certificate Insurer may, in its
reasonable discretion after consultation with the Depositor prior to
the date on which all assignments of Mortgages are required to be
filed hereunder, require the filing of assignments of Mortgages in
any state that is the subject of such opinions; and
(iii) deliver the title insurance policy or title searches,
the original Mortgages and such recorded assignments, together with
originals or duly certified copies of any and all prior assignments,
to the Trustee within 15 days of receipt thereof by the Depositor
(but in any event, with respect to any Mortgage as to which original
recording information has been made available to the Depositor,
within one year after the Startup Day).
-75-
<PAGE>
Notwithstanding the delivery of opinions specified in clause
(i) above the Trustee shall cause to be recorded each assignment of a Mortgage
upon the earliest to occur of (a) the reasonable direction of the Certificate
Insurer, (b) the removal of the Servicer pursuant to Section 8.20 hereof or
(c) notification to the Trustee of the occurrence of a bankruptcy or
insolvency relating to the Mortgagor.
Notwithstanding anything to the contrary contained in this
Section 3.05, in those instances where the public recording office retains the
original Mortgage, the assignment of a Mortgage or the intervening assignments
of the Mortgage after it has been recorded, the Depositor shall be deemed to
have satisfied its obligations hereunder upon delivery to the Trustee of a
copy of such Mortgage, such assignment or assignments of Mortgage certified by
the public recording office to be a true copy of the recorded original
thereof.
Not later than ten days following the end of the 60-day
period referred in clause (ii) of the second preceding paragraph, each Seller
shall deliver to the Trustee a list of all Mortgages with respect to Home
Equity Loans delivered by such Seller for which no Mortgage assignment has yet
been submitted for recording by such Seller, which list shall state the reason
why such Seller has not yet submitted such Mortgage assignments for recording.
With respect to any Mortgage assignment disclosed on such list as not yet
submitted for recording for a reason other than a lack of original recording
information, the Trustee shall make an immediate demand on such Seller to
prepare such Mortgage assignments, and shall inform the Certificate Insurer of
such Seller's failure to prepare such Mortgage assignments. Thereafter, the
Trustee shall cooperate in executing any documents prepared by the Certificate
Insurer and submitted to the Trustee in connection with this provision.
Following the expiration of the 60-day period referred to in clause (ii) of
the second preceding paragraph, each Seller shall promptly prepare a Mortgage
assignment for any Mortgage with respect to Home Equity Loans delivered by
such Seller for which original recording information is subsequently received
by such Seller, and shall promptly deliver a copy of such Mortgage assignment
to the Trustee. Each Seller agrees that it will follow its normal servicing
procedures and attempt to obtain the original recording information necessary
to complete a Mortgage assignment with respect to Home Equity Loans delivered
by such Seller. In the event that a Seller is unable to obtain such recording
information with respect to any Mortgage prior to the end of the 18th calendar
month following the Startup Day and has not provided to the Trustee a Mortgage
assignment with evidence of recording thereon relating to the assignment of
such Mortgage to the Trustee, the Trustee shall notify such Seller of such
Seller's obligation to provide a completed assignment (with evidence of
recording thereon) on or before the end of the 20th calendar month following
the Startup Day with respect to the Home Equity Loans. A copy of such notice
shall be sent by the Trustee to the Certificate Insurer. If no such completed
assignment (with evidence of recording thereon) is provided before the end of
such 20th calendar month, the related Home Equity Loan shall be deemed to have
breached the representation contained in clause (xxiii) of Section 3.04(b)
hereof; provided, however, that if as of the end of such 20th calendar month
either Seller then required to deliver such a completed assignment
demonstrates to the satisfaction of the Certificate Insurer that it is
exercising its best efforts to obtain such completed assignment and, during
each month thereafter until such completed assignment is delivered to the
Trustee, such Seller continues to demonstrate to the satisfaction of the
Certificate Insurer that it is exercising its best efforts to obtain such
completed assignment, the related Home Equity Loan will not be deemed to have
breached such
-76-
<PAGE>
representation. The requirement to deliver a completed assignment with evidence
of recording thereon will be deemed satisfied upon delivery of a copy of the
completed assignment certified by the applicable public recording office.
Copies of all Mortgage assignments received by the Trustee
shall be retained in the related File.
All recording required pursuant to this Section 3.05 with
respect to one or more Home Equity Loans shall be accomplished at the expense
of the Seller delivering such Home Equity Loan.
(c) In the case of Home Equity Loans which have been prepaid
in full after the Cut-Off Date and prior to the Startup Day, the Depositor, in
lieu of the foregoing, will deliver within six (6) days after the Startup Day
to the Trustee a certification of an Authorized Officer in the form set forth
in Exhibit D.
(d) Each Seller shall transfer, assign, set over and
otherwise convey, without recourse, to the Trustee all right, title and
interest of such Seller in and to any Qualified Replacement Mortgage delivered
to the Trustee on behalf of the Trust by such Seller pursuant to Section 3.03,
3.04 or 3.06 hereof and all its right, title and interest to principal and
interest due on such Qualified Replacement Mortgage after the applicable
Replacement Cut-Off Date; provided, however, that such Seller shall reserve
and retain all right, title and interest in and to payments of principal and
interest due on such Qualified Replacement Mortgage on or prior to the
applicable Replacement Cut-Off Date.
(e) As to each Home Equity Loan released from the Trust in
connection with the conveyance of a Qualified Replacement Mortgage therefor,
the Trustee will transfer, assign, set over and otherwise convey without
recourse or representation, on the order of the Seller delivering such Home
Equity Loan, all of its right, title and interest in and to such released Home
Equity Loan and all the Trust's right, title and interest to principal and
interest due on such released Home Equity Loan after the applicable
Replacement Cut-Off Date; provided, however, that the Trust shall reserve and
retain all right, title and interest in and to payments of principal and
interest due on such released Home Equity Loan on or prior to the applicable
Replacement Cut-Off Date.
(f) In connection with any transfer and assignment of a
Qualified Replacement Mortgage to the Trustee on behalf of the Trust, each
Seller agrees to (i) deliver without recourse to the Trustee on the date of
delivery of such Qualified Replacement Mortgage the original Note relating
thereto, endorsed in blank or to the order of the Trustee, (ii) cause promptly
to be recorded an assignment in the appropriate jurisdictions, (iii) deliver
the original Qualified Replacement Mortgage and such recorded assignment,
together with original or duly certified copies of any and all prior
assignments, to the Trustee within 15 days of receipt thereof by such Seller
(but in any event within 120 days after the date of conveyance of such
Qualified Replacement Mortgage) and (iv) deliver the title insurance policy,
or where no such policy is required to be provided under Section
3.05(b)(i)(B), the other evidence of title in the same manner required in
Section 3.05(b)(i)(B).
-77-
<PAGE>
(g) As to each Home Equity Loan released from the Trust in
connection with the conveyance of a Qualified Replacement Mortgage the Trustee
shall deliver on the date of conveyance of such Qualified Replacement Mortgage
and on the order of the Seller delivering such Qualified Replacement Mortgage
(i) the original Note relating thereto, endorsed without recourse or
representation, to such Seller, (ii) the original Mortgage so released and all
assignments relating thereto and (iii) such other documents as constituted the
File with respect thereto.
(h) If a Mortgage assignment is lost during the process of
recording, or is returned from the recorder's office unrecorded due to a
defect therein, the Seller that delivered the corresponding Home Equity Loan
shall prepare a substitute assignment or cure such defect, as the case may be,
and thereafter cause each such assignment to be duly recorded.
Section 3.06 Acceptance by Trustee; Certain Substitutions of Home
Equity Loans; Certification by Trustee.
(a) The Trustee agrees to execute and deliver on the Startup
Day an acknowledgment of receipt of the items delivered by each of the Sellers
and the Depositor in the form attached as Exhibit E hereto, and declares that
it will hold such documents and any amendments, replacement or supplements
thereto, as well as any other assets included in the definitions of Trust
Estate and delivered to the Trustee, as Trustee in trust upon and subject to
the conditions set forth herein for the benefit of the Owners. The Trustee
agrees, for the benefit of the Owners, to review such items within 45 days
after the Startup Day (or, with respect to any document delivered after the
Startup Day, within 45 days of receipt and with respect to any Qualified
Replacement Mortgage, within 45 days after the assignment thereof) and to
deliver to the Depositor, each of the Sellers, the Certificate Insurer and the
Servicer a certification in the form attached hereto as Exhibit F (a "Pool
Certification") to the effect that, as to each Home Equity Loan listed in the
Schedule of Home Equity Loans (other than any Home Equity Loan paid in full or
any Home Equity Loan specifically identified in such Pool Certification as not
covered by such Pool Certification), (i) all documents required to be
delivered to it pursuant to Section 3.05(b)(i) of this Agreement are in its
possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn and relate to such Home Equity Loan and (iii) based
on its examination and only as to the foregoing documents, the information set
forth on the Schedule of Home Equity Loans accurately reflects the information
set forth in the File. The Trustee shall have no responsibility for reviewing
any File except as expressly provided in this subsection 3.06(a). Without
limiting the effect of the preceding sentence, in reviewing any File, the
Trustee shall have no responsibility for determining whether any document is
valid and binding, whether the text of any assignment is in proper form
(except to determine if the Trustee is the assignee), whether any document has
been recorded in accordance with the requirements of any applicable
jurisdiction or whether a blanket assignment is permitted in any applicable
jurisdiction, but shall only be required to determine whether a document has
been executed, that it appears to be what it purports to be, and, where
applicable, that it purports to be recorded. The Trustee shall be under no
duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they are other
than what they purport to be on their face, nor shall the Trustee be under any
duty to determine independently
-78-
<PAGE>
whether there are any intervening assignments or assumption or modification
agreements with respect to any Home Equity Loan.
(b) If the Trustee during such 45-day period finds any
document constituting a part of a File which is not executed, has not been
received, or is unrelated to the Home Equity Loans identified in the Schedule
of Home Equity Loans, or that any Home Equity Loan does not conform to the
description thereof as set forth in the Schedule of Home Equity Loans, the
Trustee shall promptly so notify the Depositor, each of the Sellers, the
Certificate Insurer and the Owners. In performing any such review, the Trustee
may conclusively rely as to the purported genuineness of any such document and
any signature thereon. It is understood that the scope of the Trustee's review
of the items delivered by each of the Sellers pursuant to Section 3.05(b)(i)
is limited solely to confirming that the documents listed in Section
3.05(b)(i) have been executed and received, relate to the Files identified in
the Schedule of Home Equity Loans and conform to the description thereof in
the Schedule of Home Equity Loans. Each Seller agrees to use reasonable
efforts to remedy a material defect in a document constituting part of a File
delivered by such Seller of which it is so notified by the Trustee. If,
however, within 60 days after the Trustee's notice to it respecting such
defect the related Seller has not remedied the defect and the defect
materially and adversely affects the interest of the Owners or the Certificate
Insurer in the related Home Equity Loan such Seller will (or will cause an
affiliate of such Seller to) on the next succeeding Monthly Remittance Date
(i) if such Monthly Remittance Date is within two years following the Startup
Day, substitute in lieu of such Home Equity Loan a Qualified Replacement
Mortgage and deliver the Substitution Amount to the Servicer for deposit in
the Principal and Interest Account or (ii) purchase such Home Equity Loan at a
purchase price equal to the Loan Purchase Price thereof, which purchase price
shall be delivered to the Servicer for deposit in the Principal and Interest
Account. However, such substitution or purchase must occur within 90 days of
the Trustee's notice of the defect if the defect would prevent the Home Equity
Loan from being a Qualified Mortgage, and no substitution or purchase of a
Home Equity Loan that is not in default or for which no default is imminent
shall be made unless such Seller obtains for the Trustee and Certificate
Insurer a REMIC Opinion, addressed to and acceptable to the Trustee and
Certificate Insurer.
(c) In addition to the foregoing, the Trustee also agrees to
make a review during the 18th month after the Startup Day indicating the
current status of the exceptions previously indicated on the Pool
Certification (the "Final Certification"). After delivery of the Final
Certification, the Trustee and the Servicer shall monitor and upon request
from the Certificate Insurer provide no less frequently than monthly, updated
certifications indicating the then current status of exceptions, until all
such exceptions have been eliminated.
END OF ARTICLE III
-79-
<PAGE>
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.01 Issuance of Certificates.
On the Startup Day, upon the Trustee's receipt from the
Depositor of an executed Delivery Order in the form set forth as Exhibit G
hereto, the Trustee shall execute, authenticate and deliver the Certificates
on behalf of the Trust.
Section 4.02 Sale of Certificates.
At 11:00 a.m. New York City time on the Startup Day (the
"Closing"), at the offices of Dewey Ballantine LLP, 1301 Sixth Avenue, New
York, New York (or at such other location acceptable to the Seller), the
Sellers will sell and convey the Home Equity Loans and the money, instruments
and other property related thereto to the Depositor and the Depositor will
sell and convey the Home Equity Loans and the money, instruments and other
property related thereto to the Trustee, and the Trustee will deliver (i) to
the Underwriters the Class A Certificates and the Class B Certificates with an
aggregate Percentage Interest in each Class equal to 100%, registered in the
name of Cede & Co., or in such other names as the Underwriters shall direct,
against payment of the purchase price thereof by wire transfer of immediately
available funds to the Trust; (ii) to the Depositor, the Class C Certificates
with an aggregate Percentage Interest in such Class equal to 100%, registered
in the name of the ContiSecurities Holding Corporation or in such other name
as the Depositor shall direct; and (iii) to the respective registered Owners
thereof, a Class R-I, Class R-II and a Class R Certificate each with a
Percentage Interest equal to 99.999%, registered in the name of
ContiSecurities Holding Corporation and a Class R-I, Class R-II and a Class R
Certificate each with a Percentage Interest equal to 0.001%, registered in the
name of ContiFunding Corporation.
Upon the Trustee's receipt of the entire net proceeds of the
sale of the Certificates, the Trustee shall remit the entire balance of such
net proceeds to the Depositor in accordance with instructions delivered by the
Depositor.
END OF ARTICLE IV
-80-
<PAGE>
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01 Terms.
(a) The Certificates are pass-through securities having the
rights described therein and herein. Notwithstanding references herein or
therein with respect to the Certificates to "principal" and "interest" no debt
of any Person is represented thereby, nor are the Certificates or the
underlying Notes guaranteed by any Person (except that the Notes may be
recourse to the Mortgagors thereof to the extent permitted by law) and except
for the rights of the Trustee on behalf of the Owners of the Class A
Certificates with respect to the Certificate Insurance Policies. The
Certificates are payable solely from payments received on or with respect to
the Home Equity Loans (other than the Servicing Fees), moneys in the Principal
and Interest Account, earnings on moneys and the proceeds of property held as
a part of the Trust Estate. Each Certificate entitles the Owner thereof to
receive monthly on each Payment Date, in order of priority of distributions
with respect to such Class of Certificates as set forth in Section 7.03, a
specified portion of such payments with respect to the Home Equity Loans, pro
rata in accordance with such Owner's Percentage Interest.
(b) Each Owner is required, and hereby agrees, to return to
the Trustee any Certificate with respect to which the Trustee has made the
final distribution due thereon. Any such Certificate as to which the Trustee
has made the final distribution thereon shall be deemed canceled and shall no
longer be Outstanding for any purpose of this Agreement, whether or not such
Certificate is ever returned to the Trustee.
Section 5.02 Forms.
The Class A-1, the Class A-2, the Class A-3, the Class A-4,
the Class A-5, the Class A-6, the Class A-7, the Class A-8, the Class A-9, the
Class A-10, Class A-11, Class A-12, Class A-12 Internal, Class A-13, Class
A-13 Internal, Class A-14, Class A-14 Internal, Class A-15, Class A-15
Internal, Class A-16, Class A-16 Internal, Class A-17, Class A-18, Class A-19,
Class A-20, Class N-IO, Class P-IO, Class B-I, Class B-II Certificates, Class
C and the Class R-I, Class R-II and Class R Certificates shall be in
substantially the forms set forth in Exhibits A-1, A-2, A-3, A-4, A-5, A-6,
A-7, A-8, A-9, A-10, A-11, A-12, A-12-I, A-13, A-13-I, A-14, A-14-I, A-15,
A-15-I, A-16, A-16-I, A-17, A-18, A-19, A-20, N-IO, P-IO, B-I, B-II, C, R-I,
R-II and R-III hereof, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement or as may in the Depositor's judgment be necessary, appropriate
or convenient to comply, or facilitate compliance, with applicable laws, and
may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with the
rules of any applicable securities laws or as may, consistently herewith, be
determined by the Authorized Officer of the Depositor executing such
Certificates, as evidenced by his execution thereof.
-81-
<PAGE>
Section 5.03 Execution, Authentication and Delivery.
Each Certificate shall be executed and authenticated by the
manual or facsimile signature of one of the Trustee's Authorized Officers.
Upon proper authentication by the Trustee, the Certificates shall bind the
Trust.
The initial Certificates shall be dated as of the Startup
Day and delivered at the Closing to the parties specified in Section 4.02
hereof. Subsequently issued Certificates will be dated as of the issuance of
the Certificate.
No Certificate shall be valid until executed and
authenticated as set forth above.
Section 5.04 Registration and Transfer of Certificates.
(a) The Trustee shall cause to be kept a register (the
"Register") in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and
the registration of transfer of Certificates. The Trustee is hereby initially
appointed Registrar for the purpose of registering Certificates and transfers
of Certificates as herein provided. The Owners, the Certificate Insurer and
the Trustee shall have the right to inspect the Register during the Trustee's
normal hours and to obtain copies thereof, and the Trustee shall have the
right to rely upon a certificate executed on behalf of the Registrar by an
Authorized Officer thereof as to the names and addresses of the Owners of the
Certificates and the principal amounts and numbers of such Certificates.
If a Person other than the Trustee is appointed as Registrar
by the Owners of a majority of the aggregate Percentage Interests represented
by the Class A Certificates and the Class B Certificates then Outstanding with
the consent of the Certificate Insurer, or if there are no longer any Class A
Certificates or Class B Certificates then Outstanding, by such majority of the
Percentage Interests represented by the Class R-I Certificates, the Trustee
will give the Owners and the Certificate Insurer prompt written notice of the
appointment of such Registrar and of the location, and any change in the
location, of the Register. In connection with any such appointment the annual
fees of the bank then serving as Trustee and Registrar shall thenceforth be
reduced by the amount to be agreed upon by the Trustee and the Depositor at
such time and the reasonable fees of the Registrar shall be paid, as expenses
of the Trust, pursuant to Section 7.05 hereof.
(b) Subject to the provisions of Section 5.08 hereof, upon
surrender for registration of transfer of any Certificate at the office
designated as the location of the Register, upon the direction of the
Registrar the Trustee shall execute, authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of a
like Class and in the aggregate principal amount or percentage interest of the
Certificate so surrendered.
(c) At the option of any Owner, Certificates of any Class
owned by such Owner may be exchanged for other Certificates authorized of like
Class and tenor and a like aggregate original principal amount or percentage
interest and bearing numbers not contemporaneously outstanding, upon surrender
of the Certificates to be exchanged at the office
-82-
<PAGE>
designated as the location of the Register. Whenever any Certificate is so
surrendered for exchange, upon the direction of the Registrar, the Trustee shall
execute, authenticate and deliver the Certificate or Certificates which the
Owner making the exchange is entitled to receive.
(d) All Certificates issued upon any registration of
transfer or exchange of Certificates shall be valid evidence of the same
ownership interests in the Trust and entitled to the same benefits under this
Agreement as the Certificates surrendered upon such registration of transfer
or exchange.
(e) Every Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Registrar duly
executed by the Owner thereof or his attorney duly authorized in writing.
(f) No service charge shall be made to an Owner for any
registration of transfer or exchange of Certificates, but the Registrar or
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates; any other expenses in connection with
such transfer or exchange shall be an expense of the Trust.
(g) It is intended that the Offered Certificates be
registered so as to participate in a global book-entry system with the
Depository, as set forth herein. Each Class of Offered Certificates shall,
except as otherwise provided in Subsection (h), be initially issued in the
form of a single fully registered Certificate of such Class. Upon initial
issuance, the ownership of each such Certificate shall be registered in the
Register in the name of Cede & Co., or any successor thereto, as nominee for
the Depository.
On the Startup Day, the Offered Certificates (other than
Class A-18, Class N-IO and Class P-IO Certificates) shall be issued in
denominations of no less than $1,000 and integral multiples thereof. On the
Startup Day, the Class N-IO and Class P-IO Certificates shall be issued in
denominations of no less than $1,000 (based on the Class N-IO and Class P-IO
Notional Principal Amounts thereof) and integral multiples thereof; the
Auction Rate Certificates shall be issued in denominations of $25,000 and in
integral multiples thereof.
The Depositor and the Trustee are hereby authorized to
execute and deliver the Representation Letter with the Depository.
With respect to the Offered Certificates registered in the
Register in the name of Cede & Co., as nominee of the Depository, the
Depositor, the Servicer, the Sellers, the Certificate Insurer and the Trustee
shall have no responsibility or obligation to Direct or Indirect Participants
or beneficial owners for which the Depository holds Offered Certificates from
time to time as a Depository. Without limiting the immediately preceding
sentence, the Depositor, the Servicer, the Sellers, the Certificate Insurer
and the Trustee shall have no responsibility or obligation with respect to (i)
the accuracy of the records of the Depository, Cede & Co., or any Direct or
Indirect Participant with respect to the ownership interest in the Offered
Certificates, (ii) the delivery to any Direct or Indirect Participant or any
other Person, other than a registered
-83-
<PAGE>
Owner of an Offered Certificate as shown in the Register, of any notice with
respect to the Offered Certificates or (iii) the payment to any Direct or
Indirect Participant or any other Person, other than a registered Owner of a
Offered Certificate as shown in the Register, of any amount with respect to any
distribution of principal or interest on the Offered Certificates. No Person
other than a registered Owner of a Offered Certificate as shown in the Register
shall receive a certificate evidencing such Offered Certificate.
Upon delivery by the Depository to the Trustee of written
notice to the effect that the Depository has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions hereof with
respect to the payment of interest by the mailing of checks or drafts to the
registered Owners of Offered Certificates appearing as registered Owners in
the registration books maintained by the Trustee at the close of business on a
Record Date, the name "Cede & Co." in this Agreement shall refer to such new
nominee of the Depository.
(h) In the event that (i) the Depository or the Depositor
advises the Trustee in writing that the Depository is no longer willing or
able to discharge properly its responsibilities as nominee and depository with
respect to the Offered Certificates and the Depositor or the Trustee is unable
to locate a qualified successor or (ii) the Depositor at its sole option
elects to terminate the book-entry system through the Depository, the Offered
Certificates shall no longer be restricted to being registered in the Register
in the name of Cede & Co. (or a successor nominee) as nominee of the
Depository. At that time, the Depositor may determine that the Offered
Certificates shall be registered in the name of and deposited with a successor
depository operating a global book-entry system, as may be acceptable to the
Depositor and at the Depositor's expense, or such depository's agent or
designee but, if the Depositor does not select such alternative global
book-entry system, then the Offered Certificates may be registered in whatever
name or names registered Owners of Offered Certificates transferring the
Offered Certificates shall designate, in accordance with the provisions
hereof.
(i) Notwithstanding any other provision of this Agreement to
the contrary, so long as any of the Offered Certificates is registered in the
name of Cede & Co., as nominee of the Depository, all distributions of
principal or interest on such Offered Certificates and all notices with
respect to such Offered Certificates shall be made and given, respectively, in
the manner provided in the Representation Letter.
Section 5.05 Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) in the case of any
mutilated Certificate, such mutilated Certificate shall first be surrendered
to the Trustee, and in the case of any destroyed, lost or stolen Certificate,
there shall be first delivered to the Trustee such security or indemnity as
may be reasonably required by it to hold the Trustee and the Certificate
Insurer harmless, then, in the absence of notice to the Trustee or the
Registrar that such Certificate has been acquired by a bona fide purchaser,
and the Trustee shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and aggregate principal amount, bearing a
number not contemporaneously outstanding.
-84-
<PAGE>
Upon the issuance of any new Certificate under this Section,
the Registrar or Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto;
any other expenses in connection with such issuance shall be an expense of the
Trust.
Every new Certificate issued pursuant to this Section in
exchange for or in lieu of any mutilated, destroyed, lost or stolen
Certificate shall constitute evidence of a substitute interest in the Trust,
and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Certificates of the same Class duly
issued hereunder and such mutilated, destroyed, lost or stolen Certificate
shall not be valid for any purpose.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen
Certificates.
Section 5.06 Persons Deemed Owners.
The Trustee and the Certificate Insurer and any agent of the
Trustee may treat the Person in whose name any Certificate is registered as
the Owner of such Certificate for the purpose of receiving distributions with
respect to such Certificate and for all other purposes whatsoever and the
Trustee and the Certificate Insurer or any agent of the Trustee shall not be
affected by notice to the contrary.
Section 5.07 Cancellation.
All Certificates surrendered for registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. No Certificate
shall be authenticated in lieu of or in exchange for any Certificate canceled
as provided in this Section, except as expressly permitted by this Agreement.
All canceled Certificates may be held by the Trustee in accordance with its
standard retention policy.
Section 5.08 Limitation on Transfer of Ownership Rights.
(a) No sale or other transfer of record or beneficial
ownership of a Residual Certificate (whether pursuant to a purchase, a
transfer resulting from a default under a secured lending agreement or
otherwise) shall be made to a Disqualified Organization or an agent of a
Disqualified Organization. The transfer, sale or other disposition of a
Residual Certificate (whether pursuant to a purchase, a transfer resulting
from a default under a secured lending agreement or otherwise) to a
Disqualified Organization shall be deemed to be of no legal force or effect
whatsoever and such transferee shall not be deemed to be an Owner for any
purpose hereunder, including, but not limited to, the receipt of distributions
on such Residual Certificate. Furthermore, in no event shall the Trustee
accept surrender for transfer, registration of transfer, or register the
transfer, of any Residual Certificate nor authenticate and make available any
new Residual Certificate unless the Trustee has received an affidavit from the
proposed transferee in the form attached hereto as Exhibit I. Each holder of a
Residual Certificate by his acceptance
-85-
<PAGE>
thereof, shall be deemed for all purposes to have consented to the provisions of
this Section 5.08(a). The Class R-I, Class R-II and Class R Certificates are not
transferable except that the Owner of the Tax Matters Person Residual Interest
in the REMIC I, REMIC II or REMIC III may assign its interest to another Person
who accepts such assignment and the designation as Tax Matters Person pursuant
to Section 11.18 hereof.
(b) No other sale or other transfer of record or beneficial
ownership of a Class C, a Class R-I, Class R-II or Class R Certificate shall
be made unless such transfer is exempt from the registration requirements of
the Securities Act and any applicable state securities laws or is made in
accordance with said Act and laws. In the event such a transfer is to be made
within three years from the Startup day, (i) the Trustee or the Depositor
shall require a written opinion of counsel acceptable to and in form and
substance satisfactory to the Depositor and the Certificate Insurer in the
event that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from said Act and laws or is
being made pursuant to said Act and laws, which opinion of counsel shall not
be an expense of the Trustee, the Certificate Insurer or the Trust Estate, and
(ii) the Trustee shall require the Transferee to execute an investment letter
acceptable to and in form and substance satisfactory to each of the Sellers
certifying to the Trustee, the Certificate Insurer and each of the Sellers and
the Certificate Insurer the facts surrounding such transfer, which investment
letter shall not be an expense of the Trustee, the Trust Estate, the
Certificate Insurer or either of the Sellers. The Owner of a Class C, Class
R-I, Class R-II or Class R Certificate desiring to effect such transfer shall,
and does hereby agree to, indemnify the Trustee, the Depositor, the
Certificate Insurer and each of the Sellers against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
(c) The Internal Certificates, upon their registration or
the name of the Swap Trust, are not thereafter transferable.
(d) [RESERVED].
(e) No transfer of a Residual Certificate shall be made
unless the Trustee shall have received a representation letter from the
transferee of such Residual Certificate, acceptable to and in form and
substance satisfactory to the Trustee to the effect that such transferee is
not an employee benefit plan subject to Section 406 of ERISA nor a plan or
other arrangement subject to Section 406 of ERISA nor a plan or other
arrangement subject to Section 4975 of the Code (collectively, a "Plan"), nor
is acting on behalf of any Plan nor using the assets of any Plan to effect
such transfer. By its acceptance or acquisition of a Class B or Class C
Certificate, the transferee shall be deemed to have represented that it either
(i) is not a Plan and is not acquiring its interest in such Class B or Class C
Certificates with assets of a Plan or (ii) is an insurance company acquiring
its interest as permitted in accordance with Prohibited Transaction Exemption
95-60. Notwithstanding anything else to the contrary herein, any purported
transfer of a Certificate to or on behalf of any Plan without the delivery to
the Trustee a representation letter as described above shall be null and void
and of no effect.
(f) No sale or other transfer of any Offered Certificate may
be made to the Depositor, the Sellers or the Servicer. No sale or other
transfer of any Offered Certificate may be
-86-
<PAGE>
made to an affiliate of either Seller unless the Trustee and the Certificate
Insurer shall have been furnished with an opinion of counsel acceptable to the
Trustee and the Certificate Insurer experienced in federal bankruptcy matters to
the effect that such sale or transfer would not adversely affect the character
of the conveyance of the Home Equity Loans to the Trust as a sale. No sale or
other transfer of the Residual Certificate issued to ContiFunding Corporation on
the Startup Day may be transferred or sold to any Person, except to a person who
accepts the appointment of Tax Matters Person pursuant to Section 11.18 hereof.
Section 5.09 Assignment of Rights.
An Owner may pledge, encumber, hypothecate or assign all or
any part of its right to receive distributions hereunder, but such pledge,
encumbrance, hypothecation or assignment shall not constitute a transfer of an
ownership interest sufficient to render the transferee an Owner of the Trust
without compliance with the provisions of Section 5.04 and Section 5.08
hereof.
END OF ARTICLE V
-87-
<PAGE>
ARTICLE VI
COVENANTS
Section 6.01 Distributions.
On each Payment Date, the Trustee will withdraw amounts from
the related Account(s) and make the distributions with respect to the
Certificates in accordance with the terms of the Certificates and this
Agreement. Such distributions shall be made (i) by check or draft mailed on
each Payment Date or (ii) if requested by any Owner of (A) an Offered
Certificate (other than the Class N-IO and Class P-IO Certificates) having an
original principal balance of not less than $1,000,000, (B) a Class N-IO and
Class P-IO Certificate having an original Notional Amount of not less than
$1,000,000 or (C) Class R Certificate having a Percentage Interest of not less
than 10% in writing not later than one Business Day prior to the applicable
Record Date (which request does not have to be repeated unless it has been
withdrawn), to such Owner by wire transfer to an account within the United
States designated no later than five Business Days prior to the related Record
Date, made on each Payment Date, in each case to each Owner of record on the
immediately preceding Record Date.
Section 6.02 Money for Distributions to be Held in Trust;
Withholding.
(a) All payments of amounts due and payable with respect to
any Certificate that are to be made from amounts withdrawn from the
Certificate Account, shall be made by and on behalf of the Trustee, and no
amounts so withdrawn from the Certificate Account, for payments of
Certificates except as provided in this Section.
(b) Whenever the Depositor has appointed one or more Paying
Agents pursuant to Section 11.15 hereof, the Trustee will, on the Business Day
immediately preceding each Payment Date, deposit with such Paying Agents in
immediately available funds an aggregate sum sufficient to pay the amounts
then becoming due (to the extent funds are then available for such purpose in
the Certificate Account for the Class to which such amounts are due) such sum
to be held in trust for the benefit of the Owners entitled thereto.
(c) The Depositor may at any time direct any Paying Agent to
pay to the Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which the sums were
held by such Paying Agent; and upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
(d) The Depositor shall require each Paying Agent, including
the Trustee on behalf of the Trust to comply with all requirements of the Code
and applicable state and local law with respect to the withholding from any
distributions made by it to any Owner of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting requirements in
connection therewith.
-88-
<PAGE>
(e) Any money held by the Trustee or any Paying Agent in
trust for the payment of any amount due with respect to any Offered
Certificate and remaining unclaimed by the Owner of such Certificate for the
period then specified in the escheat laws of the State of New York after such
amount has become due and payable shall be discharged from such trust and be
paid to the Owners of the Class R-I Certificates; and the Owner of such
Offered Certificate shall thereafter, as an unsecured general creditor, look
only to the Owners of the Class R-I Certificates for payment thereof (but only
to the extent of the amounts so paid to the Owners of the Class R-I
Certificates) and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Trustee or such Paying Agent before being required to make any such payment,
may, at the expense of the Trust, cause to be published once, in the eastern
edition of The Wall Street Journal, notice that such money remains unclaimed
and that, after a date specified therein, which shall be not fewer than 30
days from the date of such publication, any unclaimed balance of such money
then remaining will be paid to the Owners of the Class R-I Certificates. The
Trustee shall, at the direction of the Depositor, also adopt and employ, at
the expense of the Trust, any other reasonable means of notification of such
payment (including but not limited to mailing notice of such payment to Owners
whose right to or interest in moneys due and payable but not claimed is
determinable from the records of the Registrar, the Trustee or any Paying
Agent, at the last address of record for each such Owner).
Section 6.03 Protection of Trust Estate.
(a) The Trustee will hold the Trust Estate in trust for the
benefit of the Owners and the Certificate Insurer and, upon request of the
Certificate Insurer or, with the consent of the Certificate Insurer at the
request of the Depositor, will from time to time execute and deliver all such
supplements and amendments hereto pursuant to Section 11.14 hereof and all
instruments of further assurance and other instruments, and will take such
other action upon such request from the Depositor or the Certificate Insurer,
to:
(i) more effectively hold in trust all or any portion of
the Trust Estate;
(ii) perfect, publish notice of, or protect the validity of
any grant made or to be made by this Agreement;
(iii) enforce any of the Home Equity Loans; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Trustee, and the ownership interests of the Owners
represented thereby, in such Trust Estate against the claims of all
Persons and parties.
The Trustee shall send copies of any request received from
the Depositor or the Certificate Insurer to take any action pursuant to this
Section 6.03 to the other parties hereto.
(b) The Trustee shall have the power to enforce, and shall
enforce the obligations and rights of the other parties to this Agreement and
the obligations of the Certificate Insurer under each Certificate Insurance
Policy; in addition, the Certificate Insurer or the Owners,
-89-
<PAGE>
by action, suit or proceeding at law or equity and shall also have the power to
enjoin, by action or suit in equity, and acts or occurrences which may be
unlawful or in violation of the rights of the Certificate Insurer and/or the
Owners as such rights are set forth in this Agreement; provided, however, that
nothing in this Section shall require any action by the Trustee unless the
Trustee shall first (i) have been furnished indemnity satisfactory to it and
(ii) when required by this Agreement, have been requested by the Certificate
Insurer or Owners of a majority of the Percentage Interests represented by the
Offered Certificates then Outstanding with the consent of the Certificate
Insurer or, if there are no longer any Offered Certificates then outstanding, by
such majority of the Percentage Interests represented by the Class R
Certificates; provided, further, however, that if there is a dispute with
respect to payments under a Certificate Insurance Policy, the Trustee's sole
responsibility is to the Owners.
(c) The Trustee shall execute any instrument required
pursuant to this Section so long as such instrument does not conflict with
this Agreement or with the Trustee's fiduciary duties, or adversely affect its
rights and immunities hereunder.
Section 6.04 Performance of Obligations.
The Trustee will not take any action that would release any
Person from any of such Person's covenants or obligations under any instrument
or document relating to the Certificates or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or document,
except as expressly provided in this Agreement or such other instrument or
document.
The Trustee may contract with other Persons to assist it in
performing its duties hereunder pursuant to Section 10.03(g).
Section 6.05 Negative Covenants.
The Trustee will not permit the Trust to:
(i) sell, transfer, exchange or otherwise dispose of any
of the Trust Estate except as expressly permitted by this Agreement;
(ii) claim any credit on or make any deduction from the
distributions payable in respect of, the Certificates (other than
amounts properly withheld from such payments under the Code) or
assert any claim against any present or former Owner by reason of the
payment of any taxes levied or assessed upon any of the Trust Estate;
(iii) incur, assume or guaranty any indebtedness of any
Person except pursuant to this Agreement;
(iv) dissolve or liquidate in whole or in part, except
pursuant to Article IX hereof; or
(v) (A) permit the validity or effectiveness of this
Agreement to be impaired, or permit any Person to be released from
any covenants or obligations with
-90-
<PAGE>
respect to the Trust or to the Certificates under this Agreement,
except as may be expressly permitted hereby or (B) permit any lien,
charge, adverse claim, security interest, mortgage or other
encumbrance to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein
or the proceeds thereof.
Section 6.06 No Other Powers.
The Trustee will not permit the Trust to engage in any
business activity or transaction other than those activities permitted by
Section 2.03 hereof.
Section 6.07 Limitation of Suits.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Agreement, the Insurance
Agreement, the Indemnification Agreement or the Certificate Insurance Policies
or for the appointment of a receiver or trustee of the Trust, or for any other
remedy with respect to an event of default hereunder, unless:
(1) such Owner has previously given written notice to the
Depositor, the Certificate Insurer and the Trustee of such
Owner's intention to institute such proceeding;
(2) the Owners of not less than 25% of the Percentage Interests
represented by the Class A Certificates and Class B
Certificates then Outstanding or, if there are no Class A or
Class B Certificates then Outstanding, by such percentage of
the Percentage Interests represented by the Class R
Certificates, shall have made written request to the Trustee
to institute such proceeding in its own name as Trustee
establishing the Trust;
(3) such Owner or Owners have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such
proceeding;
(5) as long as any Class A Certificates are Outstanding or any
Reimbursement Amount remains unpaid, the Certificate Insurer
consented in writing thereto (unless the Certificate Insurer
is the party against whom the proceeding is directed); and
(6) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Owners
of a majority of the Percentage Interests represented by the
Class A and Class B Certificates or, if there are no Class A
or Class B Certificates then Outstanding, by such majority
of the Percentage Interests represented by the Class R
Certificates;
it being understood and intended that no one or more Owners shall have any
right in any manner whatever by virtue of, or by availing themselves of, any
provision of this Agreement to affect, disturb or prejudice the rights of any
other Owner of the same Class or to obtain or to seek to
-91-
<PAGE>
obtain priority or preference over any other Owner of the same Class or to
enforce any right under this Agreement, except in the manner herein provided and
for the equal and ratable benefit of all the Owners of the same Class.
In the event the Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Owners, each
representing less than a majority of the applicable Class of Certificates and
each conforming to paragraphs (1)-(5) of this Section 6.07, the Certificate
Insurer in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provision of this Agreement (unless the
Certificate Insurer is the party against whom the proceeding is directed).
Section 6.08 Unconditional Rights of Owners to Receive
Distributions.
Notwithstanding any other provision in this Agreement, the
Owner of any Certificate shall have the right, which is absolute and
unconditional, to receive distributions to the extent provided herein and
therein with respect to such Certificate or to institute suit for the
enforcement of any such distribution, and such right shall not be impaired
without the consent of such Owner.
Section 6.09 Rights and Remedies Cumulative.
Except as otherwise provided herein, no right or remedy
herein conferred upon or reserved to the Trustee, the Certificate Insurer or
the Owners is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. Except as otherwise provided
herein, the assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
Section 6.10 Delay or Omission Not Waiver.
No delay of the Trustee, the Certificate Insurer or any
Owner of any Certificate to exercise any right or remedy under this Agreement
with respect to any event described in Section 8.20(a) or (b) shall impair any
such right or remedy or constitute a waiver of any such event or an
acquiescence therein. Every right and remedy given by this Article VI or by
law to the Trustee, the Certificate Insurer or the Owners may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee,
the Certificate Insurer or the Owners, as the case may be.
Section 6.11 Control by Owners.
The Certificate Insurer or the Owners of a majority of the
Percentage Interests represented by the Offered Certificates then Outstanding
with the consent of the Certificate Insurer or, if there are no longer any
Class A or Class B Certificates then Outstanding, by such majority of the
Percentage Interests represented by the Class R Certificates then Outstanding
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee with respect to the Certificates or exercising
any trust or power conferred on the Trustee
-92-
<PAGE>
with respect to the Certificates or the Trust Estate, including, but not limited
to, those powers set forth in Section 6.03 and Section 8.20 hereof, provided
that:
(1) such direction shall not be in conflict with any rule of law
or with this Agreement;
(2) the Trustee shall have been provided with indemnity
satisfactory to it; and
(3) the Trustee may take any other action deemed proper by the
Trustee, as the case may be, which is not inconsistent with
such direction; provided, however, that neither of the
Sellers nor the Trustee, as the case may be, need take any
action which it determines might involve it in liability or
may be unjustly prejudicial to the Owners not so directing.
Section 6.12 Indemnification.
The Depositor agrees to indemnify and hold the Trustee, the
Certificate Insurer and each Owner harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Certificate Insurer and any Owner may sustain in any way related to the
failure of the Depositor to perform its duties in compliance with the terms of
this Agreement. The Depositor shall immediately notify the Trustee, the
Certificate Insurer and each Owner if such a claim is made by a third party
with respect to this Agreement, and the Depositor shall assume (with the
consent of the Trustee) the defense of any such claim and pay all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Servicer, either of the Sellers, the Trustee, the Certificate Insurer and/or
any Owner in respect of such claim. The Trustee may, if necessary, reimburse
the Depositor from amounts otherwise distributable on the Class R Certificates
for all amounts advanced by it pursuant to the preceding sentence, except when
the claim relates directly to the failure of the Depositor to perform its
duties in compliance with the terms of this Agreement. In addition to the
foregoing, ContiMortgage agrees to indemnify and hold the Trustee, the
Certificate Insurer and each Owner harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and other costs, fees and expenses that the Trustee, the
Certificate Insurer and any Owner may sustain in any way related to the breach
by ContiMortgage of its representations and warranties set forth in Section
3.04(b)(xiii) or (xv) hereof with respect to a Home Equity Loan if such Home
Equity Loan qualifies as a "high cost mortgage" pursuant to Section 226.32 of
the Truth-in-Lending Act, as amended. The provisions of this Section 6.12
shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
Section 6.13 Access to Names and Addresses of Owners of
Certificates.
(a) If any Owner (for purposes of this Section 6.13, an
"Applicant") applies in writing to the Trustee, and such application states
that the Applicant desires to communicate with other Owners with respect to
their rights under this Agreement or under the Certificates and is accompanied
by a copy of the communication which such Applicant proposes to transmit, then
the Trustee shall, at the expense of such Applicant, within ten (10) Business
Days after the
-93-
<PAGE>
receipt of such application, furnish or cause to be furnished to such Applicant
a list of the names and addresses of the Owners of record as of the most recent
Payment Date.
(b) Every Owner, by receiving and holding such list, agrees
with the Trustee that the Trustee shall not be held accountable in any way by
reason of the disclosure of any information as to the names and addresses of
the Owners hereunder, regardless of the source from which such information was
derived.
END OF ARTICLE VI
-94-
<PAGE>
ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 7.01 Collection of Money.
Except as otherwise expressly provided herein, the Trustee
shall demand payment or delivery of all money and other property payable to or
receivable by the Trustee pursuant to this Agreement or the Certificate
Insurance Policy, including all payments due on the Home Equity Loans in
accordance with the respective terms and conditions of such Home Equity Loans
and required to be paid over to the Trustee by the Servicer or by any
Sub-Servicer. The Trustee shall hold all such money and property received by
it, other than pursuant to or as contemplated by Section 6.02(e) hereof, as
part of the Trust Estate and shall apply it as provided in this Agreement.
Section 7.02 Establishment of Accounts.
The Depositor shall cause to be established on the Startup
Day, and the Trustee shall maintain, at the Corporate Trust Office the
Certificate Account, the Auction Remainder Account and the Swap Account, each
of which is to be held by the Trustee on behalf of the Owners of the
Certificates, the Certificate Insurer and the Trustee.
Section 7.03 Flow of Funds.
(a) (i) The Trustee shall deposit to the Certificate
Account, without duplication, upon receipt, any Insured Payments, the proceeds
of any liquidation of the assets of the Trust, all remittances made to the
Trustee pursuant to Section 8.08(d)(ii) and the Monthly Remittance Amount
remitted by the Servicer with respect to each Loan Group.
(ii) For purposes of this Section 7.03:
(x) all allocations referenced in this
Section 7.03 with respect to the Class
A-12, Class A-13, Class A-14, Class A-15
and Class A-16 Certificates shall be
allocations made with respect to the
Class A-12 Internal Certificate, the
Class A-13 Internal Certificate, the
Class A-14 Internal Certificate, the
Class A-15 Internal Certificate and the
Class A-16 Internal Certificate,
respectively.
(y) the Current Interest and Interest
Carry-Forward Amounts allocated with
respect to the Class A-12, Class A-13,
Class A-14, Class A-15, and Class A-16
Certificates pursuant to clause (b)(ii)
hereof shall be calculated using the
Class A-12 Internal Pass-Through Rate,
the Class A-13 Internal Pass-Through
Rate, the Class A-14 Internal
Pass-Through Rate, the Class A-15
Internal
-95-
<PAGE>
Pass-Through Rate and the Class A-16
Internal Pass-Through Rate, respectively;
and
(z) all allocations made with respect to the
Internal Certificates shall be paid to
the Swap Trust as the Owner of the
Internal Certificates. The Trustee on
behalf of the Swap Trust shall
distribute such amounts, together with
amounts received under the Swap
Agreement and the Certificate Insurance
Policy with respect to the Group II
Class A Certificates pursuant to Section
7.12 hereof.
(b) On each Payment Date, the Monthly Remittance Amount for
a Loan Group which is then on deposit in the Certificate Account (such amount,
the "Available Funds" with respect to a Loan Group) will be applied in the
following order of priority:
(i) First, for the payment of certain fees, concurrently, to
the Trustee, the Trustee Fee and to the Certificate Insurer, the
Premium Amount, and in the case of Loan Group II, to the Auction
Agent, the Auction Agent Fee, and to the Broker-Dealer, the
Broker-Dealer Fee, in each case with respect to such Loan Group;
(ii) Second, for the payment of that Loan Group's Class A
Certificate interest, to the extent of the Available Funds then
remaining in the Certificate Account with respect to such Loan Group,
plus the interest component of any related Insured Payment, (such
amount, the "Interest Amount Available" for such Loan Group), to the
Owners of the Class A Certificates related to such Loan Group, the
related Current Interest plus the Interest Carry Forward Amount with
respect to each such Class of related Class A Certificates without
any priority among such Class A Certificates; provided, that if the
Interest Amount Available is not sufficient to make a full
distribution of interest with respect to all Classes of the related
Class A Certificates, then such amount will be distributed among the
outstanding Classes of related Class A Certificates pro rata based on
the aggregate amount of interest due on each such Class, and any
shortfall will be carried forward with accrued interest;
(iii) Third, for the payment of that Loan Group's Class B
Certificate interest, to the extent of the Available Funds then
remaining in the Certificate Account with respect to such Loan Group,
to the Owners of the Class B Certificates relating to such Loan Group
an amount equal to the Current Interest for such Class B Certificates
related to such Loan Group;
(iv) Fourth, for the payment of that Loan Group's
Reimbursement Amount, if any, then due to the Certificate Insurer, to
the extent of the Available Funds then remaining in the Certificate
Account the lesser of (x) the Reimbursement Amount related to such
Loan Group then owed to the Certificate Insurer and (y) the Maximum
Insurer Current Reimbursement Amount with respect to such Loan Group
and Payment Date;
-96-
<PAGE>
(v) Fifth, for the payment of that Loan Group's Class A
Certificate principal, to the extent of the Available Funds then
remaining in the Certificate Account with respect to such Loan Group,
to the Owners of the Class A Certificates with respect to such Loan
Group, an amount necessary to reduce the Class A Certificate
Principal Balance of such related Class A Certificates to the Class A
Optimal Balance for such Payment Date;
(vi) Sixth, for the payment of that Loan Group's Class B
Certificate principal, to the extent of the Available Funds then
remaining in the Certificate Account with respect to such Loan Group
to the Owners of the Class B Certificates related to such Loan Group,
an amount necessary to reduce the Class B Certificate Principal
Balance of the related Class B Certificates to the Class B Optimal
Balance for such Payment Date;
(vii) Seventh, to fund the Interest Carry Forward Amount, if
any, with respect to that Loan Group's Class B Certificates, to the
extent of the Available Funds then remaining in the Certificate
Account with respect to such Loan Group, to the Owners of the Class B
Certificates relating to such Loan Group an amount equal to the
Interest Carry Forward Amount for such Class B Certificates;
(viii) Eighth, to fund the Class B Realized Loss
Amortization Amount, if any, for that Loan Group's Class B
Certificates for such Payment Date; to the extent of the Available
Funds then remaining in the Certificate Account with respect to such
Loan Group, to the Owners of the Class B Certificates relating to
such Loan Group an amount equal to the Class B Realized Loss
Amortization Amount for such Class B Certificates;
(ix) Ninth, the remaining amount, if any, on deposit in the
Certificate Account with respect to both Loan Groups is the "Monthly
Excess Cashflow Amount", which shall be applied in the following
order of priority:
(a) to items "First" through "Eighth" above, in that
order, with respect to the other Loan Group;
(b) to the Servicer to the extent of any
unreimbursed Delinquency Advances or Servicing Advances and
any other costs and expenses incurred by the Issuer,
including amounts owed to the Auction Agent other than the
Auction Agent Fee;
(c) to fund a distribution to Owners of the Class C
Certificates; and
(d) to fund a distribution to Owners of the Class R
Certificates.
(c) The Class A Principal Distribution Amount for Loan Group
I shall be distributed on each Payment Date in the following order of
priority:
(i) first, to the Class A-8 Certificates, in an amount equal
to the lesser of (a) the Class A-8 Principal Distribution Amount for
such Payment Date and (b) the Class A Principal Distribution Amount
for Loan Group I on such Payment Date;
-97-
<PAGE>
(ii) second, to the Class A-1 Certificates, 100% of the
remaining Class A Principal Distribution Amount for Loan Group I,
until the Certificate Principal Balance thereof has been reduced to
zero;
(iii) third, to the Class A-2 Certificates through Class A-7
Certificates, sequentially in the order of their numerical Class
designations (beginning with the Class A-2 Certificates) in an amount
necessary to reduce the respective Certificate Principal Balances
thereof to zero;
(iv) fourth, to the Class A-8 Certificates, without regard
to the Class A-8 Principal Distribution Amount, any remaining amount
of the Class A Principal Distribution Amount for Loan Group I on such
Payment Date, until the Class A-8 Certificate Principal Balance has
been reduced to zero.
(d) The Class A Principal Distribution Amount for Loan Group
II shall be distributed on each Payment Date, pari passu, to (i) the Group IIa
Class A Certificates, in an amount equal to the Group IIa Principal
Distribution Amount and (ii) the Group IIb Class A Certificates, in an amount
equal to the Loan Group IIb Principal Distribution Amount.
(e) The Group IIa Principal Distribution Amount shall be
distributed on each Payment Date in the following order of priority:
(i) first, to the Class A-10 Certificates, in an amount
equal to the lesser of (a) the Class A-10 Principal Distribution
Amount for such Payment Date and (b) the Group IIa Principal
Distribution Amount on such Payment Date;
(ii) second, to the Class A-9 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(iii) third, to the Class A-10 Certificates, without regard
to the Class A-10 Principal Distribution Amount, any remaining amount
of the Group IIa Principal Distribution Amount for such Payment Date,
until the Class A-10 Certificate Principal Balance has been reduced
to zero.
(f) The Group IIb Principal Distribution Amount is required
to be distributed on each Payment Date in the following order of priority:
(i) first, to the Class A-19 and the Class A-20
Certificates, in that order, in the amounts necessary to reduce their
respective Certificate Principal Balances to their Maximum Principal
Balances for such Payment Date;
(ii) second, to the Class A-11 Certificates, 100% of the
remaining Group IIb Principal Distribution Amount, until the
Certificate Principal Balance thereof has been reduced to zero;
-98-
<PAGE>
(iii) third, to the Class A-12 through the Class A-17
Certificates, sequentially, in the amounts necessary to reduce their
respective Certificate Principal Balances to their Planned Principal
Balances for such Payment Date;
(iv) fourth, to the Class A-18 Certificates, any remaining
amount of the Group IIb Principal Distribution Amount, until the
Certificate Principal Balance thereof has been reduced to zero;
(v) fifth, to the Class A-12 through the Class A-17
Certificates, sequentially, and without regard to their Planned
Principal Balances, any remaining amount of the Group IIb Principal
Distribution Amount, until the Certificate Principal Balances thereof
have been reduced to zero; and
(vi) sixth, to the Class A-19 and the Class A-20
Certificates, in that order, any remaining amount of the Group IIb
Principal Distribution Amount, until the Certificate Principal
Balances thereof have been reduced to zero.
(g) Notwithstanding the foregoing, on any Payment Date on
which the Class B Certificate Principal Balance and the Overcollateralization
Amount with respect to a Loan Group is zero and a Certificate Insurer Default
has occurred and is continuing, any amounts of principal payable to the Owners
of the Class A Certificates relating to such Loan Group on such Payment Date
shall be distributed pro rata without regard to Planned Principal Balances,
maximum maturity provisions, sequential pay provisions, any "set" designation
or other order of priority.
(h) [Reserved]
(i) On each Payment Date, if the Class B Certificate
Principal Balance with respect to the Class B Certificates issued with respect
to a Loan Group has not been reduced to zero, the Trustee shall allocate the
excess of the Aggregate Group Certificate Principal Balance with respect to
such Loan Group over the Group Loan Balance with respect to such Loan Group to
reduce such Class B Certificate Principal Balance, but not below zero.
(j) [Reserved];
(k) Notwithstanding anything above, the aggregate amounts
distributed on all Payment Dates to the Owners of the Certificates on account
of principal shall not exceed the original Certificate Principal Balance of
the related Certificates.
(l) On any Payment Date during the continuance of any
Certificate Insurer Default any amounts otherwise payable to the Certificate
Insurer as Premium Amounts shall be retained in the Certificate Account.
(m) Upon receipt of Insured Payments from the Certificate
Insurer on behalf of the Owners of the Class A Certificates, the Trustee shall
deposit such Insured Payments in the Certificate Account and shall distribute
such Insured Payments, or the proceeds thereof as provided in paragraph (b)
above.
-99-
<PAGE>
(n) Anything herein to the contrary notwithstanding, any
payment with respect to principal of or interest on any of the Class A
Certificates which is made with monies received pursuant to the terms of the
related Certificate Insurance Policy shall not be considered payment of such
Certificates from the Trust or the Swap Trust, as applicable and shall not
result in the payment of or the provision for the payment of the principal of
or interest on such Certificates within the meaning of Section 7.03. The
Depositor, the Servicer and the Trustee acknowledge, and each Owner by its
acceptance of a Certificate agrees, that without the need for any further
action on the part of the Certificate Insurer, the Depositor, the Servicer,
the Trustee or the Registrar (a) to the extent the Certificate Insurer makes
payments, directly or indirectly, on account of principal of or interest on
any Class A Certificates to the Owners of such Certificates, the Certificate
Insurer will be fully subrogated to the rights of such Owners to receive such
principal and interest together with any interest thereon of the applicable
Pass-Through Rate for such Class from the Trust and (b) the Certificate
Insurer shall be paid such principal and interest only from the sources and in
the manner provided herein for the payment of such principal and interest.
It is understood and agreed that the intention of the
parties is that the Certificate Insurer shall not be entitled to reimbursement
on any Payment Date for amounts previously paid by it unless on such Payment
Date the Owners of the Class A Certificates shall also have received the full
amount of the related Class A Distribution Amounts for such Payment Date.
The Trustee or Paying Agent shall (i) receive as
attorney-in-fact of each Owner of Class A Certificates any Insured Payment
from the Certificate Insurer and (ii) disburse the same to the Owners of the
related Class A Certificates as set forth in this Section 7.03. Insured
Payments disbursed by the Trustee or Paying Agent from proceeds of a
Certificate Insurance Policy shall not be considered payment by the Trust, nor
shall such payments discharge the obligation of the Trust with respect to such
Class A Certificates and the Certificate Insurer shall be entitled to receive
the related Reimbursement Amount pursuant to Section 7.03(b)(v) hereof.
The rights of the Owners to receive distributions from the
proceeds of the Trust Estate and all ownership interests of the Owners in such
distributions, shall be as set forth in this Agreement. In this regard, all
rights of the Owners of the Residual Certificates to receive distributions in
respect of Residual Certificates, and all ownership interests of the Owners of
the Residual Certificates in and to such distributions, shall be subject and
subordinate to the preferential rights of the holders of the Offered
Certificates to receive distributions thereon and the ownership interests of
such Owners in such distributions, as described herein. In accordance with the
foregoing, the ownership interests of the Owners of the Residual Certificates
in amounts deposited in the Accounts from time to time shall not vest unless
and until such amounts are distributed in respect of the Residual Certificates
in accordance with the terms of this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, the Owners of the Residual
Certificates shall not be required to refund any amount properly distributed
on the Residual Certificates pursuant to this Section 7.03.
-100-
<PAGE>
Section 7.04 Auction Rate Certificates.
Principal payments will be made to the Auction Rate
Certificates only in amounts equal to $25,000 and integral multiples in excess
thereof. If the amount in the Certificate Account otherwise required to be
applied as a payment of principal on the Auction Rate Certificates either (i)
is less than $25,000 or (ii) exceeds an integral multiple of $25,000, then, in
the case of (i), such entire amount or, in the case of (ii) , such excess
amount, will not be paid as principal on the upcoming Payment Date, but will
be retained in the Auction Remainder Account as Amount Held for Future
Distribution until the amount therein available for payment of principal on
the Auction Rate Certificates equals $25,000 or any integral multiple thereof.
In no event, however, shall amounts remain in the Auction Remainder Account as
Amounts Held for future Distribution more than 13 months after the related
payments are deposited into the Trust. The amount being distributed to the
Auction Rate Certificates as principal will be allocated to the specific
Certificates of such Class selected no later than 5 Business Days prior to the
related Payment Date by lot or such other manner as may be determined, which
allocations will be made only in amounts equal to $25,000 and integral
multiples of $25,000 in excess thereof.
Section 7.05 Investment of Accounts.
(a) Consistent with any requirements of the Code, all or a
portion of any Account held by the Trustee for the benefit of the Owners and
the Certificate Insurer shall be invested and reinvested by the Trustee in the
name of the Trustee for the benefit of the Owners and the Certificate Insurer,
as directed in writing by the Depositor, in one or more Eligible Investments
bearing interest or sold at a discount (provided, that the proceeds of the
Certificate Insurance Policy shall not be so invested). The bank serving as
Trustee or any affiliate thereof may be the obligor on any investment which
otherwise qualifies as an Eligible Investment. No investment in any Account
shall mature later than the Business Day immediately preceding the next
Payment Date.
(b) If any amounts are needed for disbursement from any
Account held by the Trustee and sufficient uninvested funds are not available
to make such disbursement, the Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such Account. No
investments will be liquidated prior to maturity unless the proceeds thereof
are needed for disbursement.
(c) Subject to Section 10.01 hereof, the Trustee shall not
in any way be held liable by reason of any insufficiency in any Account held
by the Trustee resulting from any loss on any Eligible Investment included
therein (except to the extent that the bank serving as Trustee is the obligor
thereon).
(d) The Trustee shall invest and reinvest funds in the
Accounts held by the Trustee, in accordance with the written instructions
delivered to the Trustee on the Startup Day, but only in one or more Eligible
Investments bearing interest or sold at a discount.
-101-
<PAGE>
If the Depositor shall have failed to give investment
directions to the Trustee then the Trustee shall invest in money market funds
described in Section 7.07(h); to be redeemable without penalty no later than
the Business Day immediately preceding the next Payment Date.
(e) All income or other gain from investments in any Account
held by the Trustee shall be for the account of the Owners of the Class R-I
Certificates and distributed to the Owners of the Class R-I Certificates
immediately prior to any distribution under Section 7.03 hereof on any Payment
Date, and any loss resulting from such investments shall be for the account of
the Servicer and promptly upon the realization of such loss the Servicer shall
contribute funds in an amount equal to such loss to such Account.
Section 7.06 Payment of Trust Expenses.
(a) The Trustee shall make demand on ContiMortgage to pay
the amount of the expenses of the Trust (other than payments of premiums to
the Certificate Insurer) (including Trustee's fees and expenses not covered by
Section 7.03(b)(i)) and ContiMortgage shall promptly pay such expenses
directly to the Persons to whom such amounts are due.
(b) The Depositor shall pay directly the reasonable fees and
expenses of counsel to the Trustee.
Section 7.07 Eligible Investments.
The following are Eligible Investments:
(a) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and interest
by, the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United States;
(b) Federal Housing Administration debentures; FHLMC senior
debt obligations, and FannieMae senior debt obligations, but excluding any of
such securities whose terms do not provide for payment of a fixed dollar
amount upon maturity or call for redemption; and consolidated senior debt
obligations of any Federal Home Loan Banks; provided, that any such investment
shall be rated (or have an implied rating) in one of the two highest ratings
categories by each Rating Agency;
(c) Federal funds, certificates of deposit, time deposits,
and bankers' acceptances (having original maturities of not more than 365
days) of any domestic bank, the short-term debt obligations of which have been
rated as follows by at least Moody's and Standard & Poor's: A-1 or better by
Standard & Poor's and P-1 by Moody's and F-1 or better, if rated by Fitch;
(d) Deposits of any bank or savings and loan association
(the long-term deposit rating of which is rated as follows by at least Moody's
and Standard & Poor's: Baa3 or better by Moody's and A by each of Standard &
Poor's and by Fitch, if rated by Fitch), which has
-102-
<PAGE>
combined capital, surplus and undivided profits of at least $50,000,000 which
deposits are insured by the FDIC and held up to the limits insured by the FDIC;
(e) Investment agreements approved by the Certificate
Insurer, provided:
(i) The agreement is with a bank or insurance company which
has unsecured, uninsured and unguaranteed senior debt obligations
rated as follows by at least Moody's and Standard & Poor's: Aa2 or
better by Moody's and AA or better by Standard & Poor's and by Fitch,
if rated by Fitch, and
(ii) Moneys invested thereunder may be withdrawn without any
penalty, premium or charge upon not more than one day's notice
(provided such notice may be amended or canceled at any time prior to
the withdrawal date), and
(iii) The agreement is not subordinated to any other
obligations of such insurance company or bank, and
(iv) The same guaranteed interest rate will be paid on any
future deposits made pursuant to such agreement, and
(v) The Trustee receives an opinion of counsel that such
agreement is an enforceable obligation of such insurance company or
bank;
(f) Repurchase agreements collateralized by securities
described in (a) above with any registered broker/dealer subject to the
Securities Investors Protection Corporation's jurisdiction and subject to
applicable limits therein promulgated by Securities Investors Protection
Corporation or any commercial bank, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed short-term or long-term obligation
rated, as follows by at least Moody's and Standard & Poor's: P-1 or Aa2,
respectively, or better by Moody's, A-1 or AA, respectively or better by
Standard & Poor's and F-1 or AA, respectively, or better by Fitch, if rated by
Fitch, provided:
(i) A master repurchase agreement or specific written
repurchase agreement governs the transaction, and
(ii) The securities are held free and clear of any lien
by the Trustee or an independent third party acting
solely as agent for the Trustee, and such third
party is (a) a Federal Reserve Bank or (b) a bank
which is a member of the FDIC and which has
combined capital, surplus and undivided profits of
not less than $125 million, or (c) a bank approved
in writing for such purpose by the Certificate
Insurer and the Trustee shall have received written
confirmation from such third party that it holds
such securities, free and clear of any lien, as
agent for the Trustee, and
(iii) A perfected first security interest under the
Uniform Commercial Code, or book entry procedures
prescribed at 31 CFR 306.1 et seq. or 31 CFR
-103-
<PAGE>
350.0 et seq., in such securities is created for the
benefit of the Trustee, and
(iv) The repurchase agreement has a term of thirty days
or less and the Trustee will value the collateral
securities no less frequently than weekly and will
liquidate the collateral securities if any
deficiency in the required collateral percentage is
not restored within two business days of such
valuation, and
(v) The fair market value of the collateral securities
in relation to the amount of the repurchase
obligation, including principal and interest, is
equal to at least 104% and such collateral
securities must be valued weekly and
market-to-market at current market price plus
accrued interest.
(g) Commercial paper (having original maturities of not more
than 270 days) rated in the highest short-term rating categories of each of
Moody's and Standard & Poor's and Fitch, if rated by Fitch; and
(h) Investments in no load money market funds registered
under the Investment Company Act of 1940 whose shares are registered under the
Securities Act and rated as follows by at least Moody's and Standard & Poor's:
AAAm or AAAm-G by Standard & Poor's, Aaa by Moody's, and AAA, if rated by
Fitch;
provided that no instrument described above shall evidence either the right to
receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and principal payments
with respect to such instrument provided a yield to maturity at par greater
than 120% of the yield to maturity at par of the underlying obligations; and
provided, further, that all instruments described hereunder shall mature at
par on or prior to the next succeeding Payment Date unless otherwise provided
in this Agreement and that no instrument described hereunder may be purchased
at a price greater than par if such instrument may be prepaid or called at a
price less than its purchase price prior to stated maturity.
Section 7.08 Accounting and Directions by Trustee.
(a) Trustee shall determine whether an Insured Payment will
be required to be made by the Certificate Insurer on the following Payment
Date and if so then no later than 12:00 noon on the second Business Day
immediately preceding the related Payment Date the Trustee shall furnish the
Certificate Insurer and the Depositor with a completed Notice in the form set
forth as Exhibit A to the Certificate Insurance Policy Agreement. The Notice
shall specify the amount of the Insured Payment and shall constitute a claim
for an Insured Payment pursuant to the Certificate Insurance Policy.
Each month for so long as a Class of Auction Rate
Certificates is Outstanding, not later than 12:00 noon New York time on the
Auction Reporting Date, the Servicer shall deliver to the Certificate Insurer
and the Trustee, by telecopy, the receipt and legibility of which shall be
confirmed telephonically, with hard copy thereof to be delivered on the
Business Day following
-104-
<PAGE>
the Determination Date, a certificate signed by a Servicing Officer stating the
date (day, month and year), the Series number of the Certificates, the date of
this Agreement, and the amount to be distributed on the upcoming Remittance Date
to each Class of Auction Rate Certificates as a payment of principal.
(b) By 12:00 noon New York time, on the Business Day
preceding each Payment Date (or such earlier period as shall be agreed by the
Depositor and the Trustee), the Trustee shall notify (subject to the terms of
Section 10.03(j) hereof, based solely on information provided to the Trustee
by the Servicer) the Depositor, each of the Sellers, the Certificate Insurer
and each Owner of the following information with respect to the next Payment
Date (which notification may be given by facsimile or by telephone promptly
confirmed in writing):
(i) The aggregate amount then on deposit in the
Certificate Account;
(ii) The Class A Distribution Amount, with respect to each
Class individually and all Classes of the Class A
Certificates in the aggregate, on the next Payment Date
and the related Class B Distribution Amount;
(iii) The amount of any Insured Payment to be made by the
Certificate Insurer on such Payment Date;
(iv) The application of the amounts described in
clause (i) preceding to the allocation and
distribution of the related Class A Distribution
Amounts, and the related Class B Distribution
Amount, on such Payment Date in accordance with
Section 7.03 hereof;
(v) The Certificate Principal Balance of each Class
of the Class A and Class B Certificates, the
Class N-IO Notional Principal Amount, the Class
P-I0 Notional Principal Amount, the aggregate
amount of the principal of each Class of
Certificates to be paid on such Payment Date and
the remaining Certificate Principal Balance (or
Class N-IO Notional Principal Amount and Class
P-IO Notional Principal Amount) of each Class of
Certificates following any such payment;
(vi) The amount, if any, of any Realized Losses for
the related Remittance Period in the aggregate
and for each of the Loan Group I, Loan Group IIa
and Loan Group IIb and the amount of Cumulative
Realized Losses as of the last day of the related
Remittance Period; and
(vii) The amount of 60+ Day Delinquent Loans and the
Three-Month Rolling Average 60+ Day Delinquency Rate.
Section 7.09 Reports by Trustee to Owners and the Certificate
Insurer.
(a) On each Payment Date the Trustee shall report in writing
to the Depositor, each Owner, the Certificate Insurer, the Underwriters and
the Rating Agencies:
-105-
<PAGE>
(i) the amount of the distribution with respect to the each
Class of Certificates (based on a Certificate in the original
principal amount of $1,000 or, in the case of the Auction Rate
Certificates, the original principal amount of $25,000);
(ii) the amount of such distribution allocable to principal
on the Home Equity Loans in both Loan Groups (and, with respect to
Loan Group II, each of Loan Group IIa and Loan Group IIb), separately
identifying the aggregate amount of any Prepayments, Loan Purchase
Price amounts or other recoveries of principal included therein and
any Aggregate Group Extra Principal Distribution Amount;
(iii) the amount of such distribution allocable to interest
on the Home Equity Loans in each Loan Group (and, with respect to
Loan Group II, each of Loan Group IIa and Loan Group IIb) (based on a
Certificate in the original principal amount of $1,000);
(iv) the Interest Carry Forward Amount for each Class;
(v) the principal amount and the Planned Principal Balance,
if any, of each Class of the Offered Certificates (based on a
Certificate in the original principal amount of $1,000 or, in the
case of the Auction Rate Certificates, the original principal amount
of $25,000) which will be outstanding after giving effect to any
payment of principal on such Payment Date;
(vi) the aggregate Loan Balance of all Home Equity Loans in
both Loan Groups and in each Loan Group (and, with respect to Loan
Group II, each of Loan Group IIa and Loan Group IIb), as of the last
day of the related Remittance Period;
(vii) based upon information furnished by the Seller such
information as may be required by Section 6049(d)(7)(C) of the Code
and the regulations promulgated thereunder to assist the Owners in
computing their market discount;
(viii) the total of any Substitution Amounts or Loan
Purchase Price amounts included in such distribution with respect to
both Loan Groups and in each Loan Group (and, with respect to Loan
Group II, each of Loan Group IIa and Loan Group IIb);
(ix) the weighted average Coupon Rate of the Home Equity
Loans;
(x) the weighted average Coupon Rate of both Loan Groups and
in each Loan Group (and, with respect to Loan Group II, each of Loan
Group IIa and Loan Group IIb);
(xi) the weighted average remaining term of both Loan Groups
and in each of Loan Group (and, with respect to Loan Group II, each
of Loan Group IIa and Loan Group IIb);
-106-
<PAGE>
(xii) whether a Delinquency Trigger Event, Cumulative
Realized Loss Trigger Event and/or the Cumulative Realized Loss
Termination Trigger Event has occurred with respect to either Loan
Group;
(xiii) the Targeted Overcollateralization Amount, Class A
Enhancement Percentage, Overcollateralization Amount, Class A Optimal
Balance and Class B Optimal Balance, in each case for each Loan Group;
(xiv) the amount of any Applied Realized Loss Amount,
Realized Loss Amortization Amount and Unpaid Realized Loss Amount for
each Class of Class B Certificates as of the close of such Payment
Date;
(xv) the Pass-Through Rate for the Floating Rate
Certificates and the Auction Rate Certificates applicable to the
related Accrual Period and if the Pass-Through Rate was based on the
applicable Available Funds Cap, that such Pass-Through Rate would
have been in the absence thereof;
(xvi) the Available Funds Cap for each Certificate for such
Payment Date, if any applies;
(xvii) the amount of any Insured Payment included in the
distribution to Owners of Class A Certificates for each Loan Group; and
(xviii) any Reimbursement Amount paid on such Payment Date
and any Reimbursement Amount remaining unpaid.
(xix) such other information as the Certificate Insurer may
reasonably request with respect to Home Equity Loans that are
Delinquent in Loan Group I, Loan Group IIa and Loan Group IIb;
(xx) the largest Home Equity Loan Balance outstanding; and
(xxi) any amount remaining in the Auction Remainder Account
pursuant to Section 7.04.
The Servicer shall provide to the Trustee the information
described in Section 8.08(d)(iii) and in clause (b) below to enable the
Trustee to perform its reporting obligations under this Section, and such
obligations of the Trustee under this Section are conditioned upon such
information being received and the information provided in clauses (ii),
(vii), (viii), (ix), (xi), (xii), (xiii) and (xiv) shall be based solely upon
information contained in the monthly servicing report provided by the Servicer
to the Trustee pursuant to Section 8.01 hereof.
(b) In addition, on each Payment Date the Trustee will
distribute to the Depositor, the Certificate Insurer, each Owner, the
Underwriters and the Rating Agencies, together with the information described
in Subsection (a) preceding, the following information with respect to the
Home Equity Loans which is hereby required to be prepared by the Servicer and
furnished to the Trustee for such purpose on or prior to the related Monthly
Remittance Date:
-107-
<PAGE>
(i) the number and aggregate principal balances of all Home
Equity Loans in each Loan Group (and, with respect to Loan Group II,
Loan Group IIa and Loan Group IIb) that are: (i) 30-59 days
delinquent, (ii) 60-89 days delinquent and (iii) 90 or more days
delinquent, as of the close of business on the last business day of
the calendar month next preceding the Payment Date and the aggregate
number and aggregate Loan Balance of such Loans;
(ii) the status and the number and dollar amounts of all
Home Equity Loans in each Loan Group (and, with respect to Loan Group
II, each of Loan Group IIa and Loan Group IIb) that are in
foreclosure proceedings as of the close of business on the last
business day of the calendar month next preceding such Payment Date;
(iii) the number of Mortgagors and the Loan Balances of the
related Mortgages for all Home Equity Loans, and in each Loan Group
(and, with respect to Loan Group II, each of Loan Group IIa and Loan
Group IIb) involved in bankruptcy proceedings as of the close of
business on the last business day of the calendar month next
preceding such Payment Date;
(iv) the existence and status of any Properties for all Home
Equity Loans, and in each Loan Group (and, with respect to Loan Group
II, each of Loan Group IIa and Loan Group IIb) as to which title has
been taken in the name of, or on behalf of the Trustee, as of the
close of business of the last business day of the month next
preceding the Payment Date;
(v) the book value of any real estate acquired through
foreclosure or grant of a deed in lieu of foreclosure for all Home
Equity Loans, and in each Loan Group (and, with respect to Loan Group
II, each of Loan Group IIa and Loan Group IIb) as of the close of
business on the last business day of the calendar month next
preceding the Payment Date;
(vi) the amount of cumulative Realized Losses for all Home
Equity Loans, and in each Loan Group (and, with respect to Loan Group
II, each of Loan Group IIa and Loan Group IIb); and
(vii) the aggregate Loan Balance of 60+ Day Delinquent Loans
for all Home Equity Loans and the Home Equity Loans in Loan Group I,
Loan Group IIa and Loan Group IIb;
(viii) the Three-Month Rolling Average 60+ Day Delinquency
Rate for all Home Equity Loans and the Home Equity Loans in Loan
Group I, Loan Group IIa and Loan Group IIb and whether a Delinquency
Trigger Event or a Cumulative Realized Loss Trigger Event is in
effect; and
(ix) the aggregate Loan Balance of Optional Buyout Loans
with respect to Loan Group I, Loan Group IIa, and Loan Group IIb.
-108-
<PAGE>
(c) In addition, on each Payment Date the Trustee will
distribute to the Depositor, together with the information described in
Subsection (a) and (b) preceding, the following information with respect to
all the Home Equity Loans by each product type: Fixed Rate Loans, 6 Month
LIBOR Loans, 2/28 Mortgage Loans, 3/27 Loans, Balloon Loans, which information
is hereby required to be prepared by the Servicer and furnished to the trustee
on or prior to the related Monthly Remittance Date:
(i) the number and aggregate principal balances of all Home
Equity Loans with respect to each product type as of the close of
business on the last business day of the calendar month next
preceding the Payment Date;
(ii) the amount received from scheduled principal payments
with respect to each product type as of the close of business on the
last business day of the calendar month next preceding the Payment
Date;
(iii) the amount of Prepayments received from all Home
Equity Loans separately identifying the aggregate amount received
from:
a. Curtailments (or partial prepayments)
b. Voluntary Payoffs
c. Involuntary Payoffs (the amount of Net Liquidation
Proceeds applicable to the unpaid principal
balance from the loan)
d. loans purchased from the Trust
with respect to each product type as of the close of business on the last
business day of the calendar month next preceding the Payment Date;
(iv) the number and principal balance with respect to each
product type of all Home Equity Loans that are a. 30 - 59 days
delinquent, b. 60-89 days delinquent, c. 90 or more days delinquent
as of the close of business on the last business day of the calendar
month next preceding the Payment Date;
(v) the number and principal balance with respect to each
product type of all Home Equity Loans that are in foreclosure
proceedings as of the close of business on the last business day of
the calendar month next preceding the Payment Date;
(vi) the number and principal balance with respect to each
product type of all Home Equity Loans that are in bankruptcy
proceedings as of the close of business on the last business day of
the calendar month next preceding the Payment Date;
(vii) the number and principal balance with respect to each
product type of all Home Equity Loans that were acquired through
foreclosure or grant of a deed in lieu of foreclosure as of the close
of business on the last business day of the calendar month next
preceding the Payment Date;
-109-
<PAGE>
(viii) the number and principal balance with respect to each
product type of all Home Equity Loans that are in bankruptcy
proceedings as of the close of business on the last business day of
the calendar month next preceding the Payment Date;
(ix) the number and principal balance with respect to each
product type of all Home Equity Loans that are subject to loss
mitigation as of the close of business on the last business day of
the calendar month next preceding the Payment Date;
(x) the amount of current and cumulative realized losses
(separately identifying principal and interest losses) from following
resolution types:
a. REO Property sold
b. Short Sale
c. Deed in Lieu
d. No equity second mortgages
e. Other
as of the close of business on the last business day of the calendar month next
preceding the Payment Date;
(xi) the number and principal amount with respect to each
product type of all Home Equity Loans of Chapter 13 Loans separately
identifying:
a. those Chapter 13 Loans that are currently meeting
their payment plan;
b. those Chapter 13 Loans that are 1 to 2 payments
behind their payment plan;
c. those Chapter 13 Loans that are 2 to 3 payments
behind their payment plan;
d. and, those Chapter 13 Loans that are greater than
3 payments behind their payment plan;
(xii) the weighted average remaining term to maturity with
respect to each product type of all Home Equity Loans as of the close
of business on the last Business Day of the calendar month next
preceding the Payment Date;
(xiii) the weighted average Coupon Rate with respect to each
product type of all Home Equity Loans as of the close of business on
the last Business Day of the calendar month next preceding the
Payment Date;
-110-
<PAGE>
(d) The Servicer shall furnish to the Trustee and to the
Certificate Insurer during the term of this Agreement, such periodic, special,
or other reports or information not specifically provided for herein, as may
be necessary, reasonable, or appropriate with respect to the Trustee or the
Certificate Insurer, as the case may be, or otherwise with respect to the
purposes of this Agreement, all such reports or information to be provided by
and in accordance with such applicable instructions and directions as the
Trustee or the Certificate Insurer may reasonably require; provided, that the
Servicer shall be entitled to be reimbursed by the requesting party for the
fees and actual expenses associated with providing such reports, if such
reports are not generally produced in the ordinary course of business.
Section 7.10 Reports by Trustee.
(a) The Trustee shall report to the Depositor, each of the
Sellers, the Underwriters, the Certificate Insurer and each Owner, with
respect to the amount on deposit in the Certificate Account and the identity
of the investments included therein, as the Depositor, the Certificate Insurer
or the Seller may from time to time request. Without limiting the generality
of the foregoing, the Trustee shall, at the request of the Depositor, the
Certificate Insurer or either of the Sellers transmit promptly to the
Depositor, the Certificate Insurer and each of the Sellers copies of all
accounting of receipts in respect of the Home Equity Loans furnished to it by
the Servicer and shall notify the Certificate Insurer and each of the Sellers
if any Monthly Remittance Amount has not been received by the Trustee when
due.
(b) The Trustee shall report to the Certificate Insurer and
each Owner with respect to any written notices it may from time to time
receive which provide an Authorized Officer with actual knowledge that any of
the statements set forth in Section 3.04(b) hereof are inaccurate.
Section 7.11 Preference Payments.
The Certificate Insurer will pay any Insured Payment that is
a Preference Amount on the Business Day following receipt on a Business Day by
the Fiscal Agent of (i) a certified copy of the order requiring the return of
such Preference Amount, (ii) an opinion of counsel satisfactory to the
Certificate Insurer that such order is final and not subject to appeal, (iii)
an assignment in such form as is reasonably required by the Certificate
Insurer, irrevocably assigning to the Certificate Insurer all rights and
claims of the Owners relating to or arising under the Class A Certificates
against the debtor which made such preference payment or otherwise with
respect to such preference payment and (iv) appropriate instruments to effect
the appointment of the Certificate Insurer as agent for such Owner in any
legal proceeding related to such preference payment, such instruments being in
a form satisfactory to the Certificate Insurer, provided that if such
documents are received after 12:00 noon New York City time on such Business
Day, they will be deemed to be received on the following Business Day. Such
payment shall be disbursed to the receiver or trustee in bankruptcy named in
the final court order of the court exercising jurisdiction on behalf of the
Owner and not to any Owner directly unless such Owner has returned principal
or interest paid on the Class A Certificates to such receiver or trustee in
bankruptcy in which case payment will be disbursed to the Owner.
-111-
<PAGE>
Each Owner of a Class A Certificate, by its purchase of
Class A Certificates, the Servicer and the Trustee hereby agree that the
Certificate Insurer may at any time during the continuation of any proceeding
relating to a preference claim direct all matters relating to such preference
claim, including, without limitation, the direction of any appeal of any order
relating to such preference claim and the posting of any surety or performance
bond pending any such appeal. In addition and without limitation of the
foregoing, the Certificate Insurer shall be subrogated to the rights of the
Servicer, the Trustee and the Owner of each Class A Trust Certificate in the
conduct of any such preference claim, including, without limitation, all
rights of any party to an adversary proceeding action with respect to any
court order issued in connection with any such preference claim.
Section 7.12 Swap Trust and Swap Mechanics.
(a) (i) The parties hereto do hereby create and establish,
pursuant to the laws of the State of New York and this Agreement,
the Swap Trust, which, for convenience, shall be known as
"ContiMortgage Swap Trust 1998-B."
(ii) The Swap Trust shall be a "grantor trust" for federal
income tax purposes.
(iii) The office of the Swap Trust shall be in care of the
Trustee, addressed to One M&T Plaza, Buffalo, New York 14203,
Attention Corporate Trust Administration, or at such other address
as the Trustee may designate by notice to the Depositor, the
Seller, the Certificate Insurer and the Servicer.
(iv) The purpose of the Trust is to engage in the following
activities and only such activities: (i) the issuance of the
Swapped Certificates and the acquiring, owning and holding of the
Swap Trust Estate in connection therewith; (ii) activities that are
necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith, including the
investment of moneys in accordance with this Agreement; and (iii)
such other activities as may be required in connection with
conservation of the Swap Trust Estate and distributions to the
Owners of the Swapped Certificates; provided, however, that nothing
contained herein shall permit the Trustee to take any action which
would adversely affect the Swap Trust's status as a grantor trust.
(v) The Depositor hereby appoints the Trustee as trustee of
the Swap Trust effective as of the Startup Day, to have all the
rights, powers and duties set forth herein. The Trustee hereby
acknowledges and accepts such appointment, represents and warrants
its eligibility as of the Startup Day to serve as Trustee pursuant
to Section 10.08 hereof and declares that it will hold the Swap
Trust Estate in trust upon and subject to the conditions set forth
herein for the benefit of the Owners of the Swapped Certificates.
(b) The Depositor shall cause to be established on the
Startup Day, and the Trustee shall maintain, at the Corporate Trust Office the
Swap Account, which is to be held by
-112-
<PAGE>
the Trustee on behalf of the Owners of the Swapped Certificates, the Certificate
Insurer and the Trustee.
(c) The Trustee shall deposit to the Swap Account, without
duplication, upon receipt, any payments received under the Swap Agreement, any
Insured Swap Interest Payments, the proceeds of any liquidation of the assets
of the Swap Trust, and all remittances made to the Swap Trust pursuant to
Section 7.03 hereof.
(d) On each Payment Date, the Trustee shall make the
following disbursements from the Internal Fixed Interest Amount (plus the
amount of any Insured Swap Interest Payments, which are available only for the
payment of the amount described in Second below), in the following order of
priority, and each such disbursement shall be treated as having occurred only
after all preceding disbursements have occurred.
(i) First to the Swap Counterparty, any regularly scheduled
payment due to the Swap Counterparty under Section 2(a) of the Swap
Agreement;
(ii) Second, to the Owner of the Swapped Certificates, the
Current Interest plus the related Interest Carry Forward Amount with
respect to the related Swapped Certificates without any priority
among such Owners; provided, that if the Internal Fixed Interest
Amount plus the amount of any Insured Swap Interest Payment is not
sufficient to make a full distribution of interest with respect to
all Swapped Certificates, and the amount of the shortfall will be
carried forward as the Interest Carry Forward Amount.
(e) On each Payment Date, the Trustee shall make the
following disbursements from amounts relating to principal and each such
disbursement shall be treated as having occurred only after all preceding
disbursements have occurred:
(i) to the Owners of the Class A-12 Certificates, 100% of
the principal received by the Trustee on account of the Class A-12
Internal Certificate;
(ii) to the Owners of the Class A-13 Certificates, 100% of
the principal received by the Trustee on account of the Class A-13
Internal Certificate;
(iii) to the Owners of the Class A-14 Certificates, 100% of
the principal received by the Trustee on account of the Class A-14
Internal Certificate;
(iv) to the Owners of the Class A-15 Certificates, 100% of
the principal received by the Trustee on account of the Class A-15
Internal Certificate; and
(v) to the Owners of the Class A-16 Certificates, 100% of
the principal received by the Trustee on account of the Class A-16
Internal Certificate.
END OF ARTICLE VII
-113-
<PAGE>
ARTICLE VIII
SERVICING AND ADMINISTRATION
OF HOME EQUITY LOANS
Section 8.01 Servicer and Sub-Servicers.
Acting directly or through one or more Sub-Servicers as
provided in Section 8.03, the Servicer shall service and administer the Home
Equity Loans in accordance with this Agreement and the servicing standards set
forth in the FannieMae Guide and shall have full power and authority, acting
alone, to do or cause to be done any and all things in connection with such
servicing and administration which it may deem necessary or desirable. It is
the intent of the parties hereto that the Servicer shall have all of the
servicing obligations hereunder which a lender would have under the FannieMae
Guide (as such provisions relate to second lien mortgages); provided, however,
that to the extent that such standards, such obligations or the FannieMae
Guide are amended by FannieMae after the date hereof and the effect of such
amendment would be to impose upon the Servicer any material additional costs
or other burdens relating to such servicing obligations, the Servicer may, at
its option, determine not to comply with such amendment.
Subject to Section 8.03 hereof, the Servicer may, and is
hereby authorized to, perform any of its servicing responsibilities with
respect to all or certain of the Home Equity Loans through a Sub-Servicer as
it may from time to time designate, but no such designation of a Sub-Servicer
shall serve to release the Servicer from any of its obligations under this
Agreement. Such Sub-Servicer shall have all the rights and powers of the
Servicer with respect to such Home Equity Loans under this Agreement.
Without limiting the generality of the foregoing, but
subject to Sections 8.13 and 8.14, the Servicer in its own name or in the name
of a Sub-Servicer may be authorized and empowered pursuant to a power of
attorney executed and delivered by the Trustee to execute and deliver, and may
be authorized and empowered by the Trustee, to execute and deliver, on behalf
of itself, the Owners and the Trustee or any of them, (i) any and all
instruments of satisfaction or cancellation or of partial or full release or
discharge and all other comparable instruments with respect to the Home Equity
Loans and with respect to the Properties, (ii) to institute foreclosure
proceedings or obtain a deed in lieu of foreclosure so as to effect ownership
of any Property in the name of the Servicer on behalf of the Trustee, and
(iii) to hold title to any Property upon such foreclosure or deed in lieu of
foreclosure on behalf of the Trustee; provided, however, that to the extent
any instrument described in clause (i) preceding would be delivered by the
Servicer outside of its usual procedures for mortgage loans held in its own
portfolio the Servicer shall, prior to executing and delivering such
instrument, obtain the prior written consent of the Certificate Insurer; and
provided further, however, that Section 8.14(a) shall constitute an
authorization from the Trustee to the Servicer to execute an instrument of
satisfaction (or assignment of mortgage without recourse) with respect to any
Home Equity Loan paid in full (or with respect to which payment in full has
been escrowed). The Trustee shall execute any documentation furnished to it by
the Servicer for recordation by the Servicer in the appropriate jurisdictions
as shall be necessary to effectuate the foregoing. Subject to Sections 8.13
and 8.14,
-114-
<PAGE>
the Trustee shall execute any authorizations and other documents as the Servicer
or such Sub-Servicer shall reasonably request that are furnished to the Trustee
to enable the Servicer and such Sub-Servicer to carry out their respective
servicing and administrative duties hereunder.
The Servicer shall give prompt notice to the Trustee and the
Certificate Insurer of any action, of which the Servicer has actual knowledge,
to (i) assert a claim against the Trust or (ii) assert jurisdiction over the
Trust.
Servicing Advances incurred by the Servicer or any
Sub-Servicer in connection with the servicing of the Home Equity Loans
(including any penalties in connection with the payment of any taxes and
assessments or other charges) on any Property shall be recoverable by the
Servicer or such Sub-Servicer to the extent described in Section 8.09(b)
hereof.
Section 8.02 Collection of Certain Home Equity Loan Payments.
The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Home Equity Loans,
and shall, to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any applicable Insurance Policy,
follow collection procedures for all Home Equity Loans at least as rigorous as
those described in the FannieMae Guide. Consistent with the foregoing, the
Servicer may in its discretion waive or permit to be waived any late payment
charge, prepayment charge, assumption fee or any penalty interest in
connection with the prepayment of a Home Equity Loan or any other fee or
charge which the Servicer would be entitled to retain hereunder as servicing
compensation. In the event the Servicer shall consent to the deferment of the
due dates for payments due on a Note, the Servicer shall nonetheless make
payment of any required Delinquency Advance with respect to the payments so
extended to the same extent as if such installment were due, owing and
Delinquent and had not been deferred, and shall be entitled to reimbursement
therefor in accordance with Section 8.09(a) hereof.
Section 8.03 Sub-Servicing Agreements Between Servicer and
Sub-Servicers.
The Servicer may enter into Sub-Servicing Agreements for any
servicing and administration of Home Equity Loans with any institution that is
acceptable to the Certificate Insurer and that is in compliance with the laws
of each state necessary to enable it to perform its obligations under such
Sub-Servicing Agreement and (x) has (i) been designated an approved
seller-servicer by FHLMC or FannieMae for second mortgage loans and (ii) has
equity of at least $5,000,000, as determined in accordance with generally
accepted accounting principles or (y) is a Servicer Affiliate. The Servicer
shall give notice to the Trustee, the Certificate Insurer and the Rating
Agencies of the appointment of any Sub-Servicer. For purposes of this
Agreement, the Servicer shall be deemed to have received payments on Home
Equity Loans when any Sub-Servicer has received such payments. Each
Sub-Servicer shall be required to service the Home Equity Loans in accordance
with this Agreement and any such Sub-Servicing Agreement shall be consistent
with and not violate the provisions of this Agreement. Each Sub-Servicing
Agreement shall provide that a successor Servicer shall have the option to
terminate such agreement without payment of any fees if the original Servicer
is terminated or resigns.
-115-
<PAGE>
Section 8.04 Successor Sub-Servicers.
The Servicer shall be entitled to terminate any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement and to either itself directly service the related Home
Equity Loans or enter into a Sub-Servicing Agreement with a successor
Sub-Servicer which qualifies under Section 8.03.
Section 8.05 Liability of Servicer; Indemnification.
(a) The Servicer shall not be relieved of its obligations
under this Agreement notwithstanding any Sub-Servicing Agreement or any of the
provisions of this Agreement relating to agreements or arrangements between
the Servicer and a Sub-Servicer and the Servicer shall be obligated to the
same extent and under the same terms and conditions as if it alone were
servicing and administering the Home Equity Loans. The Servicer shall be
entitled to enter into any agreement with a Sub-Servicer for indemnification
of the Servicer by such Sub-Servicer and nothing contained in such
Sub-Servicing Agreement shall be deemed to limit or modify this Agreement.
(b) The Servicer (except Manufacturers and Traders Trust
Company if it is required to succeed the Servicer hereunder) agrees to
indemnify and hold the Trustee, the Certificate Insurer and each Owner
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and
expenses that the Trustee, the Certificate Insurer and any Owner may sustain
in any way related to the failure of the Servicer to perform its duties and
service the Home Equity Loans in compliance with the terms of this Agreement.
The Servicer shall immediately notify the Trustee, the Certificate Insurer and
each Owner if a claim is made by a third party with respect to this Agreement,
and the Servicer shall assume (with the consent of the Trustee and the
Certificate Insurer) the defense of any such claim and pay all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Servicer, the Trustee, the Certificate Insurer and/or Owner in respect of such
claim. The Trustee may, if necessary, reimburse the Servicer from amounts
otherwise distributable on the Class R Certificates for all amounts advanced
by it pursuant to the preceding sentence except when the claim relates
directly to the failure of the Servicer to service and administer the Home
Equity Loans in compliance with the terms of this Agreement. The provisions of
this Section 8.05 shall survive the termination of this Agreement and the
payment of the outstanding Certificates.
Section 8.06 No Contractual Relationship Between Sub-Servicer,
Trustee or the Owners.
Any Sub-Servicing Agreement and any other transactions or
services relating to the Home Equity Loans involving a Sub-Servicer shall be
deemed to be between the Sub-Servicer and the Servicer alone and the Trustee,
the Certificate Insurer and the Owners shall not be deemed parties thereto and
shall have no claims, rights, obligations, duties or liabilities with respect
to any Sub-Servicer except as set forth in Section 8.07.
-116-
<PAGE>
Section 8.07 Assumption or Termination of Sub-Servicing Agreement
by Trustee.
In connection with the assumption of the responsibilities,
duties and liabilities and of the authority, power and rights of the Servicer
hereunder by the Trustee pursuant to Section 8.20, it is understood and agreed
that the Servicer's rights and obligations under any Sub-Servicing Agreement
then in force between the Servicer and a Sub-Servicer shall be assumed
simultaneously by the Trustee without act or deed on the part of the Trustee;
provided, however, that the successor Servicer may terminate the Sub-Servicer
as provided in Section 8.03.
The Servicer shall, upon the reasonable request of the
Trustee, but at the expense of the Servicer, deliver to the assuming party
documents and records relating to each Sub-Servicing Agreement and an
accounting of amounts collected and held by it and otherwise use its best
reasonable efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.
Section 8.08 Principal and Interest Account.
(a) The Servicer shall establish and maintain at one or more
Designated Depository Institutions the Principal and Interest Account to be
held as a trust account. Each Principal and Interest Account shall be
identified on the records of the Designated Depository Institution as follows:
"Manufacturers and Traders Trust Company, as Trustee under the Pooling and
Servicing Agreement dated as of September 1, 1998." If the institution at any
time holding the Principal and Interest Account ceases to be eligible as a
Designated Depository Institution hereunder, then the Servicer shall, within
30 days, be required to name a successor institution meeting the requirements
for a Designated Depository Institution hereunder. If the Servicer fails to
name such a successor institution, then the Principal and Interest Account
shall thenceforth be held as a trust account with a qualifying Designated
Depository Institution. The Servicer shall notify the Trustee, the Certificate
Insurer and the Owners if there is a change in the name, account number or
institution holding the Principal and Interest Account.
Subject to Subsection (c) below, the Servicer shall deposit
all receipts required pursuant to Subsection (c) below and related to the Home
Equity Loans to the Principal and Interest Account on a daily basis (but no
later than the first Business Day after receipt).
(b) All funds in the Principal and Interest Account shall be
held (i) uninvested (up to the limits insured by the FDIC) or (ii) invested in
Eligible Investments. Any investments of funds in the Principal and Interest
Account shall mature or be withdrawable at par on or prior to the immediately
succeeding Monthly Remittance Date. The Principal and Interest Account shall
be held in trust in the name of the Trustee for the benefit of the Owners and
the Certificate Insurer. Any investment earnings on funds held in the
Principal and Interest Account shall be for the account of the Servicer and
may only be withdrawn from the Principal and Interest Account by the Servicer
immediately following the remittance of the Monthly Remittance Amount (and the
Monthly Excess Interest Amount included therein) by the Servicer. Any
investment losses on funds held in the Principal and Interest Account shall be
for the account of the Servicer and promptly upon the realization of such loss
shall be contributed by the Servicer to the Principal
-117-
<PAGE>
and Interest Account. Any references herein to amounts on deposit in the
Principal and Interest Account shall refer to amounts net of such investment
earnings.
(c) The Servicer shall deposit to the Principal and Interest
Account on the Business Day after receipt all principal collections on the
Home Equity Loans received, and interest collections on the Home Equity Loans
accrued after the Cut-Off Date including any Prepayments and Net Liquidation
Proceeds, other recoveries or amounts related to the Home Equity Loans
received by the Servicer and any income from REO Properties, but net of (i)
the Servicing Fee with respect to each Home Equity Loan and other servicing
compensation to the Servicer as permitted by Section 8.15 hereof, (ii)
principal collected and interest accrued on any Home Equity Loan on or prior
to the Cut-Off Date, (iii) Net Liquidation Proceeds to the extent such Net
Liquidation Proceeds exceed the sum of (I) the Loan Balance of the related
Home Equity Loan immediately prior to liquidation, (II) accrued and unpaid
interest on such Home Equity Loan (net of the Servicing Fee) to the date of
such liquidation, and (III) any Realized Losses incurred during the related
Remittance Period, (iv) reimbursements for Delinquency Advances and (v)
reimbursements for amounts deposited in the Principal and Interest Account
representing payments of principal and/or interest on a Note by a Mortgagor
which are subsequently returned by a depository institution as unpaid (all
such net amount herein referred to as "Daily Collections").
(d) (i) The Servicer may make withdrawals for its own
account from the amounts on deposit in the Principal and Interest Account,
with respect to the Home Equity Loans, only in the following priority and for
the following purposes:
(A) to withdraw interest paid with respect to any Home Equity
Loans that had accrued for periods prior to the Cut-Off
Date;
(B) to withdraw investment earnings on amounts on deposit in the
Principal and Interest Account;
(C) to reimburse itself pursuant to Section 8.09(a) for
unrecovered Delinquency Advances and Servicing Advances;
(D) to withdraw amounts that have been deposited to the Principal
and Interest Account in error; and
(E) to clear and terminate the Principal and Interest Account
following the termination of the Trust pursuant to Article
IX.
(ii) The Servicer shall (a) remit to the Trustee for deposit in
the Certificate Account by wire transfer, or otherwise make
funds available in immediately available funds, without
duplication, the Daily Collections allocable to a Remittance
Period not later than the related Monthly Remittance Date and
Loan Purchase Prices and Substitution Amounts two Business
Days following the related purchase or substitution, and (b)
on each Monthly Remittance Date, deliver to the Trustee and
the Certificate Insurer a monthly servicing report, with
respect to the Home Equity
-118-
<PAGE>
Loans, containing the following information: principal and
interest collected, scheduled interest, Liquidated Loans,
summary and detailed delinquency reports, Liquidation
Proceeds and other similar information concerning the
servicing of the Home Equity Loans. In addition, the Servicer
shall inform the Trustee and the Certificate Insurer on each
Monthly Remittance Date with respect to the Home Equity Loans
of the amounts of any Loan Purchase Prices or Substitution
Amounts so remitted during the related Remittance Period.
(iii) The Servicer shall provide to the Trustee the information
described in Section 8.08(d)(ii)(b) and in Section 7.09(c)
to enable the Trustee to perform its reporting requirements
under Section 7.09 and the Trustee shall forward such
information to the Underwriters within five Business Days of
receipt thereof.
Section 8.09 Delinquency Advances and Servicing Advances.
(a) If the amount on deposit in the Certificate Account as
of any Monthly Remittance Date is less than the sum of (I) the Group I and
Group II Interest Remittance Amount on such Monthly Remittance Date and (II)
the Group I and Group II Principal Remittance Amount on such Monthly
Remittance Date, the Servicer shall remit to the Trustee for deposit into the
Certificate Account a sufficient amount of its own funds to make the total
amount remitted to the Trustee equal to such sum. Such amounts of the
Servicer's own funds so deposited are "Delinquency Advances," including but
not limited to any amount advanced due to the invocation by a Mortgagor of the
relief provisions provided by the Soldiers' and Sailors' Civil Relief Act of
1940.
The Servicer shall be permitted to fund its payment of
Delinquency Advances on any Business Day and to reimburse itself for any
Delinquency Advances paid from the Servicer's own funds from collections on
any Home Equity Loan deposited to the Principal and Interest Account
subsequent to the related Remittance Period and shall deposit into the
Principal and Interest Account with respect thereto (i) collections from the
Mortgagor whose Delinquency gave rise to the shortfall which resulted in such
Delinquency Advance and (ii) Net Liquidation Proceeds recovered on account of
the related Mortgage Loan to the extent of the amount of aggregate Delinquency
Advances related thereto. If not recovered from the related Mortgagor or the
related Net Liquidation Proceeds, the Servicer shall recover Delinquency
Advances pursuant to Section 7.03(e)(iii).
Notwithstanding the foregoing, in the event that the
Servicer determines that the aggregate unreimbursed Delinquency Advances
exceed the aggregate remaining Scheduled Payments due on the Home Equity
Loans, the Servicer shall not be required to make any future Delinquency
Advances, and shall be entitled to reimbursement for such aggregate
unreimbursed Delinquency Advances as provided above. The Servicer shall give
written notice of such determination to the Trustee and the Certificate
Insurer; and the Trustee shall promptly furnish a copy of such notice to the
Owners of the Class R Certificates; provided, that the Servicer shall be
entitled to recover any unreimbursed Delinquency Advances from the aforesaid
Liquidation Proceeds prior to the payment of the Liquidation Proceeds to any
other party to this Agreement.
-119-
<PAGE>
(b) The Servicer will pay all "out-of-pocket" costs and
expenses incurred in the performance of its servicing obligations, including,
but not limited to, the cost of (i) Preservation Expenses, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of REO Property and (iv) advances required by
Section 8.13(a), but the Servicer is only required to pay such costs and
expenses to the extent the Servicer reasonably believes such costs and
expenses will be recoverable from the related Home Equity Loan. Each such
expenditure will constitute a "Servicing Advance". The Servicer may recover
Servicing Advances (x) from the Mortgagors to the extent permitted by the Home
Equity Loans or, if not recovered from the Mortgagor on whose behalf such
Servicing Advance was made, from Liquidation Proceeds realized upon the
liquidation of the related Home Equity Loan and (y) as provided in Section
7.03(e)(iii). The Servicer shall be entitled to recover the Servicing Advances
from the aforesaid Liquidation Proceeds prior to the payment of the
Liquidation Proceeds to any other party to this Agreement. Except as provided
in the previous sentence, in no case may the Servicer recover Servicing
Advances from the principal and interest payments on any Home Equity Loan or
from any amounts relating to any other Home Equity Loan except as provided in
Section 7.03(e)(iii).
Section 8.10 Compensating Interest; Repurchase of Home Equity
Loans.
(a) Prepayment of a Home Equity Loan occurs during any
calendar month or if the amount received with respect to a date-of-payment or
simple interest Home Equity Loan represents less than a full month's interest,
any difference between the interest collected from the Mortgagor and the full
month's interest at the Coupon Rate less the Servicing Fee ("Compensating
Interest") that is due shall be deposited by the Servicer (but not in excess
of the aggregate Servicing Fee for the related Remittance Period) to the
Principal and Interest Account on the next succeeding Monthly Remittance Date
and shall be included in the Monthly Remittance to be made available to the
Trustee on such Monthly Remittance Date. The Servicer shall not be entitled to
reimbursement for amounts paid as Compensating Interest.
(b) The Servicer, and in the absence of exercise thereof by
the Servicer, the Certificate Insurer, has the right and the option, but not
the obligation, for administrative convenience, to purchase for its own
account any Home Equity Loan which becomes Delinquent, in whole or in part, as
to four consecutive monthly installments or any Home Equity Loan as to which
enforcement proceedings have been brought by the Servicer pursuant to Section
8.13; provided, however, that the Servicer or the Certificate Insurer, as the
case may be, may not purchase any such Home Equity Loan unless the Servicer or
the Certificate Insurer, as the case may be, has delivered to the Trustee an
opinion of counsel experienced in federal income tax matters acceptable to the
Trustee and the Certificate Insurer to the effect that such a purchase would
not constitute a Prohibited Transaction for the Trust or otherwise subject the
Trust to tax and would not jeopardize the status any REMIC therein as a REMIC.
Any such Loan so purchased shall be purchased by the Servicer or the
Certificate Insurer, as the case may be, on a Monthly Remittance Date at a
purchase price equal to the Loan Purchase Price thereof, which purchase price
shall be deposited in the Principal and Interest Account.
-120-
<PAGE>
(c) The Net Liquidation Proceeds from the disposition of any
REO Property shall be deposited in the Principal and Interest Account and
remitted to the Trustee as part of the Daily Collections remitted by the
Servicer to the Trustee.
Section 8.11 Maintenance of Insurance.
(a) The Servicer shall cause to be maintained with respect
to each Home Equity Loan a hazard insurance policy with a generally acceptable
carrier that provides for fire and extended coverage, and which provides for a
recovery by the Trust of insurance proceeds relating to such Home Equity Loan in
an amount not less than the least of (i) the outstanding principal balance of
the Home Equity Loan (plus the related senior lien loan, if any), (ii) the
minimum amount required to compensate for damage or loss on a replacement cost
basis and (iii) the full insurable value of the premises. The Servicer shall
maintain the insurance policies required hereunder in the name of the mortgagee,
its successors and assigns, as loss payee. The policies shall require the
insurer to provide the mortgagee with 30 days' notice prior to any cancellation
or as otherwise required by law. The Servicer may also maintain a blanket hazard
insurance policy or policies if the insurer or insurers of such policies are
rated investment grade by each Rating Agency. Upon the request of the Trustee or
the Certificate Insurer, the Servicer will cause to be delivered to such
requesting Person a certified true copy of such blanket policy.
(b) If the Home Equity Loan at the time of origination
relates to a Property in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, the
Servicer will cause to be maintained with respect thereto a flood insurance
policy in a form meeting the requirements of the current guidelines of the
Federal Insurance Administration with a generally acceptable carrier in an
amount representing coverage, and which provides for a recovery by the Trust of
insurance proceeds relating to such Home Equity Loan of not less than the least
of (i) the outstanding principal balance of the Home Equity Loan (plus the
related senior lien loan, if any), (ii) the minimum amount required to
compensate for damage or loss on a replacement cost basis and (iii) the maximum
amount of insurance that is available under the Flood Disaster Protection Act of
1973. The Servicer shall indemnify the Trust out of the Servicer's own funds for
any loss to the Trust resulting from the Servicer's failure to maintain premiums
for such insurance required by this Section when so permitted by the terms of
the Mortgage as to which such loss relates.
Section 8.12 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or prospective conveyance, exercise its rights to accelerate the maturity of the
related Home Equity Loan under any "due-on-sale" clause contained in the related
Mortgage or Note; provided, however, that the Servicer shall not exercise any
such right if the "due-on-sale" clause, in the reasonable belief of the
Servicer, is not enforceable under applicable law. An opinion of counsel to the
foregoing effect shall conclusively establish the reasonableness of such belief.
In such event, the Servicer shall enter into an assumption and modification
agreement with the person to whom such property has been or is about to be
conveyed, pursuant to which such person becomes liable under the Note and,
unless prohibited by applicable law or the Mortgage Documents, the Mortgagor
remains liable
-121-
<PAGE>
thereon. If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as Mortgagor and becomes liable under the Note; provided,
however, that to the extent any such substitution of liability agreement would
be delivered by the Servicer outside of its usual procedures for mortgage loans
held in its own portfolio the Servicer shall, prior to executing and delivering
such agreement, obtain the prior written consent of the Certificate Insurer. The
Home Equity Loan, as assumed, shall conform in all respects to the requirements,
representations and warranties of this Agreement. The Servicer shall notify the
Trustee that any such assumption or substitution agreement has been completed by
forwarding to the Trustee the original copy of such assumption or substitution
agreement (indicating the File to which it relates) which copy shall be added by
the Trustee to the related File and which shall, for all purposes, be considered
a part of such File to the same extent as all other documents and instruments
constituting a part thereof. The Servicer shall be responsible for recording any
such assumption or substitution agreements. In connection with any such
assumption or substitution agreement, the required monthly payment on the
related Home Equity Loan shall not be changed but shall remain as in effect
immediately prior to the assumption or substitution, the stated maturity or
outstanding principal amount of such Home Equity Loan shall not be changed nor
shall any required monthly payments of principal or interest be deferred or
forgiven. Any fee collected by the Servicer or the Sub-Servicer for consenting
to any such conveyance or entering into an assumption or substitution agreement
shall be retained by or paid to the Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other
provision of this Agreement, the Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Home Equity Loan by operation of law or any assumption which the
Servicer may be restricted by law from preventing, for any reason whatsoever.
Section 8.13 Realization Upon Defaulted Home Equity Loans;
Modification.
(a) The Servicer shall foreclose upon or otherwise
comparably effect the ownership in the name of the Servicer on behalf of the
Trust of Properties relating to defaulted Home Equity Loans as to which no
satisfactory arrangements can be made for collection of Delinquent payments and
which the Servicer has not purchased pursuant to Section 8.10(b). In connection
with such foreclosure or other conversion, the Servicer shall exercise such of
the rights and powers vested in it hereunder, and use the same degree of care
and skill in their exercise or use, as prudent mortgage lenders would exercise
or use under the circumstances in the conduct of their own affairs and
consistent with the servicing standards set forth in the FannieMae Guide,
including, but not limited to, advancing funds for the payment of taxes, amounts
due with respect to Senior Liens, and insurance premiums. Any amounts so
advanced shall constitute "Servicing Advances" within the meaning of Section
8.09(b) hereof. The Servicer shall sell any REO Property before the start of the
12th month of the 3rd taxable year following the taxable year in which the Trust
acquired such property, at such price as the Servicer deems necessary to comply
with this covenant unless the Seller which delivered the related Home Equity
Loan obtains for the Trustee, the Certificate Insurer and the Servicer an
opinion of counsel experienced in federal income tax matters acceptable to the
Trustee and the Certificate
-122-
<PAGE>
Insurer, addressed to the Trustee, the Certificate Insurer, and the Servicer, to
the effect that the holding by the Trust of such REO Property for any greater
period will not result in the imposition of taxes on "Prohibited Transactions"
of the Trust or any REMIC therein as defined in Section 860F of the Code or
cause any REMIC therein to fail to qualify as a REMIC under the REMIC Provisions
at any time that any Certificates are outstanding. Notwithstanding the
generality of the foregoing provisions, the Servicer shall manage, conserve,
protect and operate each REO Property for the Owners solely for the purpose of
its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by any REMIC of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code or any "net income from foreclosure property" which is subject to
taxation under the REMIC Provisions. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the Owners,
rent the same, or any part thereof, as the Servicer deems to be in the best
interest of the Owners for the period prior to the sale of such REO Property.
The Servicer shall take into account the existence of any hazardous substances,
hazardous wastes or solid wastes, as such terms are defined in the Comprehensive
Environmental Response Compensation and Liability Act, the Resource Conservation
and Recovery Act of 1976, or other federal, state or local environmental
legislation, on a Property in determining whether to foreclose upon or otherwise
comparably convert the ownership of such Property. The Servicer shall not take
any such action with respect to any Property known by the Servicer to contain
such wastes or substances, without the prior written consent of the Certificate
Insurer. With respect to any Home Equity Loan secured by a mixed use Property,
the Servicer shall, prior to foreclosing upon or otherwise comparably effecting
the ownership in the name of the Servicer on behalf of the Trust, either (x)
perform a "phase one environmental study" of such Property or (y) repurchase
such Property at the Loan Purchase Price.
(b) The Servicer shall determine, with respect to each
defaulted Home Equity Loan and in accordance with the procedures set forth in
the FannieMae Guide, when it has recovered, whether through trustee's sale,
foreclosure sale or otherwise, all amounts it expects to recover from or on
account of such defaulted Home Equity Loan, whereupon such Home Equity Loan
shall become a "Liquidated Loan." After a Home Equity Loan has become a
Liquidated Loan, the Servicer shall promptly prepare and forward to the
Depositor, the Certificate Insurer and the Trustee a report detailing the
Liquidation Proceeds received from the Liquidated Loan, expenses incurred with
respect thereto, and any loss incurred in connection therewith.
(c) The Servicer shall not agree to any modification, waiver
or amendment of any provision of any Home Equity Loan unless, in the Servicer's
good faith judgment, such modification, waiver or amendment would minimize the
loss that might otherwise be experienced with respect to such Home Equity Loan
and only in the event of a payment default with respect to such Home Equity Loan
or in the event that a payment default with respect to such Home Equity Loan is
reasonably foreseeable by the Servicer; provided, however, that no such
modification, waiver or amendment shall extend the maturity date of such Home
Equity Loan beyond the Remittance Period related to the Final Scheduled Payment
Date of the latest
-123-
<PAGE>
Class of Certificates remaining in the Trust. Notwithstanding anything set out
in this Section 8.13(c) or elsewhere in this Agreement to the contrary, the
Servicer shall be permitted to modify, waive or amend any provision of a Home
Equity Loan if required by statute or a court of competent jurisdiction to do
so.
(d) The Servicer shall deliver to the Trustee for deposit in
the related File, an original counterpart of any agreement relating to such
modification, waiver or amendment, promptly following the execution thereof.
Section 8.14 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Home Equity Loan
(including any liquidation of such Home Equity Loan through foreclosure or
otherwise), or the receipt by the Servicer of a notification that payment in
full will be escrowed in a manner customary for such purposes, the Servicer
shall deliver to the Trustee the FannieMae "Request for Release of Documents"
(FannieMae Form 2009). Upon receipt of such Request for Release of Documents,
the Trustee shall promptly release the related File, in trust, in its reasonable
discretion to (i) the Servicer, (ii) an escrow agent or (iii) any employee,
agent or attorney of the Trustee. Upon any such payment in full, or the receipt
of such notification that such funds have been placed in escrow, the Servicer is
authorized to give, as attorney-in-fact for the Trustee and the mortgagee under
the Mortgage which secured the Note, an instrument of satisfaction (or
assignment of Mortgage without recourse) regarding the Property relating to such
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of payment in full, it being understood and agreed that no expense
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Principal and Interest Account. In
lieu of executing any such satisfaction or assignment, as the case may be, the
Servicer may prepare and submit to the Trustee a satisfaction (or assignment
without recourse, if requested by the Person or Persons entitled thereto) in
form for execution by the Trustee with all requisite information completed by
the Servicer; in such event, the Trustee shall execute and acknowledge such
satisfaction or assignment, as the case may be, and deliver the same with the
related File, as aforesaid.
(b) From time to time and as appropriate in the servicing of
any Home Equity Loan, including, without limitation, foreclosure or other
comparable conversion of a Home Equity Loan or collection under any applicable
Insurance Policy, the Trustee shall (except in the case of the payment or
liquidation pursuant to which the related File is released to an escrow agent or
an employee, agent or attorney of the Trustee), upon request of the Servicer and
delivery to the Trustee of a receipt signed by an Authorized Officer of the
Servicer, release the related File to the Servicer and shall execute such
documents as shall be necessary to the prosecution of any such proceedings,
including, without limitation, an assignment without recourse of the related
Mortgage to the Servicer; provided that there shall not be released and
unreturned at any one time more than 10% of the entire number of Files. Such
receipt shall obligate the Servicer to return the File to the Trustee when the
need therefor by the Servicer no longer exists unless the Home Equity Loan shall
be liquidated, in which case, upon receipt of the FannieMae "Liquidation
Schedule" relating to such liquidation, the receipt shall be released by the
Trustee to the Servicer.
-124-
<PAGE>
(c) The Servicer shall have the right to accept applications
of Mortgagors for consent to (i) partial releases of Mortgages, (ii) alterations
and (iii) removal, demolition or division of properties subject to Mortgages. No
application for approval shall be considered by the Servicer unless: (x) the
provisions of the related Note and Mortgage have been complied with; (y) the
Loan-to-Value Ratio after any release does not exceed the Loan-to-Value Ratio of
such Home Equity Loan as of the date of origination thereof and any increase in
the Loan-to-Value Ratio shall not exceed 15% unless approved in writing by the
Certificate Insurer; and (z) the lien priority of the related Mortgage is not
affected. Upon receipt by the Trustee of an Officer's Certificate executed on
behalf of the Servicer setting forth the action proposed to be taken in respect
of a particular Home Equity Loan and certifying that the criteria set forth in
the immediately preceding sentence have been satisfied, the Trustee shall
execute and deliver to the Servicer the consent or partial release so requested
by the Servicer. A proposed form of consent or partial release, as the case may
be, shall accompany any Officer's Certificate delivered by the Servicer pursuant
to this paragraph. The Servicer shall notify the Certificate Insurer and the
Rating Agencies if an application is approved under clause (y) above without
approval in writing by the Certificate Insurer.
Section 8.15 Servicing Compensation.
As compensation for its activities hereunder, the Servicer
shall be entitled to retain the amount of the Servicing Fee with respect to each
Home Equity Loan. Additional servicing compensation in the form of prepayment
charges, release fees, bad check charges, assumption fees, late payment charges,
prepayment penalties, or any other servicing-related fees, Net Liquidation
Proceeds not required to be deposited in the Principal and Interest Account
pursuant to Section 8.08(c)(ii) and similar items may, to the extent collected
from Mortgagors, be retained by the Servicer.
Section 8.16 Annual Statement as to Compliance.
The Servicer, at its own expense, will deliver to the
Trustee, the Depositor, the Certificate Insurer and the Rating Agencies, on or
before March 31 of each year, commencing in 1999, an Officer's Certificate
stating, as to each signer thereof, that (i) a review of the activities of the
Servicer during such preceding calendar year and of performance under this
Agreement has been made under such officers' supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Servicer has fulfilled
all its obligations under this Agreement for such year, or, if there has been a
default in the fulfillment of all such obligations, specifying each such default
known to such officers and the nature and status thereof including the steps
being taken by the Servicer to remedy such default.
Section 8.17 Annual Independent Certified Public Accountants' Reports.
On or before June 30 of any year, commencing in 1999, the
Servicer, at its own expense (or if the Trustee is then acting as Servicer, at
the expense of the Depositor, which in no event shall exceed $1,000 per annum),
shall cause to be delivered to the Trustee, the Certificate Insurer and the
Rating Agencies a letter or letters of a firm of independent, nationally
recognized certified public accountants reasonably acceptable to the Certificate
Insurer, dated as of the date
-125-
<PAGE>
of the Servicer's fiscal audit for subsequent letters, stating that such firm
has examined the Servicer's overall servicing operations in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers, and
stating such firm's conclusions relating thereto.
Section 8.18 Access to Certain Documentation and Information
Regarding the Home Equity Loans.
The Servicer shall provide to the Trustee, the Certificate
Insurer, the FDIC and the supervisory agents and examiners of each of the
foregoing (which, in the case of supervisory agents and examiners, may be
required by applicable state and federal regulations) access to the
documentation regarding the Home Equity Loans, such access being afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Servicer designated by it.
Section 8.19 Assignment of Agreement.
The Servicer may not assign its obligations under this
Agreement, in whole or in part, unless it shall have first obtained the written
consent of the Trustee and the Certificate Insurer, which consent shall not be
unreasonably withheld; provided, however, that any assignee must meet the
eligibility requirements set forth in Section 8.20(i) hereof for a successor
servicer.
Section 8.20 Removal of Servicer; Resignation of Servicer.
(a) The Certificate Insurer (or Trustee with the consent of
the Certificate Insurer and acting upon the request of a majority of the
Percentage Interests of the Offered Certificates then Outstanding), may remove
the Servicer upon the occurrence of any of the following events:
(i) The Servicer shall (I) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian or similar
entity with respect to itself or its property, (II) admit in writing
its inability to pay its debts generally as they become due, (III) make
a general assignment for the benefit of creditors, (IV) be adjudicated
a bankrupt or insolvent, (V) commence a voluntary case under the
federal bankruptcy laws of the United States of America or file a
voluntary petition or answer seeking reorganization, an arrangement
with creditors or an order for relief or seeking to take advantage of
any insolvency law or file an answer admitting the material allegations
of a petition filed against it in any bankruptcy, reorganization or
insolvency proceeding or (VI) take corporate action for the purpose of
effecting any of the foregoing; or
(ii) If without the application, approval or consent of the
Servicer, a proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking in respect of the Servicer
an order for relief or an adjudication in bankruptcy, reorganization,
dissolution, winding up, liquidation, a composition or arrangement with
creditors, a readjustment of debts, the appointment of a trustee,
receiver, liquidator or custodian or similar entity with respect to the
Servicer or of all or any substantial part of its assets, or
-126-
<PAGE>
other like relief in respect thereof under any bankruptcy or insolvency
law, and, if such proceeding is being contested by the Servicer in good
faith, the same shall (A) result in the entry of an order for relief or
any such adjudication or appointment or (B) continue undismissed or
pending and unstayed for any period of seventy-five (75) consecutive
days; or
(iii) The Servicer shall fail to perform any one or more of
its obligations hereunder and shall continue in default thereof for a
period of thirty (30) days (one (1) Business Day in the case of a
delay in making a required payment to the Trustee under Section
8.08(d)(ii)(a)) after the earlier of (a) actual knowledge of an officer
of the Servicer or (b) receipt of notice from the Trustee or the
Certificate Insurer of said failure; provided, however, that if the
Servicer can demonstrate to the reasonable satisfaction of the
Certificate Insurer that it is diligently pursuing remedial action,
then the cure period may be extended with the written approval of the
Certificate Insurer; or
(iv) The Servicer shall fail to cure any breach of any of
its representations and warranties set forth in Section 3.02 which
materially and adversely affects the interests of the Owners or the
Certificate Insurer for a period of sixty (60) days after the earlier
of the Servicer's discovery or receipt of notice thereof; provided
however, that if the Servicer can demonstrate to the reasonable
satisfaction of the Certificate Insurer that it is diligently
pursuing remedial action, then the cure period may be extended with
the written approval of the Certificate Insurer; or
(v) The merger, consolidation or other combination of the
Servicer with or into any other entity, unless (1) the Servicer is
the surviving entity of such combination or (2) the surviving entity is
a corporation or a state-chartered or national bank acceptable to
the Certificate Insurer (acceptable to the Owners of the Class R
Certificates as provided below but if such Owners and the Certificate
Insurer cannot agree, the Certificate Insurer shall control) organized
and doing business under the laws of any state or the United States; or
(vi) The occurrence of a Cumulative Realized Loss Termination
Trigger.
(b) The Certificate Insurer may remove the Servicer upon the
occurrence of any of the following events:
(i) an Insured Payment is made by the Certificate Insurer;
provided, however, that in the event that the Trustee shall become
the Servicer hereunder, if the Servicer can demonstrate to the
reasonable satisfaction of the Certificate Insurer that such event
was due to circumstances beyond the control of the Servicer, the
right of removal hereunder shall not be considered a default by the
Servicer;
(ii) the failure by the Servicer to make any required
Servicing Advance when due;
-127-
<PAGE>
(iii) Cumulative Realized Losses has exceeded 7% of the
Original Aggregate Loan Balance; provided, however, that in the event
that the Trustee shall become the Servicer hereunder, if the Servicer
can demonstrate to the reasonable satisfaction of the Certificate
Insurer that such event was due to circumstances beyond the control
of the Servicer, the right of removal hereunder shall not be
considered a default by the Servicer; or
(iv) the failure by the Servicer to make any required
Delinquency Advance or to pay any Compensating Interest when due;
provided, however, that (x) prior to any removal of the Servicer by the
Certificate Insurer pursuant to clause (iii) of this Section 8.20(b), the
Servicer and the Trustee shall first have been given by the Certificate Insurer
and by registered or certified mail, notice of the occurrence of one or more of
the events set forth in clause (iii) above and the Servicer shall not have
remedied, or shall not have taken actions satisfactory to the Certificate
Insurer to remedy, such event or events within 60 days after the Servicer's
receipt of such notice and (y) upon the Trustee's determination that a required
Delinquency Advance or payment of Compensating Interest has not been made by the
Servicer, the Trustee shall so notify an Authorized Officer of the Servicer, the
Owners, if any, and the Certificate Insurer as soon as is reasonably practical.
(c) If any event described in subsection (b)(iii) above
occurs and is continuing, during the thirty (30) day period following receipt of
notice, the Trustee, the Owners of the Class R Certificates and the Certificate
Insurer shall cooperate with each other to determine if the occurrence of such
event is more likely than not the result of the acts or omissions of the
Servicer or more likely than not the result of events beyond the control of the
Servicer. If the Trustee, the Owners of the Class R Certificates and the
Certificate Insurer conclude that the event is the result of the latter, the
Servicer may not be terminated, unless and until some other event set forth in
subsection (b) (i), (ii) or (iv) has occurred and is continuing. If the Trustee,
the Owners of the Class R Certificates and the Certificate Insurer conclude that
the event is the result of the former, the Certificate Insurer may terminate the
Servicer in accordance with this Section and the Trustee shall act as successor
Servicer; provided that the Trustee shall have until the 30th day following the
date of receipt of notice of the event to become the successor Servicer or to
appoint a successor Servicer pursuant to this Section.
If the Trustee, the Owners of the Class R Certificates and
the Certificate Insurer cannot agree, and the basis for such disagreement is not
arbitrary or unreasonable, as to the cause of the event, the decision of the
Certificate Insurer shall control; provided, however, that if the Certificate
Insurer decides to terminate the Servicer, the Trustee shall be relieved of its
obligation to assume the servicing or to appoint a successor, which shall be the
exclusive obligation of the Certificate Insurer.
The Certificate Insurer agrees to use its best efforts to
inform the Trustee of any materially adverse information regarding the
Servicer's servicing activities that comes to the attention of the Certificate
Insurer from time to time.
-128-
<PAGE>
(d) If any event described in sections (a) and (b) above
(other than (b)(iii) for which Section 8.20(c) controls) occurs and is
continuing, the Certificate Insurer shall notify the Owners of the Class R
Certificates in writing if the Certificate Insurer intends to terminate the
Servicer in its capacity as Servicer under this Agreement. During the 30 day
period following receipt of such notice by the Owners of the Class R
Certificates, such Owners and the Certificate Insurer shall cooperate with each
other to determine if the occurrence of such event is more likely than not the
result of the acts or omissions of the Servicer or more likely than not the
result of events beyond the control of the Servicer. If the Owners of the Class
R Certificates and the Certificate Insurer conclude that the event is the result
of the latter, the Servicer may not be terminated. If the Owners of the Class R
Certificates and the Certificate Insurer conclude that the event is the result
of the former, the Certificate Insurer may terminate the Servicer in accordance
with this Section and the Trustee shall act as successor Servicer; provided that
the Trustee shall have until the 30th day following the date of receipt of
notice of the event to become the successor Servicer or to appoint a successor
Servicer pursuant to this Section. If the Owners of the Class R Certificates and
the Certificate Insurer cannot agree as to the cause of the event, the decision
of the Certificate Insurer shall control.
(e) The Servicer shall not resign from the obligations and
duties hereby imposed on it, except upon determination that its duties hereunder
are no longer permissible under applicable law or are in material conflict by
reason of applicable law with any other activities carried on by it, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer at the date of this Agreement. Any such determination
permitting the resignation of the Servicer shall be evidenced by an opinion
of counsel to such effect which shall be delivered to the Trustee and the
Certificate Insurer, which opinion shall be at the Servicer's expense.
(f) No removal or resignation of the Servicer shall become
effective until the Trustee or a successor Servicer shall have assumed the
Servicer's responsibilities and obligations in accordance with this Section.
(g) Upon removal or resignation of the Servicer, the
Servicer at its own expense also shall promptly deliver or cause to be
delivered to a successor servicer or the Trustee all the books and records
(including, without limitation, records kept in electronic form) that the
Servicer has maintained for the Home Equity Loans, including all tax bills,
assessment notices, insurance premium notices and all other documents as well
as all original documents then in the Servicer's possession.
(h) Any collections then being held by the Servicer prior to
its removal and any collections received by the Servicer after removal or
resignation shall be endorsed by it to the Trustee and remitted directly and
immediately to the Trustee or the successor Servicer.
(i) Upon removal or resignation of the Servicer, the Trustee
(x) may solicit bids for a successor servicer as described below, and (y)
pending the appointment of a successor servicer as a result of soliciting such
bids, shall serve as Servicer. The Trustee shall, if it is unable to obtain a
qualifying bid and is prevented by law from acting as Servicer, appoint, or
petition a court of competent jurisdiction to appoint, any housing and home
finance institution,
-129-
<PAGE>
bank or mortgage servicing institution which has been designated as an approved
seller-servicer by FannieMae or Freddie Mac for first and second mortgage loans
and having equity of not less than $10,000,000 (or such lower level as may be
acceptable to the Certificate Insurer), as determined in accordance with
generally accepted accounting principles and acceptable to the Certificate
Insurer and the Owners of the Class R Certificates (provided that if the
Certificate Insurer and such Owners cannot agree as to the acceptability of such
successor Servicer, the decision of the Certificate Insurer shall control) as
the successor to the Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Servicer hereunder. The
compensation of any successor Servicer (including, without limitation, the
Trustee) so appointed shall be the aggregate Servicing Fee, together with the
other servicing compensation in the form of assumption fees, late payment
charges or otherwise as provided in Sections 8.08 and 8.15; provided, however,
that if the Trustee acts as successor Servicer then ContiMortgage agrees to pay
to the Trustee at such time that the Trustee becomes such successor Servicer a
set-up fee of twenty-five dollars ($25.00) for each Home Equity Loan then
included in the Trust Estate. The Trustee shall be obligated to serve as
successor Servicer whether or not the fee described in the preceding sentence is
paid by ContiMortgage, but shall in any event be entitled to receive, and to
enforce payment of, such fee from ContiMortgage.
(j) In the event the Trustee solicits bids as provided
above, the Trustee shall solicit, by public announcement, bids from housing
and home finance institutions, banks and mortgage servicing institutions
meeting the qualifications set forth above. Such public announcement shall
specify that the successor Servicer shall be entitled to the full amount of
the aggregate Servicing Fees as servicing compensation, together with the
other servicing compensation in the form of assumption fees, late payment
charges or otherwise as provided in Sections 8.08 and 8.15. Within thirty days
after any such public announcement, the Trustee shall negotiate and effect the
sale, transfer and assignment of the servicing rights and responsibilities
hereunder to the qualified party submitting the highest satisfactory bid as to
the price they will pay to obtain servicing. The Trustee shall deduct from any
sum received by the Trustee from the successor Servicer in respect of such
sale, transfer and assignment all costs and expenses of any public
announcement and of any sale, transfer and assignment of the servicing rights
and responsibilities hereunder. After such deductions, the remainder of such
sum less any amounts due the Trustee or the Trust from the Servicer shall be
paid by the Trustee to the Servicer at the time of such sale, transfer and
assignment to the successor Servicer.
(k) The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession, including the notification to all Mortgagors of the transfer
of servicing. The Servicer agrees to cooperate with the Trustee and any
successor Servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Trustee or
such successor Servicer, as applicable, all documents and records reasonably
requested by it to enable it to assume the Servicer's functions hereunder and
shall promptly also transfer to the Trustee or such successor Servicer, as
applicable, all amounts which then have been or should have been deposited in
the Principal and Interest Account by the Servicer or which are thereafter
received with respect to the Home Equity Loans. Neither the Trustee nor any
other successor Servicer shall be held liable by reason of any failure to make,
or any delay in making, any distribution hereunder or any portion thereof caused
by (i) the failure of the Servicer to deliver, or any delay in delivering, cash,
documents or records
-130-
<PAGE>
to it, or (ii) restrictions imposed by any regulatory authority having
jurisdiction over the Servicer. If the Servicer resigns or is replaced
hereunder, the Seller agrees to reimburse the Trust, the Certificate Insurer and
the Owners for the costs and expenses associated with the transfer of servicing
to the replacement Servicer, but subject to a maximum reimbursement to all such
parties in the amount of twenty-five dollars ($25.00) for each Home Equity Loan
then included in the Trust Estate.
(l) The Trustee or any other successor Servicer, upon
assuming the duties of Servicer hereunder, shall immediately make all
Delinquency Advances and deposit them to the Principal and Interest Account
which the Servicer has theretofore failed to remit with respect to the Home
Equity Loans; provided, however, that if the Trustee is acting as successor
Servicer, the Trustee shall only be required to make Delinquency Advances
(including the Delinquency Advances described in this clause (l)) if, in the
Trustee's reasonable good faith judgment, such Delinquency Advances will
ultimately be recoverable from the Home Equity Loans.
(m) The Servicer which is being removed or is resigning
shall give notice to the Mortgagors, the Certificate Insurer and the Rating
Agencies of the transfer of the servicing to the successor Servicer.
The Trustee shall give notice to the Owners, the Trustee,
the Seller, the Certificate Insurer and the Rating Agencies of the occurrence
of any event described in paragraphs (a) or (b) above of which the Trustee is
aware.
Section 8.21 Inspections by Certificate Insurer; Errors and Omissions
Insurance.
At any reasonable time and from time to time upon reasonable
notice, the Trustee, the Certificate Insurer or any agents thereof may inspect
the Servicer's servicing operations and discuss the servicing operations of
the Servicer during the Servicer's normal business hours with any of its
officers or directors; provided, however, that the costs and expenses incurred
by the Servicer or its agents or representatives in connection with any such
examinations or discussions shall be paid by the Servicer;
The Servicer agrees to maintain errors and omissions
coverage and a fidelity bond, each at least to the extent required by Section
305 of Part I of the FannieMae Guide or any successor provision thereof;
provided, however, that if the Trustee shall become the Servicer, any customary
insurance coverage that the Trustee maintains shall be deemed sufficient
hereunder; provided, further, that in the event that the fidelity bond or the
errors and omissions coverage is no longer in effect, the Trustee shall promptly
give such notice to the Certificate Insurer and the Owners. Upon the request of
the Trustee or the Certificate Insurer, the Servicer shall cause to be delivered
to such requesting Person a certified true copy of such fidelity bond or errors
and omission policy.
END OF ARTICLE VIII
-131-
<PAGE>
ARTICLE IX
TERMINATION OF TRUST
Section 9.01 Termination of Trust.
The Trust created hereunder and all obligations created by
this Agreement will terminate upon the payment to the Owners of all
Certificates, from amounts other than those available under the Certificate
Insurance Policy, of all amounts held by the Trustee and required to be paid to
such Owners pursuant to this Agreement upon the latest to occur of (a) the final
payment or other liquidation (or any advance made with respect thereto) of the
last Home Equity Loan in the Trust Estate, (b) the disposition of all property
acquired in respect of any Home Equity Loan remaining in the Trust Estate, (c)
at any time when a Qualified Liquidation of the Home Equity Loans included
within the Trust is effected as described below and (d) the final payment to the
Certificate Insurer of all amounts then owing to it. To effect a termination of
this Agreement pursuant to clause (c) above, the Owners of all Certificates then
Outstanding shall (i) unanimously direct the Trustee on behalf of the each REMIC
to adopt a plan of complete liquidation as contemplated by Section 860F(a)(4) of
the Code and (ii) provide to the Trustee an opinion of counsel experienced in
federal income tax matters acceptable to the Certificate Insurer and the Trustee
to the effect that each such liquidation constitutes a Qualified Liquidation,
and the Trustee either shall sell the Home Equity Loans and distribute the
proceeds of the liquidation of the Trust Estate, or shall distribute equitably
in kind all of the assets of the Trust Estate to the remaining Owners of the
Certificates each in accordance with such plan, so that the liquidation or
distribution of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of this Agreement occur no later than the close
of the 90th day after the date of adoption of the plan of liquidation and such
liquidation qualifies as a Qualified Liquidation. In no event, however, will the
Trust created by this Agreement continue beyond the expiration of twenty-one
(21) years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late Ambassador of the United States to the Court of Saint James,
living on the date hereof. The Trustee shall give written notice of termination
of the Agreement to each Owner in the manner set forth in Section 11.05.
Section 9.02 Termination Upon Option of Owners of Class R-I
Certificates.
On any Monthly Remittance Date on or after the Clean-Up Call
Date, the Owners of a majority of the Percentage Interests represented by the
Class R-I Certificates then outstanding or, in the absence of a determination by
such Owners, the Certificate Insurer may determine to purchase and may cause the
purchase from the Trust of all (but not fewer than all) Home Equity Loans and
all property theretofore acquired in respect of any Home Equity Loan by
foreclosure, deed in lieu of foreclosure, or otherwise then remaining in the
Trust Estate (i) on terms agreed upon between the Certificate Insurer and the
Owners of such Class R-I Certificates, or (ii) in the absence of such an
agreement, at a price equal to 100% of the aggregate Loan Balances of the
related Home Equity Loans as of the day of purchase minus amounts remitted from
the Principal and Interest Account to the Certificate Account representing
collections of principal on the Home Equity Loans during the current Remittance
Period, plus one month's interest on such amount computed at the Termination
Date Pass-Through Rate, plus all accrued
-132-
<PAGE>
and unpaid Servicing Fees plus the aggregate amount of any unreimbursed
Delinquency Advances and Servicing Advances and any Delinquency Advances which
the Servicer has theretofore failed to remit plus any amounts due and owing to
the Certificate Insurer under the Insurance Agreement, provided that any such
purchase price pursuant to clause (i) or (ii) shall be sufficient to pay the
Outstanding Certificate Principal Balance of and accrued and unpaid interest on
all Classes of outstanding Class A Trust and Class B Certificates plus any
amounts due and owing the Certificate Insurer under the Insurance Agreement. In
connection with such purchase, the Servicer shall remit to the Trustee all
amounts then on deposit in the Principal and Interest Account for deposit to the
Certificate Account, which deposit shall be deemed to have occurred immediately
preceding such purchase.
In connection with any such purchase, such Owners of the
Class R-I Certificates shall unanimously direct the Trustee to adopt and the
Trustee shall adopt, as to each REMIC, a plan of complete liquidation of all
Home Equity as contemplated by Section 860F(a)(4) of the Code and shall
provide to the Trustee and the Certificate Insurer an opinion of counsel
experienced in federal income tax matters acceptable to the Trustee and the
Certificate Insurer to the effect that such purchase and liquidations
constitutes, as to the REMIC, a Qualified Liquidation. In addition, such
Owners of the Class R-I Certificates shall provide to the Trustee and the
Certificate Insurer an opinion of counsel acceptable to the Trustee and the
Certificate Insurer to the effect that such purchase and liquidation does not
constitute a preference payment pursuant to the United States Bankruptcy Code.
The purchase option reserved to the Owners of a majority of
the Percentage Interests represented by the Class R-I Certificates may be
exercised by the Certificate Insurer if (i) not exercised by such owners and
(ii) the Servicer as of the Closing Date is no longer the Servicer hereunder.
Promptly following any purchase described in this Section
9.02, the Trustee will release the Files to the Owners of such Class R-I
Certificates or the Certificate Insurers, as the case may be, or otherwise
upon their order, in a manner similar to that described in Section 8.14
hereof.
Section 9.03 Termination Upon Loss of REMIC Status.
Following a final determination by the Internal Revenue
Service or by a court of competent jurisdiction, in either case from which no
appeal is taken within the permitted time for such appeal or, if any appeal is
taken, following a final determination of such appeal from which no further
appeal can be taken, to the effect that any REMIC in the Trust does not and
will no longer qualify as a REMIC pursuant to Section 860D of the Code (the
"Final Determination"), at any time on or after the date which is 30 calendar
days following such Final Determination (i) the Certificate Insurer or the
Owners of a majority in Percentage Interests represented by the Class A Trust
and Class B Certificates then Outstanding may direct the Trustee on behalf of
the Trust to adopt a plan of complete liquidation, as contemplated by Section
860F(a)(4) of the Code and (ii) the Certificate Insurer may notify the Trustee
of the Certificate Insurer's determination to purchase from the Trust all (but
not fewer than all) Home Equity Loans and all property theretofore acquired by
foreclosure, deed in lieu of foreclosure, or otherwise then remaining in
-133-
<PAGE>
the Trust Estate at a price equal to the sum of (x) the greater of (i) 100% of
the aggregate Loan Balances of the Home Equity Loans as of the day of purchase
minus amounts remitted from the Principal and Interest Account representing
collections of principal on the Home Equity Loans during the current Remittance
Period, and (ii) the fair market value of such Home Equity Loans (disregarding
accrued interest), (y) one month's interest on such amount computed at the
Adjusted Pass-Through Rate and (z) the aggregate amount of any unreimbursed
Delinquency Advances and Servicing Advances and any Delinquency Advances which
the Servicer has theretofore failed to remit.
Upon receipt of such direction from the Certificate Insurer,
the Trustee shall notify the Owners of the Residual Certificates of such
election to liquidate or such determination to purchase, as the case may be (the
"Termination Notice"). The Owners of a majority of the Percentage Interests of
the Class R-I Certificates then Outstanding may, within 60 days from the date of
receipt of the Termination Notice (the "Purchase Option Period"), at their
option, purchase from the Trust all (but not fewer than all) Home Equity Loans
and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure, or otherwise then remaining in the Trust Estate at a purchase price
equal to the aggregate Loan Balances of all Home Equity Loans as of the date of
such purchase, plus (a) one month's interest on such amount at the Termination
Date Pass-Through Rate, (b) the aggregate amount of any unreimbursed Delinquency
Advances and Servicing Advances and (c) any Delinquency Advances which the
Servicer has theretofore failed to remit. If, during the Purchase Option Period,
the Owners of the Class R-I Certificates have not exercised the option described
in the immediately preceding sentence, then upon the expiration of the Purchase
Option Period in the event that the Certificate Insurer or the Owners of the
Class A Certificates with the consent of the Certificate Insurer have given the
Trustee the direction described in clause (a)(i) above, the Trustee shall sell
the Home Equity Loans and distribute the proceeds of the liquidation of the
Trust Estate, each in accordance with the plan of complete liquidation, such
that, if so directed, the liquidation of the Trust Estate, the distribution of
the proceeds of the liquidation and the termination of this Agreement occur no
later than the close of the 60th day, or such later day as the Certificate
Insurer or the Owners of the Class A Certificates with the consent of the
Certificate Insurer shall permit or direct in writing, after the expiration of
the Purchase Option Period and (ii) in the event that the Certificate Insurer
has given the Trustee notice of the Certificate Insurer's determination to
purchase the Trust Estate described in clause (a)(ii) above the Certificate
Insurer shall, within 60 days, purchase all (but not fewer than all) Home Equity
Loans and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure or otherwise then remaining in the Trust Estate. In connection with
such purchase, the Servicer shall remit to the Trustee all amounts then on
deposit in the Principal and Interest Account for deposit to the Certificate
Account, which deposit shall be deemed to have occurred immediately preceding
such purchase.
Following a Final Determination, the Owners of a majority of
the Percentage Interests of the Class R-I Certificates then Outstanding may,
at their option and upon delivery to the Certificate Insurer of an opinion of
counsel experienced in federal income tax matters acceptable to the Certificate
Insurer selected by the Owners of the Class R-I Certificates, which opinion
shall be reasonably satisfactory in form and substance to the Certificate
Insurer, to the effect that the effect of the Final Determination is to increase
substantially the probability that the gross income of the Trust will be subject
to federal taxation, purchase from the Trust all (but not
-134-
<PAGE>
fewer than all) Home Equity Loans and all property theretofore acquired by
foreclosure, deed in lieu of foreclosure, or otherwise then remaining in the
Trust Estate at a purchase price equal to the aggregate Loan Balances of all
Home Equity Loans as of the date of such purchase, plus (a) one month's interest
on such amount computed at the Termination Date Pass-Through Rate, (b) the
aggregate amount of unreimbursed Delinquency Advances and (c) any Delinquency
Advances which the Servicer has theretofore failed to remit. In connection with
such purchase, the Servicer shall remit to the Trustee all amounts then on
deposit in the Principal and Interest Account for deposit to the Certificate
Account, which deposit shall be deemed to have occurred immediately preceding
such purchase. The foregoing opinion shall be deemed satisfactory unless the
Certificate Insurer gives the Owners of a majority of the Percentage Interests
of the Class R-I Certificates notice that such opinion is not satisfactory
within thirty days after receipt of such opinion. In connection with any such
purchase, such Owners shall direct the Trustee to adopt a plan of complete
liquidation as contemplated by Section 860F(a)(4) of the Code and shall provide
to the Trustee an opinion of counsel experienced in federal income tax matters
to the effect that such purchase constitutes a Qualified Liquidation.
Section 9.04 Disposition of Proceeds.
The Trustee shall, upon receipt thereof, deposit the
proceeds of any liquidation of the Trust Estate pursuant to this Article IX to
the Certificate Account; provided, however, that any amounts representing
unreimbursed Delinquency Advances and Servicing Advances theretofore funded by
the Servicer from the Servicer's own funds shall be paid by the Trustee to the
Servicer from the proceeds of the Trust Estate.
END OF ARTICLE IX
-135-
<PAGE>
ARTICLE X
THE TRUSTEE
Section 10.01 Certain Duties and Responsibilities.
(a) The Trustee (i) (A) undertakes to perform such duties
and only such duties as are specifically set forth in this Agreement, and no
implied covenants or obligations shall be read into this Agreement against the
Trustee and (B) the banking institution that is the Trustee shall serve as the
Trustee at all times under this Agreement, and (ii) in the absence of bad faith
on its part, may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished pursuant to and conforming to the requirements of this Agreement; but
in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, shall be under a duty
to examine the same to determine whether or not they conform to the requirements
of this Agreement.
(b) Notwithstanding the appointment of the Servicer hereunder,
the Trustee is hereby empowered to perform the duties of the Servicer it being
expressly understood, however, that the foregoing describes a power and not an
obligation of the Trustee, and that all parties hereto agree that, prior to any
termination of the Servicer, the Servicer and, thereafter, the Trustee or any
other successor servicer shall perform such duties. Specifically, and not in
limitation of the foregoing, the Trustee shall upon termination or resignation
of the Servicer, and pending the appointment of any other Person as successor
Servicer, have the power and duty during its performance as successor Servicer:
(i) to collect Mortgagor payments;
(ii) to foreclose on defaulted Home Equity Loans;
(iii) to enforce due-on-sale clauses and to enter into
assumption and substitution agreements as permitted by
Section 8.12 hereof;
(iv) to deliver instruments of satisfaction pursuant to
Section 8.14;
(v) to enforce the Home Equity Loans; and
(vi) to make Delinquency Advances and Servicing Advances
and to pay Compensating Interest.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
-136-
<PAGE>
(ii) the Trustee shall not be personally liable for any
error of judgment made in good faith by an Authorized Officer, unless
it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Certificate Insurer or the Owners of a
majority in Percentage Interest of the Certificates of the affected
Class or Classes and the Certificate Insurer relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement relating to such Certificates.
(d) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions
of this Section.
(e) No provision of this Agreement shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. None of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
(f) The permissive right of the Trustee to take actions
enumerated in this Agreement shall not be construed as a duty and the Trustee
shall not be answerable for other than its own negligence or willful
misconduct.
(g) The Trustee shall be under no obligation to institute
any suit, or to take any remedial proceeding under this Agreement, or to take
any steps in the execution of the trusts hereby created or in the enforcement
of any rights and powers hereunder until it shall be indemnified to its
satisfaction against any and all costs and expenses, outlays and counsel fees
and other reasonable disbursements and against all liability, except liability
which is adjudicated to have resulted from its negligence or willful misconduct,
in connection with any action so taken.
Section 10.02 Removal of Trustee for Cause.
(a) The Trustee may be removed pursuant to paragraph (b)
hereof upon the occurrence of any of the following events (whatever the reason
for such event and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental body):
-137-
<PAGE>
(i) the Trustee shall fail to distribute to the Owners
entitled hereto on any Payment Date amounts available for distribution
in accordance with the terms hereof; (provided, however, that any such
failure which is due to circumstances beyond the control of the Trustee
shall not be a cause for removal hereunder); or
(ii) the Trustee shall fail in the performance of, or
breach, any covenant or agreement of the Trustee in this Agreement,
or if any representation or warranty of the Trustee made in this
Agreement or in any certificate or other writing delivered pursuant
hereto or in connection herewith shall prove to be incorrect in any
material respect as of the time when the same shall have been made,
and such failure or breach shall continue or not be cured for a
period of 30 days after there shall have been given, by registered or
certified mail, to the Trustee by the Sellers, the Certificate
Insurer or by the Owners of at least 25% of the aggregate Percentage
Interests in the Trust Estate represented by the Offered Certificates
then Outstanding, or, if there are no Offered Certificates then
Outstanding, by such Percentage Interests represented by the Class R
Certificates, a written notice specifying such failure or breach and
requiring it to be remedied; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered
against the Trustee, and such decree or order shall have remained in
force undischarged or unstayed for a period of 75 days; or
(iv) a conservator or receiver or liquidator or sequestrator
or custodian of the property of the Trustee is appointed in any
insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings of or relating to the Trustee or relating to all
or substantially all of its property; or
(v) the Trustee shall become insolvent (however insolvency
is evidenced), generally fail to pay its debts as they come due, file
or consent to the filing of a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, voluntarily suspend payment of its
obligations, or take corporate action for the purpose of any of the
foregoing.
The Depositor shall give notice to the Certificate Insurer and the Rating
Agencies of the occurrence of any such event of which the Depositor is aware.
(b) If any event described in paragraph (a) occurs and is
continuing, then and in every such case (i) the Certificate Insurer or (ii)
with the prior written consent (which shall not be unreasonably withheld) of
the Certificate Insurer, the Depositor and the Owners of a majority of the
Percentage Interests represented by the Offered Certificates or if there are
no Offered Certificates then outstanding by such majority of the Percentage
Interests represented by the Retained Certificates, may, whether or not the
Trustee resigns pursuant to Section 10.09(b) hereof, immediately, concurrently
with the giving of notice to the Trustee, and without delaying
-138-
<PAGE>
the 30 days required for notice therein, appoint a successor Trustee pursuant to
the terms of Section 10.09 hereof.
(c) The Servicer shall not be liable for any costs relating
to the removal of the Trustee or the appointment of a new Trustee.
Section 10.03 Certain Rights of the Trustee.
Except as otherwise provided in Section 10.01 hereof:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Depositor, either of the
Sellers, the Certificate Insurer or the Owners of any Class of Certificates
mentioned herein shall be sufficiently evidenced in writing;
(c) whenever in the administration of this Agreement the
Trustee shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel, and the written
advice of such counsel (selected in good faith by the Trustee) shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reasonable reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement at the request or
direction of any of the Owners pursuant to this Agreement, unless such Owners
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or document, but the Trustee in its discretion may make such
further inquiry or investigation into such facts or matters as it may see fit;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys or custodians;
(h) the Trustee shall not be liable for any action it takes
or omits to take in good faith which it reasonably believes to be authorized
by the Authorized Officer of any Person
-139-
<PAGE>
or within its rights or powers under this Agreement other than as to validity
and sufficiency of its authentication of the Certificates;
(i) the right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act;
(j) pursuant to the terms of this Agreement, the Servicer is
required to furnish to the Trustee from time to time certain information and to
make various calculations which are relevant to the performance of the Trustee's
duties under this Agreement. The Trustee shall be entitled to rely in good faith
on any such information and calculations in the performance of its duties
hereunder, (i) unless and until an Authorized Officer of the Trustee has actual
knowledge, or is advised by any Owner of a Certificate (either in writing or
orally with prompt written or telecopies confirmation), that such information or
calculations is or are incorrect, or (ii) unless there is a manifest error in
any such information; and
(k) the Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust Estate created hereby or the
powers granted hereunder.
Section 10.04 Not Responsible for Recitals or Issuance of
Certificates.
The recitals and representations contained herein and in the
Certificates, except any such recitals and representations relating to the
Trustee, shall be taken as the statements of the Depositor and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representation as to the validity or sufficiency of this Agreement, of the
Certificates, or any Home Equity Loan or document related thereto other than as
to validity and sufficiency of its authentication of the Certificates. The
Trustee shall not be accountable for the use or application by the Depositor of
any of the Certificates or of the proceeds of such Certificates, or for the use
or application of any funds paid to the Depositor, either of the Sellers or the
Servicer in respect of the Home Equity Loans or deposited into or withdrawn from
the Principal and Interest Account or the Certificate Account by the Depositor,
the Servicer or either of the Sellers, and shall have no responsibility for
filing any financing or continuation statement in any public office at any time
or otherwise to perfect or maintain the perfection of any security interest or
lien or to prepare or file any tax returns or Securities and Exchange Commission
filings for the Trust or to record this Agreement. The Trustee shall not be
required to take notice or be deemed to have notice or knowledge of any default
unless an Authorized Officer of the Trustee shall have received written notice
thereof or an Authorized Officer has actual knowledge thereof. In the absence of
receipt of such notice, the Trustee may conclusively assume that no default has
occurred.
Section 10.05 May Hold Certificates.
The Trustee, any Paying Agent, Registrar or any other agent
of the Trust, in its individual or any other capacity, may become an Owner or
pledgee of Certificates and may otherwise deal with the Trust with the same
rights it would have if it were not Trustee, any Paying Agent, Registrar or
such other agent.
-140-
<PAGE>
Section 10.06 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other trust funds except to the extent required herein or
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Seller and
except to the extent of income or other gain on investments which are deposits
in or certificates of deposit of the Trustee in its commercial capacity.
Section 10.07 Compensation and Reimbursement; No Lien for Fees.
The Trustee shall receive compensation for fees and
reimbursement for expenses pursuant to Section 2.05, Section 7.03(b)(i) and
Section 7.06 hereof. The Trustee shall have no lien on the Trust Estate for
the payment of such fees and expenses.
Section 10.08 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall
be a corporation or association organized and doing business under the laws of
the United States of America or of any State authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 subject to supervision or examination by the United States of
America, acceptable to the Certificate Insurer and having a deposit rating of at
least A2 by Moody's (or such lower rating as may be acceptable to Moody's), and
deposit rating of A (and a short-term rating of A-1 or better) by Standard &
Poor's (or such lower rating as may be acceptable to Standard & Poor's) and, if
rated by Fitch, having a rating of at least A from Fitch (or such lower rating
as may be acceptable to Fitch). If such Trustee publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall, upon the request of
ContiMortgage with the consent of the Certificate Insurer (which consent shall
not be unreasonably withheld) or of the Certificate Insurer, resign immediately
in the manner and with the effect hereinafter specified in this Article X.
Section 10.09 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor trustee pursuant to this Article X shall become
effective until the acceptance of appointment by the successor trustee under
Section 10.10 hereof.
(b) The Trustee, or any trustee or trustees hereafter
appointed, may resign at any time by giving written notice of resignation to the
Depositor and by mailing notice of resignation by first-class mail, postage
prepaid, to the Certificate Insurer and the Owners at their addresses appearing
on the Register; provided, that the Trustee cannot resign solely for the failure
to receive the Trustee Fee. A copy of such notice shall be sent by the resigning
Trustee to the Rating Agencies. Upon receiving notice of resignation, the
Depositor shall promptly appoint a
-141-
<PAGE>
successor trustee or trustees acceptable to the Certificate Insurer by written
instrument, in duplicate, executed on behalf of the Trust by an Authorized
Officer of ContiMortgage, one copy of which instrument shall be delivered to the
Trustee so resigning and one copy to the successor trustee or trustees. If no
successor trustee shall have been appointed and have accepted appointment within
30 days after the giving of such notice of resignation, the resigning trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Owner may, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and appropriate, appoint a successor trustee.
(c) If at any time the Trustee shall cease to be eligible
under Section 10.08 hereof and shall fail to resign after written request
therefor by the Depositor or the Certificate Insurer, the Certificate Insurer
or the Depositor with the consent of the Certificate Insurer may remove the
Trustee and appoint a successor trustee acceptable to the Certificate Insurer
by written instrument, in duplicate, executed on behalf of the Trust by an
Authorized Officer of the Depositor, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
(d) The Owners of a majority of the Percentage Interests
represented by the Class A Certificates with the consent of the Certificate
Insurer or, if there are no Class A Certificates then Outstanding, by such
majority of the Percentage Interests represented by the Class R Certificates,
may at any time remove the Trustee and appoint a successor trustee acceptable
to the Certificate Insurer by delivering to the Trustee to be removed, to the
successor trustee so appointed, to the Depositor, to the Certificate Insurer
and to the Servicer copies of the record of the act taken by the Owners, as
provided for in Section 11.03 hereof.
(e) If the Trustee fails to perform its duties in accordance
with the terms of this Agreement, or becomes ineligible pursuant to Section
10.08 to serve as Trustee, the Certificate Insurer may remove the Trustee and
appoint a successor trustee by written instrument, in triplicate, signed by the
Certificate Insurer duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee so removed and
one complete set to the successor Trustee so appointed.
(f) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Trustee
for any cause, ContiMortgage shall promptly appoint a successor trustee
acceptable to the Certificate Insurer. If within one year after such
resignation, removal or incapability or the occurrence of such vacancy, a
successor trustee shall be appointed by act of the Certificate Insurer or the
Owners of a majority of the Percentage Interests represented by the Class A
Certificates then Outstanding with the consent of the Certificate Insurer, the
successor trustee so appointed shall forthwith upon its acceptance of such
appointment become the successor trustee and supersede the successor trustee
appointed by the Depositor. If no successor trustee shall have been so appointed
by the Depositor or the Owners and shall have accepted appointment in the manner
hereinafter provided, any Owner may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor trustee.
-142-
<PAGE>
(g) The Depositor shall give notice of any removal of the
Trustee by mailing notice of such event by first-class mail, postage prepaid,
to the Certificate Insurer, the Rating Agencies and to the Owners as their
names and addresses appear in the Register. Each notice shall include the name
of the successor Trustee and the address of its corporate trust office.
Section 10.10 Acceptance of Appointment by Successor Trustee.
Every successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Depositor on behalf of the Trust and to its
predecessor Trustee an instrument accepting such appointment hereunder and
stating its eligibility to serve as Trustee hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts, duties and obligations of its
predecessor hereunder; but, on request of the Depositor or the successor
Trustee, such predecessor Trustee shall, upon payment of its charges then
unpaid, execute and deliver an instrument transferring to such successor trustee
all of the rights, powers and trusts of the Trustee so ceasing to act, and shall
duly assign, transfer and deliver to such successor trustee all property and
money held by such Trustee so ceasing to act hereunder. Upon request of any such
successor trustee, the Depositor on behalf of the Trust shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor trustee all such rights, powers and trusts.
Upon acceptance of appointment by a successor Trustee as
provided in this Section, the Depositor shall mail notice thereof by first-class
mail, postage prepaid, to the Owners at their last addresses appearing upon the
Register. The Depositor shall send a copy of such notice to the Rating Agencies.
If the Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor Trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Trust.
No successor trustee shall accept its appointment unless at
the time of such acceptance such successor shall be qualified and eligible
under this Article X.
Section 10.11 Merger, Conversion, Consolidation or Succession to
Business of the Trustee.
Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, however,
that such corporation or association shall be otherwise qualified and eligible
under this Article X. In case any Certificates have been executed, but not
delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation to such Trustee may adopt such execution and deliver the
Certificates so executed with the same effect as if such successor Trustee had
itself executed such Certificates.
-143-
<PAGE>
Section 10.12 Reporting; Withholding.
(a) The Trustee shall timely provide to the Owners the
Internal Revenue Service's Form 1099 and any other statement required by
applicable Treasury regulations as determined by the Tax Matters Person, and
shall withhold, as required by applicable law, federal, state or local taxes, if
any, applicable to distributions to the Owners, including but not limited to
backup withholding under Section 3406 of the Code and the withholding tax on
distributions to foreign investors under Sections 1441 and 1442 of the Code.
(b) As required by law or upon request of the Tax Matters
Person and except as otherwise specifically set forth in subsection (a) above,
the Trustee shall timely file all reports prepared by the Depositor and
required to be filed by the Trust with any federal, state or local governmental
authority having jurisdiction over the Trust, including other reports that must
be filed with the Owners, such as the Internal Revenue Service's Form 1066 and
Schedule Q and the form required under Section 6050K of the Code, if applicable
to REMICs. Furthermore, the Trustee shall report to Owners, if required, with
respect to the allocation of expenses pursuant to Section 212 of the Code in
accordance with the specific instructions to the Trustee by the Depositor with
respect to such allocation of expenses. The Trustee shall, upon request of the
Depositor, collect any forms or reports from the Owners determined by the
Depositor to be required under applicable federal, state and local tax laws.
(c) The Depositor covenants and agrees that it shall provide
to the Trustee any information necessary to enable the Trustee to meet its
obligations under subsections (a) and (b) above.
(d) Except as otherwise provided, the Depositor shall have
the responsibility for preparation of all returns, forms, reports and other
documents referred to in this Section and the Trustee's responsibility shall
be to execute such documents.
Section 10.13 Liability of the Trustee.
The Trustee shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by
the Trustee herein. Neither the Trustee nor any of the directors, officers,
employees or agents of the Trustee shall be under any liability on any
Certificate or otherwise to the Depositor, either of the Sellers, the Servicer,
the Certificate Insurer or any Owner for any action taken or for refraining from
the taking of any action in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the
Trustee, its directors, officers, employees or agents or any such Person against
any liability which would otherwise be imposed by reason of negligent action,
negligent failure to act or willful misconduct in the performance of duties or
by reason of reckless disregard of obligations and duties hereunder. Subject
to the foregoing sentence, the Trustee shall not be liable for losses on
investments of amounts in the Certificate Account (except for any losses on
obligations on which the bank serving as Trustee is the obligor). In addition,
the Depositor, each of the Sellers and Servicer covenant and agree to indemnify
the Trustee, and when the Trustee is acting as Servicer, the Servicer, from, and
hold it harmless against, any and all losses, liabilities, damages, claims or
expenses (including legal fees and
-144-
<PAGE>
expenses) of whatsoever kind arising out of or in connection with the
performance of its duties hereunder other than those resulting from the
negligence or bad faith of the Trustee, and the Depositor shall pay all amounts
not otherwise paid pursuant to Sections 2.05 and 7.06 hereof. The Trustee and
any director, officer, employee or agent of the Trustee may rely and shall be
protected in acting or refraining from acting in good faith on any certificate,
notice or other document of any kind prima facie properly executed and submitted
by the Authorized Officer of any Person respecting any matters arising
hereunder. The provisions of this Section 10.13 shall survive the termination of
this Agreement and the payment of the outstanding Certificates.
Section 10.14 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at
any time, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Estate or Property may at the time be located,
the Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee and reasonably acceptable to the Certificate Insurer to act as
co-Trustee or co-Trustees, jointly with the Trustee, of all or any part of the
Trust Estate or separate Trustee or separate Trustees of any part of the Trust
Estate, and to vest in such Person or Persons, in such capacity and for the
benefit of the Owners, such title to the Trust Estate, or any part thereof, and,
subject to the other provisions of this Section 10.14, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case any event indicated in Section 8.20(a) shall have occurred and be
continuing, the Trustee subject to reasonable approval of the Certificate
Insurer alone shall have the power to make such appointment. No co-Trustee or
separate Trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 10.08 and no notice to Owners of the
appointment of any co-Trustee or separate Trustee shall be required under
Section 10.09.
Every separate Trustee and co-Trustee shall, to the extent
permitted, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate Trustee or
co-Trustee jointly (it being understood that such separate Trustee or
co-Trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate
or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate Trustee or co-Trustee, but
solely at the direction of the Trustee;
(ii) No co-Trustee hereunder shall be held personally liable
by reason of any act or omission of any other co-Trustee hereunder; and
-145-
<PAGE>
(iii) The Servicer, the Certificate Insurer and the Trustee
acting jointly may at any time accept the resignation of or remove
any separate Trustee or co-Trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate Trustees and
co-Trustees, as effectively as if given to each of them. Every instrument
appointing any separate Trustee or co-Trustee shall refer to this Agreement and
the conditions of this Section 10.14. Each separate Trustee and co-Trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Servicer.
Any separate Trustee or co-Trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate Trustee
or co-Trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
The Servicer and the Trustee hereby appoint First Union
National Bank (the "Initial Co-Trustee") as co-trustee with respect to the
Mortgage Loans secured by Mortgaged Properties situated in New Jersey and any
other part of the Trust Estate or property securing the same that at any time
may be situated in New Jersey.
END OF ARTICLE X
-146-
<PAGE>
ARTICLE XI
MISCELLANEOUS
Section 11.01 Compliance Certificates and Opinions.
Upon any application or request by the Depositor, the
Seller, the Certificate Insurer or the Owners to the Trustee to take any action
under any provision of this Agreement, the Depositor, either of the Sellers, the
Certificate Insurer or the Owners, as the case may be, shall furnish to the
Trustee a certificate stating that all conditions precedent, if any, provided
for in this Agreement relating to the proposed action have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate need be furnished.
Except as otherwise specifically provided herein, each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Agreement (including one furnished pursuant to specific
requirements of this Agreement relating to a particular application or
request) shall include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based; and
(c) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 11.02 Form of Documents Delivered to the Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an Authorized Officer of the
Trustee may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such Authorized Officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
of an Authorized Officer of the Trustee or any opinion of counsel may be based,
insofar as it relates to factual matters upon a certificate or opinion of, or
representations by, one or more Authorized Officers of the Depositor, either
of the Sellers or the Servicer, stating that the information with respect to
-147-
<PAGE>
such factual matters is in the possession of the Depositor, such Seller or the
Servicer, unless such Authorized Officer or counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous. Any opinion of counsel may also be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an Authorized Officer of the Trustee, stating that
the information with respect to such matters is in the possession of the
Trustee, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Any opinion of counsel may be based on the written
opinion of other counsel, in which event such opinion of counsel shall be
accompanied by a copy of such other counsel's opinion and shall include a
statement to the effect that such counsel believes that such counsel and the
Trustee may reasonably rely upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be consolidated
and form one instrument.
Section 11.03 Acts of Owners.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by the Owners may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Owners in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee, and, where it is hereby expressly required, to one or both of
the Sellers. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the Owners
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Certificates shall be proved by the
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Owner of any Certificate shall bind the
Owner of every Certificate issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof, in respect of anything done, omitted
or suffered to be done by the Trustee or the Trust in reliance thereon,
whether or not notation of such action is made upon such Certificates.
-148-
<PAGE>
Section 11.04 Notices, etc. to Trustee.
Any request, demand, authorization, direction, notice,
consent, waiver or act of the Owners or other documents provided or permitted
by this Agreement to be made upon, given or furnished to, or filed with the
Trustee by any Owner, the Depositor, the Certificate Insurer or either of the
Sellers shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with and received by the Trustee at the
Corporate Trust Office.
Section 11.05 Notices and Reports to Owners; Waiver of Notices.
Where this Agreement provides for notice to Owners of any
event or the mailing of any report to Owners, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Owner affected by such event or to whom
such report is required to be mailed, at the address of such Owner as it appears
on the Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice or the mailing of such
report. In any case where a notice or report to Owners is mailed in the manner
provided above, neither the failure to mail such notice or report nor any defect
in any notice or report so mailed to any particular Owner shall affect the
sufficiency of such notice or report with respect to other Owners, and any
notice or report which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given or provided. Notwithstanding the
foregoing, if the Servicer is removed or resigns or the Trust is terminated,
notice of any such events shall be made by overnight courier, registered mail or
telecopy followed by a telephone call.
Where this Agreement provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Owners shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Owners when such notice is required
to be given pursuant to any provision of this Agreement, then any manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Agreement provides for notice to any rating
agency that rated any Certificates, failure to give such notice shall not affect
any other rights or obligations created hereunder.
Section 11.06 Rules by Trustee.
The Trustee may make reasonable rules for any meeting of
Owners.
-149-
<PAGE>
Section 11.07 Successors and Assigns.
All covenants and agreements in this Agreement by any party
hereto shall bind its successors and assigns, whether so expressed or not.
Section 11.08 Severability.
In case any provision in this Agreement or in the
Certificates shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 11.09 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed
or implied, shall give to any Person, other than the Owners, the Certificate
Insurer and the parties hereto and their successors hereunder, any benefit or
any legal or equitable right, remedy or claim under this Agreement.
Section 11.10 Legal Holidays.
In any case where the date of any Monthly Remittance Date,
any Payment Date, any other date on which any distribution to any Owner is
proposed to be paid, or any date on which a notice is required to be sent to any
Person pursuant to the terms of this Agreement shall not be a Business Day, then
(notwithstanding any other provision of the Certificates or this Agreement)
payment or mailing need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made or mailed on
the nominal date of any such Monthly Remittance Date, such Payment Date, or such
other date for the payment of any distribution to any Owner or the mailing of
such notice, as the case may be, and no interest shall accrue for the period
from and after any such nominal date, provided such payment is made in full on
such next succeeding Business Day.
Section 11.11 Governing Law; Submission to Jurisdiction.
(a) In view of the fact that Owners are expected to reside
in many states and outside the United States and the desire to establish with
certainty that this Agreement will be governed by and construed and interpreted
in accordance with the law of a state having a well-developed body of commercial
and financial law relevant to transactions of the type contemplated herein, this
Agreement and each Certificate shall be construed in accordance with and
governed by the laws of the State of New York applicable to agreements made and
to be performed therein, without giving effect to the conflicts of law
principles thereof.
(b) The parties hereto hereby irrevocably submit to the
jurisdiction of the United States District Court for the Southern District of
New York and any court in the State of New York located in the City and County
of New York, and any appellate court from any thereof, in any action, suit or
proceeding brought against it or in connection with this Agreement or any of the
related documents or the transactions contemplated hereunder or for recognition
or enforcement of any judgment, and the parties hereto hereby irrevocably and
unconditionally
-150-
<PAGE>
agree that all claims in respect of any such action or proceeding may be heard
or determined in such New York State court or, to the extent permitted by law,
in such federal court. The parties hereto agree that a final judgment in any
such action, suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. To
the extent permitted by applicable law, the parties hereto hereby waive and
agree not to assert by way of motion, as a defense or otherwise in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such courts, that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that the related documents or the subject matter thereof may not be
litigated in or by such courts.
(c) Each of the Depositor, the Sellers and the Servicer
hereby irrevocably appoints and designates the Trustee as its true and lawful
attorney and duly authorized agent for acceptance of service of legal process
with respect to any action, suit or proceeding set forth in paragraph (b)
hereof. Each of the Sellers and the Servicer agrees that service of such process
upon the Trustee shall constitute personal service of such process upon it.
(d) Nothing contained in this Agreement shall limit or
affect the right of the Depositor, the Seller, the Certificate Insurer or the
Servicer or any third-party beneficiary hereunder, as the case may be, to serve
process in any other manner permitted by law or to start legal proceedings
relating to any of the Home Equity Loans against any Mortgagor in the courts of
any jurisdiction.
Section 11.12 Counterparts.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
Section 11.13 Usury.
The amount of interest payable or paid on any Certificate
under the terms of this Agreement shall be limited to an amount which shall
not exceed the maximum nonusurious rate of interest allowed by the applicable
laws of the State of New York or any applicable law of the United States
permitting a higher maximum nonusurious rate that preempts such applicable New
York laws, which could lawfully be contracted for, charged or received (the
"Highest Lawful Rate"). In the event any payment of interest on any Certificate
exceeds the Highest Lawful Rate, the Trust stipulates that such excess amount
will be deemed to have been paid to the Owner of such Certificate as a result of
an error on the part of the Trustee acting on behalf of the Trust and the Owner
receiving such excess payment shall promptly, upon discovery of such error or
upon notice thereof from the Trustee on behalf of the Trust, refund the amount
of such excess or, at the option of such Owner, apply the excess to the payment
of principal of such Certificate, if any, remaining unpaid. In addition, all
sums paid or agreed to be paid to the Trustee for the benefit of Owners of
Certificates for the use, forbearance or detention of money shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such Certificates.
-151-
<PAGE>
Section 11.14 Amendment.
(a) The Trustee, the Depositor, either of the Sellers and
the Servicer may, at any time and from time to time, and without notice to or
the consent of the Owners but with the consent of the Certificate Insurer
amend this Agreement, subject to the provisions of Section 11.16 and 11.17 and
the Trustee shall consent to such amendment, for the purpose of (i) curing any
ambiguity, correcting or supplementing any provision hereof which may be
inconsistent with any other provision hereof, or adding provisions hereto which
are not inconsistent with the provisions hereof; (ii) upon receipt of an opinion
of counsel experienced in federal income tax matters to the effect that no
entity-level tax will be imposed on the Trust or upon the transferor of a
Residual Certificate as a result of the ownership of any Residual Certificate by
a Disqualified Organization, removing the restriction on transfer set forth in
Section 5.08(b) hereof or (iii) complying with the requirements of the Code and
the regulations proposed or promulgated thereunder including any amendments
necessary to maintain REMIC status or (iv) for any other purpose, provided that
in the case of this clause (iv) such amendment shall not adversely affect in any
material respect any Owner. Any such amendment shall be deemed not to adversely
affect in any material respect any Owner if there is delivered to the Trustee
written notification from each Rating Agency that such amendment will not cause
such Rating Agency to reduce its then current rating assigned to the Class A
Certificates without regard to the Certificate Insurance Policies.
Notwithstanding anything to the contrary herein, no such amendment shall (a)
change in any manner the amount of, or change the timing of, payments which are
required to be distributed to any Owner without the consent of the Owner of such
Certificate, or (b) which affects in any manner the terms or provisions of the
Certificate Insurance Policies.
(b) Promptly after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment
to the Certificate Insurer and each Owner in the manner set forth in Section
11.05, and to the Rating Agencies.
(c) The Rating Agencies shall be provided with copies of any
amendments to this Agreement, together with copies of any opinions or other
documents or instruments executed in connection therewith.
Section 11.15 Paying Agent; Appointment and Acceptance of Duties.
The Trustee is hereby appointed Paying Agent. The Depositor
may, subject to the eligibility requirements for the Trustee set forth in
Section 10.08 hereof, appoint one or more other Paying Agents or successor
Paying Agents.
Each Paying Agent, immediately upon such appointment, shall
signify its acceptance of the duties and obligations imposed upon it by this
Agreement by written instrument of acceptance deposited with the Trustee.
Each such Paying Agent other than the Trustee shall execute
and deliver to the Trustee an instrument in which such Paying Agent shall
agree with the Trustee, subject to the provisions of Section 6.02, that such
Paying Agent will:
-152-
<PAGE>
(a) allocate all sums received for distribution to the
Owners of Certificates of each Class for which it is acting as Paying Agent on
each Payment Date among such Owners in the proportion specified by the
Trustee; and
(b) hold all sums held by it for the distribution of amounts
due with respect to the Certificates in trust for the benefit of the Owners
entitled thereto until such sums shall be paid to such Owners or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided.
Any Paying Agent other than the Trustee may at any time
resign and be discharged of the duties and obligations created by this
Agreement by giving at least sixty (60) days written notice to the Trustee.
Any such Paying Agent may be removed at any time by an instrument filed with
such Paying Agent and signed by the Trustee.
In the event of the resignation or removal of any Paying
Agent other than the Trustee such Paying Agent shall pay over, assign and
deliver any moneys held by it as Paying Agent to its successor, or if there be
no successor, to the Trustee.
Upon the appointment, removal or notice of resignation of
any Paying Agent, the Trustee shall notify the Certificate Insurer and the
Owners by mailing notice thereof at their addresses appearing on the Register.
Section 11.16 REMIC Status.
(a) The parties hereto intend that each REMIC shall
constitute, and that the affairs of each REMIC shall be conducted so as to
qualify it as a REMIC in accordance with the REMIC Provisions. In furtherance
of such intention, ContiFunding Corporation or such other person designated
pursuant to Section 11.18 hereof shall act as agent for the Trust and as "tax
matters person" (as defined in the REMIC Provisions) for the Trust and in such
capacity it shall: (i) prepare or cause to be prepared and filed, in a timely
manner, annual tax returns and any other tax return required to be filed by
each REMIC established hereunder using a calendar year as the taxable year for
each REMIC established hereunder; (ii) in the related first such tax return,
make (or cause to be made) an election satisfying the requirements of the
REMIC Provisions, on behalf of each REMIC, for it to be treated as a REMIC;
(iii) prepare and forward, or cause to be prepared and forwarded, to the
Owners all information, reports or tax returns required with respect to each
REMIC as, when and in the form required to be provided to the Owners, and to
the Internal Revenue Service and any other relevant governmental taxing
authority in accordance with the REMIC Provisions and any other applicable
federal, state or local laws, including without limitation information reports
relating to "original issue discount" as defined in the Code based upon the
prepayment assumption and calculated by using the "issue price" (within the
meaning of Section 1273 of the Code) of the Certificates of the related Class;
(iv) not take any action or omit to take any action that would cause the
termination of the REMIC status of a REMIC, except as provided under this
Agreement; (v) represent the Trust or a REMIC in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to a taxable year of
the Trust or a REMIC, enter into settlement agreements with any governmental
taxing agency, extend any
-153-
<PAGE>
statute of limitations relating to any tax item of the Trust or a REMIC, and
otherwise act on behalf of the Trust or a REMIC therein in relation to any tax
matter involving the Trust or the REMIC therein; (vi) comply with all statutory
or regulatory requirements with regard to its conduct of activities pursuant to
the foregoing clauses of this Section 11.16, including, without limitation,
providing all notices and other information to the Internal Revenue Service and
Owners of Residual Certificates required of a "tax matters person" pursuant to
subtitle F of the Code and the Treasury Regulations thereunder; (vii) make
available information necessary for the computation of any tax imposed (A) on
transferors of residual interests to certain Disqualified Organizations or (B)
on pass-through entities, any interest in which is held by or treated as held by
a Disqualified Organization; and (viii) acquire and hold the Tax Matters Person
Residual Interest. The obligations of ContiFunding Corporation or such other
designated Tax Matters Person pursuant to this Section 11.16 shall survive the
termination or discharge of this Agreement.
(b) Each of the Sellers, the Depositor, the Trustee and the
Servicer covenant and agree for the benefit of the Owners and the Certificate
Insurer (i) to take no action which would result in the termination of "REMIC"
status for a REMIC, (ii) not to engage in any "prohibited transaction," as
such term is defined in Section 860F(a)(2) of the Code, (iii) not to engage in
any other action which may result in the imposition on the Trust of any other
taxes under the Code and (iv) to cause the Servicer not to take or engage in
any such action, to the extent the Sellers are aware of any such proposed
action by the Servicer.
(c) Each REMIC shall, for federal income tax purposes,
maintain books on a calendar year basis and report income on an accrual basis.
(d) Except as otherwise permitted by Section 7.05(b), no
Eligible Investment shall be sold prior to its stated maturity (unless sold
pursuant to a plan of liquidation in accordance with Article IX hereof).
(e) Neither the Depositor, either of the Sellers nor the
Trustee shall enter into any arrangement by which the Trustee will receive a
fee or other compensation for services rendered pursuant to this Agreement,
other than as expressly contemplated by this Agreement.
(f) Notwithstanding the foregoing clauses (d) and (e),
neither the Trustee nor either of the Sellers may engage in any of the
transactions prohibited by such clauses, unless the Trustee shall have
received an opinion of counsel experienced in federal income tax matters
acceptable to the Certificate Insurer and the Trustee to the effect that such
transaction does not result in a tax imposed on the Trustee or cause a
termination of REMIC status for a REMIC; provided, however, that such
transaction is otherwise permitted under this Agreement.
(g) The Servicer and Tax Matters Person agree to indemnify
the Trust for any tax imposed on the Trust or a REMIC as a result of their
negligence.
-154-
<PAGE>
Section 11.17 Additional Limitation on Action and Imposition of Tax.
Any provision of this Agreement to the contrary
notwithstanding, the Trustee shall not, without having obtained an opinion of
counsel experienced in federal income tax matters acceptable to the
Certificate Insurer to the effect that such transaction does not result in a
tax imposed on the Trust or a REMIC or cause a termination of REMIC status for
a REMIC, (i) sell any assets in the Trust Estate, (ii) accept any contribution
of assets after the Startup Day or (iii) agree to any modification of this
Agreement. To the extent that sufficient amounts cannot be so retained to pay
or provide for the payment of such tax, the Trustee is hereby authorized to
and shall segregate, into a separate non-interest bearing account, the net
income from any such Prohibited Transactions of a REMIC and use such income,
to the extent necessary, to pay such tax; provided that, to the extent that
any such income is paid to the Internal Revenue Service, the Trustee shall
retain an equal amount from future amounts otherwise distributable to the
Owners of Class R Certificates and shall distribute such retained amounts to
the Owners of Offered Certificates to the extent they are fully reimbursed and
then to the Owners of the Class R Certificates. If any tax, including interest
penalties or assessments, additional amounts or additions to tax, is imposed
on the Trust, such tax shall be charged against amounts otherwise
distributable to the owners of the Class R Certificates on a pro rata basis.
The Trustee is hereby authorized to and shall retain from amounts otherwise
distributable to the Owners of the Class R Certificates sufficient funds to
pay or provide for the payment of, and to actually pay, such tax as is legally
owed by the Trust (but such authorization shall not prevent the Trustee from
contesting any such tax in appropriate proceedings, and withholding payment of
such tax, if permitted by law, pending the outcome of such proceedings).
Section 11.18 Appointment of Tax Matters Person.
A Tax Matters Person will be appointed for each REMIC for
all purposes of the Code and such Tax Matters Person will perform, or cause to
be performed, such duties and take, or cause to be taken, such actions as are
required to be performed or taken by the Tax Matters Person under the Code.
The Tax Matters Person for each REMIC shall be ContiFunding Corporation as
long as it owns a Class R-I, Class R-II or Class R Certificate. If
ContiFunding Corporation does not own a Class R-I, Class R-II or Class R
Certificate, as the case may be, the Tax Matters Person may be any other
entity that owns such a Class R-I, Class R-II or Class R Certificate and
accepts a designation hereunder as Tax Matters person by delivering an
affidavit in the form of Exhibit I. ContiFunding Corporation shall notify the
Trustee in writing of the name and address of another person who accepts a
designation as Tax Matters Person hereunder.
Section 11.19 The Certificate Insurer.
Any right conferred to the Certificate Insurer hereunder
shall be suspended and shall run to the benefit of the Owners during any
period in which the Certificate Insurer is in default in its payment
obligations under the Certificate Insurance Policies. At such time as the
Class A Certificates and any Reimbursement Amounts are no longer Outstanding
hereunder, the Certificate Insurer's rights hereunder shall terminate.
-155-
<PAGE>
Section 11.20 Reserved.
Section 11.21 Third Party Rights.
The Trustee, each of the Sellers, the Depositor and the
Owners agree that the Certificate Insurer shall be deemed a third-party
beneficiary of this Agreement as if it were a party hereto.
Section 11.22 Notices.
All notices hereunder shall be given as follows, until any
superseding instructions are given to all other Persons listed below:
The Trustee: Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203-2399
Tel: (716) 842-5589
Fax: (716) 842-5905
Attention: Corporate Trust Administration
The Depositor: ContiSecurities Asset Funding Corp.
3811 West Charleston Boulevard
Suite 104
Las Vegas, Nevada 89102
Tel: (702) 822-5836
Fax: (702) 822-5839
The Sellers: ContiMortgage Corporation
One Conti Park
338 South Warminster Road
Hatboro, Pennsylvania 19040-3430
Attention: President and Chief Counsel
Tel: (215) 347-3000
Fax: (215) 347-3400
ContiWest Corporation
3811 West Charleston Boulevard
Suite 104
Las Vegas, Nevada 89102
Tel: (702) 822-5836
Fax: (702) 822-5839
-156-
<PAGE>
The Servicer: ContiMortgage Corporation
One Conti Park
338 South Warminster Road
Hatboro, Pennsylvania 19040-3430
Attention: Senior Vice President and Chief Counsel
Tel: (215) 347-3000
Fax: (215) 347-3400
The Certificate Insurer: MBIA Insurance Corporation
113 King St.
Armonk, NY 10504
Attention: Insured Portfolio
Management - SF (ContiMortgage Home Equity Loan
Trust 1998-3)
Tel: (914) 273-4545
Fax: (914) 765-3810
Moody's: Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: The Home Equity Monitoring Department
Tel: (212) 553-0300
Fax: (212) 553-4773
Fitch: Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
Tel: (800) 753-4824
Fax: (212) 376-6964
Standard & Poor's: Standard & Poor's
26 Broadway, 15th Floor
New York, New York 10004
Tel: (212) 208-8000
Fax: (212) 412-0224
Attention: Residential Mortgage Surveillance Group
-157-
<PAGE>
Underwriters: Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Tel: (212) 761-4000
Fax: (212) 761-0782
Merrill Lynch, Pierce Fenner & Smith, Inc.
26th Floor
World Financial Center, North Tower
New York, New York 10281-1326
Tel: (212) 449-1000
Fax: (212) 449-9015
Bear, Stearns & Co. Inc.
245 Park Avenue, 4th Floor
New York, New York 10167
Attention: Asset Backed Securities Group
Tel: (212) 272-3311
Fax: (212) 272-7294
ContiFinancial Services Corporation
277 Park Avenue, 38th Floor
New York, New York 10172
Attention: Chief Counsel, Chief Financial Officer
and Chief Operating Officer
Tel: (212) 207-2822
Fax: (212) 207-5251
Credit Suisse First Boston
11 Madison Avenue
New York, New York 10010
Attention: Asset Finance
Tel: (212) 325-2000
Fax: (212) 325-8261
Greenwich Capital Markets, Inc.
600 Steamboat Rd.
Greenwich, CT 06830
Tel: (203) 622-5693
Fax: (203) 622-3650
NationsBanc Montgomery Securities LLC
100 North Tryon Street
11th Floor
NC1-007-11-07
Charlotte, NC 28255
-158-
<PAGE>
Tel: (704) 386-5000
Fax: (704) 388-9668
Attention: Mortgage Finance Group
Owners: As set forth in the Register.
Others: Any notice to the Depositor, either Seller or the Servicer shall
also be furnished to:
ContiTrade Services L.L.C.
Chief Counsel
277 Park Avenue, 38th Floor
New York, New York 10172
Tel: (212) 207-2822
Fax: (212) 207-5251
END OF ARTICLE XI
-159-
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Seller, the Servicer
and the Trustee have caused this Pooling and Servicing Agreement to be duly
executed by their respective officers thereunto duly authorized, all as of the
day and year first above written.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: __________________________________
Name:
Title: Authorized Signatory
By: __________________________________
Name:
Title: Authorized Signatory
CONTIMORTGAGE CORPORATION,
as Seller and Servicer
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
CONTIWEST CORPORATION, as Seller
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
-160-
<PAGE>
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: __________________________________
Name: Neil Witoff
Title: Assistant Vice President
-161-
<PAGE>
STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On the __th day of September 1998, before me personally came
_________________-and _________________, to me known, who, being by me duly
sworn, did depose and say that he/she resides at _________________ and
_________________, respectively; that he/she is a _________________ and a
_________________, respectively, of ContiSecurities Asset Funding Corp., a
Delaware Corporation; and that he/she signed his/her name thereto by order of
the respective Boards of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
NOTARIAL SEAL
-162-
<PAGE>
STATE OF PENNSYLVANIA )
): ss
COUNTY OF MONTGOMERY )
On the ___ day of September 1998, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and
say that he/she resides at _________________ County; that he/she is a
_________________ of ContiMortgage Corporation, a Delaware Corporation; and
that he signed his name thereto by order of the respective Boards of Directors
of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
NOTARIAL SEAL
-163-
<PAGE>
STATE OF PENNSYLVANIA )
): ss
COUNTY OF MONTGOMERY )
On the __ day of September 1998, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and
say that he/she resides at _________________ County; that he/she is a
_________________ of ContiMortgage Corporation, a Delaware corporation; and
that he signed his name thereto by order of the respective Boards of Directors
of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
NOTARIAL SEAL
-164-
<PAGE>
STATE OF CALIFORNIA )
): ss.:
COUNTY OF LOS ANGELES )
On the __th day of September 1998, before me personally came
Peter Abeles and Robert E. Riedl, to me known, who, being by me duly sworn,
did depose and say that he resides at 10244 Ojai-Santa Paula Road, Ojai, CA
93023 and 10417 Eastborne Avenue #5, Los Angeles, CA 90024 respectively; that
he is a President and Secretary, respectively, of ContiWest Corporation, a
Nevada corporation; and that he signed his name thereto by order of the
respective Boards of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
NOTARIAL SEAL
-165-
<PAGE>
STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On the __th day of September 1998, before me personally came
Neil B. Witoff, to me known, who, being by me duly sworn did depose and say
that he resides at Clarence, New York; that he is an Assistant Vice President
of Manufacturers and Traders Trust Company, the New York banking corporation
described in and that executed the above instrument as Trustee; and that he
signed his name thereto by order of the Board of Directors of said New York
banking corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
NOTARIAL SEAL
-166-
<PAGE>
SCHEDULE I-A
SCHEDULE OF FIXED RATE HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the
Corporate Trust Office and by the Seller at its principal office.
I-A-1
<PAGE>
SCHEDULE I-B
SCHEDULE OF GROUP IIa HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the
Corporate Trust Office and by the Seller at its principal office.
I-B-1
<PAGE>
SCHEDULE I-C
SCHEDULE OF GROUP IIb HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the
Corporate Trust Office and by the Seller at its principal office.
I-C-1
<PAGE>
SCHEDULE II
HOME EQUITY LOANS WITH DELINQUENCY CHARACTERISTICS
A copy of this Schedule is maintained by the Trustee at the
Corporate Trust Office and by the Seller at its principal office.
II-1
<PAGE>
SCHEDULE III
HOME EQUITY LOANS WITH 15-YEAR "BALLOON" PAYMENTS
A copy of this Schedule is maintained by the Trustee at the
Corporate Trust Office and by the Seller at its principal office.
III-1
<PAGE>
SCHEDULE IV
HOME EQUITY LOANS WITH 5-YEAR "BALLOON" PAYMENTS
A copy of this Schedule is maintained by the Trustee at the
Corporate Trust Office and by the Seller at its principal office.
IV-1
<PAGE>
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-1
(______% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No: A-1-1 _______________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
1
<PAGE>
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-1 Certificates. Therefore, the actualOutstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-1 (the "Class A-1
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class
A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-1 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-1
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-1 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-1 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class A-1 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-1 Certificates. The Percentage
Interest of each Class A-1 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-1 Certificate on the Startup Day by the
aggregate Class A-1 Certificate Principal Balance on the Startup Day.
<PAGE>
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
<PAGE>
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-1 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-1 Certificates are exchangeable
for new Class A-1 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-2
FORM OF CLASS A-2 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-2
(_____% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No: A-2 -1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
1
<PAGE>
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-2 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-2 (the "Class A-2
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-3, Class A-4, Class A-5, Class A-6, Class
A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-2 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-2
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-2 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-2 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class A-2 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-2 Certificates. The
<PAGE>
Percentage Interest of each Class A-2 Certificate as of any date of
determination will be equal to the percentage obtained by dividing the original
Certificate Principal Balance of such Class A-2 Certificate on the Startup Day
by the aggregate Class A-2 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or
<PAGE>
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the like Class, tenor and
a like Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-2 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-2 Certificates are exchangeable
for new Class A-2 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-3
FORM OF CLASS A-3 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-3
(_____% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No: A-3-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
1
<PAGE>
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-3 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-3 (the "Class A-3
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-4, Class A-5, Class A-6, Class
A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-3 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates."] Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-3
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-3 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-3 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class A-3 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-3 Certificates. The
<PAGE>
Percentage Interest of each Class A-3 Certificate as of any date of
determination will be equal to the percentage obtained by dividing the original
Certificate Principal Balance of such Class A-3 Certificate on the Startup Day
by the aggregate Class A-3 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or
<PAGE>
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the like Class, tenor and
a like Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-3 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-3 Certificates are exchangeable
for new Class A-3 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-4
FORM OF CLASS A-4 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-4
(_____% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No: A-4-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
1
<PAGE>
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-4 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-4 (the "Class A-4
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-5, Class A-6, Class
A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-4 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates") Class R (the "Class R Certificates"), Class R-I
(the "Class R-I Certificates") and Class R-II (the "Class R-II Certificates
and collectively with the Class R and Class R-I Certificates, the "Residual
Certificates"). The Offered Certificates, the Class C Certificates and the
Residual Certificates are together referred to herein as the "Certificates."]
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-4
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-4 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-4 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class A-4 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-4 Certificates. The
<PAGE>
Percentage Interest of each Class A-4 Certificate as of any date of
determination will be equal to the percentage obtained by dividing the original
Certificate Principal Balance of such Class A-4 Certificate on the Startup Day
by the aggregate Class A-4 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or
<PAGE>
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the like Class, tenor and
a like Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-4 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-4 Certificates are exchangeable
for new Class A-4 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-5
FORM OF CLASS A-5 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-5
(______% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No: A-5-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
<PAGE>
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-5 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-5 (the "Class A-5
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-6, Class
A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-5 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates."] Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-5
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-5 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-5 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class A-5 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-5 Certificates. The Percentage
Interest of each Class A-5 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-5 Certificate on the Startup Day by the
aggregate Class A-5 Certificate Principal Balance on the Startup Day.
<PAGE>
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
<PAGE>
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-5 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-5 Certificates are exchangeable
for new Class A-5 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-6
FORM OF CLASS A-6 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-6
(_______% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by, ContiSecurities Asset Funding Corp., ContiWest Corporation or
ContiMortgage Corporation. This Certificate represents a fractional ownership
interest in the Home Equity Loans and certain other property held by the
Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-6-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts,
<PAGE>
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-6 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-6 (the "Class A-6
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-6 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-6
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-6 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-6 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
<PAGE>
Each Owner of record of a Class A-6 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-6 Certificates. The Percentage
Interest of each Class A-6 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-6 Certificate on the Startup Day by the
aggregate Class A-6 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-6 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-6 Certificates are exchangeable
for new Class A-6 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-7
FORM OF CLASS A-7 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-7
(______% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-7-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts,
<PAGE>
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-7 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-7 (the "Class A-7
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-7 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-7
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-7 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-7 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
<PAGE>
Each Owner of record of a Class A-7 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-7 Certificates. The Percentage
Interest of each Class A-7 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-7 Certificate on the Startup Day by the
aggregate Class A-7 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-7 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-7 Certificates are exchangeable
for new Class A-7 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-8
FORM OF CLASS A-8 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-8
(______% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-8-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts,
<PAGE>
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-8 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-8 (the "Class A-8
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-8 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates") Class R (the "Class R Certificates"), Class R-I
(the "Class R-I Certificates") and Class R-II (the "Class R-II Certificates
and collectively with the Class R and Class R-I Certificates, the "Residual
Certificates"). The Offered Certificates, the Class C Certificates and the
Residual Certificates are together referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-8
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-8 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-8 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
<PAGE>
Each Owner of record of a Class A-8 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-8 Certificates. The Percentage
Interest of each Class A-8 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-8 Certificate on the Startup Day by the
aggregate Class A-8 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-8 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-8 Certificates are exchangeable
for new Class A-8 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-9
FORM OF CLASS A-9 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-9
(________ PASS-THROUGH RATE)
REPRESENTING CERTAIN INTERESTS IN A POOL OF HOME EQUITY
LOANS SERVICED BY
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No: A-9-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
<PAGE>
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-9 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-9 (the "Class A-9
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-9 Certificates, the "Class A
Certificates"), Class B-I and B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-9
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-9 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-9 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
<PAGE>
Each Owner of record of a Class A-9 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-9 Certificates. The Percentage
Interest of each Class A-9 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-9 Certificate on the Startup Day by the
aggregate Class A-9 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-9 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-9 Certificates are exchangeable
for new Class A-9 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-9
FORM OF CLASS A-9 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-9
(_________ PASS-THROUGH RATE)
REPRESENTING CERTAIN INTERESTS IN A POOL OF HOME EQUITY
LOANS SERVICED BY
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No: A-9-2 _______________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
<PAGE>
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-9 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-9 (the "Class A-9
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-10, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-9 Certificates, the "Class A
Certificates"), Class B-I and B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-9
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-9 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-9 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
<PAGE>
Each Owner of record of a Class A-9 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-9 Certificates. The Percentage
Interest of each Class A-9 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-9 Certificate on the Startup Day by the
aggregate Class A-9 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-9 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-9 Certificates are exchangeable
for new Class A-9 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-10
FORM OF CLASS A-10 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-10*
(________% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-10-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing
<PAGE>
(including, but not by way of limitation, all proceeds of any mortgage
insurance, hazard insurance and title insurance policy relating to the Home
Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-9 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-10 (the "Class A-10
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-11, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-10 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-10
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-10 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-10 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
<PAGE>
Each Owner of record of a Class A-10 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-10 Certificates. The Percentage
Interest of each Class A-10 Certificate as of any date of determination will
be equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-10 Certificate on the Startup Day by the
aggregate Class A-10 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-10 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-10 Certificates are
exchangeable for new Class A-10 Certificates of authorized denominations
evidencing the same aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
<PAGE>
EXHIBIT A-11
FORM OF CLASS A-11 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-11
(______% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No: A-11-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
<PAGE>
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-11 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST
PAYMENT DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-11 (the "Class A-11
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-12 Internal, Class
A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal,
Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-11 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-11
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-11 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-11 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class A-11 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-11 Certificates. The Percentage
Interest of each Class A-11 Certificate as of any date of determination will
be equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-11 Certificate on the Startup Day by the
aggregate Class A-11 Certificate Principal Balance on the Startup Day.
2
<PAGE>
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
3
<PAGE>
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-11 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-11 Certificates are
exchangeable for new Class A-11 Certificates of authorized denominations
evidencing the same aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT A-12
FORM OF CLASS A-12 CERTIFICATE
CONTIMORTGAGE SWAP TRUST 1998-B
PASS-THROUGH CERTIFICATE
CLASS A-12
(_______ PASS-THROUGH RATE)
Representing Certain Interests in a Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor is it insured or guaranteed by, ContiSecurities Asset
Funding Corp., or ContiMortgage Corporation. This Certificate represents a
fractional ownership interest in the property held by the ContiMortgage Swap
Trust 1998-B (the "Swap Trust").
Unless this certificate is presented by an authorized
representative of the Depository Trust Company, a New York corporation
("DTC"), to the Swap Trust or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
the Cede & Co. or in such other name as is requested by an authorized
representative of the DTC (and any payment is made to the 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, the Cede & Co.,
has an interest herein.
No: A-12-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered beneficial
Owner of a fractional interest in the ContiMortgage Swap Trust 1998-B.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance over the period from the date of initial issuance
of the Certificates to the final Payment Date for the Class A-2 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to October 15, 1998 (the first Payment Date) be less than
the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement (as defined below) provides that, in any event, upon the making of the
final distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
<PAGE>
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Trust 1998-B Pass-Through Certificates,
Class A-12 (the "Class A-12 Certificates") and issued under and subject to the
terms, provisions and conditions of that certain Pooling and Servicing Agreement
dated as of September 1, 1998 (the "Pooling and Servicing Agreement") by and
among ContiMortgage Corporation, in its capacity as a Servicer (the "Servicer"),
ContiSecurities Asset Funding Corp., in its capacity as Depositor, (the
"Depositor") and Manufacturers and Traders Trust Company, a New York banking
corporation, in its capacity as the Trustee of the Swap Trust (the " Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by virtue
of acceptance hereof assents and by which such Owner is bound. Terms capitalized
herein and not otherwise defined herein shall have the respective meanings set
forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing OCTOBER 15, 1998, the Owners of the Class A-12
Certificates as of the close of business on the day preceding the day on which a
Payment Date occurs (the "Record Date") will be entitled to receive the Class
A-11 Distribution Amount relating to such Certificate on such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-2 Floating Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to the
account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-12 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on such
Payment Date to the Owners of the Class A-12 Certificates. The Percentage
Interest of each Class A-12 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate Principal
Balance of such Class A-12 Certificate on the Startup Day by the aggregate Class
A-12 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, or guaranteed by, ContiSecurities Asset
Funding Corp. or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to the Swap Trust Estate held by the
Swap Trust.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto) of
the Swap Trust Estate or (b) the final payment to the Certificate Insurer of all
amounts then owing to it.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the
7
<PAGE>
Registrar duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the like Class, tenor and
a like Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Pooling and Servicing Trustee, and the Servicer at any time and from time to
time, and without the consent of the Owners; provided, that in certain
circumstances provided for in the Pooling and Servicing Agreement, such consent
of the Owners will be required prior to amendments. Any such consent by the
Owner at the time of the giving thereof, of this Certificate shall be conclusive
and binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-12 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-12 Certificates are exchangeable
for new Class A-12 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary, except as may otherwise be specifically provided in the Pooling
and Servicing Agreement.
8
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title: nt
Date of Authentication:
9
<PAGE>
EXHIBIT A-13
FORM OF CLASS A-13 CERTIFICATE
CONTIMORTGAGE SWAP TRUST 1998-B
PASS-THROUGH CERTIFICATE
CLASS A-13
(________ PASS-THROUGH RATE)
Representing Certain Interests in a Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor is it insured or guaranteed by, ContiSecurities Asset
Funding Corp., or ContiMortgage Corporation. This Certificate represents a
fractional ownership interest in the property held by the ContiMortgage Swap
Trust 1998-B (the "Swap Trust").
Unless this certificate is presented by an authorized
representative of the Depository Trust Company, a New York corporation
("DTC"), to the Swap Trust or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
the Cede & Co. or in such other name as is requested by an authorized
representative of the DTC (and any payment is made to the 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, the Cede & Co.,
has an interest herein.
No: A-13-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered beneficial
Owner of a fractional interest in the ContiMortgage Swap Trust 1998-B.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance over the period from the date of initial issuance
of the Certificates to the final Payment Date for the Class A-2 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to October 15, 1998 (the first Payment Date) be less than
the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement (as defined below) provides that, in any event, upon the making of the
final distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
<PAGE>
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Trust 1998-B Pass-Through Certificates,
Class A-13 (the "Class A-13 Certificates") and issued under and subject to the
terms, provisions and conditions of that certain Pooling and Servicing Agreement
dated as of September 1, 1998 (the "Pooling and Servicing Agreement") by and
among ContiMortgage Corporation, in its capacity as a Servicer (the "Servicer"),
ContiSecurities Asset Funding Corp., in its capacity as Depositor, (the
"Depositor") and Manufacturers and Traders Trust Company, a New York banking
corporation, in its capacity as the Trustee of the Swap Trust (the " Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by virtue
of acceptance hereof assents and by which such Owner is bound. Terms capitalized
herein and not otherwise defined herein shall have the respective meanings set
forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing OCTOBER 15, 1998, the Owners of the Class A-13
Certificates as of the close of business on the day preceding the day on which a
Payment Date occurs (the "Record Date") will be entitled to receive the Class
A-11 Distribution Amount relating to such Certificate on such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-2 Floating Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to the
account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-13 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on such
Payment Date to the Owners of the Class A-13 Certificates. The Percentage
Interest of each Class A-13 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate Principal
Balance of such Class A-13 Certificate on the Startup Day by the aggregate Class
A-13 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, or guaranteed by, ContiSecurities Asset
Funding Corp. or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to the Swap Trust Estate held by the
Swap Trust.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto) of
the Swap Trust Estate or (b) the final payment to the Certificate Insurer of all
amounts then owing to it.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the
11
<PAGE>
Registrar duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the like Class, tenor and
a like Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Pooling and Servicing Trustee, and the Servicer at any time and from time to
time, and without the consent of the Owners; provided, that in certain
circumstances provided for in the Pooling and Servicing Agreement, such consent
of the Owners will be required prior to amendments. Any such consent by the
Owner at the time of the giving thereof, of this Certificate shall be conclusive
and binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-13 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-13 Certificates are exchangeable
for new Class A-13 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary, except as may otherwise be specifically provided in the Pooling
and Servicing Agreement.
12
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
13
<PAGE>
EXHIBIT A-14
FORM OF CLASS A-14 CERTIFICATE
CONTIMORTGAGE SWAP TRUST 1998-B
PASS-THROUGH CERTIFICATE
CLASS A-14
(_______ PASS-THROUGH RATE)
Representing Certain Interests in a Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor is it insured or guaranteed by, ContiSecurities Asset
Funding Corp., or ContiMortgage Corporation. This Certificate represents a
fractional ownership interest in the property held by the ContiMortgage Swap
Trust 1998-B (the "Swap Trust").
Unless this certificate is presented by an authorized
representative of the Depository Trust Company, a New York corporation
("DTC"), to the Swap Trust or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
the Cede & Co. or in such other name as is requested by an authorized
representative of the DTC (and any payment is made to the 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, the Cede & Co.,
has an interest herein.
No: A-14-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered beneficial
Owner of a fractional interest in the ContiMortgage Swap Trust 1998-B.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance over the period from the date of initial issuance
of the Certificates to the final Payment Date for the Class A-2 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to October 15, 1998 (the first Payment Date) be less than
the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement (as defined below) provides that, in any event, upon the making of the
final distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Trust 1998-B Pass-Through Certificates,
Class A-14 (the "Class A-14 Certificates") and issued under and subject to the
terms, provisions and conditions of that certain Pooling and Servicing Agreement
dated as of September 1, 1998 (the
<PAGE>
"Pooling and Servicing Agreement") by and among ContiMortgage Corporation, in
its capacity as a Servicer (the "Servicer"), ContiSecurities Asset Funding
Corp., in its capacity as Depositor, (the "Depositor") and Manufacturers and
Traders Trust Company, a New York banking corporation, in its capacity as the
Trustee of the Swap Trust (the " Trustee"), to which Pooling and Servicing
Agreement the Owner of this Certificate by virtue of acceptance hereof assents
and by which such Owner is bound. Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing OCTOBER 15, 1998, the Owners of the Class A-14
Certificates as of the close of business on the day preceding the day on which a
Payment Date occurs (the "Record Date") will be entitled to receive the Class
A-11 Distribution Amount relating to such Certificate on such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-2 Floating Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to the
account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-14 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on such
Payment Date to the Owners of the Class A-14 Certificates. The Percentage
Interest of each Class A-14 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate Principal
Balance of such Class A-14 Certificate on the Startup Day by the aggregate Class
A-14 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, or guaranteed by, ContiSecurities Asset
Funding Corp. or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to the Swap Trust Estate held by the
Swap Trust.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto) of
the Swap Trust Estate or (b) the final payment to the Certificate Insurer of all
amounts then owing to it.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Pooling and Servicing Trustee, and the Servicer at any time and from time to
time, and without the consent of the Owners; provided, that in certain
circumstances provided for in the Pooling and Servicing Agreement, such consent
of the Owners will be required prior to amendments. Any such consent by the
Owner at the time of the giving thereof, of this Certificate shall be conclusive
and binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-14 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000
2
<PAGE>
original Certificate Principal Balance. As provided in the Pooling and Servicing
Agreement and subject to certain limitations therein set forth, Class A-14
Certificates are exchangeable for new Class A-14 Certificates of authorized
denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary, except as may otherwise be specifically provided in the Pooling
and Servicing Agreement.
3
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
4
<PAGE>
EXHIBIT A-15
FORM OF CLASS A-15 CERTIFICATE
CONTIMORTGAGE SWAP TRUST 1998-B
PASS-THROUGH CERTIFICATE
CLASS A-15
(__________ PASS-THROUGH RATE)
Representing Certain Interests in a Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor is it insured or guaranteed by, ContiSecurities Asset Funding
Corp., or ContiMortgage Corporation. This Certificate represents a fractional
ownership interest in the property held by the ContiMortgage Swap Trust 1998-B
(the "Swap Trust").
Unless this certificate is presented by an authorized
representative of the Depository Trust Company, a New York corporation
("DTC"), to the Swap Trust or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
the Cede & Co. or in such other name as is requested by an authorized
representative of the DTC (and any payment is made to the 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, the Cede & Co.,
has an interest herein.
No: A-15-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered beneficial
Owner of a fractional interest in the ContiMortgage Swap Trust 1998-B.
<PAGE>
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance over the period from the date of initial issuance
of the Certificates to the final Payment Date for the Class A-2 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to October 15, 1998 (the first Payment Date) be less than
the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement (as defined below) provides that, in any event, upon the making of the
final distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Trust 1998-B Pass-Through Certificates,
Class A-15 (the "Class A-15 Certificates") and issued under and subject to the
terms, provisions and conditions of that certain Pooling and Servicing Agreement
dated as of September 1, 1998 (the "Pooling and Servicing Agreement") by and
among ContiMortgage Corporation, in its capacity as a Servicer (the "Servicer"),
ContiSecurities Asset Funding Corp., in its capacity as Depositor, (the
"Depositor") and Manufacturers and Traders Trust Company, a New York banking
corporation, in its capacity as the Trustee of the Swap Trust (the " Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by virtue
of acceptance hereof assents and by which such Owner is bound. Terms capitalized
herein and not otherwise defined herein shall have the respective meanings set
forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing OCTOBER 15, 1998, the Owners of the Class A-15
Certificates as of the close of business on the day preceding the day on which a
Payment Date occurs (the "Record Date") will be entitled to receive the Class
A-11 Distribution Amount relating to such Certificate on such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-2 Floating Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to the
account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-15 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on such
Payment Date to the Owners of the Class A-15 Certificates. The Percentage
Interest of each Class A-15 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate Principal
Balance of such Class A-15 Certificate on the Startup Day by the aggregate Class
A-15 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, or guaranteed by, ContiSecurities Asset
Funding Corp. or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to the Swap Trust Estate held by the
Swap Trust.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto) of
the Swap Trust Estate or (b) the final payment to the Certificate Insurer of all
amounts then owing to it.
2
<PAGE>
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Pooling and Servicing Trustee, and the Servicer at any time and from time to
time, and without the consent of the Owners; provided, that in certain
circumstances provided for in the Pooling and Servicing Agreement, such consent
of the Owners will be required prior to amendments. Any such consent by the
Owner at the time of the giving thereof, of this Certificate shall be conclusive
and binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-15 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-15 Certificates are exchangeable
for new Class A-15 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary, except as may otherwise be specifically provided in the Pooling
and Servicing Agreement.
3
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
4
<PAGE>
EXHIBIT A-16
FORM OF CLASS A-16 CERTIFICATE
CONTIMORTGAGE SWAP TRUST 1998-B
PASS-THROUGH CERTIFICATE
CLASS A-16
(_______ PASS-THROUGH RATE)
Representing Certain Interests in a Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor is it insured or guaranteed by, ContiSecurities Asset
Funding Corp., or ContiMortgage Corporation. This Certificate represents a
fractional ownership interest in the property held by the ContiMortgage Swap
Trust 1998-B (the "Swap Trust").
Unless this certificate is presented by an authorized
representative of the Depository Trust Company, a New York corporation
("DTC"), to the Swap Trust or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
the Cede & Co. or in such other name as is requested by an authorized
representative of the DTC (and any payment is made to the 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, the Cede & Co.,
has an interest herein.
No: A-16-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered beneficial
Owner of a fractional interest in the ContiMortgage Swap Trust 1998-B.
<PAGE>
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance over the period from the date of initial issuance
of the Certificates to the final Payment Date for the Class A-2 Certificates.
Therefore, the actual Outstanding principal amount of this Certificate may, on
any date subsequent to October 15, 1998 (the first Payment Date) be less than
the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner hereof
is required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement (as defined below) provides that, in any event, upon the making of the
final distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Trust 1998-B Pass-Through Certificates,
Class A-16 (the "Class A-16 Certificates") and issued under and subject to the
terms, provisions and conditions of that certain Pooling and Servicing Agreement
dated as of September 1, 1998 (the "Pooling and Servicing Agreement") by and
among ContiMortgage Corporation, in its capacity as a Servicer (the "Servicer"),
ContiSecurities Asset Funding Corp., in its capacity as Depositor, (the
"Depositor") and Manufacturers and Traders Trust Company, a New York banking
corporation, in its capacity as the Trustee of the Swap Trust (the " Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by virtue
of acceptance hereof assents and by which such Owner is bound. Terms capitalized
herein and not otherwise defined herein shall have the respective meanings set
forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing OCTOBER 15, 1998, the Owners of the Class A-16
Certificates as of the close of business on the day preceding the day on which a
Payment Date occurs (the "Record Date") will be entitled to receive the Class
A-11 Distribution Amount relating to such Certificate on such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-2 Floating Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to the
account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-16 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on such
Payment Date to the Owners of the Class A-16 Certificates. The Percentage
Interest of each Class A-16 Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate Principal
Balance of such Class A-16 Certificate on the Startup Day by the aggregate Class
A-16 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, or guaranteed by, ContiSecurities Asset
Funding Corp. or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to the Swap Trust Estate held by the
Swap Trust.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under the
Pooling and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which is
absolute and unconditional to receive distributions to the extent provided in
the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest
2
<PAGE>
to occur of (a) the final payment or other liquidation (or any advance made with
respect thereto) of the Swap Trust Estate or (b) the final payment to the
Certificate Insurer of all amounts then owing to it.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Pooling and Servicing Trustee, and the Servicer at any time and from time to
time, and without the consent of the Owners; provided, that in certain
circumstances provided for in the Pooling and Servicing Agreement, such consent
of the Owners will be required prior to amendments. Any such consent by the
Owner at the time of the giving thereof, of this Certificate shall be conclusive
and binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on each
Payment Date to the Owner of this Certificate, as more fully described in the
Pooling and Servicing Agreement.
The Class A-16 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-16 Certificates are exchangeable
for new Class A-16 Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee or any such agent shall be affected by notice
to the contrary, except as may otherwise be specifically provided in the Pooling
and Servicing Agreement.
3
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
4
<PAGE>
EXHIBIT A-17
FORM OF CLASS A-17 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-17
(_____% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-17-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
<PAGE>
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-17 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME
EQUITY LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER
GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-17 (the "Class A-17
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-17 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-17
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-17 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-17 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
2
<PAGE>
Each Owner of record of a Class A-17 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-17 Certificates. The Percentage
Interest of each Class A-17 Certificate as of any date of determination will
be equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-17 Certificate on the Startup Day by the
aggregate Class A-17 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
3
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-17 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-17 Certificates are
exchangeable for new Class A-17 Certificates of authorized denominations
evidencing the same aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT A-18
FORM OF CLASS A-18 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-18
(AUCTION RATE CERTIFICATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-18-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
<PAGE>
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-18 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME
EQUITY LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER
GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT DATE) BE LESS THAN
ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-18 (the "Class A-18
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-17, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-18 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-18
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-18 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-18 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
2
<PAGE>
Each Owner of record of a Class A-18 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-18 Certificates. The Percentage
Interest of each Class A-18 Certificate as of any date of determination will
be equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-18 Certificate on the Startup Day by the
aggregate Class A-18 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
3
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-18 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate
Principal Balance. As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A-18 Certificates are
exchangeable for new Class A-18 Certificates of authorized denominations
evidencing the same aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT A-19
FORM OF CLASS A-19 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-19
(____% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-19-1
____________
CUSIP
$-------------- -------------------- ---------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
<PAGE>
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-19 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME
EQUITY LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER
GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-19 (the "Class A-19
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-17, Class A-18, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-19 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-19
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-19 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-19 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
2
<PAGE>
Each Owner of record of a Class A-19 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-19 Certificates. The Percentage
Interest of each Class A-19 Certificate as of any date of determination will
be equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-19 Certificate on the Startup Day by the
aggregate Class A-19 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
3
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-19 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-19 Certificates are
exchangeable for new Class A-19 Certificates of authorized denominations
evidencing the same aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE
By:
------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT A-20
FORM OF CLASS A-20 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-20
(____% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-20-1 ______________________
CUSIP
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
<PAGE>
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-20 Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-20 (the "Class A-20
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-17, Class A-18, Class A-19, Class N-IO, Class P-IO
(collectively, including the Class A-20 Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-20
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class A-20 Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class A-20 Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
2
<PAGE>
Each Owner of record of a Class A-20 Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class A-20 Certificates. The Percentage
Interest of each Class A-20 Certificate as of any date of determination will
be equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class A-20 Certificate on the Startup Day by the
aggregate Class A-20 Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
3
<PAGE>
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-20 Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A-20 Certificates are
exchangeable for new Class A-20 Certificates of authorized denominations
evidencing the same aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT N-IO
FORM OF CLASS N-IO CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS N-IO
(____% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.
No: N-IO-1 ______________________
CUSIP
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
<PAGE>
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CLASS N-IO
CERTIFICATE IS ____0%. ASSUMING THAT THE HOME EQUITY LOANS PREPAY AT A RATE
BASED ON 100% OF THE PREPAYMENT ASSUMPTION DESCRIBED IN THE PROSPECTUS
SUPPLEMENT, THIS CERTIFICATE HAS BEEN ISSUED WITH APPROXIMATELY $________ OF
OID PER $1,000,000 OF CLASS N-IO NOTIONAL PRINCIPAL AMOUNT AND THE ANNUAL
YIELD TO MATURITY WILL BE ______% (COMPOUNDED MONTHLY); THE AMOUNT OF OID
ALLOCABLE TO THE LONG FIRST ACCRUAL PERIOD IS $______ PER $1,000,000 OF CLASS
A-10 IO NOTIONAL PRINCIPAL AMOUNT COMPUTED USING DAILY COMPOUNDING.
THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER
OF THIS CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL
WITH RESPECT TO THE HOME EQUITY LOANS.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class N-IO (the "Class N-IO
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-17, Class A-18, Class A-19, Class A-20, Class P-IO
(collectively, including the Class N-IO Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class N-IO
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class N-IO Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class N-IO Notional Principal Amount of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified
the Trustee, or by check mailed to the address of the person entitled thereto
as it appears on the Register.
Each Owner of record of a Class N-IO Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class N-IO Certificates. The Percentage
Interest of each Class N-IO Certificate as of any date of determination will
be equal to the portion of the Class stated or the Percentage Interest on the
face thereof.
"Class N IO Notional Principal Amount": The Class N IO
"Notional Amount will equal (a) on any Payment Date prior to the 31st Payment
Date the aggregate outstanding Certificate Principal Balance of the Class A-8
Certificates and (b) on or after the 31st Payment Date, zero.
2
<PAGE>
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
3
<PAGE>
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class N-IO Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 based on the Class N-IO
Notional Principal Amount. As provided in the Pooling and Servicing Agreement
and subject to certain limitations therein set forth, Class N-IO Certificates
are exchangeable for new Class N-IO Certificates of authorized denominations
evidencing the same aggregate notional principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT P-IO
FORM OF CLASS P-IO CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS P-IO
(____% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.
No: P-IO-1 ______________________
CUSIP
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
<PAGE>
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER
GOVERNMENTAL AGENCY.
THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CLASS P-IO
CERTIFICATE IS ____%. ASSUMING THAT THE HOME EQUITY LOANS PREPAY AT A RATE
BASED ON 100% OF THE PREPAYMENT ASSUMPTION DESCRIBED IN THE PROSPECTUS
SUPPLEMENT, THIS CERTIFICATE HAS BEEN ISSUED WITH APPROXIMATELY $________ OF
OID PER $1,000,000 OF CLASS P-IO NOTIONAL PRINCIPAL AMOUNT AND THE ANNUAL
YIELD TO MATURITY WILL BE ____% (COMPOUNDED MONTHLY); THE AMOUNT OF OID
ALLOCABLE TO THE LONG FIRST ACCRUAL PERIOD IS $____ PER $1,000,000 OF CLASS
A-10 IO NOTIONAL PRINCIPAL AMOUNT COMPUTED USING DAILY COMPOUNDING.
THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER
OF THIS CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL
WITH RESPECT TO THE HOME EQUITY LOANS.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class P-IO (the "Class P-IO
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO
(collectively, including the Class P-IO Certificates, the "Class A
Certificates"), Class B-I and B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively with the Class R and Class R-I Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class P-IO
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class P-IO Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class P-IO Notional Principal Amount of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified
the Trustee, or by check mailed to the address of the person entitled thereto
as it appears on the Register.
Each Owner of record of a Class P-IO Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class P-IO Certificates. The Percentage
Interest of each Class P-IO Certificate as of any date of determination will
be equal to the portion of the Class stated or the Percentage Interest on the
face thereof.
2
<PAGE>
"Class P-IO Notional Principal Amount": The Class P-IO
"Notional Amount will equal (a) on any Payment Date prior to the 31st Payment
Date the aggregate outstanding Certificate Principal Balance of the Class A-16
Internal and Class A-17 Certificates and (b) on or after the 31st Payment
Date, zero.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of
3
<PAGE>
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class P-IO Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 based on the Class P-IO
Notional Principal Amount. As provided in the Pooling and Servicing Agreement
and subject to certain limitations therein set forth, Class P-IO Certificates
are exchangeable for new Class P-IO Certificates of authorized denominations
evidencing the same aggregate notional principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT B-I
FORM OF CLASS B-I CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2,
CLASS A-2 INTERNAL, CLASS A-3, CLASS A-4, CLASS A-5, CLASS A-6, CLASS A-7,
CLASS A-8, CLASS A-9 AND CLASS A-10, CLASS A-11, CLASS A-12 INTERNAL, CLASS
A-13 INTERNAL, CLASS A-14 INTERNAL, CLASS A-15 INTERNAL, CLASS A-16 INTERNAL,
CLASS A-17, CLASS A-18, CLASS A-19 AND CLASS A-20 CERTIFICATES OF THIS SERIES
TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS B-I
(____% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: B-I-1 ______________________
CUSIP
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as
<PAGE>
may be held in the name of the Trustee in the Principal and Interest Account, if
any, exclusive of investment earnings thereon (except as otherwise provided
herein), whether in the form of cash, instruments, securities or other
properties (including any Eligible Investments held by the Servicer); and (c)
proceeds of all the foregoing (including, but not by way of limitation, all
proceeds of any mortgage insurance, hazard insurance and title insurance policy
relating to the Home Equity Loans, cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations and receivables
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing) to pay the Certificates as specified in the Pooling and
Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
B-I Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CLASS B-I
CERTIFICATE IS ___%. ASSUMING THAT THE HOME EQUITY LOANS PREPAY AT A RATE
BASED ON 100% OF THE PREPAYMENT ASSUMPTION DESCRIBED IN THE PROSPECTUS
SUPPLEMENT, THIS CERTIFICATE HAS BEEN ISSUED WITH APPROXIMATELY $______ OF OID
PER $1,000,000 OF CLASS B-I PRINCIPAL AMOUNT AND THE ANNUAL YIELD TO MATURITY
WILL BE _____% (COMPOUNDED MONTHLY); THE AMOUNT OF OID ALLOCABLE TO THE LONG
FIRST ACCRUAL PERIOD IS $________ PER $1,000,000 OF CLASS B-I PRINCIPAL AMOUNT
COMPUTED USING DAILY COMPOUNDING.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
BY ITS ACCEPTANCE OR ACQUISITION OF A CLASS B-I CERTIFICATE,
THE OWNER SHALL BE DEEMED TO HAVE REPRESENTED THAT IT EITHER (I) IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO SECTION 406 OF ERISA NOR A PLAN OR OTHER
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA NOR A PLAN OR OTHER ARRANGEMENT
SUBJECT TO SECTION 4975 OF THE CODE (COLLECTIVELY, A "PLAN") NOR IS ACTING ON
BEHALF OF ANY PLAN NOR USING THE ASSETS OF ANY PLAN TO EFFECT SUCH TRANSFER OR
(II) IS AN INSURANCE COMPANY ACQUIRING ITS INTEREST AS PERMITTED IN ACCORDANCE
WITH PROHIBITED TRANSACTION CLASS EXEMPTION 95-60.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class B-I (the "Class B-I
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate
2
<PAGE>
by virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated as
ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-13 Internal,
Class A-14 Internal, Class A-15 Internal, Class A-16 Internal, Class A-17, Class
A-18, Class A-19, Class A-20, Class N-IO, Class P-IO (collectively, including
the Class A-12 Internal Certificates, the "Class A Certificates"), Class B-I and
Class B-II (the "Class B Certificates" and collectively with the Class A
Certificates, the "Offered Certificates"), Class C (the "Class C Certificates"),
Class R (the "Class R Certificates"), Class R-I (the "Class R-I Certificates")
and Class R-II (the "Class R-II Certificates and collectively, with the Class R
and Class R-I Certificates, the "Residual Certificates"). The Offered
Certificates, Class C Certificates and the Residual Certificates are together
referred to herein as the "Certificates." Terms capitalized herein and not
otherwise defined herein shall have the respective meanings set forth in the
Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class B-I
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class B-I Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class B-I Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class B-I Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class B-I Certificates. The Percentage
Interest of each Class B-I Certificate as of any date of determination will be
equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class B-I Certificate on the Startup Day by the
aggregate Class B-I Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
3
<PAGE>
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class B-I Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class B-I Certificates are exchangeable
for new Class B-I Certificates of authorized denominations evidencing the same
aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT B-II
FORM OF CLASS B-II CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2,
CLASS A-2 INTERNAL, CLASS A-3, CLASS A-4, CLASS A-5, CLASS A-6, CLASS A-7,
CLASS A-8, CLASS A-9 AND CLASS A-10, CLASS A-11, CLASS A-12 INTERNAL, CLASS
A-13 INTERNAL, CLASS A-14 INTERNAL, CLASS A-15 INTERNAL, CLASS A-16 INTERNAL,
CLASS A-17, CLASS A-18, CLASS A-19 AND CLASS A-20 CERTIFICATES OF THIS SERIES
TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS B-II
(____% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Issuer ("ContiMortgage Home Equity Loan Trust 1998-3") or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: B-II-1 ______________________
CUSIP
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as
<PAGE>
may be held in the name of the Trustee in the Principal and Interest Account, if
any, exclusive of investment earnings thereon (except as otherwise provided
herein), whether in the form of cash, instruments, securities or other
properties (including any Eligible Investments held by the Servicer); and (c)
proceeds of all the foregoing (including, but not by way of limitation, all
proceeds of any mortgage insurance, hazard insurance and title insurance policy
relating to the Home Equity Loans, cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations and receivables
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing) to pay the Certificates as specified in the Pooling and
Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
B-II Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to October 15, 1998 (the first Payment
Date) be less than the original Certificate Principal Balance set forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CLASS B-II
CERTIFICATE IS 8.25%. ASSUMING THAT THE HOME EQUITY LOANS PREPAY AT A RATE
BASED ON 100% OF THE PREPAYMENT ASSUMPTION DESCRIBED IN THE PROSPECTUS
SUPPLEMENT, THIS CERTIFICATE HAS BEEN ISSUED WITH APPROXIMATELY $27,934.00 OF
OID PER $1,000,000 OF CLASS B-II PRINCIPAL AMOUNT AND THE ANNUAL YIELD TO
MATURITY WILL BE 9.058% (COMPOUNDED MONTHLY); THE AMOUNT OF OID ALLOCABLE TO
THE LONG FIRST ACCRUAL PERIOD IS $11,754.60 PER $1,000,000 OF CLASS B-II
PRINCIPAL AMOUNT COMPUTED USING DAILY COMPOUNDING.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
BY ITS ACCEPTANCE OR ACQUISITION OF A CLASS B-II
CERTIFICATE, THE OWNER SHALL BE DEEMED TO HAVE REPRESENTED THAT IT EITHER (I)
IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO SECTION 406 OF ERISA NOR A PLAN OR
OTHER ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA NOR A PLAN OR OTHER
ARRANGEMENT SUBJECT TO SECTION 4975 OF THE CODE (COLLECTIVELY, A "PLAN") NOR
IS ACTING ON BEHALF OF ANY PLAN NOR USING THE ASSETS OF ANY PLAN TO EFFECT
SUCH TRANSFER OR (II) IS AN INSURANCE COMPANY ACQUIRING ITS INTEREST AS
PERMITTED IN ACCORDANCE WITH PROHIBITED TRANSACTION CLASS EXEMPTION 95-60.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class B-II (the "Class B-II
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate
2
<PAGE>
by virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated as
ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-13 Internal,
Class A-14 Internal, Class A-15 Internal, Class A-16 Internal, Class A-17, Class
A-18, Class A-19, Class A-20, Class N-IO, Class P-IO (collectively, including
the Class A-12 Internal Certificates, the "Class A Certificates"), Class B-I and
Class B-II (the "Class B Certificates" and collectively with the Class A
Certificates, the "Offered Certificates"), Class C (the "Class C Certificates"),
Class R (the "Class R Certificates"), Class R-I (the "Class R-I Certificates")
and Class R-II (the "Class R-II Certificates and collectively, with the Class R
and Class R-I Certificates, the "Residual Certificates"). The Offered
Certificates, Class C Certificates and the Residual Certificates are together
referred to herein as the "Certificates." Terms capitalized herein and not
otherwise defined herein shall have the respective meanings set forth in the
Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class B-II
Certificates as of the close of business on the last day of the calendar month
immediately preceding the calendar month in which a Payment Date occurs (the
"Record Date") will be entitled to receive the Class B-II Distribution Amount
relating to such Certificate on such Payment Date. Distributions will be made
in immediately available funds to Owners of Certificates having an aggregate
original Class B-II Certificate Principal Balance of at least $1,000,000 (by
wire transfer or otherwise) to the account of an Owner at a domestic bank or
other entity having appropriate facilities therefor, if such Owner has so
notified the Trustee, or by check mailed to the address of the person entitled
thereto as it appears on the Register.
Each Owner of record of a Class B-II Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class B-II Certificates. The Percentage
Interest of each Class B-II Certificate as of any date of determination will
be equal to the percentage obtained by dividing the original Certificate
Principal Balance of such Class B-II Certificate on the Startup Day by the
aggregate Class B-II Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
3
<PAGE>
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class B-II Certificates are issuable only as registered
Certificates in minimum denominations of $1,000 original Certificate Principal
Balance. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class B-II Certificates are
exchangeable for new Class B-II Certificates of authorized denominations
evidencing the same aggregate principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT A-12 INTERNAL
FORM OF CLASS A-12 INTERNAL CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-12 INTERNAL
(______% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
This Certificate is irrevocably registered in the name of
ContiMortgage Swap Trust 1998-B and is not transferable.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-12 ______________________
CUSIP
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO
----------------
Registered Owner
CONTIMORTGAGE SWAP
TRUST 1998-B
------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
<PAGE>
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-12 Internal Certificates. Therefore, the actual Outstanding principal amount
of this Certificate may, on any date subsequent to October 15, 1998 (the first
Payment Date) be less than the original Certificate Principal Balance set
forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-12 Internal (the "Class A-12
Internal Certificates") and issued under and subject to the terms, provisions
and conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-13
Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal, Class
A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-12 Internal Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-12
Internal Certificates as of the close of business on the last day of the
calendar month immediately preceding the calendar month in which a Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-12
Internal Distribution Amount relating to such Certificate on such Payment
Date. Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-12 Internal Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-12 Internal Certificate
will be entitled to receive such Owner's Percentage Interest in the amounts
due on such Payment Date to the Owners of the Class A-12 Internal
Certificates. The Percentage Interest of each Class A-12 Internal Certificate
as of any date of determination will be equal to the percentage obtained by
dividing the original Certificate Principal Balance of such Class A-12
Internal Certificate on the Startup Day by the aggregate Class A-12 Internal
Certificate Principal Balance on the Startup Day.
2
<PAGE>
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
3
<PAGE>
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-12 Internal Certificates are issuable only as
registered Certificates in minimum denominations of $1,000 original
Certificate Principal Balance. As provided in the Pooling and Servicing
Agreement and subject to certain limitations therein set forth, Class A-12
Internal Certificates are exchangeable for new Class A-12 Internal
Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT A-13 INTERNAL
FORM OF CLASS A-13 INTERNAL CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-13 INTERNAL
(_____% PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
This Certificate is irrevocably registered in the name of
ContiMortgage Swap Trust 1998-B and is not transferable.
No: A-13-1
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CONTIMORTGAGE SWAP
TRUST 1998-B
------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
<PAGE>
initial issuance of the Certificates to the final Payment Date for the Class
A-13 Internal Certificates. Therefore, the actual Outstanding principal amount
of this Certificate may, on any date subsequent to October 15, 1998 (the first
Payment Date) be less than the original Certificate Principal Balance set
forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-13 Internal (the "Class A-13
Internal Certificates") and issued under and subject to the terms, provisions
and conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal, Class
A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-13 Internal Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-13
Internal Certificates as of the close of business on the last day of the
calendar month immediately preceding the calendar month in which a Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-13
Internal Distribution Amount relating to such Certificate on such Payment
Date. Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-13 Internal Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-13 Internal Certificate
will be entitled to receive such Owner's Percentage Interest in the amounts
due on such Payment Date to the Owners of the Class A-13 Internal
Certificates. The Percentage Interest of each Class A-13 Internal Certificate
as of any date of determination will be equal to the percentage obtained by
dividing the original Certificate Principal Balance of such Class A-13
Internal Certificate on the Startup Day by the aggregate Class A-13 Internal
Certificate Principal Balance on the Startup Day.
2
<PAGE>
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
3
<PAGE>
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-13 Internal Certificates are issuable only as
registered Certificates in minimum denominations of $1,000 original
Certificate Principal Balance. As provided in the Pooling and Servicing
Agreement and subject to certain limitations therein set forth, Class A-13
Internal Certificates are exchangeable for new Class A-13 Internal
Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT A-14 INTERNAL
FORM OF CLASS A-14 INTERNAL CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-14 INTERNAL
(______%PASS-THROUGH RATE)
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
This Certificate is irrevocably registered in the name of
ContiMortgage Swap Trust 1998-B and is not transferable.
No: A-14-1
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CONTIMORTGAGE SWAP
TRUST 1998-B
------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
<PAGE>
initial issuance of the Certificates to the final Payment Date for the Class
A-14 Internal Certificates. Therefore, the actual Outstanding principal amount
of this Certificate may, on any date subsequent to October 15, 1998 (the first
Payment Date) be less than the original Certificate Principal Balance set
forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-14 Internal (the "Class A-14
Internal Certificates") and issued under and subject to the terms, provisions
and conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-15 Internal, Class A-16 Internal, Class
A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-14 Internal Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-14
Internal Certificates as of the close of business on the last day of the
calendar month immediately preceding the calendar month in which a Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-14
Internal Distribution Amount relating to such Certificate on such Payment
Date. Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-14 Internal Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-14 Internal Certificate
will be entitled to receive such Owner's Percentage Interest in the amounts
due on such Payment Date to the Owners of the Class A-14 Internal
Certificates. The Percentage Interest of each Class A-14 Internal Certificate
as of any date of determination will be equal to the percentage obtained by
dividing the original Certificate Principal Balance of such Class A-14
Internal Certificate on the Startup Day by the aggregate Class A-14 Internal
Certificate Principal Balance on the Startup Day.
2
<PAGE>
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
3
<PAGE>
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-14 Internal Certificates are issuable only as
registered Certificates in minimum denominations of $1,000 original
Certificate Principal Balance. As provided in the Pooling and Servicing
Agreement and subject to certain limitations therein set forth, Class A-14
Internal Certificates are exchangeable for new Class A-14 Internal
Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT A-15 INTERNAL
FORM OF CLASS A-15 INTERNAL CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-15 INTERNAL
(_____% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
This Certificate is irrevocably registered in the name of
ContiMortgage Swap Trust 1998-B and is not transferable.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-15-1
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CONTIMORTGAGE SWAP
TRUST 1998-B
------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each
<PAGE>
Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-15 Internal Certificates. Therefore, the actual Outstanding principal amount
of this Certificate may, on any date subsequent to October 15, 1998 (the first
Payment Date) be less than the original Certificate Principal Balance set
forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-15 Internal (the "Class A-15
Internal Certificates") and issued under and subject to the terms, provisions
and conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-16
2
<PAGE>
Internal, Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-15 Internal Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class C
(the "Class C Certificates"), Class R (the "Class R Certificates"), Class R-I
(the "Class R-I Certificates") and Class R-II (the "Class R-II Certificates and
collectively, with the Class R and Class R-I Certificates, the "Residual
Certificates"). The Offered Certificates, Class C Certificates and the Residual
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-15
Internal Certificates as of the close of business on the last day of the
calendar month immediately preceding the calendar month in which a Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-15
Internal Distribution Amount relating to such Certificate on such Payment
Date. Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-15 Internal Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-15 Internal Certificate
will be entitled to receive such Owner's Percentage Interest in the amounts
due on such Payment Date to the Owners of the Class A-15 Internal
Certificates. The Percentage Interest of each Class A-15 Internal Certificate
as of any date of determination will be equal to the percentage obtained by
dividing the original Certificate Principal Balance of such Class A-15
Internal Certificate on the Startup Day by the aggregate Class A-15 Internal
Certificate Principal Balance on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such
3
<PAGE>
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-15 Internal Certificates are issuable only as
registered Certificates in minimum denominations of $1,000 original
Certificate Principal Balance. As provided in the Pooling and Servicing
Agreement and subject to certain limitations therein set forth, Class A-15
Internal Certificates are exchangeable for new Class A-15 Internal
Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT A-16 INTERNAL
FORM OF CLASS A-16 INTERNAL CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-16 INTERNAL
(____% PASS-THROUGH RATE)*
Representing Certain Interests in a Pool of Home Equity
Loans Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional ownership interest in
the Home Equity Loans and certain other property held by the Trust.)
This Certificate is irrevocably registered in the name of
ContiMortgage Swap Trust 1998-B and is not transferable.
- ---------------
* Subject to certain limitations described in the Pooling and Servicing
Agreement.
No: A-16-1
$
------------- ------------- ----------------------
Original Certificate Date Final Scheduled
Principal Balance Payment Date
CONTIMORTGAGE SWAP
TRUST 1998-B
------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
<PAGE>
The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance over the period from the date of
initial issuance of the Certificates to the final Payment Date for the Class
A-16 Internal Certificates. Therefore, the actual Outstanding principal amount
of this Certificate may, on any date subsequent to October 15, 1998 (the first
Payment Date) be less than the original Certificate Principal Balance set
forth above.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement (as defined below) provides that, in any event, upon the
making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS. THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY ON ANY DATE SUBSEQUENT TO OCTOBER 15, 1998 (THE FIRST PAYMENT
DATE) BE LESS THAN ITS ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class A-16 Internal (the "Class A-16
Internal Certificates") and issued under and subject to the terms, provisions
and conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, including the Class A-16 Internal Certificates, the "Class A
Certificates"), Class B-I and Class B-II (the "Class B Certificates" and
collectively with the Class A Certificates, the "Offered Certificates"), Class
C (the "Class C Certificates"), Class R (the "Class R Certificates"), Class
R-I (the "Class R-I Certificates") and Class R-II (the "Class R-II
Certificates and collectively, with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, Class C Certificates
and the Residual Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
"Payment Date") commencing October 15, 1998, the Owners of the Class A-16
Internal Certificates as of the close of business on the last day of the
calendar month immediately preceding the calendar month in which a Payment
Date occurs (the "Record Date") will be entitled to receive the Class A-16
Internal Distribution Amount relating to such Certificate on such Payment
Date. Distributions will be made in immediately available funds to Owners of
Certificates having an aggregate original Class A-16 Internal Certificate
Principal Balance of at least $1,000,000 (by wire transfer or otherwise) to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Owner of record of a Class A-16 Internal Certificate
will be entitled to receive such Owner's Percentage Interest in the amounts
due on such Payment Date to the Owners of the Class A-16 Internal
Certificates. The Percentage Interest of each Class A-16 Internal Certificate
as of any date of determination will be equal to the percentage obtained by
dividing the original Certificate Principal Balance of such Class A-16
Internal Certificate on the Startup Day by the aggregate Class A-16 Internal
Certificate Principal Balance on the Startup Day.
2
<PAGE>
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code by any Person from a distribution to any
Owner shall be considered as having been paid by the Trustee to such Owner for
all purposes of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans and amounts on deposit in the
Certificate Account and the Principal and Interest Account (except as
otherwise provided in the Pooling and Servicing Agreement).
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
3
<PAGE>
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain circumstances
provided for in the Pooling and Servicing Agreement, such consent of the
Owners will be required prior to amendments. Any such consent by the Owner at
the time of the giving thereof, of this Certificate shall be conclusive and
binding upon such Owner and upon all future Owners of the Certificate and of
any Certificate issued upon the registration of Transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-16 Internal Certificates are issuable only as
registered Certificates in minimum denominations of $1,000 original
Certificate Principal Balance. As provided in the Pooling and Servicing
Agreement and subject to certain limitations therein set forth, Class A-16
Internal Certificates are exchangeable for new Class A-16 Internal
Certificates of authorized denominations evidencing the same aggregate
principal amount.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT C
FORM OF CLASS C CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2,
CLASS A-2 INTERNAL, CLASS A-3, CLASS A-4, CLASS A-5, CLASS A-6, CLASS A-7,
CLASS A-8, CLASS A-9 AND CLASS A-10, CLASS A-11, CLASS A-12 INTERNAL, CLASS
A-13 INTERNAL, CLASS A-14 INTERNAL, CLASS A-15 INTERNAL, CLASS A-16 INTERNAL,
CLASS A-17, CLASS A-18, CLASS A-19, CLASS A-20, CLASS BI AND CLASS BII
CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
INTEREST-ONLY CLASS C CERTIFICATE
Representing Certain Interests Relating to a Pool of
Home Equity Loans formed by ContiSecurities Asset Funding Corp.
and Serviced by
CONTIMORTGAGE CORPORATION
as Servicer
This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This certificate represents a fractional ownership interest in
the Home Equity Loans as described herein, moneys in certain Accounts created
pursuant to the Pooling and Servicing Agreement and certain other rights
relating thereto and is payable only from amounts received by the Trustee
relating to the Home Equity Loans held by the Trust.
No: C-1
Percentage Interest:
% ------------- ----------------------
-------- Date Final Scheduled
Payment Date
CONTISECURITIES HOLDING CORPORATION
-----------------------------------
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
Upon receiving the final distribution hereon, the Owner
hereof is required to send this Certificate to the Trustee. The Pooling and
Servicing Agreement provides that, in any event, upon the making of the final
distribution due on this Certificate, this Certificate shall be deemed
cancelled for all purposes under the Pooling and Servicing Agreement.
<PAGE>
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY
LOANS ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
BY ITS ACCEPTANCE OR ACQUISITION OF A CLASS C CERTIFICATE,
THE OWNER SHALL BE DEEMED TO HAVE REPRESENTED THAT IT EITHER (I) IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO SECTION 406 OF ERISA NOR A PLAN OR OTHER
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA NOR A PLAN OR OTHER ARRANGEMENT
SUBJECT TO SECTION 4975 OF THE CODE (COLLECTIVELY, A "PLAN") NOR IS ACTING ON
BEHALF OF ANY PLAN NOR USING THE ASSETS OF ANY PLAN TO EFFECT SUCH TRANSFER OR
(II) IS AN INSURANCE COMPANY ACQUIRING ITS INTEREST AS PERMITTED IN ACCORDANCE
WITH PROHIBITED TRANSACTION CLASS EXEMPTION 95-60.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class C (the "Class C Certificates")
and issued under and subject to the terms, provisions and conditions of that
certain Pooling and Servicing Agreement dated as of September 1, 1998 (the
"Pooling and Servicing Agreement") by and among ContiMortgage Corporation, in
its capacity as a Seller (a "Seller") and as the Servicer (the "Servicer"),
ContiWest Corporation, in its capacity as a Seller (a "Seller"),
ContiSecurities Asset Funding Corp., in its capacity as Depositor, (the
"Depositor") and Manufacturers and Traders Trust Company, a New York banking
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home
Equity Loan Trust 1998-3 Home Equity Loan Pass-Through Certificates, Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class
A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class A-13
Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal, Class
A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO (collectively,
the "Class A Certificates"), Class B-I and Class B-II (the "Class B
Certificates" and together with the Class A Certificates, the "Offered
Certificates") and Class R (the "Class R Certificates"), Class R-I (the "Class
R-I Certificates") and Class R-II (the "Class R-II Certificates and collectively
with the Class R and Class R-I Certificates, the "Residual Certificates"). The
Offered Certificates, the Class C Certificates and the Residual Certificates are
together referred to herein as the "Certificates." Terms capitalized herein and
not otherwise defined herein shall have the respective meanings set forth in the
Pooling and Servicing Agreement.
Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
On the 15th day of each month, or, if such day is not a
Business Day, then the next succeeding Business Day (each such day being a
Payment Date) commencing October 15, 1998 (the first Payment Date), the
Holders of the Class C Certificates as of the close of business on the last
business day of the calendar month immediately preceding the calendar month in
which such Payment Date occurs (the "Record Date") may be entitled to receive
the Class C Distribution Amount (as defined in the Pooling and Servicing
Agreement) relating to such Payment Date. Distributions will be made in
immediately available funds to such Owners, by wire transfer or
2
<PAGE>
otherwise, to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee at
least 5 business days prior to the related record date, or by check mailed to
the address of the person entitled thereto as it appears on the Register.
Each Owner of record of a Class C Certificate will be
entitled to receive such Owner's Percentage Interest in the amounts due on
such Payment Date to the Owners of the Class C Certificates. The Percentage
Interest of each Class C Certificate as of any date of determination will be
equal to the percentage interest set forth on such Class C Certificate.
The Trustee or any duly appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance
with the terms hereof and the Pooling and Servicing Agreement. Amounts
properly withheld under the Code or applicable to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes
of the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, the Depositor or ContiMortgage or any of their
subsidiaries and affiliates and are not insured or guaranteed by the Federal
Deposit Insurance Corporation, the Government National Mortgage Association,
or any other governmental agency. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity
Loans and amounts on deposit in the Accounts (except as otherwise provided in
the Pooling and Servicing Agreement), all as more specifically set forth
hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
hereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan in the Trust Estate or (b) the disposition of all
property acquired in respect of any Home Equity Loan remaining in the Trust
Estate or (c) at any time when a Qualified Liquidation of the Trust Estate is
effected as described below. To effect a termination of the Pooling and
Servicing Agreement pursuant to clause (c) above, the Owners of all
Certificates then Outstanding shall unanimously direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code, and the Trustee shall either sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust, or
shall distribute equitably in kind all of the assets of the Trust Estate to
the remaining Owners of the Certificates, each in accordance with such plan,
so that the liquidation or distribution of the Trust Estate, the distribution
of any proceeds of the liquidation and the termination of the Pooling and
Servicing Agreement occur no later than the close of the 90th day after the
date of adoption of the plan of liquidation and such liquidation qualifies as
a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may, at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
3
<PAGE>
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates have the right to exercise any trust
or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor and a like
Percentage Interest will be issued to the designated transferee or
transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Trustee, the
Sellers and the Servicer at any time and from time to time, without the
consent of the Owners; provided that in certain circumstances provided for in
the Pooling and Servicing Agreement, such consent of the Owners will be
required prior to amendments. Any such consent by the Owner at the time of the
giving thereof, of this Certificate shall be conclusive and binding upon such
Owner and upon all future Owners of the Certificate and of any Certificate
issued upon the registration of Transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon
this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class C Certificates are issuable only as registered
Certificates in minimum percentage interests of all interests in the Class C
Certificates. As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, Class C Certificates are
exchangeable for new Class C Certificates of the same percentage interest as
the Class C Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT R
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "RESIDUAL INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS
CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.08 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUCH
TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMER'S COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME.
NO TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE CERTIFICATE
REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT AFFIRMING,
AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A DISQUALIFIED
ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE ACCOUNT OF A
DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED OF EACH
PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY
GIVE RISE TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON
AN AGENT ACTING FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS
CLASS R CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER
IN ANY TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR
EQUAL TO THE PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO
THE PORTION OF THIS CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH
DISQUALIFIED ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON
CORPORATIONS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH"
ENTITY INCLUDES REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS,
COMMON TRUST FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART
I OF SUBCHAPTER 1T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS,
NOMINEES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS
ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
<PAGE>
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS R
(RESIDUAL INTEREST)
Representing Certain Interests Relating to a Pool of
Conventional Home Equity Loans
Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional residual ownership
interest in the Trust Estate.)
No: R-1
Percentage Interest: ____________ _________________
______% Date Final Scheduled
Distribution Date
CONTISECURITIES HOLDING CORPORATION
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account, together with investment earnings on such amounts and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class R (the "Class R Certificates")
and issued under and subject to the terms, provisions and conditions of that
certain Pooling and Servicing Agreement dated as of September 1, 1998 (the
"Pooling and Servicing Agreement") by and among ContiMortgage Corporation, in
its capacity as a Seller (a "Seller") and as the Servicer (the "Servicer"),
ContiWest Corporation, in its capacity as a Seller (a "Seller"),
ContiSecurities Asset Funding Corp., in its capacity as Depositor, (the
"Depositor") and Manufacturers and Traders Trust Company, a New York banking
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home
Equity Loan Trust 1998-3 Home Equity Loan Pass-Through Certificates, Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class
A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class A-13
Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal, Class
A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, the "Class A Certificates"), Class B-I and Class B-II (the
"Class B Certificates" and collectively with the Class A Certificates, the
"Offered Certificates"), Class C (the "Class C Certificates"), Class R-I (the
"Class R-I Certificates") and Class R-II (the "Class R-II
2
<PAGE>
Certificates" and together with Class R-I and Class R Certificates, the
"Residual Certificates"). The Offered Certificates, the Class C Certificates and
the Residual Certificates are together referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans, all as more specifically set
forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and
the Trustee shall either sell the Home Equity Loans and distribute the
proceeds of the liquidation of the Trust, or shall distribute equitably in
kind all of the assets of the Trust Estate to the remaining Owners of the
Certificates, each in accordance with such plan, so that the liquidation or
distribution of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the plan
of liquidation and such liquidation qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code, the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, or if there are no longer any Offered
Certificates then outstanding, the Owners of a majority of the Percentage
Interests represented by the Class R-I Certificates then outstanding, have the
right to exercise any trust or power set forth in Section 6.11 of the Pooling
and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor
3
<PAGE>
and a like aggregate fractional undivided interest in the REMIC will be issued
to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the Consent of the Owners; provided that in certain other
circumstances provided for in the Pooling and Servicing Agreement, such
consent of the Owners will be required prior to amendments. Any such consent
by the Owner at the time of the giving thereof, of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of Transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class R Certificates are issuable only as registered
Certificates. As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, these Class R Certificates are
exchangeable for new Class R Certificates evidencing the same Percentage
Interest as the Class R Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
----------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
-----------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT R
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "RESIDUAL INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS
CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.08 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUCH
TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMER'S COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME.
NO TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE CERTIFICATE
REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT AFFIRMING,
AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A DISQUALIFIED
ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE ACCOUNT OF A
DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED OF EACH
PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY
GIVE RISE TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON
AN AGENT ACTING FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS
CLASS R CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER
IN ANY TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR
EQUAL TO THE PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO
THE PORTION OF THIS CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH
DISQUALIFIED ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON
CORPORATIONS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH"
ENTITY INCLUDES REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS,
COMMON TRUST FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART
I OF SUBCHAPTER T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS,
NOMINEES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS
ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
<PAGE>
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS R
(RESIDUAL INTEREST)
Representing Certain Interests Relating to a Pool of
Conventional Home Equity Loans
Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional residual ownership
interest in the Trust Estate.)
No: R-2
Percentage Interest: _______________ _________________
_____% Date Final Scheduled
Distribution Date
CONTIFUNDING CORPORATION
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Initial Home Equity Loans
listed in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement
which each Seller has caused to be delivered to the Depositor and the
Depositor has caused to be delivered to the Trustee (and all substitutions
therefor as provided by Section 3.03, 3.04 and 3.06 of the Pooling and
Servicing Agreement), together with the related Home Equity Loan documents and
each Sellers' interest in any Property which secured a Home Equity Loan but
which has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class R (the "Class R Certificates")
and issued under and subject to the terms, provisions and conditions of that
certain Pooling and Servicing Agreement dated as of September 1, 1998 (the
"Pooling and Servicing Agreement") by and among ContiMortgage Corporation, in
its capacity as a Seller (a "Seller") and as the Servicer (the "Servicer"),
ContiWest Corporation, in its capacity as a Seller (a "Seller"),
ContiSecurities Asset Funding Corp., in its capacity as Depositor, (the
"Depositor") and Manufacturers and Traders Trust Company, a New York banking
corporation, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as ContiMortgage Home
Equity Loan Trust 1998-3 Home Equity Loan Pass-Through Certificates, Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class
A-8, Class A-9, Class A-10, Class A-11, Class A-12 Internal, Class A-13
Internal, Class A-14 Internal, Class A-15 Internal, Class A-16 Internal, Class
A-17, Class A-18, Class A-19, Class A-20, Class N-IO, Class P-IO
(collectively, the "Class A Certificates"), Class B-I and Class B-II (the
"Class B Certificates" and, collectively with the Class A Certificates the
"Offered Certificates"),
2
<PAGE>
Class C (the Class C Certificates"), Class R-I (the "Class R-I Certificates")
and Class R-II (the "Class R-II Certificates and collectively with the Class R
and Class R-I Certificates, the "Residual Certificates"). The Offered
Certificates, the Class C Certificates and the Residual Certificates are
together referred to herein as the "Certificates." Terms capitalized herein and
not otherwise defined herein shall have the respective meanings set forth in the
Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans, all as more specifically set
forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available
under the Certificate Insurance Policy of all amounts held by the Trustee and
required to be paid to such Owners pursuant to the Pooling and Servicing
Agreement upon the later to occur of (a) the final payment or other
liquidation (or any advance made with respect thereto) of the last Home Equity
Loan or (b) the disposition of all property acquired in respect of any Home
Equity Loan remaining in the Trust Estate or (c) at any time when a Qualified
Liquidation of the Trust Estate is effected as described below. To effect a
termination of the Pooling and Servicing Agreement pursuant to clause (c)
above, the Owners of all Certificates then Outstanding shall unanimously
direct the Trustee on behalf of the Trust to adopt a plan of complete
liquidation, as contemplated by Section 860F(a)(4) of the Code and the Trustee
shall either sell the Home Equity Loans and distribute the proceeds of the
liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each
in accordance with such plan, so that the liquidation or distribution of the
Trust Estate, the distribution of any proceeds of the liquidation and the
termination of the Pooling and Servicing Agreement occur no later than the
close of the 90th day after the date of adoption of the plan of liquidation
and such liquidation qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any of the
REMIC I, REMIC II or REMIC II as a REMIC under the Code, the Home Equity Loans
may be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, or if there are no longer any Offered
Certificates then outstanding, the Owners of a majority of the Percentage
Interests represented by the Class R-I Certificates then outstanding, have the
right to exercise any trust or power set forth in Section 6.11 of the Pooling
and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of
3
<PAGE>
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the Upper-Tier REMIC will be issued to the
designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain other
circumstances provided for in the Pooling and Servicing Agreement, such
consent of the Owners will be required prior to amendments. Any such consent
by the Owner at the time of the giving thereof, of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of Transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class R Certificates are issuable only as registered
Certificates. As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, Class R Certificates are
exchangeable for new Class R Certificates evidencing the same Percentage
Interest as the Class R Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
--------------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------
Name:
Title:
Date of Authentication
5
<PAGE>
EXHIBIT R-I
FORM OF CLASS RI CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "RESIDUAL INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS
CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.08 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
TRANSFER OF THIS CLASS R-I CERTIFICATE IS RESTRICTED AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R-I
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUCH
TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMER'S COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME.
NO TRANSFER OF THIS CLASS R-I CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN
AFFIDAVIT AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R-I CERTIFICATE FOR
THE ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT
REQUIRED OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY
GIVE RISE TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON
AN AGENT ACTING FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS
CLASS R-I CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD
OWNER IN ANY TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH
YEAR EQUAL TO THE PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT
TO THE PORTION OF THIS CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY
SUCH DISQUALIFIED ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE
ON CORPORATIONS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE TERM
"PASS-THROUGH" ENTITY INCLUDES REGULATED INVESTMENT COMPANIES, REAL ESTATE
INVESTMENT TRUSTS, COMMON TRUST FUNDS, PARTNERSHIPS, TRUSTS, ESTATES,
COOPERATIVES TO WHICH PART I OF SUBCHAPTER T OF THE CODE APPLIES AND, EXCEPT
AS PROVIDED IN REGULATIONS, NOMINEES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS
ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
<PAGE>
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS R-I
(RESIDUAL INTEREST)
Representing Certain Interests Relating to a Pool of
Conventional Home Equity Loans
Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional residual ownership
interest in the Trust Estate.)
No: R-I-1
Percentage Interest: ______________ _________________
_____% Date Final Scheduled
Distribution Date
CONTISECURITIES HOLDING CORPORATION
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account, together with investment earnings on such amounts and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class R-I (the "Class R-I
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO,
Class P-IO (collectively, the "Class A Certificates"), Class B-I and Class
B-II (the "Class B Certificates" and, collectively with the Class A
Certificates the "Offered Certificates"),Class C (the "Class C Certificates"),
Class R (the "Class R Certificates") and
2
<PAGE>
Class R-II (the "Class R-II Certificates" and collectively with the Class R and
Class R-I Certificates, the "Residual Certificates"). The Offered Certificates,
the Class C Certificates and the Certificates are together referred to herein as
the "Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans, all as more specifically set
forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and
the Trustee shall either sell the Home Equity Loans and distribute the
proceeds of the liquidation of the Trust, or shall distribute equitably in
kind all of the assets of the Trust Estate to the remaining Owners of the
Certificates, each in accordance with such plan, so that the liquidation or
distribution of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the plan
of liquidation and such liquidation qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code, the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, or if there are no longer any Offered
Certificates then outstanding, the Owners of a majority of the Percentage
Interests represented by the Class R-I Certificates then outstanding, have the
right to exercise any trust or power set forth in Section 6.11 of the Pooling
and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor
3
<PAGE>
and a like aggregate fractional undivided interest in the REMIC-I will be issued
to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the Consent of the Owners; provided that in certain other
circumstances provided for in the Pooling and Servicing Agreement, such
consent of the Owners will be required prior to amendments. Any such consent
by the Owner at the time of the giving thereof, of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of Transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class R-I Certificates are issuable only as registered
Certificates. As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, these Class R-I Certificates are
exchangeable for new Class R-I Certificates evidencing the same Percentage
Interest as the Class R-I Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
-------------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
---------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT R-I
FORM OF CLASS R-I CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "RESIDUAL INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS
CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.08 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
TRANSFER OF THIS CLASS R-I CERTIFICATE IS RESTRICTED AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R-I
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUCH
TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMER'S COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME.
NO TRANSFER OF THIS CLASS R-I CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN
AFFIDAVIT AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R-I-2 CERTIFICATE FOR
THE ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT
REQUIRED OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY
GIVE RISE TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON
AN AGENT ACTING FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS
CLASS R-I CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD
OWNER IN ANY TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH
YEAR EQUAL TO THE PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT
TO THE PORTION OF THIS CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY
SUCH DISQUALIFIED ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE
ON CORPORATIONS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE TERM
"PASS-THROUGH" ENTITY INCLUDES REGULATED INVESTMENT COMPANIES, REAL ESTATE
INVESTMENT TRUSTS, COMMON TRUST FUNDS, PARTNERSHIPS, TRUSTS, ESTATES,
COOPERATIVES TO WHICH PART I OF SUBCHAPTER T OF THE CODE APPLIES AND, EXCEPT
AS PROVIDED IN REGULATIONS, NOMINEES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS
ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
<PAGE>
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS R-I
(RESIDUAL INTEREST)
Representing Certain Interests Relating to a Pool of
Conventional Home Equity Loans
Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional residual ownership
interest in the Trust Estate.)
No: R-I-2
Percentage Interest: ______________ _________________
_____% Date Final Scheduled
Distribution Date
CONTIFUNDING CORORATION
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Initial Home Equity Loans
listed in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement
which each Seller has caused to be delivered to the Depositor and the
Depositor has caused to be delivered to the Trustee (and all substitutions
therefor as provided by Section 3.03, 3.04 and 3.06 of the Pooling and
Servicing Agreement), together with the related Home Equity Loan documents and
each Sellers' interest in any Property which secured a Home Equity Loan but
which has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class R-I (the "Class R-I
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO,
Class P-IO (collectively, the "Class A Certificates"), Class B-I and Class
B-II (the "Class B Certificates" and, collectively with the Class A
2
<PAGE>
Certificates the "Offered Certificates"),Class C (the Class C Certificates"),
Class R (the "Class R Certificates") and Class R-II (the "Class R-II
Certificates" and collectively with the Class R and Class R-I Certificates,
the "Residual Certificates"). The Offered Certificates, the Class C
Certificates and the Residual Certificates are together referred to herein as
the "Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans, all as more specifically set
forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available
under the Certificate Insurance Policy of all amounts held by the Trustee and
required to be paid to such Owners pursuant to the Pooling and Servicing
Agreement upon the later to occur of (a) the final payment or other
liquidation (or any advance made with respect thereto) of the last Home Equity
Loan or (b) the disposition of all property acquired in respect of any Home
Equity Loan remaining in the Trust Estate or (c) at any time when a Qualified
Liquidation of the Trust Estate is effected as described below. To effect a
termination of the Pooling and Servicing Agreement pursuant to clause (c)
above, the Owners of all Certificates then Outstanding shall unanimously
direct the Trustee on behalf of the Trust to adopt a plan of complete
liquidation, as contemplated by Section 860F(a)(4) of the Code and the Trustee
shall either sell the Home Equity Loans and distribute the proceeds of the
liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each
in accordance with such plan, so that the liquidation or distribution of the
Trust Estate, the distribution of any proceeds of the liquidation and the
termination of the Pooling and Servicing Agreement occur no later than the
close of the 90th day after the date of adoption of the plan of liquidation
and such liquidation qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code, the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, or if there are no longer any Offered
Certificates then outstanding, the Owners of a majority of the Percentage
Interests represented by the Class R-I Certificates then outstanding, have the
right to exercise any trust or power set forth in Section 6.11 of the Pooling
and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of
3
<PAGE>
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the REMIC will be issued to the designated
transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain other
circumstances provided for in the Pooling and Servicing Agreement, such
consent of the Owners will be required prior to amendments. Any such consent
by the Owner at the time of the giving thereof, of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of Transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class R-I Certificates are issuable only as registered
Certificates. As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, these Class R-I Certificates are
exchangeable for new Class R-I Certificates evidencing the same Percentage
Interest as the Class R-I Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
-------------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT R-II
FORM OF CLASS R-II CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "RESIDUAL INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS
CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.08 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
TRANSFER OF THIS CLASS R-II CERTIFICATE IS RESTRICTED AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R-II
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUCH
TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMER'S COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME.
NO TRANSFER OF THIS CLASS R-II CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN
AFFIDAVIT AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R-II CERTIFICATE FOR
THE ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT
REQUIRED OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY
GIVE RISE TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON
AN AGENT ACTING FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS
CLASS R-II CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD
OWNER IN ANY TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH
YEAR EQUAL TO THE PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT
TO THE PORTION OF THIS CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY
SUCH DISQUALIFIED ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE
ON CORPORATIONS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE TERM
"PASS-THROUGH" ENTITY INCLUDES REGULATED INVESTMENT COMPANIES, REAL ESTATE
INVESTMENT TRUSTS, COMMON TRUST FUNDS, PARTNERSHIPS, TRUSTS, ESTATES,
COOPERATIVES TO WHICH PART I OF SUBCHAPTER T OF THE CODE APPLIES AND, EXCEPT
AS PROVIDED IN REGULATIONS, NOMINEES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS
ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
<PAGE>
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS R-II
(RESIDUAL INTEREST)
Representing Certain Interests Relating to a Pool of
Conventional Home Equity Loans
Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional residual ownership
interest in the Trust Estate.)
No: R-II-1
Percentage Interest: _______________ _________________
____% Date Final Scheduled
Distribution Date
CONTISECURITIES HOLDING CORPORATION
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Home Equity Loans listed
in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement which
each Seller has caused to be delivered to the Depositor and the Depositor has
caused to be delivered to the Trustee (and all substitutions therefor as
provided by Section 3.03, 3.04 and 3.06 of the Pooling and Servicing
Agreement), together with the related Home Equity Loan documents and each
Sellers' interest in any Property which secured a Home Equity Loan but which
has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account, together with investment earnings on such amounts and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class R-II (the "Class R-II
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO,
Class P-IO (collectively, the "Class A Certificates"), Class B-I and Class
B-II (the "Class B Certificates" and collectively with the Class A
Certificates, the "Offered Certificates"), Class C (the "Class C
Certificates"), Class R (the "Class R Certificates"),
2
<PAGE>
and Class R-I (the "Class R-I Certificates" and together with the Class R and
Class R-II, the "Residual Certificates"). The Offered Certificates, the Class C
Certificates and the Residual Certificates are together referred to herein as
the "Certificates." Terms capitalized herein and not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans, all as more specifically set
forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the latest to occur of (a) the
final payment or other liquidation (or any advance made with respect thereto)
of the last Home Equity Loan or (b) the disposition of all property acquired
in respect of any Home Equity Loan remaining in the Trust Estate or (c) at any
time when a Qualified Liquidation of the Trust Estate is effected as described
below. To effect a termination of the Pooling and Servicing Agreement pursuant
to clause (c) above, the Owners of all Certificates then Outstanding shall
unanimously direct the Trustee on behalf of the Trust to adopt a plan of
complete liquidation as contemplated by Section 860F(a)(4) of the Code, and
the Trustee shall either sell the Home Equity Loans and distribute the
proceeds of the liquidation of the Trust, or shall distribute equitably in
kind all of the assets of the Trust Estate to the remaining Owners of the
Certificates, each in accordance with such plan, so that the liquidation or
distribution of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the plan
of liquidation and such liquidation qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of any REMIC
established by the Trust as a REMIC under the Code, the Home Equity Loans may
be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, or if there are no longer any Offered
Certificates then outstanding, the Owners of a majority of the Percentage
Interests represented by the Class R-I Certificates then outstanding, have the
right to exercise any trust or power set forth in Section 6.11 of the Pooling
and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the office
designated as the location of the Register duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Certificates of the like Class, tenor
3
<PAGE>
and a like aggregate fractional undivided interest in the REMIC will be issued
to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the Consent of the Owners; provided that in certain other
circumstances provided for in the Pooling and Servicing Agreement, such
consent of the Owners will be required prior to amendments. Any such consent
by the Owner at the time of the giving thereof, of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of Transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class R-II Certificates are issuable only as registered
Certificates. As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, these Class R-II Certificates are
exchangeable for new Class R-II Certificates evidencing the same Percentage
Interest as the Class R-II Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
--------------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT R-II
FORM OF CLASS R-II CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A CLASS OF "RESIDUAL INTERESTS" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS
CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.08 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
TRANSFER OF THIS CLASS R-II CERTIFICATE IS RESTRICTED AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R-II
CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION
860E(E)(5) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUCH
TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMER'S COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME.
NO TRANSFER OF THIS CLASS R-II CERTIFICATE WILL BE REGISTERED BY THE
CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN
AFFIDAVIT AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A
DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R-II CERTIFICATE FOR
THE ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT
REQUIRED OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE
TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY
GIVE RISE TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON
AN AGENT ACTING FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS
CLASS R-II CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD
OWNER IN ANY TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH
YEAR EQUAL TO THE PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT
TO THE PORTION OF THIS CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY
SUCH DISQUALIFIED ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE
ON CORPORATIONS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE TERM
"PASS-THROUGH" ENTITY INCLUDES REGULATED INVESTMENT COMPANIES, REAL ESTATE
INVESTMENT TRUSTS, COMMON TRUST FUNDS, PARTNERSHIPS, TRUSTS, ESTATES,
COOPERATIVES TO WHICH PART I OF SUBCHAPTER T OF THE CODE APPLIES AND, EXCEPT
AS PROVIDED IN REGULATIONS, NOMINEES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS
ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
<PAGE>
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-3
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS R-II
(RESIDUAL INTEREST)
Representing Certain Interests Relating to a Pool of
Conventional Home Equity Loans
Serviced by
CONTIMORTGAGE CORPORATION
(This certificate does not represent an interest in, or an
obligation of, nor are the underlying Home Equity Loans insured or guaranteed
by ContiSecurities Asset Funding Corp., ContiWest Corporation or ContiMortgage
Corporation. This Certificate represents a fractional residual ownership
interest in the Trust Estate.)
No: R-II-2
Percentage Interest: _______________ _________________
____% Date Final Scheduled
Distribution Date
CONTIFUNDING CORPORATION
Registered Owner
The registered Owner named above is the registered
beneficial Owner of a fractional interest in (a) the Initial Home Equity Loans
listed in Schedules I-A, I-B and I-C to the Pooling and Servicing Agreement
which each Seller has caused to be delivered to the Depositor and the
Depositor has caused to be delivered to the Trustee (and all substitutions
therefor as provided by Section 3.03, 3.04 and 3.06 of the Pooling and
Servicing Agreement), together with the related Home Equity Loan documents and
each Sellers' interest in any Property which secured a Home Equity Loan but
which has been acquired by foreclosure or deed in lieu of foreclosure, and all
payments thereon and proceeds of the conversion, voluntary or involuntary, of
the foregoing; (b) such amounts as may be held by the Trustee in the
Certificate Account together with investment earnings on such amounts and such
amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided herein), whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer); and (c) proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, hazard insurance and title
insurance policy relating to the Home Equity Loans, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part of or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified in the Pooling and Servicing Agreement.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized
Certificates designated as ContiMortgage Home Equity Loan Trust 1998-3, Home
Equity Loan Pass-Through Certificates, Class R-II (the "Class R-II
Certificates") and issued under and subject to the terms, provisions and
conditions of that certain Pooling and Servicing Agreement dated as of
September 1, 1998 (the "Pooling and Servicing Agreement") by and among
ContiMortgage Corporation, in its capacity as a Seller (a "Seller") and as the
Servicer (the "Servicer"), ContiWest Corporation, in its capacity as a Seller
(a "Seller"), ContiSecurities Asset Funding Corp., in its capacity as
Depositor, (the "Depositor") and Manufacturers and Traders Trust Company, a
New York banking corporation, in its capacity as the Trustee (the "Trustee"),
to which Pooling and Servicing Agreement the Owner of this Certificate by
virtue of acceptance hereof assents and by which such Owner is bound. Also
issued under the Pooling and Servicing Agreement are Certificates designated
as ContiMortgage Home Equity Loan Trust 1998-3 Home Equity Loan Pass-Through
Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12
Internal, Class A-13 Internal, Class A-14 Internal, Class A-15 Internal, Class
A-16 Internal, Class A-17, Class A-18, Class A-19, Class A-20, Class N-IO,
Class P-IO (collectively, the "Class A Certificates"), Class B-I and Class
B-II (the "Class B Certificates" and collectively with the Class A
2
<PAGE>
Certificates the "Offered Certificates"), Class C (the Class C Certificates"),
Class R (the "Class R Certificates"), Class R-I (the "Class R-I Certificates
and together with the Class R and Class R-II Certificates, the "Residual
Certificates"). The Offered Certificates, the Class C Certificates and the
Residual Certificates are together referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer
pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement permits the Servicer to enter into Sub-Servicing Agreements with
certain institutions eligible for appointment as Sub-Servicers for the
servicing and administration of certain Home Equity Loans. No appointment of
any Sub-Servicer shall release the Servicer from any of its obligations under
the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other
obligation of, or an interest in, nor are the underlying Home Equity Loans
insured or guaranteed by, ContiSecurities Asset Funding Corp., ContiWest
Corporation or ContiMortgage Corporation or any of their affiliates. This
Certificate is limited in right of payment to certain collections and
recoveries relating to the Home Equity Loans, all as more specifically set
forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Pooling and Servicing Agreement, or
for the appointment of a receiver or trustee, or for any other remedy under
the Pooling and Servicing Agreement except in compliance with the terms
thereof.
Notwithstanding any other provisions in the Pooling and
Servicing Agreement, the Owner of any Certificate shall have the right which
is absolute and unconditional to receive distributions to the extent provided
in the Pooling and Servicing Agreement with respect to such Certificate or to
institute suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the
obligations created thereby will terminate upon the earlier of (i) the payment
to the Owners of all Certificates from amounts other than those available
under the Certificate Insurance Policy of all amounts held by the Trustee and
required to be paid to such Owners pursuant to the Pooling and Servicing
Agreement upon the later to occur of (a) the final payment or other
liquidation (or any advance made with respect thereto) of the last Home Equity
Loan or (b) the disposition of all property acquired in respect of any Home
Equity Loan remaining in the Trust Estate or (c) at any time when a Qualified
Liquidation of the Trust Estate is effected as described below. To effect a
termination of the Pooling and Servicing Agreement pursuant to clause (c)
above, the Owners of all Certificates then Outstanding shall unanimously
direct the Trustee on behalf of the Trust to adopt a plan of complete
liquidation, as contemplated by Section 860F(a)(4) of the Code and the Trustee
shall either sell the Home Equity Loans and distribute the proceeds of the
liquidation of the Trust, or shall distribute equitably in kind all of the
assets of the Trust Estate to the remaining Owners of the Certificates, each
in accordance with such plan, so that the liquidation or distribution of the
Trust Estate, the distribution of any proceeds of the liquidation and the
termination of the Pooling and Servicing Agreement occur no later than the
close of the 90th day after the date of adoption of the plan of liquidation
and such liquidation qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides
that (i) the Owners of the Class R-I Certificates may at their option,
purchase from the Trust all remaining Home Equity Loans and other property
then constituting the Trust Estate, and thereby effect early retirement of the
Certificates, on any Monthly Remittance Date after the Clean-Up Call Date and
(ii) under certain circumstances relating to the qualification of the any
REMIC established by the Trust as a REMIC under the Code, the Home Equity
Loans may be sold, thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of a majority of the Percentage Interests
represented by the Offered Certificates, or if there are no longer any Offered
Certificates then outstanding, the Owners of a majority of the Percentage
Interests represented by the Class R-I Certificates then outstanding, have the
right to exercise any trust or power set forth in Section 6.11 of the Pooling
and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth and referred to on the face
hereof, the transfer of this Certificate is registrable in the Register upon
surrender of
3
<PAGE>
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the REMIC will be issued to the designated
transferee or transferees.
The Pooling and Servicing Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modifications of
rights and obligations of the parties provided therein by the Depositor, the
Trustee, the Sellers and the Servicer at any time and from time to time, and
without the consent of the Owners; provided, that in certain other
circumstances provided for in the Pooling and Servicing Agreement, such
consent of the Owners will be required prior to amendments. Any such consent
by the Owner at the time of the giving thereof, of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of Transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on
each Payment Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class R-II Certificates are issuable only as registered
Certificates. As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, these Class R-II Certificates are
exchangeable for new Class R-II Certificates evidencing the same Percentage
Interest as the Class R-II Certificates exchanged.
No service charge will be made for any such registration of
transfer or exchange, but the Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Depositor has caused this
Certificate to be duly executed on behalf of the Trust.
MANUFACTURERS AND TRADERS TRUST
COMPANY, AS TRUSTEE
By:
--------------------------------------
Name:
Title:
Trustee Authentication
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
---------------------------
Name:
Title:
Date of Authentication:
5
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE RE: HOME EQUITY LOANS
PREPAID IN FULL AFTER CUT-OFF DATE
CERTIFICATE RE: PREPAID LOANS
I, __________________________, _______________ of ContiMortgage
Corporation ("ContiMortgage"), hereby certify that between the "Cut-Off Date"
(as defined in the Pooling and Servicing Agreement dated as of September 1,
1998 among ContiSecurities Asset Funding Corp., as Depositor, ContiMortgage,
as a Seller and the Servicer, ContiWest Corporation, as a Seller, and
Manufacturers and Traders Trust Company, as Trustee) and the "Startup Day,"
each of the Home Equity Loans listed on the attached schedule of Home Equity
Loans have been prepaid in full.
<TABLE>
<CAPTION>
Account Number Name Original Amount Current Balance Date Paid Off Pool
- -------------- ---- --------------- --------------- ------------- ----
<S> <C> <C> <C> <C> <C>
</TABLE>
Dated: September __, 1998
CONTIMORTGAGE CORPORATION
By: ______________________
Title: ___________________
D-1
<PAGE>
EXHIBIT E
FORM OF TRUSTEE'S RECEIPT
TRUSTEE'S ACKNOWLEDGMENT OF RECEIPT
Manufacturers and Traders Trust Company, a New York banking
corporation, in its capacity as trustee (the "Trustee") under that certain
Pooling and Servicing Agreement dated as of September 1, 1998 (the "Pooling
and Servicing Agreement") among ContiSecurities Asset Funding Corp., as
Depositor, ContiMortgage Corporation, a Delaware corporation, as a seller and
the servicer ("ContiMortgage"), ContiWest Corporation ("ContiWest"), as a
seller, and Manufacturers and Traders Trust Company, as trustee (the
"Trustee"), hereby acknowledges receipt (subject to review as required by
Section 3.06(a) of the Pooling and Servicing Agreement) of the items delivered
to it by ContiMortgage and ContiWest with respect to the Home Equity Loans
pursuant to Section 3.05(b)(i) of the Pooling and Servicing Agreement.
The Trustee hereby additionally acknowledges that it shall review
such items as required by Section 3.06(a) of the Pooling and Servicing
Agreement and shall otherwise comply with Section 3.06(b) of the Pooling and
Servicing Agreement as required thereby.
MANUFACTURERS AND TRADERS
TRUST COMPANY, AS TRUSTEE
By: ______________________________
Title: ___________________________
Dated: September __, 1998
E-1
<PAGE>
EXHIBIT F
FORM OF POOL CERTIFICATION
POOL CERTIFICATION
WHEREAS, the undersigned is an Authorized Officer of Manufacturers
and Traders Trust Company, a New York banking corporation, acting in its
capacity as trustee (the "Trustee") of a certain pool of mortgage loans (the
"Pool") heretofore conveyed in trust to the Trustee, pursuant to that certain
Pooling and Servicing Agreement dated as of September 1, 1998 (the "Pooling
and Servicing Agreement") among ContiSecurities Asset Funding Corp., as
Depositor, ContiMortgage Corporation, as a Seller and the Servicer, ContiWest
Corporation, as a Seller, and Manufacturers and Traders Trust Company, as
Trustee; and
WHEREAS, the Trustee is required, pursuant to Section 3.06(a) of the
Pooling and Servicing Agreement, to review the Mortgage Files relating to the
Pool within a specified period following the Startup Day and to notify the
related Seller promptly of any defects with respect to the Pool, and such
Seller is required to remedy such defects or take certain other action, all as
set forth in Section 3.06(b) of the Pooling and Servicing Agreement; and
WHEREAS, Section 3.06(a) of the Pooling and Servicing Agreement
requires the Trustee to deliver this Pool Certification upon the satisfaction
of certain conditions set forth therein.
NOW, THEREFORE, the Trustee hereby certifies that it has determined
that all required documents (or certified copies of documents listed in
Section 3.05 of the Pooling and Servicing Agreement) have been executed or
received, and that such documents relate to the Home Equity Loans identified
in the Schedule of Home Equity Loans pursuant to Section 3.06(a) of the
Pooling and Servicing Agreement or, in the event that such documents have not
been executed and received or do not so relate to such Home Equity Loans, any
remedial action by the Sellers pursuant to Section 3.06(b) of the Pooling and
Servicing Agreement has been completed. The Trustee makes no certification
hereby, however, with respect to any intervening assignments or assumption and
modification agreements.
MANUFACTURERS AND TRADERS
TRUST COMPANY, AS TRUSTEE
By: ____________________________
Title: _________________________
Dated: September __, 1998
F-1
<PAGE>
EXHIBIT G
FORM OF DELIVERY ORDER
DELIVERY ORDER
Manufacturers and Traders Trust Company, as Trustee
One M&T Plaza
Buffalo, New York 14203
Attention: Corporate Trustee Department
Dear Sirs:
Pursuant to Section 4.01 of the Pooling and Servicing Agreement,
dated as of September 1, 1998 (the "Pooling and Servicing Agreement") among
ContiSecurities Asset Funding Corp. ("ContiSecurities"), as Depositor,
ContiMortgage Corporation, as a seller and the servicer, ContiWest
Corporation, as a seller, and Manufacturers and Traders Trust Company, as
Trustee (the "Trustee"), ContiSecurities HEREBY CERTIFIES that all conditions
precedent to the issuance of the ContiMortgage Home Equity Loan Trust 1998-3,
Home Equity Loan Pass-Through Certificates, Class A, Class B, Class C, Class
R-I, Class R-II and Class R (the "Certificates"), HAVE BEEN SATISFIED, and
HEREBY REQUESTS YOU TO AUTHENTICATE AND DELIVER said Certificates, and to
RELEASE said Certificates to the owners thereof, or otherwise upon their
order.
Very truly yours,
CONTISECURITIES ASSET FUNDING CORP.
By: _____________________________
Title: __________________________
Dated: September __, 1998
G-1
<PAGE>
EXHIBIT H
[RESERVED]
H-1
<PAGE>
EXHIBIT I
FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
AFFIDAVIT PURSUANT TO SECTION
860E(e) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____________] [the United States], on behalf
of which he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" and
will not be a "disqualified organization" as of [date of transfer] (For this
purpose, a "disqualified organization" means the United States, any state or
political subdivision thereof, any foreign government, any international
organization, any agency or instrumentality of any of the foregoing (other
than certain taxable instrumentalities), any cooperative organization
furnishing electric energy or providing telephone service to persons in rural
areas, or any organization (other than a farmers' cooperative) that is exempt
from federal income tax unless such organization is subject to the tax on
unrelated business income.); (ii) it is not acquiring the Class R-I, Class
R-II or Class R Certificates for the account of a disqualified organization;
(iii) it consents to any amendment of the Pooling and Servicing Agreement that
shall be deemed necessary by the Trustee (upon advice of counsel) to
constitute a reasonable arrangement to ensure that none of the Class R-I,
Class R-II or Class R Certificates will be owned directly or indirectly by a
disqualified organization; and (iv) it will not transfer such Class R-I, Class
R-II or Class R Certificate unless (a) it has received from the transferee an
affidavit in substantially the same form as this affidavit containing these
same four representations and (b) as of the time of the transfer, it does not
have actual knowledge that such affidavit is false.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached,
attested by its [Assistant] Secretary, this day of
________________________________, _________.
[NAME OF INVESTOR]
By:_______________________
[Name of Officer]
[Title of Officer]
I-1
<PAGE>
[Corporate Seal]
Attest:
______________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer],
known or proved to be the same person who executed the foregoing instrument
and to be the [Title of Officer] of the Investor, and acknowledged to me that
he executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ____ day of ______________, ____.
______________________________
NOTARY PUBLIC
COUNTY OF ____________________
STATE OF _____________________
My commission expires the ____ day of _______________, ____.
I-2
<PAGE>
<TABLE>
<CAPTION>
ANNEX I
PLANNED PRINCIPAL BALANCES
Planned Amortization Certificates
---------------------------------
Period Class A-12 Class A-13 Class A-14 Class A-15 Class A-16 Class A-17
- -------- --------------- --------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 $130,000,000.00 $192,000,000.00 $42,000,000.00 $70,000,000.00 $25,000,000.00 $66,602,000.00
2 130,000,000.00 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
3 130,000,000.00 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
4 130,000,000.00 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
5 130,000,000.00 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
6 130,000,000.00 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
7 130,000,000.00 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
8 124,214,006.70 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
9 108,795,238.50 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
10 93,299,654.50 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
11 77,935,558.10 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
12 61,927,412.30 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
13 46,966,066.12 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
14 32,183,172.13 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
15 17,579,333.35 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
16 3,156,622.81 192,000,000.00 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
17 0.00 181,066,327.28 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
18 0.00 167,326,877.23 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
19 0.00 153,929,228.43 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
20 0.00 140,864,580.52 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
21 0.00 128,124,363.54 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
22 0.00 115,700,231.76 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
23 0.00 103,584,838.38 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
24 0.00 91,769,534.94 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
25 0.00 80,246,579.28 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
26 0.00 69,008,464.42 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
27 0.00 58,047,878.96 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
28 0.00 47,357,701.85 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
29 0.00 36,930,997.26 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
30 0.00 26,761,009.64 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
31 0.00 16,841,158.90 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
32 0.00 7,165,035.70 42,000,000.00 70,000,000.00 25,000,000.00 66,602,000.00
33 0.00 0.00 39,726,396.80 70,000,000.00 25,000,000.00 66,602,000.00
34 0.00 0.00 30,519,160.80 70,000,000.00 25,000,000.00 66,602,000.00
35 0.00 0.00 21,537,063.74 70,000,000.00 25,000,000.00 66,602,000.00
36 0.00 0.00 12,774,652.73 70,000,000.00 25,000,000.00 66,602,000.00
37 0.00 0.00 12,774,652.73 70,000,000.00 25,000,000.00 66,602,000.00
</TABLE>
A-I-1
<PAGE>
<TABLE>
<CAPTION>
Planned Amortization Certificates
---------------------------------
Period Class A-12 Class A-13 Class A-14 Class A-15 Class A-16 Class A-17
- -------- --------------- --------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
38 0.00 0.00 12,774,652.73 70,000,000.00 25,000,000.00 66,602,000.00
39 0.00 0.00 12,774,652.73 70,000,000.00 25,000,000.00 66,602,000.00
40 0.00 0.00 7,534,219.63 70,000,000.00 25,000,000.00 66,602,000.00
41 0.00 0.00 1,321,534.23 70,000,000.00 25,000,000.00 66,602,000.00
42 0.00 0.00 0.00 65,338,911.73 25,000,000.00 66,602,000.00
43 0.00 0.00 0.00 59,577,708.93 25,000,000.00 66,602,000.00
44 0.00 0.00 0.00 54,029,612.93 25,000,000.00 66,602,000.00
45 0.00 0.00 0.00 48,686,628.73 25,000,000.00 66,602,000.00
46 0.00 0.00 0.00 43,541,066.83 25,000,000.00 66,602,000.00
47 0.00 0.00 0.00 38,585,530.64 25,000,000.00 66,602,000.00
48 0.00 0.00 0.00 33,812,906.04 25,000,000.00 66,602,000.00
49 0.00 0.00 0.00 29,216,349.64 25,000,000.00 66,602,000.00
50 0.00 0.00 0.00 24,789,278.44 25,000,000.00 66,602,000.00
51 0.00 0.00 0.00 20,525,359.94 25,000,000.00 66,602,000.00
52 0.00 0.00 0.00 16,418,502.04 25,000,000.00 66,602,000.00
53 0.00 0.00 0.00 12,462,844.24 25,000,000.00 66,602,000.00
54 0.00 0.00 0.00 8,652,747.96 25,000,000.00 66,602,000.00
55 0.00 0.00 0.00 4,982,789.47 25,000,000.00 66,602,000.00
56 0.00 0.00 0.00 1,447,747.96 25,000,000.00 66,602,000.00
57 0.00 0.00 0.00 0.00 23,042,799.07 66,602,000.00
58 0.00 0.00 0.00 0.00 19,762,913.85 66,602,000.00
59 0.00 0.00 0.00 0.00 16,603,442.49 66,602,000.00
60 0.00 0.00 0.00 0.00 13,559,910.72 66,602,000.00
61 0.00 0.00 0.00 0.00 10,628,013.16 66,602,000.00
62 0.00 0.00 0.00 0.00 7,803,606.80 66,602,000.00
63 0.00 0.00 0.00 0.00 5,082,704.65 66,602,000.00
64 0.00 0.00 0.00 0.00 2,461,469.96 66,602,000.00
65 0.00 0.00 0.00 0.00 0.00 66,538,210.15
66 0.00 0.00 0.00 0.00 0.00 64,105,371.64
67 0.00 0.00 0.00 0.00 0.00 61,761,534.28
68 0.00 0.00 0.00 0.00 0.00 59,503,406.38
69 0.00 0.00 0.00 0.00 0.00 57,327,819.62
70 0.00 0.00 0.00 0.00 0.00 55,231,724.57
71 0.00 0.00 0.00 0.00 0.00 53,212,186.03
72 0.00 0.00 0.00 0.00 0.00 51,266,378.63
73 0.00 0.00 0.00 0.00 0.00 49,391,582.75
74 0.00 0.00 0.00 0.00 0.00 47,585,180.45
75 0.00 0.00 0.00 0.00 0.00 45,844,651.61
76 0.00 0.00 0.00 0.00 0.00 44,167,570.14
77 0.00 0.00 0.00 0.00 0.00 42,551,600.55
78 0.00 0.00 0.00 0.00 0.00 40,994,494.43
79 0.00 0.00 0.00 0.00 0.00 39,494,087.11
</TABLE>
A-I-2
<PAGE>
<TABLE>
<CAPTION>
Planned Amortization Certificates
---------------------------------
Period Class A-12 Class A-13 Class A-14 Class A-15 Class A-16 Class A-17
- -------- --------------- --------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
80 0.00 0.00 0.00 0.00 0.00 38,048,294.58
81 0.00 0.00 0.00 0.00 0.00 36,655,110.40
82 0.00 0.00 0.00 0.00 0.00 35,312,602.70
83 0.00 0.00 0.00 0.00 0.00 34,018,911.49
84 0.00 0.00 0.00 0.00 0.00 32,772,245.84
85 0.00 0.00 0.00 0.00 0.00 31,542,063.70
86 0.00 0.00 0.00 0.00 0.00 30,180,580.79
87 0.00 0.00 0.00 0.00 0.00 28,867,646.98
88 0.00 0.00 0.00 0.00 0.00 27,601,475.45
89 0.00 0.00 0.00 0.00 0.00 26,380,345.36
90 0.00 0.00 0.00 0.00 0.00 25,202,599.32
91 0.00 0.00 0.00 0.00 0.00 24,066,641.04
92 0.00 0.00 0.00 0.00 0.00 22,970,932.99
93 0.00 0.00 0.00 0.00 0.00 21,913,994.23
94 0.00 0.00 0.00 0.00 0.00 20,894,398.24
95 0.00 0.00 0.00 0.00 0.00 19,910,770.92
96 0.00 0.00 0.00 0.00 0.00 18,961,788.56
97 0.00 0.00 0.00 0.00 0.00 18,046,176.03
98 0.00 0.00 0.00 0.00 0.00 17,162,704.89
99 0.00 0.00 0.00 0.00 0.00 16,310,191.67
100 0.00 0.00 0.00 0.00 0.00 15,487,496.16
101 0.00 0.00 0.00 0.00 0.00 14,693,519.82
102 0.00 0.00 0.00 0.00 0.00 13,927,204.19
103 0.00 0.00 0.00 0.00 0.00 13,187,529.41
104 0.00 0.00 0.00 0.00 0.00 12,473,512.75
105 0.00 0.00 0.00 0.00 0.00 11,784,207.24
106 0.00 0.00 0.00 0.00 0.00 11,118,700.31
107 0.00 0.00 0.00 0.00 0.00 10,476,112.53
108 0.00 0.00 0.00 0.00 0.00 9,855,596.35
109 0.00 0.00 0.00 0.00 0.00 9,256,334.90
110 0.00 0.00 0.00 0.00 0.00 8,677,540.86
111 0.00 0.00 0.00 0.00 0.00 8,118,455.34
112 0.00 0.00 0.00 0.00 0.00 7,578,346.82
113 0.00 0.00 0.00 0.00 0.00 7,056,510.12
114 0.00 0.00 0.00 0.00 0.00 6,552,265.41
115 0.00 0.00 0.00 0.00 0.00 6,064,957.27
116 0.00 0.00 0.00 0.00 0.00 5,596,722.17
117 0.00 0.00 0.00 0.00 0.00 5,144,230.54
118 0.00 0.00 0.00 0.00 0.00 4,706,896.80
119 0.00 0.00 0.00 0.00 0.00 4,284,156.38
120 0.00 0.00 0.00 0.00 0.00 3,875,463.50
121 0.00 0.00 0.00 0.00 0.00 3,467,135.45
</TABLE>
A-I-3
<PAGE>
<TABLE>
<CAPTION>
Planned Amortization Certificates
---------------------------------
Period Class A-12 Class A-13 Class A-14 Class A-15 Class A-16 Class A-17
- -------- --------------- --------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
122 0.00 0.00 0.00 0.00 0.00 3,074,260.13
123 0.00 0.00 0.00 0.00 0.00 2,696,255.92
124 0.00 0.00 0.00 0.00 0.00 2,332,563.06
125 0.00 0.00 0.00 0.00 0.00 1,982,642.83
126 0.00 0.00 0.00 0.00 0.00 1,645,976.76
127 0.00 0.00 0.00 0.00 0.00 1,322,065.85
128 0.00 0.00 0.00 0.00 0.00 1,010,429.86
129 0.00 0.00 0.00 0.00 0.00 710,606.59
130 0.00 0.00 0.00 0.00 0.00 422,151.20
131 0.00 0.00 0.00 0.00 0.00 144,635.57
</TABLE>
A-I-4
<PAGE>
ANNEX II
SPECIFIED PERCENTAGES
Maximum
Maturity
Specified
Period Percentage
------ ----------
0
1 21.95%
2 21.87%
3 21.78%
4 21.69%
5 21.60%
6 21.51%
7 21.42%
8 21.33%
9 21.24%
10 21.15%
11 21.05%
12 20.96%
13 20.86%
14 20.76%
15 20.66%
16 20.56%
17 20.46%
18 20.36%
19 20.25%
20 20.15%
21 20.04%
22 19.94%
23 19.83%
24 19.72%
25 19.61%
26 19.50%
27 19.38%
28 19.27%
29 19.15%
30 19.04%
31 18.92%
32 18.80%
33 18.68%
34 18.56%
35 18.43%
36 18.31%
37 18.18%
38 18.06%
39 17.93%
40 17.80%
41 17.67%
42 17.53%
43 17.40%
44 17.26%
45 17.12%
46 16.98%
47 16.84%
48 16.70%
49 16.55%
50 16.41%
51 16.26%
52 16.11%
53 15.96%
54 15.80%
55 15.64%
56 15.49%
57 15.33%
58 15.17%
59 15.01%
60 14.85%
61 14.69%
62 14.52%
63 14.36%
64 14.19%
65 14.01%
66 13.84%
67 13.66%
68 13.48%
69 13.30%
70 13.12%
71 12.93%
72 12.74%
73 12.55%
74 12.36%
75 12.16%
76 11.97%
77 11.76%
78 11.56%
79 11.35%
80 11.14%
81 10.93%
82 10.72%
83 10.50%
84 10.28%
85 10.05%
86 9.83%
87 9.60%
88 9.36%
89 9.13%
90 8.89%
91 8.64%
92 8.40%
93 8.14%
94 7.89%
95 7.63%
96 7.37%
97 7.11%
98 6.84%
99 6.56%
100 6.29%
101 6.01%
102 5.72%
103 5.43%
104 5.14%
105 4.84%
106 4.54%
107 4.23%
108 3.92%
109 3.60%
110 3.28%
111 2.95%
112 2.62%
113 2.28%
114 1.94%
115 1.59%
116 1.28%
117 0.97%
118 0.65%
119 0.33%
120 0.00%
121 0.00%
122 0.00%
123 0.00%
124 0.00%
125 0.00%
126 0.00%
127 0.00%
128 0.00%
129 0.00%
130 0.00%
131 0.00%
A-II-1
<PAGE>
Exhibit 8.1
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
October 16, 1998
ContiSecurities Asset Funding Corp.
3811 West Charleston Boulevard, Suite 104
Las Vegas, Nevada 89102
Re: ContiSecurities Asset Funding Corp.
ContiMortgage Home Equity Loan Trust 1998-3
Registration Statement on Form S-3
(No. 333-61863)
-------------------------------------------
Ladies and Gentlemen:
We have acted as counsel for ContiSecurities Asset Funding
Corp. in connection with the preparation and filing of the registration
statement on Form S-3 (such registration statement, the "Registration
Statement") filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act"), in respect of ContiMortgage
Home Equity Loan Pass-Through Certificates, Series 1998-3 (the
"Certificates"). Our advice formed the basis for the description of federal
income tax consequences appearing under the heading "Certain Federal Income
Tax Consequences" in the prospectus supplement contained in the Registration
Statement. Such description does not purport to discuss all possible federal
income tax consequences of an investment in Certificates but with respect to
those tax consequences which are discussed, it is our opinion that the
description is accurate. In addition, assuming (i) the REMIC elections are
made, (ii) the Pooling and Servicing Agreement is fully executed, delivered
and enforceable against the parties thereto in accordance with its terms,
(iii) the transaction described in the prospectus supplement is completed on
substantially the terms and conditions set forth therein, and (iv) continuing
compliance with the Pooling and Servicing Agreement, it is our opinion that,
for federal income tax purposes, REMIC I, REMIC II and REMIC III will each be
treated as a REMIC, each Class of the Class A, Class B and Class C
Certificates will be treated as "regular interests" in a REMIC, the Class R-II
Certificates will be treated as the sole "residual interest" in REMIC II, the
Class R-I Certificates will be treated as the sole "residual interest" in
REMIC I and the Class R Certificates will be treated as the sole "residual
interest" in REMIC III.
Very truly yours,
DEWEY BALLANTINE LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Prospectus Supplement of
ContiSecurities Asset Funding Corp. relating to ContiMortgage Home Equity Loan
Trust 1998-3, of our report dated February 3, 1998, on our audits of the
consolidated financial statements of MBIA Insurance Corporation and
Subsidiaries as of December 31, 1997 and 1996 and for each of the three years
in the period ended December 31, 1997. We also consent to the reference to our
firm under the caption "Report of Experts".
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSE COOPERS LLP
New York, New York
September 18, 1998
