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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 24, 1996
IMC Home Equity Loan Trust 1996-2
(prepared on its behalf by ContiSecurities Asset
Funding Corp.)
(Exact name of registrant as specified in its charter)
New York 33-99340 Application Pending
- ----------------------------- ----------- -------------------
(State or Other Jurisdiction) (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
c/o Chemical Bank, as Trustee
450 West 33rd Street, 15th Floor
New York, New York 10001
- -------------------------------- ----------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (202) 946-8600
No Change
(Former name or former address, if changed since last report)
Total number of sequentially numbered pages __________ Exhibit index located on
sequentially numbered page __________
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Item 2. Acquisition or Disposition of Assets
Description of the Certificates and the Mortgage Loans
ContiSecurities Asset Funding Corp. registered issuances of up to
$3,500,000,000 principal amount of Asset Backed Certificates on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended (the "Act"), by a Registration Statement on Form S-3 (Registration File
No. 33-99340) (as amended, the "Registration Statement"). Pursuant to the
Registration Statement, IMC Home Equity Loan Trust 1996-2 (the "Registrant" or
the "Trust") issued $200,000,000 in aggregate principal amount of its Home
Equity Loan Pass-Through Certificates, Series 1996-2 (the "Certificates"), on
April 24, 1996. This Current Report on Form 8-K is being filed to satisfy an
undertaking to file copies of certain agreements executed in connection with the
issuance of the Certificates, the forms of which were filed as Exhibits to the
Registration Statement.
The Certificates were issued pursuant to a Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") attached hereto as Exhibit
4.1, dated as of April 1, 1996, among ContiSecurities Asset Funding Corp. (the
"Depositor"), Industry Mortgage Company, L.P., as seller and servicer (the
"Servicer") and Chemical Bank, in its capacity as trustee (the "Trustee"). The
Certificates consist of the following classes: the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8 Certificates (the
"Class A Certificates"), the Class S-I Certificates (the "Class S-I
Certificates") and the Class R Certificates (the "Class R Certificates" and,
together with the Class A Certificates and the Class S-I Certificates, the
"Certificates"). Only the Class A Certificates were offered pursuant to the
Registration Statement. The Certificates evidence, in the aggregate, 100% of the
undivided beneficial ownership interests in the Trust.
The assets of the Trust initially include a pool of closed-end home
equity loans (the "Home Equity Loans") secured by mortgages or deeds of trust
primarily on one-to-four family residential properties. Interest distributions
on the Class A Certificates are based on the Certificate Principal Balance
thereof and the applicable Pass-Through Rate thereof. The Pass- Through Rates
for the Class A Certificates are as follows: Class A-1, 6.61%; Class A-2, 6.78%;
Class A-3, 6.98%; Class A-4, 7.10%, Class A-5, 7.34%, Class A-6, 7.75%, Class
A-7, 7.95% and Class A-8 at a variable rate equal to the lesser of (i) 13.26%
per annum and (ii) the weighted average of the Remittance Rate (as defined in
the Prospectus Supplement) of the Home Equity Loans in Group II. The Class A
Certificates have initial aggregate principal amounts as follows: Class A-1,
$62,442,000; Class A-2, $28,489,000; Class A-3, $26,630,000; Class A-4,
$10,730,000; Class A-5, $24,786,000; Class A-6, $15,882,000; Class A-7,
$16,041,000 and Class A-8, $15,000,000.
As of the Closing Date, the Home Equity Loans possessed the
characteristics described in the Prospectus dated April 17, 1996 and the
Prospectus Supplement dated April 17, 1996 filed pursuant to Rule 424(b)(5) of
the Act on April 22, 1996.
On April 30, 1996, the Trust acquired $19,733,627.91 of Subsequent Home
Equity Loans pursuant to the terms of the Pooling and Servicing Agreement and
the Subsequent Transfer Agreement attached hereto as Exhibit 10.1 among the
Depositor, the Servicer and the Trustee
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dated as of April 30, 1996. The Subsequent Home Equity Loans possess the
characteristics required by the Prospectus dated April 17, 1996 and the
Prospectus Supplement dated April 17, 1996 filed pursuant to Rule 424(b)(5) of
the Securities Act of 1933 on April 22, 1996.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibits:
4.1 Pooling and Servicing Agreement dated as of April 1,
1996, between ContiSecurities Asset Funding Corp. as
Depositor, Industry Mortgage Company L.P. as Seller
and Servicer and Chemical Bank as Trustee.
10.1 Subsequent Transfer Agreement dated as of April 30,
1996 among ContiSecurities Asset Funding Corp.,
Industry Mortgage Company and Chemical Bank.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONTISECURITIES ASSET FUNDING CORP., as
Depositor
By: /s/ James E. Moore
Name: James E. Moore
Title: President
By: /s/ Jerome M. Perelson
Name: Jerome M. Perelson
Title: Vice President
Dated: May 9, 1996
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EXHIBIT INDEX
Exhibit No. Description Page No.
4.1 Pooling and Servicing Agreement dated as of April 1,
1996, between ContiSecurities Asset Funding Corp. as
Depositor, Industry Mortgage Company L.P. as Seller
and Servicer and Chemical Bank as Trustee.
10.1 Subsequent Transfer Agreement dated as of April 30,
1996 among ContiSecurities Asset Funding Corp.,
Industry Mortgage Company and Chemical Bank.
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EXHIBIT 4.1
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POOLING AND SERVICING AGREEMENT
Relating to
IMC HOME EQUITY LOAN TRUST 1996-2
Among
CONTISECURITIES ASSET FUNDING CORP.
as Depositor,
INDUSTRY MORTGAGE COMPANY, L.P.,
as Seller,
INDUSTRY MORTGAGE COMPANY, L.P.,
as Servicer
and
CHEMICAL BANK
as Trustee
Dated as of April 1, 1996
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CONTENTS
Page
CONVEYANCE.................................................................. 1
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION............... 2
Section 1.01 Definitions...................................... 2
Section 1.02 Use of Words and Phrases......................... 32
Section 1.03 Captions; Table of Contents...................... 32
Section 1.04 Opinions......................................... 33
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST...... 34
Section 2.01 Establishment of the Trust....................... 34
Section 2.02 Office........................................... 34
Section 2.03 Purposes and Powers.............................. 34
Section 2.04 Appointment of the Trustee; Declaration of Trust. 34
Section 2.05 Expenses of the Trust............................ 34
Section 2.06 Ownership of the Trust........................... 34
Section 2.07 Situs of the Trust............................... 35
Section 2.08 Miscellaneous REMIC Provisions................... 35
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
DEPOSITOR, THE SERVICER AND THE SELLER; COVENANT
OF SELLER TO CONVEY HOME EQUITY LOANS............ 37
Section 3.01 Representations and Warranties of the Depositor.. 37
Section 3.02 Representations and Warranties of the Servicer... 39
Section 3.03 Representations and Warranties of the Seller..... 41
Section 3.04 Covenants of Seller to Take Certain Actions with
Respect to the Home Equity Loans in
Certain Situations............................... 43
Section 3.05 Conveyance of the Initial Home Equity Loans and
Qualified Replacement Mortgages.................. 50
Section 3.06 Acceptance by Trustee; Certain Substitutions of
Home Equity Loans; Certification by Trustee...... 54
Section 3.07 Conveyance of the Subsequent Home Equity Loans... 55
Section 3.08 Custodian........................................ 57
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES.................58
Section 4.01 Issuance of Certificates..........................58
Section 4.02 Sale of Certificates..............................58
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS............59
Section 5.01 Terms.............................................59
Section 5.02 Forms.............................................59
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Section 5.03 Execution, Authentication and Delivery...........59
Section 5.04 Registration and Transfer of Certificates........60
Section 5.05 Mutilated, Destroyed, Lost or Stolen
Certificates.....................................62
Section 5.06 Persons Deemed Owners............................62
Section 5.07 Cancellation.....................................63
Section 5.08 Limitation on Transfer of Ownership Rights.......63
Section 5.09 Assignment of Rights.............................64
ARTICLE VI
COVENANTS....................................... 65
Section 6.01 Distributions................................... 65
Section 6.02 Money for Distributions to be Held in Trust;
Withholding..................................... 65
Section 6.03 Protection of Trust Estate.......................66
Section 6.04 Performance of Obligations.......................67
Section 6.05 Negative Covenants...............................67
Section 6.06 No Other Powers..................................67
Section 6.07 Limitation of Suits..............................67
Section 6.08 Unconditional Rights of Owners to Receive
Distributions................................... 68
Section 6.09 Rights and Remedies Cumulative.................. 68
Section 6.10 Delay or Omission Not Waiver.................... 69
Section 6.11 Control by Owners............................... 69
Section 6.12 Indemnification by the Seller....................69
ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES.............70
Section 7.01 Collection of Money..............................70
Section 7.02 Establishment of Accounts........................70
Section 7.03 Flow of Funds....................................71
Section 7.04 Pre-Funding Account and Capitalized Interest
Account......................................... 74
Section 7.05 Investment of Accounts.......................... 75
Section 7.06 Payment of Trust Expenses....................... 76
Section 7.07 Eligible Investments............................ 76
Section 7.08 Accounting and Directions by Trustee............ 77
Section 7.09 Reports by Trustee to Owners and Certificate
Insurer......................................... 78
Section 7.10 Reports by Trustee.............................. 80
ARTICLE VIII
SERVICING AND ADMINISTRATION OF HOME EQUITY
LOANS........................................... 81
Section 8.01 Servicer and Sub-Servicers...................... 81
Section 8.02 Collection of Certain Home Equity Loan Payments. 82
Section 8.03 Sub-Servicing Agreements Between Servicer and
Sub-Servicers................................... 82
Section 8.04 Successor Sub-Servicers......................... 83
Section 8.05 Liability of Servicer; Indemnification.......... 83
Section 8.06 No Contractual Relationship Between Sub-Servicer,
Trustee or the Owners........................... 83
Section 8.07 Assumption or Termination of Sub-Servicing
Agreement by Trustee............................ 84
Section 8.08 Principal and Interest Account.................. 84
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Section 8.09 Delinquency Advances and Servicing Advances..... 86
Section 8.10 Compensating Interest; Repurchase of Home
Equity Loans.................................... 86
Section 8.11 Maintenance of Insurance........................ 87
Section 8.12 Due-on-Sale Clauses; Assumption and Substitution
Agreements...................................... 88
Section 8.13 Realization Upon Defaulted Home Equity Loans;
Workout of Home Equity Loans.................... 88
Section 8.14 Trustee to Cooperate; Release of Files.......... 90
Section 8.15 Servicing Compensation.......................... 91
Section 8.16 Annual Statement as to Compliance............... 91
Section 8.17 Annual Independent Certified Public Accountants'
Reports......................................... 91
Section 8.18 Access to Certain Documentation and Information
Regarding the Home Equity Loans................. 91
Section 8.19 Assignment of Agreement......................... 92
Section 8.20 Removal of Servicer; Retention of Servicer;
Resignation of Servicer......................... 92
Section 8.21 Inspections by Certificate Insurer; Errors and
Omissions Insurance............................. 95
Section 8.22 Additional Servicing Responsibilities for Second
Mortgage Loans.................................. 96
ARTICLE IX
TERMINATION OF TRUST............................ 97
Section 9.01 Termination of Trust............................ 97
Section 9.02 Termination Upon Option of Owners of Class R
Certificates.................................... 97
Section 9.03 Termination Upon Loss of REMIC Status........... 98
Section 9.04 Disposition of Proceeds.........................100
ARTICLE X
THE TRUSTEE.....................................101
Section 10.01 Certain Duties and Responsibilities.............101
Section 10.02 Removal of Trustee for Cause....................103
Section 10.03 Certain Rights of the Trustee...................104
Section 10.04 Not Responsible for Recitals or Issuance of
Certificates....................................105
Section 10.05 May Hold Certificates...........................105
Section 10.06 Money Held in Trust.............................105
Section 10.07 Compensation and Reimbursement..................106
Section 10.08 Corporate Trustee Required; Eligibility.........106
Section 10.09 Resignation and Removal; Appointment of
Successor.......................................106
Section 10.10 Acceptance of Appointment by Successor Trustee..108
Section 10.11 Merger, Conversion, Consolidation or Succession
to Business of the Trustee......................108
Section 10.12 Reporting; Withholding..........................108
Section 10.13 Liability of the Trustee........................109
Section 10.14 Appointment of Co-Trustee or Separate Trustee...109
ARTICLE XI MISCELLANEOUS...................................111
Section 11.01 Compliance Certificates and Opinions............111
Section 11.02 Form of Documents Delivered to the Trustee......111
Section 11.03 Acts of Owners..................................112
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Section 11.04 Notices, etc. to Trustee........................112
Section 11.05 Notices and Reports to Owners; Waiver of
Notices.........................................113
Section 11.06 Rules by Trustee and Seller.....................113
Section 11.07 Successors and Assigns..........................113
Section 11.08 Severability....................................113
Section 11.09 Benefits of Agreement...........................113
Section 11.10 Legal Holidays..................................114
Section 11.11 Governing Law; Submission to Jurisdiction.......114
Section 11.12 Counterparts....................................115
Section 11.13 Usury...........................................115
Section 11.14 Amendment.......................................115
Section 11.15 Paying Agent; Appointment and Acceptance of
Duties..........................................116
Section 11.16 REMIC Status....................................116
Section 11.17 Additional Limitation on Action and Imposition
of Tax..........................................118
Section 11.18 Appointment of Tax Matters Person...............119
Section 11.19 The Certificate Insurer.........................119
Section 11.20 Maintenance of Security Interest................119
Section 11.21 Third Party Rights..............................120
Section 11.22 Notices.........................................120
Section 11.23 Rule 144A Information...........................122
ARTICLE XII
CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 12.01 Trust Estate and Accounts Held for Benefit of
the Certificate Insurer.........................123
Section 12.02 Claims Upon the Policy; Policy Payments
Account.........................................123
Section 12.03 Effect of Payments by the Certificate Insurer;
Subrogation.....................................124
Section 12.04 Notices to the Certificate Insurer..............125
Section 12.05 Third-Party Beneficiary.........................125
Section 12.06 Rights to the Certificate Insurer To Exercise
Rights of Owners................................125
SCHEDULE I-A SCHEDULE OF GROUP I HOME EQUITY LOANS - GROUP I
SCHEDULE I-B SCHEDULE OF GROUP II HOME EQUITY LOANS
- GROUP II
SCHEDULE II SCHEDULE OF ARM LOANS
EXHIBIT A-1 FORM OF CLASS A-1 CERTIFICATE
EXHIBIT A-2 FORM OF CLASS A-2 CERTIFICATE
EXHIBIT A-3 FORM OF CLASS A-3 CERTIFICATE
EXHIBIT A-4 FORM OF CLASS A-4 CERTIFICATE
EXHIBIT A-5 FORM OF CLASS A-5 CERTIFICATE
EXHIBIT A-6 FORM OF CLASS A-6 CERTIFICATE
EXHIBIT A-7 FORM OF CLASS A-7 CERTIFICATE
EXHIBIT A-8 FORM OF CLASS A-8 CERTIFICATE
EXHIBIT B FORM OF CLASS S-I CERTIFICATE
EXHIBIT C FORM OF CLASS R CERTIFICATE
EXHIBIT D FORM OF SUBSEQUENT TRANSFER AGREEMENT
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EXHIBIT E FORM OF CERTIFICATE RE: HOME EQUITY LOANS
PREPAID IN FULL AFTER CUT-OFF DATE
EXHIBIT F-1 FORM OF TRUSTEE'S RECEIPT
EXHIBIT F-2 FORM OF CUSTODIAN'S RECEIPT
EXHIBIT G FORM OF POOL CERTIFICATION
EXHIBIT H FORM OF DELIVERY ORDER
EXHIBIT I FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
EXHIBIT J-1 FORM OF CERTIFICATE REGARDING TRANSFER
(ACCREDITED INVESTOR)
EXHIBIT J-2 FORM OF CERTIFICATE REGARDING TRANSFER (RULE 144A)
EXHIBIT K HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
v
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POOLING AND SERVICING AGREEMENT, relating to IMC HOME EQUITY LOAN TRUST
1996-2, dated as of April 1, 1996 by and among CONTISECURITIES ASSET FUNDING
CORP., a Delaware corporation, in its capacity as Depositor (the "Depositor"),
INDUSTRY MORTGAGE COMPANY, L.P., a Delaware limited partnership in its
capacities as the Seller (in such capacity, the "Seller") and as the Servicer
(in such capacity, the "Servicer"), and CHEMICAL BANK, a New York banking
corporation, in its capacity as the trustee (the "Trustee").
WHEREAS, the Seller wishes to establish a trust and two subtrusts and
provide for the allocation and sale of the beneficial interests therein and the
maintenance and distribution of the trust estate;
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, Chemical Bank, is willing to serve in the capacity of Trustee
hereunder; and
WHEREAS, Financial Security Assurance Inc. (the "Certificate Insurer")
is intended to be a third party beneficiary of this Agreement and is hereby
recognized by the parties hereto to be a third-party beneficiary of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Depositor, the Seller, the Servicer, and the
Trustee hereby agree as follows:
CONVEYANCE
To provide for the distribution of the principal of and/or interest on
the Class A Certificates, the Class S-I Certificates and the Class R
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, the Seller hereby bargains, sells,
conveys, assigns and transfers to the Depositor and the Depositor hereby
bargains, sells, conveys, assigns and transfers to the Trustee, in trust,
without recourse and for the exclusive benefit of the Owners of the
Certificates, all of the Seller's right, title and interest in and to any and
all benefits accruing to the Seller from (a) the Initial Home Equity Loans
(other than any principal and interest payments due thereon on or prior to April
1, 1996 whether or not received) listed in Schedule I-A and I-B to this
Agreement which the Seller is causing to be delivered to the Depositor and the
Depositor is causing to be delivered to the Trustee herewith and the Subsequent
Home Equity Loans (other than any principal and interest payments due thereon on
or prior to the related Subsequent Cut-Off Date whether or not received) listed
in Schedule I to any Subsequent Transfer Agreement, which the Seller will cause
to be delivered to the Depositor and the Depositor will cause to be delivered to
the Trustee (and all substitutions for such Home Equity Loans as provided by
Sections 3.03, 3.04 and 3.06), together with the related Home Equity Loan
documents and the Seller's interest in any Property which secured a Home Equity
Loan but which has been acquired by foreclosure or deed in lieu of foreclosure,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, the Pre- Funding Account, the Capitalized Interest
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,
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checks, deposit accounts, rights to payment of any and every kind, and other
forms of obligations and receivables which at any time constitute all or part of
or are included in the proceeds of any of the foregoing) to pay the Certificates
as specified herein ((a)-(c) above shall be collectively referred to herein as
the "Trust Estate"). In addition to the foregoing, the Seller shall cause the
Certificate Insurer to deliver the Insurance Policy to the Trustee for the
benefit of the Owners of the Class A Certificates and the Class S-I
Certificates.
The Trustee acknowledges such sale, accepts the Trust hereunder in
accordance with the provisions hereof and the Trustee 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.
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": The calendar month immediately preceding the month in
which the Payment Date occurs. All calculations of interest on the Certificates
will be made on the basis of a 360-day year consisting of twelve 30 day months.
"Addition Notice": With respect to the transfer of Subsequent Home
Equity Loans to the Trust for inclusion in Group I or Group II pursuant to
Section 3.07 hereof, notice given notless than ten Business Days prior to the
related Subsequent Transfer Date of the Depositor's designation of Subsequent
Home Equity Loans to be sold to the Trust for inclusion in Group I or Group II
and the aggregate Loan Balance of such Subsequent Home Equity Loans with respect
to each such Home Equity Loan Group.
"Adjusted Pass-Through Rate": As of any date of determination thereof,
a rate equal to the sum of (a) the Weighted Average Pass-Through Rate, (b) the
Class S-I Distribution Amount (calculated as a percentage of the outstanding
Class A Certificate Principal Balance) and (c) any portion of the Premium Amount
and the Trustee Fee (calculated as a percentage of the outstanding principal
amount of the Certificates) then accrued and outstanding.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement, as it may be amended
from time to time, including the Exhibits and Schedules hereto.
"Agreement of Limited Partnership": The Third Amended and Restated
Agreement of Limited Partnership of the Seller, dated as of November 1, 1995, as
at any time amended or modified.
2
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"Annual Loss Percentage (Rolling Six Month)": As of any date of
determination thereof, a fraction, expressed as a percentage, the numerator of
which is the aggregate of the Realized Losses as of the last day of the calendar
month of each Remittance Period for the six immediately preceding Remittance
Periods and the denominator of which is the Group I Maximum Collateral Amount.
"Annual Loss Percentage (Rolling Twelve Month)": For a Home Equity Loan
Group and as of any date of determination thereof, a fraction, expressed as a
percentage, the numerator of which is the aggregate of the Realized Losses with
respect to such Group as of the last day of the calendar month of each
Remittance Period for the twelve immediately preceding Remittance Periods and
the denominator of which is the related Maximum Collateral Amount.
"Appraised Value": The appraised value of any Property based upon the
appraisal 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.
"Authorized Officer": With respect to any Person, any officer of such
Person who is authorized to act for such Person in matters relating to this
Agreement, and whose action is binding upon, such Person; with respect to the
Depositor, the Seller 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 officer assigned to the Corporate Trust
Division (or any successor thereto), including any Vice President, Assistant
Vice President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement.
"Available Funds": Group I Available Funds or Group II Available Funds,
as the case may be.
"Backup Servicer": The Trustee shall initially serve as Backup Servicer
hereunder in the event of the termination of the Servicer, subject to the right
of the Trustee to assign such duties to a party acceptable to the Certificate
Insurer and the Owners of the majority of the Percentage Interests of the Class
R Certificates.
"Business Day": Any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in The City of New York, Tampa, Florida or
the city in which the Corporate Trust Office is located, are authorized or
obligated by law or executive order to be closed.
"Capitalized Interest Account": The Capitalized Interest Account
established in accordance with Section 7.02(a) hereof and maintained by the
Trustee.
"Carry-Forward Amount": With respect to any Class of the Class A
Certificates and any Payment Date, the sum of (x) the amount, if any, by which
(i) the Current Interest for such Class for the immediately preceding Payment
Date exceeded (ii) the amount of the actual distribution made to the Owners of
the Class A Certificates on such immediately preceding Payment Date pursuant to
Section 7.03(b)(iv)(B) hereof plus (y) 30 days' interest on such excess at the
Pass-Through Rate for the related Class of Class A Certificate.
"Certificate": Any one of the Class A Certificates, the Class S-I
Certificates or the Class R Certificates, each representing the interests and
the rights described in this Agreement.
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"Certificate Account": The segregated certificate account established
in accordance with Section 7.02(a) hereof and maintained at the Corporate Trust
Office entitled "Chemical Bank as Trustee on behalf of the Owners of the IMC
Home Equity Loan Trust 1996-2, Home Equity Loan Pass-Through Certificates."
"Certificate Insurance Policy": The Certificate Guaranty Insurance
Policy (number 50455-N) dated April 24, 1996 issued by the Certificate Insurer
for the benefit of the Owners of the Class A Certificates and the Class S-I
Certificates pursuant to which the Certificate Insurer guarantees Insured
Payments.
"Certificate Insurer": Financial Security Assurance Inc., a stock
insurance company organized and created under the laws of the State of New York
and 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 the Certificate Insurance Policy in accordance with its terms; or
(b)(i) the entry by a court having jurisdiction in the
premises of (A) 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, rehabilitation, reorganization or other
similar law or (B) a 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 filing 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.
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"Certificate Principal Balance": As of the Startup Day as to each of
the following Classes of Class A Certificates, the Certificate Principal
Balances thereof, as follows:
Class A-1 Certificates - $62,442,000
Class A-2 Certificates - $28,489,000
Class A-3 Certificates - $26,630,000
Class A-4 Certificates - $10,730,000
Class A-5 Certificates - $24,786,000
Class A-6 Certificates - $15,882,000
Class A-7 Certificates - $16,041,000
Class A-8 Certificates - $15,000,000
The Class R Certificates and the Class S-I Certificates do not
have a Certificate Principal Balance.
"Class": Any Class of the Class A Certificates, the Class S-I
Certificates or the Class R Certificates.
"Class A Certificate": Any one of the Fixed Rate Certificates or Class
A-8 Certificates.
"Class A Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A Certificates less the aggregate of all amounts actually distributed on
account of the Class A Distribution Amount pursuant to Section 7.03(b)(iv)
hereof with respect to principal thereon on all prior Payment Dates; provided,
however, that solely for purposes of determining the Certificate Insurer's
rights, as subrogee, the Class A Certificate Principal Balance shall not be
reduced by any principal amount paid to the Owner thereof from Insured Payments.
"Class A Certificate Termination Date": With respect to the Class A-1
Certificates, the Class A-1 Certificate Termination Date, with respect to the
Class A-2 Certificates, the Class A-2 Certificate Termination Date, with respect
to the Class A-3 Certificates, the Class A-3 Certificate Termination Date, with
respect to the Class A-4 Certificates, the Class A-4 Certificate Termination
Date, with respect to the Class A-5 Certificates, the Class A-5 Certificate
Termination Date, with respect to the Class A-6 Certificates, the Class A-6
Certificate Termination Date, with respect to the Class A-7 Certificates, the
Class A-7 Certificate Termination Date and with respect to the Class A-8
Certificates, the Class A-8 Certificate Termination Date.
"Class A Distribution Amount": The Class A-1 Distribution Amount, the
Class A-2 Distribution Amount, the Class A-3 Distribution Amount, the Class A-4
Distribution Amount, the Class A-5 Distribution Amount, the Class A-6
Distribution Amount, the Class A-7 Distribution Amount and the Class A-8
Distribution Amount.
"Class A-1 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-1 Certificate, substantially in the form annexed
hereto as Exhibit A-1 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in the REMIC for purposes of the REMIC
Provisions.
"Class A-1 Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A-1 Certificates less the aggregate of all amounts actually distributed
with respect to the Class A-1 Distribution Amount pursuant to Section
7.03(b)(iv)
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<PAGE>
hereof with respect to principal thereon on all prior Payment Dates; provided,
however, that solely for the purposes of determining the Certificate Insurer's
rights, as subrogee, the Class A-1 Certificate Principal Balance shall not be
reduced by any principal amounts paid to the Owners thereof from Insured
Payments.
"Class A-1 Certificate Termination Date": The Payment Date on which the
Class A-1 Certificate Principal Balance is reduced to zero.
"Class A-1 Current Interest": With respect to any Payment Date, 30
days' interest accrued on the Class A-1 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-1 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-1 Certificates as it relates to interest previously paid on the Class
A-1 Certificates, plus the Carry Forward Amount, if any, with respect to the
Class A-1 Certificates.
"Class A-1 Distribution Amount": With respect to any Payment Date, the
sum of (x) the Class A-1 Current Interest and (y) the Group I Principal
Distribution Amount payable to the Owners of the Class A-1 Certificates pursuant
to Section 7.03(b)(iv)(C) for such Payment Date.
"Class A-1 Pass-Through Rate": 6.61% per annum.
"Class A-2 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-2 Certificate, substantially in the form annexed
hereto as Exhibit A-2 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in the REMIC for purposes of the REMIC
provisions.
"Class A-2 Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A-2 Certificates less the aggregate of all amounts actually distributed
with respect to the Class A-2 Distribution Amount pursuant to Section
7.03(b)(iv) hereof with respect to principal thereon on all prior Payment Dates;
provided, however, that solely for the purposes of determining the Certificate
Insurer's rights, as subrogee, the Class A-2 Certificate Principal Balance shall
not be reduced by any principal amounts paid to the Owners thereof from Insured
Payments.
"Class A-2 Certificate Termination Date": The Payment Date on which the
Class A-2 Certificate Principal Balance is reduced to zero.
"Class A-2 Current Interest": With respect to any Payment Date, 30
days' interest accrued on the Class A-2 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-2 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-2 Certificates as it relates to interest previously paid on the Class
A-2 Certificates plus the Carry-Forward Amount, if any, with respect to the
Class A-2 Certificates.
"Class A-2 Distribution Amount": With respect to any Payment Date, the
sum of (x) Class A-2 Current Interest and (y) the Group I Principal Distribution
Amount payable to the Owners of the Class A-2 Certificates pursuant to Section
7.03(b)(iv)(C) for such Payment Date.
"Class A-2 Pass-Through Rate": 6.78% per annum.
"Class A-3 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-3 Certificate, substantially in the form annexed
hereto as Exhibit A-3 authenticated and delivered by
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<PAGE>
the Trustee, representing the right to distributions as set forth herein and
each evidencing an interest designated as a "regular interest" in the REMIC for
purposes of the REMIC provisions.
"Class A-3 Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A-3 Certificates less the aggregate of all amounts actually distributed
with respect to the Class A-3 Distribution Amount pursuant to Section
7.03(b)(iv) hereof with respect to principal thereon on all prior Payment Dates;
provided, however, that solely for the purposes of determining the Certificate
Insurer's rights, as subrogee, the Class A-3 Certificate Principal Balance shall
not be reduced by any principal amounts paid to the Owners thereof from Insured
Payments.
"Class A-3 Certificate Termination Date": The Payment Date on which the
Class A-3 Certificate Principal Balance is reduced to zero.
"Class A-3 Current Interest": With respect to any Payment Date, 30
days' interest accrued on the Class A-3 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-3 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-3 Certificates as it relates to interest previously paid on the Class
A-3 Certificates plus the Carry-Forward Amount, if any, with respect to the
Class A-3 Certificates.
"Class A-3 Distribution Amount": With respect to any Payment Date, the
sum of (x) Class A-3 Current Interest and (y) the Group I Principal Distribution
Amount payable to the Owners of the Class A-3 Certificates pursuant to Section
7.03(b)(iv)(C) for such Payment Date.
"Class A-3 Pass-Through Rate": 6.98% per annum.
"Class A-4 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-4 Certificate, substantially in the form annexed
hereto as Exhibit A-4 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in the REMIC for purposes of the REMIC
provisions.
"Class A-4 Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A-4 Certificates less the aggregate of all amounts actually distributed
with respect to the Class A-4 Distribution Amount pursuant to Section
7.03(b)(iv) hereof with respect to principal thereon on all prior Payment Dates;
provided, however, that solely for the purposes of determining the Certificate
Insurer's rights, as subrogee, the Class A-4 Certificate Principal Balance shall
not be reduced by any principal amounts paid to the Owners thereof from Insured
Payments.
"Class A-4 Certificate Termination Date": The Payment Date on which the
Class A-4 Certificate Principal Balance is reduced to zero.
"Class A-4 Current Interest": With respect to any Payment Date, 30
days' interest accrued on the Class A-4 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-4 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-4 Certificates as it relates to interest previously paid on the Class
A-4 Certificates plus the Carry-Forward Amount, if any, with respect to the
Class A-4 Certificates.
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"Class A-4 Distribution Amount": With respect to any Payment Date, the
sum of (x) Class A-4 Current Interest and (y) the Group I Principal Distribution
Amount payable to the Owners of the Class A-4 Certificates pursuant to Section
7.03(b)(iv)(C) for such Payment Date.
"Class A-4 Pass-Through Rate": 7.10% per annum.
"Class A-5 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-5 Certificate, substantially in the form annexed
hereto as Exhibit A-5 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in the REMIC for purposes of the REMIC
provisions.
"Class A-5 Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A-5 Certificates less the aggregate of all amounts actually distributed
with respect to the Class A-5 Distribution Amount pursuant to Section
7.03(b)(iv) hereof with respect to principal thereon on all prior Payment Dates;
provided, however, that solely for the purposes of determining the Certificate
Insurer's rights, as subrogee, the Class A-5 Certificate Principal Balance shall
not be reduced by any principal amounts paid to the Owners thereof from Insured
Payments.
"Class A-5 Certificate Termination Date": The Payment Date on which the
Class A-5 Certificate Principal Balance is reduced to zero.
"Class A-5 Current Interest": With respect to any Payment Date, 30
days' interest accrued on the Class A-5 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-5 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-5 Certificates as it relates to interest previously paid on the Class
A-5 Certificates plus the Carry-Forward Amount, if any, with respect to the
Class A-5 Certificates.
"Class A-5 Distribution Amount": With respect to any Payment Date, the
sum of (x) Class A-5 Current Interest and (y) the Group I Principal Distribution
Amount payable to the Owners of the Class A-5 Certificates pursuant to Section
7.03(b)(iv)(C) for such Payment Date.
"Class A-5 Pass-Through Rate": 7.34% per annum.
"Class A-6 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-6 Certificate, substantially in the form annexed
hereto as Exhibit A-6 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in the REMIC for purposes of the REMIC
provisions.
"Class A-6 Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A-6 Certificates less the aggregate of all amounts actually distributed
with respect to the Class A-6 Distribution Amount pursuant to Section
7.03(b)(iv) hereof with respect to principal thereon on all prior Payment Dates;
provided, however, that solely for the purposes of determining the Certificate
Insurer's rights, as subrogee, the Class A-6 Certificate Principal Balance shall
not be reduced by any principal amounts paid to the Owners thereof from Insured
Payments.
"Class A-6 Certificate Termination Date": The Payment Date on which the
Class A-6 Certificate Principal Balance is reduced to zero.
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<PAGE>
"Class A-6 Current Interest": With respect to any Payment Date, 30
days' interest accrued on the Class A-6 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-6 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-6 Certificates as it relates to interest previously paid on the Class
A-6 Certificates plus the Carry-Forward Amount, if any, with respect to the
Class A-6 Certificates.
"Class A-6 Distribution Amount": With respect to any Payment Date, the
sum of (x) Class A-6 Current Interest and (y) the Group I Principal Distribution
Amount payable to the Owners of the Class A-6 Certificates pursuant to Section
7.03(b)(iv)(C) for such Payment Date.
"Class A-6 Pass-Through Rate": 7.75% per annum.
"Class A-7 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-7 Certificate, substantially in the form annexed
hereto as Exhibit A-7 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in the REMIC for purposes of the REMIC
provisions.
"Class A-7 Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A-7 Certificates less the aggregate of all amounts actually distributed
with respect to the Class A-7 Distribution Amount pursuant to Section
7.03(b)(iv) hereof with respect to principal thereon on all prior Payment Dates;
provided, however, that solely for the purposes of determining the Certificate
Insurer's rights, as subrogee, the Class A-7 Certificate Principal Balance shall
not be reduced by any principal amounts paid to the Owners thereof from Insured
Payments.
"Class A-7 Certificate Termination Date": The Payment Date on which the
Class A-7 Certificate Principal Balance is reduced to zero.
"Class A-7 Current Interest": With respect to any Payment Date, 30
days' interest accrued on the Class A-7 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-7 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-7 Certificates as it relates to interest previously paid on the Class
A-7 Certificates plus the Carry-Forward Amount, if any, with respect to the
Class A-7 Certificates.
"Class A-7 Distribution Amount": With respect to any Payment Date, the
sum of (x) Class A-7 Current Interest and (y) the Group I Principal Distribution
Amount payable to the Owners of the Class A-7 Certificates pursuant to Section
7.03(b)(iv)(C) for such Payment Date.
"Class A-7 Pass-Through Rate": 7.95% per annum.
"Class A-8 Certificate": Any one of the Certificates designated on the
face thereof as a Class A-8 Certificate, substantially in the form annexed
hereto as Exhibit A-8 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in the REMIC for purposes of the REMIC
provisions.
"Class A-8 Certificate Principal Balance": As of any time of
determination, the Certificate Principal Balance as of the Startup Day of all
Class A-8 Certificates less the aggregate of all amounts actually distributed
with respect to the Class A-8 Distribution Amount pursuant to Section
7.03(b)(iv) hereof with respect to principal thereon on all prior Payment Dates;
provided, however, that solely for the purposes of determining the Certificate
Insurer's rights, as subrogee, the Class A-8 Certificate
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Principal Balance shall not be reduced by any principal amounts paid to the
Owners thereof from Insured Payments.
"Class A-8 Certificate Termination Date": The Payment Date on which the
Class A-8 Certificate Principal Balance is reduced to zero.
"Class A-8 Current Interest": With respect to any Payment Date, 30
days' interest accrued on the Class A-8 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-8 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-8 Certificates as it relates to interest previously paid on the Class
A-8 Certificates plus the Carry-Forward Amount, if any, with respect to the
Class A-8 Certificates.
"Class A-8 Distribution Amount": With respect to any Payment Date, the
sum of (x) Class A-8 Current Interest and (y) the Group II Principal
Distribution Amount payable to the Owners of the Class A-8 Certificates pursuant
to Section 7.03(b)(iv)(D) for such Payment Date.
"Class A-8 Pass-Through Rate": As of any Payment Date, the lesser of
(i) 13.26% per annum and (ii) the weighted average of the Remittance Rates of
the Home Equity Loans in Group II.
"Class R Certificate": Any one of the Certificates designated on the
face thereof as a Class R Certificate, substantially in the form annexed hereto
as Exhibit C, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein, and evidencing an interest designated as
the "residual interest" in the REMIC for the purposes of the REMIC Provisions.
"Class S-I Carry Forward Amount": With respect to any Payment Date, the
sum of the amount, if any, by which (x) the Class S-I Distribution Amount as of
the immediately preceding Payment Date exceeds (y) the amount of the actual
distribution made to the Owners of the Class S-I Certificates on such
immediately preceding Payment Date.
"Class S-I Certificate": Any one of the Certificates designated on the
face thereof as a Class S-I Certificate, substantially in the form annexed
hereto as Exhibit B, authenticated and delivered by the Trustee representing the
right to distributions as set forth herein. The Class S-I Certificates are a
"regular interest" in the REMIC.
"Class S-I Distribution Amount": With respect to any Payment Date, the
sum of the following (determined with respect to each Home Equity Loan listed on
Schedule II hereto): (a) one-twelfth of the product of (x) the outstanding Loan
Balance of each such Home Equity Loan on such immediately first day of the
related Remittance Period and (y) the excess, if any, of (i) the Coupon Rate of
each Home Equity Loan listed on Schedule II hereto on the first day of the
related Remittance Period over (ii) the Coupon Rate (determined as of the
Startup Day) of each Home Equity Loan listed on Schedule II hereto, (b) the
Preference Amount, if any, for the Class S-I Certificates and (c) the Class S-I
Carry Forward Amount, if any. The Class S-I Distribution Amount shall be
calculated on a loan by loan basis.
"Clean-Up Call Date": The first Monthly Remittance Date on which the
aggregate Loan Balances of the Home Equity Loans has declined to $20,000,000 or
less.
"Closing": As defined in Section 4.02 hereof.
"Code": The Internal Revenue Code of 1986, as amended.
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"Compensating Interest": As defined in Section 8.10(a) hereof.
"Corporate Trust Office": The principal office of the Trustee at
Chemical Bank, 450 W. 33rd Street, 15th Floor, New York, NY 10001, Attention:
Structured Finance Services (MBS).
"Co-Trustee": Chemical Bank New Jersey, N.A. or any successor thereto.
"Co-Trustee Agreement": The Co-Trustee Agreement dated as of April 1,
1996 between the Trustee and the Co-Trustee.
"Coupon Rate": The rate of interest borne by each Note.
"Cram Down Loss": With respect to a Home Equity Loan, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the Loan Balance or the Coupon Rate of such Home Equity Loan, the
amount of such reduction. A "Cram Down Loss" shall be deemed to have occurred on
the date of issuance of such order.
"Cumulative Loss Percentage": With respect to a Home Equity Loan Group
and as of any date of determination thereof, the aggregate of all Realized
Losses with respect to such Home Equity Loan Group since the Startup Day as a
percentage of the related Maximum Collateral Amount.
"Cumulative Loss Test": The Cumulative Loss Test for each period
indicated below is satisfied for a Home Equity Loan Group if the Cumulative Loss
Percentage for such Group for such period does not exceed the percentage set out
for such period below:
Cumulative Loss
Period Percentage
April 2, 1996 - April 1, 1998 1.00%
April 2, 1998 - April 1, 1999 1.50%
April 2, 1999 - April 1, 2000 1.75%
April 2, 2000 - and thereafter 2.00%
"Current Interest": With respect to any Payment Date, the sum of (a)
the Class A-1 Current Interest, (b) the Class A-2 Current Interest, (c) the
Class A-3 Current Interest, (d) the Class A-4 Current Interest, (e) the Class
A-5 Current Interest, (f) the Class A-6 Current Interest, (g) the Class A-7
Current Interest, (h) the Class A-8 Current Interest and (i) the Class S-I
Distribution Amount for such Payment Date.
"Custodial Agreement": The Custodial Agreement dated as of April 1,
1996 among the Custodian, the Trustee, the Depositor, the Seller and the
Servicer.
"Custodian": The First National Bank of Boston, as Custodian on behalf
of the Trustee pursuant to the Custodial Agreement.
"Cut-Off Date": As of the close of business on April 1, 1996.
"Daily Collections": As defined in Section 8.08(c) hereof.
"Delinquency Advance": As defined in Section 8.09(a) hereof.
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"Delinquent": A Home Equity Loan is "Delinquent" if any payment due
thereon is not made by the Mortgagor by the close of business on the related Due
Date. A Home Equity Loan is "30 days Delinquent" if such payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days Delinquent," "90
days Delinquent" and so on.
"Delivery Order": The delivery order in the form set forth as Exhibit H
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 named herein.
"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 "A" by Standard & Poor's and "A2" by Moody's
and (ii) the Servicer shall provide the Trustee and the Certificate Insurer with
a statement, which the Trustee will send to the Owners, identifying the location
and account information of the Principal and Interest Account upon a change in
the location of such account.
"Determination Date": With respect to each Payment Date, the fifth
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 Class A Certificates
from time to time as a securities depository.
"Disqualified Organization": "Disqualified Organization" shall have 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.
"Due Date": With respect to any Home Equity Loan, the date on which the
Monthly Payment with respect to such Home Equity Loan is required to be paid
pursuant to the related Note exclusive of any days of grace.
"Eligible Investments": Those investments so designated pursuant to
Section 7.07 hereof.
"Excess Spread Rate": For each Home Equity Loan in Group II is equal to
the excess of (x) the gross margin on such Home Equity Loan less the sum of the
rates of which the Group II Servicing Fee, Trustee Fee, Trustee Reimbursable
Expenses and Premium Amount are calculated over (y) 1.445%.
"Excess Subordinated Amount": With respect to any Home Equity Loan
Group and Payment Date, the excess, if any, of (x) the Subordinated Amount that
would apply to the related Home Equity Loan Group on such Payment Date after
taking into account the payment of the related Class A Distribution Amount on
such Payment Date (except for any distributions of related Subordination
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Reduction Amounts on such Payment Date), over (y) the related Specified
Subordinated Amount for such Payment Date; provided, however, that the Excess
Subordinated Amount for the period beginning with the Payment Date in May 1998
and ending on the Payment Date in October 1998 shall be limited to the amount
obtained using the following formula:
n-24
---- X E.S.A.
6
Where "n" is equal to the number of Payment Dates that have occurred since the
Startup Day (i.e., in May 1998, n=25) and "E.S.A." is equal to the amount of
Excess Subordinated Amount that would otherwise be obtained for such Payment
Date without regard to the provisions of this proviso.
"FDIC": The Federal Deposit Insurance Corporation, a corporate
instrumentality of the United States, or any successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the Emergency Home
Finance Act of 1970, as amended, or any successor thereof.
"File": The documents delivered to the Trustee pursuant to Section 3.06
hereof pertaining to a particular Home Equity Loan and any additional documents
required to be added to the File pursuant to this Agreement.
"Final Certification": As defined in Section 3.06(c) hereof.
"Final Determination": As defined in Section 9.03(a) hereof.
"Final Recovery Determination": With respect to any defaulted Home
Equity Loan or REO Property (other than a Home Equity Loan purchased by the
Seller, the Depositor or the Servicer), a determination made by the Servicer
that all Liquidation Proceeds which the Servicer, in its reasonable business
judgment expects to be finally recoverable in respect thereof have been so
recovered or that the Servicer believes in its reasonable business judgment the
cost of obtaining any additional recoveries therefrom would exceed the amount of
such recoveries. The Servicer shall maintain records of each Final Recovery
Determination.
"Final Scheduled Payment Date": As set out in Section 2.08(k) hereof.
"First Mortgage Loan": A Home Equity Loan which constitutes a first
priority mortgage lien with respect to any Property.
"Fixed Rate Certificates": Any one of the Class A-1 Certificates, Class
A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates or Class A-7 Certificates.
"FNMA": The Federal National Mortgage Association, a
federally-chartered and privately-owned corporation existing under the Federal
National Mortgage Association Charter Act, as amended, or any successor thereof.
"FNMA Guide": FNMA's Servicing Guide, as the same may be amended by
FNMA from time to time, and the Servicer shall elect to apply such amendments in
accordance with Section 8.01 hereof.
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"Funding Period": With respect to either Group I or Group II, the
period commencing on the Startup Day and ending on the earliest to occur of (i)
the date on which the amount on deposit with respect to such Group in the
Pre-Funding Account (exclusive of any investment earnings) is less than
$100,000, (ii) the date on which the Servicer may be removed pursuant to Section
8.20(a) hereof and (iii) May 31, 1996.
"Group I": The pool of Home Equity Loans identified in the related
Schedule of Home Equity Loans as having been assigned to Group I in Schedule I-A
hereto, including any Qualified Replacement Mortgage delivered in replacement
thereof.
"Group I Available Funds": As defined in Section 7.02(b) hereof.
"Group I Available Funds Shortfall": As defined in Section
7.03(b)(ii)(A).
"Group I Capitalized Interest Requirement": With respect to the May and
June 1996 Payment Dates, the difference, if any, between (x) the interest due on
the Fixed Rate Certificates on such Payment Date plus the Premium Amount (such
fee and amount expressed as a per annum percentage of the aggregate Loan Balance
of the Home Equity Loans in Group I) and (y) the sum of (i) one month's interest
on the aggregate Loan Balances of the Home Equity Loans in Group I as of the
close of business on the last day of the immediately preceding Remittance
Period, calculated at the weighted average of the Pass-Through Rates of the
Fixed Rate Certificates as of such Payment Date and (ii) any Group I Pre-Funding
Account Earnings to be transferred to the Certificate Account on such Payment
Date pursuant to Section 7.4(d).
"Group I Initial Specified Subordinated Amount": $4,440,000.
"Group I Interest Remittance Amount": As of any Monthly Remittance
Date, the sum, without duplication, of (i) all interest due during the related
Remittance Period with respect to the Home Equity Loans in Group I, (ii) all
Compensating Interest paid by the Servicer on such Monthly Remittance Date with
respect to Group I and (iii) the portion of the Substitution Amount relating to
interest on the Home Equity Loans in Group I.
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"Group I Monthly Remittance Amount": As of any Monthly Remittance Date,
the sum of (i) the Group I Interest Remittance Amount for such Monthly
Remittance Date and (ii) the Group I Principal Remittance Amount for such
Monthly Remittance Date.
"Group I Maximum Collateral Amount": $185,000,000.
"Group I Pre-Funding Account Earnings": With respect to the May 28,
1996 Payment Date, the actual investment earnings earned during the period from
the Startup Day through May 18, 1996 (inclusive) on that portion of the
Pre-Funding Account allocated to Group I during such period as calculated by the
Trustee pursuant to Section 3.07(d) hereof; and with respect to the June 25,
1996 Payment Date, the actual investment earnings earned during the period from
May 19, 1996 through June 18, 1996 (inclusive) on that portion of the
Pre-Funding Account allocated to Group I during such period as calculated by the
Trustee pursuant to Section 3.07(d) hereof.
"Group I Principal Distribution Amount": With respect to the Fixed Rate
Certificates for any Payment Date, the lesser of:
(a) the Group I Total Available Funds plus any Insured Payment with
respect to the Fixed Rate Certificates minus the Current Interest for such
Payment Date with respect to the Fixed Rate Certificates; and
(b)
the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to principal owed to
the Owners of the related Fixed Rate Certificates that remains
unpaid as of such Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans in Group I due on or prior
to the related Due Date thereof, to the extent actually
received by the Trustee during the related Remittance Period
and any Prepayments made by the Mortgagors and actually
received by the Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan in
Group I that was repurchased by the Seller or purchased by the
Servicer on or prior to the related Monthly Remittance Date,
to the extent such Loan Balance is actually received by the
Trustee during the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in Group I (to the extent
such Substitution Amounts relate to principal), to the extent
such Substitution Amounts are actually received by the Trustee
on the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group
I during the related Remittance Period (to the extent such Net
Liquidation Proceeds relate to principal) to the extent such
Net Liquidation Proceeds are actually received by the Trustee,
(F) the amount of any Subordination Deficit with
respect to Group I for such Payment Date,
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(G) the principal portion of the proceeds received by
the Trustee with respect to Group I from any termination of
the Trust (to the extent such proceeds related to principal),
(H) with respect to the Payment Date immediately
following the last day of the Funding Period with respect to
Group I, all amounts remaining on deposit in the Pre-Funding
Account to the extent not used to purchase Subsequent Home
Equity Loans for inclusion in Group I during such Funding
Period, and
(I) the amount of any Subordination Increase Amount
with respect to Group I for such Payment Date, to the extent
of any Net Monthly Excess Cashflow available for such purpose,
over
(ii) the amount of any Subordination Reduction Amount with
respect to Group I for such Payment Date.
"Group I Principal Remittance Amount": As of any Monthly Remittance
Date, the sum, without duplication, of (i) the principal actually collected by
the Servicer with respect to Home Equity Loans in Group I during the related
Remittance Period, (ii) the Loan Balance of each such Home Equity Loan in Group
I that was purchased from the Trustee on or prior to such Monthly Remittance
Date, to the extent such Loan Balance was actually deposited in the Principal
and Interest Account, (iii) any Substitution Amounts relating to principal
delivered by the Seller in connection with a substitution of a Home Equity Loan
in Group I, to the extent such Substitution Amounts were actually deposited in
the Principal and Interest Account on or prior to such Monthly Remittance Date,
and (iv) the principal portion of all Net Liquidation Proceeds actually
collected by the Servicer with respect to such Home Equity Loans in Group I
during the related Remittance Period (to the extent such Net Liquidation
Proceeds related to principal).
"Group I Servicing Fee": With respect to any Home Equity Loan in Group
I, 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 one month's interest at 0.50% per annum of the then outstanding
principal balance of such Home Equity Loan as of the first day of each
Remittance Period payable on a monthly basis; provided, however, that with
respect to any Group I Underwater Loan, as of any Payment Date (i) the sum of
(x) the weighted average Pass-Through Rate of the Fixed Rate Certificates and
(y) the annualized rate at which the Servicing Fee, Premium Amount and Trustee
Fee related to Group I would otherwise be calculated exceeds (ii) the weighted
average Coupon Rate of the Group I Underwater Loans for the related Remittance
Period, then the Group I Servicing Fee for such Payment Date shall be reduced by
an amount equal to the product of (a) one-twelfth of such excess (not to exceed
25 basis points on a per annum basis) and (b) the aggregate Loan Balance of the
Group I Underwater Loans as of the opening of business of the first day of such
Remittance Period divided by the aggregate Loan Balance of the Home Equity Loans
in Group I; provided, however, that if a successor Servicer is appointed
pursuant to Section 8.20 hereof, the Group I Servicing Fee shall be the amount
as agreed upon by the Trustee, the Certificate Insurer, the successor Servicer
and the Owners of a majority of the Percentage Interests of the Class R
Certificates, such amount not to exceed 0.50% per annum.
"Group I Specified Subordinated Amount": With respect to a Payment Date
(x) prior to the Stepdown Date, the amount which is equal to 2.40% of the Group
I Maximum Collateral Amount and (y) after the Stepdown Date (i) if the Stepdown
Requirement for Group I is satisfied, the lesser of (A) the greater of (i) an
amount equal to 4.80% of the then outstanding aggregate Loan Balance of the Home
16
<PAGE>
Equity Loans in Group I and (ii) 0.50% of the Group I Maximum Collateral Amount
or (B) the Group I Initial Specified Subordinated Amount or (ii) if the Stepdown
Requirement for Group I is not satisfied, the amount which is equal to 2.40% of
the Group I Maximum Collateral Amount; provided, however, that if on any Payment
Date, the Spread Squeeze Test is not satisfied and the Spread Squeeze Rate is
less than 3.00% the Group I Specified Subordinated Amount shall be increased by
an amount equal to (x) three times (y) the excess of (i) 3.00% per annum over
(ii) the Spread Squeeze Rate multiplied by (z) the then outstanding aggregate
Loan Balance of the Home Equity Loans in Group I; provided, further however,
that if on any Payment Date the Mortgage Portfolio Performance Test for Group I
is not satisfied, then the Group I Specified Subordinated Amount will be
unlimited during the period that such Mortgage Portfolio Performance Test is not
satisfied; provided, further, however, that on the Payment Date in June, 1996,
the Certificate Insurer may in a written notice provided to the Trustee, the
Seller, the Depositor and the Owners increase the amounts provided for in this
definition to maintain the rating assigned to the Class A Certificates by the
Rating Agencies without regard to the Certificate Insurance Policy as of the
Startup Day.
"Group I Subordinated Amount": As of any Payment Date, the excess, if
any, of (x) the sum of (i) the aggregate Loan Balances of the Home Equity Loans
in Group I as of the close of business on the last day of the immediately
proceeding Remittance Period and (ii) any amount on deposit in the Pre-Funding
Account relating to Group I at such time exclusive of any GroupI Pre-Funding
Account Earnings over (y) the Certificate Principal Balance of the Fixed Rate
Certificates for such Payment Date (after taking into account the payment of the
Group I Principal Distribution Amount thereon (except for any Subordination
Deficit relating to Group I and Subordination Increase Amount relating to Group
I) on such Payment Date).
"Group I Total Monthly Excess Spread": With respect to Group I and any
Payment Date, the excess of (i) the aggregate of all interest which is collected
on the Home Equity Loans in Group I during the related Remittance Period (net of
the Servicing Fee, the Trustee Fee and the Trustee Reimbursable Expenses with
respect to Group I) plus (x) any Delinquency Advances and (y) Compensating
Interest paid by the Servicer with respect to Group I for such Remittance Period
over (ii) the sum of the Current Interest on the Fixed Rate Certificates and the
Premium Amount relating to Group I for such Payment Date; provided, however,
that for any Payment Date during the Funding Period, the sum obtained in (ii)
hereof shall be multiplied by a fraction (A) the numerator of which is the
weighted average of the aggregate Loan Balances of the Home Equity Loans in
Group I (weighted by the number of days from the first day of the related
Accrual Period in the case of the Initial Home Equity Loans (or Subsequent Home
Equity Loans during any month after the month in which such Subsequent Home
Equity Loan was transferred to the Trust) or Subsequent Cut-Off Date in the case
of Subsequent Home Equity Loans that such Loan Balances were held by the Trust)
during the preceding Remittance Period minus all Subordination Increase Amounts
relating to Group I paid prior to such Payment Date and (B) the denominator of
which is the Original Group I Pre-Funded Amount plus the Loan Balances of the
Initial Home Equity Loans in Group I as reduced by the sum of (i) any actual
payments of principal received on the Home Equity Loans in Group I prior to the
related Remittance Date and (ii) all Subordination Increase Amounts relating to
Group I paid prior to such Payment Date.
"Group I Underwater Loans": Any Home Equity Loan in Group I having a
Coupon Rate as of the Startup Day or a minimum lifetime Coupon Rate that is less
than 8.68%.
"Group II": The pool of Home Equity Loans identified in the related
Schedule of Home Equity Loans as having been assigned to Group II in Schedule
I-B hereto, including any Qualified Replacement Mortgage delivered in
replacement thereof.
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"Group II Available Funds": As defined in Section 7.02(c) hereof.
"Group II Available Funds Shortfall": As defined in Section
7.03(b)(ii)(A).
"Group II Capitalized Interest Requirement": With respect to the May
and June 1996 Payment Dates, the difference, if any, between (x) the interest
due on the Class A-8 Certificates on such Payment Date plus the Premium Amount
(such fee and amount expressed as a per annum percentage of the aggregate Loan
Balance of the Home Equity Loans in Group II) and (y) the sum of (i) one month's
interest on the aggregate Loan Balances of the Home Equity Loans in Group II as
of the close of business on the last day of the immediately preceding Remittance
Period, calculated at the Class A-8 Pass-Through Rate as of such Payment Date
and (ii) any Group II Pre-Funding Account Earnings to be transferred to the
Certificate Account on such Payment Date pursuant to Section 7.4(d).
"Group II Initial Specified Subordinated Amount": $360,000.
"Group II Interest Remittance Amount": As of any Monthly Remittance
Date, the sum, without duplication, of (i) all interest due during the related
Remittance Period with respect to the Home Equity Loans in Group II, (ii) all
Compensating Interest paid by the Servicer on such Monthly Remittance Date with
respect to Group II and (iii) the portion of the Substitution Amount relating to
interest on the Home Equity Loans in Group II.
"Group II Maximum Collateral Amount": $15,000,000.
"Group II Monthly Remittance Amount": As of any Monthly Remittance
Date, the sum of (i) the Group II Interest Remittance Amount for such Monthly
Remittance Date and (ii) the Group II Principal Remittance Amount for such
Monthly Remittance Date.
"Group II Pre-Funding Account Earnings": With respect to the May 28,
1996 Payment Date, the actual investment earnings earned during the period from
the Startup Day through May 18, 1996 (inclusive) on that portion of the
Pre-Funding Account allocated to Group II during such period as calculated by
the Trustee pursuant to Section 3.07(d) hereof; and with respect to the June 25,
1996 Payment Date, the actual investment earnings earned during the period from
May 19, 1996 through June 18, 1996 (inclusive) on that portion of the
Pre-Funding Account allocated to Group II during such period as calculated by
the Trustee pursuant to Section 3.07(d) hereof.
"Group II Principal Distribution Amount": With respect to the Class A-8
Certificates for any Payment Date, the lesser of:
(a) the Group II Total Available Funds plus any Insured Payment with
respect to the Class A-8 Certificates minus the Class A-8 Current Interest for
such Payment Date; and
(b)
the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to principal
owed to the Owners of the Class A-8 Certificates that remains
unpaid as of such Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans in Group II due on or prior
to the related Due Date thereof, to the extent actually
received by the Trustee during the related Remittance Period
and any
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<PAGE>
Prepayments made by the Mortgagors and actually received by
the Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan in
Group II that was repurchased by the Seller or purchased by
the Servicer on or prior to the related Monthly Remittance
Date, to the extent such Loan Balance is actually received by
the Trustee during the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in Group II (to the extent
such Substitution Amounts relate to principal), to the extent
such Substitution Amounts are actually received by the Trustee
on the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group
II during the related Remittance Period (to the extent such
Net Liquidation Proceeds relate to principal) to the extent
such Net Liquidation Proceeds are actually received by the
Trustee,
(F) the amount of any Subordination Deficit with
respect to Group II for such Payment Date,
(G) the principal portion of the proceeds received by
the Trustee with respect to Group II from any termination of
the Trust (to the extent such proceeds related to principal),
(H) with respect to the Payment Date immediately
following the last day of the Funding Period with respect to
Group II, all amounts remaining on deposit in the Pre-Funding
Account to the extent not used to purchase Subsequent Home
Equity Loans for inclusion in Group II during such Funding
Period, and
(I) the amount of any Subordination Increase Amount
with respect to Group II for such Payment Date, to the extent
of any Net Monthly Excess Cashflow available for such purpose,
over
(ii) the amount of any Subordination Reduction Amount with
respect to Group II for such Payment Date.
"Group II Principal Remittance Amount": As of any Monthly Remittance
Date, the sum, without duplication, of (i) the principal actually collected by
the Servicer with respect to Home Equity Loans in Group II during the related
Remittance Period, (ii) the Loan Balance of eachsuch Home Equity Loan in Group
II that was purchased from the Trustee on or prior to such Monthly Remittance
Date, to the extent such Loan Balance was actually deposited in the Principal
and Interest Account, (iii) any Substitution Amounts relating to principal
delivered by the Seller in connection with a substitution of a Home Equity Loan
in Group II, to the extent such Substitution Amounts were actually deposited in
the Principal and Interest Account on or prior to such Monthly Remittance Date,
and (iv) the principal portion of all Net Liquidation Proceeds actually
collected by the Servicer with respect to such Home Equity Loans in Group II
during the related Remittance Period (to the extent such Net Liquidation
Proceeds related to principal).
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<PAGE>
"Group II Servicing Fee": With respect to any Home Equity Loan in Group
II, 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 one month's interest at 0.50% per annum of the then outstanding
principal balance of such Home Equity Loan as of the first day of each
Remittance Period payable on a monthly basis; provided, however, that if a
successor Servicer is appointed pursuant to Section 8.20 hereof, the Group II
Servicing Fee shall be such amount as agreed upon by the Trustee, the
Certificate Insurer, the successor Servicer and the Owners of a majority of the
Percentage Interests of the Class R Certificates, such amount not to exceed
0.50% per annum.
"Group II Specified Subordinated Amount": With respect to a Payment
Date (x) prior to the Stepdown Date, the amount which is equal to 2.40% of the
Group II Maximum Collateral Amount and (y) after the Stepdown Date (i) if the
Stepdown Requirement with respect to Group II is satisfied, the lesser of (A)
the greater of (i) an amount equal to 4.80% of the then outstanding aggregate
Loan Balances of the Home Equity Loans in Group II and (ii) 0.50% of the Group
II Maximum Collateral Amount or (B) the Group II Initial Specified Subordinated
Amount or (ii) if the Stepdown Requirement with respect to Group II is not
satisfied, the amount which is equal to 2.40% of the Group II Maximum Collateral
Amount; provided, however, that if on any Payment Date, the Mortgage Portfolio
Performance Test with respect to Group II is not satisfied, then the Group II
Specified Subordinated Amount will be unlimited during the period that such
Mortgage Portfolio Performance Test is not satisfied; provided, further,
however, that on the Payment Date in June, 1996, the Certificate Insurer may in
a written notice provided to the Trustee, the Seller, the Depositor and the
Owners increase the amounts provided for in this definition to maintain the
rating assigned to the Class A Certificates by the Rating Agencies without
regard to the Certificate Insurance Policy as of the Startup Day.
"Group II Subordinated Amount": As of any Payment Date, the excess, if
any, of (x) the sum of (i) the aggregate Loan Balances of the Home Equity Loans
in Group II as of the close of business on the last day of the immediately
proceeding Remittance Period and (ii) any amount on deposit in the Pre-Funding
Account relating to Group II at such time exclusive of any Group II Pre-Funding
Account Earnings over (y) the Certificate Principal Balance of the Class A-8
Certificates for such Payment Date (after taking into account the payment of the
Group IIPrincipal Distribution Amount thereon (except for any Subordination
Deficit relating to Group II and Subordination Increase Amount relating to Group
II) on such Payment Date).
"Group II Total Monthly Excess Spread": With respect to Group II and
any Payment Date, the excess of (i) the aggregate of all interest which is
collected on the Home Equity Loans in Group II during the related Remittance
Period (net of the Servicing Fee, the Trustee Fee and the Trustee Reimbursable
Expenses with respect to Group II) plus (x) any Delinquency Advances and (y)
Compensating Interest paid by the Servicer with respect to Group II for such
Remittance Period over (ii) the sum of the Class A-8 Current Interest and the
Premium Amount relating to Group II for such Payment Date; provided, however,
that for any Payment Date during the Funding Period, the sum obtained in (ii)
hereof shall be multiplied by a fraction (A) the numerator of which is the
weighted average of the aggregate Loan Balances of the Home Equity Loans in
Group II (weighted by the number of days from the first day of the related
Accrual Period in the case of the Initial Home Equity Loans (or Subsequent Home
Equity Loans during any month after the month in which such Subsequent Home
Equity Loan was transferred to the Trust) or Subsequent Cut-Off Date in the case
of Subsequent Home Equity Loans that such Loan Balances were held by the Trust)
during the preceding Remittance Period minus all Subordination Increase Amounts
relating to Group II paid prior to such Payment Date and (B) the denominator of
which is the Original Group II Pre-Funded Amount plus the Loan Balances of the
Initial Home Equity Loans in Group II as reduced by the sum of (i) any actual
payments of principal received on the Home Equity
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Loans in Group II prior to the related Remittance Date and (ii) all
Subordination Increase Amounts relating to Group II paid prior to such Payment
Date.
"Highest Lawful Rate": As defined in Section 12.13 hereof.
"Home Equity Loan Group" or "Group": Group I or Group II, as the case
may be. References herein to the related Class of Class A Certificates, when
used with respect to a Home Equity Loan Group, shall mean (A) in the case of
Group I, the Fixed Rate Certificates and (B) in the case of Group II, the Class
A-8 Certificates.
"Home Equity Loans": Such home equity loans (including Initial Home
Equity Loans and Subsequent Home Equity Loans) transferred and assigned to the
Trust pursuant to Section 3.05(a) and 3.07(a) hereof, together with any
Qualified Replacement Mortgages substituted therefor in accordance with this
Agreement, as from time to time are held as a part of the Trust Estate, the Home
Equity Loans originally so held being identified in the Schedules of Home Equity
Loans. The term "Home Equity Loan" includes the terms "First Mortgage Loan" and
"Second Mortgage Loan". The term "Home Equity Loan" includes any Home Equity
Loan which is Delinquent, which relates to a foreclosure or which relates to a
Property which is REO Property prior to such Property's disposition by the
Trust. Any home equity loan which, although intended by the parties hereto to
have been, and which purportedly was, transferred and assigned to the Trust by
the Depositor, in fact was not transferred and assigned to the Trust for any
reason whatsoever, including, without limitation, the incorrectness of the
statement set forth in Section 3.04(b)(x) hereof with respect to such home
equity loan, shall nevertheless be considered a "Home Equity Loan" for all
purposes of this Agreement.
"Indirect Participant": Any financial institution for whom any Direct
Participant holds an interest in a Class A Certificate.
"Initial Home Equity Loans": The Home Equity Loans to be conveyed to
the Trust by the Depositor on the Startup Day.
"Initial Specified Subordinated Amount": The Group I Initial Specified
Subordinated Amount or the Group II Initial Specified Subordinated Amount.
"Insurance Agreement": The Insurance and Indemnity Agreement dated as
of April 1, 1996, among the Depositor, the Seller, the Servicer and the
Certificate Insurer, as it may be amended from time to time.
"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.
"Insured Payment": With respect to any Home Equity Loan Group and as to
any Payment Date, the sum of (i) any shortfall in the amount required to pay the
related Subordination Deficit for such Payment Date from a source other than the
Certificate Insurance Policy, (ii) any shortfall in the amount required to pay
the related Current Interest for such Payment Date from a source other than the
Certificate Insurance Policy and (iii) any shortfall in the amount required to
pay the related Preference Amount from a source other than the Certificate
Insurance Policy.
"Interest Remittance Amount": The sum of the Group I Interest
Remittance Amount and the Group II Interest Remittance Amount.
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<PAGE>
"Late Payment Rate": With respect to any Payment Date, the sum of (a)
the Weighted Average Pass-Through Rate and (b) any Class S-I Distribution Amount
(calculated as a percentage of the outstanding aggregate Class A Certificate
Principal Balance) for such Payment Date. The Late Payment Rate shall be
computed on the basis of a year of 360 days calculating the actual number of
days elapsed.
"Liquidated Loan": A Home Equity Loan as to which a Final Recovery
Determination has been made.
"Liquidation Proceeds": With respect to any Liquidated Loan, all
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 actual outstanding principal balance thereof on the
Cut-Off Date with respect to the Initial Home Equity Loans or relevant
Subsequent Cut-Off Date with respect to the Subsequent Home Equity Loans, less
any principal payments relating to such Home Equity Loan included in previous
Monthly Remittance Amounts, provided, however, that the Loan Balance for any
Home Equity Loan that has become a Liquidated Loan shall be zero as of the first
day of the Remittance Period following the Remittance Period in which such Home
Equity Loan becomes a Liquidated Loan, and at all times thereafter.
"Loan Purchase Price": With respect to any Home Equity Loan purchased
from the Trust on or prior to a Monthly Remittance Date pursuant to Section
3.03, 3.04, 3.06(b) or 8.10(b) 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 all accrued and unpaid interest on such Home Equity
Loan at the Coupon Rate to but not including the date of such purchase 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 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.
"Maximum Collateral Amount": The Group I Maximum Collateral Amount or
the Group II Maximum Collateral Amount, as the case may be.
"Monthly Payment": With respect to any Home Equity Loan and any
Remittance Period, the payment of principal, if any, and interest due on the Due
Date in such Remittance Period pursuant to the related Note.
"Monthly Remittance Amount": The sum of the Group I Monthly Remittance
Amount and the Group II Monthly Remittance Amount.
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<PAGE>
"Monthly Remittance Date": The 18th day of each month, or if such day
is not a Business Day, on the next succeeding Business Day, commencing in May
1996.
"Moody's": Moody's Investors Service Inc. or any successor thereto.
"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.
"Mortgage Portfolio Performance Test": The Mortgage Portfolio
Performance Test is satisfied for a Home Equity Loan Group and any date of
determination thereof if (x) the 60+ Delinquency Percentage (Rolling Six Month)
for such Group is less than 13.5%, (y) the O/C Loss Test for such Group is
satisfied and (z) the Annual Loss Percentage (Rolling Twelve Month) for such
Group for the twelve month period immediately preceding the date of
determination thereof is not greater than or equal to 1.25%.
"Mortgagor": The obligor on a Note.
"Net Liquidation Proceeds": As to any Liquidated Loan, Liquidation
Proceeds net of expenses incurred by the Servicer (including unreimbursed
Servicing Advances) in connection with the liquidation of any defaulted Home
Equity Loan 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 Monthly Excess Cashflow": As defined in Section 7.03(b)(iii)
hereof.
"Note": The note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Home Equity Loan.
"O/C Loss Test": The O/C Loss Test for a Home Equity Loan Group and any
period set out below is satisfied if the Cumulative Loss Percentage for such
Group during such period does not exceed the percentage set out for such period
below:
Cumulative Loss
Period Percentage
April 2, 1996 - April 1, 1997 0.75%
April 2, 1997 - April 1, 1998 1.25%
April 2, 1998 - April 1, 1999 1.75%
April 2, 1999 - April 1, 2000 2.00%
April 2, 2000 - and thereafter 2.50%
"Officer's Certificate": A certificate signed by any Authorized Officer
of any Person delivering such certificate and delivered to the Trustee.
"Operative Documents": Collectively, this Agreement, the Certificate
Insurance Policy, the Certificates and the Insurance Agreement.
"Original Aggregate Loan Balance": The aggregate Loan Balances of all
Initial Home Equity Loans as of the Cut-Off Date, which is $180,259,437.53.
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"Original Aggregate Pre-Funded Amount": The amount deposited in the
Pre-Funding Account on the Startup Day from the proceeds of the sale of the
Certificates, which amount is equal to $19,740,562.47.
"Original Group I Pre-Funded Amount": $19,461,145.60.
"Original Group II Pre-Funded Amount": $279,416.87.
"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 cancelled 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.
"Overfunded Interest Amount": With respect to each Subsequent Transfer
Date, the sum, if any of (x) with respect to the Fixed Rate Certificates the
difference between (i) interest accruing from the Subsequent Cut-Off Date to May
31, 1996 on the aggregate Loan Balances of the Subsequent Home Equity Loans in
Group I acquired by the Trust on such Subsequent Transfer Date, calculated at a
rate equal to the sum of (a) the weighted average Pass-Through Rate of the Fixed
Rate Certificates and (b) the rate at which the Premium Amount is determined and
(ii) interest accruing from the Subsequent Cut-Off Date to May 31, 1996 on the
aggregate Loan Balances of the Subsequent Home Equity Loans in Group I acquired
by the Trust on such Subsequent Transfer Date, calculated at the rate at which
Pre-Funding Account moneys are invested as of such Subsequent Transfer Date and
(y) with respect to the Class A-8 Certificates, the difference between (i)
interest accruing from the Subsequent Cut-Off Date to May 31, 1996 on the
aggregate Loan Balances of the Subsequent Home Equity Loans in Group II acquired
by the Trust on such Subsequent Transfer Date, calculated at a rate equal to the
sum of (a) the Class A-8 Pass-Through Rate and (b) the rate at which the Premium
Amount is determined and (ii) interest accruing from the Subsequent Cut-Off Date
to May 31, 1996 on the aggregate Loan Balances of the Subsequent Home Equity
Loans in Group II acquired by the Trust on such Subsequent Transfer Date,
calculated at the rate of which Pre-Funded Amounts are invested as of such
Subsequent Transfer Date.
"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(e) hereof, respectively.
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"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 12.15 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 25th 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. The first Payment Date will be May 28,
1996.
"Percentage Interest": With respect to a Class of Class A Certificate,
a fraction, expressed as a decimal, the numerator of which is the initial Class
A Certificate Principal Balance represented by such Class A Certificate and the
denominator of which is the aggregate initial Class A Certificate Principal
Balance represented by all the Class A Certificates of such Class. With respect
to the Class R Certificates and the Class S-I Certificates, 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.
"Preference Amount": With respect to the Class A Certificates and the
Class S-I Certificates, as the case may be, means any amounts of Current
Interest and principal included in previous distributions of the Class A
Distribution Amount to the Owners of the Class A Certificates or the Class S-I
Distribution Amount included in previous distributions to the Owners of the
Class S-I Certificates which are recovered from such Owners as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code in accordance with a final, nonappealable order of a court having competent
jurisdiction and which have not theretofore been repaid to such Owners and for
which there has been full compliance with the provisions of Section 13.02.
"Pre-Funded Amount": With respect to any Determination Date, the amount
remaining on deposit in the Pre-Funding Account.
"Pre-Funding Account": The Pre-Funding Account established in
accordance with Section 7.02(a) hereof and maintained by the Trustee.
"Pre-Funding Account Earnings": The Group I Pre-Funding Account
Earnings or the Group II Pre-Funding Account Earnings, as the case may be.
"Premium Amount": The amount payable monthly to the Certificate Insurer
on each Payment Date in an amount equal to 0.21% per annum, on the Certificate
Principal Balance as of the related Determination Date.
"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 and which is not accompanied by an amount of interest
representing the full amount of scheduled interest due on any Due Date in any
month or months subsequent to the month of prepayment, 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) or 8.10(b) 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.
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"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": The sum of the Group I Principal
Remittance Amount and the Group II Principal Remittance Amount.
"Prohibited Transaction": "Prohibited Transaction" shall have the
meaning set forth from time to time in the definition thereof at Section
860F(a)(2) of the Code (or any successor statute thereto) and applicable to the
Trust.
"Property": The underlying property securing a Home Equity Loan.
"Prospectus": The Depositor's Prospectus dated April 17, 1996
constituting part of the Registration Statement.
"Prospectus Supplement": The IMC Home Equity Loan Trust 1996-2
Prospectus Supplement dated April 17, 1996 to the Prospectus.
"Purchase Option Period": As defined in Section 9.03(a) hereof.
"Qualified Liquidation": The meaning set forth from time to time in the
definition thereof at Section 860F(a)(4) of the Code (or any successor statute
thereto) and applicable to the Trust.
"Qualified Mortgage": The meaning set forth from time to time in the
definition thereof at Section 860G(a)(3) of the Code (or any successor statute
thereto) and applicable to the Trust.
"Qualified Replacement Mortgage": A Home Equity Loan substituted for
another pursuant to Section 3.03, 3.04 and 3.06(b) hereof, which (i) has a
Coupon Rate at least equal to the Coupon Rate of the Home Equity Loan being
replaced; provided, however, that if the Home Equity Loan being replaced is a
Group I Underwater Loan, such Qualified Replacement Mortgage will not have a
Coupon Rate less than 8.68%, (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
Home Equity Loan being replaced, (iii) shall mature no later than June 1, 2026
(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 the Seller's credit underwriting guidelines set forth in the Seller's
underwriting manual) as the Home Equity Loan which such Qualified Replacement
Mortgage replaces, (vi) shall be a First Mortgage Loan if the Home Equity Loan
which such Qualified Replacement Mortgage replaces was a First Mortgage Loan,
(vii) 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, (viii) 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), (ix) shall be a fixed rate
Home Equity Loan if the Home Equity Loan being replaced is in Group I and shall
be a first lien "CMT Loan" (as defined in the Prospectus Supplement) if the Home
Equity Loan being replaced is in Group II and (x) satisfies the criteria set
forth from time to time in the definition thereof at Section 860G(a)(4) of the
Code
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(or any successor statute thereto) and applicable to the Trust. In the event
that one or more home equity loans are proposed to be substituted for one or
more Home Equity Loans, the Certificate Insurer may allow the foregoing tests to
be met on a weighted average basis or other aggregate basis acceptable to the
Certificate Insurer, as evidenced by a written approval delivered to the Trustee
by the Certificate Insurer, except that the requirements of clauses (i), (iv),
(ix) and (x) hereof must be satisfied as to each Qualified Replacement Mortgage.
"Rating Agencies": Collectively, Moody's and Standard & Poor's or any
successors thereto.
"Realized Loss": As to any Liquidated Loan (or, in the case of a Cram
Down Loss a Home Equity Loan that is not a Liquidated Loan), the amount (not
less than zero), if any, by which (A) the sum of (x) the Loan Balance thereof as
of the date of liquidation, (y) the amount of accrued but unpaid interest
thereon (to the extent that there are no outstanding advances for such interest
by the Servicer) and (z) the amount of any Cram Down Loss with respect thereto
is in excess of (B) the Net Liquidation Proceeds realized thereon applied in
reduction of such Loan Balance.
"Record Date": With respect to each Payment Date, the last day of the
calendar month immediately preceding the calendar month in which such Payment
Date occurs.
"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
33-99340), including all amendments thereto and including the Prospectus
relating to the Class A Certificates.
"Reimbursement Amount": As of any Payment Date, the sum of (x)(i) all
Insured Payments previously paid to the Trustee by the Certificate Insurer and
not previously repaid to the Certificate Insurer pursuant to Section 7.03(b)(ii)
hereof plus (ii) interest accrued on each such Insured Payment not previously
repaid calculated pursuant to the terms of the Insurance Agreement and (y)(i)
any amounts then due and owing to the Certificate Insurer under the Insurance
Agreement (including, without limitation, any unpaid Premium Amount relating to
such Payment Date) plus (ii) interest on such amounts at the Late Payment Rate.
The Certificate Insurer shall notify the Trustee, the Depositor and the Seller
of the amount of any Reimbursement Amount.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC Opinion": As defined in Section 3.03 hereof.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations and revenue rulings promulgated thereunder, as the foregoing may
be in effect from time to time.
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"Remittance Period": With respect to each Monthly Remittance Date, the
period commencing the second day of the calendar month immediately preceding
such Monthly Remittance Date and ending the first day of the calendar month in
which such Monthly Remittance Date occurs.
"Remittance Rate": With respect to each Home Equity Loan in Group II,
is equal to the Coupon Rate of such Home Equity Loan at the beginning of the
related Remittance Period minus the sum of (a) the sum of the rates at which the
Group II Servicing Fee, Trustee Fee, Trustee Reimbursable Expenses and the
Premium Amount are calculated and (b) the Excess Spread Rate.
"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 Class A Certificates
registered in the Register under the nominee name of the Depository.
"Residual Net Monthly Excess Cashflow": With respect to any Payment
Date, the aggregate Net Monthly Excess Cashflow, if any, remaining after the
making of all applications, transfers and disbursements described in Sections
7.03(b)(i), (ii) and (iii) and 7.03(b)(iv) hereof.
"Schedule of Home Equity Loans": The schedules of Home Equity Loans
with respect to the Initial Home Equity Loans listing each Initial Home Equity
Loan to be conveyed on the Startup Day and with respect to Subsequent Home
Equity Loans listing each Subsequent Home Equity Loan conveyed to the Trust as
of each Subsequent Transfer Date. Such Schedules of Home Equity Loans shall
identify each Home Equity Loan by the Servicer's loan number, borrower's name
and address (including the state and zip code) of the Property and shall set
forth as to each Home Equity Loan the lien status thereof, the Loan-to-Value
Ratio and the Loan Balance as of the Cut-Off Date, the Coupon Rate thereof, the
original Loan Balance thereof, the current scheduled monthly payment of
principal and interest and the maturity date of the related Note, the property
type, occupancy status, Appraised Value and the original term-to-maturity
thereof and whether or not such Home Equity Loan (including related Note) has
been modified.
"Scheduled Principal Payment": As of any date of calculation, with
respect to a Home Equity Loan, the then stated scheduled monthly installment of
principal 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), without taking into account any Prepayment
made on such Home Equity Loan during the then-current Remittance Period.
"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.
"Seller": Industry Mortgage Company, L.P., a Delaware limited
partnership.
"Senior Lien": With respect to any Second Mortgage Loan, the home
equity loan relating to the corresponding Property having a first priority lien.
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"Servicer": Industry Mortgage Company, L.P., a Delaware limited
partnership, 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 home equity loans.
"Servicer Loss Test": The Servicer Loss Test for any period set out
below is satisfied, if the Cumulative Loss Percentage for such period does not
exceed the percentage set out for such period below (provided, that for purposes
of the calculation of the Servicer Loss Test, Realized Losses attributable
solely to Cram Down Losses should be excluded from the calculation of Cumulative
Loss Percentage):
Cumulative Loss
Period Percentage
April 2, 1996 - April 1, 1997 1.00%
April 2, 1997 - April 1, 1998 1.50%
April 2, 1998 - April 1, 1999 2.25%
April 2, 1999 - April 1, 2000 3.00%
April 2, 2000 - and thereafter 3.75%
"Servicer Termination Event": As defined in Section 8.20(a) hereof.
"Servicer Termination Test": The Servicer Termination Test is satisfied
for any date of determination thereof, if (x) the 60+ Delinquency Percentage
(Rolling Six Month) is less than 15.75%, (y) the Servicer Loss Test is satisfied
and (z) the Annual Loss Percentage (Rolling Twelve Month) for the twelve month
period immediately preceding the date of determination thereof is not greater
than 1.75%.
"Servicing Advance": As defined in Section 8.09(b) and Section 8.13(a)
hereof.
"Servicing Fee": The Group I Servicing Fee or the Group II Servicing
Fee or the Group I Servicing Fee and the Group II Servicing Fee, as the context
may require.
"60-Day Delinquent Loan": With respect to any Determination Date, all
REO Properties and each Home Equity Loan, with respect to which any portion of a
Monthly Payment is, as of the last day of the prior Remittance Period, two
months (calculated from Due Date with respect to such Home Equity Loan to Due
Date) or more past due (without giving effect to any grace period).
"60+ Delinquency Percentage (Rolling Six Month)": With respect to any
Home Equity Loan Group and Determination Date, the average of the percentage
equivalents of the fractions determined for each of the six immediately
preceding Remittance Periods the numerator of each of which is equal to the
aggregate Loan Balance of 60-Day Delinquent Loans in such Group as of the end of
such Remittance Period and the denominator of which is the Loan Balance of all
of the Home Equity Loans in such Group as of the end of such Remittance Period.
"Spread Squeeze Rate": On any date of determination thereof is equal to
the excess of (x) the weighted average Coupon Rate of the Home Equity Loans in
Group I over (y) the sum of (i) the rates at which the Group I Servicing Fee,
Trustee Fee, Trustee Reimbursable Expenses and Premium Amount are calculated and
(ii) the weighted average Pass-Through Rate of the Fixed Rate Certificates.
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"Spread Squeeze Test": The Spread Squeeze Test is satisfied for any
date of determination thereof with respect to Group I if (x) the 60+ Delinquency
Percentage (Rolling Six Month) with respect to Group I is less than 9.50% and
(y) the Annual Loss Percentage (Rolling Six Month) for the six-month period
immediately preceding the date of determination thereof is not greater than or
equal to 1.75%.
"Standard & Poor's": Standard & Poor's Ratings Services, a division of
The McGraw- Hill Companies or any successor thereto.
"Startup Day": April 24, 1996.
"Stepdown Date": The Determination Date occurring in May, 1998.
"Stepdown Requirement": The Stepdown Requirement is satisfied for a
Home Equity Loan Group on any date of determination thereof if, as of such date
of determination, (x) the 60+ Delinquency Percentage (Rolling Six Month) for
such Group is less than 11.25%, (y) the Cumulative Loss Test is satisfied for
such Group and (z) the Annual Loss Percentage (Rolling Twelve Month) for such
Group for the twelve month period immediately preceding the date of
determination thereof is not greater than or equal to 0.75%.
"Subordinated Amount": The Group I Subordinated Amount or the Group II
Subordinated Amount, as the case may be.
"Subordination Deficiency Amount": With respect to any Home Equity Loan
Group and Payment Date, the excess, if any, of (i) the Specified Subordinated
Amount applicable to such Home Equity Loan Group and Payment Date over (ii) the
Subordinated Amount applicable to such Home Equity Loan Group and Payment Date
prior to taking into account the payment of any related Subordination Increase
Amounts on such Payment Date.
"Subordination Deficit": With respect to any Home Equity Loan Group and
Payment Date, the amount, if any, by which (x) the Class A Certificate Principal
Balances, after taking into account the payment of the related Class A
Distribution Amount with respect to such Group on such Payment Date (except for
any Subordination Deficit with respect to such Home Equity Loan Group and
Subordination Increase Amount with respect to such Group), exceeds (y) the sum
of (a) the aggregate Loan Balances of the Home Equity Loans in the related Group
as of the close of business on the last day of the related Remittance Period and
(b) the amount, if any, on deposit in the Pre-Funding Account with respect to
such Group on such Payment Date exclusive of any Pre-Funding Account Earnings
with respect to such Group.
"Subordination Increase Amount": With respect to any Home Equity Loan
Group and Payment Date, the lesser of (i) the related Subordination Deficiency
Amount as of such Payment Date (after taking into account the payment of the
related Class A Distribution Amount on such Payment Date (except for any
Subordination Increase Amount with respect to such Home Equity Loan Group)) and
(ii) the aggregate amount of Net Monthly Excess Cashflow allocated to such Home
Equity Loan Group pursuant to Section 7.03(b)(iii)(A) or (B) on such Payment
Date.
"Subordination Reduction Amount": With respect to any Home Equity Loan
Group and Payment Date, an amount equal to the lesser of (x) the Excess
Subordinated Amount for such Home Equity Loan Group and Payment Date and (y) the
Principal Remittance Amount with respect to such Home Equity Loan Group for the
related Remittance Period.
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"Subsequent Cut-Off Date": The beginning of business on the date
specified in a Subsequent Transfer Agreement with respect to those Subsequent
Home Equity Loans which are transferred and assigned to the Trust pursuant to
the related Subsequent Transfer Agreement.
"Subsequent Home Equity Loans": The Home Equity Loans sold to the Trust
pursuant to Section 3.07 hereof, which shall be listed on the Schedule of Home
Equity Loans attached to a Subsequent Transfer Agreement.
"Subsequent Transfer Agreement": Each Subsequent Transfer Agreement
dated as of a Subsequent Transfer Date executed by the Trustee, the Depositor
and the Seller substantially in the form of Exhibit D hereto, by which
Subsequent Home Equity Loans are sold and assigned to the Trust.
"Subsequent Transfer Date": The date specified in each Subsequent
Transfer Agreement.
"Sub-Servicer": Any Person with whom the Servicer has entered into a
Sub-Servicing Agreement and who satisfies any requirements set forth in Section
8.03 hereof in respect of the qualification of a Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the Servicer
and any Sub-Servicer relating to servicing and/or administration of certain Home
Equity Loans as permitted by Section 8.03.
"Substitution Amount": As defined in Section 3.03 hereof.
"Tax Matters Certificate": The certificate issued to Chemical Bank, as
Tax Matters Person representing the Tax Matters Person Residual Interest.
"Tax Matters Person": The Person designated pursuant to Section 11.18
hereof to act as the Tax Matters Person under the Code.
"Tax Matters Person Residual Interest": The 0.001% interest in the
Class R Certificates which shall be issued to and held by Chemical Bank
throughout the term hereof unless another person shall accept an assignment of
either such interest and the designation of Tax Matters Person pursuant to
Section 11.18 hereof.
"Termination Notice": As defined in Section 9.03(a) hereof.
"Total Available Funds": The sum of the Group I Total Available Funds
and the Group II Total Available Funds.
"Total Monthly Excess Cashflow": As defined in Section 7.03(b)(ii)
hereof.
"Total Monthly Excess Spread": The Group I Total Monthly Excess Spread
or the Group II Total Monthly Excess Spread, as the case may be.
"Trust": IMC Home Equity Loan Trust 1996-2, the trust created under
this Agreement.
"Trust Estate": As defined in the conveyance clause under this
Agreement.
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"Trustee": Chemical Bank, a New York banking corporation, the Corporate
Trust Department of which is located on the date of execution of this Agreement
at 450 W. 33rd Street, 15th Floor, New York, NY 10001, not in its individual
capacity but solely as Trustee under this Agreement, and any successor
hereunder.
"Trustee Fee": The fee payable monthly to the Trustee on each Payment
Date in an amount equal to 0.015% per annum, on the outstanding aggregate Loan
Balances of the Home Equity Loans as of the related Determination Date.
"Trustee Reimbursable Expenses": Any amounts payable (i) pursuant to
Sections 11.16(a)(v) and Section 11.16(g), and (ii) pursuant to the second
sentence of Section 10.07, provided that the aggregate amounts payable pursuant
to this clause (ii) shall not exceed $50,000.
"Underwriters": Bear, Stearns & Co. Inc., Nomura Securities
International, Inc. and ContiFinancial Services Corporation.
"Weighted Average Pass-Through Rate": As to the Class A Certificates
and any Payment Date, the weighted average of the Class A-1 Pass-Through Rate,
the Class A-2 Pass- Through Rate, the Class A-3 Pass-Through Rate, the Class A-4
Pass-Through Rate, the Class A-5 Pass-Through Rate, the Class A-6 Pass-Through
Rate, the Class A-7 Pass-Through Rate and the Class A-8 Pass-Through Rate,
weighted by, respectively, the Class A-1 Certificate Principal Balance, the
Class A-2 Certificate Principal Balance, the Class A-3 Certificate Principal
Balance, the Class A-4 Certificate Principal Balance, the Class A-5 Certificate
Principal Balance, the Class A-6 Certificate Principal Balance, the Class A-7
Certificate Principal Balance and the Class A-8 Certificate Principal Balance as
of such Payment Date prior to taking into account any distributions to be made
on such Payment Date.
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.
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Section 1.04 Opinions.
Each opinion with respect to the validity, binding nature and
enforceability of documents or Certificates may be qualified to the extent that
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether considered in a
proceeding or action in equity or at law) and may state that no opinion is
expressed on the availability of the remedy of specific enforcement, injunctive
relief or any other equitable remedy. Any opinion required to be furnished by
any Person hereunder must be delivered by counsel upon whose opinion the
addressee of such opinion may reasonably rely, and such opinion may state that
it is given in reasonable reliance upon an opinion of another, a copy of which
must be attached, concerning the laws of a foreign jurisdiction. Any opinion
delivered hereunder shall be addressed to the Rating Agencies, the Certificate
Insurer and the Trustee.
END OF ARTICLE I
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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 "IMC Home Equity Loan Trust 1996-2".
Section 2.02 Office.
The office of the Trust shall be in care of the Trustee, addressed to
Chemical Bank, 450 W. 33rd Street, 15th Floor, New York, NY 10001, Attention:
Structured Finance Services (MBS), or at such other address as the Trustee may
designate by notice to the Depositor, the Seller, the Servicer, the Owners and
the Certificate Insurer.
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 the status of the Trust Estate (other than the Pre-Funding
Account and the Capitalized Interest Account) as a REMIC.
Section 2.04 Appointment of the Trustee; Declaration of Trust.
The Seller and the Depositor hereby appoint 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.
All 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)(i) hereof) and (ii) to the extent not paid pursuant to Section 10.07,
any other expenses of the Trustee that have been reviewed and approved by the
Seller, 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 the Seller. Failure by the Seller to pay any such fees or other
expenses shall not relieve the Trustee of its obligations hereunder.
Section 2.06 Ownership of the Trust.
On the Startup Day the ownership interests in the Trust shall be
transferred as set forth in Section 4.02 hereof, such transfer to be evidenced
by sale of the Certificates as described therein. Thereafter, transfer of any
ownership interest shall be governed by Sections 5.04 and 5.08 hereof.
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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 (except that certain agents of
the Trustee may be located in the State of Texas). 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 and Home Equity Loan Files and certain
other documents) located in any state other than in the State of New York.
Payments will be received by the Trust only in the State of New York and
payments from the Trust 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 Startup Day is hereby designated as the "startup day" of the
REMIC within the meaning of Section 860G(a)(9) of the Code.
(b) The Class A Certificates and the Class S-I Certificates are hereby
designated as "regular interests" in the REMIC and the Class R Certificates are
hereby designated as the "residual interest" in the REMIC, as defined in Section
860G(a) of the Code.
(c) The Owner of the Tax Matters Person Residual Interest in the REMIC
is hereby designated as "tax matters person" as defined in the REMIC Provisions
with respect to the REMIC.
(d) The Trust and the REMIC shall, for federal income tax purposes,
maintain books on a calendar year basis and report income on an accrual basis.
(e) The Trustee shall cause the Trust (other than the Pre-Funding
Account and the Capitalized Interest Account) to elect to be treated as a REMIC
under Section 860D of the Code.Any inconsistencies or ambiguities in this
Agreement or in the administration of the Trust shall be resolved in a manner
that preserves the validity of such election to be treated as a REMIC. The
Trustee shall report all expenses of the Trust Estate to the REMIC.
(f) The Trustee shall provide to the Internal Revenue Service and to
the person described in Section 860(E)(e)(3) and (6) of the Code the information
described in Treasury Regulation Section 1.860D-1(b)(5)(ii), or any successor
regulation thereto with respect to REMIC. Such information will be provided in
the manner described in Treasury Regulation Section 1.860E-2(a)(5), or any
successor regulation thereto.
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(g) For federal income tax purposes, the Final Scheduled Payment Date
for each Class of the Class A Certificates in the REMIC is hereby set to be the
Payment Date indicated below:
Final Scheduled
Class Payment Date
Class A-1 Certificates August 25, 2010
Class A-2 Certificates February 25, 2011
Class A-3 Certificates February 25, 2011
Class A-4 Certificates February 25, 2011
Class A-5 Certificates March 25, 2013
Class A-6 Certificates November 25, 2019
Class A-7 Certificates July 25, 2026
Class A-8 Certificates July 25, 2026
For federal income tax purposes, the Final Scheduled Payment Date for
the Class S-I Certificates is July 25, 2026.
END OF ARTICLE II
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ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE DEPOSITOR, THE SERVICER AND THE SELLER;
COVENANT OF SELLER 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 Seller, 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 and under the other Operative Documents to which the
Depositor is a party.
(e) No litigation is pending with respect to which the Depositor has
received service of process or, to the best of the Depositor's knowledge,
threatened against the Depositor which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative Documents
to which it is a party or that would materially and adversely affect the
condition (financial or otherwise) or operations of the Depositor or its
properties or might have consequences that would materially and adversely affect
its performance hereunder and under the other Operative Documents to which the
Depositor is a party.
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(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) Neither the Trustee nor the Depositor has any obligation to
register the Trust as an investment company under the Investment Company Act of
1940, as amended.
(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 or federal 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 ofthe 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.
(j) The transactions contemplated by this Agreement are in the ordinary
course of business of the Depositor.
(k) 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.
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.
Upon discovery by any of the Depositor, the Seller, the Servicer, any
Sub-Servicer, the Certificate Insurer, any Owner or the Trustee (each, for
purposes of this paragraph, a party) of a breach of any of the representations
and warranties set forth in this Section 3.01 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.
As promptly as practicable, but in any event, within 60 days of its discovery or
its receipt of notice of breach, the Depositor shall cure such breach in all
material
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respects; provided, however, that if the Depositor can establish to the
reasonable satisfaction of the Certificate Insurer that it is diligently
pursuing remedial action, then the cure period may be extended for an additional
90 days with the written approval of the Certificate Insurer.
Section 3.02 Representations and Warranties of the Servicer.
The Servicer hereby represents, warrants and covenants to the
Depositor, the Trustee, the Certificate Insurer and the Owners that as of the
Startup Day:
(a) The Servicer is a limited partnership duly formed and validly existing 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 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 partnership or corporate, as the case
may be, 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 Servicer and
its performance and compliance with the terms of this Agreement have been duly
authorized by all necessary action on the part of the Servicer and will not
violate the Servicer's Agreement of Limited Partnership or constitute a default
(or an event which, with notice or lapse of time, or both,would constitute a
default) under, or result in the breach of, any material contract, agreement or
other instrument to which the Servicer is a party or by which the Servicer is
bound or violate any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having jurisdiction over the
Servicer or any of its properties.
(c) This Agreement and the Operative Documents to which the Servicer is
a party, assuming due authorization, execution and delivery by the other parties
hereto and thereto, each constitutes a valid, legal and binding obligation of
the Servicer, enforceable against it in accordance with the terms hereof and
thereof, except as the enforcement hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) The Servicer is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which 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.
(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 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.
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(g) The statements contained in the Registration Statement which
describe the Servicer or matters or activities for which the Servicer is
responsible 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 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
FNMA 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 the Depositor, the Seller, the Servicer, any
Sub-Servicer, the Certificate Insurer, any Owner or the Trustee (each, for
purposes of this paragraph, a party) of a breach of any of the representations
and warranties set forth in this Section 3.02 which materially and adversely
affects the interests of the Owners or of the Certificate Insurer, the party
discovering such breach shall give prompt written notice to the other parties.
As promptly as practicable, but in any event, 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 with the written consent of the
Certificate Insurer pursuant to Section 8.20 hereof; provided, however, that if
the Servicer can establish to the reasonable satisfaction of the Certificate
Insurer that it is diligently pursuing remedial action, then the cure period may
be extended for an additional 90 days with the written approval of the
Certificate Insurer.
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Section 3.03 Representations and Warranties of the Seller.
The Seller hereby represents, warrants and covenants to the Depositor,
the Trustee, the Certificate Insurer and the Owners that as of the Startup Day:
(a) The Seller is a limited partnership duly formed and validly
existing under the laws governing its creation and existence and is in good
standing in each jurisdiction in which the nature of its business, or the
properties owned or leased by it make such qualification necessary. The Seller
has all requisite 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 Seller 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 Seller and will not violate the
Seller's Agreement of Limited Partnership 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 Seller is a party or by which the Seller 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 Seller or any of its
properties.
(c) This Agreement and the other Operative Documents to which the
Seller 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 Seller, 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 Seller 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 Seller or its properties or
the consequences of which would materially and adversely affect its performance
hereunder and under the other Operative Documents to which the Seller is a
party.
(e) No litigation is pending with respect to which the Seller has
received service of process or, to the best of the Seller's knowledge,
threatened against the Seller 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 Seller 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
Seller is a party.
(f) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Seller 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 Prospectus Supplement which
describe the Seller or matters or activities for which the Seller is responsible
in accordance with the Operative Documents or which are attributable to the
Seller therein are true and correct in all material respects, and the Prospectus
Settlement does not contain any untrue statement of a material fact with respect
to the Seller required to be stated therein or necessary to make the statements
contained therein with respect to the Seller, in light of the circumstances
under which they were made, not misleading. The Prospectus Supplement does not
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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 Seller that materially adversely
affects or in the future may (so far as the Seller can now reasonably foresee)
materially adversely affect the Seller or the Home Equity Loans or the ownership
interests therein represented by the Certificates that has not been set forth in
the Prospectus Supplement.
(h) Upon the receipt of each Home Equity Loan (including the related
Note) and other items of the Trust Estate by 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 the Seller 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 the Seller 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 Seller 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 Seller and the performance by the Seller 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 the Seller 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 the Seller.
(m) Neither the Trustee nor the Seller has any obligation to register
the Trust as an investment company under the Investment Company Act of 1940, as
amended.
(n) The Seller is not insolvent, nor will it be made insolvent by the
transfer of the Home Equity Loans, nor is the Seller aware of any pending
insolvency.
It is understood and agreed that the representations and warranties set
forth in this Section 3.03 shall survive delivery of the respective Home Equity
Loans to the Trustee.
Upon discovery by any of the Depositor, the Servicer, the Custodian,
any Sub-Servicer, any Owner, the 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 the interests of the
Certificate Insurer, the party discovering such breach shall give prompt written
notice to the other parties. The Seller hereby
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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, the Seller may (or may cause an
affiliate of the Seller to) on or prior to the Monthly Remittance Date next
succeeding such discovery or receipt of notice (i) substitute in lieu of any
Home Equity Loan not in compliance with clause (h) a Qualified Replacement
Mortgage and, if the outstanding principal amount of such Qualified Replacement
Mortgage as of the applicable Replacement Cut-Off Date is less than the Loan
Balance of such Home Equity Loan as of such Replacement Cut-Off Date, deliver an
amount (a "Substitution 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 which the Servicer has theretofore failed to remit with respect to such
Home Equity Loan 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 the
Seller obtains for the Trustee and the Certificate Insurer at the Seller's
expense 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 the REMIC therein or otherwise subject the Trust or
the REMIC therein to tax and would not jeopardize the status of the REMIC as a
REMIC (a "REMIC Opinion") addressed to the Trustee and the Certificate Insurer
and acceptable to the Certificate Insurer and the Trustee. The Seller shall also
deliver an Officer's Certificate to the Trustee and the Certificate Insurer
concurrently with the delivery of a Qualified Replacement Mortgage pursuant to
Sections 3.03, 3.04 and 3.06 stating that such Home Equity Loan meets the
requirements of the definition of a Qualified Replacement Mortgage and that all
other conditions to the substitution thereof have been satisfied. 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
Section 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 Seller to Take Certain Actions with
Respect to the Home Equity Loans in Certain
Situations.
(a) Upon the discovery by the Depositor, the Seller, the Servicer, the
Certificate Insurer, any Sub-Servicer, any Owner, the Custodian or the Trustee
that the representations and warranties set forth in clause (b) below were
untrue in any material respect as of the Startup Day (or in the case of the
Subsequent Home Equity Loans, as of the respective Subsequent Transfer Date)
with the result that the interests of the Owners or of the Certificate Insurer
are materially and adversely affected, the party discovering such breach shall
give prompt written notice to the other parties. Upon the earliest to occur of
the 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, the Seller hereby covenants and warrants that it
shall promptly cure such breach in all material respects or subject to the last
two sentences of Section 3.03 it shall on the second Monthly Remittance Date
next succeeding such discovery, receipt of notice or such time (i) substitute in
lieu of each Home Equity Loan which has given rise to the requirement for action
by the 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; provided, however,
that if the Seller can establish to the reasonable satisfaction of the
Certificate Insurer that it is diligently pursuing remedial action, the period
of time in which the Seller must substitute a Qualified Replacement Mortgage or
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purchase such Home Equity Loan may be extended for an additional 30 days with
the written approval of the Certificate Insurer. It is understood and agreed
that the obligation of the Seller so to substitute or purchase any Home Equity
Loan as to which such a statement set forth below is untrue in any material
respect and has not been remedied shall constitute the sole remedy respecting a
discovery of any such statement which is untrue in any material respect in this
Section 3.04 available to the Owners, the Trustee and the Certificate Insurer.
(b) The Seller hereby represents, warrants and covenants to the
Trustee, the Depositor, the Servicer, the Certificate Insurer and the Owners
that as of the Startup Day (with respect to the Initial Home Equity Loans) and
as of the respective Subsequent Transfer Date (with respect to the Subsequent
Home Equity Loans):
(i) The information with respect to each Initial Home Equity
Loan and Subsequent Home Equity Loan set forth in the related
Schedule of Home Equity Loans is true and correct as of the Cut-Off
Date (or in the case of the Subsequent Home Equity Loans, on the
related Subsequent Transfer Date);
(ii) All the original or certified documentation set forth in
Section 3.05 (including all material documents related thereto) with
respect to each Initial Home Equity Loan has been or will be
delivered to the Trustee on the Startup Day (or in the case of the
Subsequent Home Equity Loans, on the related Subsequent Transfer
Date) or as otherwise provided in Section 3.05;
(iii) Each Home Equity Loan being transferred to the Trust is
a Qualified Mortgage and is a Mortgage;
(iv) Each Property is improved by a single (one-to-four)
family residential dwelling (except for 79 and 8 Initial Home Equity
Loans in Group I and Group II, respectively, in the amount of
$4,452,955.40 and $737,322.34, respectively, that are condominiums,
planned unit developments, townhouses, manufactured housing, mixed
use properties, multifamily residential, or cooperative, provided
that no more than 0.15% of the Properties in Group I and none of the
Properties in Group II are secured by manufactured homes;
(v) As of the Cut-Off Date, no Initial Home Equity Loan has a
Loan-to-Value Ratio in excess of 85%, except for 76 Initial Home
Equity Loans in the amount of $6,389,282.25 that had a Loan-to-Value
Ratio not greater than 100.00%;
(vi) Each Home Equity Loan is being serviced by the Servicer
in accordance with the terms of this Agreement;
(vii) The Note related to each Initial Home Equity Loan in
Group I bears a current Coupon Rate of at least 8.00% per annum and
the Note related to each Initial Home Equity Loan in Group II bears
a current Coupon Rate of at least 6.75%;
(viii) Each Note with respect to the Initial Home Equity Loans
will provide for a schedule of substantially level and equal Monthly
Payments which are sufficient to amortize fully the principal
balance of such Note on or before its maturity date, except for
1,153 Initial Home Equity Loans in Group I in the amount of
$87,840,338.14, representing 53.06% of the aggregate Loan Balance of
the Initial Home Equity Loans in Group I as of the Cut-Off Date
which may provide for a "balloon" payment due at the end of the 15th
year (except for 107
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Initial Home Equity Loans in Group I in the amount of $2,740,734.08 which
provide for "balloon" payments due within 36 months to 120 months);
(ix) As of the Startup Day and any Subsequent Transfer Date,
each Mortgage is a valid and subsisting first or second lien of
record (or is in the process of being recorded) 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 Seller to the Depositor and by the
Depositor to the Trust herein contemplated, the 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 the 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 Cut-Off Date, no Initial Home Equity Loan is 30
days or more Delinquent except that there are 23 Initial Home Equity
Loans in Group I with an outstanding aggregate Loan Balance of
$1,576,663.64 that are 30 or more days Delinquent but not more than
60 days Delinquent;
(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 (as amended by the Riegle Community Development
and Regulatory Improvement Act of 1994) 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 2% of the Original Aggregate Loan
Balance), or (b)
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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-original principal amount 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) The improvements upon each Property are covered by a
valid and existing hazard insurance policy with a carrier generally
acceptable to the Servicer 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;
(xviii) 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 carrier generally acceptable to the Servicer 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;
(xix) 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;
(xx) The Seller has caused and will cause to be performed any
and all acts required to be performed to preserve the rights and
remedies of the Trustee in any Insurance Policies applicable to any
Home Equity Loans delivered by the 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;
(xxi) As of the Startup Day, no more than 0.54% of the
aggregate Loan Balance of the Home Equity Loans will be secured by
Properties located within any single zip code area;
(xxii) 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
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perfect the lien thereof as against creditors of or purchasers from
the Seller (or, subject to Section 3.05 hereof, are in the process
of being recorded);
(xxiii) 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;
(xxiv) 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;
(xxv) 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;
(xxvi) No Home Equity Loan has a shared appreciation feature,
or other contingent interest feature;
(xxvii) 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;
(xxviii) 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;
(xxix) Any advances made after the date of origination of a
Home Equity Loan but prior to the Cut-Off Date (or the relevant
Subsequent 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;
(xxx) 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;
(xxxi) 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;
(xxxii) 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
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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;
(xxxiii) 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;
(xxxiv) 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 other than any applicable Mortgagor redemption rights
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;
(xxxv) 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 Seller has waived any default, breach, violation or event of
acceleration;
(xxxvi) 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;
(xxxvii) The maturity date of each Home Equity Loan is at
least twelve months prior to the maturity date of the related first
home equity loan if such first home equity loan provides for a
balloon payment;
(xxxviii) Each Home Equity Loan was underwritten in accordance
with the credit underwriting guidelines of the Seller as set forth
in the Seller's Policies and Procedures Manual, as in effect on the
date hereof;
(xxxix) Each Home Equity Loan was originated based upon a full
appraisal, which included an interior inspection of the subject
property;
(xl) The Home Equity Loans were not selected for inclusion in
the Trust by the Seller on any basis intended to adversely affect
the Trust;
(xli) No more than 7.40% and 8.45% of the aggregate Loan
Balance of the Home Equity Loans in Group I and Group II,
respectively, are secured by Properties that are non-owner occupied
Properties (i.e., investor-owned and vacation);
(xlii) The Seller has no actual knowledge that there exist any
hazardous substances, hazard wastes or solid wastes, as such terms
are defined in the Comprehensive Environmental
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Response Compensation and Liability Act, the Resource Conservation
and Recovery Act of 1976, or other federal, state or local
environmental legislation on any Property;
(xliii) The Seller was 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;
(xliv) 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 in determining the qualification of the borrower for such Home
Equity Loan; (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 Initial Home Equity
Loans with related Properties subject to ground leases does not
exceed 1% of the Original Aggregate Loan Balance;
(xlv) As of the Startup Day, the Seller has not received a
notice of default of any First Mortgage Loan secured by any Property
which has not been cured by a party other than the Seller;
(xlvi) No Home Equity Loan is subject to a temporary rate
reduction pursuant to a buydown program;
(xlvii) No more than 23.05% of the aggregate Loan Balance of
the Home Equity Loans was originated under the Seller's non-income
verification program;
(xlviii) The Coupon Rate on each Home Equity Loan is
calculated on the basis of a year of 360 days with twelve 30-day
months;
(xlix) Each Home Equity Loan in Group II is directly secured
by a first lien on a single parcel of real estate and was originated
by a savings and loan association, savings bank, commercial bank,
credit union, insurance company or similar institution and examined
by a federal or state authority, or by a mortgagee approved by the
Secretary of Housing and Urban Development; and
(xlx) As of the Startup Day, each Subsequent Home Equity Loan
to be transferred to the Trust during the Funding Period has been
originated or purchased and identified by the Seller.
(c) In the event that any such repurchase pursuant to this Section
results in a prohibited transaction tax as specified in the REMIC Opinion
delivered pursuant to Section 3.03, the Trustee shall immediately notify the
Seller in writing thereof and the 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 the Seller to the Trust pursuant to Section 3.03,
Section 3.04 or
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Section 3.06 hereof, the 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 Seller, the Servicer, the Certificate
Insurer, any Sub-Servicer, the Custodian or the Trustee that the statements set
forth in subsection (b) above are untrue in any material respect 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 the Seller's
knowledge, such limitation shall not relieve the 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 Mortgage) to the Trustee.
(e) The Trustee shall have no duty to conduct any affirmative
investigation other than as specifically set forth in this Agreement as to the
occurrence of any condition requiring the repurchase or substitution of any Home
Equity Loan pursuant to this Article III or the eligibility of any Home Equity
Loan for the purpose of this Agreement.
Section 3.05 Conveyance of the Initial Home Equity Loans and
Qualified Replacement Mortgages.
(a) On the Startup Day the 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 Trustee (or Co-Trustee with respect to Home Equity Loans located in New
Jersey) for the benefit of the Owners and the Certificate Insurer, all of their
respective right, title and interest in and to the Initial Home Equity Loans
(other than payments of principal and interest due on the Home Equity Loans on
or before the Cut-Off Date). The transfer by the Depositor of the Initial 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.
In the event that either such conveyance or a conveyance pursuant to
Section 3.07 and any Subsequent Transfer Agreement is deemed to be a loan, the
parties intend that the Seller shall be deemed to have granted to the Depositor
and the Depositor shall be deemed to have granted to the Trustee a 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 Seller to the Depositor, the Seller has filed, in the appropriate office or
offices in the States of Delaware and Florida, a UCC-1 financing statement
executed by the Seller as debtor, naming the Depositor as secured party and
listing the Initial Home Equity Loans and the other property described above as
collateral and on or prior to the final Subsequent Transfer Date the Seller will
file in such offices a similar UCC-1 financing statement listing the Subsequent
Home Equity Loans so transferred as collateral. The characterization of the
Seller as a debtor and the Depositor as the 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 Seller's entire right, title and interest in the Trust Estate. In
connection with such filing, the Seller agrees that it shall cause to be filed
all necessary continuation
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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
Owners' and the Certificate Insurer's interest in the Trust Estate.
In connection with such sale, transfer, assignment, and conveyance from
the Depositor to the Trustee (or Co-Trustee with respect to Home Equity Loans
located in New Jersey), the Depositor has filed, in the appropriate office or
offices in the States of Delaware and New York a UCC-1 financing statement
executed by the Depositor as debtor, naming the Trustee (or Co- Trustee with
respect to Home Equity Loans located in New Jersey) as secured party and listing
the Initial Home Equity Loans and the other property described above as
collateral and on or prior to the final Subsequent Transfer Date the Depositor
will file in such offices a similar UCC- 1 financing statement listing the
Subsequent Home Equity Loans so transferred as collateral. The characterization
of the Depositor as a debtor and the Trustee as the 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 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 Owners' and the Certificate Insurer's
interest in the Trust Estate.
(b) In connection with the transfer and assignment of the Initial Home
Equity Loans, or on each Subsequent Transfer Date with respect to the Subsequent
Home Equity Loan, the Seller agrees to:
(i) deliver without recourse to the Custodian, on behalf of the
Trustee, on the Startup Day with respect to each Initial Home Equity
Loan or on each Subsequent Transfer Date with respect to the Subsequent
Home Equity Loans, (A) the original Notes endorsed in blank or to the
order of the Trustee, (B) (I) the original title insurance commitment
or a copy thereof certified as a true copy by the closing agent or the
Seller, and when available, the original title insurance policy or a
copy certified by the issuer of the title insurance policy or (II) the
attorney's opinion of title, (C) originals or copies of all intervening
assignments certified as true copies by the closing agent or the
Seller, showing a complete chain of title from origination to the
Trustee, if any, including warehousing assignments, if recorded, (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 Seller from the
applicable recording office) or a copy of the Mortgage certified as a
true copy by the closing agent or the Seller, 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 with
respect to the Initial Home Equity Loans or on each Subsequent Transfer
Date with respect to the Subsequent Home Equity Loans, assignments of
the Mortgages to "Chemical Bank, as Trustee of IMC Home Equity Loan
Trust 1996-2 under the Pooling and Servicing Agreement dated as of
April 1, 1996" (except that with respect to any Home Equity Loan with a
Property located in New Jersey "Chemical Bank New Jersey, N.A., as
Co-Trustee of IMC Home Equity Loan Trust 1996-2 under Pooling and
Servicing Agreement dated as of April 1, 1996") to be submitted for
recording in the appropriate jurisdictions; provided, however, that the
Seller shall not be required to prepare an assignment for any Mortgage
described in subsection (b)(i)(E)(2) above with respect to which the
original recording information has not yet been received from the
recording office; provided, further, that the Seller shall not be
required to record an assignment of a Mortgage if the Seller furnishes
to the Trustee and the Certificate Insurer, on or before the Startup
Day, with respect to the Initial Home Equity Loans or on each
Subsequent Transfer Date with respect to the Subsequent Home
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Equity Loans, at the Seller'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 satisfactory to the Certificate Insurer
and the Rating Agencies);
(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
(other than unrecorded warehouse assignments), to the Custodian, on
behalf of the Trustee, within 15 days of receipt thereof by the Seller
(but in any event, with respect to any Mortgage as to which original
recording information has been made available to the Seller, within one
year after the Startup Day with respect to the Initial Home Equity
Loans or on each Subsequent Transfer Date with respect to the
Subsequent Home Equity Loans); and
(iv) furnish to the Trustee, the Certificate Insurer and the
Rating Agencies at the Seller's expense, an opinion of counsel with
respect to the sale and perfection of the Subsequent Home Equity Loans
delivered to the Trust in form and substance satisfactory to the
Certificate Insurer.
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 Custodian, on behalf of
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 preceding paragraph, the Seller shall deliver to the
Custodian, on behalf of the Trustee a list of all Mortgages for which no
Mortgage assignment has yet been submitted for recording by the Seller, which
list shall state the reason why the 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 Custodian, on behalf of the Trustee shall
make an immediate demand on the Seller to prepare such Mortgage assignments, and
shall inform the Certificate Insurer of the Seller's failure to prepare such
Mortgage assignments. Thereafter, the Custodian, on behalf of the Trustee shall
cooperate in executing any documents prepared by the Certificate Insurer and
submitted to the Custodian, on behalf of the Trustee in connection with this
provision. Following the expiration of the 60-day period referred to in clause
(ii) of the preceding paragraph, the Seller shall promptly prepare a Mortgage
assignment for any Mortgage for which original recording information is
subsequently received by the Seller, and shall promptly deliver a copy of such
Mortgage assignment to the Custodian, on behalf of the Trustee. The Seller
agrees that it will follow its normal servicing procedures and attempt to obtain
the original recording information necessary to complete a Mortgage assignment.
In the event that the 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 with respect to the Initial Home Equity Loans and the relevant
Subsequent Transfer Date with respect to Subsequent Home Equity Loans and has
not provided to the Custodian, on behalf of the Trustee a Mortgage assignment
with evidence of recording thereon relating to the assignment of such Mortgage
to the Trustee, the Custodian, on behalf of the Trustee shall notify the Seller
of the 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 Initial Home Equity Loans and the relevant
Subsequent Transfer Date with respect to Subsequent Home Equity Loans. A copy of
such notice shall be sent by the Custodian, on behalf of the Trustee to the
Certificate Insurer. If no such
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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 (xxii) of Section 3.04(b)
hereof; provided, however, that if as of the end of such 20th calendar month the
Seller 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 Custodian,
on behalf of the Trustee, the 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 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 Custodian, on behalf
of the Trustee shall be retained in the related File.
All recording required pursuant to this Section 3.05 shall be
accomplished at the expense of the Seller.
(c) In the case of Initial Home Equity Loans which have been prepaid in
full on or after the Cut-Off Date and prior to the Startup Day, the Seller, 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 E.
(d) The Seller shall transfer, assign, set over and otherwise convey
without recourse, to the Trustee all right, title and interest of the Seller in
and to any Qualified Replacement Mortgage delivered to the Custodian, on behalf
of the Trustee on behalf of the Trust by the 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 the 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 Seller's order, 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, the Seller agrees to
(i) deliver without recourse to the Custodian, on behalf of 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 Custodian, on behalf of the Trustee within 15 days of
receipt thereof by the 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 same required in Section
3.05(b)(i)(B).
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(g) As to each Home Equity Loan released from the Trust in connection
with the conveyance of a Qualified Replacement Mortgage the Custodian, on behalf
of the Trustee shall deliver on the date of conveyance of such Qualified
Replacement Mortgage and on the order of the Seller (i) the original Note
relating thereto, endorsed without recourse or representation, to the 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 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 and to cause the
Custodian to execute and deliver on the Startup Day an acknowledgment of receipt
of the items delivered by the Seller or the Depositor in the forms attached as
Exhibit F-1 and Exhibit F-2 hereto, and declares through the Custodian that it
will hold such documents and any amendments, replacement or supplements thereto,
as well as any other assets included in the definition of Trust Estate and
delivered to the Custodian, on behalf of 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 cause the Custodian 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 Subsequent Home Equity Loan or Qualified Replacement Mortgage,
within 45 days after the assignment thereof) and to deliver to the Depositor,
the Seller, the Servicer and the Certificate Insurer a certification in the form
attached hereto as Exhibit G (a "Pool Certification") to the effect that, as to
each Home Equity Loan listed in the Schedule of Home Equity Loans (other than
any Home Equity Loan paid in full or any Home Equity Loan specifically
identified in such Pool Certification as not covered by such Pool
Certification), (i) all documents required to be delivered to it pursuant to
Section 3.05(b)(i) of this Agreement are in its possession, (ii) such documents
have been reviewed by it and have not been mutilated, damaged or torn and relate
to such Home Equity Loan and (iii) based on its examination and only as to the
foregoing documents, the information set forth on the Schedule of Home Equity
Loans accurately reflects the information set forth in the File. The Trustee
shall have no responsibility for reviewing any File except as expressly provided
in this subsection 3.06(a). Without limiting the effect of the preceding
sentence, in reviewing any File, the Trustee shall have no responsibility for
determining whether any document is valid and binding, whether the text of any
assignment is in proper form (except to determine if the Trustee is the
assignee), whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction or whether a blanket assignment is
permitted in any applicable jurisdiction, but shall only be required to
determine whether a document has been executed, that it appears to be what it
purports to be, and, where applicable, that it purports to be recorded. The
Trustee shall be under no duty or obligation to inspect, review or examine any
such documents, instruments, certificates or other papers to determine that they
are genuine, enforceable, or appropriate for the represented purpose or that
they are other than what they purport to be on their face, nor shall the Trustee
be under any duty to determine independently whether there are any intervening
assignments or assumption or modification agreements with respect to any Home
Equity Loan.
(b) If the Custodian, on behalf of 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 Custodian, on
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behalf of the Trustee shall promptly so notify the Depositor, the Seller, the
Owners and the Certificate Insurer. In performing any such review, the
Custodian, on behalf of the Trustee may conclusively rely on the Seller as to
the purported genuineness of any such document and any signature thereon. It is
understood that the scope of the review of the items delivered by the Seller
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. The Seller agrees to
use reasonable efforts to remedy a material defect in a document constituting
part of a File of which it is so notified by the Custodian, on behalf of the
Trustee. If, however, within 90 days after such notice to it respecting such
defect the Seller has not remedied the defect and the defect materially and
adversely affects the interest in the related Home Equity Loan of the Owners or
the Certificate Insurer, the Seller will (or will cause an affiliate of the
Seller to) on the next succeeding Monthly Remittance Date (i) substitute in lieu
of such Home Equity Loan a Qualified Replacement Mortgage and deliver the
Substitution Amount to the Servicer for deposit in the Principal and Interest
Account or (ii) purchase such Home Equity Loan at a purchase price equal to the
Loan Purchase Price thereof, which purchase price shall be delivered to the
Servicer for deposit in the Principal and Interest Account.
(c) In addition to the foregoing, the Custodian, on behalf of the
Trustee also agrees to make a review during the 12th month after the Startup Day
indicating the current status of the exceptions previously indicated on the Pool
Certification (the "Final Certification"). After delivery of the Final
Certification, the Custodian, on behalf of the Trustee and the Servicer shall
provide to the Certificate Insurer no less frequently than monthly updated
certifications indicating the then current status of exceptions, until all such
exceptions have been eliminated.
Section 3.07 Conveyance of the Subsequent Home Equity Loans.
(a) Subject to the satisfaction of the conditions set forth in Section
3.05 and paragraph (b) below (based on the Custodian's review of such
conditions) in consideration of the Trustee's delivery on the relevant
Subsequent Transfer Dates to or upon the order of the Seller of all or a portion
of the balance of funds in the Pre-Funding Account, the Seller shall indirectly
(through the Depositor) on any Subsequent Transfer Date sell, transfer, assign,
set over and otherwise convey without recourse, to the Trustee, and the Trustee
shall purchase on behalf of the Trust all of the Seller's right, title and
interest in and to any and all benefits accruing to the Seller from the
Subsequent Home Equity Loans (other than any principal and interest due on or
prior to the relevant Subsequent Cut-Off Date) which the Seller (through the
Depositor) is causing to be delivered to the Custodian, on behalf of the Trustee
herewith (and all substitutions therefor as provided by Section 3.03, 3.04 and
3.06), together with the related Subsequent Home Equity Loan documents and the
Seller's interest in any Property which secured a Subsequent 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 and 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 Subsequent 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). Notwithstanding
anything to the contrary herein, there shall be no more than three Subsequent
Transfer Dates during the Funding Period.
The transfer by the Seller (through the Depositor) of the Subsequent
Home Equity Loans set forth on the Schedule of Home Equity Loans to the Trustee
shall be absolute and shall be intended by the Owners and all parties hereto to
be treated as a sale by the Seller. The amount released from the Pre-
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Funding Account shall be one-hundred percent (100%) of the aggregate principal
balances of the Subsequent Home Equity Loans so transferred. Upon the transfer
by the Seller of the Subsequent Home Equity Loans hereunder, such Subsequent
Home Equity Loans (and all principal and interest due thereon subsequent to the
Subsequent Cut-Off Date) and all other rights and interests with respect to such
Subsequent Home Equity Loans transferred pursuant to a Subsequent Transfer
Agreement shall be deemed for all purposes hereunder to be part of the Trust
Estate.
(b) The obligation of the Trustee to accept the transfer of the
Subsequent Home Equity Loans and the other property and rights related thereto
described in paragraph (a) above is subject to the satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date:
(i) the Seller shall have provided the Trustee and the Certificate
Insurer with an Addition Notice and shall have provided any information
reasonably requested by any of the foregoing with respect to the Subsequent
Home Equity Loans;
(ii) the Seller shall have delivered to the Trustee a duly executed
written Subsequent Transfer Agreement (including an acceptance by the
Trustee) in substantially the form of Exhibit D hereto, which shall
indicate whether such Subsequent Home Equity Loan is to be assigned to
Group I or Group II and which shall include a Schedule of Home Equity
Loans, listing the Subsequent Home Equity Loans and any other exhibits
listed thereon;
(iii) the Seller shall have delivered to the Servicer for deposit in the
Principal and Interest Account all principal and interest due in respect of
such Subsequent Home Equity Loans after the related Subsequent Cut-Off
Date;
(iv) as of each Subsequent Transfer Date, neither the Seller nor the
Depositor was insolvent, nor will either of them be made insolvent by such
transfer, nor is either of them aware of any pending insolvency;
(v) the Funding Period with respect to the related Group shall not have
ended; and
(vi) the Seller and the Depositor each shall have delivered to the
Trustee and the Certificate Insurer an Officer's Certificate confirming the
satisfaction of each condition precedent specified in this paragraph (b)
and in the related Subsequent Transfer Agreement and the Certificate
Insurer shall have consented to such transfer.
(c) The obligation of the Trust to purchase a Subsequent Home Equity
Loan for addition to Group I on any Subsequent Transfer Date is subject to the
following requirements any of which may, at the Seller's request, be waived or
modified by the Certificate Insurer by a written waiver, (a copy of which waiver
shall be delivered to Standard & Poor's and Moody's): (i) such Subsequent Home
Equity Loan will be a fixed-rate Home Equity Loan; (ii) the original term to
maturity of such Subsequent Home Equity Loan may not exceed 30 years; (iii) such
Subsequent Home Equity Loan will have a Coupon Rate of not less than 8.90%; (iv)
such Subsequent Home Equity Loan is not secured by a Property that is a
manufactured home; and (v) following the purchase of such Subsequent Home Equity
Loan by the Trust, the Home Equity Loans (including the Subsequent Home Equity
Loans) in Group I (a) will not be 30 days or more contractually Delinquent as of
the Cut-Off Date or the related Subsequent Cut-Off Date (except that not more
than 2% of the aggregate Loan Balances of the Home Equity Loans in such Group
may be not more than 60 days Delinquent as of the related Subsequent Cut-Off
Date), (b) will have a weighted average Coupon Rate of at least 11.62%; (c) will
have a weighted average combined Loan-to-Value Ratio of not more than 72%, (d)
will not have Balloon Loans representing more than 55% by aggregate Loan
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Balance and no such Subsequent Home Equity Loan which is a Balloon Loan shall
have an original term to maturity of less than 15 years; and (e) will have no
Subsequent Home Equity Loan with a Loan Balance in excess of $525,000.
(d) The obligation of the Trust to purchase a Subsequent Home Equity
Loan for addition to Group II on any Subsequent Transfer Date is subject to the
following requirements any of which may, at the Seller's request, be waived or
modified by the Certificate Insurer by a written waiver, (a copy of which waiver
shall be delivered to Standard & Poor's and Moody's): (i) such Subsequent Home
Equity Loan will be a CMT Loan; (ii) the original term to maturity of such
Subsequent Home Equity Loan may not exceed 30 years; (iii) such Subsequent Home
Equity Loan will have a Coupon Rate of not less than 8.75%; (iv) such Subsequent
Home Equity Loan is not secured by a Property that is a manufactured home; (v)
such Subsequent Home Equity Loan will be in a first lien position; and (vi)
following the purchase of such Subsequent Home Equity Loan by the Trust, the
Home Equity Loans (including the Subsequent Home Equity Loans) in Group II (a)
will not be 30 days or more contractually Delinquent as of the Cut-Off Date or
the related Subsequent Cut-Off Date (except that not more than 2% of the
aggregate Loan Balances of the Home Equity Loans in such Group may be not more
than 60 days Delinquent as of the related Subsequent Cut-Off Date) (b) will have
a weighted average Coupon Rate of at least 10.35%; (c) will have a weighted
average combined Loan-to-Value Ratio of not more than 71%, (d) will not have any
Balloon Loans; and (e) will have no Subsequent Home Equity Loan with a Loan
Balance in excess of $500,000.
(e) In connection with each Subsequent Transfer Date and on the Payment
Dates occurring in May and June 1996, the Trustee shall determine: (i) the
amount and correct dispositions of the Group I and Group II Capitalized Interest
Requirements, Overfunded Interest Amounts, Pre-Funding Account Earnings and the
Pre-Funded Amount and (ii) any other necessary matters in connection with the
administration of the Pre-Funding Account and of the Capitalized Interest
Account. In the event that any amounts are released as a result of an error in
calculation to the Owners or Depositor from the Pre-Funding Account or from the
Capitalized Interest Account, such Owners or the Depositor shall immediately
repay such amounts to the Trustee or the Trustee shall have the right to
withhold such amounts from future distributions on such Certificates.
On the Payment Date in June, 1996, if the Subsequent Home Equity Loans,
in the aggregate, do not comply in all material respects with the conditions
specified in Section 3.07(c) above, or there is a proposed change in the
Certificate Insurer credit risk exposure by the Rating Agencies, the Certificate
Insurer may increase the Specified Subordinated Amount by an amount necessary to
cause such rating, without regard to the Certificate Insurance Policy, to be
maintained at the level assigned on the Startup Day.
Section 3.08 Custodian.
Notwithstanding anything to the contrary in this Agreement, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Files pursuant to Sections
3.05, 3.06, 3.07 and 8.14 and the related Pool Certification and Final
Certification shall be performed by the Custodian pursuant to the Custodial
Agreement. The fees and expenses of the Custodian will be paid by the Seller.
END OF ARTICLE III
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ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.01 Issuance of Certificates.
On the Startup Day, upon the Trustee's receipt from the Seller of an
executed Delivery Order in the form set forth as Exhibit H hereto, the Trustee
shall authenticate and deliver the Certificates on behalf of the Trust.
Section 4.02 Sale of Certificates.
At 11 a.m. New York City time on the Startup Day, at the offices of
Brown & Wood, One World Trade Center, 58th Floor, New York, New York 10048 (or
at such other location acceptable to the Seller), the Seller will sell and
convey the Initial Home Equity Loans and the money, instruments and other
property related thereto to the Depositor and the Depositor will sell and convey
the Initial 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 with an aggregate Percentage Interest in
each Class equal to 100% registered in the name of Cede & Co. or in such other
names as the Underwriters shall direct, against payment of the purchase price
thereof by wire transfer of immediately available funds to the Trustee, (ii) to
the initial purchasers thereof, the Class S-I Certificates with a cumulative
Percentage Interest of 100% and (iii) to the respective registered owners
thereof, Class R Certificates with a Percentage Interest equal to 99.999%,
registered in the name of the initial purchasers thereof and a Class R
Certificate with a Percentage Interest equal to 0.001%, registered in the name
of the Tax Matters Person (all such events shall be referred to herein as the
"Closing").
Upon the Trustee's receipt of the entire net proceeds of the sale of
the Class A Certificates, the Seller shall instruct the Trustee to deposit (a)
an amount equal to the Original Aggregate Pre-Funded Amount in the Pre-Funding
Account and (b) an amount equal to $187,404.25 in the Capitalized Interest
Account contributed out of such proceeds or otherwise. The Trustee shall then
remit the entire balance of such net proceeds in accordance with instructions
delivered by the Seller.
END OF ARTICLE IV
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ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01 Terms.
(a) The Certificates are pass-through securities having the rights
described therein and herein. Notwithstanding references herein or therein with
respect to the Certificates as to "principal" and "interest" thereof, 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 the terms of the related
Note and except for the rights of the Trustee on behalf of the Owners of the
Class A Certificate and the Class S-I Certificates with respect to the
Certificate Insurance Policy). The Class A 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, except as
otherwise provided herein, moneys in the Pre-Funding Account and the Capitalized
Interest Account, from earnings on moneys and the proceeds of property held as a
part of the Trust Estate and, with respect to the Class A Certificates and the
Class S-I Certificates upon the occurrence of certain events, from Insured
Payments. 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, certain related Insured
Payments, pro rata in accordance with such Owner's Percentage Interest and
certain amounts payable from the Capitalized Interest Account and from the
Pre-Funding Account.
(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 cancelled and shall no longer be
Outstanding for any purpose of this Agreement, whether or not such Certificate
is ever returned to the Trustee.
Section 5.02 Forms.
The Class A-1 Certificates, the Class A-2 Certificates, the Class A-3
Certificates, the Class A-4 Certificates, the Class A-5 Certificates, the Class
A-6 Certificates, the Class A-7 Certificates, the Class A-8 Certificates, the
Class S-I Certificates and the Class R Certificates shall be in substantially
the forms set forth in Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, B and C
hereof, respectively.
Section 5.03 Execution, Authentication and Delivery.
Each Certificate shall be executed on behalf of the Trust, by the
manual signature of one of the Trustee's Authorized Officers. In addition, each
Certificate shall be authenticated by the manual signature of one of the
Trustee's Authorized Officers.
Certificates bearing the manual signature of individuals who were at
any time the proper officers of the Trustee shall, upon proper authentication by
the Trustee, bind the Trust, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution and delivery of
such Certificates or did not hold such offices at the date of authentication of
such Certificates.
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The initial Certificates shall be dated as of the Startup Day and
delivered at the Closing to the parties specified in Section 4.02 hereof.
Subsequently issued Certificates will be dated as of the issuance of the
Certificate.
No Certificate shall be valid until executed and authenticated as set
forth above.
Section 5.04 Registration and Transfer of Certificates.
(a) The Trustee shall cause to be kept a register (the "Register") in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and the registration of transfer of
Certificates. The Trustee is hereby initially appointed Registrar for the
purpose of registering Certificates and transfers of Certificates as herein
provided. The Certificate Insurer, the Owners and the Trustee shall have the
right to inspect the Register during the Trustee's normal hours and to obtain
copies thereof, and the Trustee shall have the right to rely upon a certificate
executed on behalf of the Registrar by an Authorized Officer thereof as to the
names and addresses of the Owners of the Certificates and the principal amounts
and numbers of such Certificates.
If a Person other than the Trustee is appointed as Registrar by the
Owners of a majority of the aggregate Percentage Interests represented by the
Class A Certificates then Outstanding with the consent of the Certificate
Insurer or if there are no longer any Class A Certificates then outstanding, by
such majority of the Percentage Interests represented by the Class R
Certificates, such Owners shall give the Trustee, the Certificate Insurer and
the Owners prompt written notice of the appointment of such Registrar and of the
location, and any change in the location, of the Register. In connection with
any such appointment the reasonable fees of the Registrar shall be paid, as
expenses of the Trust, pursuant to Section 7.06 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 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
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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 Class A Certificates be registered so as to
participate in a global book-entry system with the Depository, as set forth
herein. Each Class of Class A Certificates shall, except as otherwise provided
in Subsection (h), be initially issued in the form of a single fully registered
Class A Certificate of such Class. Upon initial issuance, the ownership of each
such Class A 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, no Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7 or Class A-8 Certificates shall be issued in
denominations of less than $1,000 and integral multiples thereof.
The Depositor and the Trustee are hereby authorized to execute and
deliver the Representation Letter with the Depository in the form provided to
the Trustee by the Depositor.
With respect to the Class A Certificates registered in the Register in
the name of Cede & Co., as nominee of the Depository, the Depositor, the
Servicer, the Seller and the Trustee shall have no responsibility or obligation
to Direct or Indirect Participants or beneficial owners for which the Depository
holds Class A Certificates from time to time as a Depository. Without limiting
the immediately preceding sentence, the Depositor, the Servicer, the Seller 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 Class A Certificates,
(ii) the delivery to any Direct or Indirect Participant or any other Person,
other than a registered Owner of a Class A Certificate as shown in the Register,
of any notice with respect to the Class A Certificates or (iii) the payment to
any Direct or Indirect Participant or any other Person, other than a registered
Owner of a Class A Certificate as shown in the Register, of any amount with
respect to any distribution of principal or interest on the Class A
Certificates. No Person other than a registered Owner of a Class A Certificate
as shown in the Register shall receive a certificate evidencing such Class A
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 Class
A 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 Seller advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as nominee and depository with respect to the
Class A Certificates and the Seller or the Trustee is unable to locate a
qualified successor or (ii) the Seller at its sole option elects to terminate
the book-entry system through the Depository, the Class A Certificates shall no
longer be restricted to being registered in the Register in the name of Cede &
Co. (or a successor nominee) as nominee of the Depository. At that time, the
Seller may determine that the Class A Certificates shall be registered in the
name of and deposited with a successor depository operating a global book-entry
system, as may be acceptable to the Seller and at the Seller's expense, or such
depository's agent or designee but, if the Depositor does not select such
alternative global book-entry system, then the Class A Certificates may be
registered in whatever name
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or names registered Owners of Class A Certificates transferring Class A
Certificates shall designate, in accordance with the provisions hereof.
(i) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Class A Certificate is registered in the name of Cede &
Co., as nominee of the Depository, all distributions of principal or interest on
such Class A Certificates and all notices with respect to such Class A
Certificates shall be made and given, respectively, in the manner provided in
the Representation Letter.
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 (provided, that with
respect to an Owner which is an institutional investor, a letter of indemnity
furnished by it shall be sufficient for this purpose), then, in the absence of
notice to the Trustee or the Registrar that such Certificate has been acquired
by a bona fide purchaser, the Seller shall execute and the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and aggregate principal amount, bearing a number not contemporaneously
outstanding.
Upon the issuance of any new Certificate under this Section, the
Registrar or Trustee may require the payment from the transferor or transferee
of the related Certificate 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.
Prior to due presentment for registration of transfer of any
Certificate, the Certificate Insurer, the Trustee and any agent of the Trustee
may treat the Person in whose name any Certificate is registered as the Owner of
such Certificate for the purpose of receiving distributions with respect to such
Certificate and for all other purposes whatsoever, and neither the Certificate
Insurer, the Trustee nor any agent of the Trustee shall be affected by notice to
the contrary.
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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 cancelled by it. No Certificate shall be
authenticated in lieu of or in exchange for any Certificate cancelled as
provided in this Section, except as expressly permitted by this Agreement. All
cancelled Certificates may be held by the Trustee in accordance with its
standard retention policy.
Section 5.08 Limitation on Transfer of Ownership Rights.
(a) No sale or other transfer of record or beneficial ownership of a
Class R Certificate (whether pursuant to a purchase, a transfer resulting from a
default under a secured lending agreement or otherwise) shall be made to a
Disqualified Organization or an agent of a Disqualified Organization. The
transfer, sale or other disposition of a Class R Certificate (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 Class R Certificate. Furthermore, in no event
shall the Trustee accept surrender for transfer, registration of transfer, or
register the transfer, of any Class R Certificate nor authenticate and make
available any new Class R Certificate unless the Trustee has received an
affidavit from the proposed transferee in the form attached hereto as Exhibit I.
Each holder of a Class R Certificate by his acceptance thereof, shall be deemed
for all purposes to have consented to the provisions of this Section 5.08(a).
(b) No other sale or other transfer of record or beneficial ownership
of a Class R Certificate or Class S-I 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) in the case of transfers for which an investment letter in the
form of Exhibit J-1 is provided by the transferee, the Trustee or the Seller
shall require a written opinion of counsel acceptable to and in form and
substance satisfactory to the Seller, the Trustee 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 Seller, the Depositor, the Trustee, the Trust Estate or the
Certificate Insurer; and (ii) in the form of Exhibit J-1 or J-2, which
investment letter shall not be an expense of the Seller, the Depositor, the
Trustee, the Trust Estate or the Certificate Insurer. The Owner of a Class R
Certificate or Class S-I Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee, the Certificate Insurer, the
Depositor and the Seller against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
(c) No transfer of a Class R Certificate or Class S-I Certificate shall
be made unless the Trustee shall have received either: (i) a representation
letter from the transferee of such Class R Certificate or Class S-I Certificate,
acceptable to and in form and substance satisfactory to the Trustee (which may
be combined with the investment letter required by subsection (b) above), 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 or (ii) in the event that any Class R Certificates or Class
S-I Certificate is purchased by a Plan, or by a person or entity acting on
behalf of any Plan or using the assets of any Plan to effect such transfer
(including the assets of any Plan held in an insurance company separate or
general
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account), an Opinion of Counsel, acceptable to and in form and substance
satisfactory to the Trustee, which Opinion of Counsel shall not be at the
expense of either the Trustee or the Trust, to the effect that the purchase or
holding of any Class R Certificates or Class S-I Certificate will not result in
the assets of the Trust being deemed to be "plan assets," will not cause the
Trust to be subject to the fiduciary requirements and prohibited transaction
provisions of ERISA and the Code, and will not subject the Trustee to any
obligation or liability in addition to those expressly undertaken under this
Agreement. 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 of an Opinion of Counsel as described above shall be null and void
and of no effect.
(d) No sale or other transfer of any Class A Certificate may be made to
the Depositor, the Seller, the Servicer or any of their respective Affiliates.
Section 5.09 Assignment of Rights.
An Owner may pledge, encumber, hypothecate or assign all or any part of
its right to receive distributions hereunder, but such pledge, encumbrance,
hypothecation or assignment shall not constitute a transfer of an ownership
interest sufficient to render the transferee an Owner of the Trust without
compliance with the provisions of Section 5.04 and Section 5.08 hereof.
END OF ARTICLE V
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ARTICLE VI
COVENANTS
Section 6.01 Distributions.
On each Payment Date, the Trustee will withdraw amounts from the
Certificate Account 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) in the case of the Class A Certificates
registered in the name of the Depository, by wire transfer to the Depository or
(ii) by check or draft mailed on each Payment Date or (iii) if requested by any
Owner (other than the Depository) of (A) a Class A Certificate having an
original principal balance of not less than $1,000,000 or (B) a Class R
Certificate or Class S-I 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 or from Insured Payments shall be made by and on behalf of the Trustee
or by a Paying Agent, and no amounts so withdrawn from the Certificate Account
for payments of Certificates and no Insured Payment shall be paid over to the
Trustee except as provided in this Section.
(b) If the Seller has appointed a Paying Agent 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 Seller 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 Seller shall require the Paying Agent, including the Trustee on
behalf of the Trust to comply with all requirements of the Code and applicable
state and local law with respect to the withholding from any distributions made
by it to any Owner of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.
(e) Any money held by the Trustee or a Paying Agent in trust for the
payment of any amount due with respect to any Class A Certificate and Class S-I
Certificate remaining unclaimed by the Owner of such Certificate for the period
then specified in the escheat laws of the State of New York after such amount
has become due and payable shall be discharged from such trust and be paid to
the Owners of the Class R Certificates subject to the Certificate Insurer's
right of subrogation; and the Owner of such Class A Certificate or Class S-I
Certificate shall thereafter, as an unsecured general creditor, look only to the
Owners of the Class R Certificates for payment thereof (but only to the extent
of the amounts so paid to the Owners of the Class R Certificates) and all
liability of the Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Trustee or such Paying
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Agent before being required to make any such payment, may at the expense of the
Trust cause to be published once, in the eastern edition of The Wall Street
Journal, notice that such money remains unclaimed and that, after a date
specified therein, which shall be not fewer than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be paid to
the Owners of the Class R Certificates. The Trustee shall, at the direction of
the Seller, also adopt and employ, at the expense of the Seller, 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) Subject to Sections 10.01(e) and 10.01(g), 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 Seller, 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 (with the consent of the Certificate Insurer) 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.
To the extent not covered by the indemnity or other security
contemplated by 10.01(e) and 10.01(g), the Trustee shall be reimbursed for any
costs or expenses associated with this section pursuant to Section
7.03(b)(iv)(F) hereof.
(b) The Trustee shall have the power to enforce, and shall enforce the
obligations and rights of the other parties to this Agreement, and of the
Certificate Insurer or the Owners, by action, suit or proceeding at law or
equity, and shall also have the power to enjoin, by action or suit in equity,
any acts or occurrences which may be unlawful or in violation of the rights of
the Certificate Insurer 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 the Owners of a majority of the Percentage
Interests represented by the Class A Certificates then Outstanding with the
consent of the Certificate Insurer or, if there are no longer any Class A
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 the 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.
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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); provided, that the Trustee
shall remain liable for the performance of any such duties notwithstanding any
such contractual arrangement.
Section 6.05 Negative Covenants.
The Trustee will not:
(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, on behalf of the Trust, any
indebtedness of any Person except pursuant to this Agreement;
(iv) dissolve or liquidate the Trust 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
covenant or obligation with respect to the Trust or to the
Certificates under this Agreement, except as may be expressly
permitted hereby or (B) permit any lien, charge, adverse claim,
security interest, mortgage or other encumbrance to be created on or
extend to or otherwise arise upon or burden the Trust Estate or any
part thereof or any interest therein or the proceeds thereof.
Section 6.06 No Other Powers.
The Trustee will not permit the Trust to engage in any business
activity or transaction other than those activities permitted by Section 2.03
hereof.
Section 6.07 Limitation of Suits.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Agreement or the Certificate Insurance Policy,
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 Seller
and the Trustee of such Owner's intention to institute such
proceeding;
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(2) the Owners of not less than 25% of the Percentage Interests
represented by the Class A Certificates then Outstanding or,
if there are no Class A Certificates then Outstanding, by a
majority 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 or Class S-I Certificates
are Outstanding, 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 Certificates or, if there are no Class A 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 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)-(6) 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 and in such case the Servicer
shall determine what action if any shall be taken).
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 to 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.
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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 shall impair
any such right or remedy or constitute a waiver of such right or remedy. Every
right and remedy given by this Article VI or by law to the Trustee, the
Certificate Insurer or to the Owners may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee, the Certificate Insurer, or by
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 Class A Certificates then Outstanding with the
consent of the Certificate Insurer or, if there are no longer any Class A
Certificates then Outstanding, by such majority of the Percentage Interests
represented by the Class R Certificates then Outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee with respect to the Certificates or exercising any trust or power
conferred on the Trustee with respect to the Certificates or the Trust Estate,
including, but not limited to, those powers set forth in Section 6.03 and
Section 8.20 hereof, provided that:
(1) such direction shall not be in conflict with any rule of law
or with this Agreement;
(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 the Trustee need not
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 by the Seller.
The Seller agrees to indemnify and hold the Trustee, the Depositor, 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 sustain in any way related to the failure of Seller to perform its duties
in compliance with the terms of this Agreement. The Seller shall immediately
notify the Trustee, the Depositor, the Certificate Insurer and each Owner if a
claim is made by a third party that the Servicer has failed to perform its
obligations to service and administer the Home Equity Loans in compliance with
the terms of this Agreement, and the Seller 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 Depositor, the
Servicer, the Seller, the Trustee, the Certificate Insurer and/or Owner in
respect of such claim. The Trustee shall, in accordance with instructions
received from the Seller, reimburse the Seller only from amounts otherwise
distributable on the Class R Certificates for all amounts advanced by it
pursuant to the preceding sentence, except when a final nonappealable
adjudication determines that the claim relates directly to the failure of the
Seller to perform its duties in compliance with the terms of this Agreement. The
provisions of this Section 6.12 shall survive the termination of this Agreement
and the payment of the outstanding Certificates.
END OF ARTICLE VI
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ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 7.01 Collection of Money.
Except as otherwise expressly provided herein, the Trustee shall demand
payment or delivery of all money and other property payable to or receivable by
the Trustee pursuant to this Agreement or the Certificate Insurance Policy,
including (a) 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 and (b) Insured
Payments. 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.
(a) The Seller shall cause to be established on the Startup Day, and
the Trustee shall maintain, at the Corporate Trust Office, the Certificate
Account, a Pre-Funding Account and a Capitalized Interest Account each to be
held by the Trustee in the name of the Trust on behalf of the Owners of the
Certificates and the Certificate Insurer, as their interests may appear. The
Pre-Funding Account and the Capitalized Interest Account are not assets of the
REMIC.
(b) On each Determination Date the Trustee shall determine (subject to
the terms of Section 10.03(j) hereof, based solely on information provided to it
by the Servicer) with respect to the immediately following Payment Date, the
amounts that are expected to be on deposit in the Certificate Account (exclusive
of any deposits from the Pre-Funding Account and the Capitalized Interest
Account expected to be made and inclusive of any investment earnings on Eligible
Investments held in the Certificate Account) as of such date on such Payment
Date with respect to Group I (disregarding the amounts of any Insured Payments)
and equal to the sum of (x) such amounts excluding the amount of any Total
Monthly Excess Cashflow from Group I included in such amounts plus (y) any
amounts of related Total Monthly Excess Cashflow from either Group to be applied
on such Payment Date plus (z) any deposit to the Certificate Account relating to
Group I from the Pre-Funding Account and the Capitalized Interest Account
expected to be made. The amounts described in clause (x) of the preceding
sentence with respect to each Payment Date are the "Group I Available Funds" and
the sum of the amounts described in clauses (x), (y) and (z) of the preceding
sentence with respect to each Payment Date is the "Group I Total Available
Funds."
(c) On each Determination Date the Trustee shall determine (subject to
the terms of Section 10.03(j) hereof, based solely on information provided to it
by the Servicer) with respect to the immediately following Payment Date, the
amounts that are expected to be on deposit in the Certificate Account (exclusive
of any deposits from the Pre-Funding Account and the Capitalized Interest
Account expected to be made and inclusive of any investment earnings on Eligible
Investments held in the Certificate Account) as of such date on such Payment
Date with respect to Group II (disregarding the amounts of any Insured Payments)
and equal to the sum of (x) such amounts excluding the amount of any Total
Monthly Excess Cashflow from Group II included in such amounts plus (y) any
amounts of related Total Monthly Excess Cashflow from either Group to be applied
on such Payment Date plus (z) any deposit to the Certificate Account relating to
Group II from the Pre-Funding Account and the Capitalized Interest Account
expected to be made. The amounts described in clause (x) of the preceding
sentence with respect to each Payment Date are the "Group II Available Funds"
and the sum of the amounts described in clauses (x), (y) and (z) of the
preceding sentence with respect to each Payment Date is the "Group II Total
Available Funds."
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Section 7.03 Flow of Funds.
(a)(i) The Trustee shall deposit in the Certificate Account without
duplication, (i) upon receipt, any Insured Payments, the proceeds of any
liquidation of the assets of the Trust insofar as such assets relate to Group I,
all remittances made to the Trustee pursuant to Section 8.08(d)(ii) with respect
to Group I and the Group I Monthly Remittance Amount remitted by the Servicer,
(ii) on the May and June 1996 Payment Dates, the Group I Capitalized Interest
Requirement to be transferred on such Payment Dates from the Capitalized
Interest Account for the related Payment Date, pursuant to Section 7.04(e)
hereof and (iii) on the May and June 1996 Payment Dates, the portion of the
amount, if any, to be transferred on such Payment Date from the Pre-Funding
Account pursuant to Section 7.04(c) hereof.
(ii) The Trustee shall deposit in the Certificate Account
without duplication, (i) upon receipt, any Insured Payments, the
proceeds of any liquidation of the assets of the Trust insofar as such
assets relate to Group II, all remittances made to the Trustee pursuant
to Section 8.08(d)(ii) with respect to Group II and the Group II
Monthly Remittance Amount remitted by the Servicer, (ii) on the May and
June 1996 Payment Dates, the Group II Capitalized Interest Requirement
to be transferred on such Payment Dates from the Capitalized Interest
Account for the related Payment Date, pursuant to Section 7.04(e)
hereof and (iii) on the May and June 1996 Payment Dates, the portion of
the amount, if any, to be transferred on such Payment Date from the
Pre-Funding Account pursuant to Section 7.04(c) hereof.
(b) Subject to any superseding provisions of clause (c) below during
the continuance of a Certificate Insurer Default, with respect to funds on
deposit in the Certificate Account, on each Payment Date, the Trustee shall make
the following allocations, disbursements and transfers for each Home Equity Loan
Group from amounts deposited therein pursuant to subsection (a) in the following
order of priority, and each such allocation, transfer and disbursement shall be
treated as having occurred only after all preceding allocations, transfers and
disbursements have occurred:
(i) first, on each Payment Date from amounts then on deposit in
the Certificate Account, (A) the Trustee Fee and the Trustee
Reimbursable Expenses shall be paid to the Trustee, and (B)
provided that no Certificate Insurer Default has occurred and
is continuing the Premium Amount for such Payment Date shall
be paid to the Certificate Insurer;
(ii) second, on each Payment Date, the Trustee shall allocate an
amount equal to the sum of (x) the Total Monthly Excess Spread
with respect to such Home Equity Loan Group and Payment Date
plus (y) any Subordination Reduction Amount with respect to
such Home Equity Loan Group and Payment Date (such sum being
the "Total Monthly Excess Cashflow" with respect to such Home
Equity Loan Group and Payment Date) in the following order of
priority:
(A) first, such Total Monthly Excess Cashflow with
respect to each Group shall be allocated to the
payment of the related Principal Distribution Amount
pursuant to clause (b)(iv) below (excluding any
related Subordination Increase Amount) in an amount
equal to the amount, if any, by which (x) the related
Principal Distribution Amount (excluding any related
Subordination Increase Amount) exceeds (y) the
Available Funds with respect to such Home Equity Loan
Group (net of Trustee Fees, the Premium Amount, the
related Servicing Fee, the Trustee Reimbursable
Expenses and related Current Interest) (the amount of
such
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difference being the "Group I Available Funds
Shortfall" with respect to Group I and the "Group II
Available Funds Shortfall" with respect to Group II);
(B) second, any portion of the Total Monthly Excess
Cashflow with respect to such Home Equity Loan Group
remaining after the application described in clause
(A) above shall be allocated against any Available
Funds Shortfall with respect to either of the other
Home Equity Loan Group;
(C) third, any portion of the Total Monthly Excess
Cashflow with respect to such Home Equity Loan Group
remaining after the allocations described in clauses
(A) and (B) above shall be disbursed to the
Certificate Insurer in respect of amounts owed on
account of any Reimbursement Amount with respect to
the related Home Equity Loan Group; and
(D) fourth, any portion of the Total Monthly Excess
Cashflow with respect to such Home Equity Loan Group
remaining after the allocations described in clauses
(A), (B) and (C) above shall be disbursed to the
Certificate Insurer in respect of any Reimbursement
Amount with respect to the other Home Equity Loan
Group;
(iii) third, the amount, if any, of the Total Monthly Excess
Cashflow with respect to a Home Equity Loan Group on a Payment
Date remaining after the allocations and payments described in
clause (ii) above (the "Net Monthly Excess Cashflow" for such
Home Equity Loan Group and Payment Date) is required to be
applied in the following order or priority:
(A) first, such Net Monthly Excess Cashflow shall be used
to reduce to zero, through the payment to the Owners
of the related Class A Certificates of a
Subordination Increase Amount included in the related
Principal Distribution Amount pursuant to clause
(iv)(C) and (D) below, any Subordination Deficiency
Amount with respect to the Home Equity Loan Group as
of such Payment Date;
(B) second, any Net Monthly Excess Cashflow remaining
after the application described in clause (A) above
shall be used to reduce to zero, through the payment
to the Owners of the other Home Equity Loan Group of
a Subordination Increase Amount included in the other
Class A Principal Distribution Amount pursuant to
clause (iv) below, any Subordination Deficiency
Amount, with respect to any other Home Equity Loan
Group as of such Payment Date; and
(C) third, any Net Monthly Excess Cashflow remaining
after the applications described in clauses (A) and
(B) above shall be paid to the Servicer to the extent
of any unreimbursed Delinquency Advances and
unreimbursed Servicing Advances;
(iv) fourth, following the making by the Trustee of all
allocations, transfers and disbursements described above from
amounts (including any related Insured Payment) then on
deposit in the Certificate Account with respect to the related
Home Equity Loan Group, the Trustee shall distribute:
(A) (I) to the Certificate Insurer the amounts described
in clauses (ii)(C) and (D) above and (II) to the
Servicer the amounts described in clause (iii)(C)
above;
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(B) (i) to the Owners of each of Class A Certificates,
the related Current Interest for each Class
(including the proceeds of any Insured Payments made
by the Certificate Insurer) on a pro rata basis based
on each such Class A Certificate's Current Interest
without priority among the Class A Certificates and
(ii) to the Owners of the Class S-I Certificates, the
Class S-I Distribution Amount for such Payment Date
on a pro rata basis without priority among such Class
S-I Certificates;
(C) the Group I Principal Distribution Amount shall be
distributed as follows: (i) first, to the Owners of
the Class A-1 Certificates until the Class A-1
Certificate Principal Balance is reduced to zero;
(ii) second, to the Owners of the Class A-2
Certificates until the Class A-2 Certificate
Principal Balance is reduced to zero; (iii) third, to
the Owners of the Class A-3 Certificates until the
Class A-3 Certificate Principal Balance is reduced to
zero; (iv) fourth, to the Owners of the Class A-4
Certificates until the Class A-4 Certificate
Principal Balance is reduced to zero; (v) fifth, to
the Owners of the Class A-5 Certificates until the
Class A-5 Certificate Principal Balance is reduced to
zero; (vi) sixth, to the Owners of the Class A-6
Certificates until the Class A-6 Certificate
Principal Balance is reduced to zero; and (vii)
seventh, to the Owners of the Class A-7 Certificates
until the Class A-7 Certificate Principal Balance is
reduced to zero;
(D) the Group II Principal Distribution Amount shall be
distributed to the Owners of the Class A-8
Certificates until the Class A-8 Certificate
Principal Balance is reduced to zero;
(E) to the Trustee, for the reimbursement of expenses of
the Trustee not reimbursed pursuant to clause (b)(i)
above which expenses were incurred in connection with
its duties and obligations hereunder; and
(v) fifth, following the making by the Trustee of all allocations,
transfers and disbursements described above, the Trustee shall
distribute from the Certificate Account, to the Owners of the
Class R Certificates, the Residual Net Monthly Excess
Cashflow, if any, for such Payment Date.
(c) On any Payment Date during the continuance of any Certificate
Insurer Default, if there is a Subordination Deficit, then the related Principal
Distribution Amount for such Payment Date shall be distributed pro rata to the
Owners of any related Outstanding Class A Certificates on such Payment Date.
(d) Notwithstanding any of the foregoing provisions, the aggregate
amounts distributed on all Payment Dates to the Owners of the related Class A
Certificates on account of principal pursuant to clause (b)(iv)(C) and (D) shall
not exceed the original Certificate Principal Balance of the related Class A
Certificates.
(e) Upon receipt of Insured Payments from the Certificate Insurer on
behalf of Owners of the Class A Certificates and Class S-I Certificates, the
Trustee shall deposit such Insured Payments in the Certificate Account and shall
distribute such Insured Payments, or the proceeds thereof in accordance with
Section 7.03(b), to the Owners of such Certificates.
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(f) The Trustee or Paying Agent shall (i) receive for each Owner of the
Class A Certificates and Class S-I Certificates any Insured Payment from the
Certificate Insurer and (ii) disburse the same to the Owners of the related
Class A Certificates or Class S-I Certificates as set forth in Section 7.03(b).
Insured Payments disbursed by the Trustee or Paying Agent from proceeds of the
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 or Class S-I Certificates and the Certificate Insurer shall
be entitled to receive the Reimbursement Amount pursuant to Section
7.03(b)(ii)(C) and (D) hereof. Nothing contained in this paragraph shall be
construed so as to impose duties or obligations on the Trustee that are
different from or in addition to those expressly set forth in this Agreement.
The rights of the Owners to receive distributions from the proceeds of
the Trust Estate, and all ownership interests of the Owners in such
distributions, shall be as set forth in this Agreement. In this regard, all
rights of the Owners of the Class R Certificates to receive distributions in
respect of the Class R Certificates, and all ownership interests of the Owners
of the Class R Certificates, in and to such distributions, shall be subject and
subordinate to the preferential rights of the holders of the Class A
Certificates and the Class S-I Certificates to receive distributions thereon and
the ownership interests of such Owners in such distributions, as described
herein. In accordance with the foregoing, the ownership interests of the Owners
of the Class R Certificates in amounts deposited in the Accounts from time to
time shall not vest unless and until such amounts are distributed in respect of
the Class R Certificates in accordance with the terms of this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, and the
Owners of the Class R Certificate shall not be required to refund any amount
properly distributed on the Class R Certificates pursuant to this Section 7.03.
Section 7.04 Pre-Funding Account and Capitalized Interest Account.
(a) On the Startup Day, the Trustee will deposit, on behalf of the
Owners of the Class A Certificates and the Certificate Insurer, in the
Pre-Funding Account the Original Group I Pre- Funded Amount from the proceeds of
the sale of the Fixed Rate Certificates and (ii) the Original Group II
Pre-Funded Amount, from the proceeds of the sale of the Class A-8 Certificates.
(b) On any Subsequent Transfer Date, the Seller shall instruct the
Trustee to withdraw from the Pre-Funding Account an amount equal to 100% of the
aggregate Loan Balances of the Subsequent Home Equity Loans sold to the Trust on
such Subsequent Transfer Date and pay such amount to or upon the order of the
Seller upon satisfaction of the conditions set forth in Sections 3.05 and 3.07
hereof with respect to such transfer; in connection with such instruction, the
Seller shall additionally inform the Trustee whether such Subsequent Home Equity
Loans are being transferred to Group I or Group II. In no event shall the Seller
be permitted to instruct the Trustee to release from the Pre-Funding Account to
the Certificate Account with respect to Subsequent Home Equity Loans to be
transferred to Group I an amount in excess of the Original Group I Pre-Funded
Amount or to release from the Pre-Funding Account to the Certificate Account
with respect to Subsequent Home Equity Loans to be transferred to Group II an
amount in excess of the Original Group II Pre-Funded Amount.
(c) If the Pre-Funded Amount with respect to a Group of Home Equity
Loans has been reduced to $100,000 or less prior to the May 1996 Monthly
Remittance Date, after giving effect to any reductions in the Pre-Funded Amount
on or before the such Monthly Remittance Date, then the Trustee shall withdraw
from the Pre-Funding Account the amount (exclusive of any related Pre-Funding
Account Earnings still on deposit therein) remaining in the Pre-Funding Account
with respect to such Group and deposit such amount to the Certificate Account on
the Monthly Remittance Date;
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(d) On the first two Payment Dates, the Trustee shall transfer from the
Pre-Funding Account to the Capitalized Interest Account (i) with respect to
Group I, the Group I Pre-Funding Account Earnings, if any, applicable to such
Payment Date and (ii) with respect to Group II, the Group II Pre-Funding Account
Earnings, if any, for each Payment Date unless the Pre-Funding Account has been
reduced to $100,000 or less.
(e) On the first two Payment Dates, the Trustee shall transfer from the
Capitalized Interest Account to the Certificate Account (i) with respect to
Group I, the sum of any Group I Capitalized Interest Requirement, if any, and
any Group I Pre-Funding Account Earnings for such Payment Date and (ii) with
respect to Group II, the sum of any Group II Capitalized Interest Requirement,
if any, and any Group II Pre-Funding Account Earnings for such Payment Date
unless the Pre-Funding Account has been reduced to $100,000 or less.
(f) On each Subsequent Transfer Date the Trustee shall distribute the
Overfunded Interest Amount, if any, (calculated by the Trustee on the day prior
to such Subsequent Transfer Date) to the Seller Payment Date in June 1996, the
Trustee shall distribute to the Seller any amounts remaining in the Capitalized
Interest Account after taking into account the transfers on such Payment Date
described in clause (e) above. The Capitalized Interest Account shall be closed
at the end of the Funding Period. All amounts, if any, remaining in the
Capitalized Interest Account on such day shall be transferred to the Seller.
(g) Any amounts transferred to the Certificate Account from the
Pre-Funding Account on the June 1996 Determination Date shall be distributed to
the Owners of the Class A Certificates in accordance with Section 7.03(b)(iv)(C)
and (D).
Section 7.05 Investment of Accounts.
(a) Consistent with any requirements of the Code, all or a portion of
any Account held by the Trustee for the benefit of the Owners shall be invested
and reinvested by the Trustee in the name of the Trust, as directed in writing
by the Seller, in one or more Eligible Investments bearing interest or sold at a
discount. The bank serving as Trustee or any affiliate thereof may be the
obligor on any investment which otherwise qualifies as an Eligible Investment.
No investment in any Account shall mature later than the Business Day
immediately preceding the next Payment Date.
(b) If any amounts are needed for disbursement from any Account held by
the Trustee and sufficient uninvested funds are not available to make such
disbursement, the Trustee shall cause to be sold or otherwise converted to cash
a sufficient amount of the investments in such Account. No investments will be
liquidated prior to maturity unless the proceeds thereof are needed for
disbursement.
(c) Subject to Section 10.01 hereof, the Trustee shall not in any way
be held liable by reason of any insufficiency in any Account held by the Trustee
resulting from any loss on any Eligible Investment included therein (except to
the extent that the bank serving as Trustee is the obligor thereon).
(d) The Trustee shall invest and reinvest funds in the Accounts held by
the Trustee, in accordance with the written instructions delivered to the
Trustee on the Startup Day, but only in one or more Eligible Investments bearing
interest or sold at a discount.
If the Seller shall have failed to give investment directions to the
Trustee then the Trustee shall invest in money market funds described in Section
7.07(k) to be redeemable without penalty no later than the Business Day
immediately preceding the next Payment Date.
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(e) All income or other gain from investments in any Account held by
the Trustee shall be deposited in such Account immediately on receipt, and any
loss resulting from such investments shall be charged to such Account, as
appropriate, subject to the requirement of Section 8.08(b) that the Servicer
contribute funds in an amount equal to such loss in the case of the Principal
and Interest Account. For federal income tax purposes, the earnings on the
Capitalized Interest Account and Pre-Funding Account shall be treated as income
of the Seller.
Section 7.06 Payment of Trust Expenses.
(a) The Trustee shall make demand on the Seller to pay and the Seller
shall pay the amount of the expenses of the Trust referred to in Section 2.05
(other than payments of premiums to the Certificate Insurer) (including
Trustee's fees and expenses not covered by Section 7.03(b)(i) and
7.03(b)(iv)(E)), and the Seller shall promptly pay such expenses directly to the
Persons to whom such amounts are due.
(b) The Seller shall pay directly on the Startup Day 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, FHLMC
senior debt obligations, and FNMA senior debt obligations, but excluding any of
such securities whose terms do not provide for payment of a fixed dollar amount
upon maturity or call for redemption;
(b) Federal Housing Administration debentures;
(c) FHLMC participation certificates which guaranty timely payment of
principal and interest and senior debt obligations;
(d) Consolidated senior debt obligations of any Federal Home Loan
Banks;
(e) FNMA mortgage-backed securities (other than stripped mortgage
securities which are valued greater than par on the portion of unpaid principal)
and senior debt obligations;
(f) 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 A-1 by
Standard & Poor's and P-1 by Moody's;
(g) Deposits of any bank or savings and loan association (the long-term
deposit rating of which is Baa3 or better by Moody's and BBB by Standard &
Poor's) which has combined capital, surplus and undivided profits of at least
$50,000,000 which deposits are insured by the FDIC and held up to the limits
insured by the FDIC;
(h) Repurchase agreements collateralized by securities described in
(a), (c), or (e) 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
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commercial bank, if such broker/dealer or bank has an uninsured, unsecured and
unguaranteed short-term or long-term obligation rated P-1 or Aa2, respectively,
or better by Moody's and A-1+ or AA, respectively, or better by Standard &
Poor's, provided:
a. A master repurchase agreement or specific written
repurchase agreement governs the transaction, and
b. The securities are held free and clear of any lien by the
Trustee or an independent third party acting solely as agent for the
Trustee, and such third party is (a) a Federal Reserve Bank, (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
c. A perfected first security interest under the Uniform
Commercial Code, or book entry procedures prescribed at 31 CFR 306.1 et
seq. or 31 CFR 350.0 et seq., in such securities is created for the
benefit of the Trustee, and
d. The repurchase agreement has a term of thirty days or less
and the Trustee will value the collateral securities no less frequently
than weekly and will liquidate the collateral securities if any
deficiency in the required collateral percentage is not restored within
two business days of such valuation, and
e. The fair market value of the collateral securities in
relation to the amount of the repurchase obligation, including
principal and interest, is equal to at least 106%.
(i) Commercial paper (having original maturities of not more than 270
days) rated in the highest short-term rating categories of Standard & Poor's and
Moody's;
(j) Investments in no load money market funds rated AAAm or AAAm-G by
Standard & Poor's and Aaa by Moody's; and
(k) Any other investment permitted by each of the Rating Agencies and
the Certificate Insurer.
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.
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 Seller 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 and
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upon which the Trustee may rely) the Seller, the Depositor, each Owner and the
Certificate Insurer, of the following information with respect to the next
Payment Date (which notification may be given by facsimile, or by telephone
promptly confirmed in writing):
(1) The aggregate amount on deposit in the Certificate Account
as of the related Determination Date;
(2) The Class A Distribution Amount, with respect to each
Class individually, and all Classes in the aggregate, and the Class S-I
Distribution Amount, on the next Payment Date;
(3) The amount of any Subordination Increase Amount for each
Group;
(4) The amount of any Insured Payment to be made by the
Certificate Insurer on such Payment Date;
(5) The application of the amounts described in clauses (1),
(3) and (4) above in respect of the distribution of the Class A
Distribution Amount on such Payment Date in accordance with Section
7.03 hereof;
(6) The Class A Certificate Principal Balance, the aggregate
amount of the principal of each Class of the Class A Certificates to be
paid on such Payment Date and the remaining Certificate Principal
Balance of each Class of Class A Certificates following any such
payment;
(7) The amount, if any, of any Realized Losses for the related
Remittance Period;
(8) The amount of any Subordination Reduction Amount for each
Group;
(9) For the Payment Dates during the Funding Period, (A) the
Pre-Funded Amount previously used to purchase Subsequent Home Equity
Loans, (B) the Pre-Funded Amount distributed as either a Group I
Principal Distribution Amount or a Group, (C) the Group I and Group II
Pre-Funding Account Earnings transferred to the Capitalized Interest
Account, (D) the amounts transferred from the Capitalized Interest
Account to the Certificate Account and the amount transferred to the
Seller, if any, and (E) the remaining Pre-Funded Amount; and
(10) The amount by which the Group I Servicing Fee is reduced
because of the Group I Underwater Loans.
Section 7.09 Reports by Trustee to Owners and Certificate Insurer.
(a) On the Business Day preceding each Payment Date the Trustee shall
transmit a report in writing to each Owner, the Certificate Insurer, Standard &
Poor's and Moody's:
(i)the amount of the distribution with respect to such Owners'
Certificates (based on a Certificate in the original principal amount
of $1,000);
(ii) the amount of such Owner's distributions allocable to
principal, separately identifying the aggregate amount of any
prepayments in full or Prepayments or other recoveries of principal
included therein, with respect to Group I and Group II, and any
Pre-Funded Amounts distributed as a prepayment (based on a Certificate
in the original principal amount of $1,000) and any related
Subordination Increase Amount;
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(iii) the amount of such Owner's distributions allocable to
interest (based on a Certificate in the original principal amount of
$1,000);
(iv) if the distribution (net of any Insured Payment) to the
Owners of any Class of the Class A Certificates or Class S-I
Certificates on such Payment Date was less than the related Class A
Distribution Amount or Class S-I Distribution Amount, as the case may
be, on such Payment Date, the related Carry Forward Amount and the
allocation thereof to the related Classes of Class A Certificates or
Class S-I Certificates resulting therefrom;
(v) the amount of any Insured Payment included in the
amounts distributed to the Owners of Class A Certificates or Class S-I
Certificates on such Payment Date;
(vi) the principal amount of each Class of Class A
Certificate (based on a Certificate in the original principal amount of
$1,000) which will be Outstanding and the aggregate Loan Balance of
each Group after giving effect to any payment of principal on such
Payment Date;
(vii) the Subordinated Amount and Subordination Deficit for
each Group, if any, remaining after giving effect to all distributions
and transfers on such Payment Date;
(viii) based upon information furnished by the Servicer, 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;
(ix) the total of any Substitution Amounts and any Loan
Purchase Price amounts included in such distribution with respect to
each Group;
(x) the weighted average Coupon Rate of the Home Equity Loans
in each Group;
(xi) such other information as the Certificate Insurer or any
Owner may reasonably request with respect to Delinquent Home Equity
Loans;
(xii) the weighted average gross margin of the Home Equity
Loans in Group II;
(xiii) the largest home equity loan balance outstanding in
each Group; and
(xiv) for Payment Dates during the Funding Period, the
remaining Pre-Funded Amount for each Group.
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), (ix) and (x) shall be based solely
upon information contained in the monthly servicing report provided by the
Servicer to the Trustee pursuant to Section 8.08 hereof.
(b) In addition, on the Business Day preceding each Payment Date the
Trustee will distribute to each Owner, the Certificate Insurer, Standard &
Poor's and Moody's, together with the information described in Subsection (a)
preceding, the following information with respect to each Home Equity Loan Group
and for both Groups in the aggregate 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:
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(i) the number and aggregate principal balances of
Home Equity Loans (a) 30-59 days Delinquent, (b) 60-89 days Delinquent
and (c) 90 or more days Delinquent, as of the close of business on the
last Business Day of the calendar month immediately preceding the
Payment Date, (d) the numbers and aggregate Loan Balances of all Home
Equity Loans as of such Payment Date and (e) the percentage that each
of the amounts represented by clauses (a), (b) and (c) represent as a
percentage of the respective amounts in clause (d);
(ii) the status and the number and dollar amounts of
all Home Equity Loans in foreclosure proceedings as of the close of
business on the last Business Day of the calendar month immediately
preceding such Payment Date, separately stating, for this purpose, all
Home Equity Loans with respect to which foreclosure proceedings were
commenced in the immediately preceding calendar month;
(iii) the number of Mortgagors and the Loan Balances
of (a) the related Mortgages involved in bankruptcy proceedings as of
the close of business on the last Business Day of the calendar month
immediately preceding such Payment Date and (b) Home Equity Loans in
Group I that are "balloon" loans;
(iv) the existence and status of any REO Properties,
as of the close of business of the last Business Day of the month
immediately preceding the Payment Date;
(v) the book value of any REO Property as of the
close of business on the last Business Day of the calendar month
immediately preceding the Payment Date;
(vi) the Cumulative Loss Percentage, the amount of
cumulative Realized Losses, the current period Realized Losses, the
Annual Loss Percentage (Rolling Six Month) and the Annual Loss
Percentage (Rolling Twelve Month); and
(vii) the 60+ Delinquency Percentage and the amount
of 60-Day Delinquent Loans.
Section 7.10 Reports by Trustee.
(a) The Trustee shall report to the Depositor, the Seller, the
Certificate Insurer and each Owner, with respect to the amount on deposit in the
Certificate Account, the amount therein relating to each Group, and the identity
of the investments included therein, as the Depositor, the Seller, any Owner or
the Certificate Insurer may from time to time reasonably request. Without
limiting the generality of the foregoing, the Trustee shall, at the reasonable
request of the Depositor, the Seller, any Owner or the Certificate Insurer
transmit promptly to the Depositor, the Seller, any Owner and the Certificate
Insurer copies of all accountings of receipts in respect of the Home Equity
Loans furnished to it by the Servicer and shall notify the Seller and the
Certificate Insurer 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.
END OF ARTICLE VII
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ARTICLE VIII
SERVICING AND ADMINISTRATION
OF HOME EQUITY LOANS
Section 8.01 Servicer and Sub-Servicers.
Acting directly or through one or more Sub-Servicers as provided in
Section 8.03, the Servicer shall service and administer the Home Equity Loans in
accordance with this Agreement, the terms of the respective Home Equity Loans,
and the servicing standards set forth in the FNMA 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 but without regard to: (i) any relationship that the Servicer, any
Sub- Servicer or any Affiliate of the Servicer or any Sub-Servicer may have with
the related Mortgagor; (ii) the ownership of any Certificate by the Servicer or
any Affiliate of the Servicer; (iii) the Servicer's obligation to make
Delinquency Advances or Servicing Advances; or (iv) the Servicer's or any
Sub-Servicer's right to receive compensation for its services hereunder or with
respect to any particular transaction. 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 FNMA Guide (as such provisions relate to second lien
mortgages); provided, however, that to the extent that such standards, such
obligations or the FNMA Guide are amended by FNMA 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, in accordance with the servicing standards set
forth herein, 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 the rights and powers of the Servicer which have been
delegated to such Sub-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 home equity 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
8.13(a) and Section 8.14(a) shall each constitute a revocable power of attorney
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
held by the Trustee hereunder paid in full or foreclosed (or with respect to
which payment in full has been escrowed). Revocation of the power of attorney
created by the final proviso of the preceding sentence shall take effect upon
(i) the receipt by the Servicer of written notice thereof from the Trustee, (ii)
a Servicer Termination Event or (iii) the termination of the Trust. The Trustee
shall execute
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any documentation furnished to it by the Servicer for recordation by the
Servicer in the appropriate jurisdictions, as shall be necessary to effectuate
the foregoing. Subject to Sections 8.13 and 8.14, the Trustee shall execute a
power of attorney to the Servicer or any Sub-Servicer and furnish them with any
other documents as the Servicer or such Sub-Servicer shall reasonably request to
enable the Servicer and such Sub-Servicer to carry out their respective
servicing and administrative duties hereunder.
Upon the request of the Trustee, the Servicer shall send to the
Trustee, the details concerning the servicing of the Home Equity Loans on
computer generated tape, diskette or other machine readable format.
The Servicer shall give prompt notice to the Trustee of any action, of
which the Servicer has actual knowledge, to (i) assert a claim against the Trust
or (ii) assert jurisdiction over the Trust.
Servicing Advances incurred by the Servicer or any Sub-Servicer in
connection with the servicing of the Home Equity Loans (including any penalties
in connection with the payment of any taxes and assessments or other charges) on
any Property shall be recoverable by the Servicer or such Sub-Servicer to the
extent described in Section 8.09(b) hereof.
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 FNMA 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, with the consent of the Certificate Insurer, enter
into Sub-Servicing Agreements for any servicing and administration of Home
Equity Loans with any institution which is acceptable to the Certificate Insurer
and which, (x) is in compliance with the laws of each state necessary to enable
it to perform its obligations under such Sub-Servicing Agreement, (y) has
experience servicing home equity loans that are similar to the Home Equity Loans
and (z) has equity of not less than $5,000,000 (as determined in accordance with
generally accepted accounting principles). The Servicer shall give notice to the
Trustee, the Owners, the Certificate Insurer and the Rating Agencies of the
appointment of any Sub-Servicer (and shall receive the confirmation of the
Rating Agencies that such Sub-Servicer shall not result in a withdrawal or
downgrading by any Rating Agency of the rating or the shadow rating of the Class
A Certificates). 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 the Trustee (if acting as successor
Servicer) or any other successor Servicer shall have the option to terminate
such agreement without
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payment of any fees if the original Servicer is terminated or resigns. The
Servicer shall deliver to the Trustee and the Certificate Insurer copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof promptly
upon the Servicer's execution and delivery of such instrument.
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 Chemical Bank 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 Depositor, 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 Depositor, 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 Depositor,
the Certificate Insurer and/or Owner in respect of such claim. The Trustee
shall, in accordance with instructions received from the Servicer, reimburse the
Servicer only from amounts otherwise distributable on the Class R Certificates
for all amounts advanced by it pursuant to the preceding sentence, except when a
final nonpayable adjudication determines that the claim relates directly to the
failure of the Servicer to perform its duties in compliance with the Agreement.
The provisions of this Section 8.05(b) shall survive the termination of this
Agreement and the payment of the outstanding Certificates.
Section 8.06 No Contractual Relationship Between Sub-Servicer,
Trustee or the Owners.
Any Sub-Servicing Agreement and any other transactions or services
relating to the Home Equity Loans involving a Sub-Servicer shall be deemed to be
between the Sub-Servicer and the Servicer alone and the Trustee and the Owners
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to any Sub-Servicer except as
set forth in Section 8.07.
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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 part of the Trustee; provided, however, that
the Trustee (if acting as successor Servicer) or any other 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: Chemical Bank, as Trustee
on behalf of the Owners of the IMC Home Equity Loan Trust 1996-2 Home Equity
Loan Pass-Through Certificates. 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 immediately 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 selected
by the Trustee. 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 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 Trust for the benefit
of the Owners. Any investment earnings on funds held in the Principal and
Interest Account shall be for the account of the Servicer and may only be
withdrawn from the Principal and Interest Account by the Servicer immediately
following the remittance of the Monthly Remittance Amount (and the Total Monthly
Excess Spread 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 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 and interest collections on the
Home Equity Loans due after the Cut-Off Date, including any Prepayments and Net
Liquidation Proceeds, other recoveries or amounts related to the
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Home Equity Loans received by the Servicer and any income from REO Properties,
but net of (i) 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, plus (II) accrued and unpaid interest on such
Home Equity Loan (net of the related Servicing Fee) to the date of such
liquidation and (III) any Realized Losses incurred during the related Remittance
Period, (ii) principal and interest due (and Prepayments collected) on the Home
Equity Loans on or prior to the Cut-Off Date or related Subsequent Cut-Off Date,
as the case may be, (iii) reimbursements for Delinquency Advances and (iv)
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
Principal and Interest Account, with respect to each Home Equity Loan Group,
only in the following priority and for the following purposes:
(A) on each Monthly Remittance Date, to pay itself the related
Servicing Fees;
(B) to withdraw investment earnings on amounts on deposit in the
Principal and Interest Account;
(C) to withdraw amounts that have been deposited to the Principal
and Interest Account in error;
(D) to reimburse itself pursuant to Section 8.09(a) for
unrecovered Delinquency Advances and to retain any excess
Compensating Interest received by it pursuant to Section
8.10(a) hereof; 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 each Home Equity Loan Group, containing
(without limitation) the following information: principal and interest collected
in respect of the Home Equity Loans, scheduled principal and interest that was
due on the Home Equity Loans, relevant information with respect to Liquidated
Loans, if any, 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 each Home Equity Loan Group, of
the amounts of any Loan Purchase Prices or Substitution Amounts so remitted
during the related Remittance Period, and of the Loan Balance of the Home Equity
Loan having the largest Loan Balance as of such date.
(iii) The Servicer shall provide to the Trustee the information
described in Section 8.08(d)(ii)(b) and in Section 7.09(b) to enable the Trustee
to perform its reporting requirements under Section 7.09.
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Section 8.09 Delinquency Advances and Servicing Advances.
(a) On each Monthly Remittance Date, the Servicer shall be required to
remit to the Trustee for deposit to the Certificate Account out of the
Servicer's own funds any Delinquent payment of interest with respect to each
Delinquent Home Equity Loan, which payment was not received on or prior to the
related Remittance Date and was not theretofore advanced by the Servicer. Such
amounts of the Servicer's own funds so deposited are "Delinquency Advances".
The Servicer shall be permitted to reimburse itself on any Business Day
for any Delinquency Advances paid from the Servicer's own funds, from
collections on any Home Equity Loans that are not required to be distributed on
the Payment Date occurring during the month in which such reimbursement is made
or as provided in Section 7.03(b)(iii)(C).
Notwithstanding the foregoing, in the event that the Servicer
determines in its reasonable business judgment in accordance with the servicing
standards set out herein that any proposed Delinquency Advance would not be
recoverable, the Servicer shall not be required to make Delinquency Advances
with respect to such Home Equity Loan. To the extent that the Servicer
previously has made Delinquency Advances with respect to a Home Equity Loan that
the Servicer subsequently determines will be nonrecoverable, the Servicer shall
be entitled to reimbursement for such aggregate unreimbursed Delinquency
Advances as provided in the prior paragraph. The Servicer shall give written
notice of such determination as to why such amount would not be recoverable to
the Trustee and the Certificate Insurer; the Trustee shall promptly furnish a
copy of such notice to the Owners of the Class R Certificates; provided,
further, that the Servicer shall be entitled to recover any unreimbursed
Delinquency Advances from Liquidation Proceeds for the related Home Equity Loan.
(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, (i) Preservation Expenses, (ii) the cost of any enforcement or
judicial proceedings, including foreclosures, (iii) the cost of the management
and liquidation of REO Property and (iv) advances required by Section 8.13(a),
except to the extent that such amounts are determined by the Servicer in its
reasonable business judgment not to be recoverable. Such costs will constitute
"Servicing Advances". The Servicer may recover a Servicing Advance (x) from the
Mortgagors to the extent permitted by the Home Equity Loans or, if not
theretofore 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(b)(iii)(C). 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 other Home Equity Loan except as provided in Section
7.03(b)(iii)(C).
Section 8.10 Compensating Interest; Repurchase of Home Equity Loans.
(a) If a prepayment in full of a Home Equity Loan or a Prepayment of at
least six times a Mortgagor's Monthly Payment occurs during any calendar month,
any difference between (x) the interest collected from the Mortgagor in
connection with such payoff, and (y) the full month's interest at the Coupon
Rate that would be due on the related Due Date for such Home Equity Loan
("Compensating Interest") (but not in excess of the aggregate Servicing Fee for
the related Remittance Period) shall be deposited by the Servicer to the
Principal and Interest Account (or if such difference is an excess, the Servicer
shall retain such excess) on the next succeeding Monthly Remittance Date and
shall be included
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in the Monthly Remittance Amount to be made available to the Trustee on such
Monthly Remittance Date.
(b) Subject to the clause (c) below, the Servicer has the right and the
option, but not the obligation, to purchase for its own account any Home Equity
Loan which becomes Delinquent, in whole or in part, as to at least three
consecutive monthly installments or any Home Equity Loan as to which enforcement
proceedings have been brought by the Servicer pursuant to Section 8.13;
provided, however, that the Servicer may not purchase any such Home Equity Loan
unless the Servicer has delivered to the Trustee at the Servicer's expense, an
opinion of counsel acceptable to the Certificate Insurer and the Trustee to the
effect that such a purchase would not constitute a Prohibited Transaction for
the Trust or otherwise subject the Trust to tax and would not jeopardize the
status of the Trust Estate (other than the Pre-Funding Account and the
Capitalized Interest Account) as a REMIC. Any such Home Equity Loan so purchased
shall be purchased by the Servicer on a Monthly Remittance Date at a purchase
price equal to the Loan Purchase Price thereof, which purchase price shall be
deposited in the Principal and Interest Account.
(c) If a Home Equity Loan to be repurchased by the Servicer pursuant to
clause (b) above, is the greatest number of days Delinquent of all then
Delinquent Home Equity Loans, the Servicer may repurchase such Home Equity Loans
without having first notified the Certificate Insurer of such repurchase. In all
other cases, the Servicer must notify the Certificate Insurer, in writing, of
its intent to repurchase a Home Equity Loan and the Servicer may not repurchase
such Home Equity Loan without the written consent of the Certificate Insurer;
provided, that the Certificate Insurer shall be deemed to have consented to such
repurchase unless it notifies the Servicer, in writing, of its objection to such
repurchase within 5 days after its receipt of the notice of proposed repurchase.
(d) 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 carrier generally acceptable to the
Servicer 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 Moody's and Standard & Poor's.
(b) If the Home Equity Loan at the time of origination (or if required
by federal law, at any time thereafter) 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 then current guidelines of the Federal Insurance Administration with a
carrier generally acceptable to the Servicer 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
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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 advance 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,
provided at the expense of the Servicer, to the foregoing effect shall
conclusively establish the reasonableness of such belief. In such event, the
Servicer shall enter into an assumption and modification agreement with the
person to whom such property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Note and, unless prohibited by
applicable law or the Mortgage Documents, the Mortgagor remains liable thereon.
If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as Mortgagor and becomes liable under the Note; provided,
however, that to the extent any such substitution of liability agreement would
be delivered by the Servicer outside of its usual procedures for home equity
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 material
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, no
material term of the Home Equity Loan (including, without limitation, the
required monthly payment on the related Home Equity Loan, the stated maturity,
the outstanding principal amount or the Coupon Rate) shall 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;
Workout of Home Equity Loans.
(a) The Servicer shall foreclose upon or otherwise comparably effect
the ownership in the name of the Trustee 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
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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 FNMA Guide, including, but not limited to,
advancing funds for the payment of taxes, amounts due with respect to Senior
Liens, and insurance premiums. Any amounts so advanced shall constitute
"Servicing Advances" within the meaning of Section 8.09(b) hereof. The Servicer
shall sell any REO Property within 23 months of its acquisition by the Trust, at
such price as the Servicer deems necessary to comply with this covenant unless
the Servicer obtains for the Certificate Insurer and the Trustee, an opinion of
counsel (the expense of which opinion shall be a Servicing Advance) experienced
in federal income tax matters acceptable to the Certificate Insurer and the
Trustee, addressed to the Certificate Insurer, the Trustee and the Servicer, to
the effect that the holding by the Trust of such REO Property for any greater
period will not result in the imposition of taxes on "Prohibited Transactions"
of the Trust or the REMIC therein as defined in Section 860F of the Code or
cause the 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 the REMIC therein 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 or to be within one mile of
the site of such wastes or substances, without the prior written consent of the
Certificate Insurer.
(b) The Servicer shall determine, with respect to each defaulted Home
Equity Loan and in accordance with the procedures set forth in the FNMA 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".
(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 Class A-7 Certificates. 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.
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(d) The Servicer shall provide written notice to the Trustee and the
Certificate Insurer prior to the execution of any modification, waiver or
amendment of any provision of any Home Equity Loan; provided that if the
Certificate Insurer does not object in writing to the modification, waiver or
amendment specified in such notice within 5 Business Days after its receipt
thereof, the Servicer may effectuate such modification, waiver or amendment and
shall deliver to the Custodian, on behalf of the Trustee for deposit in the
related File, an original counterpart of the 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
Custodian, on behalf of the Trustee the FNMA "Request for Release of Documents"
(FNMA Form 2009). Upon receipt of such Request for Release of Documents, the
Custodian, on behalf of 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 or to the Trustee. In lieu of executing any such satisfaction
or assignment, as the case may be, the Servicer may prepare and submit to the
Custodian, on behalf of 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 Custodian, on behalf of 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) The Servicer shall have the right (upon receiving the consent of
the Certificate Insurer) 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 and debt-to-
income ratio after any release does not exceed the Loan-to-Value Ratio and
debt-to-income ratio of such Note on the Cut-Off Date and any increase in the
Loan-to-Value Ratio shall not exceed 5% 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.
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Section 8.15 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the related 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, unless a successor Servicer is
appointed pursuant to Section 8.20 hereof, in which case the successor Servicer
shall be entitled to such fees as are agreed upon by the Trustee, the successor
Servicer and the majority of the Percentage Interests of the Class R
Certificates.
The right to receive the Servicing Fee may not be transferred in whole
or in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement.
Section 8.16 Annual Statement as to Compliance.
The Servicer, at its own expense, will deliver to the Trustee, the
Certificate Insurer, the Depositor, and the Rating Agencies, on or before April
30 of each year, commencing in 1997, 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 April 30 of each year, commencing in 1997, the Servicer,
at its own expense (or if the Trustee is then acting as Servicer, at the expense
of the Seller, which in no event shall exceed $1,000 per annum), shall cause to
be delivered to the Trustee, the Certificate Insurer, the Depositor, and the
Rating Agencies a letter or letters of a firm of independent, nationally
recognized certified public accountants reasonably acceptable to the Certificate
Insurer stating that such firm has examined the Servicer's overall servicing
operations in accordance with the requirements of the Uniform Single Audit
Procedure 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
Office of Thrift Supervision (the "OTS"), the FDIC and the supervisory agents
and examiners of each of the FDIC and the OTS (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.
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Section 8.19 Assignment of Agreement.
Other than with respect to entering into Sub-Servicing Agreements
pursuant to Section 8.03 hereof, 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 such
consent shall not be unreasonably withheld; provided, however, that any assignee
must meet the eligibility requirements set forth in Section 8.20(g) hereof for a
successor servicer.
Section 8.20 Removal of Servicer; Retention of Servicer;
Resignation of Servicer.
(a) The Certificate Insurer or the Trustee (or, except in the case of
item (vi) below, the Owners, with the consent of the Certificate Insurer
pursuant to Section 6.11 hereof) may remove the Servicer upon the occurrence of
any of the following events (each a "Servicer Termination Event"):
(i) The Servicer shall (I) apply for or consent to
the appointment of a receiver, trustee, liquidator or custodian or
similar entity with respect to itself or its property, (II) admit in
writing its inability to pay its debts generally as they become due,
(III) make a general assignment for the benefit of creditors, (IV) be
adjudicated a bankrupt or insolvent, (V) commence a voluntary case
under the federal bankruptcy laws of the United States of America or
file a voluntary petition or answer seeking reorganization, an
arrangement with creditors or an order for relief or seeking to take
advantage of any insolvency law or file an answer admitting the
material allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding or (VI) take corporate action
for the purpose of effecting any of the foregoing; or
(ii) If without the application, approval or consent
of the Servicer, a proceeding shall be instituted in any court of
competent jurisdiction, under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking in respect of
the Servicer an order for relief or an adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition or
arrangement with creditors, a readjustment of debts, the appointment of
a trustee, receiver, liquidator or custodian or similar entity with
respect to the Servicer or of all or any substantial part of its
assets, or other like relief in respect thereof under any bankruptcy or
insolvency law, and, if such proceeding is being contested by 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 payment required of the Servicer under this
Agreement) 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
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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 or
an Affiliate of the Servicer is the surviving entity of such
combination or (2) the surviving entity (A) is servicing at least
$300,000,000 of home equity loans that are similar to the Home Equity
Loans and (B) has equity of not less than $10,000,000 (as determined in
accordance with generally acceptable account principles); or
(vi) The failure of the Servicer (except the Trustee
in its capacity as successor Servicer) to satisfy the Servicer
Termination Test.
(b) Upon the occurrence of a Servicer Termination Event, the Servicer
shall act as servicer under this Agreement, subject to the right of removal set
forth in subsection (a) hereof, for an initial period commencing on the date on
which such Servicer Termination Event occurred and ending on the last day of the
calendar quarter in which such Servicer Termination Event occurred, which period
shall be extended for a succeeding quarterly period on June 30, September 30,
December 31, and March 31 of each year as provided below (each such quarterly
period for which the Servicer shall be designated to act as servicer hereunder,
a "Term of Service"); provided that nothing in this Section 8.20(b) shall
prohibit the Certificate Insurer or the Trustee from removing the Servicer
pursuant to Section 8.20(a). Notwithstanding the foregoing, the Certificate
Insurer may, in its sole discretion, extend the period for which the Servicer is
to act as such for a period in excess of one quarter (provided such extension
shall be an additional one or more quarters), but any such extension shall be
revocable at any time by the Certificate Insurer upon written notice delivered
to the Trustee and the Servicer at least fifteen days prior to the expiration of
the related quarterly period.
(c) 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.
(d) 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
acceptable to the Trustee at the expense of the Servicer to such effect which
shall be delivered to the Trustee and the Certificate Insurer.
(e) 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.
(f) 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.
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(g) 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.
(h) Upon removal or resignation of the Servicer, the Trustee may (A)
solicit bids for a successor servicer as described below or (B) shall appoint
the Backup Servicer as Servicer. If the Trustee elects to solicit bids for a
successor Servicer, the Trustee agrees to act as Backup Servicer during the
solicitation process. The Trustee shall, if it is unable to obtain a qualifying
bid and is prevented by law from acting as Servicer, appoint, or petition a
court of competent jurisdiction to appoint, any housing and home finance
institution, bank or mortgage servicing institution which has been designated as
an approved seller-servicer by FNMA or FHLMC for first and second home equity
loans and having equity of not less than $5,000,000 (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 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 (other than the Trustee in
its capacity as successor Servicer) so appointed shall be the amount agreed to
between the successor Servicer, the Certificate Insurer and the majority of the
Percentage Interests of the Class R Certificates, (up to a maximum of 0.50% per
annum on each Home Equity Loan) 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 becomes the
successor Servicer it shall receive as its compensation the same compensation
paid to the Servicer immediately prior to the Servicer's removal or resignation;
provided, further, however, that if the Trustee acts as successor Servicer then
the Seller 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 amount payable in excess
of twenty-five dollars ($25.00) per Home Equity Loan, if any, shall be payable
to the successor Servicer and reimbursable pursuant to Section 7.03(b)(iv)(E)
hereof. The Trustee shall be obligated to serve as successor Servicer whether or
not the fee described in this section is paid by the Seller, but shall in any
event be entitled to receive, and to enforce payment of, such fee from the
Seller.
(i) In the event the Trustee elects to solicit 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 servicing compensation in accordance
with clause (g) above, 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 to the 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 Servicer's successor.
(j) 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
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also transfer to the Trustee or such successor Servicer, as applicable, all
amounts which then have been or should have been deposited in the Principal and
Interest Account by the Servicer or which are thereafter received with respect
to the Home Equity Loans. Neither the Trustee nor any other successor Servicer
shall be held liable by reason of any failure to make, or any delay in making,
any distribution hereunder or any portion thereof caused by (i) the failure of
the Servicer to deliver, or any delay in delivering, cash, documents or records
to it, or (ii) restrictions imposed by any regulatory authority having
jurisdiction over the Servicer. If the Servicer resigns or is replaced
hereunder, the Seller agrees to reimburse the Trust, the Owners and the
Certificate Insurer 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. The amount payable in excess of
twenty-five dollars ($25.00) per Home Equity Loan, if any, shall be payable to
the successor Servicer and reimbursable pursuant to Section 7.03(b)(iv)(E)
hereof.
(k) The Trustee or any other successor Servicer, upon assuming the
duties of Servicer hereunder, shall immediately (i) record all assignments of
Home Equity Loans not previously recorded in the name of the Trustee pursuant to
Section 3.05(b)(ii) as a result of an opinion of counsel and (ii) make all
Delinquency Advances and Compensating Interest payments 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 (j)) if, in the Trustee's reasonable good faith judgment, such
Delinquency Advances will ultimately be recoverable from the Home Equity Loans.
(l) The Servicer which is being removed or is resigning shall give
notice to the Mortgagors, to Moody's and to Standard & Poor's of the transfer of
the servicing to the successor.
(m) The Trustee shall give notice to the Certificate Insurer, the
Owners, the Trustee, the Seller, Moody's and Standard & Poor's of the occurrence
of any event described in paragraphs (a) above of which the Trustee is aware.
Section 8.21 Inspections by Certificate Insurer; Errors and
Omissions Insurance.
(a) At any reasonable time and from time to time upon reasonable
notice, the Trustee, the Certificate Insurer, any Owner of a Class R
Certificate, or any agents thereof may inspect the Servicer's servicing
operations and discuss the servicing operations of the Servicer during the
Servicer's normal business hours with any of its officers or directors;
provided, however, that the costs and expenses incurred by the Servicer or its
agents or representatives in connection with any such examinations or
discussions shall be paid by the Servicer.
(b) The Servicer (including the Trustee if it shall become the Servicer
hereunder) 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 FNMA Guide or
any successor provision thereof; provided, however, that in any 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.
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Section 8.22 Additional Servicing Responsibilities for Second
Mortgage Loans.
The Servicer must notify any superior lienholder in writing of the
existence of the Second Mortgage Loan and request notification of any action (as
described below) to be taken against the Mortgagor or the Mortgaged Property by
the superior lienholder.
If the Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations under a First Mortgage
Loan, or has declared or intends to declare a default under the mortgage or the
promissory note secured thereby, or has filed or intends to file an election to
have the Mortgaged Property sold or foreclosed, the Servicer shall take, on
behalf of the Trust, whatever actions are necessary to protect the interests of
the Owners and the Certificate Insurer, and/or to preserve the security of the
related Home Equity Loan, subject to the application of the REMIC Provisions.
The Servicer shall advance the necessary funds to cure the default or reinstate
the lien securing a First Mortgage Loan, if such advance is in the best
interests of the Certificate Insurer and the Owners; provided, however, that no
such additional advance need be made if such advance would be nonrecoverable.
The Servicer shall thereafter take such action as is necessary to recover the
amount so advanced. Any expenses incurred by the Servicer pursuant to this
Section 8.22 shall be Servicing Advances.
END OF ARTICLE VIII
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ARTICLE IX
TERMINATION OF TRUST
Section 9.01 Termination of Trust.
The Trust created hereunder and all obligations created by this
Agreement will terminate upon the payment to the Owners of all Certificates 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 later to occur of (a) the final payment or other
liquidation (or any advance made with respect thereto) of the last Home Equity
Loan in the Trust Estate, (b) the disposition of all property acquired in
respect of any Home Equity Loan remaining in the Trust Estate and (c) at any
time when a Qualified Liquidation of both Home Equity Loan Groups within the
Trust is effected as described in Section 9.02. To effect a termination of this
Agreement pursuant to clause (c) above, the Owners of all Certificates then
Outstanding shall provide to the Trustee, at their expense, 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 Servicer either shall sell the Home Equity Loans
and the Trustee shall distribute the proceeds of the liquidation of the Trust
Estate, or the Servicer shall distribute equitably in kind all of the assets of
the Trust Estate to the remaining Owners of the Certificates to the effect that
each such liquidation constitutes 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 United
Kingdom, living on the date hereof. The Trustee shall give written notice of
termination of the Agreement to each Owner in the manner set forth in Section
11.05.
Section 9.02 Termination Upon Option of Owners of Class R
Certificates.
(a) On any Monthly Remittance Date after the Clean-Up Call Date, the
Owners of a majority of the Percentage Interests represented by the Class R
Certificates then outstanding may determine to purchase, in whole only, 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 such
Owners of the Class R Certificates, or (ii) in the absence of such an agreement,
at a price equal to (x) in the case of Home Equity Loans 100% of the aggregate
Loan Balances of the related Home Equity Loans and (y) in the case of REO
Properties, the appraised value of such properties (such appraisal to be
conducted by an appraiser mutually agreed upon by the Servicer and the Trustee)
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 Adjusted Pass-Through Rate, plus all
accrued and unpaid Servicing Fees plus the aggregate amount of any unreimbursed
Delinquency Advances and Servicing Advances and Delinquency Advances which the
Servicer has theretofore failed to remit; provided, that in any case such price
shall not be less than the then outstanding Class A Certificate Principal
Balance. In connection with such purchase, the Servicer shall remit to the
Trustee all amounts then on deposit in the Principal and Interest Account for
deposit to the Certificate Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.
(b) In the event that the Owners of the Class R Certificates purchase
all Home Equity Loans and each REO Property remaining in the Trust Estate
pursuant to Section 9.02(a), the Trust Estate shall be terminated in accordance
with the following additional requirements:
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(i) The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to the Trust Estate's final
Tax Return pursuant to Treasury regulation Section 1.860F-1 and shall
satisfy all requirements of a qualified liquidation under Section 860F
of the Code and any regulations thereunder,
(ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Trustee
shall sell all of the assets of the Trust Estate to the Owner for cash;
and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the owners of the Class R Certificates all
cash on hand in the Trust Estate (other than cash retained to meet
claims), and the Trust Estate shall terminate at that time.
(c) By their acceptance of the Certificates, the Owners thereof hereby
agree to authorize the Trustee to specify the first day in the 90-day
liquidation period in a statement attached to the Trust Estate's final Tax
Return, which shall be binding upon all successor Owners.
(d) In connection with any such purchase, such Owners of the Class R
Certificates shall provide to the Trustee and the Certificate Insurer an opinion
of counsel at the expense of such Owners experienced in federal income tax
matters acceptable to the Certificate Insurer and the Trustee to the effect that
such purchase and liquidation constitutes a Qualified Liquidation of the REMIC.
(e) Promptly following any purchase described in this Section 9.02, the
Trustee will release the Files to the Owners of such Class R Certificates or the
Certificate Insurer, 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.
(a) Following a final determination by the Internal Revenue Service or
by a court of competent jurisdiction, in either case from which no appeal is
taken within the permitted time for such appeal, or if any appeal is taken,
following a final determination of such appeal from which no further appeal can
be taken, to the effect that the REMIC does not and will no longer qualify as a
REMIC pursuant to Section 860D of the Code (the "Final Determination"), at any
time on or after the date which is 30 calendar days following such Final
Determination (i) the Certificate Insurer or the Owners of a majority in
Percentage Interests represented by the Class A Certificates then Outstanding
with the consent of the Certificate Insurer 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 in respect of any Home
Equity Loan then remaining in 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.
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Upon receipt of such direction from the Certificate Insurer, the
Trustee shall notify the Owners of the Class R Certificates of such election to
liquidate or such determination to purchase, as the case may be (the
"Termination Notice"). The Owners of a majority of the Percentage Interest of
the Class R Certificates then Outstanding may, within 60 days from the date of
receipt of the Termination Notice (the "Purchase Option Period"), at their
option, purchase from 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 in respect of any Home Equity Loan 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 Adjusted Pass-Through Rate, (b) the aggregate amount of
any unreimbursed Delinquency Advances and Servicing Advances and (c) any
Delinquency Advances which the Servicer has theretofore failed to remit. If,
during the Purchase Option Period, the Owners of the Class R Certificates have
not exercised the option described in the immediately preceding paragraph, then
upon the expiration of the Purchase Option Period (i) 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 Servicer 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) preceding 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 in
respect of any Home Equity Loan 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.
(b) Following a Final Determination, the Owners of a majority of the
Percentage Interest of the Class R 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
and selected by the Owners of the Class R 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 fewer than all) Home Equity Loans
and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure, or otherwise in respect of any Home Equity Loan 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 Adjusted 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 Interest of the Class R
Certificates notice that such opinion is not satisfactory within thirty days
after receipt of such opinion.
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Section 9.04 Disposition of Proceeds.
The Trustee shall, upon receipt thereof, deposit the proceeds of any
liquidation of the Trust Estate pursuant to this Article IX to the Certificate
Account; provided, however, that any amounts representing unreimbursed
Delinquency Advances and Servicing Advances theretofore funded by the Servicer
from the Servicer's own funds shall be paid by the Trustee to the Servicer from
the proceeds of the Trust Estate.
END OF ARTICLE IX
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ARTICLE X
THE TRUSTEE
Section 10.01 Certain Duties and Responsibilities.
(a) The Trustee (i) (A) undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Trustee and (B) the
banking institution that is the Trustee shall serve as the Trustee at all times
under this Agreement, and (ii) in the absence of bad faith on its part, may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions or any other
resolutions, statements, reports, documents, orders or other instruments
furnished pursuant to and conforming to the requirements of this Agreement; but
in the case of any such certificates or opinions or any other resolutions,
statements, reports, documents, orders or other instruments 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; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Servicer, the Certificate Insurer, the Seller or the Depositor hereunder. If any
such instrument is found not to conform in any material respect to the
requirements of this Agreement, the Trustee shall notify the Owners of the
Certificates of such instrument in the event that the Trustee, after so
requesting, does not receive a satisfactorily corrected instrument.
(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;
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(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;
(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
of 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;
(iv) 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. In the absence of receipt of such notice, the
Trustee may conclusively assume that there is no default; and
(v) Subject to the other provisions of this Agreement and without
limiting the generality of this Section 10.01, the Trustee
shall have no duty (A) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement
evidencing a security interest, or to see to the maintenance
of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (B) to
see to any insurance or (C) to see to the payment or
discharge of any tax, assessment, or other governmental
charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust
Estate from funds available in the Certificate Account.
(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.
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Section 10.02 Removal of Trustee for Cause.
(a) The Trustee may be removed pursuant to paragraph (b) hereof upon
the occurrence of any of the following events (whatever the reason for such
event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the Trustee shall fail to distribute to the Owners
entitled hereto on any Payment Date any amounts available for
distribution that it has received in accordance with the terms hereof;
(provided, however, that any such failure which is due to circumstances
beyond the control of the Trustee shall not be a cause for removal
hereunder); or
(2) the Trustee shall fail in the performance of, or breach,
any covenant or agreement of the Trustee in this Agreement, or if any
representation or warranty of the Trustee made in this Agreement or in
any certificate or other writing delivered pursuant hereto or in
connection herewith shall prove to be incorrect in any material respect
as of the time when the same shall have been made, and such failure or
breach shall continue or not be cured for a period of 30 days after
there shall have been given, by registered or certified mail, to the
Trustee by the Seller, the Certificate Insurer, or by the Owners of at
least 25% of the aggregate Percentage Interests in the Trust Estate
represented by the Class A Certificates then Outstanding, or, if there
are no Class A 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
(3) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Trustee, and such decree or order shall have remained in
force undischarged or unstayed for a period of 75 days; or
(4) a conservator or receiver or liquidator or sequestrator
or custodian of the property of the Trustee is appointed in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to the Trustee or relating to all
or substantially all of its property; or
(5) the Trustee shall become insolvent (however insolvency is
evidenced), generally fail to pay its debts as they come due, file or
consent to the filing of a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, voluntarily suspend payment of its
obligations, or take corporate action for the purpose of any of the
foregoing.
The Depositor shall give to the Certificate Insurer, Moody's and
Standard & Poor's notice 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 Class A Certificates or if there are no Class A Certificates
then outstanding by such majority of the Percentage Interests represented by the
Class R Certificates, may, whether or not the Trustee resigns pursuant to
Section 10.09(b) hereof, immediately, concurrently with the giving of notice
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to the Trustee, and without delaying the 30 days required for notice therein,
appoint a successor Trustee pursuant to the terms of Section 10.09 hereof.
(c) The Servicer shall not be liable for any costs relating to the
removal of the Trustee or the appointment of a new Trustee.
Section 10.03 Certain Rights of the Trustee.
Except as otherwise provided in Section 10.01 hereof:
(a) the Trustee (acting as Trustee or Tax Matters Person) may request
and 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, the Seller, 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 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, unless requested in writing to do so by the Owners; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such cost, expense or liability
as a condition to taking any such action;
(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 custodian;
(h) the Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized by the
Authorized Officer of any Person or within its rights or powers under this
Agreement other than as to validity and sufficiency of its authentication of the
Certificates;
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(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 make various
calculations which are relevant to the performance of the Trustee's duties under
the 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 telecopy confirmations), 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 the execution and authentication of the Certificates, shall
be taken as the statements of the Seller, and the Trustee assumes no
responsibility for their correctness (other than with respect to such execution
and authentication). 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 Seller 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, the Seller 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 the Seller, 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.
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.
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Section 10.07 Compensation and Reimbursement.
The Trustee shall receive compensation for fees and reimbursement for
expenses pursuant to Section 2.05, Section 6.12, Section 7.03(b)(i), Section
7.06 and Section 10.13 hereof. Except as otherwise provided in this Agreement,
the Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified by the Trust and held harmless against any loss, liability, or
"unanticipated out-of-pocket" expense incurred or paid to third parties (which
expenses shall not include salaries paid to employees, or allocable overhead, of
the Trustee) in connection with the acceptance or administration of its trusts
hereunder or the Certificates, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. All such amounts described in the preceding
sentence shall be payable as provided in (A) Section 7.03(b)(i) with respect to
the first $50,000 of such amounts and (B) Section 7.03(b)(iv)(E) with respect to
the remainder of such amounts, subject in the case of clause (B), to Sections
10.01(e) and 10.01(g). The Trustee and any director, officer, employee or agent
of the Trustee shall be indemnified by the Seller and held harmless against any
loss, liability or reasonable expenses incurred by the Trustee in performing its
duties as Tax Matters Person for the REMIC under this Agreement, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of its duties as Tax Matters Person for the
REMIC. The provisions of this Section 10.07 shall survive the termination of
this Agreement.
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 the Owners of a majority of
the Percentage Interests of the Class A Certificates and having a deposit rating
of at least A- from Standard & Poor's and A2 by Moody's. 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 the Seller 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.
A copy of such notice shall be sent by the resigning Trustee to the Rating
Agencies. Upon receiving notice of resignation, the Depositor shall promptly
appoint a successor trustee or trustees acceptable to the Certificate Insurer by
written instrument, in duplicate, executed on behalf of the Trust by an
Authorized Officer of the Seller, 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
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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 by the Certificate Insurer, the Certificate Insurer or the
Depositor with the written 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 Servicer and to the Certificate Insurer,
copies of the record of the act taken by the Owners, as provided for in Section
12.03 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,
the Seller shall promptly appoint a successor trustee acceptable to the
Certificate Insurer and the Owner of the majority of Percentage Interests of the
Class A Certificates then Outstanding. 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.
(g) The Seller 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, to the Rating Agencies and to the Owners as their names and
addresses appear in the Register. Each notice shall include the name of the
successor Trustee and the address of its corporate trust office.
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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.
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 (a) preceding, the Trustee shall
timely file all reports prepared by the Seller 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
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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 Seller with respect to such allocation of expenses. The
Trustee shall, upon request of the Seller, collect any forms or reports from the
Owners determined by the Seller to be required under applicable federal, state
and local tax laws.
(c) Except as otherwise provided, the Trustee shall have the
responsibility for preparation and execution of those returns, forms, reports
and other documents referred to in this Section.
(d) The Seller covenants and agrees that it shall provide to the
Trustee any information necessary to enable the Trustee to meet its obligations
under subsections (a), (b) and (c) above.
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 Certificate Account, the Depositor, the Seller, the Servicer or
any Owner for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Trustee, its directors,
officers, employees or agents or any such Person against any liability which
would otherwise be imposed by reason of negligent action, negligent failure to
act or willful misconduct in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. Subject to the foregoing
sentence, the Trustee shall not be liable for losses on investments of amounts
in the Certificate Account (except for any losses on obligations on which the
bank serving as Trustee is the obligor). In addition, the Depositor, the Seller
and Servicer covenant and agree to indemnify the Trustee and the Servicer (if
the Servicer is also the Trustee) from, and hold it harmless against, any and
all losses, liabilities, damages, claims or expenses (including legal fees and
expenses) of whatsoever kind arising out of or in connection with the
performance of its duties hereunder other than those resulting from the
negligence or bad faith of the Trustee, and the Seller shall pay all amounts not
otherwise paid or reimbursed pursuant to Sections 2.05, 6.12 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
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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 Owner 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
(iii) The Servicer, and 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 parties hereto acknowledge that the Co-Trustee will act as
co-trustee hereunder pursuant to the Co-Trustee Agreement and shall be entitled
to the same rights and subject to the same standards as the Trustee with respect
to all rights and immunities of the Trustee, including with respect to
indemnification and the obligations and duties of the Servicer to the Trustee
pursuant to Sections 2.05, 8.05, 10.07 and 11.16(a). The Trustee shall pay the
Co-Trustee any compensation to which the Co-Trustee may be entitled from its own
funds.
END OF ARTICLE X
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ARTICLE XI
MISCELLANEOUS
Section 11.01 Compliance Certificates and Opinions.
Upon any application or request by the Depositor, the Seller, the
Certificate Insurer or the Owners to the Trustee to take any action under any
provision of this Agreement, the Depositor, the Seller, 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 matter upon a certificate or opinion of, or representations
by, one or more Authorized Officers of the Depositor, the Seller or the
Servicer, stating that the information with respect to such factual matters is
in the possession of the Depositor, the 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
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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 the Seller. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Owners signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and the Trust, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Certificates shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Owner of any Certificate shall bind the Owner of
every Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Trustee or the Trust in reliance thereon, whether or
not notation of such action is made upon such Certificates.
Section 11.04 Notices, etc. to Trustee.
Any request, demand, authorization, direction, notice, consent, waiver
or act of the Owners or other documents provided or permitted by this Agreement
to be made upon, given or furnished to, or filed with the Trustee by any Owner,
the Certificate Insurer, the Depositor, the Seller shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with and
received by the Trustee at its Corporate Trust Office as set forth in Section
2.02 hereof.
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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 resigned 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 and Seller.
The Trustee may make reasonable rules for any meeting of Owners.
Section 11.07 Successors and Assigns.
All covenants and agreements in this Agreement by any party hereto
shall bind its successors and assigns, whether so expressed or not.
Section 11.08 Severability.
In case any provision in this Agreement or in the Certificates shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.09 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Owners, 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.
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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
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, Seller and 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 Seller
and 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 Servicer or the Certificate Insurer or
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.
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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.
Section 11.14 Amendment.
(a) The Trustee, the Depositor, the Seller and the Servicer, may at any
time and from time to time, with the prior approval of the Certificate Insurer
but without the giving of notice to or the receipt of the consent of the Owners,
amend this Agreement, and the Trustee shall consent to the amendment for the
purposes of (i) if accompanied by an approving opinion of counsel which shall
not be at the expense of the Trustee experienced in federal income tax matters,
removing the restriction against the transfer of a Class R Certificate to a
Disqualified Organization (as such term is defined in the Code), (ii) complying
with the requirements of the Code including any amendments necessary to maintain
REMIC status of the Trust Estate (other than the Pre-Funding Account and the
Capitalized Interest Account), (iii) curing any ambiguity, (iv) correcting or
supplementing any provisions of this Agreement which are inconsistent with any
other provisions of this Agreement or (v) for any other purpose, provided that
in the case of clause (v), (A) the Seller delivers an opinion of counsel
acceptable to the Trustee which shall not be at the expense of the Trustee that
such amendment will not adversely effect in any material respect the interest of
the Owners and (B) such amendment will not result in a withdrawal or reduction
of the rating of the Class A Certificates without regard to the Certificate
Insurance Policy. Notwithstanding anything to the contrary, no such amendment
shall (a) change in any manner the amount of, or delay the timing of, payments
which are required to be distributed to any Owner without the consent of the
Owner of such Certificate, (b) change the percentages of Percentage Interest
which are required to consent to any such amendments, without the consent of the
Owners of all Certificates of the Class or Classes affected then outstanding or
(c) which affects in any manner the terms or provisions of the Certificate
Insurance Policy.
(b) The Certificate Insurer and the Rating Agencies shall be provided
by the Seller with copies of any amendments to this Agreement, together with
copies of any opinions or other documents or instruments executed in connection
therewith.
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(c) Notwithstanding any contrary provisions of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (provided by the Person requesting
such amendment) to the effect that such amendment will not result in the
imposition of any tax on the Trust pursuant to the REMIC Provisions or cause the
REMIC to fail to qualify as a REMIC at any time that any of the Certificates are
outstanding.
Section 11.15 Paying Agent; Appointment and Acceptance of Duties.
The Trustee is hereby appointed Paying Agent. The Seller may, subject
to the eligibility requirements for the Trustee set forth in Section 10.08
hereof, including, without limitation, the written consent of the Certificate
Insurer, appoint one or more other Paying Agents or successor Paying Agents.
Each Paying Agent, immediately upon such appointment, shall signify its
acceptance of the duties and obligations imposed upon it by this Agreement by
written instrument of acceptance deposited with the Trustee.
Each such Paying Agent other than the Trustee shall execute and deliver
to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of Section 6.02, that such Paying Agent will:
(a) allocate all sums received for distribution to the Owners
of Certificates of each Class for which it is acting as Paying Agent on
each Payment Date among such Owners in the proportion specified by the
Trustee; and
(b) hold all sums held by it for the distribution of amounts
due with respect to the Certificates in trust for the benefit of the
Owners entitled thereto until such sums shall be paid to such Owners or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided.
Any Paying Agent other than the Trustee may at any time resign and be
discharged of the duties and obligations created by this Agreement by giving at
least sixty (60) days written notice to the Trustee. Any such Paying Agent may
be removed at any time by an instrument filed with such Paying Agent and signed
by the Trustee.
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 the Trust Estate (other than the
Pre-Funding Account and the Capitalized Interest Account) shall constitute, and
that the affairs of the Trust Estate (other than the Pre-Funding Account and the
Capitalized Interest Account) shall be conducted so as to qualify it as a REMIC
in accordance with the REMIC Provisions. In furtherance of such intention,
Chemical Bank or such other person designated pursuant to Section 11.18 hereof
shall act as agent for the Trust and as Tax Matters Person for the Trust and
that in such capacity it shall: (i) prepare or cause to be prepared and
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filed, at its own expense, in a timely manner, annual tax returns and any other
tax return required to be filed by the REMIC using a calendar year as the
taxable year for the REMIC (ii) in the related first such tax return, make (or
cause to be made) an election satisfying the requirements of the REMIC
Provisions, on behalf of the REMIC for it to be treated as a REMIC; (iii) at the
Tax Matters Person's expense, prepare and forward, or cause to be prepared and
forwarded, to the Owners all information, reports or tax returns required with
respect to the REMIC including Schedule Q to Form 1066, 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; provided that the tax return filed on
Schedule Q to Form 1066 shall be prepared and forwarded to the Owners of the
Class R Certificates no later than 50 days after the end of the period to which
such tax return related; (iv) not take any action or omit to take any action
that would cause the termination of the REMIC status of the REMIC, except as
provided under this Agreement; (v) represent, the Trust or the REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to a
taxable year of the Trust, or the REMIC, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of the Trust, or the REMIC, and otherwise act on behalf of the
Trust, or the REMIC in relation to any tax matter involving the Trust, or the
REMIC (the legal expenses and costs of any such action described in this
subsection (v) and any liability resulting therefrom shall constitute expenses
of the Trust and the Trustee shall be entitled to reimbursement therefor as
provided in Section 7.03(b)(i) unless such legal expenses and costs are incurred
by reason of the Trustee's willful misfeasance, bad faith or negligence); (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 Owners of Class R Certificates required of a "tax
matters person" pursuant to subtitle F of the Code and the Treasury Regulations
thereunder; (vii) make available information necessary for the computation of
any tax imposed (A) on transferor of residual interests to certain Disqualified
Organizations or (B) on pass-through entities, any interest in which is held by
a Disqualified Organization; and (viii) acquire and hold the Tax Matters Person
Residual Interest. The obligations of the Trustee or such other designated Tax
Matters Person pursuant to this Section 11.16 shall survive the termination or
discharge of this Agreement.
In addition to the foregoing, the Tax Matters Person shall prepare and
forward, or cause to be prepared and forwarded, to the Seller as long as it is
an Owner of a Class R Certificate each year, beginning in December 1996, on or
before the twenty-seventh day (or if such day is not a business day, on the next
succeeding business day) of the month of (1) March (beginning in 1997), with
respect to the period January 1 to March 31, (2) May, with respect to the period
April 1 to May 31, (3) August, with respect to the period June 1 to August 31
and (4) December, with respect to the period September 1 to December 31, an
estimate of such Owner's allocable portion of taxable income or net loss, excess
inclusions and investment expenses for the related period to the extent such
amounts are required to be furnished on Schedule Q to Form 1066. Such estimates
shall be made to the extent of and based upon information provided to the Tax
Matters Person by the Servicer (which information may consist of actual
information related to payments received on the Home Equity Loans, except that
the estimate with respect to any month for which actual information is not
available may be based on the payment history for prior months and an assumption
of prepayments of the Home Equity Loans as provided by the Servicer). The legal
expenses and costs of any action or proceeding resulting from or relating to the
estimates provided by the Tax Matters Person pursuant to this Section 11.16(a)
and any liability resulting therefrom shall constitute expenses of the Servicer
and the Trustee shall be entitled to reimbursement therefor from the
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Servicer unless such legal expenses, costs or liability are incurred by reason
of the Trustee willful misfeasance, bad faith or gross negligence.
(b) The Seller, 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 the 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 Seller is aware of any such proposed action by the Servicer.
(c) The 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, the Seller 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), the Trustee or
the Seller may engage in any of the transactions prohibited by such clauses,
provided that the Trustee shall have received 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 Trustee or
cause a termination of REMIC status for the REMIC; provided, however, that such
transaction is otherwise permitted under this Agreement.
(g) In the event that any tax is imposed on "prohibited transactions"
of the Trust created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of the Trust as defined in Section
860G(c) of the Code, on any contributions to the Trust after the Startup Date
therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Trustee if such tax arises out of or results from the
willful misfeasance, bad faith or negligence in performance by the Trustee of
any of its obligations under Article X, (ii) to the Servicer if such tax arises
out of or results from a breach by the Servicer of any of its obligations under
Article VIII or otherwise (iii) against amounts on deposit in the Certificate
Account and shall be paid by withdrawal therefrom.
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 at the expense
of the party seeking to take such action but in no event at the expense of the
Trust to the effect that such transaction does not result in a tax imposed on
the Trust or the REMIC or cause a termination of REMIC status for the REMIC, (i)
sell any assets in the Trust Estate, (ii) accept any contribution of assets
after the Startup Day (other than Subsequent Home Equity Loans) (iii) allow the
Servicer to foreclose upon any Home Equity Loan if such foreclosure would result
in a tax on the Trust or the REMIC or cause termination of the REMIC status for
the REMIC or (iv) 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
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separate non-interest bearing account, the net income from any such Prohibited
Transactions of the 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 Class A 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 REMIC for all purposes of
the Code and such Tax Matters Person will perform, or cause to be performed,
such duties and take, or cause to be taken, such actions as are required to be
performed or taken by the Tax Matters Person under the Code. The Tax Matters
Person for the REMIC shall be the Trustee as long as it owns a Class R
Certificate. If the Trustee does not own a Class R Certificate, the Tax Matters
Person may be any other entity that owns a Class R Certificate and accepts a
designation hereunder as Tax Matters person by delivering an affidavit in the
form of Exhibit I.
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
there exists a Certificate Insurer Default; provided, that the right of the
Certificate Insurer to receive the Premium Amount shall not be suspended if such
Certificate Insurer Default was a default other than a default under clause (a)
of the definition thereof. At such time as the Class A Certificates and the
Class S-I Certificates are no longer Outstanding hereunder and the Certificate
Insurer has received all Reimbursement Amounts, the Certificate Insurer's rights
hereunder shall terminate.
Section 11.20 Maintenance of Security Interest.
(a) The Owners of the Class R Certificates (except Chemical Bank) shall
each execute and file such financing statements and cause to be executed and
filed such continuation statements, all in such manner and in such places as may
be required by law fully to preserve, maintain, and protect the interest of the
Trustee under this Agreement in the Total Monthly Excess Cashflow and in the
proceeds thereof. The Owners of the Class R Certificates shall each deliver (or
cause to be delivered) to the Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) No Owner of Class R Certificates (except Chemical Bank) shall
change its name, identity, address or corporate structure in any manner that
would, could, or might make any financing statement or continuation statements
filed by such Owner in accordance with paragraph (a) above seriously misleading
within the meaning of ss. 9-402(7) of the UCC, unless it shall have theretofore
filed amendments to such statements reflecting such change and shall have given
the Trustee at least 15 days' prior written notice thereof.
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(c) The Depositor and each Owner of a Class R Certificate shall
continuously keep an original executed counterpart of this Agreement in its
official records.
Section 11.21 Third Party Rights.
The Trustee, the Seller, 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: Chemical Bank
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attention: Structured Finance Services (MBS)
(212) 946-8600
(212) 946-3240 - Fax
The Depositor: ContiSecurities Asset Funding Corp.
277 Park Avenue
New York, NY 10172
(212) 207-2800
(212) 207-5251 - Fax
The Seller: Industry Mortgage Company, L.P.
3450 Bushwood Park Drive
Tampa, FL 33618
(813) 932-2211
(813) 932-8257 - Fax
The Servicer: Industry Mortgage Company, L.P.
3450 Bushwood Drive
Tampa, FL 33618
(813) 932-2211
(813) 932-8257 - Fax
The Certificate
Insurer: Financial Security Assurance
350 Park Avenue
New York, New York 10022
Attention: Surveillance Department
Tel: (212) 826-0100
Fax: (212) 339-3518
(212) 339-3529
120
<PAGE>
The Underwriters Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: Asset-Backed Securities
Tel: (212) 272-2000
Fax: (212) 272-7294
Nomura Securities International, Inc.
Two World Financial Center
Building B, 21st Floor
New York, New York 10281-1198
Attention: Residential Mortgage-Backed Group
Tel: (212) 667-1000
Fax: (212) 667-1391
ContiFinancial Services Corporation
277 Park Avenue
New York, New York 10172
Attention: Chief Counsel
Tel: (212) 207-2822
Fax: (212) 207-2837
Moody's: Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: The Residential Mortgage
Monitoring Department
Tel: (212) 553-0300
Fax: (212) 553-0355
Standard & Poor's: Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies
26 Broadway
15th Floor
New York, New York 10004
Attention: Residential Mortgage Group
Tel: (212) 208-8000
Fax: (212) 208-8365
Others: Any notice to the Depositor 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
121
<PAGE>
Section 11.23 Rule 144A Information. For so long as any of the Class R
Certificates or Class S-I Certificates are "restricted securities" within the
meaning of Rule 144A under the Securities Act, the Servicer agrees to provide to
any Owner of the Class R Certificate or Class S-I Certificates and to any
prospective purchaser of Class R Certificates or Class S-I Certificates
designated by such an Owner, upon the request of such Owner or prospective
purchaser, the information specified below which is intended to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act; provided that
this Section 11.23 shall require, as to the Trustee or the Servicer, only that
the Servicer provide publicly available information regarding it or the Trustee
in response to any such request; and provided further that the Servicer shall be
obligated to provide only such basic, material information concerning the
structure of the Class R Certificates or Class S-I Certificates and
distributions thereon, the nature, performance and servicing of the Home Equity
Loans supporting the Certificates, and any credit enhancement mechanism, if any,
associated with the Certificates. Any recipient of information provided pursuant
to this Section 11.23 shall agree that such information shall not be disclosed
or used for any purpose other than the evaluation of the Class R Certificates or
Class S-I Certificates by the prospective purchaser. The Trustee shall have no
responsibility for the sufficiency under Rule 144A of any information so
provided by the Servicer to any Owner or prospective purchaser of Class R
Certificates or Class S-I Certificates.
END OF ARTICLE XI
122
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ARTICLE XII
CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 12.01 Trust Estate and Accounts Held for Benefit of
the Certificate Insurer.
The Trustee shall hold the Trust Estate for the benefit of the related
Owners and the Certificate Insurer and all references in this Agreement and in
the Certificates to the benefit of Owners of the Certificates shall be deemed to
include the Certificate Insurer. The Trustee shall cooperate in all reasonable
respects with any reasonable request by the Certificate Insurer for action to
preserve or enforce the Certificate Insurer's rights or interests under this
Agreement and the Certificates.
The Servicer hereby acknowledges and agrees that it shall service and
administer the Home Equity Loans and any REO Properties, and shall maintain the
Principal and Interest Account, for the benefit of the Owners and for the
benefit of the Certificate Insurer, and all references in this Agreement to the
benefit of or actions on behalf of the Owners shall be deemed to include the
Certificate Insurer. Unless a Certificate Insurer Default exists, the Servicer
shall not terminate any Sub-Servicing Agreements without cause without the prior
consent of the Certificate Insurer.
Section 12.02 Claims Upon the Policy; Policy Payments Account.
(a) If on the Determination Date, the funds then on deposit
in the Certificate Account, are insufficient to pay the Insured Payments on such
Payment Date, the Trustee shall give notice to the Certificate Insurer by
telephone or telecopy of the amount of such deficiency, confirmed in writing in
the form set forth as Exhibit A to the Endorsement of the Certificate Insurance
Policy, to the Certificate Insurer and the Fiscal Agent (as defined in the
Certificate Insurance Policy), if any, at or before 9:00 a.m., New York City
time, on the second Business Day prior to such Payment Date.
(b) The Trustee shall establish a separate special purpose trust
account for the benefit of the Owners of the Class A Certificates, the Class S-I
Certificates and the Certificate Insurer referred to herein as the "Policy
Payments Account" over which the Trust shall have exclusive control and sole
right of withdrawal. The Trustee shall deposit any amount paid under the
Certificate Insurance Policy in the Policy Payments Account and distribute such
amount only for purposes of payment to the Owners of the Class A Certificates or
the Class S-I Certificates of the Insured Payments for which a claim was made
and such amount may not be applied to satisfy any costs, expenses or liabilities
of the Servicer, the Trustee or the Trust. Amounts paid under the Certificate
Insurance Policy shall be transferred to the Certificate Account in accordance
with the next succeeding paragraph and disbursed by the Trustee to Owners of the
Class A Certificates or the Class S-I Certificates in accordance with Section
7.03. It shall not be necessary for such payments to be made by checks or wire
transfers separate from the checks or wire transfers used to pay the Insured
Payments with other funds available to make such payment. However, the amount of
any payment of principal of or interest on the related Class A Certificates or
the Class S-I Certificates to be paid from funds transferred from the Policy
Payments Account shall be noted as provided in paragraph (c) below in the
Register and in the statement to be furnished to Owners of the Class A
Certificates or the Class S-I Certificates pursuant to Section 7.08. Funds held
in the Policy Payments Account shall not be invested by the Trustee.
On any Payment Date with respect to which a claim has been
made under the Insurance Policy, the amount of funds received by the Trustee as
a result of any claim under the Insurance Policy, to the extent required to make
the Insured Payment on such Payment Date shall be withdrawn from the Policy
Payments Account and deposited in the Certificate Account and applied by the
Trustee, together
123
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with the other funds to be withdrawn from the Certificate Account, directly to
the payment in full of the Insured Payment due on the related Class of Class A
Certificates or Class S-I Certificates. Funds received by the Trustee as a
result of any claim under the Insurance Policy shall be deposited by the Trustee
in the Policy Payments Account and used solely for payment to the Owners of the
Class A Certificates or Class S-I Certificates may not be applied to satisfy any
costs, expenses or liabilities of the Servicer, the Trustee or the Trust. Any
funds remaining in the Policy Payments Account on the first Business Day
following a Payment Date shall be remitted to the Certificate Insurer, pursuant
to the instructions of the Certificate Insurer, by the end of such Business Day.
(c) The Trustee shall keep a complete and accurate record of
the amount of interest and principal paid in respect of any Class A Certificate
or Class S-I Certificates from moneys received under the Certificate Insurance
Policy. The Certificate Insurer shall have the right to inspect such records at
reasonable times during normal business hours upon one Business Day's prior
notice to the Trustee.
(d) The Trustee shall promptly notify the Certificate Insurer
and Fiscal Agent of any proceeding or the institution of any action, of which an
Authorized Officer of the Trustee has actual knowledge, seeking the avoidance as
a preferential transfer under applicable bankruptcy, insolvency, receivership or
similar law (a "Preference Claim") of any distribution made with respect to the
Class A Certificates or Class S-I Certificates. Each Owner of a Class A
Certificate or Class S-I Certificates by its purchase of such Certificate, the
Servicer and the Trustee hereby agree that, the Certificate Insurer (so long as
no Certificate Insurer Default exists) 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, (i) the direction of any
appeal of any order relating to such Preference Claim and (ii) the posting of
any surety, supersedeas 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 Owner of Class A
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 12.03 Effect of Payments by the Certificate Insurer;
Subrogation.
Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on any of the Class A Certificates or
Class S-I Certificates which is made with moneys received pursuant to the terms
of the Certificate Insurance Policy shall not be considered payment of such
Certificates from the Trust 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 or Class S-I Certificates
to the Owners of such Certificates, the Certificate Insurer will be fully
subrogated to the rights of such Holders to receive such principal and interest
from the Trust and (b) the Certificate Insurer shall be paid such principal and
interest but only from the sources and in the manner provided herein for the
payment of such principal and interest.
The Trustee, the Seller, the Depositor and the Servicer shall
cooperate in all respects with any reasonable request by the Certificate Insurer
for action to preserve or enforce the Certificate Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests of
the Owners as otherwise set forth therein.
124
<PAGE>
Section 12.04 Notices to the Certificate Insurer.
All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to any other party hereto or to any of the
Owners shall also be sent to the Certificate Insurer.
Section 12.05 Third-Party Beneficiary.
The Certificate Insurer shall be a third-party beneficiary of
this Agreement, entitled to enforce the provisions hereof as if a party hereto.
Section 12.06 Rights to the Certificate Insurer To Exercise Rights
of Owners.
By accepting its Certificate, each Owner of a Class A
Certificate agrees that unless a Certificate Insurer Default exists, the
Certificate Insurer shall have the right to exercise all rights of the Owners of
the Class A Certificates as specified under this Agreement without any further
consent of the Owners of the Class A Certificates.
END OF ARTICLE XII
125
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Seller, the Servicer and the
Trustee have caused this Agreement to be duly executed by their respective
officers thereunto duly authorized, all as of the day and year first above
written.
CONTISECURITIES ASSET FUNDING CORP.
as Depositor
By:
------------------------------------------
Title:
---------------------------------------
By:
------------------------------------------
Title:
---------------------------------------
INDUSTRY MORTGAGE COMPANY, L.P., as Seller
By: Industry Mortgage Corporation,
as General Partner
By:
------------------------------------------
Title:
---------------------------------------
INDUSTRY MORTGAGE COMPANY, L.P., as Servicer
By: Industry Mortgage Corporation,
as General Partner
By:
------------------------------------------
Title:
---------------------------------------
CHEMICAL BANK
as Trustee
By:
------------------------------------------
Title:
---------------------------------------
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the ___ day of _____________, 1996, before me personally came
__________________ and ____________ to me known, who, being by me duly sworn,
did each depose and say that he/she resides at ________________,
_____________________________ and __________________, ________________________;
that he/she is a ____________________ and of Contisecurities Asset Funding
Corp., 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
--------------------------
Notary Public
<PAGE>
STATE OF FLORIDA )
: ss.:
COUNTY OF HILLSBOROUGH )
On the ___ day of _____________, 1996, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and say
that he/she resides at ________________, _____________________________; that
he/she is a ____________________ of Industry Mortgage Corporation, a Delaware
corporation, the general partner of Industry Mortgage Company, L.P., a Delaware
limited partnership; 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
---------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the ___ day of _______________, 1996, before me personally came
______________, to me known, who, being by me duly sworn did depose and say that
he/she resides at ____________________; that he/she is a
________________________ of Chemical Bank, the New York banking corporation
described in and that executed the above instrument as Trustee; and that he/she
signed his/her 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
---------------------------
Notary Public
<PAGE>
SCHEDULE I-A
SCHEDULE OF HOME EQUITY LOANS - GROUP I
A copy of this Schedule is maintained by the Trustee at the Corporate
Trust Office and by the Servicer.
<PAGE>
SCHEDULE I-B
SCHEDULE OF HOME EQUITY LOANS - GROUP II
A copy of this Schedule is maintained by the Trustee at the Corporate
Trust Office and by the Servicer.
<PAGE>
SCHEDULE II
SCHEDULE OF ARM LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate
Trust Office and by the Servicer.
<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.
IMC HOME EQUITY LOAN TRUST 1996-2
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-1
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Originated or Purchased and Serviced by
INDUSTRY MORTGAGE COMPANY, L.P.
(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. or Industry Mortgage Company, L.P. 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
("IMC Home Equity Loan Trust 1996-2") 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- --------------
CUSIP
$ April __, 1996
- ----------------------- ----------------- ---------------
Original Class A-1 Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
----------------
Registered Owner
A-1-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Initial Home Equity Loans in Group I (other
than any principal and interest due thereon on or prior to April 1, 1996 whether
or not received) listed in Schedule I-A to the Pooling and Servicing Agreement
which the Seller is causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee and the Subsequent Home Equity Loans
in Group II (other than any principal and interest payments due thereon or prior
to the related Subsequent Cut-Off Date whether or not received) listed in
Schedule I-A to any Subsequent Transfer Agreement, which the Seller will cause
to be delivered to the Depositor and the Depositor will cause to be delivered to
the Trustee (and all substitutions therefor as provided by Section 3.03, 3.04
and 3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and the Depositor's interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, the Pre- Funding Account and the Capitalized
Interest 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 in the Pooling and Servicing Agreement), 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 ((a) - (c) above shall be
collectively referred to herein as the "Trust Estate").
The Owner hereof is entitled to principal payments on each Payment
Date, as hereinafter described, which will fully amortize such original Class
A-1 Certificate Principal Balance over the period from the date of initial
issuance of the Certificates to the final Payment Date for the Class A-1
Certificates. Therefore, the actual Outstanding principal amount of this
Certificate may, on any date subsequent to May 28, 1996 (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 MAY 28, 1996 (THE FIRST PAYMENT DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
A-1-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, 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 April 1, 1996 (the "Pooling and Servicing
Agreement") by and among Industry Mortgage Company, L.P., in its capacity as the
Seller (the "Seller") and as the Servicer (the "Servicer"), ContiSecurities
Asset Funding Corp., in its capacity as Depositor (the "Depositor") and Chemical
Bank, 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 IMC Home Equity Loan Trust 1996-2 Home Equity Loan Pass-Through
Certificates, Class A-2 (the "Class A-2 Certificates"), Class A-3 (the "Class
A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"), Class A-5 (the
"Class A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"), Class A-7
(the "Class A-7 Certificates"), Class A-8 (the "Class A-8 Certificates"), Class
S-I (the "Class S-I Certificates") and Class R (Residual Interest) (the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates and the Class A-8
Certificates shall be together referred to as the "Class A Certificates" and the
Class A Certificates, the Class S-I Certificates and the Class R Certificates
are together referred to herein as the "Certificates." Terms capitalized herein
and not otherwise defined herein shall have the respective meanings set forth in
the Pooling and Servicing Agreement.
On the 25th 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 May 28, 1996, 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
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.
"Class A-1 Distribution Amount" means with respect to any Payment Date
the sum of (x) the Class A-1 Current Interest and (y) the Group I Principal
Distribution Amount payable to the Owners of the Class A-1 Certificates pursuant
to Section 7.03(b)(iv)(C) of the Pooling and Servicing Agreement for such
Payment Date:
"Class A-1 Current Interest" means with respect to any Payment Date, 30
days' interest accrued on the Class A-1 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-1 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-1 Certificates as it relates to interest previously paid on the Class
A-1 Certificates, plus the Carry Forward Amount, if any, with respect to the
Class A-1 Certificates.
A-1-3
<PAGE>
"Group I Principal Distribution Amount" means with respect to the Fixed
Rate Certificates for any Payment Date, the lesser of:
(a) the Group I Total Available Funds plus any Insured Payment with
respect to the Fixed Rate Certificates minus the Current Interest
for such Payment Date with respect to the Fixed Rate
Certificates; and
(b) the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to
principal owed to the Owners of the Fixed Rate
Certificates that remains unpaid as of such Payment
Date,
(B) the principal portion of all scheduled
monthly payments on the Home Equity Loans in Group I
due on or prior to the related Due Date thereof, to
the extent actually received by the Trustee during
the related Remittance Period and any Prepayments
made by the Mortgagors and actually received by the
Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity
Loan in Group I that was repurchased by the Seller or
purchased by the Servicer on or prior to the related
Monthly Remittance Date, to the extent such Loan
Balance is actually received by the Trustee during
the related Remittance Period,
(D) any Substitution Amounts delivered by
the Seller on the related Monthly Remittance Date in
connection with a substitution of a Home Equity Loan
in Group I (to the extent such Substitution Amounts
relate to principal), to the extent such Substitution
Amounts are actually received by the Trustee on the
related Remittance Date,
(E) all Net Liquidation Proceeds actually
collected by the Servicer with respect to the Home
Equity Loans in Group I during the related Remittance
Period (to the extent such Net Liquidation Proceeds
relate to principal) to the extent such Net
Liquidation Proceeds are actually received by the
Trustee,
(F) the amount of any Subordination Deficit
with respect to Group I for such Payment Date,
(G) the principal portion of the proceeds
received by the Trustee with respect to Group I from
any termination of the Trust (to the extent such
proceeds related to principal),
(H) with respect to the Payment Date
immediately following the last day of the Funding
Period with respect to Group I, all amounts remaining
on deposit in the Pre-Funding Account to the extent
not used to purchase Subsequent Home Equity Loans for
inclusion in Group I during the Funding Period, and
(I) the amount of any Subordination Increase
Amount with respect to Group I for such Payment Date,
to the extent of any Net Monthly Excess Cashflow
available for such purpose, over
A-1-4
<PAGE>
(ii) the amount of any Subordination Reduction Amount
with respect to Group I for such Payment Date.
The Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy to make Insured Payments available to the Trustee
on or prior to the related Payment Date for distribution to the Owners. "Insured
Payments" means with respect to any Home Equity Loan Group and as to any Payment
Date, the sum of (i) any shortfall in the amount required to pay the related
Subordination Deficit for such Payment Date from a source other than the
Certificate Insurance Policy, (ii) any shortfall in the amount required to pay
the related Current Interest for such Payment Date from a source other than the
Certificate Insurance Policy and (iii) any shortfall in the amount required to
pay the related Preference Amount from a source other than the Certificate
Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall distribute
in accordance with the Pooling and Servicing Agreement such amounts (directly or
through a Paying Agent) to the Owners of the appropriate Class of the Class A
and Class S-I Certificates.
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. or Industry Mortgage Company,
L.P. 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)
and payments received by the Trustee pursuant to the Certificate Insurance
Policy, 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 Owner of this Certificate, by
its acceptance hereof, agrees, however, that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Trustee or Paying Agent), to the owners of such Class A-1
Certificates, the Certificate Insurer will be subrogated to the rights of such
Owners of Class A-1 Certificates with respect to such Insured Payment, shall be
deemed to the extent of the payments so made to be a registered Owner of such
Class A-1 Certificates
A-1-5
<PAGE>
and shall receive all future distributions of the Class A-1 Distribution Amount
until all such Insured Payments by the Certificate Insurer have been fully
reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the Percentage
Interests represented by the Class A Certificates with the prior written consent
of the Certificate Insurer 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
Seller and the Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer 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,
A-1-6
<PAGE>
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 $1,000,000 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 with respect to the Certificate Insurer.
A-1-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK, as Trustee
By:
---------------------------------
Title:
------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
------------------------------------
Title:
---------------------------------
A-1-8
<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.
IMC HOME EQUITY LOAN TRUST 1996-2
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-2
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Group II Home Equity
Loans Originated or Purchased and Serviced by
INDUSTRY MORTGAGE COMPANY, L.P.
(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. or Industry Mortgage Company, L.P. 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
("IMC Home Equity Loan Trust 1996-2") 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- -----------
CUSIP
$ April __, 1996
- ----------------------- ---------------
Original Class A-2 Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
----------------
Registered Owner
A-2-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Initial Home Equity Loans in Group I (other
than any principal and interest due thereon on or prior to April 1, 1996 whether
or not received) listed in Schedule I-A to the Pooling and Servicing Agreement
which the Seller is causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee and the Subsequent Home Equity Loans
in Group I (other than any principal and interest payments due thereon or prior
to the related Subsequent Cut-Off Date whether or not received) listed in
Schedule I-A to any Subsequent Transfer Agreement, which the Seller will cause
to be delivered to the Depositor and the Depositor will cause to be delivered to
the Trustee (and all substitutions therefor as provided by Section 3.03, 3.04
and 3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and the Depositor's interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, the Pre- Funding Account and the Capitalized
Interest 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 in the Pooling and Servicing Agreement), 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 ((a) - (c) above shall be
collectively referred to herein as the "Trust Estate").
The Owner hereof is entitled to principal payments on each Payment
Date, as hereinafter described, which will fully amortize such original Class
A-2 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 May 28, 1996 (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 MAY 28, 1996 (THE FIRST PAYMENT DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
A-2-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, 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 April 1, 1996 (the "Pooling and Servicing
Agreement") by and among Industry Mortgage Company, L.P., in its capacity as the
Seller (the "Seller") and as the Servicer (the "Servicer"), ContiSecurities
Asset Funding Corp., in its capacity as Depositor (the "Depositor") and Chemical
Bank, 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 IMC Home Equity Loan Trust 1996-2 Home Equity Loan Pass-Through
Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-3 (the "Class
A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"), Class A-5 (the
"Class A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"), Class A-7
(the "Class A-7 Certificates"), Class A-8 (the "Class A-8 Certificates"), Class
S-I (the "Class S-I Certificates") and Class R (Residual Interest) (the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates and the Class A-8
Certificates shall be together referred to as the "Class A Certificates" and the
Class A Certificates, the Class S-I Certificates and the Class R Certificates
are together referred to herein as the "Certificates." Terms capitalized herein
and not otherwise defined herein shall have the respective meanings set forth in
the Pooling and Servicing Agreement.
On the 25th 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 May 28, 1996, 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
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-2 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class A-2 Certificates. The Percentage Interest of each
Class A-2 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-2 Certificate on the Startup Day by the aggregate Class A-2
Certificate Principal Balance on the Startup Day.
"Class A-2 Distribution Amount" means with respect to any Payment Date
the sum of (x) the Class A-2 Current Interest and (y) the Group I Principal
Distribution Amount payable to the Owners of the Class A-2 Certificates pursuant
to Section 7.03(b)(iv)(C) of the Pooling and Servicing Agreement for such
Payment Date:
"Class A-2 Current Interest" means with respect to any Payment Date, 30
days' interest accrued on the Class A-2 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-2 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-2 Certificates as it relates to interest previously paid on the Class
A-2 Certificates, plus the Carry Forward Amount, if any, with respect to the
Class A-2 Certification.
A-2-3
<PAGE>
"Group I Principal Distribution Amount" means with respect to the Fixed
Rate Certificates for any Payment Date, the lesser of:
(a) the Group I Total Available Funds plus any Insured Payment with
respect to the Fixed Rate Certificates minus the Current Interest
for such Payment Date with respect to the Fixed Rate
Certificates; and
(b) the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to principal
owed to the Owners of the Fixed Rate Certificates that remains
unpaid as of such Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans in Group I due on or prior
to the related Due Date thereof, to the extent actually
received by the Trustee during the related Remittance Period
and any Prepayments made by the Mortgagors and actually
received by the Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan in
Group I that was repurchased by the Seller or purchased by the
Servicer on or prior to the related Monthly Remittance Date,
to the extent such Loan Balance is actually received by the
Trustee during the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in Group I (to the extent
such Substitution Amounts relate to principal), to the extent
such Substitution Amounts are actually received by the Trustee
on the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group
I during the related Remittance Period (to the extent such Net
Liquidation Proceeds relate to principal) to the extent such
Net Liquidation Proceeds are actually received by the Trustee,
(F) the amount of any Subordination Deficit with
respect to Group I for such Payment Date,
(G) the principal portion of the proceeds received by
the Trustee with respect to Group I from any termination of
the Trust (to the extent such proceeds related to principal),
(H) with respect to the Payment Date immediately
following the last day of the Funding Period with respect to
Group I, all amounts remaining on deposit in the Pre-Funding
Account to the extent not used to purchase Subsequent Home
Equity Loans for inclusion in Group I during the Funding
Period, and
(I) the amount of any Subordination Increase Amount
with respect to Group I for such Payment Date, to the extent
of any Net Monthly Excess Cashflow available for such purpose,
over
A-2-4
<PAGE>
(ii) the amount of any Subordination Reduction Amount with
respect to Group I for such Payment Date.
The Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy to make Insured Payments available to the Trustee
on or prior to the related Payment Date for distribution to the Owners. "Insured
Payments" means with respect to any Home Equity Loan Group and as to any Payment
Date, the sum of (i) any shortfall in the amount required to pay the related
Subordination Deficit for such Payment Date from a source other than the
Certificate Insurance Policy, (ii) any shortfall in the amount required to pay
the related Current Interest for such Payment Date from a source other than the
Certificate Insurance Policy and (iii) any shortfall in the amount required to
pay the related Preference Amount from a source other than the Certificate
Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall distribute
in accordance with the Pooling and Servicing Agreement such amounts (directly or
through a Paying Agent) to the Owners of the appropriate Class of the Class A
and Class S-I Certificates.
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. or Industry Mortgage Company,
L.P. 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)
and payments received by the Trustee pursuant to the Certificate Insurance
Policy 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 Owner of this Certificate, by
its acceptance hereof, agrees, however, that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Trustee or Paying Agent), to the owners of such Class A-2
Certificates, the Certificate Insurer will be subrogated to the rights of such
Owners of Class A-2 Certificates with respect to such Insured Payment, shall be
A-2-5
<PAGE>
deemed to the extent of the payments so made to be a registered Owner of such
Class A-2 Certificates and shall receive all future distributions of the Class
A-2 Distribution Amount until all such Insured Payments by the Certificate
Insurer have been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the Percentage
Interests represented by the Class A Certificates with the prior written consent
of the Certificate Insurer 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
Seller and the Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer and without the consent of the
A-2-6
<PAGE>
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 amendment. 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 $1,000,000 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 with respect to the Certificate Insurer.
A-2-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK, as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
--------------------------------------
Title:
-----------------------------------
A-2-8
<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.
IMC HOME EQUITY LOAN TRUST 1996-2
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-3
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Originated or Purchased and Serviced by
INDUSTRY MORTGAGE COMPANY, L.P.
(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. or Industry Mortgage Company, L.P. 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
("IMC Home Equity Loan Trust 1996-2") 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- --------
CUSIP
$ April __, 1996
- ------------------ --------------- ---------------
Original Class A-3 Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
----------------
Registered Owner
A-3-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Initial Home Equity Loans in Group I (other
than any principal and interest due thereon on or prior to April 1, 1996 whether
or not received) listed in Schedule I-A to the Pooling and Servicing Agreement
which the Seller is causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee and the Subsequent Home Equity Loans
in Group I (other than any principal and interest payments due thereon or prior
to the related Subsequent Cut-Off Date whether or not received) listed in
Schedule I-A to any Subsequent Transfer Agreement, which the Seller will cause
to be delivered to the Depositor and the Depositor will cause to be delivered to
the Trustee (and all substitutions therefor as provided by Section 3.03, 3.04
and 3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and the Depositor's interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, the Pre- Funding Account and the Capitalized
Interest 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 in the Pooling and Servicing Agreement), 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 ((a) - (c) above shall be
collectively referred to herein as the "Trust Estate").
The Owner hereof is entitled to principal payments on each Payment
Date, as hereinafter described, which will fully amortize such original Class
A-3 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 May 28, 1996 (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 MAY 28, 1996 (THE FIRST PAYMENT DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
A-3-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, 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 April 1, 1996 (the "Pooling and Servicing
Agreement") by and among Industry Mortgage Company, L.P., in its capacity as the
Seller (the "Seller") and as the Servicer (the "Servicer"), ContiSecurities
Asset Funding Corp., in its capacity as Depositor (the "Depositor") and Chemical
Bank, 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 IMC Home Equity Loan Trust 1996-2 Home Equity Loan Pass-Through
Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2 (the "Class
A-2 Certificates"), Class A-4 (the "Class A-4 Certificates"), Class A-5 (the
"Class A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"), Class A-7
(the "Class A-7 Certificates"), Class A-8 (the "Class A-8 Certificates"), Class
S-I (the "Class S-I Certificates") and Class R (Residual Interest) (the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates and the Class A-8
Certificates shall be together referred to as the "Class A Certificates" and the
Class A Certificates, the Class S-I Certificates and the Class R Certificates
are together referred to herein as the "Certificates." Terms capitalized herein
and not otherwise defined herein shall have the respective meanings set forth in
the Pooling and Servicing Agreement.
On the 25th 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 May 28, 1996, 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
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-3 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class A-3 Certificates. The Percentage Interest of each
Class A-3 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-3 Certificate on the Startup Day by the aggregate Class A-3
Certificate Principal Balance on the Startup Day.
"Class A-3 Distribution Amount" means with respect to any Payment Date
the sum of (x) the Class A-3 Current Interest and (y) the Group I Principal
Distribution Amount payable to the Owners of the Class A-3 Certificates pursuant
to Section 7.03(b)(iv)(C) of the Pooling and Servicing Agreement for such
Payment Date:
"Class A-3 Current Interest" means with respect to any Payment Date, 30
days' interest accrued on the Class A-3 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-3 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-3 Certificates as it relates to interest previously paid on the Class
A-3 Certificates, plus the Carry Forward Amount, if any, with respect to the
Class A-3 Certification.
A-3-3
<PAGE>
"Group I Principal Distribution Amount" means with respect to the Fixed
Rate Certificates for any Payment Date, the lesser of:
(a) the Group I Total Available Funds plus any Insured Payment with
respect to the Fixed Rate Certificates minus the Current Interest
for such Payment Date with respect to the Fixed Rate
Certificates; and
(b) the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to principal
owed to the Owners of the Fixed Rate Certificates that remains
unpaid as of such Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans in Group I due on or prior
to the related Due Date thereof, to the extent actually
received by the Trustee during the related Remittance Period
and any Prepayments made by the Mortgagors and actually
received by the Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan in
Group I that was repurchased by the Seller or purchased by the
Servicer on or prior to the related Monthly Remittance Date,
to the extent such Loan Balance is actually received by the
Trustee during the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in Group I (to the extent
such Substitution Amounts relate to principal), to the extent
such Substitution Amounts are actually received by the Trustee
on the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group
I during the related Remittance Period (to the extent such Net
Liquidation Proceeds relate to principal) to the extent such
Net Liquidation Proceeds are actually received by the Trustee,
(F) the amount of any Subordination Deficit with
respect to Group I for such Payment Date,
(G) the principal portion of the proceeds received by
the Trustee with respect to Group I from any termination of
the Trust (to the extent such proceeds related to principal),
(H) with respect to the Payment Date immediately
following the last day of the Funding Period with respect to
Group I, all amounts remaining on deposit in the Pre-Funding
Account to the extent not used to purchase Subsequent Home
Equity Loans for inclusion in Group I during the Funding
Period, and
(I) the amount of any Subordination Increase Amount
with respect to Group I for such Payment Date, to the extent
of any Net Monthly Excess Cashflow available for such purpose,
over
A-3-4
<PAGE>
(ii) the amount of any Subordination Reduction Amount with
respect to Group I for such Payment Date.
The Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy to make Insured Payments available to the Trustee
on or prior to the related Payment Date for distribution to the Owners. "Insured
Payments" means with respect to any Home Equity Loan Group and as to any Payment
Date, the sum of (i) any shortfall in the amount required to pay the related
Subordination Deficit for such Payment Date from a source other than the
Certificate Insurance Policy, (ii) any shortfall in the amount required to pay
the related Current Interest for such Payment Date from a source other than the
Certificate Insurance Policy and (iii) any shortfall in the amount required to
pay the related Preference Amount from a source other than the Certificate
Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall distribute
in accordance with the Pooling and Servicing Agreement such amounts (directly or
through a Paying Agent) to the Owners of the appropriate Class of the Class A
and Class S-I Certificates.
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. or Industry Mortgage Company,
L.P. 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)
and payments received by the Trustee pursuant to the Certificate Insurance
Policy 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 Owner of this Certificate, by
its acceptance hereof, agrees, however, that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Trustee or Paying Agent), to the owners of such Class A-3
Certificates, the Certificate Insurer will be subrogated to the rights of such
Owners of Class A-3 Certificates with respect to such Insured Payment, shall be
A-3-5
<PAGE>
deemed to the extent of the payments so made to be a registered Owner of such
Class A-3 Certificates and shall receive all future distributions of the Class
A-3 Distribution Amount until all such Insured Payments by the Certificate
Insurer have been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the Percentage
Interests represented by the Class A Certificates with the prior written consent
of the Certificate Insurer 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
Seller and the Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer and without the consent of the
A-3-6
<PAGE>
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 amendment. 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 $1,000,000 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 with respect to the Certificate Insurer.
A-3-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK, as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
-------------------------------------
Title:
----------------------------------
A-3-8
<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.
IMC HOME EQUITY LOAN TRUST 1996-2
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-4
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Originated or Purchased and Serviced by
INDUSTRY MORTGAGE COMPANY, L.P.
(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. or Industry Mortgage Company, L.P. 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
("IMC Home Equity Loan Trust 1996-2") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
No: A-4-
--------
CUSIP
$ April __, 1996
- ------------------ --------------- ---------------
Original Class A-4 Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
----------------
Registered Owner
A-4-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Initial Home Equity Loans in Group I (other
than any principal and interest due thereon on or prior to April 1, 1996 whether
or not received) listed in Schedule I-A to the Pooling and Servicing Agreement
which the Seller is causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee and the Subsequent Home Equity Loans
in Group I (other than any principal and interest payments due thereon or prior
to the related Subsequent Cut-Off Date whether or not received) listed in
Schedule I-A to any Subsequent Transfer Agreement, which the Seller will cause
to be delivered to the Depositor and the Depositor will cause to be delivered to
the Trustee (and all substitutions therefor as provided by Section 3.03, 3.04
and 3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and the Depositor's interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, the Pre- Funding Account and the Capitalized
Interest 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 in the Pooling and Servicing Agreement), 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 ((a) - (c) above shall be
collectively referred to herein as the "Trust Estate").
The Owner hereof is entitled to principal payments on each Payment
Date, as hereinafter described, which will fully amortize such original Class
A-4 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 May 28, 1996 (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 MAY 28, 1996 (THE FIRST PAYMENT DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
A-4-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, 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 April 1, 1996 (the "Pooling and Servicing
Agreement") by and among Industry Mortgage Company, L.P., in its capacity as the
Seller (the "Seller") and as the Servicer (the "Servicer"), ContiSecurities
Asset Funding Corp. in its capacity as Depositor (the "Depositor") and Chemical
Bank, 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 IMC Home Equity Loan Trust 1996-2 Home Equity Loan Pass-Through
Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2 (the "Class
A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class A-5 (the
"Class A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"), Class A-7
(the "Class A-7 Certificates"), Class A-8 (the "Class A-8 Certificates"), Class
S-I (the "Class S-I Certificates") and Class R (Residual Interest) (the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates and the Class A-8
Certificates shall be together referred to as the "Class A Certificates" and the
Class A Certificates, the Class S-I Certificates and the Class R Certificates
are together referred to herein as the "Certificates." Terms capitalized herein
and not otherwise defined herein shall have the respective meanings set forth in
the Pooling and Servicing Agreement.
On the 25th 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 May 28, 1996, 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
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-4 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class A-4 Certificates. The Percentage Interest of each
Class A-4 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-4 Certificate on the Startup Day by the aggregate Class A-4
Certificate Principal Balance on the Startup Day.
"Class A-4 Distribution Amount" means with respect to any Payment Date
the sum of (x) the Class A-4 Current Interest and (y) the Group I Principal
Distribution Amount payable to the Owners of the Class A-4 Certificates pursuant
to Section 7.03(b)(iv)(C) of the Pooling and Servicing Agreement for such
Payment Date:
"Class A-4 Current Interest" means with respect to any Payment Date, 30
days' interest accrued on the Class A-4 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-4 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-4 Certificates as it relates to interest previously paid on the Class
A-4 Certificates, plus the Carry Forward Amount, if any, with respect to the
Class A-4 Certification.
A-4-3
<PAGE>
"Group I Principal Distribution Amount" means with respect to the Fixed
Rate Certificates for any Payment Date, the lesser of:
(a) the Group I Total Available Funds plus any Insured Payment with
respect to the Fixed Rate Certificates minus the Current Interest
for such Payment Date with respect to the Fixed Rate
Certificates; and
(b) the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to principal
owed to the Owners of the Fixed Rate Certificates that remains
unpaid as of such Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans in Group I due on or prior
to the related Due Date thereof, to the extent actually
received by the Trustee during the related Remittance Period
and any Prepayments made by the Mortgagors and actually
received by the Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan in
Group I that was repurchased by the Seller or purchased by the
Servicer on or prior to the related Monthly Remittance Date,
to the extent such Loan Balance is actually received by the
Trustee during the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in Group I (to the extent
such Substitution Amounts relate to principal), to the extent
such Substitution Amounts are actually received by the Trustee
on the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group
I during the related Remittance Period (to the extent such Net
Liquidation Proceeds relate to principal) to the extent such
Net Liquidation Proceeds are actually received by the Trustee,
(F) the amount of any Subordination Deficit with
respect to Group I for such Payment Date,
(G) the principal portion of the proceeds received by
the Trustee with respect to Group I from any termination of
the Trust (to the extent such proceeds related to principal),
(H) with respect to the Payment Date immediately
following the last day of the Funding Period with respect to
Group I, all amounts remaining on deposit in the Pre-Funding
Account to the extent not used to purchase Subsequent Home
Equity Loans for inclusion in Group I during the Funding
Period, and
(I) the amount of any Subordination Increase Amount
with respect to Group I for such Payment Date, to the extent
of any Net Monthly Excess Cashflow available for such purpose,
over
A-4-4
<PAGE>
(ii) the amount of any Subordination Reduction Amount with
respect to Group I for such Payment Date.
The Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy to make Insured Payments available to the Trustee
on or prior to the related Payment Date for distribution to the Owners. "Insured
Payments" means with respect to any Home Equity Loan Group and as to any Payment
Date, the sum of (i) any shortfall in the amount required to pay the related
Subordination Deficit for such Payment Date from a source other than the
Certificate Insurance Policy, (ii) any shortfall in the amount required to pay
related Current Interest for such Payment Date from a source other than the
Certificate Insurance Policy and (iii) any shortfall in the amount required to
pay the related Preference Amount from a source other than the Certificate
Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall distribute
in accordance with the Pooling and Servicing Agreement such amounts (directly or
through a Paying Agent) to the Owners of the appropriate Class of the Class A
and Class S-I Certificates.
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. or Industry Mortgage Company,
L.P. 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)
and payments received by the Trustee pursuant to the Certificate Insurance
Policy 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 Owner of this Certificate, by
its acceptance hereof, agrees, however, that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Trustee or Paying Agent), to the owners of such Class A-4
Certificates, the Certificate Insurer will be subrogated to the rights of such
Owners of Class A-4 Certificates with respect to such Insured Payment, shall be
A-4-5
<PAGE>
deemed to the extent of the payments so made to be a registered Owner of such
Class A-4 Certificates and shall receive all future distributions of the Class
A-4 Distribution Amount until all such Insured Payments by the Certificate
Insurer have been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the Percentage
Interests represented by the Class A Certificates with the prior written consent
of the Certificate Insurer 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
Seller and the Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer and without the consent of the
A-4-6
<PAGE>
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 amendment. 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 $1,000,000 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 with respect to the Certificate Insurer.
A-4-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK, as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
-------------------------------------
Title:
----------------------------------
A-4-8
<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.
IMC HOME EQUITY LOAN TRUST 1996-2
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-5
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Originated or Purchased and Serviced by
INDUSTRY MORTGAGE COMPANY, L.P.
(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. or Industry Mortgage Company, L.P. 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
("IMC Home Equity Loan Trust 1996-2") 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-
--------
CUSIP
$ April __, 1996
- ------------------ --------------- ---------------
Original Class A-5 Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
----------------
Registered Owner
A-5-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Initial Home Equity Loans in Group I (other
than any principal and interest due thereon on or prior to April 1, 1996 whether
or not received) listed in Schedule I-A to the Pooling and Servicing Agreement
which the Seller is causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee and the Subsequent Home Equity Loans
in Group I (other than any principal and interest payments due thereon or prior
to the related Subsequent Cut-Off Date whether or not received) listed in
Schedule I-A to any Subsequent Transfer Agreement, which the Seller will cause
to be delivered to the Depositor and the Depositor will cause to be delivered to
the Trustee (and all substitutions therefor as provided by Section 3.03, 3.04
and 3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and the Depositor's interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, the Pre- Funding Account and the Capitalized
Interest 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 in the Pooling and Servicing Agreement), 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 ((a) - (c) above shall be
collectively referred to herein as the "Trust Estate").
The Owner hereof is entitled to principal payments on each Payment
Date, as hereinafter described, which will fully amortize such original Class
A-5 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 May 28, 1996 (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 MAY 28, 1996 (THE FIRST PAYMENT DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
A-5-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, 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 April 1, 1996 (the "Pooling and Servicing
Agreement") by and among Industry Mortgage Company, L.P., in its capacity as the
Seller (the "Seller") and as the Servicer (the "Servicer"), ContiSecurities
Asset Funding Corp., in its capacity as Depositor (the "Depositor") and Chemical
Bank, 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 IMC Home Equity Loan Trust 1996-2 Home Equity Loan Pass-Through
Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2 (the "Class
A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class A-4 (the
"Class A-4 Certificates"), Class A-6 (the "Class A-6 Certificates"), Class A-7
(the "Class A-7 Certificates"), Class A-8 (the "Class A-8 Certificates"), Class
S-I (the "Class S-I Certificates") and Class R (Residual Interest) (the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5, the Class A-6
Certificates, the Class A-7 Certificates and the Class A-8 Certificates shall be
together referred to as the "Class A Certificates" and the Class A Certificates,
the Class S-I Certificates and the Class R Certificates are together referred to
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 25th 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 May 28, 1996, 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
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.
"Class A-5 Distribution Amount" means with respect to any Payment Date
the sum of (x) the Class A-5 Current Interest and (y) the Group I Principal
Distribution Amount payable to the Owners of the Class A-5 Certificates pursuant
to Section 7.03(b)(iv)(C) of the Pooling and Servicing Agreement for such
Payment Date:
"Class A-5 Current Interest" means with respect to any Payment Date, 30
days' interest accrued on the Class A-5 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-5 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-5 Certificates as it relates to interest previously paid on the Class
A-5 Certificates, plus the Carry Forward Amount, if any, with respect to the
Class A-5 Certification.
A-5-3
<PAGE>
"Group I Principal Distribution Amount" means with respect to the Fixed
Rate Certificates for any Payment Date, the lesser of:
(a) the Group I Total Available Funds plus any Insured Payment with
respect to the Fixed Rate Certificates minus the Current Interest
for such Payment Date with respect to the Fixed Rate
Certificates; and
(b) the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to principal
owed to the Owners of the Fixed Rate Certificates that remains
unpaid as of such Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans in Group I due on or prior
to the related Due Date thereof, to the extent actually
received by the Trustee during the related Remittance Period
and any Prepayments made by the Mortgagors and actually
received by the Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan in
Group I that was repurchased by the Seller or purchased by the
Servicer on or prior to the related Monthly Remittance Date,
to the extent such Loan Balance is actually received by the
Trustee during the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in Group I (to the extent
such Substitution Amounts relate to principal), to the extent
such Substitution Amounts are actually received by the Trustee
on the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group
I during the related Remittance Period (to the extent such Net
Liquidation Proceeds relate to principal) to the extent such
Net Liquidation Proceeds are actually received by the Trustee,
(F) the amount of any Subordination Deficit with
respect to Group I for such Payment Date,
(G) the principal portion of the proceeds received by
the Trustee with respect to Group I from any termination of
the Trust (to the extent such proceeds related to principal),
(H) with respect to the Payment Date immediately
following the last day of the Funding Period with respect to
Group I, all amounts remaining on deposit in the Pre-Funding
Account to the extent not used to purchase Subsequent Home
Equity Loans for inclusion in Group I during the Funding
Period, and
(I) the amount of any Subordination Increase Amount
with respect to Group I for such Payment Date, to the extent
of any Net Monthly Excess Cashflow available for such purpose,
over
A-5-4
<PAGE>
(ii) the amount of any Subordination Reduction Amount with
respect to Group I for such Payment Date.
The Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy to make Insured Payments available to the Trustee
on or prior to the related Payment Date for distribution to the Owners. "Insured
Payments" means with respect to any Home Equity Loan Group and as to any Payment
Date, the sum of (i) any shortfall in the amount required to pay the related
Subordination Deficit for such Payment Date from a source other than the
Certificate Insurance Policy, (ii) any shortfall in the amount required to pay
related Current Interest for such Payment Date from a source other than the
Certificate Insurance Policy and (iii) any shortfall in the amount required to
pay the related Preference Amount from a source other than the Certificate
Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall distribute
in accordance with the Pooling and Servicing Agreement such amounts (directly or
through a Paying Agent) to the Owners of the appropriate Class of the Class A
and Class S-I Certificates.
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. or Industry Mortgage Company,
L.P. 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)
and payments received by the Trustee pursuant to the Certificate Insurance
Policy 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 Owner of this Certificate, by
its acceptance hereof, agrees, however, that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Trustee or Paying Agent), to the owners of such Class A-5
Certificates, the Certificate Insurer will be subrogated to the rights of such
Owners of Class A-5 Certificates with respect to such Insured Payment, shall be
A-5-5
<PAGE>
deemed to the extent of the payments so made to be a registered Owner of such
Class A-5 Certificates and shall receive all future distributions of the Class
A-5 Distribution Amount until all such Insured Payments by the Certificate
Insurer have been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the Percentage
Interests represented by the Class A Certificates with the prior written consent
of the Certificate Insurer 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
Seller and the Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer 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
A-5-6
<PAGE>
will be required prior to amendment. 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 $1,000,000 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 with respect to the Certificate Insurer.
A-5-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK, as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
-------------------------------------
Title:
----------------------------------
A-5-8
<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.
IMC HOME EQUITY LOAN TRUST 1996-2
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-6
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Originated or Purchased and Serviced by
INDUSTRY MORTGAGE COMPANY, L.P.
(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. or Industry Mortgage Company, L.P. 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
("IMC Home Equity Loan Trust 1996-2") 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-6-
--------
CUSIP
$ April __, 1996
- ------------------ --------------- ---------------
Original Class A-6 Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
----------------
Registered Owner
A-6-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Initial Home Equity Loans in Group I (other
than any principal and interest due thereon on or prior to April 1, 1996 whether
or not received) listed in Schedule I-A to the Pooling and Servicing Agreement
which the Seller is causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee and the Subsequent Home Equity Loans
in Group I (other than any principal and interest payments due thereon or prior
to the related Subsequent Cut-Off Date whether or not received) listed in
Schedule I-A to any Subsequent Transfer Agreement, which the Seller will cause
to be delivered to the Depositor and the Depositor will cause to be delivered to
the Trustee (and all substitutions therefor as provided by Section 3.03, 3.04
and 3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and the Depositor's interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, the Pre- Funding Account and the Capitalized
Interest 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 in the Pooling and Servicing Agreement), 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 ((a) - (c) above shall be
collectively referred to herein as the "Trust Estate").
The Owner hereof is entitled to principal payments on each Payment
Date, as hereinafter described, which will fully amortize such original Class
A-6 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 May 28, 1996 (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 MAY 28, 1996 (THE FIRST PAYMENT DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
A-6-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, 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 April 1, 1996 (the "Pooling and Servicing
Agreement") by and among Industry Mortgage Company, L.P., in its capacity as the
Seller (the "Seller") and as the Servicer (the "Servicer"), ContiSecurities
Asset Funding Corp., in its capacity as Depositor (the "Depositor") and Chemical
Bank, 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 IMC Home Equity Loan Trust 1996-2 Home Equity Loan Pass-Through
Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2 (the "Class
A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class A-4 (the
"Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"), Class A-7
(the "Class A-7 Certificates"), Class A-8 (the "Class A-8 Certificates"), Class
S-I (the "Class S-I Certificates") and Class R (Residual Interest) (the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates and the Class A-8
Certificates shall be together referred to as the "Class A Certificates" and the
Class A Certificates, the Class S-I Certificates and the Class R Certificates
are together referred to 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 25th 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 May 28, 1996, 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
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-6 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class A-6 Certificates. The Percentage Interest of each
Class A-6 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-6 Certificate on the Startup Day by the aggregate Class A-6
Certificate Principal Balance on the Startup Day.
"Class A-6 Distribution Amount" means with respect to any Payment Date
the sum of (x) the Class A-6 Current Interest and (y) the Group I Principal
Distribution Amount payable to the Owners of the Class A-6 Certificates pursuant
to Section 7.03(b)(iv)(C) of the Pooling and Servicing Agreement for such
Payment Date:
"Class A-6 Current Interest" means with respect to any Payment Date, 30
days' interest accrued on the Class A-6 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-6 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-6 Certificates as it relates to interest previously paid on the Class
A-6 Certificates, plus the Carry Forward Amount, if any, with respect to the
Class A-6 Certification.
A-6-3
<PAGE>
"Group I Principal Distribution Amount" means with respect to the Fixed
Rate Certificates for any Payment Date, the lesser of:
(a) the Group I Total Available Funds plus any Insured Payment with
respect to the Fixed Rate Certificates minus the Current Interest
for such Payment Date with respect to the Fixed Rate
Certificates; and
(b) the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to principal
owed to the Owners of the Fixed Rate Certificates that remains
unpaid as of such Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans in Group I due on or prior
to the related Due Date thereof, to the extent actually
received by the Trustee during the related Remittance Period
and any Prepayments made by the Mortgagors and actually
received by the Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan in
Group I that was repurchased by the Seller or purchased by the
Servicer on or prior to the related Monthly Remittance Date,
to the extent such Loan Balance is actually received by the
Trustee during the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in Group I (to the extent
such Substitution Amounts relate to principal), to the extent
such Substitution Amounts are actually received by the Trustee
on the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group
I during the related Remittance Period (to the extent such Net
Liquidation Proceeds relate to principal) to the extent such
Net Liquidation Proceeds are actually received by the Trustee,
(F) the amount of any Subordination Deficit with
respect to Group I for such Payment Date,
(G) the principal portion of the proceeds received by
the Trustee with respect to Group I from any termination of
the Trust (to the extent such proceeds related to principal),
(H) with respect to the Payment Date immediately
following the last day of the Funding Period with respect to
Group I, all amounts remaining on deposit in the Pre-Funding
Account to the extent not used to purchase Subsequent Home
Equity Loans for inclusion in Group I during the Funding
Period, and
(I) the amount of any Subordination Increase Amount
with respect to Group I for such Payment Date, to the extent
of any Net Monthly Excess Cashflow available for such purpose,
over
A-6-4
<PAGE>
(ii) the amount of any Subordination Reduction Amount with
respect to Group I for such Payment Date.
The Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy to make Insured Payments available to the Trustee
on or prior to the related Payment Date for distribution to the Owners. "Insured
Payments" means with respect to any Home Equity Loan Group and as to any Payment
Date, the sum of (i) any shortfall in the amount required to pay the related
Subordination Deficit for such Payment Date from a source other than the
Certificate Insurance Policy, (ii) any shortfall in the amount required to pay
related Current Interest for such Payment Date from a source other than the
Certificate Insurance Policy and (iii) any shortfall in the amount required to
pay the related Preference Amount from a source other than the Certificate
Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall distribute
in accordance with the Pooling and Servicing Agreement such amounts (directly or
through a Paying Agent) to the Owners of the appropriate Class of the Class A
and Class S-I Certificates.
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. or Industry Mortgage Company,
L.P. 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)
and payments received by the Trustee pursuant to the Certificate Insurance
Policy 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 Owner of this Certificate, by
its acceptance hereof, agrees, however, that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Trustee or Paying Agent), to the owners of such Class A-6
Certificates, the Certificate Insurer will be subrogated to the rights of such
Owners of Class A-6 Certificates with respect to such Insured Payment, shall be
A-6-5
<PAGE>
deemed to the extent of the payments so made to be a registered Owner of such
Class A-6 Certificates and shall receive all future distributions of the Class
A-6 Distribution Amount until all such Insured Payments by the Certificate
Insurer have been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the Percentage
Interests represented by the Class A Certificates with the prior written consent
of the Certificate Insurer 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
Seller and the Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer 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
A-6-6
<PAGE>
will be required prior to amendment. 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 $1,000,000 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 with respect to the Certificate Insurer.
A-6-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK, as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
-------------------------------------
Title:
----------------------------------
A-6-8
<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.
IMC HOME EQUITY LOAN TRUST 1996-2
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-7
(_____% Pass-Through Rate)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Originated or Purchased and Serviced by
INDUSTRY MORTGAGE COMPANY, L.P.
(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. or Industry Mortgage Company, L.P. 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
("IMC Home Equity Loan Trust 1996-2") 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-7-
--------
CUSIP
$ April __, 1996
- ------------------ --------------- ---------------
Original Class A-7 Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
----------------
Registered Owner
A-7-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Initial Home Equity Loans in Group I (other
than any principal and interest due thereon on or prior to April 1, 1996 whether
or not received) listed in Schedule I-A to the Pooling and Servicing Agreement
which the Seller is causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee and the Subsequent Home Equity Loans
in Group I (other than any principal and interest payments due thereon or prior
to the related Subsequent Cut-Off Date whether or not received) listed in
Schedule I-A to any Subsequent Transfer Agreement, which the Seller will cause
to be delivered to the Depositor and the Depositor will cause to be delivered to
the Trustee (and all substitutions therefor as provided by Section 3.03, 3.04
and 3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and the Depositor's interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, the Pre- Funding Account and the Capitalized
Interest 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 in the Pooling and Servicing Agreement), 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 ((a) - (c) above shall be
collectively referred to herein as the "Trust Estate").
The Owner hereof is entitled to principal payments on each Payment
Date, as hereinafter described, which will fully amortize such original Class
A-7 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 May 28, 1996 (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 MAY 28, 1996 (THE FIRST PAYMENT DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
A-7-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, 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 April 1, 1996 (the "Pooling and Servicing
Agreement") by and among Industry Mortgage Company, L.P., in its capacity as the
Seller (the "Seller") and as the Servicer (the "Servicer"), ContiSecurities
Asset Funding Corp., in its capacity as Depositor (the "Depositor") and Chemical
Bank, 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 IMC Home Equity Loan Trust 1996-2 Home Equity Loan Pass-Through
Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2 (the "Class
A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class A-4 (the
"Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"), Class A-6
(the "Class A-6 Certificates"), Class A-8 (the "Class A-8 Certificates"), Class
S-I (the "Class S-I Certificates") and Class R (Residual Interest) (the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates and the Class A-8
Certificates shall be together referred to as the "Class A Certificates" and the
Class A Certificates, the Class S-I Certificates and the Class R Certificates
are together referred to 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 25th 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 May 28, 1996, 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
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-7 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class A-7 Certificates. The Percentage Interest of each
Class A-7 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-7 Certificate on the Startup Day by the aggregate Class A-7
Certificate Principal Balance on the Startup Day.
"Class A-7 Distribution Amount" means with respect to any Payment Date
the sum of (x) the Class A-7 Current Interest and (y) the Group I Principal
Distribution Amount payable to the Owners of the Class A-7 Certificates pursuant
to Section 7.03(b)(iv)(C) of the Pooling and Servicing Agreement for such
Payment Date:
"Class A-7 Current Interest" means with respect to any Payment Date, 30
days' interest accrued on the Class A-7 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-7 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-7 Certificates as it relates to interest previously paid on the Class
A-7 Certificates, plus the Carry Forward Amount, if any, with respect to the
Class A-7 Certification.
A-7-3
<PAGE>
"Group I Principal Distribution Amount" means with respect to the Fixed
Rate Certificates for any Payment Date, the lesser of:
(a) the Group I Total Available Funds plus any Insured Payment with
respect to the Fixed Rate Certificates minus the Current Interest
for such Payment Date with respect to the Fixed Rate
Certificates; and
(b) the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to principal
owed to the Owners of the Fixed Rate Certificates that remains
unpaid as of such Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans in Group I due on or prior
to the related Due Date thereof, to the extent actually
received by the Trustee during the related Remittance Period
and any Prepayments made by the Mortgagors and actually
received by the Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan in
Group I that was repurchased by the Seller or purchased by the
Servicer on or prior to the related Monthly Remittance Date,
to the extent such Loan Balance is actually received by the
Trustee during the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in Group I (to the extent
such Substitution Amounts relate to principal), to the extent
such Substitution Amounts are actually received by the Trustee
on the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group
I during the related Remittance Period (to the extent such Net
Liquidation Proceeds relate to principal) to the extent such
Net Liquidation Proceeds are actually received by the Trustee,
(F) the amount of any Subordination Deficit with
respect to Group I for such Payment Date,
(G) the principal portion of the proceeds received by
the Trustee with respect to Group I from any termination of
the Trust (to the extent such proceeds related to principal),
(H) with respect to the Payment Date immediately
following the last day of the Funding Period with respect to
Group I, all amounts remaining on deposit in the Pre-Funding
Account to the extent not used to purchase Subsequent Home
Equity Loans for inclusion in Group I during the Funding
Period, and
(I) the amount of any Subordination Increase Amount
with respect to Group I for such Payment Date, to the extent
of any Net Monthly Excess Cashflow available for such purpose,
over
A-7-4
<PAGE>
(ii) the amount of any Subordination Reduction Amount with
respect to Group I for such Payment Date.
The Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy to make Insured Payments available to the Trustee
on or prior to the related Payment Date for distribution to the Owners. "Insured
Payments" means with respect to any Home Equity Loan Group and as to any Payment
Date, the sum of (i) any shortfall in the amount required to pay the related
Subordination Deficit for such Payment Date from a source other than the
Certificate Insurance Policy, (ii) any shortfall in the amount required to pay
related Current Interest for such Payment Date from a source other than the
Certificate Insurance Policy and (iii) any shortfall in the amount required to
pay the related Preference Amount from a source other than the Certificate
Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall distribute
in accordance with the Pooling and Servicing Agreement such amounts (directly or
through a Paying Agent) to the Owners of the appropriate Class of the Class A
and Class S-I Certificates.
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. or Industry Mortgage Company,
L.P. 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)
and payments received by the Trustee pursuant to the Certificate Insurance
Policy 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 Owner of this Certificate, by
its acceptance hereof, agrees, however, that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Trustee or Paying Agent), to the owners of such Class A-7
Certificates, the Certificate Insurer will be subrogated to the rights of such
Owners of Class A-7 Certificates with respect to such Insured Payment, shall be
A-7-5
<PAGE>
deemed to the extent of the payments so made to be a registered Owner of such
Class A-7 Certificates and shall receive all future distributions of the Class
A-7 Distribution Amount until all such Insured Payments by the Certificate
Insurer have been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the Percentage
Interests represented by the Class A Certificates with the prior written consent
of the Certificate Insurer 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
Seller and the Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer 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
A-7-6
<PAGE>
will be required prior to amendment. 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 $1,000,000 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 with respect to the Certificate Insurer.
A-7-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK, as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
-------------------------------------
Title:
----------------------------------
A-7-8
<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.
IMC HOME EQUITY LOAN TRUST 1996-2
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS A-8
(Variable Pass-Through Rate)
Representing Certain Interests in a Pool of Group II Home Equity
Loans Originated or Purchased and Serviced by
INDUSTRY MORTGAGE COMPANY, L.P.
(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. or Industry Mortgage Company, L.P. 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
("IMC Home Equity Loan Trust 1996-2") 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-8-
--------
CUSIP
$ April __, 1996
- ------------------ --------------- ---------------
Original Class A-8 Certificate Date Final Scheduled
Principal Balance Payment Date
CEDE & CO.
----------------
Registered Owner
A-8-1
<PAGE>
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Initial Home Equity Loans in Group II (other
than any principal and interest due thereon on or prior to April 1, 1996 whether
or not received) listed in Schedule I-B to the Pooling and Servicing Agreement
which the Seller is causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee and the Subsequent Home Equity Loans
in Group II (other than any principal and interest payments due thereon or prior
to the related Subsequent Cut-Off Date whether or not received) listed in
Schedule I-B to any Subsequent Transfer Agreement, which the Seller will cause
to be delivered to the Depositor and the Depositor will cause to be delivered to
the Trustee (and all substitutions therefor as provided by Section 3.03, 3.04
and 3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and the Depositor's interest in any Property which secured
a Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, the Pre- Funding Account and the Capitalized
Interest 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 in the Pooling and Servicing Agreement), 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 ((a) - (c) above shall be
collectively referred to herein as the "Trust Estate").
The Owner hereof is entitled to principal payments on each Payment
Date, as hereinafter described, which will fully amortize such original Class
A-8 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 May 28, 1996 (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 MAY 28, 1996 (THE FIRST PAYMENT DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
A-8-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, 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 April 1, 1996 (the "Pooling and Servicing
Agreement") by and among Industry Mortgage Company, L.P., in its capacity as the
Seller (the "Seller") and as the Servicer (the "Servicer"), ContiSecurities
Asset Funding Corp. in its capacity as Depositor (the "Depositor") and Chemical
Bank, 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 IMC Home Equity Loan Trust 1996-2 Home Equity Loan Pass-Through
Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2 (the "Class
A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class A-4 (the
"Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"), Class A-6
(the "Class A-6 Certificates"), Class A-7 (the "Class A-7 Certificates"), Class
S-I (the "Class S-I Certificates") and Class R (Residual Interest) (the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates and the Class A-8
Certificates shall be together referred to as the "Class A Certificates" and the
Class A Certificates, the Class S-I Certificates and the Class R Certificates
are together referred to herein as the "Certificates." Terms capitalized herein
and not otherwise defined herein shall have the respective meanings set forth in
the Pooling and Servicing Agreement.
On the 25th 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 May 28, 1996, 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
Certificate Principal Balance of at least $1,000,000 (by wire transfer or
otherwise) to the account of an Owner at a domestic bank or other entity having
appropriate facilities therefor, if such Owner has so notified the Trustee, or
by check mailed to the address of the person entitled thereto as it appears on
the Register.
Each Owner of record of a Class A-8 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Payment Date
to the Owners of the Class A-8 Certificates. The Percentage Interest of each
Class A-8 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-8 Certificate on the Startup Day by the aggregate Class A-8
Certificate Principal Balance on the Startup Day.
"Class A-8 Distribution Amount" means with respect to any Payment Date
the sum of (x) the Class A-8 Current Interest and (y) the Group II Principal
Distribution Amount payable to the Owners of the Class A-8 Certificates pursuant
to Section 7.03(b)(iv)(D) of the Pooling and Servicing Agreement for such
Payment Date:
"Class A-8 Current Interest" means with respect to any Payment Date, 30
days' interest accrued on the Class A-8 Certificate Principal Balance
immediately prior to such Payment Date during the related Accrual Period at the
Class A-8 Pass-Through Rate plus the Preference Amount owed to the Owners of the
Class A-8 Certificates as it relates to interest previously paid on the Class
A-8 Certificates, plus the Carry Forward Amount, if any, with respect to the
Class A-8 Certification.
A-8-3
<PAGE>
"Class A-8 Pass-Through Rate": As of any Payment Date, the lesser of
(i) 13.26% per annum and (ii) the weighted average of the Remittance Rates on
the Home Equity Loans in Group II.
"Group II Principal Distribution Amount" means with respect to the
Class A-8 Certificates for any Payment Date, the lesser of:
(a) the Group II Total Available Funds plus any Insured Payment with
respect to the Class A-8 Certificates minus the Class A-8 Current
Interest for such Payment Date; and
(b) the excess, if any, of (i) the sum of:
(A) the Preference Amount with respect to principal
owed to the Owners of the Class A-8 Certificates that remains
unpaid as of such Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans in Group II due on or prior
to the related Due Date thereof, to the extent actually
received by the Trustee during the related Remittance Period
and any Prepayments made by the Mortgagors and actually
received by the Trustee during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan in
Group II that was repurchased by the Seller or purchased by
the Servicer on or prior to the related Monthly Remittance
Date, to the extent such Loan Balance is actually received by
the Trustee during the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in Group II (to the extent
such Substitution Amounts relate to principal), to the extent
such Substitution Amounts are actually received by the Trustee
on the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group
II during the related Remittance Period (to the extent such
Net Liquidation Proceeds relate to principal) to the extent
such Net Liquidation Proceeds are actually received by the
Trustee,
(F) the amount of any Subordination Deficit with
respect to Group II for such Payment Date,
(G) the principal portion of the proceeds received by
the Trustee with respect to Group II from any termination of
the Trust (to the extent such proceeds related to principal),
(H) with respect to the Payment Date immediately
following the last day of the Funding Period with respect to
Group II, all amounts remaining on deposit in the Pre-Funding
Account to the extent not used to purchase Subsequent Home
Equity Loans for inclusion in Group II during the Funding
Period, and
(I) the amount of any Subordination Increase Amount
with respect to Group II for such Payment Date, to the extent
of any Net Monthly Excess Cashflow available for such purpose,
over
A-8-4
<PAGE>
(ii) the amount of any Subordination Reduction Amount with
respect to Group II for such Payment Date.
The Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy to make Insured Payments available to the Trustee
on or prior to the related Payment Date for distribution to the Owners. "Insured
Payments" means with respect to any Home Equity Loan Group and as to any Payment
Date, the sum of (i) any shortfall in the amount required to pay the related
Subordination Deficit for such Payment Date from a source other than the
Certificate Insurance Policy, (ii) any shortfall in the amount required to pay
related Current Interest for such Payment Date from a source other than the
Certificate Insurance Policy and (iii) any shortfall in the amount required to
pay the related Preference Amount from a source other than the Certificate
Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall distribute
in accordance with the Pooling and Servicing Agreement such amounts (directly or
through a Paying Agent) to the Owners of the appropriate Class of the Class A
and Class S-I Certificates.
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. or Industry Mortgage Company,
L.P. 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)
and payments received by the Trustee pursuant to the Certificate Insurance
Policy 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 Owner of this Certificate, by
its acceptance hereof, agrees, however, that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Trustee
A-8-5
<PAGE>
or Paying Agent), to the owners of such Class A-8 Certificates, the Certificate
Insurer will be subrogated to the rights of such Owners of Class A-8
Certificates with respect to such Insured Payment, shall be deemed to the extent
of the payments so made to be a registered Owner of such Class A-8 Certificates
and shall receive all future distributions of the Class A-8 Distribution Amount
until all such Insured Payments by the Certificate Insurer have been fully
reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the Percentage
Interests represented by the Class A Certificates with the prior written consent
of the Certificate Insurer 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
Seller and the Servicer at any time and from time to time, with the prior
A-8-6
<PAGE>
written approval of the Certificate Insurer 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 amendment. 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 $1,000,000 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 with respect to the Certificate Insurer.
A-8-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK, as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
-------------------------------------
Title:
----------------------------------
A-8-8
<PAGE>
EXHIBIT B
FORM OF CLASS S-I 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.
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 5.08 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
IMC Home Equity Loan Trust 1996-2
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS S-I
Representing Certain Interests Relating to a Pool of ARM Loans in Group I
Originated or Purchased and Serviced by
Industry Mortgage Company, L.P.
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. or Industry Mortgage Company, L.P. 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.: S-I
April __, 1996
Date
- ------------------- -----------------
Percentage Interest Final Scheduled
Distribution Date
-----------------
Registered Holder
B-1
<PAGE>
The registered Owner named above is th registered Owner of a fractional
interest in (a) the Initial Home Equity Loans (other than any principal and
interest due thereon on or prior to April 1, 1996 whether or not received)
listed in Schedule II to the Pooling and Servicing Agreement which the Seller is
causing to be delivered to the Depositor and the Depositor is causing to be
delivered to the Trustee [and the Subsequent Home Equity Loans (other than any
principal and interest payments due thereon or prior to the related Subsequent
Cut-Off Date whether or not received) listed in Schedule II to any Subsequent
Transfer Agreement, which the Seller will cause to be delivered to the Depositor
and the Depositor will cause to be delivered to the Trustee] (and all
substitutions therefor as provided by Section 3.03, 3.04 and 3.06 of the Pooling
and Servicing Agreement), together with the related Home Equity Loan documents
and the 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 the name of the Trustee in the Principal and Interest Account, if
any, exclusive of investment earnings thereon (except as otherwise provided in
the Pooling and Servicing Agreement), 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 ((a)-(c) above shall be
collectively referred to herein as the "Trust Estate").
Upon receiving the final distribution hereon, the Owner hereof is
required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement provides that, in any event, upon the making of the final distribution
due on this Certificate, this Certificate shall be deemed cancelled for all
purposes under the Pooling and Servicing Agreement.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE THE HOLDER OF THIS
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTION OF PRINCIPAL WITH RESPECT
TO THE HOME EQUITY LOANS.
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, Home Equity Loan Pass-Through
Certificates, Class S-I (the "Class S-I Certificates") and issued under and
subject to the terms, provisions and conditions of that certain Pooling and
Servicing Agreement dated as of April 1, 1996 (the "Pooling and Servicing
Agreement") by and among Industry Mortgage Company, L.P., in its capacity as the
Seller (the "Seller") and as the Servicer (the "Servicer"), ContiSecurities
Asset Funding Corp., in its capacity as Depositor, (the "Depositor") and
Chemical Bank, 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 IMC Home Equity Loan Trust 1996-2 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 and Class A-8 (collectively, the "Class A Certificates") and Class R
(the "Class R Certificates"). The Class A Certificates, the Class S-I
B-2
<PAGE>
Certificates and the Class R Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
Terms capitalized herein and not otherwise defined herein shall have
the respective meanings set forth in the Pooling and Servicing Agreement.
On the 25th 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 May 28, 1996, the Owners of the Class S-I 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") will be entitled to receive the Class S-I Distribution Amount relating to
such Payment Date. Distributions will be made in immediately available funds to
such Owners, by wire transfer or otherwise, to the account of an Owner at a
domestic bank or other entity having appropriate facilities therefor, if such
Owner has so notified the Trustee at least 5 business days prior to the related
record date, or by check mailed to the address of the person entitled thereto as
it appears on the Register.
Each Owner of record of a Class S-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 S-I Certificates. The Percentage Interest of each
Class S-I Certificate as of any date of determination will be equal to the
percentage interest set forth on such Class S-I Certificate.
"Class S-I Distribution Amount" means with respect to each Payment
Date, the sum of the following (determined with respect to each Home Equity Loan
listed on Schedule II to the Pooling and Servicing Agreement) (a) one-twelfth of
the product of (x) the outstanding Loan Balance of each such Home Equity Loan on
such immediately preceding Payment Date and (y) the excess, if any, of (i) the
Coupon Rate of each Home Equity Loan listed on such Schedule II on the first day
of the related Remittance Period over (ii) the Coupon Rate (determined as of the
Startup Day) of each Home Equity Loan listed on such Schedule II, (b) the
Preference Amount, if any, as it relates to the Class S-I Certificates and (c)
the Class S-I Carry Forward Amount, if any. The Class S-I Distribution Amount
shall be calculated on a loan-by-loan basis.
The Certificate Insurer is required, subject to the terms of the
Insurance Policy to make Insured Payments available to the Trustee on or prior
to the related Payment Date for distribution to the Owners. "Insured Payments"
means with respect to any Home Equity Loan Group and as to any Payment Date, the
sum of (i) any shortfall in the amount required to pay the related Subordination
Deficit for such Payment Date from a source other than the Certificate Insurance
Policy, (ii) any shortfall in the amount required to pay the related Current
Interest for such Payment Date from a source other than the Certificate
Insurance Policy, and (iii) any shortfall in the amount required to pay the
related Preference Amount from a source other than the Certificate Insurance
Policy.
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
B-3
<PAGE>
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. or Industry Mortgage Company,
L.P. 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 earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, 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 such plan and such liquidation qualifies as a Qualified
Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may, at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
B-4
<PAGE>
The Certificate Insurer or the Owners of a majority of the Percentage
Interests represented by the Class A Certificates then outstanding with the
prior written consent of the Certificate Insurer 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
Seller and the Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer 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 amendment. 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 S-I Certificates are issuable only as registered Certificates
in minimum percentage interests of all interests in the Class S-I Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class S-I Certificates are exchangeable for new
Class S-I Certificates of the same percentage interest as the Class S-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 with respect to the Certificate Insurer.
B-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK,
as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
-------------------------------------
Title:
----------------------------------
B-6
<PAGE>
EXHIBIT C
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.
C-1
<PAGE>
IMC HOME EQUITY LOAN TRUST 1996-2
Home Equity Loan PASS-THROUGH CERTIFICATE
CLASS R
(Residual Interest)
Representing Certain Interests Relating to two Pools of
Home Equity Loans Originated or Purchased
and Serviced by
INDUSTRY MORTGAGE COMPANY, L.P.
(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. or Industry Mortgage Company, L.P. This
Certificate represents a fractional residual ownership interest in the Trust
Estate as defined below.)
No: R -__ April __, 1996
--------------------
Date
Percentage Interest _________%
-------------------------
Registered Owner
The registered Owner named above is the registered Owner of a
fractional interest in (a) the Initial Home Equity Loans (other than any
principal and interest due thereon on or prior to April 1, 1996 whether or not
received) listed in Schedule I-A and I-B to the Pooling and Servicing Agreement
which the Seller is causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee and the Subsequent Home Equity Loans
(other than any principal and interest payments due thereon or prior to the
related Subsequent Cut-Off Date whether or not received) listed in Schedule I-A
and I-B to any Subsequent Transfer Agreement, which the Seller will cause to be
delivered to the Depositor and the Depositor will cause to be delivered to the
Trustee (and all substitutions therefor as provided by Section 3.03, 3.04 and
3.06 of the Pooling and Servicing Agreement), together with the related Home
Equity Loan documents and the Seller's interest in any Property which secured a
Home Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, the Pre-Funding Account and the Capitalized Interest
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 in
the Pooling and Servicing Agreement), 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 ((a)-(c) above shall be
collectively referred to herein as the "Trust Estate").
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
C-2
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as IMC Home Equity Loan Trust 1996-2, 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 April 1, 1996 (the "Pooling and Servicing Agreement") by
and among Industry Mortgage Company, L.P., in its capacity as the Seller (the
"Seller") and as the Servicer (the "Servicer"), ContiSecurities Asset Funding
Corp. in its capacity as Depositor, (the "Depositor") and Chemical Bank, 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 IMC Home
Equity Loan Trust 1996-2 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
(collectively, the "Class A Certificates") and Class S-I (the "Class S-I
Certificates"). The Class A Certificates, the Class S-I Certificates and the
Class R Certificates are together referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 25th 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 May 28, 1996, each Owner of a Class R Certificate 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 Residual Net Monthly Excess Cashflow relating to such
Certificate on such Payment Date. Distributions will be made in immediately
available funds to Owners of Class R Certificates having an aggregate Percentage
Interest of at least 10% (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.
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. or Industry Mortgage Company,
L.P. 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
C-3
<PAGE>
provided in the Pooling and Servicing Agreement with respect to such Certificate
or to institute suit for the enforcement of any such distribution, and such
right shall not be impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier of (i) the payment to the Owners
of all Certificates from amounts other than those available under the
Certificate Insurance Policy of all amounts held by the Trustee and required to
be paid to such Owners pursuant to the Pooling and Servicing Agreement upon the
later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Home Equity Loan in the 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 provide 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 Servicer shall either sell the Home Equity Loans and the
Trustee shall distribute the proceeds of the liquidation of the Trust Estate, or
the Servicer shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates to the effect that each such
liquidation constitutes a Qualified Liquidation, each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of the
Pooling and Servicing Agreement occur no later than the close of the 90th day
after the date of adoption of the plan of liquidation and such liquidation
qualifies as a Qualified Liquidation.
The Pooling and Servicing Agreement additionally provides that (i) the
Owners of the Class R Certificates may at their option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any Monthly
Remittance Date after the Clean Up Call Date and (ii) under certain
circumstances relating to the qualification of the REMIC as a REMIC under the
Code the Home Equity Loans may be sold, thereby effecting the early retirement
of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of a majority of the Percentage
Interests represented by the Class A Certificates then outstanding with the
prior written consent of the Certificate Insurer have the right to exercise any
trust or power set forth in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the Trust Estate 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
Seller and the Servicer at any time and from time to time, with the prior
written approval of the Certificate Insurer and without the consent of the
C-4
<PAGE>
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 amendment. 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 with respect to the Certificate Insurer.
C-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
CHEMICAL BANK,
as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
CHEMICAL BANK, as Trustee
By:
-------------------------------------
Title:
----------------------------------
C-6
<PAGE>
EXHIBIT D
FORM OF SUBSEQUENT TRANSFER AGREEMENT
ContiSecurities Asset Funding Corp. (the "Depositor"), as Depositor,
Industry Mortgage Company, L.P. (the "Seller"), as Seller, and IMC Home Equity
Loan Trust 1996-2, as Purchaser, pursuant to the Pooling and Servicing Agreement
dated as of April 1, 1996 among the Depositor, the Seller, as Seller and
Servicer, and Chemical Bank, as Trustee (the "Pooling and Servicing Agreement"),
hereby confirm their understanding with respect to the sale by the Seller and
the purchase by the Depositor and the sale by the Depositor and the purchase by
the Purchaser of those Home Equity Loans (the "Subsequent Home Equity Loans")
listed on the attached Schedule of Home Equity Loans.
Conveyance of Subsequent Home Equity Loans. As of _____________, 1996
(the "Subsequent Cut-Off Date"), the Seller does hereby irrevocably transfer,
assign, setover and otherwise convey to the Depositor and the Depositor does
hereby irrevocably transfer, assign, set over and otherwise convey to the
Purchaser, without recourse (except as otherwise explicitly provided for herein)
all right, title and interest in and to any and all benefits accruing from the
Subsequent Home Equity Loans (other than any principal and interest payments
received thereon on or prior to the Subsequent Cut-Off Date) which are delivered
to the Trustee herewith (and all substitutions therefor as provided by Sections
3.03, 3.04 and 3.06 of the Pooling and Servicing Agreement), together with the
related Subsequent Home Equity Loan documents and the interest in any Property
which secured a Subsequent 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; and
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 Subsequent 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). The Depositor shall deliver the original
Mortgage or mortgage assignment with evidence of recording thereon (except as
otherwise provided by the Pooling and Servicing Agreement) and other required
documentation in accordance with the terms set forth in Sections 3.05 and 3.07
of the Pooling and Servicing Agreement.
The costs relating to the delivery of the documents specified in this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement shall be
borne by the Depositor.
Additional terms of the sale are attached hereto as Attachment A.
The Depositor hereby affirms the representations and warranties set
forth in the Pooling and Servicing Agreement that relate to the Depositor and
the Subsequent Home Equity Loans as of the date hereof. The Depositor hereby
delivers notice and confirms that each of the conditions set forth in Section
3.07(b) to the Pooling and Servicing Agreement are satisfied as of the date
hereof.
All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified, confirmed and incorporated herein, provided that in the event
of any conflict the provisions of this Subsequent Transfer Agreement shall
control over the conflicting provisions of the Pooling and Servicing Agreement.
D-1
<PAGE>
Terms capitalized herein and not defined herein shall have their
respective meanings as set forth in the Pooling and Servicing Agreement.
CONTISECURITIES ASSET FUNDING CORP.
as Depositor
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
INDUSTRY MORTGAGE COMPANY, L.P.
as Seller
By:
--------------------------------
Name:
Title:
CHEMICAL BANK, as Trustee for IMC
Home Equity Loan Trust 1996-2
By:
--------------------------------
Name:
Title:
Dated:
D-2
<PAGE>
EXHIBIT E
FORM OF CERTIFICATE RE: HOME EQUITY LOANS
PREPAID IN FULL AFTER CUT-OFF DATE
CERTIFICATE RE: PREPAID LOANS
I, __________________________, _______________ of Industry Mortgage
Company, L.P. ("IMC"), hereby certify that between the "Cut-Off Date" (as
defined in the Pooling and Servicing Agreement dated as of April 1, 1996 among
ContiSecurities Asset Funding Corp., as Depositor, IMC as Seller and Servicer,
and Chemical Bank, as Trustee) and the "Startup Day," the following schedule of
"Home Equity Loans" (each as defined in the Pooling and Servicing Agreement)
have been prepaid in full.
Account Original Current Date Paid
Number Name Amount Balance Off
Dated: April __, 1996
By:
----------------------------------
Title:
-------------------------------
E-1
<PAGE>
EXHIBIT F-1
TRUSTEE'S ACKNOWLEDGEMENT OF RECEIPT
Chemical Bank, in its capacity as Trustee (the "Trustee") under that
certain Pooling and Servicing Agreement dated as of April 1, 1996 ( the "Pooling
and Servicing Agreement") among ContiSecurities Asset Funding Corp., as
Depositor, Industry Mortgage Company, L.P., a Delaware limited partnership, as
seller and servicer ("IMC"), and Chemical Bank, as Trustee (the "Trustee"),
hereby acknowledges receipt of an aggregate cash amount of approximately
$__________ into the Pre-Funding Account and an aggregate cash amount of
approximately $__________ into the Capitalized Interest Account pursuant to
Section 7.04 of the Pooling and Servicing Agreement.
The Trustee hereby additionally acknowledges that it shall cause the
Custodian (as defined in the Pooling and Servicing Agreement) to review such
items as required by Section 3.06(a) of the Pooling and Servicing Agreement.
CHEMICAL BANK, as Trustee
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Dated: April __, 1996
F-1-1
<PAGE>
EXHIBIT F-2
CUSTODIAN'S ACKNOWLEDGEMENT OF RECEIPT
The First National Bank of Boston, in its capacity as custodian (the
"Custodian) under the Custodial Agreement dated as of April 1, 1996 among the
Custodian and Chemical Bank, in its capacity as Trustee (the "Trustee") under
that certain Pooling and Servicing Agreement dated as of April 1, 1996 ( the
"Pooling and Servicing Agreement") among ContiSecurities Asset Funding Corp., as
Depositor, Industry Mortgage Company, L.P., a Delaware limited partnership, as
seller and servicer ("IMC"), and Chemical Bank, 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 IMC with
respect to the Initial Home Equity Loans pursuant to Section 3.05(b)(i) of the
Pooling and Servicing Agreement.
The Schedules of Initial Home Equity Loans is attached to this Receipt.
The Custodian 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.
THE FIRST NATIONAL BANK OF BOSTON,
as custodian
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Dated: April __, 1996
F-2-1
<PAGE>
EXHIBIT G
FORM OF POOL CERTIFICATION
POOL CERTIFICATION
WHEREAS, the undersigned is an Authorized Officer of The First National
Bank of Boston, in its capacity as Custodian (the "Custodian") under the
Custodial Agreement dated April 1, 1996 between the Custodian and Chemical Bank,
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 April 1, 1996 (the "Pooling and Servicing Agreement")
among ContiSecurities Asset Funding Corp., as Depositor, Industry Mortgage
Company, L.P., as Seller (the "Seller") and Servicer, and Chemical Bank, as
Trustee; and
WHEREAS, the Custodian 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
Seller promptly of any defects with respect to the Pool, and the 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 Custodian to deliver this Pool Certification upon the satisfaction
of certain conditions set forth therein.
NOW, THEREFORE, the Custodian 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 Seller pursuant to Section 3.06(b) of the Pooling and Servicing Agreement
has been completed. The Custodian makes no certification hereby, however, with
respect to any intervening assignments or assumption and modification
agreements.
THE FIRST NATIONAL BANK OF BOSTON, as
Custodian
By:
--------------------------------
Title:
-----------------------------
Dated: April __, 1996
G-1
<PAGE>
EXHIBIT H
FORM OF DELIVERY ORDER
DELIVERY ORDER
Chemical Bank, as Trustee
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attention: Structured Finance Services
Dear Sirs:
Pursuant to Section 4.01 of the Pooling and Servicing Agreement, dated
as of April 1, 1996 (the "Pooling and Servicing Agreement") among
ContiSecurities Asset Funding Corp., as Depositor, Industry Mortgage Company,
L.P., a Delaware Corporation ("IMC"), as Seller and Servicer, and Chemical Bank,
a New York banking corporation, as Trustee (the "Trustee"), IMC HEREBY CERTIFIES
that all conditions precedent to the issuance of the IMC Home Equity Loan Trust
1996-2, Home Equity Loan Pass-Through Certificate, Class A, Class S-I 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. Instructions regarding the
registration of the Certificates are attached hereto.
Very truly yours,
CONTISECURITIES ASSET FUNDING CORP.
By:
--------------------------------
Title:
-----------------------------
By:
--------------------------------
Title:
-----------------------------
Dated: April __, 1996
H-1
<PAGE>
EXHIBIT I
FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
AFFIDAVIT PURSUANT TO SECTION
860E(e) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of ] [the United States], on behalf of which he
makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" and will
not be a "disqualified organization" as of [date of transfer] (For this purpose,
a "disqualified organization" means the United States, any state or political
subdivision thereof, any foreign government, any international organization, any
agency or instrumentality of any of the foregoing (other than certain taxable
instrumentalities), any cooperative organization furnishing electric energy or
providing telephone service to persons in rural areas, or any organization
(other than a farmers' cooperative) that is exempt from federal income tax
unless such organization is subject to the tax on unrelated business income.);
(ii) it is not acquiring the Class R Certificate for the account of a
disqualified organization; (iii) it consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by the Trustee (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the Class R
Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Class R Certificate unless (a)
it has received from the transferee an affidavit in substantially the same form
as this affidavit containing these same four representations and (b) as of the
time of the transfer, it does not have actual knowledge that such affidavit is
false.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] and its corporate seal to be hereunto attached, attested by
its [Assistant] Secretary, this day of , .
[NAME OF INVESTOR]
By:
--------------------------------
[Name of Officer]
[Title of Officer]
I-1
<PAGE>
[Corporate Seal]
Attest:
- --------------------------------
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to be the same person who executed the foregoing instrument and to be
the [Title of Officer] of the Investor, and acknowledged to me that he executed
the same as his free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this______ day of____________ ,_______.
- --------------------------------
NOTARY PUBLIC
COUNTY OF
--------------------------------
STATE OF
--------------------------------
My commission expires the____day of________________, __________ .
I-2
<PAGE>
EXHIBIT J-1
FORM OF CERTIFICATE REGARDING TRANSFER
(ACCREDITED INVESTOR)
[DATE]
Chemical Bank, as Trustee
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attention: Corporate Trustee Department
Re: IMC Home Equity Loan Trust 1996-2
Home Equity Loan Pass-Through Certificates,
Class S-I ("Certificates")
Gentlemen:
In connection with our purchase on the date hereof of the
above-referenced Certificates from ______________________ ("Seller"),
[PURCHASER] (the "Purchaser") hereby certifies that:
1. The Purchaser is acquiring the Certificates for [investment
purposes only for]1 the Purchaser's own account and not with a view to or for
sale or transfer in connection with any distribution thereof in any manner which
would violate Section 5 of the Securities Act of 1933, as amended (the "Act"),
provided that the disposition of its property shall at all times be and remain
within its control;
2. The Purchaser understands that the Certificates have not been and
will not be registered under the Act and may not be resold or transferred unless
they are (a) registered pursuant to the Act or (b) sold or transferred in
transactions which are exempt from registration;
3. The Purchaser has received a copy of the Pooling and Servicing
Agreement dated as of April 1, 1996 (the "Pooling and Servicing Agreement")
pursuant to which the Certificates are being sold, and such other documents and
information concerning the Certificates and the home equity loans in which the
Certificates represent interests which it has requested;
4. The Purchaser believes it has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Certificates and that it is able to bear the
economic risks of such an investment;
5. [The Purchaser is not an "employee benefit plan," within the
meaning of Section 3(3) of the Employment Retirement Income Security Act of
1974, as amended ("ERISA") that is subject to the provisions of Title I of ERISA
or a "plan" described in Section 4975(e)(1)
- --------
1 Not required if the Purchaser is a broker/dealer.
J-1
<PAGE>
of the Internal Revenue Code of 1986] OR [The source of funds to be used by the
Purchaser to purchase the Certificates is a general account and either (i) no
part of such assets constitutes assets of an "employee benefit plan," within the
meaning of Section 3(3) of the Employment Retirement Income Security Act of
1974, as amended ("ERISA") that is subject to the provisions of Title I of ERISA
or a "plan" described in Section 4975(e)(l) of the Internal Revenue Code of
1986, or (ii) to the extent that such assets constitute assets of an "employee
benefits plan" within the meaning of Section 3(3) of ERISA, or a "plan" within
the meaning of Section 4975(e)(1) of the Code, it acknowledges that in the
discharge of its duty as a plan fiduciary in connection with the purchase of the
Certificates it has concluded that such purchase will not constitute a violation
of Section 404(a) of ERISA];
6. If the Purchaser sells any of the Certificates at its option, it
will (i) obtain from any investor that purchases any Certificate from it a
letter substantially in the form of Exhibit J-1 or J-2 to the Pooling and
Servicing Agreement and (ii) to the extent required by the Pooling and Servicing
Agreement, cause an opinion of counsel to be delivered, addressed and
satisfactory to the Seller and the Trustee, to the effect that such sale is in
compliance with all applicable federal and state securities laws; and
7. The Purchaser certifies that for purposes of the Certificate
Register, its address, including telecopier number and telephone number, is as
follows:
telecopier:
telephone:
(H) The purchase of the Certificates by the Purchaser does not violate
the provisions of the first sentence of Section 5.08(d) of the Pooling and
Servicing Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this letter to be executed
by its signatory, duly authorized, as of the date first above written.
[PURCHASER]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
J-2
<PAGE>
EXHIBIT J-2
FORM OF CERTIFICATE REGARDING TRANSFER
(Rule 144A)
[Date]
Chemical Bank
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attention: Corporate Trustee Department
Re: IMC Home Equity Loan Trust 1996-2
Home Equity Loan Pass-Through Certificates,
Class __-___ ("Certificates")
Dear Gentlemen or Ladies:
In connection with our purchase on the date hereof of the
above-referenced Certificates from _______________ ("Seller") hereby certify
that:
1. We are acquiring the Certificates for our own account for investment
and not with a view to or for sale or transfer in connection with any
distribution thereof in any manner which would violate the Securities Act of
1933, as amended (the "Act"), provided that the disposition of our property
shall at all times be and remain within our control;
2. We understand that the Certificates have not been and will not be
registered under the Act and may not be resold or transferred unless they are
(a) registered pursuant to the Act or (b) sold or transferred in transactions
which are exempt from registration;
3. We have received a copy of the Pooling and Servicing Agreement dated
as of April 1, 1996 (the "Pooling and Servicing Agreement") pursuant to which
the Certificates are being sold, and such other documents and information
concerning the Certificates and the home equity loans in which the Certificates
represent interests which we have requested;
4. We believe we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Certificates and that we are able to bear the economic risks
of such an investment;
5. If we sell any of the Certificates at our option, we will either (i)
obtain from any institutional investor that purchases any Certificate from us a
certificate containing the same representations, warranties and agreements
contained in the foregoing paragraphs 1, 2 through 4 and this paragraph 5 or
(ii) deliver an opinion of counsel to such institutional investor, addressed and
satisfactory to the Seller and the Trustee, to the effect that such sale is in
compliance with all applicable federal and state securities laws;
J-5
<PAGE>
6. We are acquiring the Certificates for our own account and the source
of funds to be used by us to purchase the Certificates is a general account and
either (i) no part of such assets constitutes assets of an "employee benefit
plan," within the meaning of Section 3(3) of the Employment Retirement Income
Security Act of 1974, as amended ("ERISA") that is subject to the provisions of
Title I of ERISA or a "plan" described in Section 4975(e)(l) of the Internal
Revenue Code of 1986, or (ii) to the extent that such assets constitute assets
of an "employee benefits plan" within the meaning of Section 3(3) of ERISA, or a
"plan" within the meaning of Section 4975(e)(1) of the Code, we acknowledge that
in the discharge of our duty as a plan fiduciary in connection with the purchase
of the Certificates we have concluded that such purchase will not constitute a
violation of Section 404(a) of ERISA;
7. We certify that for purposes of the Certificate Register, our
address, including telecopier number and telephone number, is as follows:
------------------------------------
------------------------------------
------------------------------------
telecopier:
telephone:
8. If we sell any of the Certificates, will obtain from any purchaser
from us the same representations contained in the foregoing paragraph 6 and this
paragraph 7; and
9. Our purchase of the Certificates does not violate the provisions of
the first sentence of Section 5.08(d) of the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, we have signed this certificate as of the date
first written above.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
J-4
<PAGE>
EXHIBIT K TO THE POOLING AND SERVICING AGREEMENT
HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
Loan Number Borrower Name Original Loan Amount Exception
K-1
<PAGE>
SUBSEQUENT TRANSFER AGREEMENT
-----------------------------
ContiSecurities Asset Funding Corp. (The "Depositor"), Industry
Mortgage Company, L.P. (The "Seller"), and IMC Home Equity Loan Trust 1996-2
(the "Purchaser") pursuant to the Pooling and Servicing Agreement dated as of
April 1, 1996 among the Depositor, the Seller, as Seller and Servicer and
Chemical Bank, as Trustee (the "Pooling and Servicing Agreement"), hereby
confirm their understanding with respect to the sale by the Seller and the
purchase by the Depositor and the sale by the Depositor and the purchase by the
Purchaser of those Home Equity Loans (the "Subsequent Home Equity Loans") listed
on the attached Schedule of Home Equity Loans.
Conveyance of Subsequent Home Equity Loans. As of April 30, 1996 (the
"Subsequent Transfer Date"), the Seller does hereby irrevocably transfer,
assign, setover and otherwise convey to the Depositor and the Depositor does
hereby irrevocably transfer, assign, setover and otherwise convey to the
Purchaser, without recourse (except as otherwise explicitly provided for herein)
all right, title and interest in and to any and all benefits accruing from the
Subsequent Home Equity Loans (other than any principal received and interest
payments due thereon on or prior to April 1, 1996 whether or not received) (such
date, the "Subsequent Cut-Off Date") which are delivered to the Custodian on
behalf of the Trustee herewith (and all substitutions therefor as provided by
Sections 3.03, 3.04 and 3.06 of the Pooling and Servicing Agreement), together
with the related Subsequent Home Equity Loan documents and the interest in any
Property which secured a Subsequent 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; and
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 Subsequent 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). The Seller shall deliver the original
Mortgage or mortgage assignment with evidence of recording thereon (except as
otherwise provided by the Pooling and Servicing Agreement) and other required
documentation in accordance with the terms set forth in Sections 3.05 and 3.07
of the Pooling and Servicing Agreement.
The costs relating to the delivery of the documents specified in this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement shall be
borne by the Seller.
The Seller hereby affirms the representations and warranties set forth
in the Pooling and Servicing Agreement that relate to the Seller and the
Subsequent Home Equity Loans as of the date hereof. The Seller hereby delivers
notice and confirms that each of the conditions set forth in Section 3.07(b) and
3.07(c) to the Pooling and Servicing Agreement are satisfied as of the date
hereof.
Pursuant to Section 3.07(a) of the Pooling and Servicing Agreement, the
Seller hereby instructs the Trustee to release one-hundred percent of the
aggregate principal balances of the
<PAGE>
Subsequent Home Equity Loans so transferred fromthe Pre-Funding Account,
$19,733,627.91 pursuant to this Subsequent Transfer Agreement.
All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified, confirmed and incorporated herein, provided that in the event
of any conflict the provisions of this Subsequent Transfer Agrement shall
control over the conflicting provisions of the Pooling and Servicing Agreement.
Terms capitalized herein and not defined herein shall have their
respective meanings as set forth in the Pooling and Servicing Agreement.
CONTISECURITIES ASSET FUNDING CORP.
as Depositor
By: ____________________________
Name:
Title:
By: _____________________________
Name:
Title:
INDUSTRY MORTGAGE COMPANY, L.P.
as Seller
By: Industry Mortgage Corporation, its
general partner
By: _______________________________
Name:
Title:
IMC HOME EQUITY LOAN TRUST 1996-2,
by Chemical Bank, as Trustee
By: _________________________________
Name:
Title:
Dated: April 30, 1996
2
<PAGE>
<TABLE>
<CAPTION>
IMC Home Equity Loan Trust 1996-2 Cut-off-Dat 01-Apr-96
Subsequent Transfer - Schedule of Mortgage Loans (Fixed Loans)
Loan Property Zip Original Interest
No. Number Name City State Code Amount Rate Term
====================================================================================================================================
<S><C> <C> <C> <C> <C> <C> <C> <C>
1 TC6030693 ABSALON KENVIL NJ 07847 130,000.00 10.75 180
2 TC6030311 ADAMS MONROE NC 28110 33,400.00 13.99 180
3 TC6030314 AL-SAID ATLANTA GA 30310 40,000.00 15.99 180
4 TC6030773 ALLEN DAYTON OH 45431 35,000.00 9.80 240
5 TC6030646 ALSTON MOUNT VERN NY 10550 255,000.00 9.99 180
6 FC6030945 AMARI LITTLE FAL NJ 07424 24,600.00 10.50 120
7 TC6030536 AMODIO SCHAGHTICO NY 12151 30,000.00 11.50 180
8 TC6030441 ANDERSON TUCKER GA 30084 84,720.00 11.75 180
9 TC6030718 ANDERSON BOISE ID 83703 55,000.00 9.89 180
10 TC6030170 ANDRES, II KANSAS CIT MO 64119 50,000.00 11.55 180
11 TC6030719 ANICELLO SEATTLE WA 98116 28,200.00 15.25 180
12 TC6030482 ANRIA MIAMI FL 33176 16,500.00 12.49 180
13 TC6030313 ARLINE JUPITER FL 33458 236,000.00 12.49 180
14 TC6030312 ASHE ATLANTA GA 30324 160,000.00 12.49 180
15 TC6030733 AZIZ WETHERSFIE CT 06109 30,000.00 11.50 180
16 TC6030694 BAGLEY WEST JORDA UT 84084 20,300.00 10.35 180
17 TC6030537 BAKER BROCKTON MA 02401 63,700.00 13.50 180
18 TC6030594 BALAESH VANCOUVER WA 98664 174,900.00 10.80 360
19 TC5111386 BAPTISTE MIAMI FL 33169 116,000.00 11.99 360
20 TC6030309 BARNES DECATUR GA 30032 51,200.00 12.99 180
21 TC6030388 BARR NORFOLK VA 23523 52,500.00 12.99 180
22 TC6030303 BAUGHER BUSHWOOD MD 20618 202,000.00 10.19 360
23 TC6030647 BEATON BROOKLYN NY 11203 115,000.00 11.90 180
24 TC6030538 BELLINO LLOYD HARB NY 11724 100,000.00 11.60 240
25 TC6030774 BENNIS LENNON MI 48449 101,065.00 11.65 180
26 TC6030304 BERK ATLANTA GA 30328 175,000.00 12.99 180
27 TC6030422 BERRY, III MARIETTA GA 30064 50,000.00 13.99 180
28 TC6030442 BLAKE STONE MOUN GA 30058 252,000.00 11.49 180
29 TB6020239 BLESENER MORRISON CO 80465 20,000.00 11.50 180
30 TC6030657 BLOUNT DEER PARK WA 99006 87,500.00 12.25 180
31 TC6030658 BLUM SCHENECTAD NY 12306 34,000.00 9.99 180
32 TC6030539 BOCK CLEVELAND OH 44102 29,400.00 13.25 180
33 TC6030421 BOWE SARASOTA FL 34234 46,800.00 12.99 360
34 TC6030595 BOYANOVSKY LAKE OSWEG OR 97034 40,000.00 13.60 180
35 TC6021824 BOYD ALBUQUERQU NM 87105 137,600.00 10.99 360
36 FC6030828 BRADDY SPRING GRO VA 23881 49,000.00 12.99 360
37 TC6030540 BRAGUNIER, JR BOONSBORO MD 21713 13,500.00 11.99 120
38 TC6030734 BRAXTON BALTIMORE MD 21207 52,000.00 10.99 180
39 TC5121424 BREEDLOVE ASHTABULA OH 44004 70,000.00 11.99 180
40 TC6030696 BRISCOE BALTIMORE MD 21218 42,500.00 10.99 180
41 TC6030390 BROOME ORLANDO FL 32811 33,000.00 12.00 180
42 TC6030659 BROSS OLD LYME CT 06371 128,000.00 9.30 180
43 TC6030541 BROTHERS CANTON OH 44708 20,000.00 11.85 180
44 TC6030467 BROWN STONE MOUN GA 30087 132,800.00 11.99 180
45 TC6030596 BROWN BRONX NY 10466 77,000.00 12.50 180
46 TC6030735 BROWN BALTIMORE MD 21216 40,250.00 13.50 180
47 TC6030485 BRY PORT ST. J FL 32456 25,000.00 11.49 180
48 TC6030736 BRYNE TRENTON NJ 08611 59,500.00 14.70 180
49 TC6030697 BUANCORE NEW HYDE P NY 11040 22,000.00 9.99 180
50 TC6030720 BURKMAN BASALT ID 83218 42,880.00 10.63 180
51 TC6030698 BURNS PARKER CO 80134 357,000.00 10.55 180
52 TC6030699 BURT DUNDALK MD 21222 36,000.00 9.40 180
53 TC6030597 BURTON CLEVELAND OH 44128 55,200.00 12.75 180
54 TC6030407 BUTLER ATLANTA GA 30318 76,500.00 11.99 180
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Amort Debt Payment Maturity Paid Scheduled
No. Number Term LTV CLTV Ratio Amount Date Thru Balance
===================================================================================================================================
<S><C> <C> <C> <C> <C> <C> <C> <C> <C>
1 TC6030693 360 70.65 70.65 35.73 $1,213.53 03/11/11 04/13/96 $129,988.63
2 TC6030311 360 66.80 66.80 16.65 $395.48 02/15/11 03/15/96 $33,393.91
3 TC6030314 360 50.00 50.00 35.00 $537.58 01/23/11 02/23/96 $39,990.78
4 TC6030773 240 64.82 64.82 37.67 $333.14 03/18/16 03/18/96 $35,000.00
5 TC6030646 360 85.00 85.00 48.62 $2,235.92 03/14/11 04/14/96 $255,000.00
6 FC6030945 120 60.52 69.99 31.59 $331.94 03/11/06 04/11/96 $24,600.00
7 TC6030536 180 34.48 34.48 9.70 $350.46 03/11/11 04/11/96 $30,000.00
8 TC6030441 360 80.00 80.00 30.00 $855.17 02/01/11 03/01/96 $84,668.51
9 TC6030718 360 71.43 71.43 38.43 $478.20 04/01/11 05/01/96 $55,000.00
10 TC6030170 360 76.34 76.34 36.41 $497.05 04/01/11 04/01/96 $50,000.00
11 TC6030719 180 46.75 59.45 47.85 $399.52 03/19/11 03/19/96 $28,200.00
12 TC6030482 180 64.01 78.36 48.00 $203.26 03/10/11 04/10/96 $16,500.00
13 TC6030313 360 80.00 80.00 45.21 $2,516.90 02/10/11 02/10/96 $235,939.47
14 TC6030312 360 40.00 40.00 22.45 $1,706.37 02/25/11 03/25/96 $159,958.96
15 TC6030733 180 18.52 18.52 29.77 $350.46 03/19/11 04/19/96 $30,000.00
16 TC6030694 180 56.28 72.78 23.95 $222.51 03/15/11 03/15/96 $20,300.00
17 TC6030537 360 70.00 70.00 45.83 $729.63 03/08/11 03/08/96 $63,700.00
18 TC6030594 360 69.99 69.99 50.11 $1,639.24 01/24/26 03/24/96 $174,769.13
19 TC5111386 360 80.00 80.00 25.24 $1,192.30 11/05/25 01/05/96 $115,864.92
20 TC6030309 360 80.00 80.00 17.31 $565.97 12/25/10 03/25/96 $50,958.92
21 TC6030388 360 61.77 61.77 36.33 $580.34 02/15/11 03/15/96 $52,487.97
22 TC6030303 360 73.46 73.46 24.00 $1,801.12 11/01/25 04/01/96 $201,298.52
23 TC6030647 360 66.86 66.86 50.12 $1,174.06 03/16/11 04/16/96 $115,000.00
24 TC6030538 240 35.91 44.25 43.22 $1,073.33 03/06/16 04/11/96 $100,000.00
25 TC6030774 360 85.00 85.00 40.71 $1,012.42 03/18/11 03/18/96 $101,065.00
26 TC6030304 360 70.00 70.00 50.00 $1,934.48 02/25/11 03/25/96 $174,959.90
27 TC6030422 360 10.26 60.26 55.00 $592.04 12/15/10 03/15/96 $49,960.92
28 TC6030442 360 90.00 90.00 39.00 $2,493.61 03/01/11 04/01/96 $251,919.29
29 TB6020239 180 50.96 66.96 34.01 $233.64 03/28/11 03/28/96 $20,000.00
30 TC6030657 360 67.31 67.31 58.69 $916.91 02/01/11 04/01/96 $87,452.40
31 TC6030658 180 33.42 84.93 50.06 $365.16 03/13/11 04/13/96 $34,000.00
32 TC6030539 360 54.95 54.95 17.22 $330.98 03/08/11 04/08/96 $29,391.08
33 TC6030421 360 65.00 65.00 49.00 $517.34 03/05/26 04/05/96 $46,800.00
34 TC6030595 360 43.55 53.62 45.00 $461.31 01/17/11 02/17/96 $39,983.95
35 TC6021824 360 80.00 80.00 42.09 $1,309.36 04/01/26 04/01/96 $137,600.00
36 FC6030828 360 65.33 65.33 25.60 $541.65 03/01/26 03/01/96 $48,988.78
37 TC6030540 120 69.92 79.92 40.00 $193.61 03/12/06 04/12/96 $13,500.00
38 TC6030734 360 80.00 80.00 31.06 $494.82 03/20/11 03/20/96 $52,000.00
39 TC5121424 360 70.00 70.00 50.00 $719.49 12/21/10 03/21/96 $69,939.18
40 TC6030696 360 85.00 85.00 40.86 $404.42 03/20/11 03/20/96 $42,500.00
41 TC6030390 180 61.11 61.11 33.40 $396.06 02/15/11 04/15/96 $32,933.94
42 TC6030659 360 80.00 80.00 42.00 $1,057.67 03/01/11 04/01/96 $127,934.33
43 TC6030541 180 57.14 57.14 32.17 $238.11 03/06/11 04/06/96 $20,000.00
44 TC6030467 360 80.00 80.00 41.29 $1,364.98 02/20/11 03/20/96 $132,761.91
45 TC6030596 180 36.32 36.32 28.89 $949.04 02/28/11 03/28/96 $76,853.04
46 TC6030735 360 70.00 70.00 45.02 $461.03 03/20/11 03/20/96 $40,250.00
47 TC6030485 180 53.89 63.89 44.00 $291.89 01/05/11 04/05/96 $24,965.00
48 TC6030736 360 70.00 70.00 35.53 $738.09 03/18/11 04/18/96 $59,500.00
49 TC6030697 180 73.99 83.15 39.44 $236.28 03/04/11 04/04/96 $22,000.00
50 TC6030720 360 80.00 80.00 46.60 $396.25 03/01/11 03/01/96 $42,863.42
51 TC6030698 360 70.00 70.00 46.00 $3,278.97 03/18/11 03/18/96 $357,000.00
52 TC6030699 180 48.00 48.00 23.43 $373.75 03/14/11 03/14/96 $36,000.00
53 TC6030597 360 80.00 80.00 49.00 $599.85 02/28/11 02/29/96 $55,186.65
54 TC6030407 360 85.00 85.00 30.00 $786.30 03/01/11 04/01/96 $76,478.06
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMC Home Equity Loan Trust 1996-2 Cut-off-Dat 01-Apr-96
Subsequent Transfer - Schedule of Mortgage Loans (Fixed Loans)
Loan Property Zip Original Interest
No. Number Name City State Code Amount Rate Term
====================================================================================================================================
<S><C> <C> <C> <C> <C> <C> <C> <C>
55 TC5100966 BUTTERFIELD RIDGEVILLE IN 47380 37,575.00 12.20 180
56 TC6030775 CADDLE CHICAGO IL 60619 37,500.00 10.95 180
57 TC6030504 CAMDEN NORCROSS GA 30092 32,000.00 10.99 180
58 TC6030317 CAMPBELL DURHAM NC 27703 30,000.00 14.19 180
59 TC6020261 CANDIDO SCHENECTAD NY 12304 40,000.00 10.45 180
60 TC6030376 CANNIDA ATLANTA GA 30354 52,800.00 12.99 180
61 TC6030443 CANTLEY BRADENTON FL 34205 51,600.00 12.49 180
62 TC6011089 CARNES ROME GA 30161 126,400.00 10.20 180
63 TC6030700 CARPETHOS PROVIDENCE RI 02908 50,000.00 9.60 240
64 TC6030318 CARR ATLANTA GA 30310 59,500.00 13.99 180
65 TC6030598 CARROLL JR LAWRENCEVI NJ 08648 124,000.00 14.99 180
66 TC6030377 CARTER EAST POINT GA 30344 64,000.00 11.99 180
67 TC6030542 CARTER BALTIMORE MD 21213 24,500.00 9.99 240
68 TC6030543 CARTER BALTIMORE MD 21213 23,100.00 9.99 240
69 TC6030701 CARTER JR LORAIN OH 44052 38,000.00 12.15 180
70 TC6030599 CATER SCHOHARIE NY 12157 60,000.00 14.99 360
71 TC6030315 CERNAZ BOCA RATON FL 33428 224,000.00 12.99 180
72 TC6010590 CHAMBERLAIN EAST HADDA CT 06423 50,000.00 10.99 180
73 TC6030545 CHAPLIN FONDA NY 12068 25,900.00 11.80 180
74 TC6030546 CHO BEAVERTON OR 97006 210,900.00 12.10 180
75 TC6030648 CICALESE SHORT HILL NJ 07078 421,600.00 10.70 180
76 TC6030792 CLAPP JR PEMBROKE MA 02359 105,000.00 10.00 180
77 TC6030600 CLARK-WILLIAMS SILVER SPR MD 20906 92,000.00 10.99 180
78 TC6030378 CLAYBO DUNWOODY GA 30338 29,086.00 12.99 84
79 TC6030392 CLOUD VIRGINIA B VA 23456 85,000.00 12.99 180
80 TC6030548 CLYNES UNIONVILLE NY 10988 84,000.00 11.50 180
81 TC6030810 CODY CHURCHVILL NY 14428 84,000.00 11.65 180
82 TC6030547 COFFEE WASHINGTON DC 20018 66,750.00 10.99 240
83 TC6030549 COLLINS CRANSTON RI 02905 74,300.00 11.75 240
84 TB6030109 COLVIN PENSACOLA FL 32507 27,000.00 11.30 180
85 TC6030316 COOPER ORLANDO FL 32832 165,500.00 12.49 180
86 TC6030408 COOPER JR ATLANTA GA 30316 38,500.00 11.99 180
87 TC6030310 CORRELL NEWPORT NE VA 23607 39,000.00 12.75 120
88 TC6030660 COTNER TUCSON AZ 85705 20,000.00 9.20 360
89 TC6030702 COUVRETTE TUCSON AZ 85716 91,000.00 9.05 360
90 TC6030409 COX ATLANTA GA 30316 55,000.00 13.99 180
91 TB6030185 CRANDALL LUTZ FL 33549 54,750.00 10.10 180
92 TC6030737 CRANDALL SALEM OR 97306 63,650.00 13.75 180
93 TC6030601 CRAWFORD CLEVELAND OH 44108 31,200.00 11.75 180
94 TC6010833 CROUTHERS JONESBORO TN 37659 35,675.66 14.89 180
95 TC6020773 DALSTON CORINTH NY 12822 141,600.00 11.50 240
96 TC6030738 DALTON LINDENWOOD NJ 08021 40,000.00 10.50 240
97 TC6030796 DAMON-MOORE LAKEVILLE MA 02347 86,000.00 14.75 180
98 TC6030661 DAVIS CLEVELAND OH 44128 21,000.00 13.75 180
99 TC6030410 DE VICO SUNNY ISLE FL 33160 40,000.00 11.49 180
100 TC6010884 DEAMUS ATLANTA GA 30354 56,000.00 12.99 180
101 TC6030721 DEJESUS SR PORTLAND OR 97212 20,500.00 13.75 180
102 NC6020043 DELANEY SOMERS POI NJ 08244 83,000.00 12.29 180
103 TC6030444 DESROCHES COLLEGE PA GA 30337 97,125.00 10.99 180
104 TC6030445 DESROCHES COLLEGE PA GA 30337 97,125.00 10.99 180
105 FC6030922 DIAS EAST ELMHU NY 11369 26,000.00 13.99 180
106 TC6030430 DOBERNIC ROSWELL GA 30075 90,000.00 10.79 180
107 TC6030722 DUNSMUIR MILWAUKIE OR 97267 109,600.00 8.99 180
108 TC6030321 EDWARDS WEST PALM FL 33407 34,000.00 12.49 180
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Amort Debt Payment Maturity Paid Scheduled
No. Number Term LTV CLTV Ratio Amount Date Thru Balance
===================================================================================================================================
<S><C> <C> <C> <C> <C> <C> <C> <C> <C>
55 TC5100966 360 75.00 75.00 42.00 $392.30 09/28/10 03/28/96 $37,533.22
56 TC6030775 360 46.88 46.88 21.67 $355.71 03/20/11 03/20/96 $37,500.00
57 TC6030504 360 65.90 81.14 50.00 $304.50 02/01/11 04/01/96 $31,988.57
58 TC6030317 360 75.00 75.00 41.27 $359.98 02/10/11 03/10/96 $29,994.75
59 TC6020261 180 62.50 62.50 42.29 $440.92 02/13/11 04/13/96 $39,907.41
60 TC6030376 360 80.00 80.00 44.63 $583.66 02/20/11 02/20/96 $52,787.90
61 TC6030443 360 80.00 80.00 49.00 $550.30 01/15/11 03/15/96 $51,586.77
62 TC6011089 360 80.00 80.00 51.44 $1,127.98 02/28/11 03/29/96 $126,346.42
63 TC6030700 240 54.35 54.35 40.67 $469.34 03/18/16 03/19/96 $50,000.00
64 TC6030318 360 70.00 70.00 44.05 $704.53 01/20/11 01/20/96 $59,478.16
65 TC6030598 360 55.11 55.11 26.00 $1,566.92 02/23/11 02/23/96 $123,982.05
66 TC6030377 360 80.00 80.00 42.06 $657.82 02/01/11 04/01/96 $63,813.42
67 TC6030542 240 70.00 70.00 37.95 $236.27 03/06/16 03/06/96 $24,500.00
68 TC6030543 240 70.00 70.00 39.00 $222.77 03/06/16 03/06/96 $23,100.00
69 TC6030701 180 58.46 58.46 26.80 $459.74 02/22/11 03/22/96 $37,925.01
70 TC6030599 360 59.70 59.70 43.75 $758.19 03/08/26 04/08/96 $60,000.00
71 TC6030315 360 70.00 70.00 51.68 $2,476.14 02/25/11 02/25/96 $223,948.66
72 TC6010590 180 42.09 79.40 44.00 $567.98 01/02/11 02/02/96 $49,778.87
73 TC6030545 180 70.00 70.00 42.08 $307.52 03/07/11 04/07/96 $25,900.00
74 TC6030546 360 75.00 75.00 49.00 $2,185.59 03/11/11 04/11/96 $210,900.00
75 TC6030648 360 79.55 79.55 43.10 $3,919.72 03/15/11 03/15/96 $421,600.00
76 TC6030792 360 73.68 73.68 33.00 $921.46 04/01/11 04/01/96 $105,000.00
77 TC6030600 360 80.00 80.00 40.41 $875.44 03/14/11 04/14/96 $92,000.00
78 TC6030378 84 63.64 78.63 36.34 $528.97 03/01/03 04/01/96 $28,850.86
79 TC6030392 360 73.91 73.91 33.26 $939.61 03/01/11 03/01/96 $84,980.52
80 TC6030548 360 80.00 80.00 39.99 $831.84 03/11/11 04/11/96 $84,000.00
81 TC6030810 360 75.00 75.00 32.50 $841.47 03/22/11 03/22/96 $84,000.00
82 TC6030547 240 75.00 75.00 41.56 $688.53 03/07/16 04/07/96 $66,750.00
83 TC6030549 240 82.56 82.56 41.05 $805.19 03/08/16 04/08/96 $74,300.00
84 TB6030109 180 59.34 59.34 15.32 $311.99 04/01/11 04/01/96 $27,000.00
85 TC6030316 360 79.95 79.95 37.00 $1,765.03 03/01/11 04/01/96 $165,456.58
86 TC6030408 180 18.80 79.91 27.00 $461.82 02/23/11 03/23/96 $38,422.86
87 TC6030310 360 100.00 100.00 15.75 $423.81 05/01/05 04/01/96 $38,917.21
88 TC6030660 360 25.64 25.64 41.15 $163.81 02/21/26 02/21/96 $19,989.52
89 TC6030702 360 70.00 70.00 44.60 $735.48 03/15/26 03/15/96 $91,000.00
90 TC6030409 360 62.50 62.50 42.00 $651.24 02/23/11 03/23/96 $54,989.97
91 TB6030185 360 68.44 68.44 34.83 $484.53 03/28/11 03/28/96 $54,750.00
92 TC6030737 360 40.20 79.98 38.00 $741.59 03/04/11 03/04/96 $63,650.00
93 TC6030601 360 65.00 65.00 35.40 $314.94 03/14/11 04/14/96 $31,200.00
94 TC6010833 360 64.98 64.98 44.43 $447.96 03/05/11 03/05/96 $35,675.66
95 TC6020773 240 80.00 80.00 45.00 $1,510.06 02/16/16 03/16/96 $141,407.00
96 TC6030738 240 48.78 48.78 40.49 $399.35 03/18/16 03/18/96 $40,000.00
97 TC6030796 360 45.26 45.26 59.00 $1,070.25 04/01/11 04/01/96 $86,000.00
98 TC6030661 180 50.00 50.00 49.27 $276.15 03/18/11 03/18/96 $21,000.00
99 TC6030410 180 45.46 45.46 28.00 $467.02 02/25/11 03/25/96 $39,915.98
100 TC6010884 360 80.00 80.00 48.00 $619.04 01/01/11 04/01/96 $56,000.00
101 TC6030721 180 56.10 72.76 33.04 $269.57 03/11/11 04/11/96 $20,500.00
102 NC6020043 180 79.81 79.81 37.85 $1,011.68 02/21/11 03/21/96 $82,838.38
103 TC6030444 360 70.00 70.00 35.00 $924.21 02/25/11 04/25/96 $97,090.29
104 TC6030445 360 70.00 70.00 35.00 $924.21 02/25/11 02/25/96 $97,090.29
105 FC6030922 180 9.89 25.94 43.95 $346.08 03/06/11 04/06/96 $26,000.00
106 TC6030430 360 56.82 75.00 49.00 $842.84 01/10/11 04/10/96 $89,988.14
107 TC6030722 360 80.00 80.00 21.74 $881.07 04/01/11 04/01/96 $109,600.00
108 TC6030321 360 68.00 68.00 20.92 $362.60 03/01/11 04/01/96 $33,991.28
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
IMC Home Equity Loan Trust 1996-2 Cut-off-Dat 01-Apr-96
Subsequent Transfer - Schedule of Mortgage Loans (Fixed Loans)
Loan Property Zip Original Interest
No. Number Name City State Code Amount Rate Term
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
109 TC6030794 EL DEB MEDFORD MA 02155 143,250.00 12.80 180
110 FC6030833 EMBREY OWINGS MD 20736 90,000.00 14.99 360
111 TC6030497 EVERETT CUMBERLAND MD 21502 40,000.00 11.99 360
112 FC6030920 FICHTHORN CHESTER NY 10919 150,000.00 11.38 240
113 TC6010070 FINK BLOOMFIELD MI 48302 220,000.00 12.35 180
114 TC6030322 FISCHER BALTIMORE MD 21220 54,250.00 11.70 180
115 TD5110201 FLORES DES MOINES IA 50315 17,600.00 10.10 240
116 TB6030128 FORD CANTONMENT FL 32533 32,000.00 9.99 180
117 TC6010843 FREAS BOWLING GR KY 42103-9050 84,000.00 11.05 180
118 TC6030813 FREER STONE RIDG NY 12484 41,000.00 15.50 240
119 TC6030554 FRYE BRONX NY 10461 60,000.00 11.70 240
120 TC6030555 FULLER NORTH BABY NY 11703 38,000.00 11.99 240
121 TC5120851 GALLEGOS ALBUQUERQU NM 87107 47,250.00 12.35 180
122 TC6030556 GAMBREL PHOENIX AZ 85006 39,750.00 11.74 180
123 TC6030706 GARCIA ALBUQUERQU NM 87109 62,000.00 10.99 180
124 TC6030665 GARDNER HURRICANE UT 84737 56,250.00 9.40 360
125 TC6030776 GARRETT INDIANAPOL IN 46205 37,500.00 9.30 180
126 TC6030723 GASSMAN CASPER WY 82609 120,600.00 10.49 180
127 TC6030707 GBAYBEE CHICAGO IL 60637 25,000.00 13.25 120
128 TC6030324 GEATHERS GAMBRILS MD 21054 111,000.00 13.99 360
129 TC6030740 GETAS GARDNERVIL NV 89410 108,800.00 9.40 360
130 TC6030666 GILLS JR AKRON OH 44313 21,000.00 10.60 120
131 TC6030741 GOBLE SANDYTON T NJ 07826 74,500.00 12.50 240
132 TC6030394 GOFF TAMPA FL 33617 61,520.00 12.99 180
133 TC6030777 GOULD GRAND RAPI MI 49506 28,000.00 11.30 180
134 FC6030939 GRAGNANO WEST BABYL NY 11704 131,000.00 9.13 180
135 TC6030742 GRALEY LAKEWOOD OH 44107 64,000.00 10.85 180
136 TC6030743 GRANGER CASTLE ROC WA 98661 37,000.00 13.85 180
137 TC6030326 GRAY TAMPA FL 33607 28,700.00 13.99 180
138 TC6030328 GREEN FREDERICK MD 21702 77,600.00 12.50 180
139 TC6030379 GREEN JENSEN BEA FL 34957 61,750.00 11.99 180
140 TC6030744 GREENE DARIEN CT 06820 271,000.00 9.60 180
141 TC6030806 GUALARIO NEPTUNE NJ 07753 73,500.00 10.50 180
142 TC6030807 GURNECK BELLINGHAM WA 98225 78,200.00 10.25 180
143 NC6030149 HAAS VERNON NJ 07461 63,000.00 13.25 240
144 FC6030940 HAINES MANCHESTER MD 21101 17,700.00 10.99 120
145 BO6010034 HARTMANN WEBSTER CI IA 50595 31,500.00 12.70 180
146 TC6030411 HAWKINS SANFORD FL 32771 28,000.00 13.99 240
147 TC6030795 HEALY BURLINGTON MA 01803 61,875.00 11.05 180
148 CB6030084 HEMMERLING BRAZIL IN 47834 28,000.00 10.60 180
149 TC6030725 HENDRICKS REDMOND WA 98053 40,700.00 12.50 180
150 TC5120863 HERRERA ALBUQUERQU NM 87102 61,000.00 12.15 180
151 TC5120763 HICKEY DETROIT MI 48224 24,500.00 12.70 180
152 TD5120168 HILDRETH MAPLE GROV MN 55311 88,650.00 10.65 180
153 FC6010872 HILL WASHINGTON DC 20001 90,000.00 13.50 180
154 TC6030412 HOUNSCHELL CONYERS GA 30207 45,500.00 13.99 180
155 TC6030330 HUMPHRIES STONE MOUN GA 30083 71,920.00 11.99 180
156 TC6030331 HUNTER LAKELAND FL 33801 32,800.00 12.49 360
157 FC6030952 HYNSON DETROIT MI 48219 88,500.00 13.70 180
158 TC6030778 IAFELICE SOUTH EUCL OH 44121 75,200.00 11.30 180
159 TC6030395 IGLESIA HIALEAH FL 33010 14,250.00 12.49 180
160 TC6030333 JACKSON BYRON GA 31008 48,000.00 12.99 180
161 TC6030335 JEFFRIES WASHINGTON DC 20011 28,000.00 10.99 180
162 TC6010168 JENKINS CHATTANOOG TN 37406 29,500.00 9.95 180
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Amort Debt Payment Maturity Paid Scheduled
No. Number Term LTV CLTV Ratio Amount Date Thru Balance
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
109 TC6030794 360 75.00 75.00 31.00 $1,562.27 03/01/11 04/01/96 $143,215.73
110 FC6030833 360 61.43 61.43 25.32 $1,137.28 03/05/26 04/05/96 $90,000.00
111 TC6030497 360 80.00 80.00 21.00 $411.14 02/25/26 03/25/96 $39,987.67
112 FC6030920 240 57.69 57.69 43.85 $1,586.74 03/06/16 04/06/96 $150,000.00
113 TC6010070 360 73.33 73.33 25.08 $2,322.40 03/04/11 03/04/96 $220,000.00
114 TC6030322 360 70.00 70.00 36.50 $545.53 02/25/11 02/25/96 $54,233.41
115 TD5110201 240 80.00 80.00 46.02 $171.02 02/10/16 04/10/96 $17,569.19
116 TB6030128 180 71.11 71.11 35.53 $343.68 04/02/11 04/02/96 $32,000.00
117 TC6010843 360 80.00 80.00 33.93 $803.12 02/28/11 03/30/96 $83,970.37
118 TC6030813 240 50.00 50.00 44.56 $555.09 02/15/16 03/15/96 $40,974.49
119 TC6030554 240 38.71 38.71 45.80 $648.15 03/06/16 04/08/96 $60,000.00
120 TC6030555 240 18.66 47.02 39.01 $418.15 03/11/16 03/11/96 $38,000.00
121 TC5120851 360 75.00 75.00 14.00 $498.79 01/20/11 03/01/96 $47,186.15
122 TC6030556 360 75.00 75.00 37.73 $400.94 03/11/11 04/11/96 $39,750.00
123 TC6030706 360 51.67 51.67 21.15 $589.97 03/20/11 03/20/96 $62,000.00
124 TC6030665 360 75.00 75.00 38.00 $468.88 02/16/26 02/16/96 $56,221.75
125 TC6030776 360 78.13 78.13 41.32 $309.87 03/18/11 06/18/96 $37,499.94
126 TC6030723 360 90.00 90.00 38.71 $1,102.27 03/01/11 04/01/96 $120,551.97
127 TC6030707 120 32.17 48.84 45.00 $376.97 03/19/06 04/19/96 $25,000.00
128 TC6030324 360 75.00 75.00 54.43 $1,314.33 03/01/26 04/01/96 $110,979.75
129 TC6030740 360 80.00 80.00 27.37 $906.92 03/20/26 03/20/96 $108,800.00
130 TC6030666 120 60.00 60.00 48.72 $284.54 03/18/06 03/18/96 $21,000.00
131 TC6030741 240 70.95 70.95 33.00 $846.42 03/21/16 03/21/96 $74,500.00
132 TC6030394 360 80.00 86.35 46.90 $680.05 02/01/11 04/01/96 $61,505.90
133 TC6030777 360 70.00 70.00 44.13 $273.02 03/13/11 04/13/96 $27,973.27
134 FC6030939 180 46.79 46.79 26.07 $1,338.45 03/06/11 04/06/96 $131,000.00
135 TC6030742 360 80.00 80.00 47.00 $602.24 03/21/11 03/21/96 $64,000.00
136 TC6030743 180 59.76 98.34 44.97 $489.02 03/18/11 03/18/96 $37,000.00
137 TC6030326 360 73.59 73.59 42.16 $339.83 06/25/10 03/25/96 $28,109.51
138 TC6030328 360 80.00 80.00 44.00 $828.19 03/01/11 04/01/96 $77,580.14
139 TC6030379 360 65.00 65.00 45.04 $634.69 03/01/11 04/01/96 $61,732.30
140 TC6030744 360 78.55 78.55 40.01 $2,298.51 03/20/11 03/20/96 $271,000.00
141 TC6030806 360 70.00 70.00 30.12 $672.33 03/22/11 03/22/96 $73,500.00
142 TC6030807 360 85.00 85.00 49.00 $700.75 03/22/11 03/22/96 $78,200.00
143 NC6030149 240 44.24 79.24 38.99 $749.34 12/06/15 04/07/96 $62,837.07
144 FC6030940 120 25.18 42.53 33.10 $243.72 03/11/06 04/11/96 $17,700.00
145 BO6010034 180 75.00 75.00 39.37 $392.36 03/28/11 03/28/96 $31,500.00
146 TC6030411 240 70.00 70.00 33.00 $347.98 01/10/16 04/10/96 $27,967.41
147 TC6030795 360 75.00 75.00 30.00 $591.59 04/01/11 04/01/96 $61,875.00
148 CB6030084 180 80.00 80.00 21.17 $311.25 04/01/11 04/01/96 $28,000.00
149 TC6030725 180 59.74 70.31 52.30 $501.64 03/20/11 03/20/96 $40,700.00
150 TC5120863 360 71.77 71.77 33.00 $634.51 11/20/10 03/20/96 $60,930.93
151 TC5120763 360 70.00 70.00 13.78 $265.29 12/11/10 02/11/96 $24,481.81
152 TD5120168 360 90.00 90.00 26.42 $820.88 02/06/11 04/06/96 $88,615.89
153 FC6010872 360 75.00 75.00 35.83 $1,030.88 01/11/11 01/11/96 $89,963.03
154 TC6030412 360 70.00 70.00 22.00 $538.76 02/01/11 04/01/96 $45,491.69
155 TC6030330 360 80.00 80.00 50.00 $739.22 01/20/11 03/20/96 $71,899.38
156 TC6030331 360 80.00 80.00 44.00 $349.81 03/05/26 04/05/96 $32,800.00
157 FC6030952 360 75.00 75.00 34.46 $1,027.63 04/01/11 04/01/96 $88,500.00
158 TC6030778 360 80.00 80.00 22.91 $733.25 03/22/11 03/22/96 $75,200.00
159 TC6030395 180 33.40 40.00 37.91 $175.54 01/10/11 04/10/96 $14,186.31
160 TC6030333 360 80.00 79.94 51.00 $530.60 01/15/11 03/15/96 $47,951.65
161 TC6030335 180 39.11 63.67 38.54 $318.07 09/25/10 03/25/96 $27,444.44
162 TC6010168 180 33.71 33.71 40.56 $316.11 01/29/11 02/29/96 $29,356.39
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMC Home Equity Loan Trust 1996-2 Cut-off-Dat 01-Apr-96
Subsequent Transfer - Schedule of Mortgage Loans (Fixed Loans)
Loan Property Zip Original Interest
No. Number Name City State Code Amount Rate Term
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
163 TC6030336 JENNINGS ATLANTA GA 30318 52,000.00 11.99 180
164 TC6021691 JERLS GRAND RAPI MI 49544 51,375.00 13.00 180
165 TC6030426 JETT OAK GROVE VA 22443 28,000.00 13.99 180
166 TC6030337 JOHNSON STONE MOUN GA 30067 88,000.00 11.99 180
167 TC6030413 JOHNSON NORTH MIAM FL 33162 38,500.00 13.99 360
168 TC6030188 JOHNSON JR BATON ROUG LA 70807 36,000.00 10.95 180
169 TC6030429 JOHNSON, JR EDENTON NC 27932 25,000.00 14.49 180
170 TC6030338 JONES COLLEGE PA GA 30337 18,800.00 14.50 180
171 TD6020031 KAUFFMAN ROCHESTER NY 14613 45,000.00 10.70 240
172 TC6030380 KEGLEY DARLINGTON MD 21034 86,400.00 9.25 360
173 TC6030396 KELLY PORT RICHE FL 34668 14,649.00 13.25 180
174 TC6030671 KENNEDY OREGON CIT OR 97045 190,000.00 11.13 180
175 TC6030779 KENNEDY TERRE HAUT IN 47807 46,000.00 11.60 180
176 TC6030830 KIM LAKE SUCCE NY 11020 66,000.00 11.95 240
177 TC6030606 KOOPMAN TAPPAN NY 10983 120,000.00 10.75 240
178 TC5121241 KUBICHEK BRYAN TX 77802 44,650.00 12.35 180
179 TB6030173 KUKOL SANIBEL FL 33957 243,750.00 11.30 180
180 TB5040223 LABONTE OPA LOCKA FL 33055 59,500.00 15.40 180
181 NC6010179 LALUMERA PHILADELPH PA 19135 25,000.00 12.50 180
182 TC6030563 LAMB LIBERTYTOW MD 21762 122,400.00 10.99 180
183 TC6030708 LAMBERTON PORTLAND OR 97203 50,000.00 9.25 180
184 TC6030781 LEWIS CINCINNATI OH 45229 105,000.00 10.65 240
185 TC6030814 LI KINGSTON NY 12401 81,000.00 12.55 240
186 TC6030782 LINDEN CHAGRIN FA OH 44023 140,000.00 10.10 180
187 TC6030343 LIPSEY FAYETTEVIL NC 28304 33,800.00 12.90 180
188 TC6030344 LIPSEY FAYETTEVIL NC 28314 34,450.00 12.90 180
189 TC6030564 LISENA HUNTINGTON NY 11746 41,000.00 10.35 180
190 TC5121357 LOFARO BELLEVUE TN 37221 42,400.00 12.50 180
191 TC6030345 LONG VIRGINIA B VA 23454 38,000.00 12.75 180
192 TC6030397 LORENZO MIAMI FL 33193 16,600.00 11.99 180
193 TC6030346 LOUCKS ORLANDO FL 32836 60,000.00 11.99 180
194 TC6030709 LOVENDAHL BLUFFDALE UT 84065 27,092.00 10.99 180
195 TC6030747 LYDON SCITUATE MA 02066 25,000.00 11.35 180
196 FC6030675 LYLE DELTONA FL 32738 65,450.00 11.99 180
197 TC6030748 LYNCH BARBERTON OH 44203 22,750.00 11.25 180
198 TC6030607 MAHAFFEY CORTEZ CO 81321 79,900.00 9.95 180
199 TC6020262 MAHLER WATERBURY CT 06710 45,500.00 10.99 180
200 TC6020669 MAHONE EAST CLEVE OH 44121 125,000.00 12.65 180
201 TC5121455 MARBLE GRAND BLAN MI 48439 70,000.00 13.00 180
202 TC6030815 MARTIN SANTA FE NM 87501 91,200.00 10.20 180
203 TC6030749 MASSE SEEKONK MA 02771 193,800.00 9.99 180
204 TC6030784 MATHIS CINCINNATI OH 45211 62,400.00 10.70 180
205 TC6030672 MAYS MONTICELLO NY 12701 70,000.00 10.75 180
206 TC6030785 MCKEE FRUITPORT MI 49415 74,750.00 10.80 180
207 TC6030728 MCKITRICK TENINO WA 98589 72,100.00 12.50 180
208 TC6030786 MILIVOJEVIC CLEAVELAND OH 44142 41,850.00 11.80 180
209 TC6030414 MILLER MARIETTA GA 30060 34,250.00 12.19 240
210 TC6030464 MINOR, JR CULPEPER VA 22701 48,000.00 13.99 180
211 TC6020709 MOORE PLAINFIELD NJ 07063 63,750.00 14.50 180
212 TC6030398 MURPHY HAMPTON VA 23663 52,500.00 12.99 180
213 TB6020329 MURRELL PARRISH FL 34219 15,400.00 11.80 180
214 TC5120148 NEWHOUSE MAPLE HEIG OH 44137 42,000.00 11.95 180
215 TC5100936 NICHOLS COLUMBUS GA 31907 55,250.00 10.10 180
216 TC6030415 OGLETREE WOODSTOCK GA 30188 45,000.00 12.99 180
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Amort Debt Payment Maturity Paid Scheduled
No. Number Term LTV CLTV Ratio Amount Date Thru Balance
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
163 TC6030336 360 80.00 80.00 37.78 $534.48 02/10/11 04/10/96 $52,000.00
164 TC6021691 360 75.00 75.00 22.02 $568.31 04/01/11 04/01/96 $51,375.00
165 TC6030426 360 50.91 50.91 39.00 $331.54 12/15/10 03/15/96 $27,978.31
166 TC6030337 360 97.89 97.89 45.02 $904.50 02/05/11 04/05/96 $87,989.18
167 TC6030413 360 53.10 53.10 38.00 $455.87 03/01/26 04/01/96 $38,491.85
168 TC6030188 180 80.00 80.00 43.31 $408.05 03/27/11 03/27/96 $36,000.00
169 TC6030429 360 42.02 42.02 25.35 $305.94 12/15/10 03/15/96 $24,887.58
170 TC6030338 180 40.66 70.03 29.50 $256.72 08/15/08 04/15/96 $17,602.23
171 TD6020031 240 75.00 75.00 35.09 $455.34 04/01/16 04/01/96 $45,000.00
172 TC6030380 360 80.00 80.00 44.90 $710.79 03/05/26 04/05/96 $86,400.00
173 TC6030396 180 63.35 80.00 44.25 $187.76 02/10/11 04/10/96 $14,630.94
174 TC6030671 360 79.97 79.97 48.69 $1,827.38 02/15/11 04/15/96 $189,934.08
175 TC6030779 360 80.00 80.00 39.29 $459.05 03/18/11 03/18/96 $46,000.00
176 TC6030830 240 52.32 65.09 28.00 $724.42 03/25/16 03/25/96 $66,000.00
177 TC6030606 240 58.54 58.54 42.86 $1,218.27 02/16/16 03/16/96 $119,856.73
178 TC5121241 360 74.42 74.42 29.83 $471.34 01/04/11 04/04/96 $44,626.24
179 TB6030173 360 75.00 75.00 50.51 $2,376.71 04/01/11 04/01/96 $243,750.00
180 TB5040223 0 70.00 70.00 47.55 $849.12 08/01/10 04/01/96 $58,960.17
181 NC6010179 360 44.64 44.64 29.12 $266.81 02/08/11 04/08/96 $24,993.61
182 TC6030563 360 80.00 80.00 48.03 $1,164.72 03/12/11 04/12/96 $122,400.00
183 TC6030708 360 49.02 49.02 19.29 $411.34 03/19/11 04/19/96 $50,000.00
184 TC6030781 240 52.76 52.76 49.57 $1,058.90 03/11/16 03/11/96 $105,000.00
185 TC6030814 240 64.80 64.80 32.81 $923.13 02/28/16 03/28/96 $80,924.00
186 TC6030782 360 74.47 74.47 52.23 $1,238.96 03/19/11 03/19/96 $140,000.00
187 TC6030343 360 65.00 65.00 50.25 $371.26 03/01/11 04/01/96 $33,792.09
188 TC6030344 360 65.00 65.00 43.47 $378.39 03/01/11 04/01/96 $34,441.95
189 TC6030564 180 40.25 69.74 26.00 $449.41 03/04/11 03/04/96 $41,000.00
190 TC5121357 360 80.00 80.00 41.59 $452.52 11/08/10 01/08/96 $42,355.90
191 TC6030345 180 00.00 100.00 23.68 $474.56 03/10/09 04/10/96 $36,136.21
192 TC6030397 180 47.29 58.00 46.00 $199.12 02/25/11 02/25/96 $16,566.74
193 TC6030346 360 46.62 62.41 46.38 $616.71 03/01/11 04/01/96 $59,982.79
194 TC6030709 180 69.93 84.98 38.56 $307.76 03/18/11 03/18/96 $27,092.00
195 TC6030747 180 45.94 60.48 27.19 $289.67 03/22/11 03/22/96 $25,000.00
196 FC6030675 360 85.00 85.00 31.01 $672.73 03/02/11 03/02/96 $65,450.00
197 TC6030748 180 65.00 65.00 45.00 $262.16 03/22/11 03/22/96 $22,750.00
198 TC6030607 360 85.00 85.00 40.62 $698.23 03/13/11 03/13/96 $79,900.00
199 TC6020262 360 65.00 65.00 43.19 $432.96 02/14/11 04/14/96 $45,440.78
200 TC6020669 360 66.14 66.14 44.49 $1,348.64 02/21/11 03/21/96 $124,969.07
201 TC5121455 180 66.99 66.99 15.72 $885.67 12/12/10 02/12/96 $69,569.07
202 TC6030815 360 80.00 80.00 28.53 $813.86 03/25/11 03/25/96 $91,200.00
203 TC6030749 360 85.00 85.00 29.71 $1,699.30 03/13/11 04/13/96 $193,800.00
204 TC6030784 360 70.11 70.11 33.70 $580.15 03/18/11 04/18/96 $62,380.33
205 TC6030672 360 75.27 75.27 50.00 $653.44 02/12/11 02/12/96 $69,973.64
206 TC6030785 360 62.29 62.29 51.64 $700.59 03/18/11 03/18/96 $74,750.00
207 TC6030728 360 70.00 70.00 38.96 $769.49 02/01/11 04/01/96 $72,062.91
208 TC6030786 360 75.00 75.00 31.61 $424.05 03/18/11 03/18/96 $41,850.00
209 TC6030414 240 31.65 75.00 50.00 $381.67 02/05/16 04/05/96 $34,221.96
210 TC6030464 360 64.87 64.87 26.00 $568.36 02/10/11 03/10/96 $47,991.24
211 TC6020709 360 65.05 65.05 32.23 $780.65 02/27/11 03/27/96 $63,739.66
212 TC6030398 360 75.00 75.00 23.00 $580.34 01/05/11 04/05/96 $52,478.19
213 TB6020329 180 56.65 74.99 30.74 $182.85 04/01/11 04/01/96 $15,400.00
214 TC5120148 360 70.00 70.00 51.00 $430.41 12/01/10 04/01/96 $41,950.63
215 TC5100936 180 85.00 85.00 44.52 $597.10 11/08/10 04/08/96 $54,748.57
216 TC6030415 180 24.76 85.57 37.67 $569.06 03/01/11 04/01/96 $44,917.13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMC Home Equity Loan Trust 1996-2 Cut-off-Dat 01-Apr-96
Subsequent Transfer - Schedule of Mortgage Loans (Fixed Loans)
Loan Property Zip Original Interest
No. Number Name City State Code Amount Rate Term
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
217 TC6021802 PANKOWSKI MILWAUKEE WI 53215 13,000.00 11.24 120
218 TC6030449 PEARSON GAINESVILL FL 32601 33,157.00 12.49 180
219 NC5120122 PENXA, JR WILLINGBOR NJ 08046 20,910.00 14.49 144
220 TC6020264 PEREZ PHOENIX AZ 85019 20,000.00 9.40 120
221 TC6030098 PEREZ MIAMI FL 33175 111,000.00 11.98 180
222 TC6030729 PETERSON NAMPA ID 83651 81,200.00 10.79 180
223 TC6030788 PIERCE ALEXANDRIA IN 46001 70,200.00 10.40 180
224 TC6030821 PONTICELLI AVONDALE AZ 85323 92,540.00 11.15 180
225 TC6030416 POPE, JR DECATUR GA 30030 46,400.00 11.99 180
226 NC5110068 RASCONA OZONE PARK NY 11416 85,000.00 13.50 360
227 TC5110316 RENWICK HOLLY MI 48442 47,700.00 15.99 96
228 TB5120273 REYNOLDS FORT MYERS FL 33907 22,400.00 10.00 180
229 TC6030787 REYNOLDS SHEFFIELD OH 44054 88,800.00 10.95 180
230 FC6030944 ROANE IRVINGTON NY 10533 40,100.00 10.88 180
231 TC5120103 ROGERS JR CHATTANOOG TN 37404 47,482.75 11.45 180
232 TC5120118 ROGERS JR CHATTANOOG TN 37404 31,220.78 11.45 180
233 TC5120119 ROGERS JR CHATTANOOG TN 37404 30,017.84 11.45 180
234 NC5120206 RUIZ WALDWICK NJ 07463 17,000.00 12.99 120
235 TC6030797 RUSSO BURLINGTON MA 01803 110,000.00 14.65 180
236 TB5080173 RYAN INDEPENDEN MO 64052 55,200.00 12.94 180
237 TB5080180 RYAN INDEPENDEN MO 64052 20,400.00 12.94 180
238 TC6011179 SCHEUERMANN FORT LAUDE FL 3334 96,050.00 11.25 180
239 TC6030730 SCHMETT PORTLAND OR 97236 60,000.00 12.10 180
240 TC6011172 SCHREIBER TAYLOR MIL KY 41015 33,500.00 10.40 180
241 TC6030789 SCHROEN JACKSON MI 49201 80,500.00 11.95 180
242 TC6030731 SIMPSON WENATCHEE WA 98801 27,000.00 14.00 180
243 TC5120906 SMITH PHOENIX AZ 85044 129,625.00 11.85 180
244 TC6010326 SMITH CHATTANOOG TN 37411 50,999.29 11.40 180
245 TC6030386 STEEPLE EAST POINT GA 30344 56,000.00 11.99 180
246 TC6030798 STEWART DANVERS MA 01923 318,750.00 15.05 180
247 TC5120816 STOOTS DAWSON MI 15428 32,800.00 12.90 180
248 ND5110054 STREICHER CLIFTON NJ 07011 118,500.00 10.50 360
249 ND5110075 STREICHER PATERSON NJ 07502 66,500.00 10.50 360
250 TC5120578 STRICKLAND CHICAGO IL 60619 16,284.00 15.98 180
251 FC6020417 TONGUE SR ANNAPOLIS MD 21401 93,800.00 10.50 180
252 FC6030930 VAUGHT JR STATEN ISL NY 10301 15,200.00 10.50 120
253 NC5120217 VERGA MASTIC NY 11951 57,600.00 10.90 360
254 TC6030732 VICKERS OLYMPIA WA 98502 43,000.00 9.95 180
255 TC6030799 VLACHOS CAMBRIDGE MA 02138 209,000.00 11.93 180
256 TC6030790 WAGNER, JR MOORESVILL IN 46158 59,500.00 9.90 180
257 NC6020014 WALTON III LITTLE EGG NJ 08087 90,000.00 9.50 180
258 TC5121211 WARREN DUDLEY GA 31022 67,200.00 12.25 360
259 TC6010020 WATKINS BELLS TN 38006 34,400.84 11.80 180
260 TC6030791 WATSON CINCINNATI OH 45251 68,000.00 11.70 180
261 CC6030029 WAYMAN LEXINGTON KY 40504 76,900.00 12.10 120
262 TC6030800 WELCH SALEM MA 01970 187,200.00 9.50 180
263 NC5110062 WELFARE JAMAICA NY 11436 68,250.00 14.50 360
264 TC5121375 WESOLEK W EHMPSTEA NY 11552 60,000.00 12.99 240
265 TC6021538 WILKERSON BILOXI MS 39532 28,900.00 14.25 180
266 NC5110079 WILLIS SOUTHAMPTO NJ 08088 370,500.00 12.50 180
267 TC6010681 WILMHOFF COVINGTON KY 41016 21,000.00 11.24 180
268 TC6021775 WILSON MT MORRIS MI 48458 340,000.00 12.00 180
269 TC6020576 ZARAFSHAN SHERMAN OA CA 91403 20,600.00 11.38 180
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Amort Debt Payment Maturity Paid Scheduled
No. Number Term LTV CLTV Ratio Amount Date Thru Balance
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
217 TC6021802 120 32.50 32.50 47.39 $180.85 03/22/06 03/22/96 $13,000.00
218 TC6030449 360 80.87 80.87 44.00 $353.61 12/25/10 03/25/96 $33,148.50
219 NC5120122 144 74.19 100.00 44.90 $307.00 11/01/07 04/01/96 $20,638.17
220 TC6020264 120 40.00 40.00 34.73 $257.70 02/12/06 04/12/96 $19,898.97
221 TC6030098 360 75.00 75.00 39.96 $1,139.63 04/01/11 04/01/96 $111,000.00
222 TC6030729 360 80.00 80.00 39.91 $760.42 04/01/11 04/01/96 $81,200.00
223 TC6030788 360 90.00 90.00 33.51 $636.91 03/19/11 03/19/96 $70,200.00
224 TC6030821 360 69.99 69.99 37.13 $891.78 03/15/11 04/19/96 $92,540.00
225 TC6030416 360 80.00 80.00 46.52 $476.92 01/15/11 03/15/96 $46,386.69
226 NC5110068 360 48.57 48.57 45.48 $973.60 04/01/26 04/01/96 $85,000.00
227 TC5110316 240 65.34 65.34 42.00 $663.27 10/01/03 04/01/96 $47,528.36
228 TB5120273 180 58.95 58.95 19.18 $240.72 01/23/11 04/23/96 $22,291.45
229 TC6030787 360 80.00 80.00 45.96 $842.31 03/21/11 03/21/96 $88,800.00
230 FC6030944 180 29.34 43.92 46.59 $452.63 03/15/11 04/15/96 $40,100.00
231 TC5120103 180 69.83 69.83 23.04 $553.16 03/06/11 03/06/96 $47,482.75
232 TC5120118 180 69.38 69.38 23.04 $363.72 03/06/11 03/06/96 $31,220.78
233 TC5120119 180 69.81 69.81 23.04 $349.70 03/06/11 03/06/96 $30,017.84
234 NC5120206 120 75.13 84.58 32.92 $253.73 02/04/06 04/04/96 $16,930.30
235 TC6030797 360 64.71 64.71 43.00 $1,360.16 02/01/11 03/01/96 $109,965.31
236 TB5080173 360 60.00 60.00 52.21 $608.04 08/24/10 03/24/96 $55,104.41
237 TB5080180 360 60.00 60.00 52.21 $224.71 08/24/10 03/24/96 $20,365.81
238 TC6011179 360 85.00 85.00 36.52 $932.90 02/01/11 04/01/96 $95,984.83
239 TC6030730 360 80.00 80.00 19.04 $621.79 04/01/11 04/01/96 $60,000.00
240 TC6011172 180 50.68 73.31 21.94 $368.23 02/28/11 03/29/96 $33,390.33
241 TC6030789 360 70.00 70.00 44.62 $824.94 03/20/11 03/20/96 $80,500.00
242 TC6030731 180 52.33 68.40 34.94 $359.57 03/20/11 03/20/96 $27,000.00
243 TC5120906 360 85.00 85.00 49.70 $1,318.39 12/01/10 04/01/96 $129,469.35
244 TC6010326 360 75.00 75.00 45.94 $501.15 03/06/11 03/06/96 $50,999.29
245 TC6030386 360 70.00 70.00 39.00 $575.59 03/01/11 04/01/96 $55,983.94
246 TC6030798 360 75.00 75.00 43.30 $4,043.17 03/01/11 03/01/96 $318,704.49
247 TC5120816 360 80.00 80.00 26.90 $360.27 12/07/10 03/07/96 $32,776.00
248 ND5110054 360 74.76 74.76 48.67 $1,083.97 03/20/26 03/20/96 $118,500.00
249 ND5110075 360 70.00 70.00 45.98 $608.31 03/20/26 03/20/96 $66,500.00
250 TC5120578 180 52.31 77.36 49.00 $238.94 08/10/10 03/10/96 $15,962.86
251 FC6020417 360 70.00 70.00 38.90 $858.03 02/05/11 03/05/96 $93,762.72
252 FC6030930 120 68.27 79.96 30.26 $205.10 03/07/06 03/07/96 $15,200.00
253 NC5120217 360 90.00 90.00 34.68 $544.20 02/01/26 04/01/96 $57,557.81
254 TC6030732 180 46.88 79.96 34.09 $460.77 03/13/11 04/13/96 $43,000.00
255 TC6030799 360 29.31 29.31 46.00 $2,137.75 03/01/11 04/01/96 $209,000.00
256 TC6030790 360 85.00 85.00 33.83 $517.77 03/19/11 03/19/96 $59,500.00
257 NC6020014 180 75.63 75.63 27.08 $939.81 03/01/11 03/01/96 $89,772.69
258 TC5121211 360 80.00 80.00 33.00 $704.19 11/01/25 01/01/96 $67,106.90
259 TC6010020 180 80.00 80.00 33.97 $408.45 02/23/11 02/23/96 $34,330.66
260 TC6030791 360 88.31 88.31 37.47 $658.16 03/19/11 03/19/96 $65,450.00
261 CC6030029 360 83.98 83.98 26.18 $796.93 04/01/06 04/01/96 $76,900.00
262 TC6030800 360 90.00 90.00 42.00 $1,574.08 04/01/11 04/01/96 $187,200.00
263 NC5110062 360 65.00 65.00 26.21 $835.76 03/01/26 03/01/96 $68,238.93
264 TC5121375 240 39.39 70.00 44.00 $702.52 12/19/15 03/19/96 $59,839.22
265 TC6021538 180 67.70 99.99 37.53 $389.74 04/01/11 04/01/96 $28,900.00
266 NC5110079 360 65.00 65.00 50.50 $3,954.19 01/01/11 03/01/96 $370,132.27
267 TC6010681 180 70.00 70.00 28.00 $241.86 02/15/11 05/15/96 $21,000.00
268 TC6021775 360 80.00 80.00 28.51 $3,497.29 02/28/11 02/29/96 $339,902.71
269 TC6020576 180 73.24 82.40 36.63 $239.01 01/01/11 04/01/96 $20,467.54
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMC Home Equity Loan Trust 1996-2 Cut-off-Dat 01-Apr-96
Subsequent Transfer - Schedule of Mortgage Loans (Fixed Loans)
Loan Property Zip Original Interest
No. Number Name City State Code Amount Rate Term
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Totals $19,478,370.16 11.7436 201.269
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Amort Debt Payment Maturity Paid Scheduled
No. Number Term LTV CLTV Ratio Amount Date Thru Balance
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Totals 327.215 70.14418 72.26355 39.14866 $ 19,461,337.52
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
IMC Home Equity Loan Trust 1996-2
Subsequent Transfer - Scheduleof Mortgage Loans (Adjustable Rate) Cut-Off Date: 01-Apr-96
Loan Zip Property Original Interest Debt Amort. Lien
Number Name Code Property Address City Amount LTV Rate Term CLTV Ratio Term Status
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TC5100501 MILLER 80118 8074 BANNOCK DRIVE LARKSPUR $273,750.00 82.955% 8.75% 360 82.955 39% 360 1
Loan Maturity Paid Scheduled
Number Date Thru Balance
================================================
<S> <C> <C> <C>
TC5100501 07/01/25 01/01/96 $272,290.39
</TABLE>
<PAGE>
