<PAGE> 1
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
April 25, 1996
Fund America Investors Corporation II
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 33-73748 84-1218906
- - ---------------------------- --------------- ------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
6400 S. Fiddler's Green Circle
Suite 1200B
Englewood, Colorado 80111
------------------------------ ----------
(Address of Principal (zip Code)
Executive Offices)
Registrant's telephone number, including area code (303) 290-2065
No Change
-------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
________________________________________________________________________________
<PAGE> 2
Item 2. Acquisition of Disposition of Assets.
Reference is hereby made to the Registrant's Registration Statement on
Form S-3 (File No. 33-73748) (as amended, the "Registration Statement"),
pursuant to which the Registrant registered $501,000,000 aggregate principal
amount of its collateralized mortgage obligations and pass-through
certificates, issuable in various series, for sale in accordance with the
provisions of the Securities Act of 1933, as amended (the "Act"). Reference is
also hereby made to the Prospectus dated April 22, 1996 and the related
Prospectus Supplement, dated April 22, 1996 (collectively, the "Prospectus"),
which were filed with the Commission on April 24, 1996 pursuant to Rule
424(b)(5), with respect to the Fund America Investors Trust V Collateralized
Mortgage Obligations, Series 1996-A (the "Bonds").
The Registrant is filing this Current Report on Form 8-K to report the
acquisition by the Registrant of certain conventional first lien mortgage loans
(the "Adjustable Rate Mortgage Loans") and second lien mortgage loans (the
"Fixed Rate Mortgage Loans" and, together with the Adjustable Rate Mortgage
Loans, the "Mortgage Loans") on April 25, 1995 from IMH Assets Corp., a
California corporation ("IMH"), pursuant to the terms of a Mortgage Loan
Purchase Agreement dated as of April 25, 1995 (the "Mortgage Loan Purchase
Agreement") between the Registrant and IMH. IMH acquired the Mortgage Loans
from its parent, Imperial Credit Mortgage Holdings, Inc., a California
corporation ("Imperial Credit"). The Mortgage Loans were acuired by the
Registrant for an aggregate purchase price of $295,315,915, which purchase
price was paid by the transfer to Imperial Credit, at the the Registrant's
direction, of $295,315,915 of the net proceeds from the sale of the Bonds.
The Mortgage Loans were pooled to form a mortgage pass-through
certificate (the "Certificate") pursuant to the terms of a Pooling and
Servicing Agreement dated as of April 1, 1996 (the "Pooling and Servicing
Agreement") among the Registrant, as seller, ICI Funding Corporation, a
California corporation, as master servicer, and Bankers Trust Company of
California, N.A. as trustee (the "Pooling Trustee"). The Registrant then
conveyed all of its right, title and interest in the Certificate to Fund
America Investors Trust V (the "Issuer") pursuant to the terms of a Deposit
Trust Agreement dated as of April 25, 1995 (the "Deposit Trust Agreement")
between the Issuer and Wilmington Trust Company, as owner trustee (the "Owner
Trustee"). The Issuer then pledged all of its right, title and interest in the
Certificate to Bankers Trust Company of California, N.A. as trustee (the
"Indenture Trustee") as collateral for the Bonds which were issued pursuant to
an Indenture dated as of April 1, 1996 (the "Indenture") between the Issuer and
the Indenture Trustee. Certain administrative functions will be performed by
Bankers Trust Company of California, N.A. ("Bankers Trust Company") for the
Issuer pursuant to the terms of a Management Agreement, dated as of April 25,
1996 (the "Management Agreement") between Bankers Trust Company and the Issuer.
Forms of the Pooling and Servicing Agreement, the Mortgage Loan
Purchase Agreement, the Deposit Trust Agreement and the Management Agreement
are filed as Exhibits 4.1, 10.1, 10.2 and 10.3, respectively, to this Current
Report on Form 8-K.
<PAGE> 3
The following tables set forth certain information, as of April 1,
1996 (the "Cut-off Date"), unless specified otherwise, with respect to the
Adjustable Rate Mortgage Loans evidenced by the Certificate:
Principal Balances of FUND AMERICA 1996-A - ADJUSTABLE LOANS at Origination
<TABLE>
<CAPTION>
% of
Number Aggregate Original Aggregate Original
Range ($) of Loans Principal Balance Principal Balance
- - --------- -------- ------------------ ------------------
<S> <C> <C> <C> <C>
0.01 - 50,000.00 24 $ 1,000,300.00 0.36%
50,000.01 - 100,000.00 197 15,719,736.00 5.73
100,000.01 - 150,000.00 284 35,350,616.00 12.89
150,000.01 - 200,000.00 228 39,543,725.00 14.41
200,000.01 - 250,000.00 252 57,441,519.00 20.94
250,000.01 - 300,000.00 144 39,577,450.00 14.43
300,000.01 - 350,000.00 75 24,371,950.00 8.88
350,000.01 - 400,000.00 66 25,014,300.00 9.12
400,000.01 - 450,000.00 22 9,350,200.00 3.41
450,000.01 - 500,000.00 24 11,624,600.00 4.24
500,000.01 - 550,000.00 12 6,350,700.00 2.31
550,000.01 - 600,000.00 10 5,806,000.00 2.12
600,000.01 - 650,000.00 4 2,515,500.00 0.92
650,000.01 - 700,000.00 1 681,000.00 0.25
------ ---------------- -------
Total 1,343 $ 274,347,596.00 100.00%
====== ================ =======
</TABLE>
Principal Balances of FUND AMERICA 1996-A - ADJUSTABLE LOANS
as of the Cut-off Date
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Range ($) of Loans the Cut-off Date the Cut-off Date
- - --------- -------- ------------------ ------------------
<S> <C> <C> <C> <C>
0.01 - 50,000.00 28 $ 1,135,689.36 0.42%
50,000.01 - 100,000.00 206 16,307,217.64 6.10
100,000.01 - 150,000.00 290 36,047,952.51 13.49
150,000.01 - 200,000.00 236 40,915,008.48 15.31
200,000.01 - 250,000.00 248 56,133,956.11 21.01
250,000.01 - 300,000.00 136 37,212,190.45 13.93
300,000.01 - 350,000.00 70 22,779,517.23 8.53
350,000.01 - 400,000.00 59 22,228,268.81 8.32
400,000.01 - 450,000.00 21 8,801,811.86 3.29
450,000.01 - 500,000.00 22 10,557,925.02 3.95
500,000.01 - 550,000.00 13 6,790,761.85 2.54
550,000.01 - 600,000.00 10 5,739,693.19 2.15
600,000.01 - 650,000.00 3 1,888,676.06 0.71
650,000.01 - 700,000.00 1 666,773.41 0.25
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
2
<PAGE> 4
Property Types of FUND AMERICA 1996-A - ADJUSTABLE LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Type of Loans the Cut-off Date the Cut-off Date
- - ---- -------- ------------------ ------------------
<S> <C> <C> <C>
Single Family 1,037 $ 208,450,221.87 78.01%
Two Family 21 3,078,791.11 1.15
Three Family 7 1,434,542.77 0.54
Four Family 7 921,718.43 0.34
Condominium 102 15,326,481.80 5.74
Condo (High Rise) 1 95,930.52 0.04
Planned Unit Development 162 37,357,871.61 13.98
Manufactured Housing 5 397,861.15 0.15
Units 1 142,022.72 0.05
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
Mortgage Rates of FUND AMERICA 1996-A - ADJUSTABLE LOANS at Origination
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Mortgage Rate (%) of Loans the Cut-off Date the Cut-off Date
- - ----------------- -------- ------------------ ------------------
<S> <C> <C> <C>
3.500 - 3.999 117 $ 27,844,918.73 10.42%
4.000 - 4.499 139 31,713,446.55 11.87
4.500 - 4.999 188 39,635,481.19 14.83
5.000 - 5.499 136 25,407,354.51 9.51
5.500 - 5.999 131 20,734,103.56 7.76
6.000 - 6.499 116 21,569,952.75 8.07
6.500 - 6.999 108 27,340,601.23 10.23
7.000 - 7.499 58 11,178,384.20 4.18
7.500 - 7.999 79 16,223,256.27 6.07
8.000 - 8.499 73 13,386,783.76 5.01
8.500 - 8.999 92 16,301,634.86 6.10
9.000 - 9.499 40 7,254,036.28 2.71
9.500 - 9.999 41 6,080,281.52 2.27
10.000 - 10.499 7 700,870.18 0.26
10.500 - 10.999 11 1,263,533.41 0.47
11.000 - 11.499 3 274,938.82 0.10
11.500 - 11.999 2 152,503.48 0.06
12.000 - 12.499 1 63,162.47 0.02
13.000 - 13.499 1 80,198.21 0.03
15.500 - 15.999 20 741,443.03 2.16
16.500 - 16.999 1 19,155.65 0.06
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
3
<PAGE> 5
Mortgage Rates of FUND AMERICA 1996-A - ADJUSTABLE LOANS as of the Cut-Off Date
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Mortgage Rate (%) of Loans the Cut-off Date the Cut-off Date
- - ----------------- -------- ------------------ ------------------
<S> <C> <C> <C>
5.500 - 5.999 1 $ 166,147.50 0.06%
6.000 - 6.499 10 1,901,140.32 0.71
6.500 - 6.999 38 7,442,930.79 2.79
7.000 - 7.499 97 23,815,145.76 8.91
7.500 - 7.999 251 61,358,871.25 22.96
8.000 - 8.499 340 69,778,012.04 26.11
8.500 - 8.999 429 76,194,807.76 28.52
9.000 - 9.499 81 12,293,464.44 4.60
9.500 - 9.999 50 8,326,726.60 3.12
10.000 - 10.499 10 1,685,559.92 0.63
10.500 - 10.999 21 2,770,566.89 1.04
11.000 - 11.499 6 765,700.96 0.29
11.500 - 11.999 6 503,260.75 0.19
12.000 - 12.499 1 63,162.47 0.02
12.500 - 12.999 1 59,746.32 0.02
13.000 - 13.499 1 80,198.21 0.03
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
Original Loan-to-Value Ratios of FUND AMERICA 1996-A - ADJUSTABLE LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Loan-to-Value Ratio (%) of Loans the Cut-off Date the Cut-off Date
- - ----------------------- -------- ------------------ ------------------
<S> <C> <C> <C> <C>
Less than or equal to 25.00 1 $ 53,838.17 0.02%
25.01- 30.00 7 1,017,961.54 0.38
30.01- 35.00 5 634,882.72 0.24
35.01- 40.00 11 2,025,649.02 0.76
40.01- 45.00 9 1,654,760.22 0.62
45.01- 50.00 15 2,242,245.81 0.84
50.01- 55.00 22 4,194,094.24 1.57
55.01- 60.00 36 6,677,339.93 2.50
60.01- 65.00 45 9,749,644.33 3.65
65.01- 70.00 116 23,678,598.77 8.86
70.01- 75.00 198 43,447,994.40 16.26
75.01- 80.00 322 66,899,544.49 25.04
80.01- 85.00 50 10,278,768.64 3.85
85.01- 90.00 219 45,591,788.17 17.06
90.01- 95.00 287 49,058,331.53 18.36
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
4
<PAGE> 6
Geographical Distribution of FUND AMERICA 1996-A - ADJUSTABLE LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Location of Loans the Cut-off Date the Cut-off Date
- - -------- -------- ------------------ ------------------
<S> <C> <C> <C>
Alabama 2 $ 289,156.99 0.11%
Arizona 16 1,824,723.32 0.68
California 937 208,026,015.38 77.85
Colorado 61 10,180,672.93 3.81
Connecticut 3 680,594.45 0.25
Delaware 6 545,822.33 0.20
Florida 35 4,981,001.43 1.86
Georgia 3 803,681.15 0.30
Hawaii 2 540,799.28 0.20
Idaho 9 703,268.31 0.26
Illinois 3 452,681.27 0.17
Indiana 1 29,687.56 0.01
Kansas 1 72,570.97 0.03
Maryland 8 1,767,309.68 0.66
Mississippi 1 67,185.16 0.03
Missouri 1 74,773.99 0.03
Montana 1 48,286.33 0.02
Nevada 11 1,408,968.39 0.53
New Jersey 55 8,486,218.50 3.18
New York 7 1,197,526.79 0.45
North Carolina 10 1,349,594.77 0.51
Oregon 59 8,258,881.72 3.09
Pennsylvania 13 1,439,931.28 0.54
Rhode Island 1 298,905.33 0.11
South Carolina 2 233,296.06 0.09
Texas 4 534,508.29 0.20
Utah 14 1,463,888.28 0.55
Virginia 3 492,467.95 0.18
Washington 74 10,953,024.09 4.10
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
Occupancy status of the FUND AMERICA 1996-A - ADJUSTABLE LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Occupancy of Loans the Cut-off Date the Cut-off Date
- - --------- -------- ------------------ ------------------
<S> <C> <C> <C>
Owner Occupied 1,208 $ 252,196,739.56 94.38%
Second Home 43 5,750,551.31 2.15
Non Owner Occupied 92 9,258,151.11 3.46
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
5
<PAGE> 7
Purpose of the FUND AMERICA 1996-A - ADJUSTABLE LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Loan Purpose of Loans the Cut-off Date the Cut-off Date
- - ------------ -------- ------------------ ------------------
<S> <C> <C> <C>
Purchase 565 $ 105,463,059.13 39.47%
Refinance 538 116,900,547.96 43.75
Equity-out Refinance 240 44,841,834.89 16.78
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
Loan Programs of FUND AMERICA 1996-A - ADJUSTABLE LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Program of Loans the Cut-off Date the Cut-off Date
- - ------- -------- ------------------ ------------------
<S> <C> <C> <C>
Full Documentation Program 1,066 $ 207,979,865.54 77.84%
Alternate Documentation Program 22 3,545,528.30 1.33
No Income Verification 194 43,242,982.66 16.18
No Income No Ratio 37 7,418,890.49 2.78
No Income No Asset 7 1,978,876.53 0.74
Limited Doc (SE) 17 3,039,298.46 1.14
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
Risk Grade of FUND AMERICA 1996-A - ADJUSTABLE LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Risk Grade of Loans the Cut-off Date the Cut-off Date
- - ---------- -------- ------------------ ------------------
<S> <C> <C> <C> <C>
A 1,065 $ 221,584,674.55 82.93%
A- 216 37,212,280.53 13.93
B 45 6,613,563.80 2.48
C 13 1,494,480.86 0.56
CX 4 300,442.24 0.11
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
6
<PAGE> 8
Maximum Mortgage Rates of FUND AMERICA 1996-A - ADJUSTABLE LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Maximum Mortgage Rates(%) of Loans the Cut-off Date the Cut-off Date
- - ------------------------- -------- ------------------ ------------------
<S> <C> <C> <C>
9.500 - 9.999 117 $ 27,844,918.73 10.42%
10.000 - 10.499 139 31,713,446.55 11.87
10.500 - 10.999 188 39,635,481.19 14.83
11.000 - 11.499 131 24,084,086.78 9.01
11.500 - 11.999 113 17,814,930.26 6.67
12.000 - 12.499 74 10,329,142.16 3.87
12.500 - 12.999 181 45,168,991.30 16.90
13.000 - 13.499 54 9,696,270.10 3.63
13.500 - 13.999 72 15,201,460.95 5.69
14.000 - 14.499 69 13,095,429.35 4.90
14.500 - 14.999 80 13,559,092.33 5.07
15.000 - 15.499 37 6,559,777.49 2.46
15.500 - 15.999 47 7,792,325.25 2.92
16.000 - 16.499 9 1,283,685.67 0.48
16.500 - 16.999 17 1,966,463.64 0.74
17.000 - 17.499 7 703,558.11 0.26
17.500 - 17.999 6 613,021.44 0.23
18.000 - 18.499 1 63,162.47 0.02
19.000 - 19.499 1 80,198.21 0.03
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
Gross Margins of FUND AMERICA 1996-A - ADJUSTABLE LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Gross Margin (%) of Loans the Cut-off Date the Cut-off Date
- - ---------------- -------- ------------------ ------------------
<S> <C> <C> <C> <C>
1.750 - 1.999 1 $ 235,234.86 0.09%
2.000 - 2.249 1 192,741.71 0.07
2.500 - 2.749 12 2,110,309.05 0.79
2.750 - 2.999 576 117,138,194.33 43.84
3.000 - 3.249 356 76,352,295.22 28.57
3.250 - 3.499 105 21,443,960.80 8.03
3.500 - 3.749 38 8,087,351.45 3.03
3.750 - 3.999 26 4,784,510.27 1.79
4.000 - 4.249 9 1,133,165.71 0.42
4.250 - 4.499 4 677,162.54 0.25
4.500 - 4.749 1 40,970.03 0.02
4.750 - 4.999 57 9,492,990.67 3.55
5.000 - 5.249 33 6,594,708.84 2.47
5.250 - 5.499 14 2,692,307.65 1.01
5.500 - 5.749 40 7,092,966.81 2.65
5.750 - 5.999 37 5,081,282.00 1.90
6.000 - 6.249 16 2,261,049.14 0.85
6.250 - 6.499 4 471,560.24 0.18
6.500 - 6.749 7 564,034.59 0.21
6.750 - 6.999 1 58,990.12 0.02
7.000 - 7.249 3 579,101.14 0.22
7.500 - 7.749 1 40,356.60 0.02
9.000 - 9.249 1 80,198.21 0.03
------ ---------------- --------
Total 1,343 $ 267,205,441.98 100.00%
====== ================ ========
</TABLE>
7
<PAGE> 9
FUND AMERICA 1996-A - ADJUSTABLE LOANS - LOAN AGE IN MONTHS
STATISTIC COLUMNS : 121-123
WEIGHT COLUMNS : 46-56
<TABLE>
<CAPTION>
Aggregate Principal
Number Balance as of the
of Loans Cut-off Date Weight Amt Weight %
- - ------------- ---------- ------------------- ---------------- --------
<S> <C> <C> <C> <C>
0.0 - 11.9 526 39.17 % 108,063,992.89 40.44 %
12.0 - 23.9 245 18.24 % 39,274,850.35 14.70 %
24.0 - 35.9 569 42.37 % 119,090,715.90 44.57 %
36.0 - 47.9 3 0.22 % 775,882.84 0.29 %
- - ------------- ----- -------- ---------------- --------
1343 100.00 % 267,205,441.98 100.00 %
</TABLE>
Weighted Average (All Values Used) : 17.908
8
<PAGE> 10
The following tables set forth certain information, as of the Cut-off
Date unless otherwise specified, with respect to the Fixed Rate Mortgage Loans
evidenced by the Certificate:
Principal Balances of FUND AMERICA 1996-A - FIXED LOANS at Origination
<TABLE>
<CAPTION>
% of
Number Aggregate Original Aggregate Original
Range ($) of Loans Principal Balance Principal Balance
- - --------- -------- ------------------ ------------------
<S> <C> <C> <C> <C>
0.01 - 50,000.00 903 $ 27,970,498.00 80.45%
50,000.01 - 100,000.00 65 4,273,795.00 12.29
100,000.01 - 150,000.00 14 1,668,850.00 4.80
150,000.01 - 200,000.00 2 357,500.00 1.03
200,000.01 - 250,000.00 2 495,000.00 1.42
------ ---------------- --------
Total 986 $ 34,765,643.00 100.00%
====== ================ ========
</TABLE>
Principal Balances of FUND AMERICA 1996-A - FIXED LOANS as of the Cut-off Date
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Range ($) of Loans the Cut-off Date the Cut-off Date
- - --------- -------- ------------------ ------------------
<S> <C> <C> <C> <C>
0.01 - 50,000.00 903 $ 27,632,457.63 80.39%
50,000.01 - 100,000.00 65 4,235,440.89 12.32
100,000.01 - 150,000.00 14 1,653,323.90 4.81
150,000.01 - 200,000.00 2 357,078.59 1.04
200,000.01 - 250,000.00 2 493,822.07 1.44
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
Property Types of FUND AMERICA 1996-A - FIXED LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Type of Loans the Cut-off Date the Cut-off Date
- - ---- -------- ------------------ ------------------
<S> <C> <C> <C>
Single Family 858 $ 29,897,932.06 86.98%
Two Family 12 469,062.06 1.36
Three Family 1 34,591.05 0.10
Four Family 3 99,516.51 0.29
Condominium 39 1,053,291.47 3.06
De Minimis Planned Unit Development 1 28,665.77 0.08
Planned Unit Development 66 2,624,906.46 7.64
Manufactured Housing 6 164,157.70 0.48
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
9
<PAGE> 11
Mortgage Rates of FUND AMERICA 1996-A - FIXED LOANS at Origination
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Mortgage Rate (%) of Loans the Cut-off Date the Cut-off Date
- - ----------------- -------- ------------------ ------------------
<S> <C> <C> <C>
11.000 - 11.499 1 $ 19,869.09 0.06%
11.500 - 11.999 36 1,365,098.30 3.97
12.000 - 12.499 30 1,350,689.55 3.93
12.500 - 12.999 156 6,248,370.71 18.18
13.000 - 13.499 73 2,661,421.26 7.74
13.500 - 13.999 283 8,329,461.98 24.23
14.000 - 14.499 262 9,670,788.86 28.14
14.500 - 14.999 90 2,875,465.06 8.37
15.000 - 15.499 34 1,090,359.59 3.17
15.500 - 15.999 20 741,443.03 2.16
16.500 - 16.999 1 19,155.65 0.06
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
Mortgage Rates of FUND AMERICA 1996-A - FIXED LOANS as of the Cut-Off Date
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Mortgage Rate (%) of Loans the Cut-off Date the Cut-off Date
- - ----------------- -------- ------------------ ------------------
<S> <C> <C> <C>
11.000 - 11.499 1 $ 19,869.09 0.06%
11.500 - 11.999 36 1,365,098.30 3.97
12.000 - 12.499 30 1,350,689.55 3.93
12.500 - 12.999 156 6,248,370.71 18.18
13.000 - 13.499 73 2,661,421.26 7.74
13.500 - 13.999 283 8,329,461.98 24.23
14.000 - 14.499 262 9,670,788.86 28.14
14.500 - 14.999 90 2,875,465.06 8.37
15.000 - 15.499 34 1,090,359.59 3.17
15.500 - 15.999 20 741,443.03 2.16
16.500 - 16.999 1 19,155.65 0.06
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
10
<PAGE> 12
Original Loan-to-Value Ratios of FUND AMERICA 1996-A - FIXED LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Loan-to-Value Ratio (%) of Loans the Cut-off Date the Cut-off Date
- - ----------------------- -------- ------------------ ------------------
<S> <C> <C> <C>
Less than or equal to 30.00 2 $ 60,756.68 0.18%
30.01- 35.00 2 82,349.69 0.24
35.01- 40.00 1 29,948.00 0.09
40.01- 45.00 2 84,865.46 0.25
45.01- 50.00 3 184,085.19 0.54
55.01- 60.00 6 367,203.77 1.07
60.01- 65.00 7 332,529.69 0.97
65.01- 70.00 18 1,119,186.81 3.26
70.01- 75.00 31 1,712,349.05 4.98
75.01- 80.00 39 1,332,756.82 3.88
80.01- 85.00 72 2,395,407.61 6.97
85.01- 90.00 159 5,974,427.84 17.38
90.01- 95.00 114 3,897,117.11 11.34
95.01-100.00 530 16,799,139.36 48.87
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
Geographical Distribution of FUND AMERICA 1996-A - FIXED LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Location of Loans the Cut-off Date the Cut-off Date
- - -------- -------- ------------------ ------------------
<S> <C> <C> <C>
Arizona 18 $ 459,143.31 1.34%
California 634 22,196,578.27 64.58
Colorado 30 924,249.16 2.69
Delaware 1 32,523.98 0.09
Florida 21 782,794.71 2.28
Georgia 7 193,585.32 0.56
Hawaii 10 821,211.33 2.39
Idaho 2 48,880.22 0.14
Illinois 2 52,259.11 0.15
Indiana 1 11,195.53 0.03
Kansas 2 53,012.19 0.15
Maryland 51 2,079,038.19 6.05
Massachusetts 2 41,820.46 0.12
Montana 1 45,789.94 0.13
Nevada 17 531,212.87 1.55
New Hampshire 4 135,230.87 0.39
New Jersey 41 1,466,454.69 4.27
New Mexico 16 597,912.76 1.74
New York 5 184,543.24 0.54
North Carolina 6 172,035.33 0.50
Ohio 1 32,659.64 0.10
Oregon 33 1,033,332.42 3.01
Pennsylvania 4 94,164.89 0.27
Rhode Island 1 27,802.57 0.08
South Carolina 1 21,737.54 0.06
Texas 4 137,271.67 0.40
Utah 27 783,070.38 2.28
Virginia 9 305,425.48 0.89
Washington 32 1,032,241.66 3.00
Wisconsin 1 26,969.91 0.08
Wyoming 2 47,975.44 0.14
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
11
<PAGE> 13
Occupancy status of the FUND AMERICA 1996-A - FIXED LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Occupancy of Loans the Cut-off Date the Cut-off Date
- - --------- -------- ------------------ ------------------
<S> <C> <C> <C>
Owner Occupied 983 $ 34,286,290.22 99.75%
Second Home 1 27,952.63 0.08
Non Owner Occupied 2 57,880.23 0.17
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
Purpose of the FUND AMERICA 1996-A - FIXED LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Loan Purpose of Loans the Cut-off Date the Cut-off Date
- - ------------ -------- ------------------ ------------------
<S> <C> <C> <C>
Purchase 65 $ 2,575,799.41 7.49%
Refinance 163 5,650,956.60 16.44
Equity-out Refinance 758 26,145,367.07 76.07
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
Loan Programs of FUND AMERICA 1996-A - FIXED LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Program of Loans the Cut-off Date the Cut-off Date
- - ------- -------- ------------------ ------------------
<S> <C> <C> <C>
Full Documentation Program 876 $ 29,761,778.60 86.59%
Alternate Documentation Program 13 488,624.79 1.42
No Income Verification 74 2,578,991.24 7.50
No Income No Ratio 9 510,177.23 1.48
No Income No Asset 10 826,066.77 2.40
Limited Doc (SE) 4 206,484.45 0.60
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
12
<PAGE> 14
Risk Grade of FUND AMERICA 1996-A - FIXED LOANS
<TABLE>
<CAPTION>
Aggregate % of Aggregate
Principal Balance Principal Balance
Number Outstanding as of Outstanding as of
Risk Grade of Loans the Cut-off Date the Cut-off Date
- - ---------- -------- ------------------ ------------------
<S> <C> <C> <C> <C>
A 911 $ 30,991,217.10 90.16%
A- 58 2,562,848.56 7.46
B 11 491,707.25 1.43
C 6 326,350.17 0.95
------ ---------------- --------
Total 986 $ 34,372,123.08 100.00%
====== ================ ========
</TABLE>
FUND AMERICA 1996-A - FIXED LOANS - LOAN AGE IN MONTHS
STATISTIC COLUMNS : 121-123
WEIGHT COLUMNS : 46-56
<TABLE>
<CAPTION>
Aggregate
Principal Balance
Number Outstanding as of
of Loans the Cut-off Date Weight Amt Weight %
- - ------------- -------- ------------------ ------------- --------
<S> <C> <C> <C> <C> <C>
0.0 - 11.9 980 99.39 % 34,158,044.79 99.38 %
12.0 - 23.9 6 0.61 % 214,078.29 0.62 %
- - ------------- ----- -------- --------------- --------
986 100.00 % 34,372,123.08 100.00 %
</TABLE>
Weighted Average (All Values Used) : 6.601
13
<PAGE> 15
Item 7. Financial Statements and Exhibits.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Form of Pooling and Servicing Agreement
10.1 Form of Mortgage Loan Purchase Agreement
10.2 Form of Deposit Trust Agreement
10.3 Form of Management Agreement
</TABLE>
14
<PAGE> 16
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.
FUND AMERICA INVESTORS CORPORATION II
By: /s/ Howard J. Glicksman
------------------------------------
Howard J. Glicksman
Vice President
Dated: May 10, 1996
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Index
-------
<S> <C>
4.1 Form of Pooling and Servicing Agreement
10.1 Form of Mortgage Loan Purchase Agreement
10.2 Form of Deposit Trust Agreement
10.3 Form of Management Agreement
</TABLE>
<PAGE> 1
EXHIBIT 4.1
FUND AMERICA INVESTORS CORPORATION II
SELLER,
ICI FUNDING CORPORATION
MASTER SERVICER
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
TRUSTEE
__________________________________________
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 1996
__________________________________________
Fund America Investors Corporation II
Mortgage Pass-Through Certificates
Series 1996-A
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
ARTICLE II
Conveyance of Mortgage Loans;Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Section 2.02 Acceptance of Mortgage Loans by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2
Section 2.03 Representations, Warranties and Covenants of the
Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-4
Section 2.04 Substitution of Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-6
Section 2.05 Representations and Warranties of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . II-7
Section 2.06 Issuance of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-8
Section 2.07 Representations and Warranties Concerning the Seller . . . . . . . . . . . . . . . . . . . . . . . II-8
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer to Assure Servicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
Section 3.02 Sub-Servicing Agreements Between Master Servicer and Sub-Servicers . . . . . . . . . . . . . . . . III-2
Section 3.03 Successor Sub-Servicers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-2
Section 3.04 Liability of the Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-3
Section 3.05 Assumption or Termination of Sub-Servicing Agreements by Trustee . . . . . . . . . . . . . . . . . III-3
Section 3.06 Collection of Mortgage Loan Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-4
Section 3.07 Collection of Taxes, Assessments and Similar Items; Servicing Accounts . . . . . . . . . . . . . . III-4
Section 3.08 Access to Certain Documentation and Information
Regarding the Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-5
Section 3.09 Maintenance of Primary Insurance Policies; Collection Thereunder . . . . . . . . . . . . . . . . . III-6
Section 3.10 Maintenance of Hazard Insurance and Fidelity Coverage . . . . . . . . . . . . . . . . . . . . . . III-6
Section 3.11 Due-on-Sale Clauses; Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-8
Section 3.12 Realization Upon Defaulted Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-9
Section 3.13 Trustee to Cooperate; Release of Mortgage Files . . . . . . . . . . . . . . . . . . . . . . . . III-10
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 3.14 Servicing and Master Servicing Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . III-11
Section 3.15 Annual Statement of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-11
Section 3.16 Annual Independent Public Accountants' Servicing Report . . . . . . . . . . . . . . . . . . . . III-12
Section 3.17 Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-13
Section 3.18 Optional Purchase of Defaulted Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . III-13
ARTICLE IV
Accounts
Section 4.01 Protected Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
Section 4.02 Certificate Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2
Section 4.03 Permitted Withdrawals and Transfers from the Certificate Account . . . . . . . . . . . . . . . . . IV-4
Section 4.04 Custody Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6
ARTICLE V
Certificates
Section 5.01 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
Section 5.02 Registration of Transfer and Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . V-5
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . . . . V-9
Section 5.04 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-9
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
Section 6.02 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3
Section 6.03 Statements to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3
Section 6.04 Reports to the Trustee, the Bond Insurer and the Master Servicer . . . . . . . . . . . . . . . . . VI-4
Section 6.05 Monthly Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-4
Section 6.06 Compensating Interest Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-7
Section 6.07 Reports of Foreclosures and Abandonment of Mortgaged Property . . . . . . . . . . . . . . . . . . VI-10
</TABLE>
ARTICLE VII
The Master Servicer
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 7.01 Liabilities of the Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1
Section 7.02 Merger or Consolidation of the Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1
Section 7.03 Indemnification of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1
Section 7.04 Limitation on Liability of the Master Servicer and Others . . . . . . . . . . . . . . . . . . . . VII-1
Section 7.05 Master Servicer Not to Resign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2
Section 7.06 Appointment of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-3
Section 7.07 Sale and Assignment of Master Servicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-3
ARTICLE VIII
Default
Section 8.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
Section 8.02 Trustee to Act; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-2
Section 8.03 Notification to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-3
Section 8.04 Waiver of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-3
Section 8.05 List of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-4
ARTICLE IX
Concerning the Trustee
Section 9.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1
Section 9.02 Certain Matters Affecting the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-2
Section 9.03 Trustee Not Liable for Certificates or Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . IX-4
Section 9.04 Trustee May Own Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-4
Section 9.05 Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-4
Section 9.06 Eligibility Requirements for Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-5
Section 9.07 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-5
Section 9.08 Resignation and Removal of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-5
Section 9.09 Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-6
Section 9.10 Merger or Consolidation of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-7
Section 9.11 Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . IX-7
Section 9.12 Master Servicer Shall Provide Information as Reasonably Required . . . . . . . . . . . . . . . . . IX-8
Section 9.13 Federal Information Returns and Reports to
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-8
</TABLE>
ARTICLE X
Termination
iii
<PAGE> 5
<TABLE>
<S> <C>
Section 10.01 Termination Upon Repurchase by ICI Funding or its Designee or
Liquidation of All Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1
Section 10.02 Additional Termination Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-3
ARTICLE XI
Miscellaneous Provisions
Section 11.01 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
Section 11.02 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
Section 11.03 Recordation of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-2
Section 11.04 Limitation on Rights of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-2
Section 11.05 Acts of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-3
Section 11.06 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-4
Section 11.07 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-4
Section 11.08 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-4
Section 11.09 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-4
Section 11.10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-4
Section 11.11 Article and Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-4
Section 11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-5
Section 11.13 Notice to Rating Agencies and Bond Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-5
Section 11.14 Rights of the Bond Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-5
EXHIBITS
Exhibit A - Form of Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - Representations and Warranties of IMH Assets
Regarding the Mortgage Loans
Exhibit D - Form of Request for Release
Exhibit E - Form of Purchaser Representation Letter
Exhibit F - Form of Trustee's Initial Certification
Exhibit G - Form of Trustee's Final Certification
</TABLE>
iv
<PAGE> 6
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of April 1, 1996, among Fund
America Investors Corporation II, a Delaware corporation, as the seller (the
"Seller"), ICI Funding Corporation, a California corporation ("ICI Funding"),
as master servicer (the "Master Servicer"), and Bankers Trust Company of
California, N.A., a national banking association, as trustee (the "Trustee").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Seller will acquire the Mortgage
Loans from IMH Assets Corp., a California corporation ("IMH Assets"). IMH
Assets acquired the Mortgage Loans from its parent, Imperial Credit Mortgage
Holdings, Inc., a California corporation ("Imperial Holdings"). On the Closing
Date, the Seller will convey the Mortgage Loans and certain other property to
the Trust Fund and receive in consideration therefor a Certificate evidencing
the entire beneficial ownership interest in the Trust Fund. ICI Funding will
be the Master Servicer for the Mortgage Loans.
The Seller will cause the Certificate to be pledged to Bankers Trust
Company of California, N.A., as indenture trustee (the "Indenture Trustee")
under an Indenture (the "Indenture") to be dated as of April 1, 1996 between
Fund America Investors Trust V, as settlor, and the Indenture Trustee, in
connection with the issuance of the Fund America Investors Trust V
Collateralized Mortgage Obligations, Series 1996-A (the "Bonds").
The Mortgage Loans will have an Outstanding Principal Balance as of
the Cutoff Date, after deducting all Scheduled Principal due on or before the
Cutoff Date, of $301,578,036. The initial principal amount of the Certificate
will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the
Seller, the Master Servicer and the Trustee agree as follows:
v
<PAGE> 7
ARTICLE I.
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
Account: The Custody Account, the Certificate Account, the Protected
Accounts or the Servicing Accounts as the context may require.
Accrued Certificate Interest: For any Certificate for any
Distribution Date, the interest accrued during the related Interest Accrual
Period at the applicable Pass-Through Rate on the Current Principal Amount of
such Certificate immediately prior to such Distribution Date. All
distributions of interest will be calculated on the basis of the actual number
of days in the Interest Accrual Period and on a 360-day year. Accrued
Certificate Interest for a Certificate shall be reduced by the excess of (i)
the amount of any Interest Shortfall and Interest Losses for the related
Distribution Date over (ii) Compensating Interest Payments with respect to the
related Prepayment Period. Any such resulting excess shall be allocated to the
amount of Accrued Certificate Interest that would have resulted absent such
Interest Shortfall and Interest Losses.
Adjustable Rate Mortgage Loan: A Mortgage Loan with a Mortgage Rate
that is subject to periodic adjustment calculated on the basis of the LIBOR
Index, plus an applicable Gross Margin. Each Adjustable Rate Mortgage Loan is
secured by a first lien on the related Mortgaged Property.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan,
each annual adjustment date, which is the first day of the month in which the
Mortgage Rate of such Adjustable Rate Mortgage Loan changes pursuant to the
related Mortgage Note.
Advancing Date: The fourth Business Day preceding the related
Distribution Date.
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to
direct the management and policies of a Person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise. "Controlled"
and "Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
Aggregate Stated Principal Balance: With respect to the Mortgage Loans
and a Distribution Date, the aggregate of the Stated Principal Balances of the
Mortgage Loans with respect to such Distribution Date.
I-1
<PAGE> 8
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Anniversary Determination Date: The Determination Date occurring in
May of each year that the Certificates are outstanding, commencing in May,
1996.
Applicable Credit Rating: A rating of "AAA," in the case of S&P, or
"Aaa," in the case of Moody's, for any long-term deposit or security; a rating
of "A-1+," in the case of S&P, or "P-1," in the case of Moody's, for any short-
term deposit or security; or a rating of "AAAm," in the case of S&P, or "Aaa,"
in the case of Moody's, for any Permitted Investment listed in clause (viii) of
the definition thereof.
Appraised Value: For any Mortgaged Property, the amount set forth as
the appraised value of such Mortgaged Property in an appraisal made for the
mortgage originator in connection with its origination of the related Mortgage
Loan.
Assumed Final Distribution Date: With respect to the Certificate, the
Distribution Date in April 2026.
Balloon Loan: A Mortgage Loan, the Mortgage Note with respect to
which provides for regular monthly payments of principal and interest computed
on the basis of an amortization term that is longer than the related term to
stated maturity, with a balloon payment due at stated maturity which is
significantly larger than the regular monthly payments.
Bankruptcy Code: The United States Bankruptcy Code, as amended, as
codified in 11 U.S.C. Sections 101-1330.
Bankruptcy Coverage Termination Date: The Distribution Date upon
which the Bankruptcy Loss Amount has been reduced to zero or a negative number.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction.
Bankruptcy Loss Amount: As of any Determination Date prior to the
first Anniversary Determination Date, the Bankruptcy Loss Amount shall equal
$100,000, as reduced by the aggregate amount of Deficient Valuations and Debt
Service Reductions since the Cutoff Date. As of any Determination Date after
the first Anniversary Determination Date, other than an Anniversary
Determination Date, the Bankruptcy Loss Amount shall equal the Bankruptcy Loss
Amount on the immediately preceding Anniversary Determination Date as reduced
by the aggregate amount of Deficient Valuations and Debt Service Reductions
since such preceding Anniversary Determination Date. As of any Anniversary
Determination Date, the Bankruptcy Loss Amount shall equal the lesser of (x)
the Bankruptcy Loss Amount as of the preceding Determination Date as reduced by
any Deficient Valuations and Debt Service Reductions for the preceding
Distribution Date, and (y) the
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S&P Formula Amount for such Anniversary Determination Date. The Bankruptcy
Loss Amount may be further reduced by the Master Servicer (including
accelerating the manner in which such coverage is reduced) provided that prior
to any such reduction, (i) the Master Servicer shall obtain written
confirmation from each Rating Agency that such reduction shall not adversely
affect the then-current rating assigned to the Bonds by such Rating Agency and
shall provide a copy of such written confirmation to the Trustee and (ii) the
Bond Insurer shall have consented to such reduction .
Bond Insurance Policy: The Financial Guaranty Insurance Policy (No.
50458--N) dated the Closing Date, including any endorsements thereto, issued by
the Bond Insurer for the benefit of the holders of the Bonds.
Bond Insurer: Financial Security Assurance, Inc. or its successors in
interest.
Bond Insurer Default: The existence and continuance of a failure by
the Bond Insurer to make a payment required under the Bond Insurance Policy in
accordance with its terms.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions in the State of New York or such state in
which the Corporate Trust office is located are authorized or obligated by law
or executive order to be closed.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the form annexed hereto as Exhibit A, with the blanks
therein appropriately completed.
Certificate Account: The trust account or accounts created and
maintained pursuant to Section 4.02, which shall be denominated "Bankers Trust
Company of California, N.A., as Trustee f/b/o holders of Fund America Investors
Corporation II Mortgage Pass-Through Certificates, Series 1996-A - Certificate
Account."
Certificate Account Advance: As of any Advancing Date, the amount on
deposit in a Protected Account or Custody Account which is not required to be
transferred to the Certificate Account for distribution during the calendar
month in which such Advancing Date occurs but which is deposited in the
Certificate Account and used to make a distribution to Certificateholders
during such calendar month on account of Scheduled Payments on the Mortgage
Loans due on the Due Date for such month not being paid on or before such
Advancing Date except insofar as such unpaid amounts are the result of
application of the Relief Act.
Certificate Owner: Any Person who is the beneficial owner of a
Certificate.
Certificate Register: The register maintained pursuant to Section
5.02(a).
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Certificateholder: A Holder of a Certificate. For so long as the
Bonds are outstanding, the Certificateholder shall be Bankers Trust Company of
California, N.A., or its successor, as Indenture Trustee, for the benefit of
the holders of the Bonds.
Closing Date: April 25, 1996.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest Payments: As defined in Section 6.06.
Converted Mortgage Loan: Each Convertible Mortgage Loan, the Mortgage
Rate of which has been converted at the option of the Mortgagor from an
adjustable Mortgage Rate to a fixed Mortgage Rate.
Convertible Mortgage Loan: An Adjustable Rate Mortgage Loan that by
its terms and subject to certain conditions allows the Mortgagor to convert the
adjustable Mortgage Rate thereon to a fixed Mortgage Rate.
Corporate Trust Office: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at 3 Park Plaza, 16th
Floor, Irvine, California 92714, Attention: Fund America/ICI 1996-A.
Cumulative Loss Amount: With respect to any Distribution Date, a
fraction, expressed as a percentage, equal to (i) the principal portion of all
Realized Losses incurred with respect to the Mortgage Loans during all prior
Prepayment Periods divided by (ii) the Cutoff Date Balance.
Current Principal Amount: With respect to any Certificate as of any
Distribution Date, the initial principal amount of such Certificate reduced by
(A) the sum of (i) all amounts distributed on previous Distribution Dates on
such Certificate with respect to principal and (ii) the principal portion of
all Realized Losses allocated prior to such Distribution Date to such
Certificate.
Custody Account: A trust account created and maintained pursuant to
Section 4.04.
Cutoff Date: April 1, 1996.
Cutoff Date Balance: $301,578,036.
Debt Service Reduction: With respect to a Mortgage Loan and as of any
Determination Date, a reduction in the scheduled Monthly Payment for such
Mortgage Loan by a court of competent jurisdiction as a result of a proceeding
initiated by or against the related Mortgagor under the Bankruptcy Code, except
a reduction constituting a Deficient Valuation or any reduction that results in
a permanent forgiveness of principal.
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Debtor Relief Laws: Any applicable liquidation, conservatorship,
receivership, bankruptcy, insolvency, rearrangement, moratorium,
reorganization, or similar debtor relief laws affecting the rights of creditors
generally from time to time in effect.
Defaulted Mortgage Loan: Any Mortgage Loan as to which the Mortgagor
has failed to make unexcused payment in full of three or more consecutive
scheduled payments of principal and interest.
Deficiency Amount: With respect to the Certificates as of any
Distribution Date the sum of (i) any shortfalls in amounts available in the
Certificate Account to pay one month's interest for the related Interest
Accrual Period on the Current Principal Amount thereof at the then applicable
Pass-Through Rate, net of any Interest Shortfalls, (ii) any Realized Loss and
(iii) following the termination of the Trust Fund pursuant to Section 10.01,
any excess of (A) the Current Principal Amount of the Certificates, over (B)
the Distributable Funds for such date remaining after payment of interest on
the Certificates.
Deficient Valuation: As to any Mortgage Loan and as of any
Determination Date, (i) the excess of (a) the then Outstanding Principal
Balance of such Mortgage Loan over (b) the valuation by a court of competent
jurisdiction of the related Mortgaged Property; or (ii) any reduction in the
principal element of a Monthly Payment that constitutes a permanent forgiveness
of principal, each as a result of a proceeding initiated by or against the
related Mortgagor under the Bankruptcy Code.
Definitive Certificates: The meaning specified in Subsection 5.01(b)
hereof.
Delinquency Ratio: With respect to a Due Period, a fraction,
expressed as a percentage, equal to (i) the aggregate of the Stated Principal
Balances of all Mortgage Loans that are 60 days or more delinquent (including
Mortgage Loans in foreclosure and Mortgage Loans relating to REO Properties) as
of the last day of such Due Period divided by (ii) the aggregate of the Stated
Principal Balances of all of the Mortgage Loans as of such last day of such Due
Period.
Designated Depository Institution: A depository institution
(commercial bank, mutual savings bank or savings and loan association) or trust
company (which may include the Trustee), the deposits of which are fully
insured by the FDIC to the extent provided by law.
Determination Date: The earlier of (i) the third Business Day
preceding the related Distribution Date or (ii) the 20th day of the month in
which such Distribution Date occurs or, if the 20th day of such month is not a
Business Day, then the immediately preceding Business Day.
Distributable Funds: With respect to any Distribution Date, an amount
equal to the aggregate of the following amounts with respect to the Mortgage
Loans: (a) all previously undistributed payments on account of principal
(including the principal portion of Scheduled Payments received before the
Cutoff Date but due after the Cutoff Date, Principal Prepayments and the
principal portion of Net Liquidation Proceeds) and all previously undistributed
payments on account of interest
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received after the Cutoff Date and on or prior to the related Determination
Date, (b) any Monthly Advances (including Certificate Account Advances) and
Compensating Interest Payments by the Master Servicer with respect to such
Distribution Date and (c) any amount reimbursed by the Master Servicer pursuant
to Subsections 4.02(d) and 4.04(d) in connection with losses on Permitted
Investments, except:
(i) all payments that were due on or before the Cutoff
Date;
(ii) all Principal Prepayments and Liquidation Proceeds
received during the month in which such Distribution Date occurs and
all related payments of interest;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates
subsequent to the Due Date in the month in which such Distribution
Date occurs;
(iv) amounts received on particular Mortgage Loans as late
payments or recoveries of principal or interest and respecting which,
and to the extent that, there are any unreimbursed Monthly Advances or
Certificate Account Advances;
(v) amounts of Monthly Advances determined to be
Nonrecoverable Advances; and
(vi) amounts permitted to be withdrawn from the
Certificate Account pursuant to Subsection 4.03(a).
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the initial issuance of the Certificates,
or, if such 25th day is not a Business Day, the Business Day immediately
following.
Due Date: With respect to each Mortgage Loan, the first day of each
month, on which its Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which the
Distribution Date occurs and ending at the close of business on the first day
of the month in which the Distribution Date occurs.
ERISA: Employee Retirement Income Security Act of 1974, as amended.
Event of Default: An event described in Section 8.01.
Excess Bankruptcy Loss: Any Bankruptcy Loss, or portion thereof, (i)
occurring after the Bankruptcy Coverage Termination Date or (ii) if on such
date, in excess of the then-applicable Bankruptcy Loss Amount.
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Excess Fraud Loss: Any Fraud Loss, or portion thereof, (i) occurring
after the Fraud Coverage Termination Date or (ii) if on such date, in excess of
the then-applicable Fraud Loss Amount.
Excess Liquidation Proceeds: The amount, if any, by which Liquidation
Proceeds with respect to a Liquidated Mortgage Loan exceed the sum of (i) the
Outstanding Principal Balance of such Mortgage Loan and accrued but unpaid
interest at the related Mortgage Rate through the related Liquidation Date,
plus (ii) related Liquidation Expenses, to the extent that such amount is not
required by law to be paid to the related Mortgagor.
Excess Special Hazard Loss: Any Special Hazard Loss, or portion
thereof, (i) occurring after the Special Hazard Termination Date or (ii) if on
such date, in excess of the then-applicable Special Hazard Loss Amount.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
FHLMC: Federal Home Loan Mortgage Corporation or any successor
thereto.
Fixed Rate Mortgage Loan: A Mortgage Loan with a Mortgage Rate that
is fixed for the life of such Mortgage Loan. Each Fixed Rate Mortgage Loan is
secured by a second lien on the related Mortgaged Property that is subordinate
to the related first lien mortgage loan with respect to such Mortgaged
Property.
FNMA: Federal National Mortgage Association or any successor thereto.
Fraud Coverage Termination Date: The Distribution Date upon which the
related Fraud Loss Amount has been reduced to zero or a negative number.
Fraud Loss: Any Realized Loss attributable to fraud in the
origination of the related Mortgage Loan.
Fraud Loss Amount: As of any Distribution Date after the Cutoff Date,
(x) prior to the first anniversary of the Cutoff Date, an amount equal to
$9,047,341 minus the aggregate amount of Fraud Losses that would have been
allocated to the Certificates in accordance with Section 6.03 hereof in the
absence of the Loss Allocation Limitation since the Cutoff Date; (y) from the
first to the second anniversary of the Cutoff Date, an amount equal to (1) the
lesser of (a) the Fraud Loss Amount as of the most recent anniversary of the
Cutoff Date and (b) 2.00% of the aggregate Outstanding Principal Balance of all
of the Mortgage Loans as of the most recent anniversary of the Cutoff Date
minus (2) the Fraud Losses that would have been allocated to the Certificates
in accordance with Section 6.03 in the absence of the Loss Allocation
Limitation since the most recent anniversary of the Cutoff Date; and (z) from
the second through the fifth anniversary of the Cutoff Date, an amount equal to
(1) the lesser of (a) the Fraud Loss Amount as of the most recent anniversary
of the Cutoff
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Date and (b) 1.00% of the aggregate Outstanding Principal Balance of all of the
Mortgage Loans as of the most recent anniversary of the Cutoff Date minus (2)
the Fraud Losses that would have been allocated to the Certificates in
accordance with Section 6.03 in the absence of the Loss Allocation Limitation
since the most recent anniversary of the Cutoff Date. After the fifth
anniversary of the Cutoff Date the Fraud Loss Amount shall be zero.
Guaranty Agreement: The Guaranty Agreement dated as of April 25, 1996
between Imperial Holdings and the Seller with respect to certain obligations of
IMH Assets under the Seller Contract.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added to the
LIBOR Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Adjustable Rate
Mortgage Loan.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsection 11.05(e), solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Seller, the Master Servicer or the Trustee or any
Affiliate thereof shall be deemed not to be outstanding and the Fractional
Undivided Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Fractional Undivided Interests
necessary to effect any such consent has been obtained.
ICI Funding: ICI Funding Corporation, a California corporation, or
its successors in interest.
Indemnified Persons: The Trustee, its employees and any separate
co-trustee.
Independent: When used with respect to any specified Person, this
term means that such Person (a) is in fact independent of the Seller or the
Master Servicer and of any Affiliate of the Seller or the Master Servicer, (b)
does not have any direct financial interest or any material indirect financial
interest in the Seller or the Master Servicer, or any Affiliate of the Seller
or the Master Servicer, and (c) is not connected with the Seller or the Master
Servicer, or any Affiliate as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Insurance Policy: With respect to any Mortgage Loan, any Primary
Insurance Policy, standard hazard insurance policy, flood insurance policy or
title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse Insured Expenses.
Insured Expenses: Expenses covered by any Insurance Policy.
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Insurer: Any issuer of an Insurance Policy.
Interest Accrual Period: With respect to each Distribution Date for
the Certificates, the calendar month preceding the month in which the
Distribution Date occurs.
Interest Determination Date: With respect to any Adjustable Rate
Mortgage Loan and any Interest Accrual Period, the second London Business Day
preceding the commencement of such Interest Accrual Period.
Interest Losses: The interest portion of any Excess Bankruptcy
Losses, Excess Fraud Losses, Excess Special Hazard Losses, Realized Losses and
Debt Service Reductions.
Interest Shortfall: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Voluntary Principal Prepayment, or constitutes a Relief Act Mortgage Loan, an
amount determined as follows:
(a) partial principal prepayments: one month's interest
at the applicable Net Mortgage Rate on the amount of such prepayment;
(b) principal prepayments in full: the difference between
(i) one month's interest at the applicable Net Mortgage Rate on the
Stated Principal Balance of such Mortgage Loan immediately prior to
such prepayment and (ii) the amount of interest for the calendar month
of such prepayment (adjusted to the applicable Net Mortgage Rate)
received at the time of such prepayment;
(c) as to any Relief Act Mortgage Loan, the excess of (i)
30 days' interest (or, in the case of a principal prepayment in full,
interest to the date of prepayment) on the Stated Principal Balance
thereof (or, in the case of a principal prepayment in part, on the
amount so prepaid) at the related Net Mortgage Rate over (ii) 30 days'
interest (or, in the case of a principal prepayment in full, interest
to the date of prepayment) on such Stated Principal Balance (or, in
the case of a Principal Prepayment in part, on the amount so prepaid)
at the Net Mortgage Rate required to be paid by the Mortgagor as
limited by application of the Relief Act.
LIBOR: With respect to an Adjustable Rate Mortgage Loan and any
Interest Accrual Period, the rate determined by the Trustee on the related
Interest Determination Date on the basis of the offered rates of the Reference
Banks for six-month U.S. dollar deposits, as such rates appear on the Reuters
Screen LIBO page, as of 11:00 a.m. (London time) on such Interest Determination
Date. On each Interest Determination Date, LIBOR for the related Interest
Accrual Period will be established by the Trustee as follows:
(i) if on such Interest Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the related
Interest Accrual Period shall be the
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arithmetic mean of such offered quotations (rounded upwards, if
necessary, to the nearest whole multiple of 0.0625%).
(ii) if on such Distribution Date fewer than two Reference Banks
provide such offered quotations, LIBOR for the related
Interest Accrual Period shall be the higher of (i) LIBOR as
determined on the previous Interest Determination Date and
(ii) the Reserve Interest Rate.
LIBOR Index: With respect to each Adjustable Rate Mortgage Loan, the
index specified in the Mortgage Note used to determine the Mortgage Rate on
such Adjustable Rate Mortgage Loan. If the LIBOR Index is no longer available,
the Master Servicer will choose a new index in accordance with Section 2.03(x)
hereof.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer has determined that all amounts it expects to recover from or
on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer has certified that such Mortgage Loan has
become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer and not recovered by the Master Servicer under any Primary Insurance
Policy for reasons other than the Master Servicer's failure to ensure the
maintenance of or compliance with a Primary Insurance Policy, such expenses
including (a) property protection expenses, (b) property sales expenses, (c)
foreclosure and sale costs, including court costs and reasonable attorneys,
fees, and (d) similar expenses reasonably paid or incurred in connection with
liquidation.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through trustee's sale,
foreclosure sale, Insurance Proceeds, condemnation proceeds or otherwise.
Loan Summary and Remittance Report: The report to be submitted by the
Master Servicer to the Trustee pursuant to Subsection 6.07(b).
Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Original Value of the related
Mortgaged Property.
London Business Day: Any day on which banks in the City of London are
open and conducting transactions in U.S. dollars.
Loss Allocation Limitation: The meaning specified in Section 6.03(d)
hereof.
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Master Servicer: With respect to the Mortgage Loans, ICI Funding, or
its successor in interest, or any successor master servicer with respect to the
Mortgage Loans appointed as herein provided.
Master Servicing Fee: As to any Mortgage Loan and Distribution Date,
an amount equal to the product of (i) the Stated Principal Balance of such
Mortgage Loan as of the Due Date in the preceding calendar month and (ii) the
Master Servicing Fee Rate.
Master Servicing Fee Rate: With respect to each Adjustable Rate
Mortgage Loan, the per annum rate of 0.375% and with respect to each Fixed Rate
Mortgage Loan, the per annum rate of 0.25%.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.
Monthly Advance: The advance (including a Certificate Account
Advance) required to be made by the Master Servicer on the related Advancing
Date pursuant to Section 6.08.
Monthly Payment: With respect to any Mortgage Loan and any month, the
related Scheduled Payment.
Moody's: Moody's Investors Service Inc., and its successors in
interest.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loan: A mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.04 and held as a part of the
Trust Fund, as identified in the Mortgage Loan Schedules, including a mortgage
loan the property securing which has become an REO Property.
Mortgage Loan Schedules: The schedules, attached hereto as Exhibit B
with respect to the Mortgage Loans, and as amended from time to time to reflect
the repurchase or substitution of Mortgage Loans pursuant to this Agreement.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under the related
Mortgage Loan.
Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan
that is not a Converted Mortgage Loan, the annual rate at which interest
accrues on such Mortgage Loan from time to time
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in accordance with the provisions of the related Mortgage Note, which rate, (1)
as of any date of determination until the first Adjustment Date following the
Cutoff Date shall be the rate set forth in the related Mortgage Loan Schedule
as the Mortgage Rate in effect for the Due Period immediately following the
Cutoff Date and (2) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date, to equal the sum, rounded
either to the nearest or to the next highest 0.125% as provided in the related
Mortgage Note, of the LIBOR Index, as most recently available as of a date
prior to the Adjustment Date as set forth in the related Mortgage Note, plus
the related Gross Margin; provided that the Mortgage Rate on such Adjustable
Rate Mortgage Loan on any Adjustment Date shall never be more than the lesser
of (i) the sum of the Mortgage Rate in effect immediately prior to the
Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the
related Maximum Mortgage Rate, and shall never be less than the greater of (i)
the Mortgage Rate in effect immediately prior to the Adjustment Date less the
Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate.
With respect to each Converted Mortgage Loan, the fixed annual rate at
which interest accrues from time to time on such Converted Mortgage Loan.
With respect to each Fixed Rate Mortgage Loan, the annual rate at
which interest accrues from time to time on any Mortgage Loan pursuant to the
related Mortgage Note, which rate is equal to the "Mortgage Rate" set forth
with respect thereto on the related Mortgage Loan Schedule.
With respect to each Mortgage Loan that has become an REO Property, as
of any date of determination, the annual rate borne by the such Mortgage Loan
immediately prior to the date such Mortgage Loan became an REO Property.
Mortgaged Property: Land and improvements securing the indebtedness
of a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable
therefrom to the Master Servicer in accordance with this Agreement and (ii)
unreimbursed advances by the Master Servicer or related Sub-Servicer and
Monthly Advances.
Net Mortgage Rate: With respect to each Mortgage Loan, the Mortgage
Rate in effect from time to time less the Master Servicing Fee Rate.
Nonrecoverable Advance: Any advance (i) which was previously made or
is proposed to be made by the Master Servicer; and (ii) which, in the good
faith judgment of the Master Servicer, will not or, in the case of a proposed
advance, would not, be ultimately recoverable by the Master Servicer from
Liquidation Proceeds, Insurance Proceeds or future payments on any Mortgage
Loan.
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Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President of the Master Servicer and delivered to the Trustee,
as required by this Agreement.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Master
Servicer.
Original Value: Except in the case of a refinance Mortgage Loan, the
lesser of the Appraised Value or sales price of Mortgaged Property at the time
a Mortgage Loan is closed, and for a refinance Mortgage Loan, the Original
Value is the value of such property set forth in an appraisal acceptable to the
Master Servicer.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased pursuant to Sections 2.02, 2.03 or 3.19 or replaced pursuant to
Section 2.04.
Outstanding Principal Balance: As of the time of any determination,
the principal balance of a Mortgage Loan remaining to be paid by the Mortgagor,
or, in the case of an REO Property, the principal balance of the related
Mortgage Loan remaining to be paid by the Mortgagor at the time such property
was acquired by the Trust Fund.
Pass-Through Rate: As to each Certificate, the per annum rate of
interest equal to the weighted average of the Net Mortgage Rates of the
Mortgage Loans based on the Stated Principal Balances of the Mortgage Loans.
Any monthly calculation of interest at the Pass-Through Rate shall be
calculated on the basis of the actual number of days in the related Interest
Accrual Period and on a 360 day year.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
Permitted Investments: Any one or more of the following obligations
or securities:
(i) direct obligations of, and obligations fully
guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of
America;
(ii) (a) demand or time deposits, federal funds or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States
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of America or any state thereof (including the Trustee acting in its
commercial banking capacity) and subject to supervision and
examination by federal and/or state banking authorities, provided that
the commercial paper and/or the short-term deposit rating and/or the
long-term unsecured debt obligations or deposits of such depository
institution or trust company at the time of such investment or
contractual commitment providing for such investment have the
Applicable Credit Rating or better from each Rating Agency and (b) any
other demand or time deposit or certificate of deposit that is fully
insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any
security described in clause (i) above or (b) any other security
issued or guaranteed by an agency or instrumentality of the United
States of America, the obligations of which are backed by the full
faith and credit of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (ii) (a) above where the Trustee holds
the security therefor;
(iv) securities bearing interest or sold at a discount
issued by any corporation (including the Trustee) incorporated under
the laws of the United States of America or any state thereof that
have the Applicable Credit Rating or better from each Rating Agency at
the time of such investment or contractual commitment providing for
such investment; provided, however, that securities issued by any
particular corporation will not be Permitted Investments to the extent
that investments therein will cause the then outstanding principal
amount of securities issued by such corporation and held as part of
the Trust to exceed 10% of the aggregate Outstanding Principal
Balances and amounts of all the Mortgage Loans and Permitted
Investments held as part of the Trust;
(v) commercial paper (including both noninterest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than one year after the date of
issuance thereof) having the Applicable Credit Rating or better from
each Rating Agency at the time of such investment;
(vi) a Reinvestment Agreement issued by any bank,
insurance company or other corporation or entity;
(vii) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to the Rating
Agency; and
(viii) any money market funds the collateral of which
consists of obligations fully guaranteed by the United States of
America or any agency or instrumentality of the United States of
America the obligations of which are backed by the full faith and
credit of the United States of America (which may include repurchase
obligations secured by collateral described in clause (i)) and having
the Applicable Credit Rating or better from each Rating Agency;
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provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par; provided
further, however that no Permitted Investment shall be purchased at a premium
over par.
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: Any amount previously distributed to a
Certificateholder that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Prepayment Period: With respect to any Distribution Date, the
calendar month preceding the month of the Distribution Date.
Primary Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage Loan which provides compensation to
a Mortgage Note holder in the event of default by the obligor under such
Mortgage Note or the related Security Instrument, or any replacement policy
therefor.
Principal Prepayment: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment, including Insurance Proceeds
and the purchase price in connection with any purchase of a Mortgage Loan, any
cash deposit in connection with the substitution of a Mortgage Loan, but
excluding Liquidation Proceeds received at the time a Mortgage Loan becomes a
Liquidated Mortgage Loan.
Protected Account: A trust account established and maintained by the
Master Servicer or any Sub-Servicer with respect to the Mortgage Loans or with
respect to REO Property in a Designated Depository Institution for receipt of
principal and interest and other amounts as described in Section 4.01.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the
claims paying ability of which is acceptable to the Rating Agencies for
collateralized mortgage obligations having the same rating as the Bonds rated
by the Rating Agencies as of the Closing Date.
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Rating Agencies: Moody's and S&P.
Rating Agency Eligible Account: A depository account, including one
maintained with the Trustee, which either (i) is maintained with the corporate
trust department of a depository institution or trust company organized under
the laws of the United States of America or any one of the states thereof or
the District of Columbia, acting in a fiduciary capacity or (ii) is maintained
with an entity which is an institution whose deposits are insured by the FDIC,
the unsecured and uncollateralized long-term debt obligations of which shall be
rated "A" or better by S&P and A2 or better by Moody's, or one of the two
highest short-term ratings by S&P and the highest short term rating by Moody's,
and which is either (a) a federal savings association duly organized, validly
existing and in good standing under the federal banking laws, (b) an
institution duly organized, validly existing and in good standing under the
applicable banking laws of any state, (c) a national banking association under
the federal banking laws, or (d) a principal subsidiary of a bank holding
company.
Realized Loss: With respect to a Mortgage Loan (A) as to any
Liquidated Mortgage Loan, an amount (not less than zero) equal to (i) the
unpaid principal balance of the Liquidated Mortgage Loan immediately prior to
the Liquidation Date, plus (ii) accrued and unpaid interest thereon at the
Mortgage Rate through the last day of the month in which the Liquidation Date
occurred, minus (iii) the Net Liquidation Proceeds, if any, received in respect
of such Liquidated Mortgage Loan, and (B) without duplication of the foregoing,
any Bankruptcy Loss, Special Hazard Loss or Fraud Loss incurred with respect
to such Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
Reference Banks: Bankers Trust Company, Barclay's Bank PLC, The Bank
of Tokyo and National Westminster Bank PLC and their successors in interest;
provided that of any of the foregoing banks are not suitable to serve as a
Reference Bank, than any leading banks selected by the Trustee which are
engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London, (ii)
not controlling, under the control of or under common control with the Seller
or any Affiliate thereof, (iii) whose quotations appear on the Reuters Screen
LIBO page on the relevant Interest Determination Date and (iv) which have been
designated as such by the Trustee.
Reinvestment Agreements: One or more reinvestment agreements,
acceptable to the Rating Agencies and the Bond Insurer, from a bank, insurance
company or other corporation or entity (including the Trustee), having the
Applicable Credit Rating.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
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REO Property: A Mortgaged Property acquired in the name of the
Trustee, for the benefit of Certificateholders, by foreclosure or deed-in-lieu
of foreclosure in connection with a defaulted Mortgage Loan.
Reporting Date: The 18th day of the month of the Distribution Date,
or if such day is not a Business Day, the preceding Business Day.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) repurchased pursuant to Section 2.02, 2.03 or
3.18, an amount equal to the sum of (i) 100% of the Outstanding Principal
Balance of such Mortgage Loan as of the date of repurchase (or if the related
Mortgaged Property was acquired with respect thereto, 100% of the Outstanding
Principal Balance at the date of the acquisition) plus (ii) accrued but unpaid
interest on the Outstanding Principal Balance at the related Mortgage Rate,
through and including the last day of the month of repurchase increased by any
previously unpaid or unreimbursed Master Servicing Fees or advances payable to
the Master Servicer with respect to such Mortgage Loan.
Request for Release: A request for release in the form attached hereto
as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under
this Agreement with respect to such Mortgage Loan.
Responsible Officer: Any officer assigned to the corporate trust
department or similar department of the Trustee (or any successor division or
department thereto), and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
Rolling 60 Day Delinquency Rate: With respect to a Distribution Date,
a number, expressed as a percentage, equal to the average of the Delinquency
Ratios for each of the two (or one, in the case of the first Distribution Date)
immediately preceding Due Periods.
Rolling Twelve Month Loss Amount: With respect to a Distribution
Date, an amount equal to a fraction, expressed as a percentage (i) in the case
of each Distribution Date prior to the Distribution Date in April 1997, equal
to (x) the aggregate of the principal portions all Realized Losses incurred
with respect to the Mortgage Loans during all Prepayment Periods through the
Prepayment Period with respect to such Distribution Date divided by (y) the
Aggregate Stated Principal Balance of the Mortgage loans as of the Cutoff Date
or (ii) in the case of each other Distribution Date, equal to (x) the aggregate
of principal portions of all Realized Losses incurred with respect to the
Mortgage Loans during the twelve preceding Prepayment Periods through the
Prepayment Period with respect to such Distribution Date divided by (y) the
Aggregate Stated Principal Balance of the Mortgage Loans with respect to the
thirteenth preceding Distribution Date.
Scheduled Interest: The interest portion of any Scheduled
Payment.
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Scheduled Payment: With respect to any Mortgage Loan and any month,
the scheduled payment or payments of principal and interest due during such
month on such Mortgage Loan which either is payable by a Mortgagor in such
month under the related Mortgage Note or, in the case of REO Property, would
otherwise have been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Securities Act: The Securities Act of 1933, as amended.
Security Instrument: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed,
including any riders or addenda thereto.
Seller: Fund America Investors Corporation II, a Delaware
corporation, or its successors in interest.
Seller Contract: The Mortgage Loan Purchase Agreement dated as of
April 25, 1996, among IMH Assets, as seller, and Fund America Investors
Corporation II, as purchaser, and all amendments thereof and supplements
thereto.
Servicing Account: The separate trust account created and maintained
by the Master Servicer or each Sub- Servicer with respect to the Mortgage Loans
with respect to REO Property in a Designated Depository Institution for
collection of taxes, assessments, insurance premiums and comparable items as
described in Section 3.07.
Servicing Amount: With respect to each Distribution Date, that
amount, calculated on a monthly basis and on a Mortgage Loan by Mortgage Loan
basis, equal to the sum of (i) with respect to each Mortgage Loan which has
been prepaid in full during the related Prepayment Period, the product of (a)
the amount of the Principal Prepayment, (b) the Master Servicing Fee Rate with
respect to such Mortgage Loan and (c) a fraction, the numerator of which is the
number of days elapsed from the Due Date in the month prior to the month of the
Distribution Date to the date of Principal Prepayment and the denominator of
which is 365, and (ii) with respect to all other Mortgage Loans, the product of
(x) the Stated Principal Balance of such Mortgage Loan as of the Due Date in
the month prior to the month of the Distribution Date and (y) one-twelfth of
the Master Servicing Fee Rate with respect to such Mortgage Loan.
Servicing Officer: Any officer of the Master Servicer or of an agent
or independent contractor through which all or part of the Master Servicer's
master servicing responsibilities are carried out, involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name and
specimen signature appear on a list of servicing officers furnished to the
Trustee by the Master Servicer as such list may from time to time be amended in
accordance with the foregoing.
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S&P: Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and its successors in interest.
S&P Formula Amount: As to each Anniversary Determination Date, the
greater of (i) $100,000 and (ii) the product of (x) 0.06% and (y) the Stated
Principal Balance of each Mortgage Loan as of the preceding Distribution Date
remaining in the Trust whose original principal balance was 75% or greater of
the Original Value thereof.
Special Hazard Loss: (i) A Realized Loss suffered by a Mortgaged
Property on account of direct physical loss, exclusive of (a) any loss covered
by a hazard policy or a flood insurance policy required to be maintained in
respect of such Mortgaged Property under Section 3.10 and (b) any loss caused
by or resulting from:
(1) normal wear and tear;
(2) conversion or other dishonest act on the part of the Trustee,
the Master Servicer or any of their agents or employees; or
(3) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues;
or (ii) any Realized Loss suffered by the Trust Fund arising from or related to
the presence or suspected presence of hazardous wastes or hazardous substances
on a Mortgaged Property unless such loss to a Mortgaged Property is covered by
a hazard policy or a flood insurance policy required to be maintained in
respect of such Mortgaged Property under Section 3.10.
Special Hazard Loss Amount: As of any Distribution Date, an amount
equal to $4,322,657 minus the sum of (i) the aggregate amount of Special Hazard
Losses and (ii) the Adjustment Amount (as defined below) as most recently
calculated. On each anniversary of the Cutoff Date, the "Adjustment Amount"
shall be equal to the amount, if any, by which the amount calculated in
accordance with the preceding sentence (without giving effect to the deduction
of the Adjustment Amount for such anniversary) exceeds the greatest of (A) 1.0%
of the Outstanding Principal Balance of all the Mortgage Loans on the
Distribution Date immediately preceding such anniversary, (B) the highest
percentage of Mortgage Loans by outstanding principal balances secured by
Mortgaged Properties located in any single, five digit California zip code, and
(C) twice the Outstanding Principal Balance of the Mortgage Loan that has the
largest outstanding Principal Balance on the Distribution Date immediately
preceding such anniversary.
Special Hazard Termination Date: The Distribution Date upon which the
Special Hazard Loss Amount has been reduced to zero or a negative number (or
the Cross-Over Date, if earlier).
Stated Principal Balance: With respect to any Mortgage Loan, as of
any date of determination, the principal balance of such Mortgage Loan as of
the Cutoff Date as shown in the
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related Mortgage Loan Schedule, minus the sum of (i) the Scheduled Principal due
on a Due Date subsequent to the Cutoff Date, to the extent received from the
Mortgagor or advanced by the Master Servicer and distributed to
Certificateholders on or before such date of determination, (ii) all Principal
Prepayments received after the Cutoff Date, to the extent distributed to
Certificateholders on or before such date of determination, (iii) all
Liquidation Proceeds and Insurance Proceeds applied by the Master Servicer as
recoveries of principal and distributed to Certificateholders on or before such
date of determination, (iv) the principal portion of any Repurchase Price
distributed to Certificateholders on or before such date of determination and
(v) any Realized Loss incurred with respect thereto, to the extent allocated to
Certificateholders on or before such date of determination.
Sub-Servicer: Any Person with which the Master Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
Sub-Servicing Agreement: The written contract between the Master
Servicer and a Sub-Servicer and any successor Sub-Servicer relating to
servicing and administration of certain Mortgage Loans as provided in Section
3.02.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee
pursuant to Section 2.04, in each case, in the opinion of the Master Servicer,
(i) which has an Outstanding Principal Balance not materially greater nor
materially less than the Mortgage Loan for which it is to be substituted; (ii)
which has a Mortgage Rate and Net Mortgage Rate not less than, and not
materially greater than, such Mortgage Loan; (iii) which has a maturity date
not materially earlier or later than such Mortgage Loan and not later than the
latest maturity date of any Mortgage Loan; (iv) which is of the same property
type and occupancy type as such Mortgage Loan; (v) which has a Loan-to-Value
Ratio not greater than the Loan-to-Value Ratio of such Mortgage Loan; (vi)
which is current in payment of principal and interest as of the date of
substitution; and (vii) as to which the payment terms do not vary in any
material respect from the payment terms of the Mortgage Loan for which it is to
be substituted. The opinion of the Master Servicer shall be evidenced by an
Officer's Certificate delivered to the Trustee.
Trust Fund or Trust: The corpus of the trust created by this
Agreement, consisting of the Mortgage Loans and the other assets described in
Section 2.01(a).
Trustee: Bankers Trust Company of California, N.A., or its successor
in interest, or any successor trustee appointed as herein provided.
Uninsured Cause: Any cause of damage to a Mortgaged Property or REO
Property such that the complete restoration of such Mortgaged Property or REO
Property is not fully reimbursable by the hazard insurance policies required to
be maintained pursuant to Section 3.10, without regard to whether or not such
policy is maintained.
Voluntary Principal Prepayment: With respect to any Distribution
Date, any prepayment of principal received from the related Mortgagor on a
Mortgage Loan.
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ARTICLE II.
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee. (a) The
Seller concurrently with the execution and delivery of this Agreement, sells,
transfers and assigns to the Trustee without recourse all its right, title and
interest in and to (i) the Mortgage Loans identified in the Mortgage Loan
Schedules, including all interest and principal due with respect to the
Mortgage Loans after the Cutoff Date, but excluding any payments of principal
and interest due on or prior to the Cutoff Date; (ii) such assets as shall from
time to time be credited or are required by the terms of this Agreement to be
credited to the Certificate Account (excluding any income to the Master
Servicer from Permitted Investments under Subsection 4.02(d)), (iii) such
assets relating to the Mortgage Loans as from time to time may be held by the
Master Servicer or a Sub-Servicer in Protected Accounts (excluding any income
to the Master Servicer or any Sub-Servicer from Permitted Investments under
Subsection 4.01(a)), (iv) such assets relating to the Mortgage Loans as from
time to time may be held by the Trustee in the Custody Account (excluding any
income to the Master Servicer from Permitted Investments under Section
4.04(d)), (v) any Servicing Accounts (to the extent the mortgagee has a claim
thereto and excluding any income to the Master Servicer or Sub-Servicer or
interest payable to Mortgagors pursuant to applicable law), (vi) any REO
Property, (vii) the Required Insurance Policies and any amounts paid or payable
by the Insurer under any Insurance Policy (to the extent the mortgagee has a
claim thereto), (viii) the Seller Contract to the extent provided in Subsection
2.03(b), (ix) the Guaranty Agreement, and (x) any proceeds of the foregoing.
In connection with the conveyance of Seller's right, title and interest in and
to the Mortgage Loans and other assets of the Trust Fund pursuant to this
Agreement, Seller is acting as agent of IMH Assets to facilitate the sale of
the Bonds pursuant to the Indenture that is secured by the Certificates. It is
the express intent of the parties hereto that the conveyance of the Mortgage
Loans by the Seller to the Trustee, as contemplated by this Agreement be, and
be treated as, a sale. It is, further, not the intention of the parties that
such conveyance be deemed a pledge of the Mortgage Loans by the Seller to the
Trustee to secure a debt or other obligation of the Seller. However, in the
event that, notwithstanding the intent of the parties, the Mortgage Loans are
held by a court to continue to be property of the Seller, then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the applicable Uniform Commercial Code, and (b) the
transfer of the Mortgage Loans provided for herein shall be deemed to be a
grant by the Seller to the Trustee of a first priority perfected security
interest in all of the Seller's right, title and interest in, to and under the
Mortgage Loans and other assets in the Trust Fund.
(b) In connection with the above transfer and assignment, the
Seller hereby deposits with the Trustee, with respect to each Mortgage Loan,
(i) the original Mortgage Note, endorsed without recourse to the order of the
Trustee and showing an unbroken chain of endorsements from the original payee
thereof to the Person endorsing it to the Trustee, (ii) the original Security
Instrument, which shall have been recorded, with evidence of such recording
indicated thereon, (iii) the assignment to the Trustee of the Security
Instrument, with evidence of recording with respect to each
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Mortgage Loan in the name of the Trustee thereon, (iv) all intervening
assignments of the Security Instrument, if any, with evidence of recording
thereon, (v) the original or a copy of the policy or certificate of primary
mortgage guaranty insurance, to the extent available, if any, (vi) the original
policy of title insurance or mortgagee's certificate of title insurance or
commitment or binder for title insurance and (vii) originals of all assumption
and modification agreements, if any; provided, however, that in lieu of the
foregoing, the Seller may deliver the following documents, under the
circumstances set forth below: (x) in lieu of the original policy of title
insurance, the Seller may deliver a binder or commitment therefor, or, in
California, a preliminary title report, or, in Iowa, an attorney's certificate;
(y) in lieu of the original Security Instrument or intervening assignments
thereof which have been delivered or are being delivered to recording offices
for recording and have not been returned to the Seller in time to permit their
delivery as specified above, the Seller may deliver a true copy thereof with a
certification by ICI Funding or the title company issuing the commitment for
title insurance, on the face of such copy, substantially as follows: "Certified
to be a true and correct copy of the original, which has been transmitted for
recording"; and (z) in lieu of the Security Instrument, assignment to the
Trustee or intervening assignments thereof, if the applicable jurisdiction
retains the originals of such documents (as evidenced by a certification from
ICI Funding to such effect) the Seller may deliver photocopies of such
documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were recorded;
and provided, further, however, that in the case of Mortgage Loans which have
been prepaid in full after the Cutoff Date and prior to the Closing Date, the
Seller, in lieu of delivering the above documents, may deliver to the Trustee a
certification of a Servicing Officer to such effect and shall deposit all
amounts paid in respect of such Mortgage Loans in the Certificate Account on
the Closing Date. The Seller shall deliver such original documents (including
any original documents as to which certified copies had previously been
delivered) or such certified copies together with the original title insurance
policy (or, if a master title policy has been issued by the title insurer, a
mortgagee's certificate of title insurance) if a title insurance binder or
commitment or other assurance of title was originally deposited, to the Trustee
promptly after they are received. The Master Servicer shall cause, at its
expense, the Security Instrument and intervening assignments, if any, and the
assignment of the Security Instrument to the Trustee to be recorded not later
than 180 days after the Closing Date.
Section 2.02 Acceptance of Mortgage Loans by Trustee. (a) The
Trustee acknowledges receipt of, subject to the exceptions it notes pursuant to
the procedures described below, the documents (or certified copies thereof)
referred to in Section 2.01 and declares that it holds and will continue to
hold those documents and any amendments, replacements or supplements thereto
and all other assets of the Trust Fund as Trustee in trust for the use and
benefit of all present and future Holders of the Certificates. No later than
45 days after the Closing Date (or, with respect to any Substitute Mortgage
Loan, within 5 days after the receipt by the Trustee thereof and, with respect
to any documents received beyond 45 days after the Closing Date, promptly
thereafter), the Trustee agrees, for the benefit of the Certificateholders, to
review each Mortgage File delivered to it and to execute and deliver, or cause
to be executed and delivered, to the Seller, the Bond Insurer and the Master
Servicer an Initial Certification in the form annexed hereto as Exhibit F. In
conducting such review, the Trustee will ascertain whether all required
documents described in Section 2.01(b) have
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been executed and received and whether those documents relate, determined on
the basis of the Mortgagor name, original principal balance and loan number, to
the Mortgage Loans it has received, as identified in Exhibit B to this
Agreement, as supplemented (provided, however, that with respect to those
documents described in subclauses (b)(v) and (b)(vii) of Section 2.01, the
Trustee's obligations shall extend only to documents actually delivered
pursuant to such subsections). In performing any such review, the Trustee may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Trustee finds any document constituting part of the Mortgage File not to have
been executed or received, or to be unrelated to the Mortgage Loans identified
in Exhibit B or to appear to be defective on its face, the Trustee shall
promptly notify IMH Assets and the Bond Insurer. IMH Assets shall correct or
cure any such defect within 60 days from the date of notice from the Trustee of
the defect and if IMH Assets is unable to cure such defect within such period,
and if such defect materially and adversely affects value of the related
Mortgage Loan or the interest of the Certificateholders in the related Mortgage
Loan, IMH Assets shall, subject to Section 2.04, within 90 days from the
Trustee's notification purchase such Mortgage Loan at the Repurchase Price;
provided, however, that if such defect relates solely to the inability of IMH
Assets to deliver the original Security Instrument or intervening assignments
thereof, or a certified copy, because the originals of such documents, or a
certified copy, have not been returned by the applicable jurisdiction, IMH
Assets shall not be required to purchase such Mortgage Loan, if IMH Assets
delivers such original documents or certified copy promptly upon receipt, but
in no event later than 360 days after the Closing Date. Pursuant to the
Guaranty Agreement, Imperial Holdings has guaranteed the obligation of IMH
Assets to cure, repurchase or substitute a defective Mortgage Loan.
(b) No later than 180 days after the Closing Date, the Trustee
will review, for the benefit of the Certificateholders, the Mortgage Files and
will execute and deliver or cause to be executed and delivered to the Seller,
the Bond Insurer and the Master Servicer, a Final Certification in the form
annexed hereto as Exhibit G. In conducting such review, the Trustee will
ascertain whether (i) an original of each document required to be recorded has
been returned from the recording office with evidence of recording thereon or a
certified copy has been obtained from the recording office; and (ii) an
original title insurance policy (or if a master title policy has been issued by
the title insurer, a mortgagee's certificate of title insurance) has been
delivered whenever a title insurance binder or commitment or other assurance of
title was originally deposited. If the Trustee finds any document constituting
part of the Mortgage File has not been received, or to be unrelated, determined
on the basis of the Mortgagor name, original principal balance and loan number,
to the Mortgage Loans identified in Exhibit B or to appear defective on its
face, the Trustee shall promptly notify IMH Assets and the Bond Insurer. IMH
Assets shall correct or cure any such defect within 60 days from the date of
notice from the Trustee of the defect and if IMH Assets is unable to cure such
defect within such period, and if such defect materially and adversely affects
the interests of the Certificateholders in the related Mortgage Loan, IMH
Assets shall, subject to Section 2.04, within 90 days from the Trustee's
notification purchase such Mortgage Loan at the Repurchase Price; provided,
however, that if such defect relates solely to the inability of IMH Assets to
deliver the original Security Instrument or intervening assignments thereof, or
a certified copy, because the originals of such documents, or a certified copy,
have not been returned by the applicable
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jurisdiction, IMH Assets shall not be required to purchase such Mortgage Loan,
if IMH Assets delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. Pursuant
to the Guaranty Agreement, Imperial Holdings has guaranteed the obligation of
IMH Assets to cure, repurchase or substitute a defective Mortgage Loan.
(c) In the event that a Mortgage Loan is purchased by IMH Assets
in accordance with Subsections 2.02(a) or (b) above or Section 3.19, the Master
Servicer shall cause the Repurchase Price to be deposited into the Certificate
Account on or prior to the Business Day prior to the Distribution Date on which
the proceeds of such purchase are to be distributed to the Certificateholders
and the Master Servicer shall provide a written notification of such deposit
(which notification shall detail the components of the Repurchase Price),
signed by a Servicing Officer, to the Trustee. Upon deposit of the Repurchase
Price in the Certificate Account, the Trustee shall release to IMH Assets the
related Mortgage File and shall execute and deliver all instruments of transfer
or assignment, without recourse, furnished to it by IMH Assets as are necessary
to vest in IMH Assets title to and rights under the Mortgage Loan. Such
purchase shall be deemed to have occurred on the date on which certification of
the deposit of the Repurchase Price in the Certificate Account was received by
the Trustee. The Trustee shall amend the applicable Mortgage Loan Schedule to
reflect such repurchase and shall promptly notify the Master Servicer, the Bond
Insurer and the Rating Agencies of such amendment. The obligation of IMH
Assets (or Imperial Holdings pursuant to the Guaranty Agreement) to repurchase
any Mortgage Loan as to which such a defect in a constituent document exists
shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.
Section 2.03 Representations, Warranties and Covenants of the
Master Servicer. (a) The Master Servicer hereby represents, warrants and
covenants to the Seller, the Bond Insurer and the Trustee as of the Closing
Date that:
(i) It is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation
and throughout the term of this Agreement will remain a corporation
duly organized, validly existing and in good standing under the laws
of such state or any state of reincorporation, and has the corporate
power and authority to perform its obligations under this Agreement;
(ii) The execution and delivery of this Agreement have
been duly authorized by all requisite corporate action;
(iii) This Agreement, assuming due authorization,
execution, and delivery by the other parties hereto, will constitute
its legal, valid and binding obligation, enforceable in accordance
with its terms, except only as such enforcement may be limited by
applicable Debtor Relief Laws and that certain equitable remedies may
not be available regardless of whether enforcement is sought in equity
or at law;
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(iv) Its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not
(A) violate its certificate of incorporation or bylaws (B) to its
knowledge, violate any law or regulation, or any administrative or
judicial decree or order to which it is subject or (C) 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 it is a
party or which may be applicable to it or any of its assets;
(v) To its best knowledge, after reasonable
investigation, it 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
reasonably be expected to have consequences that would materially and
adversely affect its financial condition or operations or its
performance hereunder;
(vi) It does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant
contained in this Agreement to be performed by it;
(vii) The consummation of the transactions contemplated by
this Agreement are in the ordinary course of its business;
(viii) No litigation is pending or, to its best knowledge,
threatened against it, which could be reasonably expected to
materially and adversely affect its entering into this Agreement or
performing its obligations under this Agreement or which would have a
material adverse effect on its financial condition;
(ix) As to each Mortgage Loan, the Seller Contract is in
full force and effect; and
(x) In the event the LIBOR Index is not published or is
otherwise unavailable, the Master Servicer, in accordance with the
terms of the Mortgage Notes, will select a comparable alternative
index over which it has no control and which is readily verifiable by
Mortgagors.
(b) The Seller hereby assigns to the Trustee, on behalf of the
Bond Insurer and the Certificateholders, all of its right, title and interest
in the Seller Contract (but none of its obligations) insofar as such contract
relates to the representations and warranties set forth in Exhibit C hereto
regarding the Mortgage Loans (including the substitution and repurchase
obligations of IMH Assets); provided that the obligations of IMH Assets to
substitute or repurchase a Mortgage Loan shall be the Trustee's, the
Certificateholder's and the Bond Insurer's sole remedy for any breach thereof.
At the request of the Trustee, the Seller shall take such actions as may be
necessary to enforce the above right, title and interest on behalf of the
Trustee and the Certificateholders or shall execute such further documents as
the Trustee may reasonably require in order to enable the Trustee to carry out
such enforcement.
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Section 2.04 Substitution of Mortgage Loans. Notwithstanding
anything to the contrary in this Agreement, in lieu of purchasing a Mortgage
Loan pursuant to Sections 2.02 or 2.03, IMH Assets may, no later than the date
by which such purchase by IMH Assets would otherwise be required, tender to the
Trustee a Substitute Mortgage Loan accompanied by an Officer's Certificate of
IMH Assets that such Substitute Mortgage Loan conforms to the requirements set
forth in the definition of "Substitute Mortgage Loan"; provided, however, that
substitution pursuant to this Section 2.04 in lieu of purchase shall not be
permitted after the termination of the two-year period beginning on the Closing
Date. The Trustee shall examine the Mortgage File for any Substitute Mortgage
Loan in the manner set forth in Section 2.02(a) and shall notify the Master
Servicer and the Bond Insurer in writing, within five Business Days after
receipt, whether or not the documents relating to the Substitute Mortgage Loan
satisfy the requirements of the third sentence of Subsection 2.02(a). Within
two Business Days after such notification, (i) the Master Servicer shall cause
IMH Assets to deposit in the appropriate subaccount of the Certificate Account
the amount, if any, by which the Outstanding Principal Balance as of the next
preceding Due Date of the Mortgage Loan for which substitution is being made,
after giving effect to Scheduled Principal due on such date, exceeds the
Outstanding Principal Balance as of such date of the Substitute Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which amount shall
be treated for the purposes of this Agreement as if it were the payment by IMH
Assets of the Repurchase Price for the purchase of a Mortgage Loan by IMH
Assets, or (ii) the Trustee, at the Master Servicer's direction, shall remit to
the Master Servicer from amounts on deposit in the appropriate subaccount of
the Certificate Account the amount, if any, by which the Outstanding Principal
Balance as of the next preceding Due Date of the Mortgage Loan for which
substitution is being made, after giving effect to Scheduled Principal due on
such date, is less than the Outstanding Principal Balance as of such date of
the Substitute Mortgage Loan, after giving effect to Scheduled Principal due on
such date, which amount shall be paid to IMH Assets for the purposes of this
Agreement as if it were an overpayment by IMH Assets of the Repurchase Price
for the purchase of a Mortgage Loan by IMH Assets. After such notification to
IMH Assets, and, if any such excess exists, upon receipt of such deposit and of
written notification thereof signed by a Servicing Officer, the Trustee shall
accept such Substitute Mortgage Loan, which shall thereafter be deemed to be a
Mortgage Loan hereunder. in the event of such a substitution, accrued interest
on the Substitute Mortgage Loan for the month in which the substitution occurs
and any Principal Prepayments made thereon during such month shall be the
property of the Trust Fund and accrued interest for such month on the Mortgage
Loan for which the substitution is made and any Principal Prepayments made
thereon during such month shall be the property of IMH Assets. The Scheduled
Principal on a Substitute Mortgage Loan due on the Due Date in the month of
substitution shall be the property of IMH Assets and the Scheduled Principal on
the Mortgage Loan for which the substitution is made due on such Due Date shall
be the property of the Trust Fund. Upon acceptance of the Substitute Mortgage
Loan, the Trustee shall release to IMH Assets the related Mortgage File related
to any Mortgage Loan released pursuant to this Section 2.04 and shall execute
and deliver all instruments of transfer or assignment, without recourse, in
form as provided to it as are necessary to vest in IMH Assets title to and
rights under any Mortgage Loan released pursuant to this Section 2.04. IMH
Assets shall deliver the documents related to the Substitute Mortgage Loan in
accordance with the provisions of Subsections 2.01(b) and 2.02(b), with the
date of acceptance of the Substitute Mortgage Loan deemed to be the Closing
Date for purposes
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of the time periods set forth in those Subsections. The representations and
warranties set forth in Exhibit C shall be deemed to have been made by IMH
Assets with respect to each Substitute Mortgage Loan as of the date of
acceptance of such Mortgage Loan by the Trustee. The Trustee shall amend the
applicable Mortgage Loan Schedule to reflect such substitution and shall
provide a copy of such amended Mortgage Loan Schedule to the Master Servicer,
the Bond Insurer and the Rating Agencies.
Section 2.05 Representations, Warranties and Covenants of the
Trustee. The Trustee hereby represents, warrants and covenants to the to the
Seller, the Bond Insurer and the Master Servicer, as of the Closing Date (and
in the case of paragraphs (v) and (vi) below throughout the term of the
Agreement), that:
(i) The Trustee is a banking association duly organized,
validly existing and in good standing under the laws of the United
States of America with a principal place of business in Irvine,
California;
(ii) Subject to the right of the Trustee to appoint a
co-trustee or separate trustee under Section 9.11 hereof in order to
meet the legal requirements of a particular jurisdiction, the Trustee
has full power, authority and legal right to execute and deliver this
Agreement and to perform its obligations under this Agreement and has
taken all necessary action to authorize the execution, delivery and
performance by it of this Agreement and the Certificates;
(iii) To the best of the Trustee's knowledge, after
reasonable investigation, the execution and delivery by the Trustee of
this Agreement and the Certificates and the performance by the Trustee
of its obligations under this Agreement and the Certificates will not
violate any provision of the Trustee's Articles of Association or
Bylaws or any law or regulation governing the Trustee or any order,
writ, judgment or decree of any court, arbitrator or governmental
authority or agency applicable to the Trustee or any of its assets.
To the best of the Trustee's knowledge, after reasonable
investigation, such execution, delivery and performance will not
require the authorization, consent or approval of, the giving of
notice to, the filing or registration with, or the taking of any other
action with respect to, any governmental authority or agency
regulating the activities of national banking associations. To the
best of the Trustee's knowledge, after reasonable investigation, such
execution, delivery and performance will not conflict with, or result
in a breach or violation of, any material indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the Trustee is
a party or by which it or its properties is bound;
(iv) This Agreement has been duly executed and delivered
by the Trustee. This Agreement and the Certificates, when executed
and delivered, will constitute the valid, legal and binding
obligations of the Trustee, enforceable against the Trustee in
accordance with their terms, except as the enforcement thereof may be
limited by applicable Debtor Relief
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Laws and that certain equitable remedies may not be available
regardless of whether enforcement is sought in equity or at law;
(v) Funds held by the Trustee in the Certificate Account
and the Custody Account shall be segregated on the books of the
Trustee and shall be held by the Trustee in trust for the benefit of
the Certificateholders; and
(vi) All funds received by the Trustee and required to be
deposited in the Certificate Account and the Custody Account pursuant
to this Agreement will be promptly so deposited.
Section 2.06 Issuance of Certificates. The Trustee acknowledges
the assignment to it of the Mortgage Loans and the other assets comprising the
Trust Fund and, concurrently therewith, has signed, and countersigned and
delivered to the Seller, in exchange therefor, Certificates in such authorized
denominations representing such Fractional Undivided Interests as the Seller
has requested.
Section 2.07 Representations and Warranties Concerning the Seller.
The Seller hereby represents and warrants to the Trustee, the Bond Insurer and
the Master Servicer as follows:
(i) the Seller (a) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and (b) is qualified and in good standing as a foreign corporation to do
business in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be expected to have a
material adverse effect on the Seller's business as presently conducted or on
the Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(ii) the Seller has full corporate power to own its
property, to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(iii) the execution and delivery by the Seller of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Seller; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental
rule, regulation, judgment, decree or order binding on the Seller or its
properties or the articles of incorporation or by-laws of the Seller, except
those conflicts, breaches or defaults. which would not reasonably be expected
to have a material adverse effect on the Seller's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Seller
of this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
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state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have already
been obtained, given or made;
(v) this Agreement has been duly executed and delivered
by the Seller and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the Seller
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally); and
(vi) there are no actions, suits or proceedings pending
or, to the knowledge of the Seller, threatened against the Seller, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii) with
respect to any other matter which in the judgment of the Seller will be
determined adversely to the Seller and will if determined adversely to the
Seller materially and adversely affect the Seller's ability to enter into this
Agreement or perform its obligations under this Agreement; and the Seller is
not in default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement.
Section 2.08 Restrictions on Modifications to Documents in
Mortgage File. With respect to each Mortgage Loan, in no event shall either
the Seller, the Master Servicer or the Trustee permit any modification of such
Mortgage Loan or the related documents in the Mortgage File which would have
the effect of changing (i) the interest rate on or term of such Mortgage Loan
(other than, with respect to an Adjustable Rate Mortgage Loan, adjustments to
such interest rate made pursuant to the existing terms of the related Mortgage
Note) or (ii) the outstanding principal balance of such Mortgage Loan (except
with respect to actual payments of principal received with respect thereto).
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ARTICLE III.
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer to Assure Servicing. (a) The Master
Servicer shall supervise, or take such actions as are necessary to ensure, the
servicing and administration of the Mortgage Loans and any REO Property in
accordance with this Agreement and its normal servicing practices, which
generally conform to the standards of an institution prudently servicing
mortgage loans for its own account and shall have full authority to do anything
it reasonably deems appropriate or desirable in connection with such servicing
and administration. The Master Servicer may perform its responsibilities
relating to servicing through other agents or independent contractors, but
shall not thereby be released from any of its responsibilities as hereinafter
set forth. The authority of the Master Servicer, in its capacity as master
servicer, and any Sub-Servicer acting on its behalf, shall include, without
limitation, the power to (i) consult with and advise any Sub-Servicer regarding
administration of a related Mortgage Loan, (ii) approve any recommendation by a
Sub-Servicer to foreclose on a related Mortgage Loan, (iii) supervise the
filing and collection of insurance claims and take or cause to be taken such
actions on behalf of the insured person thereunder as shall be reasonably
necessary to prevent the denial of coverage thereunder, and (iv) effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing a related Mortgage Loan, including the employment of attorneys, the
institution of legal proceedings, the collection of deficiency judgments, the
acceptance of compromise proposals, the filing of claims under any Primary
Insurance Policy and any other matter pertaining to a delinquent Mortgage Loan.
The authority of the Master Servicer shall include, in addition, the power on
behalf of the Certificateholders, the Trustee or any of them to (i) execute and
deliver customary consents or waivers and other instruments and documents, (ii)
consent to transfers of any related Mortgaged Property and assumptions of the
related Mortgage Notes and Security Instruments (in the manner provided in this
Agreement) and (iii) collect any Insurance Proceeds and Liquidation Proceeds.
Without limiting the generality of the foregoing, the Master Servicer and any
Sub-Servicer acting on its behalf may, and is hereby authorized, and empowered
by the Trustee to, execute and deliver, on behalf of itself, the
Certificateholders, the Trustee, or any of them, any instruments of
satisfaction, cancellation, partial or full release, discharge and all other
comparable instruments, with respect to the related Mortgage Loans, the
Insurance Policies and the accounts related thereto, and the Mortgaged
Properties. The Master Servicer may exercise this power in its own name or in
the name of a Sub-Servicer.
(b) Notwithstanding the provisions of Subsection 3.01(a), the
Master Servicer shall not take any action inconsistent with the interests of
the Trustee or the Certificateholders in the Mortgage Loans or with the rights
and interests of the Trustee, the Bond Insurer or the Certificateholders under
this Agreement.
(c) The Trustee shall furnish the Master Servicer with any powers
of attorney and other documents in form as provided to it necessary or
appropriate to enable the Master Servicer to service and administer the related
Mortgage Loans and REO Property.
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Section 3.02 Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers. (a) The Master Servicer may enter into Sub-Servicing Agreements
with Sub-Servicers for the servicing and administration of the Mortgage Loans
and for the performance of any and all other activities of the Master Service
hereunder. Each Sub-Servicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans, and in either case shall
be authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Sub-Servicer to perform its
obligations hereunder and under the Sub-Servicing Agreement, and in either case
shall be a FHLMC or FNMA approved mortgage servicer. Any Sub-Servicing
Agreement entered into by the Master Servicer shall include the provision that
such Agreement may be immediately terminated (x) with cause and without any
termination fee by any Master Servicer hereunder other than ICI Funding or (y)
without cause in which case the Master Servicer shall be responsible for any
termination fee or penalty resulting therefrom. In addition, each Sub-
Servicing Agreement shall provide for servicing of the Mortgage Loans
consistent with the terms of this Agreement. With the consent of the Trustee
and the Bond Insurer, which consent shall not be unreasonably withheld, the
Master Servicer and the Sub-Servicers may enter into Sub-Servicing Agreements
and make amendments to the Sub-Servicing Agreements or enter into different
forms of Sub-Servicing Agreements; provided, however, that any such amendments
or different forms shall be consistent with and not violate the provisions of
this Agreement, and that no such amendment or different form shall be made or
entered into which could be reasonably expected to be materially adverse to the
interests of the Certificateholders, without the consent of the Bond Insurer
(which consent shall not unreasonably be withheld) and Holders of Certificates
entitled to at least 51% of the Fractional Undivided Interests. The parties
hereto acknowledge that the initial Sub-Servicer shall be Imperial Credit
Industries, Inc.
The Master Servicer shall forward a copy of all Sub-Servicing
Agreements to the Trustee and the Bond Insurer.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each Sub-Servicer under the related Sub-Servicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements and the pursuit
of other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense, but
shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement only to the extent, if any, that the Master Servicer has not
otherwise been reimbursed from Excess Liquidation Proceeds pursuant to Section
4.03(iv) with respect to a Liquidated Mortgage Loan or (ii) from a specific
recovery of costs, expenses or attorneys, fees against the party against whom
such enforcement is directed.
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Section 3.03 Successor Sub-Servicers. The Master Servicer shall
be entitled to terminate any Sub-Servicing Agreement that may exist in
accordance with the terms and conditions of such Sub-Servicing Agreement and
without any limitation by virtue of this Agreement; provided, however, that
upon termination, the Master Servicer shall either act as servicer of the
related Mortgage Loan or enter into an appropriate contract with a successor
Sub-Servicer pursuant to which such successor Sub-Servicer will be bound by all
relevant terms of the related Sub-Servicing Agreement pertaining to the
servicing of such Mortgage Loan.
Section 3.04 Liability of the Master Servicer. (a)
Notwithstanding any Sub-Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer
and a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Master Servicer shall under all circumstances remain obligated
and primarily liable to the Trustee, the Certificateholders and the Bond
Insurer for the servicing and administering of the Mortgage Loans and any REO
Property in accordance with this Agreement. The obligations and liability of
the Master Servicer shall not be diminished by virtue of Sub-Servicing
Agreements or by virtue of indemnification of the Master Servicer by any
Sub-Servicer, or any other Person. The obligations and liability of the Master
Servicer shall remain of the same nature and under the same terms and
conditions as if the Master Servicer alone were servicing and administering the
related Mortgage Loans. The Master Servicer shall, however, be entitled to
enter into indemnification agreements with any Sub-Servicer or other Person and
nothing in this Agreement shall be deemed to limit or modify such
indemnification. For the purposes of this Agreement, the Master Servicer shall
be deemed to have received any payment on a Mortgage Loan on the date the
Sub-Servicer received such payment; provided, however, that this sentence shall
not apply to the Trustee acting as the Master Servicer; provided, further,
however, that the foregoing provision shall not affect the obligation of the
Master Servicer if it is also the Trustee to advance amounts which are not
Nonrecoverable Advances.
(b) Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a
Sub-Servicer in its capacity as such and not as an originator shall be deemed
to be between the Sub-Servicer and the Master Servicer alone, and the Trustee,
the Bond Insurer and the Certificateholders shall not be deemed parties thereto
and shall have no claims, rights, obligations, duties or liabilities with
respect to the Sub- Servicer except as set forth in Section 3.05.
Section 3.05 Assumption or Termination of Sub-Servicing Agreements
by Trustee. (a) If the Trustee or its designee shall assume the master
servicing obligations of the Master Servicer in accordance with Section 8.02
below, the Trustee, to the extent necessary to permit the Trustee to carry out
the provisions of Section 8.02 with respect to the Mortgage Loans, shall
succeed to all of the rights and obligations of the Master Servicer under each
of the Sub- Servicing Agreements. In such event, the Trustee or its designee
as the successor master servicer shall be deemed to have assumed all of the
Master Servicer's rights and obligations therein and to have replaced the
Master Servicer as a party to such Sub-Servicing Agreements to the same extent
as if such Sub-Servicing Agreements had been assigned to the Trustee or its
designee as a successor master servicer, except
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that the Trustee or its designee as a successor master servicer shall not be
deemed to have assumed any obligations or liabilities of the Master Servicer
arising prior to such assumption (other than the obligation to make any Monthly
Advances and to replenish the Certificate Account in an amount equal to any
Certificate Account Advances) and the Master Servicer shall not thereby be
relieved of any liability or obligations under such Sub-Servicing Agreements
arising prior to such assumption. Nothing in the foregoing shall be deemed to
entitle the Trustee or its designee as a successor master servicer at any time
to receive any portion of the servicing compensation provided under Section
3.14 except for such portion as the Master Servicer would be entitled to
receive.
(b) In the event that the Trustee or its designee as successor
master servicer for the Trustee assumes the servicing obligations of the Master
Servicer under Section 8.02, upon the reasonable request of the Trustee or such
designee as successor master servicer, the Master Servicer shall at its own
expense deliver to the Trustee, or at its written request to such designee,
photocopies of all documents and records, electronic or otherwise, relating to
the Sub-Servicing Agreements and the related Mortgage Loans or REO Property
then being serviced and an accounting of amounts collected and held by it, if
any, and will otherwise cooperate and use its reasonable efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements, or
responsibilities hereunder to the Trustee, or at its written request to such
designee as successor master servicer.
Section 3.06 Collection of Mortgage Loan Payments. (a) The
Master Servicer will coordinate and monitor remittances by Sub-Servicers to the
Trustee with respect to the Mortgage Loans in accordance with this Agreement.
(b) The Master Servicer shall make its best reasonable efforts to
collect or cause to be collected all payments required under the terms and
provisions of the Mortgage Loans and shall follow, and use its best reasonable
efforts to cause Sub-Servicers to follow, collection procedures comparable to
the collection procedures of prudent mortgage lenders servicing mortgage loans
for their own account to the extent such procedures shall be consistent with
this Agreement. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive or permit to be waived any late payment charge, prepayment
charge, assumption fee, or any penalty interest in connection with the
prepayment of a Mortgage Loan and (ii) suspend or reduce or permit to be
suspended or reduced regular monthly payments for a period of up to six months,
or arrange or permit an arrangement with a Mortgagor for a scheduled
liquidation of delinquencies. In the event the Master Servicer shall consent
to the deferment of the due dates for payments due on a Mortgage Note, the
Master Servicer shall nonetheless make a Monthly Advance or shall cause the
related Sub-Servicer to make an advance to the same extent as if such
installment were due, owing and delinquent and had not been deferred through
liquidation of the Mortgaged Property; provided, however, that the obligation
of the Master Servicer to make a Monthly Advance shall apply only to the extent
that the Master Servicer believes, in good faith, that such advances are not
Nonrecoverable Advances.
(c) Within five Business Days after the Master Servicer has
determined that all amounts which it expects to recover from or on account of a
Mortgage Loan have been recovered and that no further Liquidation Proceeds will
be received in connection therewith, the Master Servicer shall
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provide to the Trustee a certificate of a Servicing Officer that such Mortgage
Loan became a Liquidated Mortgage Loan as of the date of such determination.
Section 3.07 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
(a) The Master Servicer shall establish and maintain or cause the
Sub-Servicers to establish and maintain, in addition to the Protected Accounts,
one or more Servicing Accounts. The Master Servicer or a Sub-Servicer will
deposit and retain therein all collections from the Mortgagors for the payment
of taxes, assessments, insurance premiums, or comparable items as agent of the
Mortgagors.
(b) The deposits in the Servicing Accounts shall be held in a
Designated Depository Institution in an account designated as a "Mortgage Loan
Servicing Account," held in trust by the Master Servicer or a Sub-Servicer as
Trustee of Taxes and Insurance Custodial Account for borrowers and for ICI
Funding (and its successors and assigns) acting on its own behalf and for ICI
Funding as agent for holders of various pass-through securities and other
interests in mortgage loans sold by it; and agent for various mortgagors, as
their interests may appear or under such other designation as may be permitted
by a Sub-Servicing Agreement. The amount at any time credited to a Servicing
Account must be fully insured by the FDIC, or, to the extent that such deposits
exceed the limits of such insurance, such excess must be (i) transferred to
another fully insured account in another Designated Depository Institution or
(ii) if permitted by applicable law, invested in Permitted Investments held in
trust by the Master Servicer or a Sub-Servicer as described above and maturing,
or be subject to redemption or withdrawal, no later than the date on which such
funds are required to be withdrawn, and in no event later than 45 days after
the date of investment. The Master Servicer may, or may permit a Sub-Servicer
to, establish Servicing Accounts not conforming to the foregoing requirements
to the extent that such Servicing Accounts are Rating Agency Eligible Accounts;
withdrawals of amounts from the Servicing Accounts may be made only to effect
timely payment of taxes, assessments, insurance premiums, or comparable items,
to reimburse the Master Servicer or a Sub-Servicer for any advances made with
respect to such items, to refund to any Mortgagors any sums as may be
determined to be overages, to pay interest, if required, to Mortgagors on
balances in the Servicing Accounts or to clear and terminate the Servicing
Accounts at or any time after the termination of this Agreement in accordance
with Section 10.01.
Section 3.08 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Master Servicer shall provide, and shall
cause any Sub-Servicer to provide, to the Trustee, the Bond Insurer and the
Seller access to the documentation regarding the related Mortgage Loans and REO
Property and to the Certificateholders, the FDIC, and the supervisory agents
and examiners of the FDIC (to which the Trustee shall also provide) access to
the documentation regarding the related Mortgage Loans required by applicable
regulations, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Master Servicer
or the Sub-Servicers that are designated by these entities; provided, however,
that, unless otherwise required by law, the Trustee, the Master Servicer or the
Sub-Servicer shall not be required to provide access to such documentation if
the provision thereof would violate the legal
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right to privacy of any Mortgagor provided, further, however, that the Trustee,
the Bond Insurer and the Seller shall coordinate their requests for such access
so as not to impose a burden on, or cause an interruption of, the business of
the Master Servicer or any Sub-Servicer. The Master Servicer, the
Sub-Servicers and the Trustee shall allow representatives of the above entities
to photocopy any of the documentation and shall provide equipment for that
purpose at a charge that covers their own actual out-of-pocket costs.
Section 3.09 Maintenance of Primary Insurance Policies; Collection
Thereunder. The Master Servicer shall, or shall cause the related Sub-Servicer
to, exercise its best reasonable efforts to maintain and keep in full force and
effect each Primary Insurance Policy by a Qualified Insurer, or other insurer
satisfactory to the Rating Agencies, with respect to each Adjustable Rate
Mortgage Loan as to which as of the Cutoff Date such a Primary Insurance Policy
was in effect (or, in the case of a Substitute Mortgage Loan, the date of
substitution) and the original principal amount of the related Mortgage Note
exceeded 80% of the Original Value in an amount at least equal to the excess of
such original principal amount over 75% of such Original Value until the
principal amount of any such Adjustable Rate Mortgage Loan is reduced below 80%
of the Original Value or, based upon a new appraisal, the principal amount of
such Adjustable Rate Mortgage Loan represents less than 80% of the new
appraised value. The Master Servicer shall, or shall cause the related
Sub-Servicer to, effect the timely payment of the premium on each Primary
Insurance Policy. The Master Servicer and the related Sub-Servicer shall have
the power to substitute for any Primary Insurance Policy another substantially
equivalent policy issued by another Qualified Insurer; provided that such
substitution shall be subject to the condition that (i) it will not cause the
ratings on the Bonds to be downgraded or withdrawn, as evidenced by a writing
from each Rating Agency, and (ii) the Bond Insurer shall have consented
thereto, which consent shall not reasonably be withheld.
Section 3.10 Maintenance of Hazard Insurance and Fidelity
Coverage. (a) The Master Servicer shall maintain and keep, or cause each
Sub-Servicer to maintain and keep, with respect to each Mortgage Loan and each
REO Property, in full force and effect hazard insurance (fire insurance with
extended coverage) equal to at least the lesser of the Outstanding Principal
Balance of the Mortgage Loan (together, in the case of a Fixed Rate Mortgage
Loan, with the outstanding principal balance of the related first lien mortgage
loan) or the current replacement cost of the Mortgaged Property, and containing
a standard mortgagee clause, provided, however, that the amount of hazard
insurance may not be less than the amount necessary to prevent loss due to the
application of any co-insurance provision of the related policy. Unless
applicable state law requires a higher deductible, the deductible on such
hazard insurance policy may be no more than $1,000 or 1% of the applicable
amount of coverage, whichever is less. In the case of a condominium unit or a
unit in a planned unit development, the required hazard insurance shall take
the form of a multi-peril policy covering the entire condominium project or
planned unit development, in an amount equal to at least 100% of the insurable
value based on replacement cost.
(b) Any amounts collected by the Master Servicer or a Sub-Servicer
under any such hazard insurance policy (other than amounts to be applied to the
restoration or repair of the Mortgaged Property or amounts released to the
Mortgagor in accordance with the Master Servicer's
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or a Sub-Servicer's normal servicing procedures, the terms of the Mortgage
Note, the Security Instrument or applicable law) shall be deposited initially
in a Protected Account, for transmittal to the Certificate Account or Custody
Account, subject to withdrawal pursuant to Section 4.03 and Section 4.04.
(c) Any cost incurred by a Master Servicer or a Sub-Servicer in
maintaining any such hazard insurance policy shall not be added to the amount
owing under the Mortgage Loan for the purpose of calculating monthly
distributions to Certificateholders, notwithstanding that the terms of the
Mortgage Loan so permit. Such costs shall be recoverable by the Master
Servicer or a Sub-Servicer out of related late payments by the Mortgagor or out
of Insurance Proceeds or Liquidation Proceeds or by the Master Servicer from
the Repurchase Price, to the extent permitted by Section 4.03.
(d) No earthquake or other additional insurance is to be required
of any Mortgagor or maintained on property acquired with respect to a Security
Instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. When, at
the time of origination of the Mortgage Loan or at any subsequent time, the
Mortgaged Property is located in a federally designated special flood hazard
area, the Master Servicer shall use its best reasonable efforts to cause with
respect to the Mortgage Loans and each REO Property, flood insurance (to the
extent available and in accordance with mortgage servicing industry practice)
to be maintained. Such flood insurance shall cover the Mortgaged Property,
including all items taken into account in arriving at the Appraised Value on
which the Mortgage Loan was based, and shall be in an amount equal to the
lesser of (i) the Outstanding Principal Balance of the related Mortgage Loan
(together, in the case of a Fixed Rate Mortgage Loan, with the outstanding
principal balance of the related first lien mortgage loan) and (ii) the minimum
amount required under the terms of coverage to compensate for any damage or
loss on a replacement cost basis, but not more than the maximum amount of such
insurance available for the related Mortgaged Property under either the regular
or emergency programs of the National Flood Insurance Program (assuming that
the area in which such Mortgaged Property is located is participating in such
program). Unless applicable state law requires a higher deductible, the
deductible on such flood insurance may not exceed $1,000 or 1% of the
applicable amount of coverage, whichever is less.
(e) If insurance has not been maintained complying with
Subsections 3. 10 (a) and (d) and there shall have been a loss which would have
been covered by such insurance had it been maintained, the Master Servicer
shall pay, or cause the related Sub-Servicer to pay, for any necessary repairs.
(f) The Master Servicer shall present, or cause the related
Sub-Servicer to present, claims under any applicable Primary Insurance Policy
or the related hazard insurance or flood insurance policy.
(g) The Master Servicer shall obtain and maintain at its own
expense and for the duration of this Agreement a blanket fidelity bond and
shall cause each Sub-Servicer to obtain and maintain
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an errors and omissions insurance policy covering such Sub-Servicer's officers,
employees and other persons acting on its behalf in connection with its
activities under this Agreement. The amount of coverage shall be at least
equal to the coverage maintained by the Master Servicer acceptable to FNMA or
FHLMC to service loans for it or otherwise in an amount as is commercially
available at a cost that is generally not regarded as excessive by industry
standards. The Master Servicer shall promptly notify the Trustee of any
material change in the terms of such bond or policy. The Master Servicer shall
provide annually to the Trustee a certificate of insurance that such bond and
policy are in effect. If any such bond or policy ceases to be in effect, the
Master Servicer shall, to the extent possible, give the Trustee ten days,
notice prior to any such cessation and shall use its reasonable best efforts
to obtain a comparable replacement bond or policy, as the case may be. Any
amounts relating to the Mortgage Loans collected under such bond or policy
shall be deposited initially in a Protected Account for transmittal to the
Certificate Account or Custody Account, subject to withdrawel pursuant to
Section 4.03 and Section 4.04.
Section 3.11 Due-on-Sale Clauses; Assumption Agreements. (a) In
any case in which the Master Servicer is notified by any Mortgagor or
Sub-Servicer that a Mortgaged Property relating to a Mortgage Loan has been or
is about to be conveyed by the Mortgagor, the Master Servicer shall enforce, or
shall instruct such Sub-Servicer to enforce, any due-on-sale clause contained
in the related Security Instrument to the extent permitted under the terms of
the related Mortgage Note and by applicable law unless the Master Servicer
reasonably believes such enforcement is likely to result in legal action by the
Mortgagor. The Master Servicer or the related Sub-Servicer may repurchase a
Mortgage Loan at the Repurchase Price when the Master Servicer requires
acceleration of the Mortgage Loan, but only if the Master Servicer is
satisfied, as evidenced by an Officer's Certificate delivered to the Trustee,
that either (i) such Mortgage Loan is in default or default is reasonably
foreseeable or (ii) if such Mortgage Loan is not in default or default is not
reasonably foreseeable, such repurchase will have no adverse tax consequences
for the Trust Fund or any Certificateholder. If the Master Servicer reasonably
believes that such due-on-sale clause cannot be enforced under applicable law
or if the Mortgage Loan does not contain a due-on-sale clause, the Master
Servicer is authorized, and may authorize any Sub-Servicer, to consent to a
conveyance subject to the lien of the Mortgage, and to take or enter into an
assumption agreement from or with the Person to whom such property has been or
is about to be conveyed, pursuant to which such Person becomes liable under the
related Mortgage Note and unless prohibited by applicable state law, such
Mortgagor remains liable thereon, on condition, however, that the related
Mortgage Loan shall continue to be covered by a hazard policy and (if so
covered before the Master Servicer or the related Sub-Servicer enters into such
agreement) by any Primary Insurance Policy. In connection with any such
assumption, the Mortgage Rate borne by the related Mortgage Note may not be
changed. The Master Servicer shall notify the Trustee, whenever possible,
before the completion of such assumption agreement, and shall forward to the
Trustee the original copy of such assumption agreement, which copy shall be
added by the Trustee to the related Mortgage File and which shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee or
additional interest collected by the Master Servicer or Sub-Servicer for
consenting to any such conveyance or entering into any such
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assumption agreement may be retained by the Master Servicer or the related
Sub-Servicer as additional servicing compensation.
(b) Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any conveyance by the
Mortgagor of the related Mortgaged Property or assumption of a Mortgage Loan
which the Master Servicer reasonably believes it may be restricted by law from
preventing, for any reason whatsoever or if the exercise of such right would
impair or threaten to impair any recovery under any applicable Insurance
Policy, or, in the Master Servicer's judgment, be reasonably likely to result
in legal action by the Mortgagor.
Section 3.12 Realization Upon Defaulted Mortgage Loans. (a) The
Master Servicer shall, or shall direct the related Sub-Servicer to, foreclose
upon or otherwise comparably convert the ownership of properties securing any
Mortgage Loans that come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.06 except that the Master Servicer shall not, and shall
not direct the related Sub-Servicer to, foreclose upon or otherwise comparably
convert a Mortgaged Property if there is evidence of toxic waste thereon and
the Master Servicer determines it would be imprudent to do so or not in
accordance with appropriate servicing standards. In making such determination,
the Master Servicer may conclusively rely on results of third party inspections
from parties it reasonably believes are qualified to conduct such inspections.
In connection with such foreclosure or other conversion, the Master Servicer in
conjunction with the related Sub-Servicer, if any, shall use its best
reasonable efforts to preserve REO Property and to realize upon defaulted
Mortgage Loans in such manner as to maximize the receipt of principal and
interest by the Certificateholders, taking into account, among other things,
the timing of foreclosure and the considerations set forth in Subsection
3.12(b). The foregoing is subject to the proviso that the Master Servicer shall
not be required to expend its own funds in connection with any foreclosure or
towards the restoration of any property unless it determines in good faith (i)
that such restoration or foreclosure will increase the proceeds of liquidation
of the Mortgage Loan to Certificateholders after reimbursement to itself for
such expenses and (ii) that such expenses will be recoverable to it either
through Liquidation Proceeds (respecting which it shall have priority for
purposes of reimbursements from the Certificate Account pursuant to Section
4.03) or through Insurance Proceeds (respecting which it shall have similar
priority). The Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof (as well as its normal servicing
compensation), and in respect of the Master Servicer only, to receive Excess
Liquidation Proceeds as additional servicing compensation to the extent that
transfers or withdrawals from the Certificate Account with respect thereto are
permitted under Section 4.03. Any income from or other funds (net of any income
taxes) generated by REO Property shall be deemed for purposes of this Agreement
to be Insurance Proceeds.
(b) The Trust Fund shall not acquire any real property (or any
personal property incident to such real property) except in connection with a
default or reasonably foreseeable default of a
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Mortgage Loan. In the event that the Trust Fund acquires any real property (or
personal property incident to such real property) in connection with a default
or imminent default of a Mortgage Loan, such property shall be disposed of by
the Trust Fund within two years after its acquisition by the Trust Fund.
Section 3.13 Trustee to Cooperate; Release of Mortgage Files. (a)
Upon payment in full of any Mortgage Loan or the receipt by the Master Servicer
of a notification that payment in full will be escrowed in a manner customary
for such purposes, the Master Servicer will immediately notify the Trustee by a
certification signed by a Servicing Officer in the Form of Exhibit D (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Certificate Account have been or will be so deposited in the
appropriate subaccount thereof) and shall request delivery to the Master
Servicer or Sub-Servicer, as the case may be, of the Mortgage File. Upon
receipt of such certification and request, the Trustee shall promptly release
the related Mortgage File to the Master Servicer or Sub-Servicer and execute
and deliver to the Master Servicer, without recourse, the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Security Instrument (furnished by the
Master Servicer), together with the Mortgage Note with written evidence of
cancellation thereon.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan or collection under a Required Insurance
Policy, the Master Servicer shall deliver to the Trustee a Request for Release
signed by a Servicing Officer on behalf of the Master Servicer in substantially
the form attached as Exhibit D hereto. Upon receipt of the Request for
Release, the Trustee shall deliver the Mortgage File or any document therein to
the Master Servicer or Sub-Servicer, as the case may be, as bailee for the
Trustee.
(c) The Master Servicer shall cause each Mortgage File or any
document therein released pursuant to Subsection 3.13(b) to be returned to the
Trustee when the need therefor no longer exists, and in any event within 21
days of the Master Servicer's receipt thereof, unless the Mortgage Loan has
become a Liquidated Mortgage Loan and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the appropriate subaccount of the
Certificate Account or such Mortgage File is being used to pursue foreclosure
or other legal proceedings. Prior to return of a Mortgage File or any document
to the Trustee, the Master Servicer, the related Insurer or Sub-Servicer to
whom such file or document was delivered shall retain such file or document in
its respective control as bailee for the Trustee unless the Mortgage File or
such document has been delivered to an attorney, or to a public trustee or
other public official as required by law, to initiate or pursue legal action or
other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. If a Mortgage Loan
becomes a Liquidated Mortgage Loan, the Trustee shall deliver the Request for
Release with respect thereto to the Master
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Servicer upon deposit of the related Liquidation Proceeds in the appropriate
subaccount of the Certificate Account.
(d) The Trustee shall execute and deliver to the Master Servicer
any court pleadings, requests for trustee's sale or other documents necessary
to (i) the foreclosure or trustee's sale with respect to a Mortgaged Property;
(ii) any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment
against the Mortgagor; or (iv) enforce any other rights or remedies provided by
the Mortgage Note or Security Instrument or otherwise available at law or
equity. Together with such documents or pleadings the Master Servicer shall
deliver to the Trustee a certificate of a Servicing Officer in which it
requests the Trustee to execute the pleadings or documents. The certificate
shall certify and explain the reasons for which the pleadings or documents are
required. It shall further certify that the Trustee's execution and delivery
of the pleadings or documents will not invalidate any insurance coverage under
the Required Insurance Policies or invalidate or otherwise affect the lien of
the Security Instrument, except for the termination of such a lien upon
completion of the foreclosure or trustee's sale.
Section 3.14 Master Servicing Compensation. (a) As compensation
for its activities hereunder, the Master Servicer shall be entitled to receive
the Master Servicing Fee from full payments of accrued interest on each
Mortgage Loan. The Master Servicer shall be solely responsible for paying any
and all fees with respect to a Sub-Servicer and the Trust Fund shall not bear
any fees, expenses or other costs directly associated with any Sub-Servicer.
(b) The Master Servicer may retain additional servicing
compensation in the form of conversion charges with respect to a Converted
Mortgage Loan, prepayment charges, if any, assumption fees, tax service fees,
fees for statement of account or payoff, late payment charges, interest on
amounts deposited in any Accounts or Permitted Investments of such amounts, or
otherwise, to the extent such fees are collected from the related Mortgagors
or, with respect to a Liquidated Mortgage Loan, to the extent such fees have
accrued. The Master Servicer is also entitled to receive Excess Liquidation
Proceeds as additional servicing compensation to the extent that transfers or
withdrawals from the Certificate Account with respect thereto are permitted
under Subsection 4.03(a)(xii). The Master Servicer shall be required to pay all
expenses it incurs in connection with servicing activities under this Agreement
and shall not be entitled to reimbursement except as provided in this
Agreement. Expenses to be paid by the Master Servicer under this Subsection
3.14(b) shall include payment of the expenses of the accountants retained
pursuant to Section 3.16.
Section 3.15 Annual Statement of Compliance. Within 120 days
after December 31 of each year, commencing December 1996, the Master Servicer
at its own expense, shall deliver to the Trustee, with a copy to the Bond
Insurer and the Rating Agencies, an Officer's Certificate stating, as to the
signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding fiscal year and of performance under this Agreement has
been made under such officer's supervision, (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has fulfilled
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all its obligations under this Agreement for such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof including the steps
being taken by the Master Servicer to remedy such default; (iii) a review of
the activities of each Sub-Servicer during the Sub-Servicer's most recently
ended fiscal year on or prior to such December 31 and its performance under its
Sub- Servicing Agreement has been made under such officer's supervision; and
(iv) to the best of the Servicing Officer's knowledge, based on his review and
the certification of an officer of the Sub-Servicer (unless the Servicing
Officer has reason to believe that reliance on such certification is not
justified), either each Sub-Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement and its Sub-Servicing
Agreement in all material respects throughout the year, or, if there has been a
default in performance or fulfillment of any such duties, responsibilities or
obligations, specifying the nature and status of each such default known to the
Servicing Officer. Copies of such statements shall be provided by the Master
Servicer to the Certificateholders upon request or by the Trustee at the
expense of the Master Servicer should the Master Servicer fail to provide such
copies.
Section 3.16 Annual Independent Public Accountants' Servicing
Report. (a) Within 120 days after December 31 of each year, commencing
December, 1996, the Master Servicer, at its expense, shall cause a firm of
Independent public accountants who are members of the American Institute of
Certified Public Accountants to furnish a statement to the Master Servicer,
which will be provided to the Trustee, the Bond Insurer and the Rating Agencies
to the effect that, in connection with the firm's examination of the Master
Servicer's financial statements as of the end of such fiscal year, nothing came
to their attention that indicated that the Master Servicer was not in
compliance with Sections 3.07, 4.01, 4.02, 4.03 and 4.04 except for (i) such
exceptions as such firm believes to be immaterial and (ii) such other
exceptions as are set forth in such statement.
(b) Within 120 days after December 31 of each year, commencing
December 1996, the Master Servicer, at its expense, shall or shall cause each
Sub-Servicer to cause a nationally recognized firm of independent certified
public accountants to furnish to the Master Servicer or such Sub-Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer or such Sub-Servicer
which includes an assertion that the Master Servicer or such Sub-Servicer has
complied with certain minimum mortgage loan servicing standards (to the extend
applicable to commercial and multifamily mortgage loans), identified in the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America, with respect to the servicing of first
and second lien conventional single family mortgage loans during the most
recently completed calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. Immediately upon receipt of such report, the Master
Servicer shall or shall cause each Sub-Servicer to furnish a copy of such
report to the Trustee, the Rating Agencies and the Bond Insurer.
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Section 3.17 Additional Information. The Master Servicer agrees
to furnish the Seller from time to time upon reasonable request, such further
information, reports and financial statements as the Seller deems appropriate
to prepare and file all necessary reports with the Securities and Exchange
Commission.
Section 3.18 Optional Purchase of Defaulted Mortgage Loans and
Mandatory Repurchase of Converted Mortgage Loans. The Master Servicer shall
have the right, but not the obligation, to purchase any Defaulted Mortgage Loan
for a price equal to the Repurchase Price therefor. In addition, the Master
Servicer shall be obligated to repurchase any Converted Mortgage Loan at a
price equal to the Repurchase Price therefor. Any such purchase shall be
accomplished as provided in Subsection 2.02(c) hereof. Notwithstanding the
foregoing, the Trustee, whether acting as Trustee or in the capacity of
successor Master Servicer, shall have no obligation to repurchase any Mortgage
Loan, including without limitation, a Converted Mortgage Loan.
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ARTICLE IV.
Accounts
Section 4.01 Protected Accounts. (a) The Master Servicer shall
and shall require each Sub-Servicer to establish and maintain a Protected
Account complying with the requirements set forth in this Section 4.01, with
records to be kept with respect thereto on a Mortgage Loan by Mortgage Loan
basis, into which accounts shall be deposited within 24 hours of receipt all
collections of principal and interest on any Mortgage Loan and with respect to
any REO Property received by the Master Servicer, or a Sub-Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, the Repurchase
Price for any Mortgage Loan that has been repurchased and advances made from
the Master Servicer's or the Sub-Servicer's own funds (less servicing
compensation as permitted by Subsection 3.14(a)) and all other amounts to be
deposited in the Protected Accounts. The Master Servicer is hereby authorized
to make withdrawals from and deposits to the related Protected Accounts for
purposes required or permitted by this Agreement. All Protected Accounts shall
be held in a Designated Depository Institution and segregated on the books of
such institution. The amount at any time credited to a Protected Account shall
be fully insured by the FDIC or, to the extent that such balance exceeds the
lesser of $100,000 or the limits of such insurance, such excess must be
transferred to the appropriate subaccount of the Certificate Account or the
related Custody Account or invested in Permitted Investments. No monies on
deposit in the Protected Account shall be reinvested except as specifically
provided herein.
Amounts on deposit in a Protected Account may be invested in Permitted
Investments, such Permitted Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Custody Account or Certificate
Account, and shall be held until required for such deposit. The income earned
from Permitted Investments made pursuant to this Section 4.01 shall be paid to
the Master Servicer or the related Sub-Servicer as additional compensation for
its obligations under this Agreement, and the risk of loss of moneys required
to be distributed to the Certificateholders resulting from such investments
shall be borne by and be the risk of the Master Servicer or the related
Sub-Servicer. The Master Servicer shall cause the related Sub-Servicer to
deposit the amount of any such loss in the related Protected Account within two
Business Days of receipt of notification of such loss but not later than the
second Business Day prior to the Distribution Date on which the moneys so
invested are required to be distributed to the Certificateholders. The Master
Servicer may, and the Master Servicer may permit the related Sub-Servicer to,
transfer funds to other accounts (which shall for purposes hereof be deemed to
be Protected Accounts) or to establish Protected Accounts not conforming to the
foregoing requirements, to the extent that such other accounts or Protected
Accounts are Rating Agency Eligible Accounts.
(b) On or before each Determination Date, the Master Servicer
shall withdraw or shall cause (by written direction to the Trustee if such
withdrawal is from a Custody Account) to be withdrawn from the Protected
Accounts or the Custody Account and shall immediately deposit or cause to be
deposited in the Certificate Account amounts representing the following
collections and
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payments (other than with respect to principal of or interest on the Mortgage
Loans due on or before the Cutoff Date):
(i) Scheduled Payments on the related Mortgage Loans
received or advanced by the Master Servicer or Sub-Servicers which
were due on or prior to the related Due Date, net of the amount
thereof comprising the Master Servicing Fee due the Master Servicer;
(ii) Full Principal Prepayments and any Liquidation
Proceeds received by the Master Servicer or Sub- Servicers with
respect to such Mortgage Loans in the related Prepayment Period, with
interest to the date of prepayment or liquidation, net of the amount
thereof comprising the Master Servicing Fee due the Master Servicer;
(iii) Partial prepayments of principal received by the
Master Servicer or Sub-Servicers for such Mortgage Loans in the
related Prepayment Period; and
(iv) Any amount to be used as a Certificate Account
Advance.
(c) Withdrawals may be made from a Protected Account only to make
remittances as provided in Subsections 4.01(b) or 4.03(c), or Sections 4.04; to
reimburse the Master Servicer or a Sub-Servicer for advances of principal and
interest which have been recovered by subsequent collection from the related
Mortgagor; to remove amounts deposited in error; to remove fees, charges or
other such amounts deposited on a temporary basis; or to clear and terminate
the account at the termination of this Agreement in accordance with Section
10.01.
Section 4.02 Certificate Account. (a) The Trustee shall
establish and maintain in the name of the Trustee, for the benefit of the
Certificateholders, the Certificate Account as a segregated non-interest
bearing trust account or accounts in the corporate trust department of the
Trustee. The Trustee will deposit in the Certificate Account as received the
following amounts:
(i) Any amounts withdrawn from a Protected Account
pursuant to Subsection 4.01(b) or the Custody Account pursuant to
Section 4.04;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds or Liquidation Proceeds
received by the Master Servicer which were not deposited in a
Protected Account or the Custody Account;
(iv) The Repurchase Price with respect to any Mortgage
Loans purchased by IMH Assets pursuant to Sections 2.02 and 2.03 or
the Master Servicer pursuant to Section 3.18, any amounts which are to
be treated pursuant to Section 2.04 as the payment of such a
Repurchase Price, and all proceeds of any Mortgage Loans or property
acquired with respect thereto repurchased by the Master Servicer or
its designee pursuant to Section 10.01;
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(v) Any amounts required to be deposited with respect to
losses on Permitted Investments pursuant to Subsection 4.02(d) or
Section 4.04(d) below; and
(vi) Any other amounts received by the Master Servicer or
the Trustee and required to be deposited in the Certificate Account
pursuant to this Agreement.
(b) All amounts deposited to the Certificate Account shall be held
by the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement, subject to the right of the Master Servicer to require the Trustee
to make withdrawals therefrom as provided herein. The foregoing requirements
for crediting the Certificate Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of prepayment, conversion or late payment charges or assumption, tax
service, statement account or payoff, substitution, satisfaction, release and
other like fees and charges, need not be credited by the Master Servicer or the
related Sub-Servicer to the Certificate Account and may be retained by the
Master Servicer or the related Sub-Servicer as servicing compensation. In the
event that the Master Servicer shall deposit or cause to be deposited to the
Certificate Account any amount not required to be credited thereto, the
Trustee, upon receipt of a written request therefor signed by a Servicing
Officer of the Master Servicer, shall promptly transfer such amount to the
Master Servicer, any provision herein to the contrary notwithstanding.
(c) The Certificate Account shall constitute a trust account of
the Trust Fund segregated on the books of the Trustee and held by the Trustee
in trust for the benefit of the Certificateholders. The amount at any time
credited to the Certificate Account shall be (i) fully insured by the FDIC to
the maximum coverage provided thereby, (ii) at the written direction of the
Master Servicer invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in such Permitted Investments to be held by
the Trustee as the Master Servicer may direct (such direction to be confirmed
in writing) and in the absence of such direction, the Trustee shall invest
funds in the Certificate Account in Permitted Investments described in clause
(viii) of the definition thereof, or (iii) from the maturity of any Permitted
Investment on the Business Day prior to a Distribution Date through the
distribution of such funds on such Distribution Date or at such other time and
in such amount as, in the judgment of the Master Servicer, cannot reasonably be
invested in accordance with items (i) or (ii) of this sentence, held by the
Trustee in such Certificate Account. All Permitted Investments shall mature or
be subject to redemption or withdrawal on or before, and shall be held until,
the next succeeding Distribution Date if the obligor for such Permitted
Investment is the Trustee or, if such obligor is any other Person, the Business
Day preceding such Distribution Date.
(d) The income earned from Permitted Investments made pursuant to
this Section 4.02 shall be paid to the Master Servicer, as additional
compensation for its obligations under this Agreement, and the risk of loss of
moneys required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the Master Servicer. The
amount of any such loss shall be deposited by the Master Servicer in the
appropriate subaccount of the Certificate Account within two Business Days of
receipt of notification of such loss but not later
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than the second Business Day prior to the Distribution Date on which the moneys
so invested are required to be distributed to the Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the
Certificate Account. (a) The Trustee will, from time to time on demand of the
Master Servicer, make or cause to be made such withdrawals or transfers from
the Certificate Account as the Master Servicer has designated for such transfer
or withdrawal as specified in a certificate signed by a Servicing Officer (upon
which the Trustee may conclusively rely) for the following purposes:
(i) [intentionally omitted];
(ii) to reimburse the Master Servicer or any Sub-Servicer
for any Monthly Advance of its own funds or any advance of such
Sub-Servicer's own funds, the right of the Master Servicer or a
Sub-Servicer to reimbursement pursuant to this subclause (ii) being
limited to amounts received on a particular Mortgage Loan (including,
for this purpose, the Repurchase Price therefor, Insurance Proceeds
and Liquidation Proceeds) which represent late payments or recoveries
of the principal of or interest on such Mortgage Loan respecting which
such Monthly Advance or advance was made;
(iii) to reimburse the Master Servicer or any Sub-Servicer
from Insurance Proceeds or Liquidation Proceeds relating to a
particular Mortgage Loan for amounts expended by the Master Servicer
or such Sub- Servicer pursuant to Section 3.12 in good faith in
connection with the restoration of the related Mortgaged Property
which was damaged by an Uninsured Cause or in connection with the
liquidation of such Mortgage Loan;
(iv) to reimburse the Master Servicer or any Sub-Servicer
from Insurance Proceeds relating to a particular Mortgage Loan for
Insured Expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer or such Sub-Servicer from Liquidation
Proceeds from a particular Mortgage Loan for Liquidation Expenses
incurred with respect to such Mortgage Loan; provided that the Master
Servicer shall not be entitled to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to the extent that (i) any
amounts with respect to such Mortgage Loan were paid to the Master
Servicer as Excess Liquidation Proceeds pursuant to clause (xii) of
this Subsection 4.03(a); and (ii) such Liquidation Expenses were not
included in the computation of such Excess Liquidation Proceeds;
(v) to pay the Master Servicer or any Sub-Servicer
(payment to any Sub-Servicer to be subject to prior payment to the
Master Servicer of an amount equal to the Master Servicing Fee), as
appropriate, from Liquidation Proceeds or Insurance Proceeds received
in connection with the liquidation of any Mortgage Loan, the amount
which it or such Sub-Servicer would have been entitled to receive
under subclause (x) of this Subsection 4.03(a) as servicing
compensation on account of each defaulted scheduled payment on such
Mortgage Loan if paid in a timely manner by the related Mortgagor, but
only to the extent
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that the aggregate of Liquidation Proceeds and Insurance Proceeds with
respect to such Mortgage Loan, after any reimbursement to the Master
Servicer or any Sub-Servicer, pursuant to subclauses (ii), (iii), (iv)
and (vii) of this Subsection 4.03(a), exceeds the Outstanding
Principal Balance of such Mortgage Loan plus accrued and unpaid
interest thereon at the related Mortgage Rate less the Master
Servicing Fee Rate to but not including the date of payment (in any
event, the amount of servicing compensation received by a Sub-Servicer
and the Master Servicer with respect to any defaulted scheduled
payment shall not exceed the applicable Master Servicing Fee);
(vi) to pay the Master Servicer or any Sub-Servicer
(payment to any Sub-Servicer to be subject to prior payment to the
Master Servicer of an amount equal to the Master Servicing Fee), as
appropriate, from the Repurchase Price for any Mortgage Loan, the
amount which it or such Sub-Servicer would have been entitled to
receive under subclause (x) of this Subsection 4.03(a) as servicing
compensation, but only to the extent that the Repurchase Price with
respect to such Mortgage Loan after any reimbursement to the Master
Servicer or any Sub-Servicer pursuant to subclauses (ii) and (vii) of
this Subsection 4.03(a) exceeds the Outstanding Principal Balance of
such Mortgage Loan plus accrued and unpaid interest thereon at the
related Net Mortgage Rate through the last day of the month of
repurchase (in any event, the amount of servicing compensation
received by a Sub- Servicer and the Master Servicer with respect to
any repurchased Mortgage Loan shall not exceed the applicable Master
Servicing Fee);
(vii) to reimburse the Master Servicer or any Sub-Servicer
for advances of funds pursuant to Sections 3.07, 3.09 and 3.10, the
right to reimbursement pursuant to this subclause being limited to
amounts received on the related Mortgage Loan (including, for this
purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late recoveries of the payments
for which such advances were made;
(viii) to pay IMH Assets or the Master Servicer, as the case
may be, with respect to each Mortgage Loan that has been purchased
pursuant to Sections 2.02, 2.03, 3.18 or 10.01, all amounts received
thereon, representing recoveries of principal that reduce the
Outstanding Principal Balance of the related Mortgage Loan below the
Outstanding Principal Balance used in calculating the Repurchase Price
or representing interest included in the calculation of the Repurchase
Price or accrued after the end of the month during which such
repurchase occurs;
(ix) to reimburse the Master Servicer or any Sub-Servicer
for any Monthly Advance or advance, after a Realized Loss has been
allocated with respect to the related Mortgage Loan if the Monthly
Advance or advance has not been reimbursed pursuant to clauses (ii)
and (vii);
(x) to pay the Master Servicer servicing compensation as
set forth in Section 3.14;
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(xi) to reimburse the Master Servicer for expenses, costs
and liabilities incurred by and reimbursable to it pursuant to
Subsection 7.04(d);
(xii) to pay to the Master Servicer, as additional
servicing compensation, any Excess Liquidation Proceeds;
(xiii) to clear and terminate the Certificate Account
pursuant to Section 10.01;
(xiv) to remove amounts deposited in error; and
(xv) to fund the Indemnity as provided in Section 7.04(c).
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Certificate Account pursuant to subclauses (i) through
(vii), inclusive, and (ix).
(b) Notwithstanding the provisions of this Section 4.03, the
Master Servicer may, but is not required to, allow the Sub-Servicers to deduct
from amounts received by them or from the related Protected Account, prior to
deposit in the Certificate Account or the Custody Account, any portion to which
such Sub-Servicers are entitled as servicing compensation (including income on
Permitted Investments) or reimbursement of any reimbursable advances made by
such Sub- Servicers.
(c) Notwithstanding the foregoing, no withdrawals may be made from
the Certificate Account during the period beginning at 12:00 noon (New York
City time) on the second Business Day preceding a Distribution Date through
such Distribution Date.
Section 4.04 Custody Account. (a) The Trustee shall establish
and maintain for the benefit of the Certificateholders the Custody Account as a
segregated non-interest bearing trust account in the corporate trust department
of the Trustee (or a Rating Agency Eligible Account).
(b) Within one Business Day after receipt, the Master Servicer
shall withdraw or shall cause to be withdrawn from each Protected Account and
shall immediately deposit or cause to be deposited in the Custody Account all
amounts in the Protected Account not otherwise invested in Permitted
Investments pursuant to Section 4.01 and exceeding the lesser of $100,000 or
the FDIC insurance limit (other than with respect to principal of or interest
on the Mortgage Loans due on or before the Cutoff Date).
(c) Withdrawals may be made from the Custody Account only to make
remittances as provided in Sections 4.01(b) or 4.04(d); to reimburse the Master
Servicer or any Sub-Servicer for advances of principal and interest which have
been recovered by subsequent collection from the related Mortgagor; to remove
amounts deposited in error; to remove fees, charges or other such amounts
deposited on a temporary basis; or to clear and terminate the account at the
termination of this Agreement in accordance with Section 10.01.
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(d) Funds in the Custody Account may be invested at the direction
of the Master Servicer (such direction to be confirmed promptly in writing) in
Permitted Investments held in trust for the benefit of the Certificateholders
and in the absence of such directions, funds in the Custody Account shall be
invested in Permitted Investments described in clause (viii) of the definition
thereof. Such Permitted Investments must mature, or be subject to redemption
or withdrawal, no later than the earlier of (i) 30 days and (ii) the date on
which such funds are required to be withdrawn for deposit in the Certificate
Account pursuant to Section 4.01(b), and such funds shall be held in the
Custody Account until they are required to be deposited into the Certificate
Account. The income earned from Permitted Investments made pursuant to this
Section 4.04 shall be paid to the Master Servicer as additional compensation
for its obligations under this Agreement, and the risk of loss of moneys
required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the Master Servicer. The
amount of any such loss shall be deposited by the Master Servicer in the
Custody Account within two Business Days of receipt of notification of such
loss but not later than the second Business Day prior to the Distribution Date
on which the moneys so invested are required to be distributed to the
Certificateholders. No monies on deposit in the Custody Account shall be
reinvested except as specifically provided herein.
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ARTICLE V.
Certificates
Section 5.01 Certificates. The Certificates shall be substantially
in the form set forth in Exhibit A and shall be executed, countersigned and
delivered by the Trustee upon the order of the Seller upon receipt by the
Trustee of the documents specified in Section 2.02(a). The Certificates shall
be issued in denominations of 100/100th Fractional Undivided Interest. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a countersignature of
the Trustee substantially in the form set forth in Exhibit A, and such
countersignature shall be conclusive evidence, and the only evidence, that such
Certificate has been duly executed, countersigned and delivered hereunder. The
Trustee's signature shall be for authentication purposes only and neither the
Trustee nor any Person signing on its behalf shall have any liability on the
respective Certificate (other than the countersignature thereon). All
Certificates shall be dated the date of their countersignature.
Section 5.02 Registration of Transfer and Exchange of
Certificates. (a) The Trustee shall maintain at an office or agency a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and
of transfers and exchanges of certificates as herein provided.
(b) No transfer of a Certificate or Certificates shall be made
unless such transfer is made pursuant to an effective registration statement
under the Securities Act of 1933, as amended, (the "Act") or is exempt from the
registration requirements under the Act. In the event that a transfer is to be
made in reliance upon an exemption from the Act, the Trustee may require, in
order to assure compliance with the Act, that the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee each
certify to the Trustee in writing the facts surrounding such transfer. In the
event that such certification of facts does not on its face establish the
availability of an exemption under Section 4(5) or a comparable provision of
the Act, the Trustee shall require an Opinion of Counsel satisfactory to it
that such transfer may be made pursuant to an exemption from the Act, which
Opinion of Counsel shall not be an expense of the Master Servicer or the
Trustee. Neither the Master Servicer nor the Trustee is obligated to register
any of the Certificates under the Act or any other federal or state securities
law.
(c) It is a condition to the transfer of any Certificate to any
Person other than the Indenture Trustee that the transferee certify in writing
to the Seller and the Trustee that such transferee (i) is not an employee
benefit plan, trust or account, including an individual retirement account,
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or that is described in Section 4975(e)(1) of the Federal Tax Laws
(any such plan, trust or account being referred to as a "Plan") and (ii) has
not acquired and will not acquire such Certificate with plan assets, within the
meaning of 29 CFR 2510.3-101, of a Plan.
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A form of the letter from the purchaser of any Certificate, containing
the representations described in the preceding two paragraphs, is in the form
of a Purchaser Representation Letter attached hereto as Exhibit E.
(d) Subject to paragraphs (b) and (c) above, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to this Section 5.02 and upon
satisfaction of all requirements for transfer, the Trustee shall execute,
countersign and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like aggregate Fractional
Undivided Interest.
At the option of the Certificateholders, Certificates may, upon
satisfaction of the requirement for exchange, be exchanged for other
Certificates of authorized denominations of the same aggregate Fractional
Undivided Interest, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange the Trustee shall execute, countersign and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Each
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) (a) be duly endorsed by, or be accompanied by a
written instrument of transfer in form acceptable to, transfer agents
registered with the Securities and Exchange Commission and the Seller and the
Trustee, and (b) be duly executed by the holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any transfer or exchange of any
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of any Certificates.
All Certificates surrendered to the Trustee for transfer and exchange
shall be canceled and retained by the Trustee in accordance with the Trustee's
standard procedures.
Section 5.03 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) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and Fractional Undivided Interest but in each case bearing a
different number. The mutilated, destroyed, lost or stolen Certificate shall
thereupon be canceled of record by the Trustee and shall be of no further
effect and evidence no rights.
Section 5.04 Persons Deemed Owners. Prior to due presentation of
a Certificate for registration of transfer, the Seller, the Master Servicer,
the Trustee, the Bond Insurer and any agent of the Seller, the Master Servicer,
the Trustee or the Bond Insurer may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 6.01 and for all other purposes
whatsoever. Neither the Seller, the
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Master Servicer, the Trustee, the Bond Insurer nor any agent of the Seller, the
Master Servicer or the Trustee or the Bond Insurer shall be affected by notice
to the contrary. No Certificate shall be deemed duly presented for a transfer
effective on any Record Date unless the Certificate to be transferred is
presented no later than the close of business on the third Business Day
preceding such Record Date.
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ARTICLE VI.
Payments to Certificateholders
Section 6.01 Distributions on the Certificates.
(a) Distributions. On each Distribution Date, the Trustee shall
make disbursements of Distributable Funds in the Certificate Account to the
Certificateholder in the following priority and amounts:
(i) an amount equal to Accrued Certificate Interest at
the Pass-through Rate in respect of the Mortgage Loans, on the Current
Principal Amount of the Certificate immediately prior to such
Distribution Date, including Compensating Interest Payments, less any
amount not remitted to the Certificate Account because the Master
Servicer has determined that such remittance would constitute a
Nonrecoverable Advance;
(ii) an amount equal to the Scheduled Principal due on
the Due Date on each outstanding Mortgage Loan (including each
defaulted Mortgage Loan but excluding a Liquidated Mortgage Loan) to
the extent received or advanced by the Master Servicer, less any
amount not remitted to the Certificate Account because the Master
Servicer has determined that such remittance would constitute a
Nonrecoverable Advance; and
(iii) an amount equal to all remaining Distributable Funds
in the Certificate Account, after taking into account the
distributions made in subsections (i) and (ii) above, which amount
shall be treated as principal or interest in accordance with the terms
of the related Mortgage Loan.
Section 6.02 Payments. (a) No later than the Reporting Date, the
Master Servicer shall provide to the Trustee any information with respect to
the Mortgage Loans required to enable the Trustee to make, or cause its agent
to make, distributions on the Certificates.
(b) Payment of amounts to each Certificateholder pursuant to
Section 6.01 shall be made (i) by check mailed to each Certificateholder
entitled thereto at the address appearing in the Certificate Register or (ii)
upon receipt by the Trustee on or before the fifth Business Day preceding the
Record Date of written instructions from a Certificateholder holding
Certificates representing an initial aggregate Current Principal Amount of not
less than $1,000,000 by wire transfer to a United States dollar account
maintained by the payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer; provided, however,
that the final payment in respect of the Certificates will be made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee specified in the notice to Certificateholders of such final payment.
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Section 6.03 Statements to Certificateholders. (a) Concurrently
with each distribution to Certificateholders, the Trustee shall forward by
first-class mail to each Certificateholder, with a copy to the Seller, the
Master Servicer, the Bond Insurer and the Rating Agencies, a statement setting
forth the following information, expressed with respect to clauses (i) through
(vi) in the aggregate and as a Fractional Undivided Interest representing an
initial Current Principal Amount of $1,000:
(i) the Current Principal Amount of the Certificates
immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal
on the Certificates;
(iii) the aggregate amount of interest accrued at the
Pass-Through Rate with respect to the Certificates during the related
Interest Accrual Period;
(iv) the Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed
with respect to the Certificates;
(v) the amount of the distribution allocable to interest
on the Certificates;
(vi) the Pass-Through Rate with respect to such
Distribution Date;
(vii) the Current Principal Amount of the Certificates
after such Distribution Date;
(viii) the amount of any Monthly Advances and Compensating
Interest Payments by the Master Servicer included in such
distribution;
(ix) the amount of any Realized Losses (listed separately
for each category of Realized Loss) during the related Prepayment
Period and the amount and source (separately identified) of any
distribution in respect thereof included in such distribution;
(x) the cumulative amount of any Realized Losses since
the Closing Date;
(xi) the amount of any Excess Bankruptcy Losses, Excess
Special Hazard Losses and Excess Fraud Losses (listed separately for
each category of excess losses) during the related Prepayment Period
and the amount and source (separately identified) of any distribution
in respect thereof included in such distribution;
(xii) the Rolling 60 Day Delinquency Rate, the Rolling
Twelve Month Delinquency Rate, and the Cumulative Loss Amount as of
such Distribution Date;
(xiii) the amount of Scheduled Principal and Principal
Prepayments, (including but separately identifying the principal
amount of Net Liquidation Proceeds);
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(xiv) the number of Mortgage Loans (excluding REO
Property), remaining in the Trust Fund as of the end of the related
Due Period;
(xv) the Stated Principal Balance of the Mortgage Loans
remaining in the Trust Fund as of the related Distribution Date, after
giving effect to the Distributions made to Certificateholders on such
Distribution Date pursuant to Section 6.01(a) hereof;
(xvi) information regarding any Mortgage Loan delinquencies
as of the end of the related Due Period, including the aggregate
number, aggregate Outstanding Principal Balance and aggregate Stated
Principal Balance of Mortgage Loans delinquent 30 days, 60 days and 90
days or more;
(xvii) the number of Mortgage Loans in the foreclosure
process as of the end of the related Due Period and the aggregate
Outstanding Principal Balance of such Mortgage Loans;
(xviii) the number and aggregate Outstanding Principal
Balance of all Mortgage Loans which were REO Property as of the end of
the related Due Period; and
(xix) the book value (the sum of (A) the Outstanding
Principal Balance of the Mortgage Loan, (B) accrued interest through
the date of foreclosure and (C) foreclosure expenses) of any REO
Property; provided that, in the event that such information is not
available to the Master Servicer and the Trustee on the Distribution
Date, such information shall be furnished promptly after it becomes
available.
The information set forth above shall be calculated, or reported, as
the case may be, by the Trustee based on data provided by the Master Servicer
pursuant to Subsection 6.05(a) and, with respect to prior periods, Section
6.06, upon which the Trustee may conclusively rely. The information furnished
by the Master Servicer shall be sufficient for the Trustee to calculate any
statements it is required to make.
(b) By April 30 of each year beginning in 1997, the Trustee will
furnish a report to each Holder of the Certificates of record at any time
during such calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Master Servicer determines and advises the Trustee
to be necessary and/or to be required by the Internal Revenue Service or by a
federal or state law or rules or regulations to enable such Holders to prepare
their tax returns for such calendar year. Copies of such report shall also be
furnished to the Master Servicer. Such obligations shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to the requirements of the Code.
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The Master Servicer shall supply to the Trustee in a timely manner the
information required for the statements described above which, where
appropriate, shall be the information from which the Trustee can calculate the
statements it is required to make.
Section 6.04 Reports to the Trustee, the Bond Insurer and the
Master Servicer. (a) Not later than 15 days after each Distribution Date, the
Trustee shall forward to the Master Servicer a statement setting forth the
status of the Certificate Account, the Custody Account as of the close of
business on the last day of the month of the Distribution Date and showing, for
the month covered by such statement, deposits in or withdrawals from the
Certificate Account and the Custody Account.
(b) On or before the Reporting Date, the Master Servicer shall
provide to the Trustee, with a copy to the Bond Insurer, with respect to the
Mortgage Loans and the REO Property, respectively, a Loan Summary and
Remittance Report which shall be based upon reports from Sub-Servicers, if any,
received by the Master Servicer on or before the 7th Business Day of such month
with respect to the Mortgage Loans and REO Property and containing the
following information (in respect of the REO Property, only such information
which is applicable):
(i) Aggregate deposits to and withdrawals from the
Certificate Account since the date of the prior statement, stated
separately for each category of deposit specified in Section 4.02 and
each category of withdrawal specified in Section 4.03, indicating
separately the aggregate of amounts withdrawn which are not applicable
to a particular Mortgage Loan;
(ii) Amount of Distributable Funds expected for the
related Distribution Date and attributable to each of the following
categories stated separately with respect to the Adjustable Rate
Mortgage Loans and the Fixed Rate Mortgage Loans:
(A) regularly scheduled principal;
(B) Principal Prepayments (stated separately for partial
and full prepayments and Net Liquidation Proceeds,
stating Liquidation Proceeds and Liquidation Expenses
separately);
(C) Insurance Proceeds;
(D) interest on the Mortgage Loans;
(E) Monthly Advances made by the Master Servicer;
(F) Certificate Account Advances;
(G) Compensating Interest Payments; and
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(H) reimbursements in connection with losses on Permitted Investments.
(iii) Aggregate Outstanding Principal Balances of the
Mortgage Loans as of the related Due Date, without giving effect to
payments due on such date;
(iv) Realized Losses for the prior month and, in the
aggregate, from the Closing Date;
(v) Aggregate Stated Principal Balance of the Mortgage
Loans as of the related Due Date;
(vi) The Stated Principal Balance of the Mortgage Loans as
of the related Distribution Date, after giving effect to the
distributions made to Certificateholders on such Distribution Date
pursuant to Section 6.01(a) hereof;
(vii) Book value of any collateral acquired by means of
foreclosure, grant of deed in lieu of foreclosure or otherwise in
respect of any Mortgage Loan;
(viii) Number and aggregate Outstanding Principal Balance of
Mortgage Loans which are 30, 60, 90 and 120 days delinquent, those
which are in foreclosure and those which are REO Property;
(ix) Interest Shortfalls with respect to the related
Distribution Date and portion thereof resulting from the provisions of
the Relief Act;
(x) Amount, if any, by which the aggregate of payments of
scheduled principal and interest on the Mortgage Loans that were due
on the related Due Date and delinquent, other than as a result of the
Relief Act, as of the 18th day of such month exceeds the sum of the
Monthly Advances to be made by the Master Servicer and Certificate
Account Advances for such Distribution Date;
(xi) Aggregate Master Servicing Fee for the related Due
Period;
(xii) Such other information regarding each Mortgage Loan,
including an updated Mortgage Loan Schedule in magnetic tape format,
as may be reasonably requested by the Bond Insurer or the Trustee.
(c) On or before each Reporting Date, the Master Servicer shall
deliver a magnetic tape or diskette to the Trustee indicating the payment
status of each Mortgage Loan as of such Reporting Date.
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Section 6.05 Monthly Advances. If the Scheduled Payment (together
with any advances from the Sub-Servicers) on a Mortgage Loan that was due on
the Due Date in the month of a Distribution Date which is delinquent other than
as a result of application of the Relief Act exceeds the amount deposited in
the Certificate Account which will be used for a Certificate Account Advance
with respect to such Mortgage Loan, the Master Servicer will deposit in the
Certificate Account not later than the Advancing Date immediately preceding the
related Distribution Date an amount equal to such deficiency net of the related
Master Servicing Fee for such Mortgage Loan, except to the extent the Master
Servicer determines any such advance to be nonrecoverable from Liquidation
Proceeds, Insurance Proceeds or future payments on any Mortgage Loan; provided
however, that with respect to a Balloon Loan that has reached its stated
maturity, any such advances by the Master Servicer shall be limited to advances
in an amount equal to 30 days' interest on the Outstanding Principal Balance of
such Balloon Loan at the related Net Mortgage Rate for each Interest Accrual
Period until such Balloon Loan is paid in full or becomes a Liquidated Mortgage
Loan. Subject to the foregoing and in the absence of such a determination, the
Master Servicer shall continue to make such advances through the date that the
related Mortgaged Property has, in the judgment of the Master Servicer, been
completely liquidated. Any amount used as a Certificate Account Advance shall
be replaced by the Master Servicer by deposit in the Certificate Account on or
before any future date to the extent that funds in the Certificate Account on
such date are less than the amount required to be transferred by the Master
Servicer to the appropriate subaccount of the Certificate Account. If
applicable, on the fifth Business Day preceding each Distribution Date, the
Master Servicer shall present an Officer's Certificate to the Trustee (i)
stating that the Master Servicer elects not to make a Monthly Advance in a
stated amount and (ii) detailing the reason it deems the advance to be
nonrecoverable. The Trustee shall forward a copy of such Officer's Certificate
to the Bond Insurer.
Section 6.06 Compensating Interest Payments. The Master Servicer
shall deposit in the Certificate Account not later than the Advancing Date
immediately preceding the related Distribution Date an amount equal to the
lesser of (i) the aggregate amounts determined pursuant to subclauses (a) and
(b) of the definition of Interest Shortfall for the related Distribution Date
and (ii) the Master Servicing Fee for such Distribution Date (such amount, the
"Compensating Interest Payment") . The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest Payment.
Section 6.07 Reports of Foreclosures and Abandonment of Mortgaged
Property. Each year the Master Servicer shall report or cause to be reported
to the Internal Revenue Service foreclosures and abandonments of any Mortgaged
Property as required by Section 6050J of the Code.
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ARTICLE VII.
The Master Servicer
Section 7.01 Liabilities of the Master Servicer. The Master
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by it herein. Only the
Master Servicer, any successor Master Servicer or the Trustee acting as Master
Servicer shall be liable with respect to the servicing of the Mortgage Loans
and the REO Property for actions taken by any such person in contravention of
the Master Servicer's duties hereunder.
Section 7.02 Merger or Consolidation of the Master Servicer. (a)
The Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation,
and will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its duties under this
Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided that any such successor to the Master Servicer shall
be qualified to service mortgage loans for FNMA and FHLMC.
Section 7.03 Indemnification of the Trustee. The Master Servicer
agrees to the extent described in this Section 7.03 to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense incurred without negligence or willful misconduct on their part,
arising out of, or in connection with, failure by the Master Servicer to
perform its duties in compliance with this Agreement, including the costs and
expenses (including reasonable legal fees and expenses) of defending themselves
against any claim in connection with such failure, provided that with respect
to any such claim, the Trustee shall have given the Master Servicer written
notice thereof promptly after the Trustee shall have with respect to such claim
knowledge thereof. The Master Servicer shall assume the defense of any claim
for which an Indemnified Person is entitled to indemnification pursuant to this
Section 7.03, and the Master Servicer shall pay all expenses in connection
therewith, including reasonable legal fees, and shall promptly pay, discharge
and satisfy any judgment or decree which may be rendered against an Indemnified
Person in respect of such claim.
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Section 7.04 Limitation on Liability of the Master Servicer and
Others. Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors,
officers, employees or agents of the Master Servicer shall be under any
liability to the Indemnified Persons, the Seller, the Trust Fund, the Bond
Insurer or the Certificateholders for taking any action or for refraining from
taking any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Master
Servicer or any such Person against any breach of warranties or representations
made herein or any liability which would otherwise be imposed by reason of such
Person's willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of obligations and duties
hereunder.
(b) The Master Servicer and any director, officer, employee or
agent of the Master Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder.
(c) The Master Servicer and any director, officer, employee or
agent of the Master Servicer shall be indemnified by the Trust and held
harmless thereby against any loss, liability or expense incurred in connection
with any legal proceedings relating to this Agreement or the Certificates
(including reasonable legal fees and disbursements of counsel), other than (i)
any loss, liability or expense related to its willful failure to perform its
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and (ii)
any loss, liability or expense incurred by reason of such Person's willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder.
(d) The Master Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
duties under this Agreement and that in its opinion may involve it in any
expense or liability; provided, however, the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust Fund, and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account as provided by Subsection 4.03(a). Nothing in this Subsection 7.04(d)
shall affect the Master Servicer's obligation to supervise, or to take such
actions as are necessary to ensure, the servicing and administration of the
Mortgage Loans pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to
this Agreement, unless specifically required to do so pursuant to this
Agreement, the Master Servicer shall not be required to investigate or make
recommendations concerning potential liabilities which the Trust might incur as
a result of such course of action by reason of the condition of the Mortgaged
Properties but shall give notice to the Trustee if it has notice of such
potential liabilities.
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Section 7.05 Master Servicer Not to Resign. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law. Any such
determination permitting the resignation of the Master Servicer shall be
evidenced by an opinion of Independent Counsel to such effect delivered to the
Trustee and the Bond Insurer. No such resignation by the Master Servicer shall
become effective until the Trustee or a successor to the Master Servicer shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 8.02 hereof. The Trustee shall notify the Rating
Agencies of the resignation of the Master Servicer.
Section 7.06 [Reserved]
Section 7.07 Sale and Assignment of Master Servicing. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in their entirety as Master Servicer under this Agreement; provided, however,
that: (i) the purchaser or transferee accepting such assignment and delegation
(a) shall be a Person which shall be qualified to service mortgage loans for
FNMA or FHLMC; (b) shall, in the case of successor master servicers only, have
a net worth of not less than $10,000,000 (unless otherwise approved by each
Rating Agency pursuant to clause (ii) below); (c) shall be reasonably
satisfactory to the Trustee and the Bond Insurer (as evidenced in writings
signed by the Trustee and the Bond Insurer) as having a comparable servicing
ability to that of the Master Servicer on the Closing Date; (d) shall execute
and deliver to the Trustee and the Bond Insurer an agreement, in form and
substance reasonably satisfactory to the Trustee and the Bond Insurer, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement, any custodial agreement and any agreement
substantially in the form of Exhibit G hereto from and after the effective date
of such agreement; (ii) each Rating Agency shall be given prior written notice
of the identity of the proposed successor to the Master Servicer and each
Rating Agency's rating of the Bonds in effect immediately prior to such
assignment, sale and delegation will not be downgraded or withdrawn as a result
of such assignment, sale and delegation, as evidenced by a letter to such
effect delivered to the Master Servicer and the Trustee and the Bond Insurer;
and (iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee and the Bond Insurer an Officer's Certificate and an
Opinion of Independent Counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising prior
to the effective date thereof.
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ARTICLE VIII.
Default
Section 8.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default 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):
(i) The Master Servicer fails to cause to be deposited in
the Certificate Account any amount so required to be deposited
pursuant to this Agreement, including any Monthly Advances required to
be made pursuant to Section 6.08, and such failure continues
unremedied for a period of two Business Days after the date such
deposit was required to be made; or
(ii) The Master Servicer fails to observe or perform in
any material respect any other covenants and agreements set forth in
the Certificates or this Agreement to be performed by it, which
failure materially and adversely affects the rights of the
Certificateholders, and such failure continues unremedied for a period
of 60 days after the date on which written notice of such failure,
properly requiring the same to be remedied, shall have been given to
the Master Servicer by the Trustee or to the Master Servicer, the Bond
Insurer and the Trustee by the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund; or
(iii) There is entered against the Master Servicer a decree
or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for
the winding up or liquidation of its affairs, and the continuance of
any such decree or order is unstayed and in effect for a period of 60
consecutive days, or an involuntary case is commenced against the
Master Servicer under any applicable insolvency or reorganization
statute and the petition is not dismissed within 60 days after the
commencement of the case; or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings
of or relating to the Master Servicer or substantially all of its
property; or the Master Servicer admits in writing its inability to
pay its debts generally as they become due, files a petition to take
advantage of any applicable insolvency or reorganization statute,
makes an assignment for the benefit of its creditors, or voluntarily
suspends payment of its obligations; or
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(v) The Master Servicer assigns or delegates its duties
or rights under this Agreement in contravention of the provisions
permitting such assignment or delegation under Section 7.05 or 7.07.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, may in each case with the
consent of the Bond Insurer and at the direction of the Bond Insurer shall, by
notice in writing to the Master Servicer (and to the Trustee if given by such
Certificateholders), with a copy to the Rating Agencies, terminate all of the
rights and obligations (but not the liabilities) of the Master Servicer under
this Agreement and in and to the Mortgage Loans serviced by the Master Servicer
and the proceeds thereof. Upon the receipt by the Master Servicer of the
written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates, the Mortgage Loans or
under any other related agreements, including the Sub-Servicing Agreements (but
only to the extent that such other agreements relate to the Mortgage Loans)
shall, subject to Section 8.02, automatically and without further action pass
to and be vested in the Trustee pursuant to this Section 8.01; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer as attorney-in-fact or otherwise, any
and all documents and other instruments and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's rights and obligations hereunder, including, without limitation, the
transfer to the Trustee of (i) the property and amounts which are then or
should be part of the Trust or which thereafter become part of the Trust; (ii)
originals or copies of all documents of the Master Servicer reasonably
requested by the Trustee to enable it to assume the Master Servicer's duties
thereunder; and (iii) the rights and obligations of the Master Servicer under
the Sub-Servicing Agreements with respect to the Mortgage Loans. In addition
to any other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer
under this Agreement, the Master Servicer shall be entitled to receive, out of
any amount received on account of a Mortgage Loan or REO Property, that portion
of such payments which it would have received as reimbursement pursuant to
Section 3.14 if notice of termination had not been given. The termination of
the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.
Section 8.02 Trustee to Act; Appointment of Successor. (a) Upon
the receipt by the Master Servicer of a notice of termination pursuant to
Section 8.01 or an opinion of Independent Counsel pursuant to Section 7.05 to
the effect that the Master Servicer is legally unable to act or to delegate its
duties to a Person which is legally able to act, the Trustee shall
automatically become the successor in all respects to the Master Servicer in
its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities, duties,
liabilities and limitations on liabilities relating thereto placed on the
Master Servicer by the terms and provisions hereof; provided, however, that the
Trustee (i) shall be under no obligation to
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repurchase any Mortgage Loan; and (ii) shall have no obligation whatsoever with
respect to any liability incurred by the Master Servicer at or prior to the
time of receipt by the Master Servicer of such notice or by the Trustee of such
Opinion of Independent Counsel; provided, however, that the Trustee, as
successor Master Servicer, shall be required to make any Monthly Advances and
to replenish the Certificate Account in an amount equal to any Certificate
Account Advances to the extent that the Master Servicer failed to make such
advances. As compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans which the Master Servicer would have been
entitled to retain if the Master Servicer had continued to act hereunder,
except for those amounts due the Master Servicer as reimbursement for advances
previously made or expenses previously incurred. Notwithstanding the above,
the Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act or if the Bond Insurer shall request in writing, appoint, or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution which is a FNMA- or FHLMC-approved servicer, and
with respect to a successor to the Master Servicer only, having a net worth of
not less than $10,000,000, and acceptable to the Bond Insurer, as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the
Trustee shall act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on the Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of that permitted the Trustee under this Subsection 8.02(a), and
that such successor shall undertake and assume the obligations of the Trustee
to pay compensation to any third Person acting as an agent or independent
contractor in the performance of master servicing responsibilities hereunder.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of either the
Master Servicer respecting the Mortgage Loans as provided herein, it shall do
so in a separate capacity and not in its capacity as Trustee and, accordingly,
the provisions of Article IX shall be inapplicable to the Trustee in its duties
as the successor to the Master Servicer in the servicing of the Mortgage Loans
(although such provisions shall continue to apply to the Trustee in its
capacity as Trustee); the provisions of Article VII, however, shall apply to it
in its capacity as successor master servicer.
Section 8.03 Notification to Certificateholders. Upon any
termination or appointment of a successor to the Master Servicer, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to the Bond
Insurer and the Rating Agencies.
Section 8.04 Waiver of Defaults. The Trustee shall transmit by
mail to all Certificateholders and the Bond Insurer, within 60 days after the
occurrence of any Event of Default known to the Trustee, unless such Event of
Default shall have been cured, notice of each such Event of Default hereunder
known to the Trustee. The Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund may, on
behalf of all
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Certificateholders, with the written consent of the Bond Insurer (which consent
will not be unreasonably withheld), waive any default by the Master Servicer in
the performance of its obligations hereunder and the consequences thereof,
except a default in the making of or the causing to be made any required
distribution on the Certificates. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived. The Master Servicer shall give notice of any such waiver to the Rating
Agencies.
Section 8.05 List of Certificateholders. Upon written request of
three or more Certificateholders of record, for purposes of communicating with
other Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
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ARTICLE IX.
Concerning the Trustee
Section 9.01 Duties of Trustee. (a) The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiver of all Events
of Default which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement as duties of the
Trustee. If an Event of Default has occurred and has not been cured or waived,
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise under the circumstances in the conduct of his own
affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are
specifically required to be furnished to the Trustee pursuant to any provision
of this Agreement, the Trustee shall examine them to determine whether they are
in the form required by 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 Master Servicer hereunder.
(c) The Trustee shall make monthly distributions and the final
distribution to the Certificateholders as provided in Sections 6.01 and 10.01
herein.
(d) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and
after the curing or waiver of all such Events of Default which may
have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the directions of the Bond Insurer or Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less
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than 25% of the Trust Fund, if such action or non-action relates to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or other power
conferred upon the Trustee, under this Agreement; and
(iv) The Trustee shall not be required to take notice or
be deemed to have notice or knowledge of any default or Event of
Default unless a Responsible Officer of the Trustee's corporate trust
department shall have actual knowledge thereof. In the absence of
such notice, the Trustee may conclusively assume there is no such
default or Event of Default.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
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 Master 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 Master Servicer in accordance
with the terms of this Agreement.
(e) All funds received by the Trustee and required to be deposited
in the Certificate Account and the Custody Account pursuant to this Agreement
will be promptly so deposited by the Trustee. In the absence of investment
instructions from the Master Servicer, the Trustee shall have no duty to invest
funds on deposit in the Accounts.
Section 9.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 9.01:
(i) The Trustee may rely and shall be protected in acting
or refraining from acting in reliance on any resolution, Officer's
Certificate, certificate of a Servicing Officer, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion
of Counsel shall be full and complete authorization and protection
with respect to any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of
Counsel;
(iii) The Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Agreement, other than
its obligation to give notices pursuant to this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be
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incurred therein or thereby. Nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event
of Default of which a Responsible Officer of the Trustee's corporate
trust department has actual knowledge (which has not been cured), to
exercise such of the rights and powers vested in it by this Agreement,
and to use the same degree of care and skill in their exercise, as a
prudent person would exercise under the circumstances in the conduct
of his own affairs;
(iv) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Prior to the occurrence of an Event of Default
hereunder and after the curing or waiver of all Events of Default
which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Bond Insurer or Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 51% of the Trust Fund and provided that 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, reasonably assured to the Trustee by the
security afforded to it by the terms of this Agreement. The Trustee
may require reasonable indemnity against such expense or liability as
a condition to taking any such action. The reasonable expense of
every such examination shall be paid by the Certificateholders
requesting the investigation or the Bond Insurer, as the case may be;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through
agents or attorneys; provided, however, that the Trustee may not
appoint any agent other than an Affiliate to perform its custodial or
paying agent functions under this Agreement without the express
written consent of the Master Servicer, which consent will not be
unreasonably withheld. The Trustee shall not be liable or responsible
for the misconduct or negligence of any of the Trustee's agents or
attorneys or a custodian or paying agent appointed hereunder by the
Trustee with due care and when required, with the consent of the
Master Servicer;
(vii) Should the Trustee deem the nature of any action
required on its part, other than a payment or transfer under
Subsection 4.02(b) or Section 4.03, to be unclear, the Trustee may
require prior to such action that it be provided by the Master
Servicer with reasonable further instructions;
(viii) 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 accountable for other than its negligence or
willful misconduct in the performance of any such act;
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(ix) The Trustee shall not be required to give any bond or
surety with respect to the execution of the trust created hereby or
the powers granted hereunder; and
(x) The Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Mortgage Loan by IMH Assets pursuant
to this Agreement or the eligibility of any Mortgage Loan for purposes
of this Agreement.
Section 9.03 Trustee Not Liable for Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Seller, and the Trustee shall have no
responsibility for their correctness. The Trustee makes no representation as
to the validity or sufficiency of the Certificates (other than the signature
and countersignature of the Trustee on the Certificates) or of any Mortgage
Loan except as expressly provided in Sections 2.02 and 2.05 hereof. The
Trustee's signature and countersignature (or countersignature of its agent) on
the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
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 Seller with respect to the Mortgage
Loans. Subject to the provisions of Section 2.05, the Trustee shall not be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or
the validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. The Trustee
shall at no time have any responsibility or liability for or with respect to
the legality, validity and enforceability of any Mortgage or any Mortgage Loan,
or the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Fund or its ability to generate the payments to be distributed to
Certificateholders, under this Agreement. The Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.
Section 9.04 Trustee May Own Certificates. The Trustee in its
individual capacity or in any capacity other than as Trustee hereunder may
become the owner or pledgee of any Certificates with the same rights it would
have if it were not Trustee, and may otherwise deal with the parties hereto.
Section 9.05 Eligibility Requirements for Trustee. The Trustee
and any successor Trustee shall during the entire duration of this Agreement be
a state bank or trust company or a national banking association with its
principal office in a state and city reasonably acceptable to the Master
Servicer and organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee,
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$50,000,000, subject to supervision or examination by federal or state
authority and, in the case of a successor Trustee other than pursuant to
Section 9.10, rated in one of the two highest long-term debt categories of, or
otherwise acceptable to, each of the Rating Agencies and the Bond Insurer. The
Trustee shall not be an Affiliate of the Master Servicer, unless the Trustee
acts as successor Master Servicer hereunder. If the 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 9.05 the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 9.05, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.07.
Section 9.06 Insurance. The Trustee, at its own expense, shall at
all times maintain and keep in full force and effect: (i) fidelity insurance,
(ii) theft of documents insurance and (iii) forgery insurance. All such
insurance shall be in amounts, with standard coverage and subject to
deductibles, as are customary for insurance typically maintained by banks which
act as custodians for investor-owned mortgage pools. A certificate of an
officer of the Trustee as to the Trustee's compliance with this Section 9.06
shall be furnished to the Master Servicer, the Bond Insurer or any
Certificateholder upon request.
Section 9.07 Resignation and Removal of the Trustee. (a) The
Trustee may at any time resign and be discharged from the Trust hereby created
by giving written notice thereof to the Master Servicer, with a copy to the
Bond Insurer and the Rating Agencies. Upon receiving such notice of
resignation, the Bond Insurer shall, with the consent of the Master Servicer,
which consent shall not be unreasonably withheld, promptly appoint a successor
Trustee by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee and the successor Trustee.
If no successor Trustee shall have been so 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.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.05 and shall fail to resign after
written request therefor by the Bond Insurer or the Master Servicer or if at
any time the Trustee shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Bond Insurer, with the consent of the Master Servicer,
which consent will not be unreasonably withheld, shall be entitled to remove
the Trustee and appoint a successor Trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to each of the
Trustee so removed, the successor Trustee and the Bond Insurer.
(c) The Bond Insurer or Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust Fund
with the consent of the Bond Insurer, which consent will not be unreasonably
withheld, may at any time remove the Trustee and appoint a successor
IX-5
<PAGE> 77
Trustee by written instrument or instruments, in quadruplicate, signed by the
Bond Insurer or such Holders or their attorneys-in-fact duly authorized, one
complete set of which instruments shall be delivered to each of the Master
Servicer and the Bond Insurer, the Trustee so removed and the successor so
appointed.
(d) No resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.07 shall
become effective except upon appointment of and acceptance of such appointment
by the successor Trustee as provided in Section 9.08. If the Trustee resigns
or is removed pursuant to this Section 9.07, such Trustee shall resign or be
removed as Indenture Trustee, and any successor Trustee shall become the
successor Indenture Trustee. Conversely, if the Indenture Trustee resigns or
is removed pursuant to the Indenture, such Indenture Trustee shall resign or be
removed as Trustee hereunder, and any successor Indenture Trustee shall become
the successor Trustee hereunder.
Section 9.08 Successor Trustee. (a) Any successor Trustee
appointed as provided in Section 9.07 shall execute, acknowledge and deliver to
the Master Servicer, the Bond Insurer and to its predecessor Trustee an
instrument accepting such appointment hereunder. The resignation or removal of
the predecessor Trustee shall then become effective and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Trustee herein. The predecessor Trustee
shall after payment of its outstanding fees and expenses promptly deliver to
the successor Trustee all assets and records of the Trust held by it hereunder,
and the Master Servicer and the predecessor Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
more fully and certainly vesting and confirming in the successor Trustee all
such rights, powers, duties and obligations.
(b) No successor Trustee shall accept appointment as provided in
this Section 9.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 9.05.
(c) Upon acceptance of appointment by a successor Trustee as
provided in this Section 9.08, the successor Trustee shall mail notice of the
succession of such Trustee hereunder to the Bond Insurer and to all
Certificateholders at their addresses as shown in the Certificate Register and
to the Rating Agencies. The Master Servicer shall pay the cost of any mailing
by the successor Trustee.
Section 9.09 Merger or Consolidation of Trustee. Any state bank
or trust company or national banking association into which the Trustee may be
merged or converted or with which it may be consolidated or any state bank or
trust company or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any state
bank or trust company or national banking association succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such state bank or trust company
or national banking association shall be eligible under the provisions of
IX-6
<PAGE> 78
Section 9.06. Such succession shall be valid without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 9.010 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the Master
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Master Servicer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions
of this Section 9.10, such powers, duties, obligations, rights and trusts as
the Master Servicer and the Trustee may consider necessary or desirable.
(b) If the Master Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a written request so to
do, or in case an Event of Default with respect to the Master Servicer shall
have occurred and be continuing, the Trustee shall have the power to make such
appointment without the Master Servicer.
(c) No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor Trustee under Section 9.05
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee and required to be conferred
on such co- trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co- trustee jointly,
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. 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.
IX-7
<PAGE> 79
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or
attorney-in-fact, with full power and authority, to do any lawful act under or
with respect to 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.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Master Servicer and the Trustee acting jointly may at any time accept the
resignation of or remove any separate trustee or co-trustee, except that
following the occurrence of any Event of Default which has not been cured, the
Trustee acting alone may accept the resignation of or remove any separate
trustee or co-trustee.
Section 9.011 Master Servicer Shall Provide Information as
Reasonably Required. The Master Servicer shall furnish to the Trustee during
the term of this Agreement, such periodic, special, or other reports or
information as may reasonably be requested by the Trustee in order to fulfill
its duties and obligations under this Agreement.
IX-8
<PAGE> 80
ARTICLE X.
Termination
Section 10.01 Termination Upon Repurchase by ICI Funding or its
Designee or Liquidation of All Mortgage Loans. (a) Subject to Section 10.02,
the respective obligations and responsibilities of the Seller, the Master
Servicer and the Trustee created hereby, other than the obligation of the
Trustee or the Master Servicer to make payments to Certificateholders as
hereinafter set forth and to the Trustee, shall terminate upon:
(i) the repurchase by or at the direction of the Master
Servicer or its designee of all Mortgage Loans and all property
remaining in the Trust at a price equal to (a) 100% of the Outstanding
Principal Balance of each Mortgage Loan (other than a Mortgage Loan
related to REO Property) as of the date of repurchase, net of the
principal portion of any unreimbursed Monthly Advances made by the
purchaser, together with interest at the applicable Mortgage Rate
accrued but unpaid through and including the last day of the month of
repurchase, plus (b) the appraised value of any REO Property (but not
more than the Outstanding Principal Balance of the related Mortgage
Loan,. together with interest at the applicable Mortgage Rate accrued
on that balance but unpaid through and including the last day of the
month of repurchase), less the good faith estimate of the Master
Servicer of liquidation expenses to be incurred in connection with its
disposal thereof, such appraisal to be calculated by an appraiser
mutually agreed upon by the Master Servicer, the Bond Insurer and the
Trustee at the expense of the Master Servicer; or
(ii) the later of the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage
Loan remaining in the Trust Fund or the disposition of all property
acquired with respect to any Mortgage Loan; provided, however, that in
the event that an advance has been made, but not yet recovered, at the
time of such termination, the Person having made such advance shall be
entitled to receive, notwithstanding such termination, any payments
received subsequent thereto with respect to which such advance was
made.
(b) In no event, however, shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date of this Agreement.
(c) The right of the Master Servicer or its designee to repurchase
all Mortgage Loans pursuant to Subsection 10.01(a)(i) above shall be
exercisable prior to the 15th day of any month and only if (i) the aggregate
Stated Principal Balance of such Mortgage Loans at the time of any such
repurchase is less than 10% of the Cutoff Date Balance and (ii) the Bonds have
been redeemed in accordance with the provisions of the Indenture.
X-1
<PAGE> 81
(d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Bond Insurer and the Rating Agencies,
upon which the Certificateholders shall surrender their Certificates to the
Trustee for payment of the final distribution and cancellation. Such notice
shall be given by letter, mailed not earlier than the 15th day and not later
than the 25th day of the month next preceding the month of such final
distribution, and shall specify (i) the Distribution Date upon which final
payment of the Certificates will be made upon presentation and surrender of the
Certificates at the office of the Trustee therein designated, (ii) the amount
of any such final payment and (iii) that the Record Date otherwise applicable
to such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Trustee
therein specified.
(e) If the option by the Master Servicer to repurchase or cause
the repurchase of all Mortgage Loans under Subsection 10.01(a)(i) above is
exercised, the Master Servicer and/or its designee, as the case may be, shall
deliver to the Trustee for deposit in the Certificate Account, by the Business
Day prior to the applicable Distribution Date, an amount equal to the
repurchase price for the Mortgage Loans being purchased by it and all property
acquired with respect to such Mortgage Loans remaining in the Trust. Upon the
presentation and surrender of the Certificates, the Trustee shall distribute
(A) to the Certificateholders, an amount equal to (i) the amount otherwise
distributable to the Certificateholders on such Distribution Date but for such
repurchase and (ii) the Current Principal Amount and any accrued but unpaid
interest at the Pass-Through Rate and (B) the remainder, if any, to the Master
Servicer. Upon deposit of the required repurchase price and delivery to the
Trustee of an Officer's Certificate from the Master Servicer certifying that
such deposit in the Certificate Account has been made, and following such final
Distribution Date, the Trustee shall promptly release to the Master Servicer
and/or its designee, as the case may be, the Mortgage Files for the remaining
Mortgage Loans, and the Accounts shall terminate, subject to the Trustee's
obligation to hold any amounts payable to Certificateholders in trust without
interest pending final distributions pursuant to Subsection 10.01(i).
(f) In the event that this Agreement is terminated by reason of
the payment or liquidation of all Mortgage Loans or the disposition of all
property acquired with respect to all mortgage Loans under Subsection
10.01(a)(ii) above, the Master Servicer shall deliver to the Trustee for
deposit in the Certificate Account all distributable amounts remaining in the
Custody Account and shall cause the Sub-Servicers to deliver to the Trustee for
deposit in the Certificate Account all distributable amounts remaining in their
Protected Accounts. Upon the presentation and surrender of the Certificates,
the Trustee shall distribute to the Certificateholders, in accordance with
their respective interests, all distributable amounts remaining in the
Certificate Account. Upon deposit by the Sub-Servicers of such distributable
amounts and delivery to the Trustee of an Officer's Certificate from the Master
Servicer certifying that such deposit has been made, and following such final
Distribution Date, the Trustee shall promptly release to the Master Servicer
the Mortgage Files for the remaining Mortgage Loans, and the Accounts shall
terminate, subject to the Trustee's obligation to hold any amounts payable to
the Certificateholders in trust without interest pending final distributions
pursuant to Subsection 10.01(i).
X-2
<PAGE> 82
(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within six months after the second notice, not all the Certificates shall have
been surrendered for cancellation, the Trustee may take appropriate steps, or
appoint any agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain subject to
this Agreement.
(h) In addition and without prejudice to the foregoing, the
respective obligations of the Seller, the Master Servicer and the Trustee
created hereby may be terminated in respect of the Certificates on any date
occurring after maturity of the Bonds and the release of the Certificates from
any pledge securing the Bonds. Termination in the foregoing circumstances
shall be effected upon receipt by the Trustee of written notice from 100% of
the Certificateholders requiring termination of this Agreement in respect of
the Certificates and requesting the transfer of the Trust Fund to them in the
manner specified in such notice.
X-3
<PAGE> 83
ARTICLE XI.
Miscellaneous Provisions
Section 11.01 Amendment. (a) This Agreement may be amended from
time to time by the Seller, the Trustee and the Master Servicer, with the
written consent of the Bond Insurer (which consent will not be unreasonably
withheld), without notice to or the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions herein that may
be defective or inconsistent with any other provisions herein, to comply with
any changes in the Code or to make any other provisions with respect to matters
or questions arising under this Agreement which shall not be inconsistent with
the provisions of this Agreement; provided, however, that such action shall
not, as evidenced by an opinion of Independent Counsel, (i) adversely affect in
any material respect the interests of any Certificateholder, or (ii) adversely
affects the tax consequences to the Trust Fund or to a Certificateholder with
respect to the holding of a Certificate.
(b) This Agreement may also be amended from time to time by the
Seller, the Trustee and the Master Servicer, with the consent of the Bond
Insurer (which consent will not be unreasonably withheld), with the consent of
the holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, or (ii) reduce the aforesaid
percentage of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Bond Insurer (which consent shall
not unreasonably be withheld) and the Holders of all Certificates then
outstanding.
(c) Promptly after the execution of any such amendment, the
Trustee shall furnish a copy of such amendment or written notification of the
substance of such amendment to each Certificateholder, with a copy to the
Rating Agencies and the Bond Insurer.
(d) In the case of an amendment under Subsection 11.01(b) above,
it shall not be necessary for the Certificateholders to approve the particular
form of such an amendment. Rather, it shall be sufficient if the
Certificateholders approve the substance of the amendment. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations
as the Trustee may prescribe.
Section 11.02 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the Mortgaged Properties are
situated, and in any other appropriate public recording office or elsewhere.
The Master Servicer
XI-1
<PAGE> 84
shall effect such recordation, at its expense upon the request in writing of a
Certificateholder, but only if such direction is accompanied by an Opinion of
Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.
Section 11.03 Limitation on Rights of Certificateholders. (a) The
death or incapacity of any Certificateholder shall not terminate this Agreement
or the Trust, nor entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to establish the Certificateholders
from time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Seller, the Master Servicer or any successor to any such parties unless (i)
such Certificateholder previously shall have given to the Trustee a written
notice of a continuing default, as herein provided, (ii) the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less
than 51% of the Trust Fund shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs and expenses and liabilities to be incurred therein
or thereby, and (iii) the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by
virtue of any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04 Acts of Certificateholders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Agreement to be given or taken by Certificateholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Certificateholders in person or by an agent duly appointed
in writing. Except as herein otherwise expressly provided, such action shall
become effective when such
XI-2
<PAGE> 85
instrument or instruments are delivered to the Trustee and, where it is
expressly required, to the Seller. 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 Seller, if
made in the manner provided in this Section 11.05.
(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 a certificate of a 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. Where
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his or her authority. The fact and date of the execution
of any such instrument or writing, or the authority of the individual executing
the same, may also be proved in any other manner which the Trustee deems
sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Seller, the Master Servicer nor any successor to any such parties
shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action of the holder of any Certificate shall bind
every future holder of the same Certificate and the holder of every Certificate
issued upon the registration of transfer or exchange thereof, if applicable, or
in lieu thereof with respect to anything done, omitted or suffered to be done
by the Trustee, the Seller, the Master Servicer or any successor to any such
party in reliance thereon, whether or not notation of such action is made upon
such Certificates.
(e) In determining whether the Holders of the requisite percentage
of Certificates evidencing Fractional Undivided Interests have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee in its individual capacity, the Seller, the
Master Servicer or any Sub-Servicer or any Affiliate thereof shall be
disregarded, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Certificates which the Trustee knows to be so owned
shall be so disregarded. Certificates which have been pledged in good faith to
the Trustee in its individual capacity, the Seller, the Master Servicer or any
Sub-Servicer or any Affiliate thereof may be regarded as outstanding if the
pledgor establishes to the satisfaction of the Trustee the pledgor's right to
act with respect to such Certificates and that the pledgor is not an Affiliate
of the Trustee, the Seller, the Master Servicer or any Sub- Servicer, as the
case may be.
Section 11.05 Governing Law. THIS AGREEMENT AND THE CERTIFICATES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS,
XI-3
<PAGE> 86
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 11.06 Notices. All demands and notices hereunder shall be
in writing and shall be deemed given when delivered to (i) in the case of the
Seller, 6400 S. Fiddler's Green Circle, Suite 1200B, Englewood, Colorado,
Attention: Howard J. Glicksman, Esq. (with a copy to Ms. Helen M. Dickens), or
such other address as may hereafter be furnished to the other parties hereto in
writing; (ii) in the case of the Master Servicer, 20371 Irvine Avenue, Santa
Ana Heights, California 92707, Attention: Richard Johnson or such other address
as may hereafter be furnished to the other parties hereto in writing; (iii) in
the case of the Trustee, at its Corporate Trust Office, Attention: FAIC II/ICI
1996-A, or such other address as may hereafter be furnished to the other
parties hereto in writing; (iv) in the case of the Rating Agencies, S&P, 25
Broadway, New York, New York 10004 Attention: Residential Mortgage Surveillance
Group and Moody's, 99 Church Street, New York, New York 10007, Attention:
Residential Mortgage Pass-Through Group; or (v) in the case of the Bond
Insurer, 245 Park Avenue, New York, New York 10222, Attention: Senior Vice
President Surveillance Department, or to such other address as may hereafter by
furnished to the parties hereto in writing by the Bond Insurer (with a copy to
the attention of the General Counsel and Head Financial Guaranty Group marked
"URGENT MATERIAL ENCLOSED" in the case of any notice of a Master Servicer Event
of Default or any notice where failure to respond is deemed consent or
acceptance). Any notice delivered to the Seller, the Master Servicer or the
Trustee under this Agreement shall be effective only upon receipt. Any notice
required or permitted to be mailed to a Certificateholder, unless otherwise
provided herein, shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 11.07 Restrictions on Sale of Mortgage Loans. The Trustee
is prohibited from selling or otherwise disposing of any Mortgage Loans, except
as specifically set forth herein, unless (i) the consent of all of the
Certificateholders has been obtained and (ii) the Bonds are no longer
outstanding.
Section 11.08 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the holders thereof.
Section 11.09 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto.
XI-4
<PAGE> 87
Section 11.10 Article and Section Headings. The article and
section headings herein are for convenience of reference only, and shall not
limit or otherwise affect the meaning hereof.
Section 11.11 Counterparts. This Agreement may be executed in two
or more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same
instrument.
Section 11.12 Notice to Rating Agencies and Bond Insurer. The
article and section headings herein are for convenience of reference only, and
shall not limited or otherwise affect the meaning hereof. The Trustee shall
use its best reasonable efforts to promptly provide notice to each Rating
Agency and the Bond Insurer with respect to each of the following which it has
actual knowledge:
1. Any change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been
cured;
3. The resignation or termination of the Master Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Custody Account or the
Certificate Account.
In addition, the Trustee shall promptly furnish to each Rating Agency
and the Bond Insurer copies of the following:
1. Each report to Certificateholders described in Section 6.06;
and
2. Each annual independent public accountants' servicing report
received as described in Section 3.16.
Section 11.013 Rights of the Bond Insurer. (a) The Bond Insurer is
an express third-party beneficiary of this Agreement unless a Bond Insurer
Default exists.
(b) On each Distribution Date the Trustee shall forward to the
Bond Insurer a copy of the reports furnished to the Certificateholders on such
Distribution Date.
(c) The Trustee shall provide to the Bond Insurer copies of any
Opinion of Counsel, Officer's Certificate, request for consent or request for
amendment to any document related hereto promptly upon the Trustee's production
or receipt thereof.
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<PAGE> 88
(d) For so long as a Bond Insurer Default exists and is
continuing, the Bond Insurer shall have no right to control, direct or maintain
any actions or require any consents or approval under this Agreement.
XI-6
<PAGE> 89
IN WITNESS WHEREOF, the Seller, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
FUND AMERICA INVESTORS CORPORATION II,
as Seller
By: ________________________________________
Name: Jamie R. Gross
Title: Vice President
ICI FUNDING CORPORATION,
as Master Servicer
By: ________________________________________
Name: William S. Ashmore
Title: Executive Vice President
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: ________________________________________
Name: Michelle Lambott
Title: Assistant Vice President
<PAGE> 90
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 25th day of April, 1996 before me, a notary public in and for
said State, personally appeared Jamie R. Gross, known to me to be a Vice
President of Fund America Investors Corporation II, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________________________
Notary Public
[Notarial Seal]
<PAGE> 91
STATE OF CALIFORNIA )
) ss.:
COUNTY OF CALIFORNIA)
On the 25th day of April, 1996 before me, a notary public in and for
said State, personally appeared _______________, known to me to be a __________
of ICI Funding Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________________________
Notary Public
[Notarial Seal]
<PAGE> 92
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 25th day of April, 1996 before me, a notary public in and for
said State, personally appeared Michelle Lambott known to me to be an Assistant
Vice President of Bankers Trust Company of California, N.A., the national
banking association that executed the within instrument, and also known to me
to be the person who executed it on behalf of said bank and acknowledged to me
that such bank executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________________________
_____________________________________
_ Notary Public
[Notarial Seal]
<PAGE> 93
EXHIBIT A
Form of Certificate
[begins on next page]
<PAGE> 94
PRINCIPAL IN RESPECT OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE
AGREEMENT (AS DEFINED BELOW). ACCORDINGLY, THE CURRENT PRINCIPAL AMOUNT OF
THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL PRINCIPAL AMOUNT OF
THIS CERTIFICATE AS SET FORTH HEREON. THIS CERTIFICATE DOES NOT REPRESENT AN
INTEREST IN OR OBLIGATION OF FUND AMERICA INVESTORS CORPORATION II OR THE
TRUSTEE (AS DEFINED HEREIN).
MORTGAGE PASS-THROUGH CERTIFICATE, SERIES 1996-A
evidencing a beneficial ownership interest in a
trust fund which consists of a pool of
conventional mortgage loans, secured by liens
on one- to four-family residential real properties, sold by
FUND AMERICA INVESTORS CORPORATION II
Certificate No. __ Initial Principal Amount: $301,578,036
Initial Pass-Through Rate: Variable Fractional Undivided Interest: 100%
First Distribution Date: May 25, 1996 Cut-Off Date: April 1, 1996
This certifies that _____________________________, is the registered
owner of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates in a trust fund (the "Trust Fund")
consisting primarily of conventional first and second lien mortgage loans (the
"Mortgage Loans"). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-Off Date specified above (the
"Agreement"), by and between Fund America Investors Corporation II, as seller,
ICI Funding, as Master Servicer, and Bankers Trust Company of California, N.A.,
as trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest in respect of this Certificate will accrue on the Current
Principal Amount hereof during the first Interest Accrual at a per annum rate
equal to the Initial Pass-Through Rate as specified on the face hereof.
Interest in respect of this Certificate will accrue on the Current Principal
Amount hereof during each subsequent Interest Accrual Period at a rate equal to
the Pass-Through Rate (as specified in the Pooling and Servicing Agreement).
The Trustee will distribute on the 25th day of each month, or, if such 25th day
is not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date on the face
page hereof, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the calendar month preceding the
month of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount
required to be distributed to the Certificateholders. The Assumed Final
Distribution Date is the first anniversary of the Distribution Date immediately
following the latest scheduled maturity date of any Mortgage Loan and is not
likely to be the date on which the Current Principal Amount of this Class of
Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee (i) by
check mailed to the Certificateholder entitled thereto at the address appearing
in the Certificate Register or (ii) upon receipt by the Trustee on or before
the fifth Business Day preceding the Record Date of written instructions from a
Certificateholder representing an initial aggregate Current Principal Amount of
not less than $1,000,000, by wire transfer to a United States money account
maintained by the Payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Trustee for that purpose and designated in such notice.
This Certificate is one of a duly authorized issue of certificates
designated as set forth on the face hereof (the "Certificates"), issued in one
class. The Certificates, in the aggregate, evidence the entire beneficial
ownership interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights, and limitations
of rights, benefits, obligations, and duties evidenced hereby, and the rights,
duties, and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Master Servicer and the rights of the Certificateholders under the Agreement
from time to time by the Master Servicer and the Trustee with the consent of
Certificateholders evidencing Fractional Undivided Interests aggregating not
less than 51% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Fractional Undivided Interests thereof). Any
such consent by the Certificateholder shall be conclusive and binding on such
Certificateholder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in lieu hereof whether or not
notation of such
<PAGE> 95
consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
No transfer of a Certificate or Certificates shall be made unless such
transfer is made in accordance with the provisions of the Securities Act of
1933, as amended, (the "Act"). In the event that a transfer is to be made in
reliance upon an exemption from the Act, the Trustee may require, in order to
assure compliance with the Act, that the Certificateholder desiring to effect
such transfer and such Certificateholder's prospective transferee each certify
to the Trustee in writing the facts surrounding such transfer. In the event
that such certification of facts does not on its face establish the
availability of an exemption under Section 4(5) or a comparable provision of
the Act, the Trustee shall require an Opinion of Counsel satisfactory to it
that such transfer may be made pursuant to an exemption from the Act, which
Opinion of Counsel shall not be an expense of the Master Servicer or the
Trustee. Neither the Master Servicer nor the Trustee is obligated to register
any of the Certificates under the Act or any other federal or state securities
law.
It is a condition to the transfer of any Certificate to any Person
other than the Indenture Trustee that the transferee certify in writing to the
Seller and the Trustee that such transferee (i) is not an employee benefit
plan, trust or account, including an individual retirement account, that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or
that is described in Section 4975(e)(1) of the Federal Tax Laws (any such plan,
trust or account being referred to as a "Plan") and (ii) has not acquired and
will not acquire such Certificate with plan assets, within the meaning of 29
CFR 2510.3-101, of a Plan.
Subject to the preceding two paragraphs, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to the Agreement and upon
satisfaction of all requirements for transfer, the Trustee shall execute,
countersign and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like aggregate Fractional
Undivided Interest.
At the option of the Certificateholders, Certificates may, upon
satisfaction of the requirements for exchange, be exchanged for other
Certificates of authorized denominations of the same aggregate Fractional
Undivided Interest, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange the Trustee shall execute, countersign and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Each
Certificate presented or surrendered for transfer or exchange shall be duly
endorsed by, or be accompanied by a written instrument of transfer in form
acceptable to the Trustee, and duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any transfer or exchange of any
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of any Certificates.
<PAGE> 96
The Certificates are issuable only as registered Certificates without
coupons in the denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as
requested by the Holder surrendering the same.
Prior to due presentation of a Certificate for registration of
transfer, the Seller, the Master Servicer, the Trustee, and any agent of the
Seller, the Master Servicer, or 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 thereon and for all other purposes whatsoever.
Neither the Seller, the Master Servicer, the Trustee, the Bond Insurer nor any
agent of the Seller, the Master Servicer or the Trustee or the Bond Insurer
shall be affected by notice to the contrary. No Certificate shall be deemed
duly presented for a transfer effective on any Record Date unless the
Certificate to be transferred is presented no later than the close of business
on the third Business Day preceding such Record Date.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier
of (i) the later of (A) the making of the final payment or other liquidation,
or any advance with respect thereto, of the last Mortgage Loan remaining in the
Trust Fund and (B) the disposition of all property acquired with respect to any
Mortgage Loan, or (ii) the optional repurchase by the Master Servicer or its
designee of all the Mortgage Loans and all properties remaining in the Trust
Fund in accordance with the terms of the Agreement. Such optional repurchase
may be made only prior to the 15th day of any month and only if (i) the
aggregate Scheduled Principal Balance of the Mortgage Loans is less than 10% of
the Cut-Off Date Balance and (ii) the Bonds have been redeemed in accordance
with the provisions of the Indenture. The exercise of such right will effect
the early retirement of the Certificates. In no event, however, will the Trust
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by the Trustee, by
manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
<PAGE> 97
IN WITNESS WHEREOF, this Certificate has been be duly executed by the
Trustee, not in its individual capacity but solely as Trustee.
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.
By:_____________________________________
Authorized Signatory of
Bankers Trust Company of California, N.A.,
not in its individual capacity but solely
as Trustee
Countersigned:
By:___________________________________________
Authorized Signatory of
Bankers Trust Company of California, N.A., not
in its individual capacity but solely as Trustee
Dated:
<PAGE> 98
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert social security
or other identifying number of assignee)
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
this Certificate evidencing an Undivided Fractional Interest in certain
distributions with respect to the Trust Fund and hereby authorizes the transfer
of registration of such interest to assignee on the Certificate Register of
said Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate and Undivided Fractional Interest, to the above named assignee and
deliver such Certificate to the following address:
Dated:____________________________
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
<PAGE> 99
EXHIBIT B
Mortgage Loan Schedule
<PAGE> 100
EXHIBIT C
Representations and Warranties of Imperial Holdings
Concerning the Mortgage Loans
(1) the information set forth in the Mortgage Loan
Schedules is true and correct in all material respects;
(2) the terms of the Mortgage Note and the Mortgage have
not been impaired, waived, altered or modified in any respect, except
by written instruments, if required by law in the jurisdiction where
the Mortgaged Property is located or as approved by the title insurer,
to the extent required by the Primary Mortgage Insurance Policy;
(3) except as otherwise noted in the Mortgage Loan
Schedules, the Mortgage File for each Mortgage Loan contains a true,
accurate and correct copy of each of the documents specified to be
contained therein in the form so specified for each Mortgage Loan;
(4) immediately prior to the transfer to the Purchaser,
the Seller was the sole owner of beneficial title to and holder of
each Mortgage and Mortgage Note relating to the Mortgage Loans and is
conveying the same to the Purchaser free and clear of any and all
liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature, except for liens
which will be released simultaneously with such conveyance;
(5) each Mortgage is a valid and enforceable first lien
(in the case of a Adjustable Rate Mortgage Loan) or second lien (in
the case of a Fixed Rate Mortgage Loan) on the property securing the
related Mortgage Note and each Mortgaged Property is owned by the
Mortgagor in fee simple (except with respect to common areas in the
case of condominiums, PUDs and de minimis PUDs) or by leasehold for a
term longer than the term of the related Mortgage, subject only to (i)
the lien of current real property taxes and assessments, (ii)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal
obtained in connection with the origination of the related Mortgage
Loan or referred to in the lender's title insurance policy delivered
to the originator of the related Mortgage Loan, (iii) in the case of
any Fixed Rate Mortgage Loan, the lien of the related first lien
mortgage loan, and (iv) other matters to which like properties are
commonly subject which do not materially interfere with the benefits
of the security intended to be provided by such Mortgage;
(6) as of the Cut-Off Date, no payment of principal of or
interest on or in respect of any Mortgage Loan is 30 days or more past
due;
<PAGE> 101
(7) to Seller's knowledge, there is no mechanics' lien or
claim for work, labor or material affecting the premises subject to
any Mortgage which is or may be a lien prior to, or equal with, the
lien of such Mortgage except those which are insured against by the
title insurance policy referred to in (l) below;
(8) as of the Cut-Off Date, (i) no Mortgage Loan had been
30 days or more delinquent more than once during the preceding 12
months, and (ii) to Seller's knowledge, there was no delinquent tax or
assessment lien against the property subject to any Mortgage, except
where such lien was being contested in good faith and a stay had been
granted against levying on the property;
(9) there is no valid offset, right of rescission,
defense or counterclaim, including the defense of usury, with respect
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal and interest on such Mortgage
Note, and no such right of rescission, offset, counterclaim or defense
has been asserted with respect thereto;
(10) except to the extent insurance is in place which will
cover such damage, the physical property subject to any Mortgage is
free of material damage and is in good repair and there is no
proceeding pending or, to Seller's knowledge, threatened for the total
or partial condemnation of any Mortgaged Property;
(11) each Mortgage Loan at the time it was made complied
in all material respects with applicable state and federal laws,
including, without limitation, the Federal Truth-in-Lending Act and
other consumer protection laws, real estate settlement procedures,
usury, equal credit opportunity and disclosure laws; each Mortgage
Loan is being serviced in all material respects in accordance with
applicable state and federal laws, including, without limitation, the
Federal Truth-in-Lending Act and other consumer protection laws, real
estate settlement procedures, usury, equal credit opportunity and
disclosure laws;
(12) a lender's title insurance policy (on an ALTA or CLTA
form) or binder, or other assurance of title customary in the relevant
jurisdiction therefor in a form acceptable to FNMA or FHLMC, was
issued on the date of the origination of each related Mortgage Loan by
a title insurance company that, to Seller's knowledge, is qualified to
do business in the jurisdiction where the related Mortgaged Property
is located, insuring the Seller and its successors and assigns that
the Mortgage is a valid first lien (in the case of a Adjustable Rate
Mortgage Loan) or second lien (in the case of a Fixed Rate Mortgage
Loan) on the related Mortgaged Property. Seller is the sole insured
under such lender's title insurance policy, and such policy, binder or
assurance is valid and shall remain in full force and effect, and each
such policy, binder or assurance shall contain all applicable
endorsements including a negative amortization endorsement, if
applicable;
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<PAGE> 102
(13) in the event the Mortgage constitutes a deed of trust,
either a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in the Mortgage or if no duly qualified trustee has been
properly designated and so serves, the Mortgage contains satisfactory
provisions for the appointment of such trustee by the holder of the
Mortgage at no cost or expense to such holder, and no fees or expenses
are or will become payable by Purchaser to the trustee under the deed
of trust, except in connection with a trustee's sale after default by
the mortgagor;
(14) the original principal amount of each Adjustable Rate
Mortgage Loan is not more than 95% of the Original Value; except as
set forth below, each Adjustable Rate Mortgage Loan for which the
outstanding principal as of the Cut-Off Date of the related Mortgage
Note exceeded 80% of the Original Value is covered by a Primary
Mortgage Insurance Policy issued by a private mortgage insurer
insuring against default under the Mortgage Note in an amount at least
equal to the excess of such outstanding principal amount over 75% of
such Original Value until the principal balance of such Adjustable
Rate Mortgage Loan is reduced below 80% of the Original Value or,
based upon a new appraisal, the principal balance of such Adjustable
Rate Mortgage Loan represents less than 80% of the new appraised
value; all of the insurers which have Primary Mortgage Insurance
Policies with respect to the Adjustable Rate Mortgage Loans meet
FNMA's, FHLMC's and the Rating Agencies' standards; approximately
4.17% of the Adjustable Rate Mortgage Loans (by Cut-Off Date Balance)
had Loan-to- Value Ratios in excess of 80% and were not covered by
Primary Mortgage Insurance Policies. The weighted average
Loan-to-Value Ratio of the Adjustable Rate Mortgage Loans does not
exceed 80% and the percentage (by Cut-Off Date Balance) of Adjustable
Rate Mortgage Loans having Loan-to-Value Ratios in excess of 80% does
not exceed 40%. The Loan-to-Value Ratios of the Fixed Rate Mortgage
Loans range from 28.73% to 100% and the weighted average combined
Loan-to-Value Ratio of the Fixed Rate Mortgage Loans does not exceed
91.0%;
(15) at the time of origination, each Mortgaged Property
was the subject of an appraisal which conforms to the Seller's
underwriting requirements, and a true, accurate and complete copy of
such appraisal is contained in the Mortgage File;
(16) on the basis of a representation by the borrower at
the time of origination of the Mortgage Loans, at least 94% of the
Adjustable Rate Mortgage Loans (by Cut-Off Date Balance) will be
secured by Mortgages on owner-occupied primary residence properties
and at least 99% of the Fixed Rate Mortgage Loans (by Cut-Off Date
Balance) will be secured by Mortgages on owner-occupied primary
residence properties; at the time of origination of the Mortgage
Loans, at least 95% of the Mortgage Loans (by aggregate principal
balance) will be secured by Mortgages on properties which were
owner-occupied primary residences;
(17) the Mortgage Note is not and has not been secured by
any collateral, pledged account or other security other than the lien
of the corresponding Mortgage and no Mortgage Loan is secured by more
than one Mortgaged Property;
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<PAGE> 103
(18) neither the Seller nor any servicer of the related
Mortgage Loans has advanced funds or knowingly received any advance of
funds by a party other than the Mortgagor, directly or indirectly, for
the payment of any amount required by the Mortgage, except for (i)
interest accruing from the date of the related Mortgage Note or date
of disbursement of the Mortgage Loan proceeds, whichever is later, to
the date which precedes by 30 days the first Due Date under the
related Mortgage Note, and (ii) customary advances for insurance and
taxes;
(19) each Mortgage Note, the related Mortgage and other
agreements executed in connection therewith are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally
and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and
all parties to each Mortgage Note and the Mortgage had legal capacity
to execute the Mortgage Note and the Mortgage and each Mortgage Note
and Mortgage has been duly and properly executed by the Mortgagor;
(20) each Mortgage Loan contains a "due on sale" clause
which provides for the acceleration of the payment of the unpaid
principal balance of the related Mortgage Loan in the event the
related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;
(21) to Seller's knowledge, to the extent required under
applicable law, each originator and subsequent mortgagee or servicer
of a Mortgage Loan was authorized to transact and do business in each
jurisdiction in which the related Mortgaged Property is located at all
times when it held or serviced such Mortgage Loan; and, to Seller's
knowledge, any obligations of the holder of the related Mortgage
Note, Mortgage and other loan documents have been complied with in all
material respects; and, to Seller's knowledge, the servicing of each
Mortgage Loan has been in accordance with Seller's servicing
requirements and the terms of the Mortgage Notes, the Mortgage and
other loan documents, whether such origination and servicing was done
by the Seller, its affiliates, or any third party which originated the
Mortgage Loan on behalf of, or sold the Mortgage Loan to, any of them,
or any servicing agent of any of the foregoing;
(22) the related Mortgage Note and Mortgage contain
customary and enforceable provisions such as to render the rights and
remedies of the holder adequate for the realization against the
Mortgaged Property of the benefits of the security, including
realization by judicial, or, if applicable, non-judicial foreclosure,
and there is no homestead or other exemption available to the
Mortgagor which would interfere with such right to foreclosure;
(23) the proceeds of the Mortgage Loans have been fully
disbursed, there is no obligation on the part of the related
mortgagees to make future advances thereunder and any
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<PAGE> 104
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; and all costs, fees and expenses incurred in
making, closing or recording the Mortgage Loan have been paid, except
recording fees with respect to Mortgages not recorded as of the
Closing Date, and no Mortgagor is entitled to any refund of the
amounts paid or due under the related Mortgage Note or Mortgage;
(24) as of the Closing Date, the improvements on each
Mortgaged Property securing a Mortgage Loan are insured by an insurer
which is acceptable to Seller against loss by fire and such hazards as
are covered under a standard extended coverage endorsement in the
locale in which the Mortgaged Property is located, in an amount which
is not less than the lesser of (A) the maximum insurable value of the
improvements securing such Mortgage Loan (B) the outstanding principal
balance of the related Mortgage Loan (together, in the case of a Fixed
Rate Mortgage Loan, with the outstanding principal balance of the
related first lien mortgage loan), but in no event in an amount less
than an amount that is required to prevent the Mortgagor from being
deemed to be a co-insurer thereunder; if the improvement on the
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium project; if
upon origination of the related Mortgage Loan, the improvements on the
Mortgaged Property were in an area identified as a federally
designated flood area, a flood insurance policy is in effect in an
amount representing coverage not less than the lesser of (i) the
outstanding principal balance of the Mortgage Loan (together, in the
case of a Fixed Rate Mortgage Loan, with the outstanding principal
balance of the related first lien mortgage loan), (ii) the restorable
cost of improvements located on such Mortgaged Property and (iii) the
maximum coverage available under federal law;
(25) all insurance policies with respect to a Mortgage
Loan contain a standard mortgagee clause naming the originator, its
successors and assigns, as the mortgagee thereunder. Such insurance
policies require prior notice to the insured of termination or
cancellation and no such notice has been received. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;
(26) there is no material monetary default existing under
any Mortgage or the related Mortgage Note and there is no material
event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material
default, breach or event of acceleration; and neither the Seller, any
of its affiliates nor any servicer of any related Mortgage Loan has
taken any action to waive any default, breach or event of
acceleration; no foreclosure action is threatened or has been
commenced with respect to the Mortgage Loan;
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<PAGE> 105
(27) no Mortgagor, at the time of origination of the
applicable Mortgage, was a debtor in any state or federal bankruptcy
or insolvency proceeding;
(28) all inspections, licenses and certificates required
to be made or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and occupancy of the
same, including, but not limited to, certificates of occupancy and
fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(29) to the Seller's knowledge, the Mortgaged Property and
all improvements thereon comply with all requirements of any
applicable zoning and subdivision laws and ordinances, except where
the failure to comply would not have a material adverse affect on the
market value of the Mortgaged Property;
(30) to Seller's knowledge, all improvements which were
considered in determining the value of the related Mortgaged Property
lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property;
(31) no instrument of release or waiver has been executed
in connection with the Mortgage Loans, 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;
(32) no Adjustable Rate Mortgage Loan provides for a
balloon payment and each Mortgage Note with respect to a Adjustable
Rate Mortgage Loan contains provisions providing for its full
amortization by the end of its original term and is payable on the
first day of each month in monthly installments of principal and
interest, with interest payable in arrears, over an original term of
not more than 30 years; approximately 32.16% of the Fixed Rate
Mortgage Loans (by Cut-Off Date Balance) are balloon loans which
provide for regular monthly payments of principal and interest
computed on the basis of an amortization term that is longer than the
related term to stated maturity, with a balloon payment due at stated
maturity;
(33) no Mortgage Loan was originated based on an appraisal
of the related Mortgaged Property made prior to completion of
construction of the improvements thereon unless a certificate of
completion was obtained prior to closing of the Mortgage Loan;
(34) each of the Mortgaged Properties consists of a single
parcel of real property with a detached single-family residence
erected thereon, or a two- to four-family dwelling, an individual
condominium unit in a condominium project or an individual unit in a
planned unit development. No Mortgaged Property consists of a single
parcel of real property with a cooperative housing development erected
thereon. Any condominium unit or planned unit development either
conforms with applicable FNMA or FHLMC requirements regarding
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<PAGE> 106
such dwellings or is covered by a waiver confirming that such
condominium unit or planned unit development is acceptable to FNMA or
FHLMC. Measured by principal balance, no more than 20% of the
Mortgage Loans are secured by an individual unit in a low-rise or
high-rise condominium project, none are secured by real property with
a townhouse erected thereon, and at least 94% are secured by real
property with a detached single-family residence erected thereon
(which may include manufactured housing); No such residence is a
mobile home;
(35) none of the Mortgage Loans is a "buy down" mortgage
loan;
(36) no more than 11% of the Adjustable Rate Mortgage
Loans (by Cut-Off Date Balance), are subject to provisions which
permit or require the conversion of the related Mortgage Rate to a
fixed interest rate;
(37) as of the Cut-Off Date, the Net Rate of each
Adjustable Rate Mortgage Loan was not more than 12.75% per annum and
not less than 5.50% per annum, and the weighted average Net Rate of
the Adjustable Rate Mortgage Loans was approximately 7.864% per annum;
(38) as of the Cut-Off Date, the Net Rate of each Fixed
Rate Mortgage Loan was not more than 10.99% per annum and not less
than 16.615% per annum, and the weighted average Net Rate of the Fixed
Rate Mortgage Loans was approximately 13.375% per annum;
(39) the Mortgage Loans were selected from mortgage loans
owned by the Seller in a fair manner;
(40) The terms of the Mortgage Note related to each
Adjustable Rate Mortgage Loan provide that, on the first calendar day
of the sixth calendar month following the calendar month in which such
Adjustable Rate Mortgage Loan was originated and semi-annually
thereafter (each such date, an "Adjustment Date"), the Mortgage Rate
on such Adjustable Rate Mortgage Loan will be adjusted to equal the
sum, rounded to the nearest multiple of 0.125%, of (a) the arithmetic
mean of the London interbank offered rate quotations for six-month
Eurodollar deposits (the "Index"), as published by Federal National
Mortgage Association or The Wall Street Journal, and most recently
available as of 45 days prior to the related Adjustment Date and (b) a
fixed percentage amount specified in the related Mortgage Note (each,
a "Gross Margin"), ranging from 1.875% to 9.00% per annum, provided,
however, that the Mortgage Rate generally will not increase or
decrease by more than 1.0% on any related Adjustment Date (the
"Periodic Rate Cap"), and will not increase above a specified maximum
Mortgage Rate over the life of the Mortgage Loan (the "Maximum
Mortgage Rate") or decrease below a specified minimum Mortgage Rate
over the life of the Mortgage Loan (the "Minimum Mortgage Rate");
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<PAGE> 107
(41) as of the Cut-Off Date, the weighted average
remaining term of each Adjustable Rate Mortgage Loan is not more than
360 months and not less than 342 months and the weighted average
remaining term of Fixed Rate Mortgage Loan is not more than 180 months
and not less than 173 months;
(42) with respect to each Fixed Rate Mortgage Loan, either
(A) no consent for such Fixed Rate Mortgage Loan was required by the
holder of the related first lien mortgage loan prior to the making of
such Fixed Rate Mortgage Loan or (B) such consent has been obtained
and is contained in the related Mortgage File;
(43) no more than 17% of the Adjustable Rate Mortgage
Loans (by Cut-Off Date Balance) have been the subject of cash-out
refinances;
(44) no more than 77% of the Fixed Rate Mortgage Loans (by
Cut-Off Date Balance) have been the subject of cash-out refinances;
(45) no more than 44% of the Adjustable Rate Mortgage
Loans (by Cut-Off Date Balance) have been the subject of rate and term
refinances and no more than 23% of the Fixed Rate Mortgage Loans (by
Cut-Off Date Balance as of the Cut-off Date) have been the subject of
rate and term refinances;
(46) no fewer than 39% of the Adjustable Rate Mortgage
Loans (by Cut-Off Date Balance) are purchase money loans;
(47) no more than 77% of the Adjustable Rate Mortgage
Loans (by Cut-Off Date Balance) are secured by mortgaged properties
located in the state of California, and no more than 5% of the
Adjustable Rate Mortgage Loans (by Cut-Off Date Balance) are located
in any other state; no more than 65% and 6.5% of the Fixed Rate
Mortgage Loans (by Cut-Off Date Balance) are secured by mortgaged
properties located in the states of California and Maryland,
respectively, and no more than 5% of the Fixed Rate Mortgage Loans (by
Cut-Off Date Balance) are located in any other state;
(48) the original principal balances of the Adjustable
Rate Mortgage Loans ranged from approximately $29,750 to approximately
$681,000. The average outstanding principal balance of the Adjustable
Rate Mortgage Loans is approximately $198,162; the original principal
balances of the Fixed Rate Mortgage Loans ranged from approximately
$10,000 to approximately $250,000. The average outstanding principal
balance of the Fixed Rate Mortgage Loans is approximately $35,264; and
(49) none of the Adjustable Rate Mortgage Loans have
original terms to maturity of more than 360 months and none of the
Fixed Rate Mortgage Loans have original terms to maturity of more than
180 months.
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<PAGE> 108
EXHIBIT D
REQUEST FOR RELEASE
(for Trustee)
Loan Information
Name of Mortgagor:_________________________________________
Loan No.: __________________________________________
Trustee:
Name: __________________________________________
Address: __________________________________________
Trustee Mortgage
File No.: __________________________________________
Master Servicer:
Name: __________________________________________
Address: __________________________________________
Certificates: Fund America Investors Corporation II
Mortgage Pass-Through Certificates, Series 1996-A
The undersigned hereby acknowledges that it has received from Bankers
Trust Company of California, N.A., as Trustee for the holders of Fund America
Investors Corporation II Mortgage Pass-Through Certificates, Series 1996-A, the
documents referred to below (the "Documents"). All capitalized terms not
otherwise defined in this Request for Release shall have the meanings given
them in the Pooling and Servicing Agreement dated as of April 1, 1996 (the
"Pooling and Servicing Agreement") among Fund America Investors Corporation II,
as Seller, ICI Funding Corporation, as Master Servicer and Bankers Trust
Company of California, N.A., as Trustee.
( ) Mortgage Note dated __________, 19__, in the original principal sum of
$____________, made by _____________, payable to, or endorsed to the
order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no. _____________
in the County Recorder's Office of the County of __________, State of
___________ in book/reel/docket _____________ of official records at
page/image __________.
<PAGE> 109
( ) Deed of Trust recorded on ______________ as instrument no. ___________
in the County Recorder's Office of the County of _________________,
State of ________________ in book/reel/docket _____________ of
official records at page/image ____________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_____________ as instrument no. _________ in the County Recorder's
Office of the County of ___________, State of _______________ in
book/reel/docket ________________ of official records at page/image
______________.
( ) _______________________________________________________________________
( ) _______________________________________________________________________
( ) _______________________________________________________________________
( ) _______________________________________________________________________
The undersigned hereby acknowledges and agrees as follows:
(1) The Master Servicer shall, and if the Master Servicer
releases the Documents to a Sub-Servicer or related Insurer the Master
Servicer shall cause such Sub-Servicer or related Insurer to, hold and
retain possession of the Documents in trust for the benefit of the
Trustee, solely for the purposes provided in the Agreement.
(2) The Master Servicer shall not cause or permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions
nor shall the Master Servicer assert or seek to assert any claims or
rights of set off to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return the Documents to the
Trustee when the need therefor no longer exists, and in any event
within 21 days of the Master Servicer's receipt thereof, unless the
Mortgage Loan relating to the Documents has been liquidated and the
proceeds thereof have been remitted to the Certificate Account or the
Documents are being used to pursue foreclosure or other legal
proceedings and except as expressly provided in the Agreement.
(4) Prior to the return of the Documents to the Trustee,
the Master Servicer shall, and if the Master Servicer releases such
Documents to a Sub-Servicer or related Insurer, the Master Servicer
shall cause such Sub-Servicer or related Insurer to, retain the
Documents in its control unless the Documents have been delivered to
an attorney, or to a public trustee or other public official as
required by law, to initiate or pursue legal action or other
proceedings for the foreclosure of the Mortgaged Property either
judicially or nonjudicially, and the Master Servicer has delivered to
the Trustee a certificate of a Servicing Officer certifying as
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<PAGE> 110
to the name and address of the Person to which the Documents were
delivered and the purpose or purposes of such delivery.
(5) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trustee, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the
possession, custody or control of the Master Servicer.
Date:_____________, 19___.
________________________________________
[Name of Master Servicer]
By:_____________________________________
Its:____________________________________
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<PAGE> 111
EXHIBIT E
FORM OF PURCHASER REPRESENTATION LETTER
[Purchaser Letterhead]
[Date]
[Issuer]
[Certificate Registrar]
and
[Seller #1]
Ladies and Gentlemen:
In connection with the purchase by [Purchaser] from [Seller #1] of
approximately $________________ aggregate principal amount of Fund America
Investors Corporation II Pass-Through Certificates, Series 1996-A ("the
Certificates"), created pursuant to the Pooling and Servicing Agreement dated
as of April 1, 1996 by and among Fund America Investors Corporation II, as
seller, ICI Funding Corporation, as Master Servicer, and Bankers Trust Company
of California, N.A., as Trustee, we hereby represent and covenant to you the
following:
(a) [Purchaser] is acquiring the Certificates for itself and not
for any other persons or entity.
(b) [Purchaser] is an "accredited investor" as defined in Rule
501(a) under the Securities Act of 1933 and is experienced in making
investments in securities comparable to the Certificates.
(c) [Purchaser] has been furnished with all information regarding
the Certificates which it has requested from [Seller #1] or [Issuer].
(d) [Purchaser] has not offered or sold any of the Certificates
to, solicited offers to buy any Certificates from, or otherwise approached or
negotiated with respect to the Certificates with, any prospective purchaser, or
taken any other action which would result in a violation of Section 5 of the
Securities Act of 1933 or any applicable state securities laws.
(e) [Purchaser] is acquiring the Certificates for investment
purposes and not with a view to resale or distribution.
<PAGE> 112
[Issuer]
[Date]
Page -2-
(f) [Purchaser] will not transfer, sell, pledge, encumber or
otherwise dispose of the Certificates in any manner which would result in a
violation of Section 5 of the Securities Act of 1933 or any applicable state
securities laws.
(g) [Purchaser] (i) is not an employee benefit plan, trust or
account, including an individual retirement account, that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or that is
described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as
amended, (any such plan, trust or account being referred to as a "Plan") and
(ii) has not acquired and is not acquiring the Certificates with plan assets,
within the meaning of 29 CFR 2510.3-101, of a Plan.
Very truly yours,
[Purchaser]
By:_____________________________________
Name:______________________________
Title:______________________________
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<PAGE> 113
EXHIBIT F
FORM OF INITIAL CERTIFICATION
[Seller]
[Certificate Insurer]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of April 1, 1996,
among Fund America Investors Corporation II, as seller, ICI
Funding Corporation, as master servicer, and Bankers Trust
Company of California, N.A., as trustee for Mortgage
Pass-Through Certificates, Series 1996-A
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as otherwise noted on the attached exception report, that as to each Mortgage
Loan listed on the Mortgage Loan Schedules (other than any Mortgage Loan paid
in full or listed on the attachment hereto) it has reviewed the items specified
in subparagraphs (i) and (ii) of Section 2.01 of the Pooling and Servicing
Agreement and has determined that: (i) all documents required to be included in
the Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the applicable Mortgage Loan Schedule respecting such
Mortgage Loan is correct and accurately reflects the information in the
Mortgage Loan File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in subclauses (v) and (vii) of
Section 2.01(b) should be included in any Mortgage File. The Trustee makes no
representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedules or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
<PAGE> 114
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
By:_____________________________________
Name:_______________________________
Title:______________________________
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<PAGE> 115
EXHIBIT G
FORM OF FINAL CERTIFICATION
[Seller]
[Certificate Insurer]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of April 1, 1996,
Fund America Investors Corporation II, as seller, ICI Funding
Corporation, as master servicer, and Bankers Trust Company of
California, N.A., as trustee for Mortgage Pass-Through
Certificates, Series 1996-A
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as otherwise noted on the attached exception report, that as to each Mortgage
Loan listed on the Mortgage Loan Schedules (other than any Mortgage Loan paid
in full or listed on the attachment hereto) it has received the documents set
forth in Section 2.01 and has determined that (i) all documents required to be
included in the Mortgage File pursuant to the Pooling and Servicing Agreement
are in its possession; (ii) such documents have been reviewed by it and appear
regular on their face, have, where applicable, been executed and relate to such
Mortgage Loan; and (iii) based on examination by it, and only as to such
documents, the information set forth in the applicable Mortgage Loan Schedule
respecting such Mortgage Loan is correct and accurately reflects the
information in the Mortgage Loan File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in subclasses (v) and (vii) of
Section 2.01(b) should be included in any Mortgage File. The Trustee makes no
representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedules or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
Meanings assigned to them in the above- captioned Pooling and Servicing
Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
By:_____________________________________
Name:________________________________
Title:_______________________________
<PAGE> 1
EXHIBIT 10.1
IMH ASSETS CORP.,
as Seller
and
FUND AMERICA INVESTORS CORPORATION II,
as Purchaser
________________________________________________________________________________
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of April 25, 1996
________________________________________________________________________________
Fund America Investors Trust V,
Collateralized Mortgage Obligations
Series 1996-A
<PAGE> 2
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of April 25, 1996,
as amended and supplemented by any and all amendments hereto (collectively, the
"Agreement"), by and between IMH ASSETS CORP., a California corporation (the
"Seller"), and Fund America Investors Corporation II, a Delaware corporation
(the "Purchaser").
Upon the terms and subject to the conditions of this
Agreement, the Seller agrees to sell, and the Purchaser agrees to purchase,
certain conventional mortgage loans having original terms to maturity of up to
30 years (the "Mortgage Loans") as described more fully herein. The Seller
acquired the Mortgage Loans from Imperial Credit Mortgage Holdings, Inc., a
California corporation ("Imperial Holdings"), pursuant to a mortgage loan
purchase agreement of even date herewith between the Seller and Imperial
Holdings (the "Imperial Holdings Purchase Agreement"). The Purchaser, acting
as agent of the Seller in order to facilitate the sale of the Bonds (defined
below) secured by the Mortgage Loans, intends to deposit the Mortgage Loans
into a trust fund (the "Trust Fund") in exchange for a Fund America Investors
Corporation II Mortgage Pass-Through Certificate, Series 1996-A (the
"Certificate"), to be created under a pooling and servicing agreement, to be
dated as of April 1, 1996 (the "Pooling and Servicing Agreement"), among the
Purchaser, as depositor, ICI Funding Corporation, a California corporation, as
master servicer (in such capacity, the "Master Servicer"), and Bankers Trust
Company of California, N.A., as trustee (in such capacity, the "Trustee").
Pursuant to the terms of the Agreement,the Purchaser is acting solely in the
capacity of agent of the Seller to facilitate the sale of the Bonds and is not
entitled to the economic benefits associated with ownership of the Mortgage
Loans or the Certificate and will not be subject to the economic burdens
associated with such ownership. The Purchaser then intends to transfer the
Certificate to Fund America Investors Trust V (the "Issuer"), an owner trust
created pursuant to the terms of a Deposit Trust Agreement dated as of April
25, 1996 (the "Deposit Trust Agreement") between the Purchaser and Wilmington
Trust Company, as owner trustee (the "Owner Trustee"). The Owner Trustee will
pledge the Certificate to Bankers Trust Company of California, N.A., as
indenture trustee (in such capacity, the "Indenture Trustee") as collateral for
the Fund America Investors Trust V Collateralized Mortgage Obligations, Series
1996-A, Class A Bonds (the "Bonds") to be issued under the terms of an
Indenture dated as of April 1, 1996 (the "Indenture"), between the Owner
Trustee and the Indenture Trustee.
The Purchaser has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-73748) relating to collateralized mortgage obligations and pass-through
certificates to be offered from time to time by Purchaser and certain trusts,
all of the beneficial ownership of which is owned by Purchaser, in accordance
with Rule 415 under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder (the "Securities Act").
Such registration statement, when it became effective under the Securities Act,
and the prospectus relating to the public offering of the Bonds by the Issuer
(the "Public Offering"), as from time to time each is amended or supplemented
pursuant to the Securities Act or otherwise, are referred to herein as the
"Registration Statement" and the "Prospectus," respectively. The "Prospectus
Supplement" shall mean that supplement to the Prospectus, dated April 22, 1996,
relating to the Bonds. With respect to the Public Offering of the Bonds, the
Purchaser and Salomon Brothers Inc and PaineWebber Incorporated (together, the
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<PAGE> 3
"Underwriters") have entered into an underwriting agreement dated April 22,
1996 and a related terms agreement dated as of April 22, 1996 (collectively,
the "Underwriting Agreement").
Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:
SECTION 1. Definitions. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms
are defined as follows:
Acquisition Price: (A) Cash in an amount equal to the
product of (x) ____% and (y) the Cut-Off Date Balance (as defined below) of the
Mortgage Loans and (B) the Trust Certificate.
Certificateholder: Any holder of a Certificate.
Closing Date: April 25, 1996.
Code: The Internal Revenue Code of 1986, as amended.
Cut-Off Date: April 1, 1996.
Cut-Off Date Balance: The aggregate outstanding principal
balance of the Mortgage Loans on the Cut-Off Date, after deduction of principal
payments due on or before the Cut-Off Date whether or not received, including
as to any Mortgage Loan originated or acquired after the Cut-Off Date, the
original principal balance thereof.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Substitute Mortgage Loan.
Due Date: The first day of each calendar month when the
scheduled payment on any Mortgage Loan is due.
FHLMC: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
First Lien Mortgage Loan: Any Mortgage Loan secured by a
Mortgage with a lien of first priority on the related Mortgaged Property. All
of the First Lien Mortgage Loans have adjustable Mortgage Rates.
FNMA: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
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<PAGE> 4
Insurance Policy: With respect to any Mortgage Loan, any
Primary Mortgage Insurance Policy, standard hazard insurance policy, flood
insurance policy or title insurance policy.
Loan-to-Value Ratio: The fraction, expressed as a percentage,
(i) the numerator of which is the original principal balance of a particular
Mortgage Loan and (ii) the denominator of which is the Original Value of the
Mortgaged Property.
Mortgage: The mortgage or deed of trust creating a first or
second lien on an interest in the related Mortgaged Property.
Mortgage File: The items referred to in Exhibit 1 and Exhibit
2 pertaining to a particular Mortgage Loan and any additional documents
required to be added to such documents pursuant to this Agreement.
Mortgage Loan: The indebtedness of a Mortgagor evidenced by a
Mortgage Note which is secured by real property and which is being sold to the
Purchaser pursuant to this Agreement. The Mortgage Loans are identified in the
Mortgage Loan Schedules.
Mortgage Loan Schedules: The mortgage loan schedules attached
as Exhibits B-1 and B-2 to the Pooling and Servicing Agreement. The Mortgage
Loan Schedules set forth the information listed on Exhibit 3 to this Agreement
with respect to each Mortgage Loan.
Mortgage Note: The note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor with respect to a Mortgage Loan, and
any modifications or amendments thereof.
Mortgaged Property: The real property, together with
improvements thereon, securing the indebtedness of the Mortgagor under the
related Mortgage Note.
Mortgage Rate: The annual rate of interest borne by a
Mortgage Note as stated therein.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Rate: For each First Lien Mortgage Loan, the Mortgage
Rate for such Mortgage Loan less 0.375% per annum, and for each Second Lien
Mortgage Loan, the Mortgage Rate for such Mortgage Loan less 0.250% per annum.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Seller or the Purchaser, reasonably acceptable to the Trustee.
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<PAGE> 5
Original Value: The value of the Mortgaged Property at the
time of origination of the related Mortgage Loan, such value being the lower of
the value of such property set forth in an appraisal accepted by the originator
of such Mortgage Loan or the sales price of such property at the time of
origination or, in the case of a refinancing, the value of such property set
forth in an appraisal acceptable to the originator of such Mortgage Loan.
Person: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
Primary Mortgage Insurance Policy: The certificate of private
mortgage insurance relating to a particular Mortgage Loan, or any replacement
policy therefor, to the extent required under the Pooling and Servicing
Agreement.
Purchase Price: With respect to any Mortgage Loan required to
be purchased by the Seller pursuant to the applicable provisions of this
Agreement, an amount equal to the sum of (i) 100% of the principal remaining
unpaid on such Mortgage Loan as of the date of purchase plus (ii) accrued and
unpaid interest thereon at the Mortgage Rate through and including the last day
of the month of purchase increased by the amount of any unpaid servicing fee or
reimbursement of advances otherwise due to the Master Servicer with respect to
such Mortgage Loan.
Rating Agency: Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, and Moody's Investors Service, Inc.
Second Lien Mortgage Loan: Any Mortgage Loan secured by a
Mortgage with a second lien on the related Mortgaged Property. All of the
Second Lien Mortgage Loans have fixed Mortgage Rates.
Securities Act: The Securities Act of 1933, as amended.
Servicing Officer: An officer of the Seller identified as a
"Servicing Officer" pursuant to the Pooling and Servicing Agreement.
Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon
such substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.
Trust Certificate: A certificate representing a 100%
beneficial ownership interest in the Issuer.
SECTION 2. Purchase and Sale of the Mortgage Loans. (a)
Upon satisfaction of the conditions set forth in Section 10 hereof, the Seller
agrees to sell, and the Purchaser agrees to
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<PAGE> 6
purchase, Mortgage Loans having an aggregate Cut-Off Date Balance of
approximately $301,578,036.
(b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificate and the Bonds will
take place on the Closing Date at the office of the Purchaser's counsel in New
York, New York or such other place as the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Seller
the cash portion of the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated in writing by the Seller to the Purchaser and the Purchaser shall
assign and convey the Trust Certificate to the Seller.
SECTION 3. [Reserved]
SECTION 4. Mortgage Loan Transfer. (a) The Purchaser will
be entitled to all scheduled payments of principal and interest on the Mortgage
Loans due after the Cut-Off Date (regardless of when actually collected) and
all payments of other than scheduled principal and interest received after the
Cut-Off Date. The Seller will be entitled to all scheduled payments of
principal and interest on the Mortgage Loans due on or before the Cut-Off Date
(including payments collected after the Cut-Off Date) and all payments of other
than scheduled principal and interest on the Mortgage Loans received on or
before the Cut-Off Date.
(b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholder. In connection with the transfer and assignment of the
Mortgage Loans, the Seller has delivered or will deliver or cause to be
delivered to the Trustee by the Closing Date or such later date as is agreed to
by the Purchaser and Seller (each of the Closing Date and such later date is
referred to as a "Mortgage File Delivery Date"), the items of each Mortgage
File, provided, however, that in lieu of the foregoing, the Seller may deliver
the following documents, under the circumstances set forth below: (x) in lieu
of the original policy of title insurance, the Seller may deliver a binder or
commitment therefor, or, in California, a preliminary title report, or, in
Iowa, an attorney's certificate; (y) in lieu of the original Mortgage or
intervening assignments thereof which have been delivered or are being
delivered to recording offices for recording and have not been returned in time
to permit their delivery as specified above, the Seller may deliver a true copy
thereof with a certification by the Seller, or the title company issuing the
commitment for title insurance, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the original, which has
been transmitted for recording;" and (z) in lieu of the Mortgage or intervening
assignments thereof, if the applicable jurisdiction retains the originals of
such documents or if the originals are lost (in each case, as evidenced by a
certification from the Seller to such effect), the Seller may deliver
photocopies of such documents containing an original certification by the
judicial or other governmental authority of the jurisdiction where such
documents were recorded; and
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<PAGE> 7
provided further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-Off Date and prior to the Closing Date, the
Seller, in lieu of delivering the above documents, may deliver to the Trustee a
certification to such effect. The Seller shall deliver such original documents
(including any original documents as to which certified copies had previously
been delivered) or such certified copies together with the original title
insurance policy (or, if a master title policy has been issued by the title
insurer, a mortgagee's certificate of title insurance), if a title insurance
binder or commitment or other assurance of title was originally deposited, to
the Trustee promptly after they are received. The Seller shall cause the
Mortgage and intervening assignments, if any, and the assignment of the
Mortgage to be recorded not later than 180 days after the Closing Date. Upon
the request of the Purchaser, the Seller will assist the Purchaser in effecting
the assignment referred to above.
SECTION 5. Examination of Mortgage Files. (a) On or before
the Mortgage File Delivery Date, the Seller will have made the Mortgage Files
available to the Purchaser or its agent for examination which may be at the
offices of the Trustee or the Seller and/or the Seller's custodian. The fact
that the Purchaser or its agent has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
Purchaser's rights to demand cure, repurchase, substitution or other relief as
provided in this Agreement. In furtherance of the foregoing, the Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Seller's compliance with the
delivery and recordation requirements of this Agreement and the Pooling and
Servicing Agreement. In addition, upon request of the Purchaser, the Seller
agrees to provide to the Purchaser or the Underwriters information regarding
the Mortgage Loans and their servicing, to make the Mortgage Files available to
the Purchaser and the Underwriters (which may be at the offices of the Seller
and/or the Seller's custodian) and to make available personnel knowledgeable
about the Mortgage Loans for discussions with the Purchaser and the
Underwriters, upon reasonable request during regular business hours, sufficient
to permit the Purchaser to conduct such due diligence as any such party
reasonably believes is appropriate.
(b) Pursuant to the Pooling and Servicing Agreement, the
Trustee for the benefit of the Certificateholder will review items of the
Mortgage Files as set forth on Exhibit 1 within 45 days of the Closing Date
(and will review each document permitted to be delivered to the Trustee after
the Closing Date, if received by the Trustee after the initial 45-day period,
within 15 days after its delivery to the Trustee) and will deliver to the
Seller and the Master Servicer a certification in the form attached as Exhibit
H to the Pooling and Servicing Agreement. If, as a result of its review, the
Trustee determines that any document set forth on Exhibit 1 is missing, does
not appear regular on its face, has not been executed, is unrelated, determined
on the basis of the Mortgagor name, original principal balance and loan number,
to the Mortgage Loans identified in the applicable Mortgage Loan Schedule (a
"Material Defect"), the Trustee shall notify the Seller of such Material
Defect. The Seller shall correct or cure any such Material Defect within 60
days from the date of notice from the Trustee of the Material Defect and if the
Seller does not correct or cure such Material Defect within such period and
such defect materially and adversely affects the value of the Mortgage Loans or
the interest of the Certificateholder in the related Mortgage Loan, the Seller
will, in accordance with the
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<PAGE> 8
terms of the Pooling and Servicing Agreement, within 90 days of the date of
notice, provide the Trustee with a Substitute Mortgage Loan (if within two
years of the Closing Date) or purchase the related Mortgage Loan at the
applicable Purchase Price; provided, however, that if such defect relates
solely to the inability of the Seller to deliver the original security
instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan if the Seller delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing
Date.
(c) Pursuant to the Pooling and Servicing Agreement, the
Trustee will review the Mortgage Files within 180 days of the Closing Date and
will deliver to the Seller and the Master Servicer a certification in the form
attached as Exhibit I to the Pooling and Servicing Agreement. If the Trustee
is unable to deliver a final certification with respect to the items listed in
Exhibit 2 due to any Material Defect, the Trustee shall notify the Seller of
such Material Defect. The Seller shall correct or cure any such Material
Defect within 60 days from the date of notice from the Trustee of the Material
Defect and if the Seller does not correct or cure such Material Defect within
such period and such defect materially and adversely affects the value of the
related Mortgage Loan or the interest of the Certificateholder in the related
Mortgage Loan, the Seller will, in accordance with the terms of the Pooling and
Servicing Agreement, within 90 days of the date of notice, provide the Trustee
with a Substitute Mortgage Loan (if within two years of the Closing Date) or
purchase the related Mortgage Loan at the applicable Purchase Price; provided,
however, that if such defect relates solely to the inability of the Seller to
deliver the original security instrument or intervening assignments thereof, or
a certified copy because the originals of such documents, or a certified copy,
have not been returned by the applicable jurisdiction, the Seller shall not be
required to purchase such Mortgage Loan if the Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date.
(d) At the time of any substitution, the Seller shall deliver
the Substitute Mortgage Loan, the related Mortgage File and any other documents
and payments required to be delivered in connection with a substitution
pursuant to the Pooling and Servicing Agreement. At the time of any purchase
or substitution, the Trustee shall (i) release and assign to the Seller the
documents (including, but not limited to, the Mortgage, Mortgage Note and other
contents of the Mortgage File) in its possession relating to the Deleted
Mortgage Loan and (ii) execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary to vest in the
Seller title to such Deleted Mortgage Loan.
SECTION 6. Recordation of Assignments of Mortgage.
(a) The Seller will, promptly after the Closing Date,
cause each Mortgage and each assignment of Mortgage from the Seller to the
Trustee, and all unrecorded intervening assignments, if any, delivered on or
prior to the Closing Date, to be recorded in all recording offices in the
jurisdictions where the related Mortgaged Properties are located. While each
such Mortgage or assignment is being recorded, the Seller shall leave or cause
to be left with the Trustee a certified
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<PAGE> 9
copy of such Mortgage or assignment. In the event that, within 180 days of the
Closing Date, the Trustee has not received evidence of recording with respect
to each Mortgage Loan delivered to the Purchaser pursuant to the terms hereof,
the failure to provide evidence of recording shall be considered a Material
Defect, and the provisions of Section 5(c) and (d) shall apply. All customary
recording fees and reasonable expenses relating to the recordation of the
assignments of Mortgage to the Trustee shall be borne by the Seller.
(b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser, as
contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. However, in the event that, notwithstanding the
intent of the parties, the Mortgage Loans are held by a court to continue to be
the property of the Seller, then (a) this Agreement shall also be deemed to be
a security agreement within the meaning of Articles 8 and 9 of the applicable
Uniform Commercial Code; (b) the transfer of the Mortgage Loans provided for
herein shall be deemed to be a grant by the Seller to the Purchaser of a
security interest in all of the Seller's right, title and interest in and to
the Mortgage Loans and all amounts payable to the holders of the Mortgage Loans
in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities
or other property, to the extent the Purchaser would otherwise be entitled to
own such Mortgage Loans and proceeds pursuant to Section 4 hereof, including
all amounts, other than investment earnings, from time to time held or invested
in any accounts created pursuant to the Pooling and Servicing Agreement,
whether in the form of cash, instruments, securities or other property; (c) the
possession by the Purchaser or Trustee of Mortgage Notes and such other items
of property as constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 (or comparable
provision) of the applicable Uniform Commercial Code; and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of
perfecting such security interest under applicable law. Any assignment of the
interest of the Purchaser pursuant to any provision hereof or pursuant to the
Pooling and Servicing Agreement shall also be deemed to be an assignment of any
security interest created hereby. The Seller and the Purchaser shall, to the
extent consistent with this Agreement, take such actions as may be reasonably
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected first priority security interest under applicable law and will be
maintained as such throughout the term of the Pooling and Servicing Agreement.
SECTION 7. Representations and Warranties of Seller
Concerning the Mortgage Loans. The Seller hereby represents and warrants to
the Purchaser as of the Closing Date or such other date as may be specified
below:
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<PAGE> 10
(a) the information set forth in the
Mortgage Loan Schedules is true and correct in all material respects;
(b) the terms of the Mortgage Note and
the Mortgage have not been impaired, waived, altered or modified in
any respect, except by written instruments, if required by law in the
jurisdiction where the Mortgaged Property is located or as approved by
the title insurer, to the extent required by the Primary Mortgage
Insurance Policy;
(c) except as otherwise noted in the
Mortgage Loan Schedules, the Mortgage File for each Mortgage Loan
contains a true, accurate and correct copy of each of the documents
specified to be contained therein in the form so specified for each
Mortgage Loan;
(d) immediately prior to the transfer to
the Purchaser, the Seller was the sole owner of beneficial title to
and holder of each Mortgage and Mortgage Note relating to the Mortgage
Loans and is conveying the same to the Purchaser free and clear of any
and all liens, claims, encumbrances, participation interests,
equities, pledges, charges or security interests of any nature, except
for liens which will be released simultaneously with such conveyance;
(e) each Mortgage is a valid and
enforceable first lien (in the case of a First Lien Mortgage Loan) or
second lien (in the case of a Second Lien Mortgage Loan) on the
property securing the related Mortgage Note and each Mortgaged
Property is owned by the Mortgagor in fee simple (except with respect
to common areas in the case of condominiums, PUDs and de minimis PUDs)
or by leasehold for a term longer than the term of the related
Mortgage, subject only to (i) the lien of current real property taxes
and assessments, (ii) covenants, conditions and restrictions, rights
of way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal obtained in connection with the origination of the
related Mortgage Loan or referred to in the lender's title insurance
policy delivered to the originator of the related Mortgage Loan, (iii)
in the case of any Second Lien Mortgage Loan, the lien of the related
first lien mortgage Loan, and (iv) other matters to which like
properties are commonly subject which do not materially interfere with
the benefits of the security intended to be provided by such Mortgage;
(f) as of the Cut-Off Date, no payment
of principal of or interest on or in respect of any Mortgage Loan is
30 days or more past due;
(g) to Seller's knowledge, there is no
mechanics' lien or claim for work, labor or material affecting the
premises subject to any Mortgage which is or may be a lien prior to,
or equal with, the lien of such Mortgage except those which are
insured against by the title insurance policy referred to in (l)
below;
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<PAGE> 11
(h) as of the Cut-Off Date, (i) no
Mortgage Loan had been 30 days or more delinquent more than once
during the preceding 12 months, and (ii) to Seller's knowledge, there
was no delinquent tax or assessment lien against the property subject
to any Mortgage, except where such lien was being contested in good
faith and a stay had been granted against levying on the property;
(i) there is no valid offset, right of
rescission, defense or counterclaim, including the defense of usury,
with respect to any Mortgage Note or Mortgage, including the
obligation of the Mortgagor to pay the unpaid principal and interest
on such Mortgage Note, and no such right of rescission, offset,
counterclaim or defense has been asserted with respect thereto;
(j) except to the extent insurance is in
place which will cover such damage, the physical property subject to
any Mortgage is free of material damage and is in good repair and
there is no proceeding pending or, to Seller's knowledge, threatened
for the total or partial condemnation of any Mortgaged Property;
(k) each Mortgage Loan at the time it
was made complied in all material respects with applicable state and
federal laws, including, without limitation, the Federal
Truth-in-Lending Act and other consumer protection laws, real estate
settlement procedures, usury, equal credit opportunity and disclosure
laws; each Mortgage Loan is being serviced in all material respects in
accordance with applicable state and federal laws, including, without
limitation, the Federal Truth-in-Lending Act and other consumer
protection laws, real estate settlement procedures, usury, equal
credit opportunity and disclosure laws;
(l) a lender's title insurance policy
(on an ALTA or CLTA form) or binder, or other assurance of title
customary in the relevant jurisdiction therefor in a form acceptable
to FNMA or FHLMC, was issued on the date of the origination of each
related Mortgage Loan by a title insurance company that, to Seller's
knowledge, is qualified to do business in the jurisdiction where the
related Mortgaged Property is located, insuring the Seller and its
successors and assigns that the Mortgage is a valid first lien (in the
case of a First Lien Mortgage Loan) or second lien (in the case of a
Second Lien Mortgage Loan) on the related Mortgaged Property. Seller
is the sole insured under such lender's title insurance policy, and
such policy, binder or assurance is valid and shall remain in full
force and effect, and each such policy, binder or assurance shall
contain all applicable endorsements including a negative amortization
endorsement, if applicable;
(m) in the event the Mortgage constitutes a
deed of trust, either a trustee, duly qualified under applicable law
to serve as such, has been properly designated and currently so serves
and is named in the Mortgage or if no duly qualified trustee has been
properly designated and so serves, the Mortgage contains satisfactory
provisions for the appointment of such trustee by the holder of the
Mortgage at no cost or expense to such
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<PAGE> 12
holder, and no fees or expenses are or will become payable by
Purchaser to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the mortgagor;
(n) the original principal amount of
each First Lien Mortgage Loan is not more than 95% of the Original
Value; except as set forth below, each First Lien Mortgage Loan for
which the outstanding principal as of the Cut-Off Date of the related
Mortgage Note exceeded 80% of the Original Value is covered by a
Primary Mortgage Insurance Policy issued by a private mortgage insurer
insuring against default under the Mortgage Note in an amount at least
equal to the excess of such outstanding principal amount over 75% of
such Original Value until the principal balance of such First Lien
Mortgage Loan is reduced below 80% of the Original Value or, based
upon a new appraisal, the principal balance of such First Lien
Mortgage Loan represents less than 80% of the new appraised value; all
of the insurers which have Primary Mortgage Insurance Policies with
respect to the First Lien Mortgage Loans meet FNMA's, FHLMC's and the
Rating Agencies' standards; approximately 4.17% of the First Lien
Mortgage Loans (by Cut-Off Date Balance) had Loan-to-Value Ratios in
excess of 80% and were not covered by Primary Mortgage Insurance
Policies. The weighted average Loan-to-Value Ratio of the First Lien
Mortgage Loans does not exceed 80% and the percentage (by Cut-Off Date
Balance) of First Lien Mortgage Loans having Loan-to-Value Ratios in
excess of 80% does not exceed 40%. The Loan-to-Value Ratios of the
Second Lien Mortgage Loans range from 28.73% to 100% and the weighted
average combined Loan-to- Value Ratio of the Second Lien Mortgage
Loans does not exceed 91.0%;
(o) at the time of origination, each
Mortgaged Property was the subject of an appraisal which conforms to
the Seller's underwriting requirements, and a true, accurate and
complete copy of such appraisal is contained in the Mortgage File;
(p) on the basis of a representation by
the borrower at the time of origination of the Mortgage Loans, at
least 94% of the First Lien Mortgage Loans (by Cut-Off Date Balance)
will be secured by Mortgages on owner-occupied primary residence
properties and at least 99% of the Second Lien Mortgage Loans (by
Cut-Off Date Balance) will be secured by Mortgages on owner-occupied
primary residence properties; at the time of origination of the
Mortgage Loans, at least 95% of the Mortgage Loans (by aggregate
principal balance) will be secured by Mortgages on properties which
were owner-occupied primary residences;
(q) the Mortgage Note is not and has not
been secured by any collateral, pledged account or other security
other than the lien of the corresponding Mortgage and no Mortgage Loan
is secured by more than one Mortgaged Property;
(r) neither the Seller nor any servicer
of the related Mortgage Loans has advanced funds or knowingly received
any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required by the
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<PAGE> 13
Mortgage, except for (i) interest accruing from the date of the
related Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is later, to the date which precedes by 30 days
the first Due Date under the related Mortgage Note, and (ii) customary
advances for insurance and taxes;
(s) each Mortgage Note, the related
Mortgage and other agreements executed in connection therewith are
genuine, and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms except as such
enforcement may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and
all parties to each Mortgage Note and the Mortgage had legal capacity
to execute the Mortgage Note and the Mortgage and each Mortgage Note
and Mortgage has been duly and properly executed by the Mortgagor;
(t) each Mortgage Loan contains a "due
on sale" clause which provides for the acceleration of the payment of
the unpaid principal balance of the related Mortgage Loan in the event
the related Mortgaged Property is sold without the prior consent of
the mortgagee thereunder;
(u) to Seller's knowledge, to the extent
required under applicable law, each originator and subsequent
mortgagee or servicer of a Mortgage Loan was authorized to transact
and do business in each jurisdiction in which the related Mortgaged
Property is located at all times when it held or serviced such
Mortgage Loan; and, to Seller's knowledge, any obligations of the
holder of the related Mortgage Note, Mortgage and other loan documents
have been complied with in all material respects; and, to Seller's
knowledge, the servicing of each Mortgage Loan has been in accordance
with Seller's servicing requirements and the terms of the Mortgage
Notes, the Mortgage and other loan documents, whether such origination
and servicing was done by the Seller, its affiliates, or any third
party which originated the Mortgage Loan on behalf of, or sold the
Mortgage Loan to, any of them, or any servicing agent of any of the
foregoing;
(v) the related Mortgage Note and
Mortgage contain customary and enforceable provisions such as to
render the rights and remedies of the holder adequate for the
realization against the Mortgaged Property of the benefits of the
security, including realization by judicial, or, if applicable, non-
judicial foreclosure, and there is no homestead or other exemption
available to the Mortgagor which would interfere with such right to
foreclosure;
(w) the proceeds of the Mortgage Loans
have been fully disbursed, there is no obligation on the part of the
related mortgagees to make future advances thereunder and 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
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<PAGE> 14
with; and all costs, fees and expenses incurred in making, closing or
recording the Mortgage Loan have been paid, except recording fees with
respect to Mortgages not recorded as of the Closing Date, and no
Mortgagor is entitled to any refund of the amounts paid or due under
the related Mortgage Note or Mortgage;
(x) as of the Closing Date, the
improvements on each Mortgaged Property securing a Mortgage Loan are
insured by an insurer which is acceptable to Seller against loss by
fire and such hazards as are covered under a standard extended
coverage endorsement in the locale in which the Mortgaged Property is
located, in an amount which is not less than the lesser of (A) the
maximum insurable value of the improvements securing such Mortgage
Loan (B) the outstanding principal balance of the related Mortgage
Loan (together, in the case of a Second Lien Mortgage Loan, with the
outstanding principal balance of the related first lien mortgage
loan), but in no event in an amount less than an amount that is
required to prevent the Mortgagor from being deemed to be a co-insurer
thereunder; if the improvement on the Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium project; if upon origination of the
related Mortgage Loan, the improvements on the Mortgaged Property were
in an area identified as a federally designated flood area, a flood
insurance policy is in effect in an amount representing coverage not
less than the lesser of (i) the outstanding principal balance of the
Mortgage Loan (together, in the case of a Second Lien Mortgage Loan,
with the outstanding principal balance of the related first lien
mortgage loan), (ii) the restorable cost of improvements located on
such Mortgaged Property and (iii) the maximum coverage available under
federal law;
(y) all insurance policies with respect
to a Mortgage Loan contain a standard mortgagee clause naming the
originator, its successors and assigns, as the mortgagee thereunder.
Such insurance policies require prior notice to the insured of
termination or cancellation and no such notice has been received. The
Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at the Mortgagor's cost and expense
and to seek reimbursement therefor from the Mortgagor;
(z) there is no material monetary
default existing under any Mortgage or the related Mortgage Note and
there is no material event which, with the passage of time or with
notice and the expiration of any grace or cure period, would
constitute a material default, breach or event of acceleration; and
neither the Seller, any of its affiliates nor any servicer of any
related Mortgage Loan has taken any action to waive any default,
breach or event of acceleration; no foreclosure action is threatened
or has been commenced with respect to the Mortgage Loan;
(aa) no Mortgagor, at the time of
origination of the applicable Mortgage, was a debtor in any state or
federal bankruptcy or insolvency proceeding;
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<PAGE> 15
(bb) all inspections, licenses and
certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the
use and occupancy of the same, including, but not limited to,
certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities;
(cc) to the Seller's knowledge, the
Mortgaged Property and all improvements thereon comply with all
requirements of any applicable zoning and subdivision laws and
ordinances, except where the failure to comply would not have a
material adverse affect on the market value of the Mortgaged Property;
(dd) to Seller's knowledge, all
improvements which were considered in determining the value of the
related Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property;
(ee) no instrument of release or waiver
has been executed in connection with the Mortgage Loans, 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;
(ff) no First Lien Mortgage Loan provides
for a balloon payment and each Mortgage Note with respect to a First
Lien Mortgage Loan contains provisions providing for its full
amortization by the end of its original term and is payable on the
first day of each month in monthly installments of principal and
interest, with interest payable in arrears, over an original term of
not more than 30 years; approximately 32.16% of the Second Lien
Mortgage Loans (by Cut-Off Date Balance) are balloon loans which
provide for regular monthly payments of principal and interest
computed on the basis of an amortization term that is longer than the
related term to stated maturity, with a balloon payment due at stated
maturity;
(gg) no Mortgage Loan was originated
based on an appraisal of the related Mortgaged Property made prior to
completion of construction of the improvements thereon unless a
certificate of completion was obtained prior to closing of the
Mortgage Loan;
(hh) each of the Mortgaged Properties
consists of a single parcel of real property with a detached
single-family residence erected thereon, or a two- to four-family
dwelling, an individual condominium unit in a condominium project or
an individual unit in a planned unit development. No Mortgaged
Property consists of a single parcel of real property with a
cooperative housing development erected thereon. Any condominium unit
or planned unit development either conforms with applicable FNMA or
FHLMC
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<PAGE> 16
requirements regarding such dwellings or is covered by a waiver
confirming that such condominium unit or planned unit development is
acceptable to FNMA or FHLMC. Measured by principal balance, no more
than 20% of the Mortgage Loans are secured by an individual unit in a
low-rise or high-rise condominium project, none are secured by real
property with a townhouse erected thereon, and at least 94% are
secured by real property with a detached single-family residence
erected thereon (which may include manufactured housing); No such
residence is a mobile home;
(ii) none of the Mortgage Loans is a "buy
down" mortgage loan;
(jj) no more than 11% of the First Lien
Mortgage Loans (by Cut-Off Date Balance), are subject to provisions
which permit or require the conversion of the related Mortgage Rate
to a fixed interest rate;
(kk) as of the Cut-Off Date, the Net Rate
of each First Lien Mortgage Loan was not more than 12.75% per annum
and not less than 5.50% per annum, and the weighted average Net Rate
of the First Lien Mortgage Loans was approximately 7.864% per annum;
(ll) as of the Cut-Off Date, the Net Rate
of each Second Lien Mortgage Loan was not more than 10.99% per annum
and not less than 16.615% per annum, and the weighted average Net Rate
of the Second Lien Mortgage Loans was approximately 13.375% per annum;
(mm) the Mortgage Loans were selected
from mortgage loans owned by the Seller in a fair manner;
(nn) The terms of the Mortgage Note
related to each First Lien Mortgage Loan provide that, on the first
calendar day of the sixth calendar month following the calendar month
in which such First Lien Mortgage Loan was originated and
semi-annually thereafter (each such date, an "Adjustment Date"), the
Mortgage Rate on such First Lien Mortgage Loan will be adjusted to
equal the sum, rounded to the nearest multiple of 0.125%, of (a) the
arithmetic mean of the London interbank offered rate quotations for
six-month Eurodollar deposits (the "Index"), as published by Federal
National Mortgage Association or The Wall Street Journal, and most
recently available as of 45 days prior to the related Adjustment Date
and (b) a fixed percentage amount specified in the related Mortgage
Note (each, a "Gross Margin"), ranging from 1.875% to 9.00% per annum,
provided, however, that the Mortgage Rate generally will not increase
or decrease by more than 1.0% on any related Adjustment Date (the
"Periodic Rate Cap"), and will not increase above a specified maximum
Mortgage Rate over the life of the Mortgage Loan (the "Maximum
Mortgage Rate") or decrease below a specified minimum Mortgage Rate
over the life of the Mortgage Loan (the "Minimum Mortgage Rate");
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<PAGE> 17
(oo) as of the Cut-Off Date, the
weighted average remaining term of each First Lien Mortgage Loan is
not more than 360 months and not less than 342 months and the weighted
average remaining term of Second Lien Mortgage Loan is not more than
180 months and not less than 173 months;
(pp) with respect to each Second Lien
Mortgage Loan, either (A) no consent for such Second Lien Mortgage
Loan was required by the holder of the related first lien mortgage
loan prior to the making of such Second Lien Mortgage Loan or (B) such
consent has been obtained and is contained in the related Mortgage
File;
(qq) no more than 17% of the First Lien
Mortgage Loans (by Cut-Off Date Balance) have been the subject of
cash-out refinances;
(rr) no more than 77% of the Second Lien
Mortgage Loans (by Cut-Off Date Balance) have been the subject of
cash-out refinances;
(ss) no more than 44% of the First Lien
Mortgage Loans (by Cut-Off Date Balance) have been the subject of rate
and term refinances and no more than 23% of the Second Lien Mortgage
Loans (by Cut-Off Date Balance as of the Cut-off Date) have been the
subject of rate and term refinances;
(tt) no fewer than 39% of the First Lien
Mortgage Loans (by Cut-Off Date Balance) are purchase money loans;
(uu) no more than 77% of the First Lien
Mortgage Loans (by Cut-Off Date Balance) are secured by mortgaged
properties located in the state of California, and no more than 5% of
the First Lien Mortgage Loans (by Cut-Off Date Balance) are located in
any other state; no more than 65% and 6.5% of the Second Lien Mortgage
Loans (by Cut-Off Date Balance) are secured by mortgaged properties
located in the states of California and Maryland, respectively, and no
more than 5% of the Second Lien Mortgage Loans (by Cut-Off Date
Balance) are located in any other state;
(vv) the original principal balances of
the First Lien Mortgage Loans ranged from approximately $29,750 to
approximately $681,000. The average outstanding principal balance of
the First Lien Mortgage Loans is approximately $198,162; the original
principal balances of the Second Lien Mortgage Loans ranged from
approximately $10,000 to approximately $250,000. The average
outstanding principal balance of the Second Lien Mortgage Loans is
approximately $35,264; and
(ww) none of the First Lien Mortgage
Loans have original terms to maturity of more than 360 months and none
of the Second Lien Mortgage Loans have original terms to maturity of
more than 180 months.
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<PAGE> 18
It is understood and agreed that the representations
and warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns (including the Trustee), notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or assignment of
Mortgage or the examination of any Mortgage File. Upon any substitution for a
Mortgage Loan, the representations and warranties set forth above shall be
deemed to be made by the Seller as to any Substitute Mortgage Loan as of the
date of substitution.
Upon discovery or receipt of notice by the Seller, the
Purchaser or the Trustee of a breach of any representation or warranty of the
Seller set forth in this Section 7 which materially and adversely affects the
value of the Mortgage Loans delivered to the Purchaser pursuant to this
Agreement or the interests of the Purchaser, the Certificateholder or the
Trustee therein, the party discovering or receiving notice of such breach shall
give prompt written notice to the others. In the case of any such breach of a
representation or warranty set forth in this Section 7, within 60 days from the
date of discovery by the Seller, or the date the Seller is notified by the
party discovering or receiving notice of such breach (whichever occurs
earlier), the Seller will (i) cure such breach in all material respects, (ii)
purchase the affected Mortgage Loan at the applicable Purchase Price or (iii)
if within two years of the Closing Date, substitute a qualifying Substitute
Mortgage Loan in exchange for such Mortgage Loan. The obligations of the
Seller to cure, purchase or substitute a qualifying Substitute Mortgage Loan
shall constitute the Purchaser's, the Trustee's and the Certificateholder's
sole and exclusive remedy under this Agreement or otherwise respecting a breach
of representations or warranties hereunder with respect to the Mortgage Loans.
Any cause of action against the Seller or relating to or
arising out of a breach by the Seller of any representations and warranties
made in this Section 7 shall accrue as to any Mortgage Loan upon the failure by
the Seller to cure such breach, purchase such Mortgage Loan or substitute a
qualifying Substitute Mortgage Loan pursuant to the terms hereof.
SECTION 8. Representations and Warranties Concerning the
Seller. (a) As of the date hereof and as of the Closing Date, the Seller
represents and warrants to the Purchaser as follows:
(1) the Seller (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of California
and (ii) is qualified and in good standing as a foreign corporation to do
business in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be expected to have a
material adverse effect on the Seller's ability to enter into this Agreement
and to consummate the transactions contemplated hereby.
(2) the Seller has full corporate power to own its
property, to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(3) the execution and delivery by the Seller of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Seller; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated will
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<PAGE> 19
conflict with or result in a breach of, or constitute a default under, any of
the provisions of any material indenture, deed of trust, contract or other
agreement or instrument to which Seller is a party or is bound, or any material
law, governmental rule, regulation, judgment, decree or order binding on the
Seller or its properties or the articles of incorporation or by-laws of the
Seller, except those conflicts, breaches or defaults which would not reasonably
be expected to have a material adverse effect on the Seller's ability to enter
into this Agreement and to consummate the transactions contemplated hereby;
(4) the execution, delivery and performance by the
Seller of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
(5) this Agreement has been duly executed and
delivered by the Seller and, assuming due authorization, execution and delivery
by the Purchaser, constitutes a legally valid and binding obligation of the
Seller enforceable against the Seller in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership or moratorium or other similar laws affecting creditors' rights,
and by the availability of equitable remedies (including specific performance
and injunctive relief), regardless of whether such enforcement is considered in
a proceeding in equity or at law, and except as enforcement of the
indemnification provisions hereof may be limited by public policy;
(6) except as disclosed on Schedule A attached
hereto, there are no actions, suits or proceedings pending or, to the knowledge
of the Seller, threatened against the Seller, before or by any court,
administrative agency, arbitrator or governmental body which (i) with respect
to any of the transactions contemplated by this Agreement or (ii) with respect
to any other matter which in the judgment of the Seller will be determined
adversely to the Seller and will if determined adversely to the Seller
materially and adversely affect the Seller's ability to perform its obligations
under this Agreement; and the Seller is not in default with respect to any
order of any court, administrative agency, arbitrator or governmental body so
as to materially and adversely affect the transactions contemplated by this
Agreement;
(7) Seller acquired title to the Mortgage Loans
in good faith, without notice of any adverse claim; and
(8) the Seller's Information (as defined in
Section 13(a) hereof) does not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading.
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<PAGE> 20
SECTION 9. Representations and Warranties Concerning the
Purchaser. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Seller as follows:
(1) the Purchaser (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (ii) is qualified and in good standing as a foreign corporation to
do business in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be expected to have a
material adverse effect on the Purchaser's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
(2) the Purchaser has full corporate power to own
its property, to carry on its business as presently conducted and to enter into
and perform its obligations under this Agreement;
(3) the execution and delivery by the Purchaser of
this Agreement have been duly authorized by all necessary corporate action on
the part of the Purchaser; and neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of any material
indenture, deed of trust, contract or other agreement or instrument to which
Purchaser is a party or is bound, or any material law, governmental rule,
regulation, judgment, decree or order binding on the Purchaser or its
properties or the articles of incorporation or by-laws of the Purchaser, except
those conflicts, breaches or defaults which would not reasonably be expected to
have a material adverse effect on the Purchaser's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(4) the execution, delivery and performance by the
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have already
been obtained, given or made;
(5) this Agreement has been duly executed and
delivered by the Purchaser and, assuming due authorization, execution and
delivery by the Seller, constitutes a valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership or moratorium or other similar laws affecting creditors' rights,
and by the availability of equitable remedies (including specific performance
and injunctive relief), regardless of whether such enforcement is considered in
a proceeding in equity or at law, and except as enforcement of the
indemnification provisions hereof may be limited by public policy;
(6) there are no actions, suits or proceedings
pending or, to the knowledge of the Purchaser, threatened against the
Purchaser, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions contemplated by
this Agreement or (ii) with respect to any other matter which in the judgment
of the Purchaser will be
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<PAGE> 21
determined adversely to the Purchaser and will if determined adversely to the
Purchaser materially and adversely affect the Purchaser's ability to perform
its obligations under this Agreement; and the Purchaser is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(7) the Purchaser's Information (as defined in
Section 13(b) hereof) does not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading.
SECTION 10. Conditions to Closing. (a) The obligations
of the Purchaser under this Agreement will be subject to the satisfaction, on or
prior to the Closing Date, of the following conditions:
(1) Each of the obligations of the Seller
required to be performed at or prior to the Closing Date pursuant to the terms
of this Agreement shall have been duly performed and complied with in all
material respects; all of the representations and warranties of the Seller
under this Agreement shall be true and correct as of the date or dates
specified in all material respects; and no event shall have occurred which,
with notice or the passage of time, would constitute a default under this
Agreement, or the Pooling and Servicing Agreement; and the Purchaser shall have
received certificates to that effect signed by authorized officers of the
Seller.
(2) The Purchaser shall have received all of the
following closing documents, in such forms as are agreed upon and reasonably
acceptable to the Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the respective terms thereof:
(i) The Pooling and Servicing Agreement,
in form and substance reasonably satisfactory to the Trustee and the
Purchaser, and all documents required thereby duly executed by all
signatories;
(ii) A certificate of an officer of the
Seller dated as of the Closing Date, in a form reasonably acceptable
to the Purchaser, and attached thereto the resolutions of the Seller
authorizing the transactions contemplated by this Agreement and the
Pooling and Servicing Agreement, together with copies of the Seller's
certificate of incorporation, as applicable;
(iii) One or more opinions of counsel from
the Seller's counsel, covering the matters set forth in Exhibit 6-A
and otherwise in form and substance reasonably satisfactory to the
Purchaser, the Trustee and each Rating Agency; and
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<PAGE> 22
(iv) A Guaranty from the Sellers's parent,
Imperial Credit Mortgage Holdings, Inc. ("Imperial Holdings"),
substantially in the form attached hereto as Exhibit 8.
(v) An opinion of counsel from counsel
to Imperial Holdings, covering the matters set forth in Exhibit 6-B
and otherwise in a form and substance reasonably satisfactory to
Purchaser, the Trustee and each Rating Agency.
(vi) An opinion of counsel from counsel
to the Master Servicer pursuant to Section 6(f) of the Underwriting
Agreement.
(3) The Bonds to be sold to the Underwriters
pursuant to the Underwriting Agreement shall have been so issued and sold to
the Underwriters.
(4) The Purchaser shall have received an
accountants' letter, addressed to the Purchaser and in a form that is
reasonably acceptable to Purchaser, from KPMG Peat Marwick L.L.P. covering the
matters set forth in Section 12 hereof.
(5) The Seller shall have furnished to the
Purchaser such other certificates of its officers to evidence fulfillment of
the conditions set forth in this Agreement and the transactions contemplated
hereby as the Purchaser and its counsel may reasonably request, including
transfer certificates in substantially the form of Exhibit 9 and Exhibit 10
attached hereto.
(b) The obligations of the Seller under this Agreement shall
be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(1) The obligations of the Purchaser required to
be performed by it on or prior to the Closing Date pursuant to the terms of
this Agreement shall have been duly performed and complied with in all material
respects, and all of the representations and warranties of the Purchaser under
this Agreement shall be true and correct in all material respects as of the
date hereof and as of the Closing Date, and no event shall have occurred which
would constitute a breach by it of the terms of this Agreement, and the Seller
shall have received a certificate to that effect signed by an authorized
officer of the Purchaser.
(2) The Seller shall have received copies of all
of the following closing documents, in such forms as are agreed upon and
reasonably acceptable to the Seller, duly executed by all signatories other
than the Seller as required pursuant to the respective terms thereof:
(i) The Pooling and Servicing Agreement,
in form and substance reasonably satisfactory to the Seller, and all
documents required thereby duly executed by all signatories;
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<PAGE> 23
(ii) A certificate of an officer of the
Purchaser dated as of the Closing Date, in a form reasonably
acceptable to the Seller, and attached thereto the resolutions of the
Purchaser authorizing the transactions contemplated by this Agreement
and the Pooling and Servicing Agreement, together with copies of the
Purchaser's articles of incorporation, and evidence as to the good
standing of the Purchaser dated as of a recent date;
(iii) One or more opinions of counsel from
the Purchaser's counsel, covering the matters set forth in Exhibit 7
attached hereto in form and substance reasonably satisfactory to the
Seller; and
(iv) All other documents, certiificates
and opinions as may be requested by the Rating Agencies (as defined in
the Indenture) to obtain the desired rating of the Bonds.
SECTION 11. Servicing; Servicing Fee. (a) The Mortgage
Loans will be master serviced and serviced by the Master Servicer pursuant to
the terms of the Pooling and Servicing Agreement.
(b) The Seller represents to the Purchaser that, as of
the Closing Date, the Mortgage Loans are serviced by the Master Servicer and
are not subject to servicing agreements with any other third party, other than
the sub-servicing agreement dated as of December 1, 1995 between the Master
Servicer and Imperial Credit Industries, Inc. The Seller, without
reimbursement from the Purchaser, will pay any fees or penalties required by
any third party servicer for releasing the Mortgage Loans from any such
servicing agreement which may be claimed to be in effect and shall arrange for
the orderly transfer of such servicing from any such third party servicer to
the Seller on or prior to the Closing Date.
SECTION 12. Accountants' Letters. (a) KPMG Peat Marwick
L.L.P. will review the characteristics of a sample of the Mortgage Loans
described in the Mortgage Loan Schedules and will compare those characteristics
to the description of the Mortgage Loans contained in the Prospectus Supplement
under the captions "Terms of the Bonds" and "Description of the Mortgage
Loans". The Seller will cooperate with the Purchaser in making available all
information and taking all steps reasonably necessary to permit such
accountants to complete the review and to deliver the letters required of them
under the Underwriting Agreement. KPMG Peat Marwick L.L.P. will also confirm
certain calculations as set forth under the caption "Certain Yield and
Prepayment Considerations" in the Prospectus Supplement.
(b) KPMG Peat Marwick L.L.P. will deliver to the
Purchaser a letter, dated the date of the Prospectus Supplement, in the form
previously agreed to by the Seller and the Purchaser, with respect to the
financial and statistical information relating to the Master Servicer and its
loan program contained in the Prospectus Supplement under the caption "The
Master Servicer."
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<PAGE> 24
(c) KPMG Peat Marwick L.L.P. will provide to the
Purchaser a verbal confirmation with respect to the accuracy of the original
issue discount information to be set forth on the face of the Bonds, if any.
SECTION 13. Indemnification. (a) The Seller shall indemnify
and hold harmless the Purchaser and its directors, officers and controlling
persons (as defined in Section 15 of the Securities Act) from and against any
loss, claim, damage or liability or action in respect thereof, to which they or
any of them may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based
upon (i) any untrue statement of a material fact contained in the Seller's
Information as identified in Exhibit 4, the omission to state in the Prospectus
Supplement or Prospectus (or any amendment thereof or supplement thereto
approved by the Seller and in which additional Seller's Information is
identified), in reliance upon and in conformity with Seller's Information a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made, not misleading,
(ii) any representation or warranty made by the Seller in Section 8 hereof
being, or alleged to be, untrue or incorrect, or (iii) any failure by the
Seller to perform its obligations under this Agreement; and the Seller shall
reimburse the Purchaser and each other indemnified party for any legal and
other expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action. The foregoing indemnity agreement is in addition to any
liability which the Seller otherwise may have to the Purchaser, or any other
such indemnified party.
(b) The Purchaser shall indemnify and hold harmless the
Seller and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the Purchaser's Information as
identified in Exhibit 5, the omission to state in the Prospectus Supplement or
Prospectus (or any amendment thereof or supplement thereto approved by the
Purchaser and in which additional Purchaser's Information is identified), in
reliance upon and in conformity with the Purchaser's Information, a material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances in which they were made, not misleading, (ii) any
representation or warranty made by the Purchaser in Section 9 hereof being, or
alleged to be, untrue or incorrect, or (iii) any failure by the Purchaser to
perform its obligations under this Agreement; and the Purchaser shall reimburse
the Seller and each other indemnified party for any legal and other expenses
reasonably incurred by them in connection with investigating or defending or
preparing to defend any such loss, claim, damage, liability or action. The
foregoing indemnity agreement is in addition to any liability which the
Purchaser otherwise may have to the Seller or any other such indemnified party.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify each party
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<PAGE> 25
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve
it from any liability which it may have under this Section 13 except to the
extent that it has been prejudiced in any material respect by such failure or
from any liability which it may have otherwise). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent it may elect by written notice delivered
to the indemnified party promptly (but, in any event, within 30 days) after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there is a conflict of interest between itself
or themselves and the indemnifying party in the conduct of the defense of any
claim or that the interests of the indemnified party or parties are not
substantially co-extensive with those of the indemnifying party (in which case
the indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties (provided,
however, that the indemnifying party shall be liable only for the fees and
expenses of one counsel in addition to any local counsel required by the laws,
rules or regulations of any applicable court). Anything in this subsection to
the contrary notwithstanding, an indemnifying party shall not be liable for any
settlement or any claim or action effected without its written consent;
provided, however, that such consent was not unreasonably withheld.
(d) If the indemnification provided for in paragraphs (a)
and (b) of this Section 13 shall for any reason be unavailable to an
indemnified party in respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to in Section 13, then the indemnifying
party shall in lieu of indemnifying the indemnified party contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, in such proportion as
shall be appropriate to reflect the relative benefits received by the Seller on
the one hand and the Purchaser on the other from the purchase and sale of the
Mortgage Loans, the offering of the Bonds and the other transactions
contemplated hereunder. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution from any person who is not
also found liable for such fraudulent misrepresentation.
(e) The parties hereto agree that reliance by an
indemnified party on any publicly available information or any information or
directions furnished by an indemnifying party shall not constitute negligence,
bad faith or willful misconduct by such indemnified party.
SECTION 14. Notices. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing.
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<PAGE> 26
Notices to the Seller shall be directed to Imperial Credit Secured Assets
Corp., 20371 Irvine Avenue, Santa Ana Heights, California 92707, (Telecopy #
(714) 438-2150), Attention: Richard Johnson; notices to the Purchaser shall be
directed to Fund America Investors Corporation II, Plaza Tower One, Suite
1200B, 6400 S. Fiddler's Green Circle, Englewood, Colorado 80111, (Telecopy
#(303) 741-6944), Attention: Howard J. Glicksman, Esq. (with a copy to Ms.
Helen M. Dickens); or to any other address as may hereafter be furnished by
one party to the other party by like notice. Any such demand, notice or
communication hereunder shall be deemed to have been received on the date
received at the premises of the addressee (as evidenced, in the case of
registered or certified mail, by the date noted on the return receipt) provided
that it is received on a business day during normal business hours and, if
received after normal business hours, then it shall be deemed to be received on
the next business day.
SECTION 15. Transfer of Mortgage Loans. The Purchaser
retains the right to assign the Mortgage Loans and any or all of its interest
under this Agreement to the Trustee without the consent of the Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; provided, however, the Purchaser shall
remain entitled to the benefits set forth in Sections 13 and 17 hereto.
Notwithstanding the foregoing, the sole and exclusive right and remedy of the
Trustee with respect to a breach of representation or warranty of the Seller
shall be the purchase or substitution obligations of the Seller contained in
Sections 5 and 7 hereof.
SECTION 16. Termination. This Agreement may be terminated
(a) by the mutual consent of the parties hereto prior to the Closing Date, (b)
by the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Seller, if the conditions to the Seller's obligations
to close set forth under Section 10(b) hereof are not fulfilled as and when
required to be fulfilled. In the event of termination pursuant to clause (b),
the Seller shall pay, and in the event of termination pursuant to clause (c),
the Purchaser shall pay, all reasonable out of pocket expenses incurred by the
other in connection with the transactions contemplated by this Agreement. In
the event of a termination pursuant to clause (a), each party shall be
responsible for its own expenses.
SECTION 17. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Seller or the
Purchaser submitted pursuant hereto, shall remain operative and in full force
and effect and shall survive delivery of the Mortgage Loans to the Purchaser
(and by the Purchaser to the Trustee). Subsequent to the delivery of the
Mortgage Loans to the Purchaser, the Seller's representations and warranties
contained herein with respect to the Mortgage Loans shall be deemed to relate
to the Mortgage Loans actually delivered to the Purchaser and included in the
Mortgage Loan Schedules and to any Substitute Mortgage Loan, but not to any
Deleted Mortgage Loan.
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<PAGE> 27
SECTION 18. Severability. If any provision of this Agreement
shall be prohibited or invalid under applicable law, the Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
SECTION 19. Counterparts. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.
SECTION 20. Amendment. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party and the
Trustee.
SECTION 21. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
SECTION 22. Further Assurances. Each of the parties agrees
to execute and deliver such instruments and take such actions as the other
party may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement including any amendments
hereto which may be required by either Rating Agency.
SECTION 23. Successors and Assigns. This Agreement shall
bind and inure to the benefit of and be enforceable by the Seller and the
Purchaser and their permitted successors and assigns and, to the extent
specified in Section 13 hereof, their respective directors, officers and
controlling persons (within the meaning of federal securities laws). The
Seller acknowledges and agrees that the Purchaser will assign its rights under
this Agreement (including, without limitation, with respect to the Seller's
representations and warranties respecting the Mortgage Loans) to the Trustee.
Any person into which the Seller may be merged or consolidated (or any person
resulting from any merger or consolidation involving the Seller), any person
resulting from a change in form of the Seller or any person succeeding to the
business of the Seller, shall be considered the "successor" of the Seller
hereunder and shall be considered a party hereto without the execution or
filing of any paper or any further act or consent on the part of either party
hereto. This Agreement cannot be assigned, pledged or hypothecated by the
Seller without the written consent of the Purchaser and the Trustee and any
such assignment or purported assignment shall be deemed null and void.
SECTION 24. The Seller. The Seller will keep in full effect
all rights as are necessary to perform its respective obligations under this
Agreement.
SECTION 25. Entire Agreement. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof.
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<PAGE> 28
SECTION 26. No Partnership. Nothing herein contained shall
be deemed or construed to create a partnership or joint venture between the
parties hereto. It is understood that the services of the Seller and Master
Servicer shall be rendered as an independent contractor and not as agent for
the Purchaser.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 29
IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective duly authorized officers as of the date
first above written.
IMH ASSETS CORP.
By:__________________________________
Name: William S. Ashmore
Title: President
FUND AMERICA INVESTORS CORPORATION II
By:__________________________________
Name: Jamie R. Gross
Title: Vice President
Signature Page to Mortgage Loan Purchase Agreement
<PAGE> 30
EXHIBITS AND SCHEDULE TO
MORTGAGE LOAN PURCHASE AGREEMENT
Exhibit 1 - Contents of Mortgage File
Exhibit 2 - Contents of Final Mortgage File
Exhibit 3 - Mortgage Loan Schedule Information
Exhibit 4 - Seller's Information
Exhibit 5 - Purchaser's Information
Exhibit 6-A - Substance of Opinion of Seller's Counsel
Exhibit 6-B - Substance of Opinion of Counsel to Imperial Holdings
Exhibit 7 - Substance of Opinion of Purchaser's Counsel
Exhibit 8 - Form of Guaranty from Imperial Credit Mortgage Holdings, Inc.
to Purchaser
Exhibit 9 Form of Transfer Certificate
Exhibit 10- Form of Transfer Certificate as to ERISA Matters
Schedule A - Schedule of Pending or Threatened Litigation Against Seller
<PAGE> 31
EXHIBIT 1
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items, which shall be available for inspection by
the Purchaser or its designee, and which shall be delivered to the Purchaser or
its designee pursuant to the terms of the Agreement.
(i) The original Mortgage Note, including any riders
thereto, endorsed by the Seller or the originator without recourse in
proper form to the order of the Trustee, at the direction of the
Purchaser, with any intervening endorsements showing an unbroken chain
of endorsements from the originator to the Trustee;
(ii) An original duly executed assignment of Mortgage in
recordable form from the Seller to the Trustee;
(iii) The original recorded Mortgage with evidence of such
recording indicated thereon. If, in connection with any Mortgage
Loan, the Seller cannot deliver the original Mortgage with evidence of
recording thereon on or prior to the Closing Date because of its
delivery to, or a delay caused by, the public recording office where
such Mortgage has been delivered for recordation, or if such original
Mortgage Loan has been retained by the public recording office as a
matter of policy, or has been lost, the Seller shall deliver or cause
to be delivered to the Trustee a photocopy thereof (certified by the
Seller to be a true and correct copy of the original which has been
transmitted for recordation), together with an officer's certificate
of the Seller stating that such Mortgage has been dispatched to the
appropriate recording official for recordation, has been retained by
such recording office as a matter of policy or has been lost, as
applicable;
(iv) If applicable, all original intervening recorded
assignments with evidence of such recording indicated thereon, showing
an unbroken chain of title to the Mortgage from the originator to the
Seller or the Trustee;
(v) The originals of each recorded assumption, modification
or substitution agreement, if any, relating to the Mortgage Loan with
evidence of such recording indicated thereon. If in connection with
any Mortgage Loan the Seller cannot deliver the assumption,
modification or substitution agreement with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by
the public recording office where such assumption, modification or
substitution agreement has been delivered for recordation, the Seller
shall deliver or cause to be delivered to the Trustee a photocopy of
such assumption, modification or substitution agreement (certified by
the Seller to be a true and correct copy of the original which has
been transmitted for recordation), together with a certificate of an
<PAGE> 32
officer of the Seller stating that such assumption, modification or
substitution agreement has been dispatched to the appropriate
recording official for recordation;
(vi) The original mortgagee's title insurance policy or a
written commitment to issue such title insurance policy; and
(vii) The certificate of primary mortgage insurance, if
applicable.
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<PAGE> 33
EXHIBIT 2
CONTENTS OF FINAL MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items, which shall be available for inspection by
the Purchaser or its agent, and which shall be delivered to the Purchaser
pursuant to the terms of the Agreement.
(i) The original Mortgage Note, including any riders
thereto, endorsed by the Seller or the originator without recourse in
proper form to the order of the Trustee, at the direction of the
Purchaser, with any intervening endorsements showing an unbroken chain
of title from the originator to the Trustee;
(ii) An original duly executed assignment of Mortgage in
recordable form from the Seller or the originator to the Trustee, with
evidence of recording indicated thereon; provided that if such
document is not included because of a delay by the public recording
office where such document has been delivered for recordation, the
Seller shall include a copy thereof certified by the appropriate
recording office;
(iii) The original recorded Mortgage with evidence of
recording indicated thereon; provided that if such document is not
included because of a delay by the public recording office where such
document has been delivered for recordation or such office as a matter
of policy does not return the original of such document or if such
original Mortgage has been lost, the Seller shall include a copy
thereof certified by the appropriate recording office;
(iv) If applicable, the original intervening assignments,
including warehousing assignments, if any, with evidence of recording
thereon, showing an unbroken chain of title to the Mortgage from the
originator or the Seller, as the case may be, to the Seller or the
Trustee; provided that if such document is not included because of a
delay by the public recording office where such document has been
delivered for recordation or such office as a matter of policy does
not return the original of such document, the Seller shall include a
copy thereof certified by the appropriate recording office;
(v) The originals of each assumption, modification or
substitution agreement, if any, relating to the Mortgage Loan;
(vi) The original mortgagee's title insurance policy (or,
if a master title policy has been issued by the title insurer, a
mortgagee's certificate of title insurance); and
(vii) The certificate of primary mortgage insurance, if
applicable.
<PAGE> 34
EXHIBIT 3
MORTGAGE LOAN SCHEDULE INFORMATION
The Mortgage Loan Schedules shall set forth the following
information with respect to each Mortgage Loan:
(i) the loan number and the loan program series number;
(ii) the Mortgagor's name;
(iii) the street address (including city, state and zip
code) of the Mortgaged Property;
(iv) the property type;
(v) the Mortgage Rate;
(vi) the Servicing Rate;
(vii) the Net Rate;
(viii) the original term;
(ix) the maturity date;
(x) the calculated remaining term to maturity;
(xi) the original principal balance;
(xii) the first payment date;
(xiii) the principal and interest payment in effect as of
the Cut-Off Date;
(xiv) the principal balance as of the Cut-Off Date;
(xv) the Loan-to-Value Ratio at origination;
(xvi) paid-through date;
(xvii) occupancy status;
(xviii) the insurer of any Primary Mortgage Insurance Policy;
(xviii) the loan purpose;
<PAGE> 35
(xix) the gross margin (if a First Lien Mortgage Loan);
(xx) the lifetime cap and floor (if a First Lien Mortgage
Loan);
(xxi) the periodic rate cap (if a First Lien Mortgage
Loan);
(xxii) convertibility feature (if a First Lien Mortgage
Loan);
(xxiii) combined loan-to-value ratio (if a Second Lien
Mortgage Loan);
(xiv) balloon status (if applicable); and
(xv) borrower credit grade.
Such schedule also shall set forth the total number of Mortgage Loans, the
total of each of the amounts described under (xi), (xiii) and (xiv) above for
all of the Mortgage Loans, the weighted average by principal balance as of the
Cut-Off Date of all of the Mortgage Loans of each of the rates described under
(v), (vi) and (vii) above and the weighted average remaining term to maturity
by principal balance as of the Cut-Off Date of all Mortgage Loans.
- 2 -
<PAGE> 36
EXHIBIT 4
SELLER'S INFORMATION
All information in the Prospectus Supplement described under the
following Sections: "TERMS OF THE BONDS -- Master Servicer," "TERMS OF THE
BONDS -- Security for the Bonds -- The Non-Agency Certificate," "RISK FACTORS
- - -- Risks Associated with the Mortgage Loans" (insofar as such information
relates to numerical or statistical information regarding the Mortgage Loans),
"THE MASTER SERVICER," and "DESCRIPTION OF THE MORTGAGE LOANS."
In addition, all information provided by Seller with respect to the
Mortgage Loans to be set forth in a Current Report on Form 8-K to be filed by
the Purchaser with the Securities and Exchange Commission within 15 days after
the Closing Date.
<PAGE> 37
EXHIBIT 5
PURCHASER'S INFORMATION
All information in the Prospectus Supplement and the Prospectus except
(i) the Seller's Information and (ii) all information in the Prospectus
Supplement described under the following Sections: "TERMS OF THE BONDS --
Credit Enhancement -- The Bond Insurance Policy," "DESCRIPTION OF THE BONDS --
The Bond Insurance Policy," and "THE BOND INSURER."
In addition, all information to be set forth in a Current Report on
Form 8-K to be filed by the Purchaser with the Securities and Exchange
Commission within 15 days after the Closing Date, other than the Seller's
Information included therein.
<PAGE> 38
EXHIBIT 6-A
SUBSTANCE OF OPINION OF SELLER'S COUNSEL
1. The Seller is duly organized, validly existing, and in good standing
under the laws of the State of California. The Seller has the
corporate power and authority to execute, deliver, and perform its
obligations under the Mortgage Loan Purchase Agreement (the
"Agreement").
2. The Agreement has been duly and validly authorized, executed and
delivered by the Seller and constitutes the valid, legal and binding
obligation of the Seller, enforceable against the Seller in accordance
with its terms.
3. Neither the execution and delivery of the Agreement by the Seller nor
the fulfillment of the terms of or the consummation of the
transactions contemplated thereby will result in a breach of any term
or provision of the Certificate of Incorporation or Bylaws of the
Seller, or to counsel's knowledge, will conflict with, result in a
breach or violation of, or constitute a default under, (i) the terms
of any material indenture or other agreement or instrument known to
counsel to which the Seller is a party or by which it is bound, (ii)
any state or federal statute or regulation applicable to the Seller,
or (iii) any order of any state of or federal court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Seller, except in any such case where the default, breach or
violation would not have a material adverse effect on either the
Seller or its ability to perform its obligations under the Agreement.
4. No consent, approval, authorization or order of any state or federal
court or government agency or body is required for the execution,
delivery and performance by the Seller of the Agreement, or the
consummation of the transactions contemplated thereby, except for
those consents, approvals, authorizations or orders which previously
have been obtained.
5. There is no action, suit, proceeding or investigation pending or, to
counsel's knowledge, threatened against the Seller which, in counsel's
judgment, would draw into question the validity of the Agreement,
which seeks to prevent the consummation of any of the transactions
contemplated in the Agreement or which would be likely to impair
materially the ability of the Seller to perform its obligations under
the terms of the Agreement.
<PAGE> 39
EXHIBIT 6-B
SUBSTANCE OF OPINION OF COUNSEL TO IMPERIAL HOLDINGS
1. Imperial Credit Mortgage Holdings, Inc. (the "Guarantor") is duly
organized, validly existing, and in good standing under the law of the
State of Maryland. The Guarantor has the corporate power and
authority to execute, deliver and perform its obligations under that
certain Guaranty dated as of April 25, 1996 (the "Guaranty") made by
the Guarantor for the benefit of Purchaser, that certain Insurance and
Indemnification Agreement dated as of April 1, 1996 (the "Insurance
and Indemnification Agreement") by and among Financial Security
Assurance Inc., the Guarantor, Fund America Investors Trust V and Fund
America Investors Corporation II, and that certain Indemnification
Agreement dated April 22, 1996 (the "Indemnification Agreement" and,
together with the Insurance and Indemnification Agreement," the
"Indemnification Agreements") among the Guarantor and the
Underwriters.
2. The Guaranty and the Indemnification Agreements have been duly and
validly authorized, executed and delivered by the Guarantor and
constitute the valid, legal and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its terms.
3. Neither the execution and delivery of the Guaranty by the Guarantor
nor the fulfillment of the terms of or the consummation of the
transactions contemplated thereby will result in a breach of any term
or provision of the Articles of Incorporation or Bylaws of the
Guarantor, or to counsel's knowledge, will conflict with, result in a
breach or violation of, or constitute a default under, (i) the terms
of any material indenture or other agreement or instrument known to
counsel to which the Guarantor is a party or by which it is bound,
(ii) any state or federal statute or regulation applicable to the
Guarantor, or (iii) any order of any state of or federal court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Guarantor, except in any such case where the
default, breach or violation would not have a material adverse effect
on either the Guarantor or its ability to perform its obligations
under the Guaranty.
4. No consent, approval, authorization or order of any state or federal
court or government agency or body is required for the execution,
delivery and performance by the Guarantor of the Guaranty or the
Indemnification Agreements, or the consummation of the transactions
contemplated thereby, except for those consents, approvals,
authorizations or orders which previously have been obtained.
5. There is no action, suit, proceeding or investigation pending or, to
counsel's knowledge, threatened against the Guarantor which, in
counsel's judgment, would draw into question the validity of the
Guaranty or the Indemnification Agreements, which seeks to prevent the
performance of any of the obligations of Guarantor under the Guaranty
or the Indemnification Agreements or which would be likely to impair
materially the ability of the Guarantor to perform its obligations
under the terms of the Guaranty or the Indemnification Agreements.
<PAGE> 40
EXHIBIT 7
SUBSTANCE OF OPINION OF PURCHASER'S COUNSEL
1. The Purchaser has been duly incorporated and is validly existing as a
corporation under the laws of the State of Delaware and is in good
standing under the laws of the States of Delaware and Colorado.
2. The Purchaser has the corporate power and authority to enter into the
Mortgage Loan Purchase Agreement and the Pooling and Servicing
Agreement, to convey the Mortgage Loans and other property provided
for therein to the Trustee under the Pooling and Servicing Agreement
and to consummate the transactions contemplated therein; the
execution, delivery and performance of the Mortgage Loan Purchase
Agreement and the Pooling and Servicing Agreement have been duly
authorized by all requisite corporate action on the part of the
Purchaser and (a) do not conflict with or result in a breach of the
Certificate of Incorporation or By-laws of the Purchaser, or, to the
knowledge of such counsel, any of the provisions of any material
indenture, mortgage, contract or other material instrument to which
the Purchaser is a party or by which it is bound, or any state or
federal statute, or any order or regulation of any state or federal
court, regulatory body, administrative agency or governmental body
having jurisdiction over the Purchaser and (b) except as provided in
the Mortgage Loan Purchase Agreement and the Pooling and Servicing
Agreement, do not result in the creation or imposition of any lien,
charge or encumbrance upon any of the property of the Purchaser
pursuant to the terms of any such material indenture, mortgage,
contract or other instrument.
3. Assuming due authorization, execution and delivery thereof by the
parties thereto other than the Purchaser, the Mortgage Loan Purchase
Agreement and the Pooling and Servicing Agreement, as executed and
delivered by the Purchaser, are the valid, legal and binding
obligations of the Purchaser, enforceable in accordance with their
respective terms, subject to the effect of bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and court
decisions with respect thereto, and counsel expresses no opinion with
respect to the application of equitable principles in any proceeding,
whether at law or in equity.
4. The Certificate is in the form authorized by the Pooling and Servicing
Agreement, has been duly and validly authorized by all necessary
corporate action and, when executed and authenticated as specified in
the Pooling and Servicing Agreement and delivered against payment
therefor will be validly issued and outstanding; and the Certificate
will be entitled to the benefits of the Pooling and Servicing
Agreement, subject to the effect of bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and court
decisions with respect thereto, and counsel expresses no opinion with
respect to the application of equitable principles in any proceeding,
whether at law or in equity.
- 2 -
<PAGE> 41
5. Upon (1) delivery of possession of the Mortgage Files to the Trustee as
provided in the Pooling and Servicing Agreement, (2) recording of the
original assignment of each Mortgage in the appropriate real property
records where the applicable Mortgage Loan was filed, and (3) filing
of the Financing Statement, the transfer of the Mortgage Loans by
Purchaser is either a sale of the Mortgage Loans to the Trustee or the
grant to the Trustee of a perfected security interest therein which
shall be prior to any other security interest perfected solely by
possession or by filing a financing statement under the UCC or by
filing such an assignment in the appropriate real property records.
6. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended. The Trust Fund
created by the Pooling and Servicing Agreement is not required to be
registered under the Investment Company Act of 1940, as amended.
7. No consent, approval, authorization or order, or registration, filing
with or notice to any court or governmental agency or body, is
required for the execution, delivery and performance by the Purchaser
of, or compliance by the Purchaser with, the Mortgage Loan Purchase
Agreement or the Pooling and Servicing Agreement or the consummation
of the transactions contemplated by such Agreements, except such as
may be required under the blue sky laws of any jurisdiction (as to
which counsel gives no opinion) and such others which have been
obtained or made and disclosed by the Purchaser.
8. To the best of counsel's knowledge, there is no action, suit or
proceeding before or by any court or governmental agency or body now
pending or threatened against the Purchaser asserting the invalidity
of the Mortgage Loan Purchase Agreement or the Pooling and Servicing
Agreement, seeking to prevent the consummation of any of the
transactions contemplated in such Agreements, or which might
materially and adversely affect the performance by the Purchaser of
its obligations under, or the validity or enforcement of, such
Agreements.
- 3 -
<PAGE> 42
EXHIBIT 8
GUARANTY
THIS GUARANTY ("Guaranty") dated as of April 25, 1996, is
executed and delivered by Imperial Credit Mortgage Holdings, Inc., a Maryland
corporation ("Guarantor"), to Fund America Investors Corporation II, a Delaware
corporation ("FAIC II").
The Guarantor irrevocably and unconditionally guarantees to
FAIC II and its successors and assigns, the due payment and performance of all
obligations and liabilities (the "Obligations") of IMH Assets Corp., a
California corporation ("IMH") under Section 5(c), the second to the last
paragraph under Section 7, Section 13(a)(i) and Section 13(d) (but only to the
extent that Section 13(d) relates to the obligations of IMH under Section
13(a)(i)) of the Mortgage Loan Purchase Agreement dated as of April 25, 1996
among FAIC II and IMH (the "Agreement"), regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of FAIC II and its successors and assigns with respect
thereto. This guaranty is unconditional and absolute, and if for any reason
all or any portion of the Obligations shall not be performed or paid promptly,
when due, the Guarantor will immediately perform or pay the same, without being
subject to any defense, right of set-off or counterclaim which the Guarantor
may have or assert. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any the
Obligations is rescinded or must otherwise be returned by FAIC II or its
successors or assigns upon the insolvency, bankruptcy or reorganization of the
Guarantor or otherwise, all as though such payment had not been made.
The obligations, covenants, agreements and duties of the
Guarantor under this Guaranty shall in no way be affected or impaired by reason
of the happening from time to time of any of the following, without the
necessity of any notice to, or further consent of, the Guarantor: (1) the
release or waiver, by operation of law or otherwise, of the performance or
observance by IMH of any express or implied agreement, covenant, term or
condition in the Agreement to be performed or observed by IMH; (2) the
extension of the time for the performance by IMH of the Obligations; (3) the
supplementing, modification or amendment (whether material or otherwise) of the
Agreement or any of the Obligations of IMH set forth therein; (4) any failure,
omission, delay or lack of diligence on the part of FAIC II, to enforce, assert
or exercise any right, privilege, power or remedy conferred on FAIC II in the
Agreement, or any action on the part of FAIC II granting indulgence or
extension of any kind; (5) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, IMH or any of the assets of IMH; (6) any
invalidity of or defect or deficiency in or lack of enforceability of the
Agreement or performance of IMH's obligations thereunder; (7) the settlement or
compromise of any Obligation or (8) any other circumstance (including, without
limitation, any statute of limitations) that might otherwise constitute a
defense available to, or a discharge of, IMH or the Guarantor.
<PAGE> 43
Until payment in full of all of the Obligations, the Guarantor
hereby irrevocably waives any claim or other rights it may now or hereafter
acquire against IMH or any assignee thereof that arise from the existence,
payment, performance or enforcement of the Guarantor's obligations under this
Guaranty or the Agreement, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of FAIC II or any of its
successors or assigns against IMH.
The Guarantor hereby waives notice of acceptance of this
Guaranty and of any liability to which it applies or may apply, presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor, notice
of acceleration, notice of intent to accelerate and all other notices and
demands.
This is a guaranty of performance and not of collection, and
the Guarantor waives any right to require that any action be brought against
IMH or any other person or entity. Should a party seek to enforce the
obligations of the Guarantor by action in any court, the Guarantor waives any
necessity, substantive or procedural, that a judgment previously be rendered
against IMH or any other person or entity be joined in such cause or that a
separate action be brought against IMH or any other person or entity; the
obligations of the Guarantor hereunder are several from those of IMH, and are
primary obligations concerning which the Guarantor is the principal obligor.
All waivers herein contained shall be without prejudice to FAIC II or its
successors and assigns at its option to proceed against IMH or any other person
or entity, whether by separate action or by joinder. The Guarantor agrees that
this guaranty shall not be discharged except by complete performance of all the
Obligations.
The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
THIS GUARANTY SHALL BE DEEMED TO HAVE BEEN MADE AND PERFORMED
IN THE STATE OF CALIFORNIA AND SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE , WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF
SUCH STATE.
This Guaranty shall bind the successors, assigns, receivers,
trustees and representatives of Guarantor and shall inure to the benefit of
FAIC II, its successors and assigns. FAIC II may assign or otherwise transfer
all or any portion of its rights and obligations under the Agreement and this
Guaranty to any other person, and such other person shall thereunpon become
vested with all the benefits in respect thereof granted to FAIC II herein,
therein or otherwise. Guarantor shall not assign its obligations hereunder
without the prior written consent of FAIC II and the Trustee.
THIS GUARANTY is executed as of the day and year first above
written.
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.
- 2 -
<PAGE> 44
By:___________________________
Name:
Title:
- 3 -
<PAGE> 45
EXHIBIT 9
TRANSFER CERTIFICATE
Wilmington Trust Company, as Owner Trustee
11 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, California 92714
Re: Proposed Transfer of Trust Certificates
Gentlemen:
This certification is being made by _______________ (the "Proposed
Transferee") in connection with the proposed Transfer to the Proposed
Transferee of a trust certificate (the "Trust Certificate") representing __%
fractional undivided interest in Fund America Investors Trust V (the "Trust")
created pursuant to a Deposit Trust Agreement, dated as of April 25, 1996 (such
agreement, as amended, being referred to herein as the "Deposit Trust
Agreement") between Fund America Investors Corporation II and Wilmington Trust
Company, as Owner Trustee. Initially capitalized terms used but not defined
herein have the meanings assigned to them in the Deposit Trust Agreement. The
Proposed Transferee hereby certifies as follows:
1. The Proposed Transferee understands that (a) the Trust
Certificates have not been and will not be registered or qualified under the
Securities Act of 1933, as amended (the "Securities Act"), or the securities
laws of any state, (b) neither the Trust nor the Owner Trustee is required, and
neither intends, to so register or qualify the Trust Certificates, and (c) the
Trust Certificates cannot be resold unless a. they are registered and qualified
under the Securities Act and the applicable state securities laws or b. an
exemption from registration and qualification is available.
2. The Proposed Transferee is acquiring the Trust Certificate for its
own account for investment only and not with a view to or for sale or other
transfer in connection with any distribution of the Trust Certificate in any
manner that would violate the Securities Act or any applicable state securities
laws.
3. The Proposed Transferee (a) is an "Accredited Investor" (as such
term is defined under Rule 501(a) of the Securities Act) having such knowledge
and experience in financial and business matters, and in particular in such
matters related to securities similar to the Trust Certificate, such that it is
capable of evaluating the merits and risks of investment in the Trust
Certificate and (b) is able to bear the economic risks of such an investment.
<PAGE> 46
4. The Proposed Transferee has had an opportunity, within a reasonable
period of time prior to purchasing the Trust Certificate, to ask questions of
the Agent and the Owner Trustee concerning the Trust Certificate and has
received satisfactory answers to such questions. The Proposed Transferee has
been furnished with all information that it has requested regarding (a) the
Trust Certificate, (b) the Trust, (c) the Owner Trustee and (d) the Deposit
Trust Agreement.
5. The Proposed Transferee will not authorize nor has it authorized
any person (a) to offer, pledge, sell, dispose of or otherwise transfer any
Trust Certificate, any interest in any Trust Certificate or any other similar
security to any person in any manner, (b) to solicit any offer to buy or to
accept a pledge, disposition or other transfer of any Trust Certificate, any
interest in any Trust Certificate or any other similar security from any person
in any manner, (c) otherwise to approach or negotiate with respect to any Trust
Certificate, any interest in any Trust Certificate or any other similar
security with any person in any manner, (d) to make any general solicitation by
means of general advertising or in any other manner, or (e) to take any other
action that would constitute a distribution of any Trust Certificate under the
Securities Act, that would render the disposition of any Trust Certificate a
violation of Section 5 of the Securities Act or any state securities law, or
that could require registration or qualification pursuant thereto. Neither the
Proposed Transferee nor anyone acting on its behalf has offered any Trust
Certificate for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Trust Certificate. The
Proposed Transferee will not sell or otherwise transfer any Trust Certificates,
except in compliance with the provisions of the Deposit Trust Agreement.
6. The net worth of the Proposed Transferee exceeds $5,000,000.
7. The Proposed Transferee is [check as applicable]: (a) [ ] not a
Non-U.S. Person or (b) [ ] is a Non-U.S. Person that will hold the Trust
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor of such Trust Certificate and
the Owner Trustee with an effective Internal Revenue Service Form 4224 or (c)
[ ] is a Non-U.S. Person that has delivered to both the transferor of the Trust
Certificate and the Owner Trustee an opinion of counsel satisfactory to such
transferor to the effect that the Transfer
-2-
<PAGE> 47
of such Trust Certificate to it is in accordance with the requirements of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder and that such Transfer of the Trust Certificate will not be
disregarded for federal income tax purposes.
Date:
------------------------------ --------------------------------
Name of Proposed Transferee
--------------------------------
Signature
--------------------------------
Name
--------------------------------
Title
-3-
<PAGE> 48
EXHIBIT 10
TRANSFER CERTIFICATE AS TO ERISA MATTERS
Wilmington Trust Company, as Owner Trustee
11 North Market Street
Rodney Square North
Wilmington, Delaware 19890
The Undersigned, hereby certifies that:
1. He is ______________________ of _______________ (the "Investor"),
a corporation duly organized and existing under the laws of the State of
California, on behalf of which he makes this affidavit.
2. The Investor is not, and on ________________________, 199__ will
not be, and on such date will not be investing the funds of, an employee
benefit plan, trust or account subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or a plan subject to Section
4975 of the Internal Revenue Code of 1986, as amended (the "Code") or a
governmental plan defined in Section 3(32) of ERISA subject to any federal,
state or local law which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code ("Similar Law") (each a "Benefit Plan") and is
not an entity, including an insurance company separate account, whose
underlying assets include Benefit Plan assets by reason of a Benefit Plan's
investment in the entity (collectively, with a Benefit Plan, a "Benefit Plan
Investor").
3. The Investor hereby acknowledges that under the terms of the
Deposit Trust Agreement (the "Agreement") between Fund America Investors
Corporation II (the "Company") and Wilmington Trust Company, as Owner Trustee,
dated as of April __, 1996, no transfer of a Trust Certificate shall be
permitted to be made to any person unless the proposed transferee delivers to
the Owner Trustee either (i) a certificate from such transferee to the effect
that such transferee is not an employee benefit plan, trust or account subject
to ERISA or subject to Section 4975 of the Code or a governmental plan subject
to any Similar Law and is not an entity, including an insurance company
separate account, whose underlying assets include Benefit Plan assets by reason
of a Benefit Plan's investment in the entity (collectively, with a Benefit
Plan, a "Benefit Plan Investor")and is not using the assets of a Benefit Plan
to acquire any such Trust Certificate or (ii) an opinion of counsel
satisfactory to the Owner Trustee to the effect that the purchase and holding
of such Trust Certificate will not constitute or result in the assets of the
Trust being deemed to be "Plan Assets" subject to the fiduciary responsibility
provisions of ERISA or a prohibited transaction within the meaning of Section
4.06 of Section 4.07 of ERISA or Section 4975 of the Code or Similar Law, and
will not subject the Administrator, the Owner Trustee or the Company to any
obligation or liability (including obligations or liabilities under ERISA,
Section 4975 of the Code or Similar Law) in addition to those undertaken in the
Agreement. Notwithstanding the foregoing the Owner Trustee will not require
such opinion if, as a result of change of law or otherwise, counsel
satisfactory to the Owner Trustee has rendered
<PAGE> 49
an opinion to the effect that the purchase and holding of such Trust
Certificate by a Benefit Plan Investor will not constitute or result in a
prohibited transaction under ERISA or Section 4975 of the Code or Similar Law).
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] on this ____ day of ________, 199_.
By:
---------------------------------
Name:
Title:
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SCHEDULE A
Schedule of Pending or Threatened Litigation Against Seller
None.
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EXHIBIT 10.2
FUND AMERICA INVESTORS CORPORATION II,
as Agent
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
________________________________________________________________________________
DEPOSIT TRUST AGREEMENT
Dated as of April 25, 1996
________________________________________________________________________________
Fund America Investors Trust V,
Collateralized Mortgage Obligations
Series 1996-A
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DEPOSIT TRUST AGREEMENT relating to FUND AMERICA INVESTORS TRUST V, is
dated and effective as of April 25, 1996 between FUND AMERICA INVESTORS
CORPORATION II, a Delaware corporation with its principal place of business
located in Colorado (herein, together with its permitted successors and
assigns, called the "Company"), and WILMINGTON TRUST COMPANY, a Delaware
banking corporation (in its individual capacity, "WTC").
Article I.
Definitions
Section 1.1. Definitions. Capitalized terms set forth below shall
have the following meanings when used in this Agreement:
"Affiliate" of any Person means any other Person controlling,
controlled by or under common control with such Person.
"Agent" shall mean Fund America Investors Corporation II in its
capacity as agent for the holders of Trust Certificates pursuant to Article
VIII hereof, or any successor in such capacity.
"Agreement" means this Deposit Trust Agreement and any amendments or
modifications hereof.
"Authorized Officer" means any officer of the Owner Trustee who is
authorized to act for the Owner Trustee and whose name appears on a list of
such authorized officers furnished by the Owner Trustee to the Company and the
Indenture Trustee, as such list may be amended or supplemented from time to
time.
"Bonds" means the Fund America Investors Trust V Collateralized
Mortgage Obligations, Series 1996-A, Class A Bonds issued in the aggregate
principal amount of $296,300,000 and due April 25, 2026. The Bonds will be
issued by the Trust acting through the Owner Trustee under the Indenture.
"Business Day" means any day except a Saturday, Sunday or other day on
which banking institutions in Wilmington, Delaware or New York, New York are
authorized by law or regulation to close or a day on which the New York Stock
Exchange is closed.
"Certificate" means the mortgage pass-through certificate created
pursuant to the Pooling and Servicing Agreement.
"Certificate Register" means the register maintained pursuant to
Section 2.3(c).
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"Closing Date" has the meaning specified in the Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means the Certificate that will be granted to the
Indenture Trustee pursuant to Section 3.2 hereof and subject to the Lien of the
Indenture.
"Collection Account" has the meaning assigned to such term in the
Indenture.
"Company" means Fund America Investors Corporation II, a Delaware
corporation, and its successors and assigns.
"Corporate Trust Office" of a Person means the principal corporate
trust or other similar office of such Person.
"Distribution" has the meaning assigned to such term in the Indenture.
"Grant" and variants thereof have the same meaning they have in the Indenture.
"Holder" means the Person in whose name a Bond is registered in the
Bond Register pursuant to Section 2.04 of the Indenture.
"Indenture" means the Indenture dated as of April 1, 1996 relating to
the Bonds to be entered into between the Trust and the Indenture Trustee, as
such Indenture may be amended or supplemented from time to time.
"Indenture Trustee" means Bankers Trust Company of California, N.A., a
national banking association, as trustee under the Indenture, or any successor
Person that shall have become the Indenture Trustee under the Indenture.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Lien" means any lien, mortgage, security interest, pledge, charge,
equity or claim of others or encumbrance of any kind.
"Management Agreement" means the agreement to be entered into between
the Owner Trustee and the Manager and to be dated of even date herewith
pursuant to which the Manager will provide administrative, accounting and
clerical services to the Trust.
"Manager" has the meaning assigned to such term in the Management
Agreement.
"Non-U.S. Person" means a person who is not one of the following: a
citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws
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of the United States or any political subdivision thereof, or an estate or
trust that is subject to U.S. federal income tax regardless of the source of
its income.
"Owner Trustee" means WTC, a Delaware banking corporation, acting not
in its individual capacity, but solely in its fiduciary capacity as trustee
hereunder, and any banking corporation that shall have become its successor
pursuant to Section 7.4.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement dated as of April 1, 1996 by and among the Company, as Seller, ICI
Funding Corporation, as Master Servicer, and Bankers Trust Company of
California, N.A., as Trustee.
"Related Agreement" means any agreement executed and delivered in
connection with the issuance of the Bonds, any agreement executed and delivered
in connection with the sale of Trust Certificates and any other agreement
relating to the transactions contemplated hereby.
"Securities Act" means the Securities Act of 1933, as amended.
"Trust" means the trust created under the laws of the State of
Delaware pursuant to this Agreement and designated as "Fund America Investors
Trust V".
"Trust Certificate" means any equity certificate representing an
ownership interest in the Trust in substantially the form attached hereto as
Annex 1.
"Trust Property" means all money, instruments and other property
deposited in the Trust pursuant hereto, including the Collateral and all
proceeds thereof.
Section 1.2. Indenture Definitions. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
Article II.
Declaration of Trust;
Issuance and Transfer of Trust Certificates;
Duties of Owner Trustee
Section 2.1. Declaration of Trust; Purpose and Powers. WTC is hereby
appointed to hold and agrees to hold the Trust Property as Owner Trustee in
trust upon the terms and conditions and for the use and benefit of the holders
of the Trust Certificates as herein set forth and, with respect
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to the Collateral, subject to the Lien of the Indenture. The office of the
Trust shall be care of the Owner Trustee at the address set forth in Section
9.4 or at such other address as the Owner Trustee may designate by notice to
the holders of Trust Certificates and the Agent. It is the intention of the
parties hereto that the Trust constitute a business trust under the Delaware
Business Trust Act (12 Del.C. Section 3801 et seq.) and that the Trust be
classified and taxed as a grantor trust under Subpart E, Part I of Subchapter J
of Chapter 1 of Subtitle A of the Code, for federal income tax purposes. The
purpose of the Trust is to (i) issue and administer the Bonds, (ii) purchase
and own the Collateral, (iii) to Grant the Collateral to the Indenture Trustee
to support the Bonds issued pursuant to the Indenture, (iv) administer the
Trust Property subsequent to the discharge of the Indenture, and (v) if
directed by holders of Trust Certificates representing more than 50% of the
beneficial interests in the Trust, sell the Trust Property subsequent to the
discharge of the Indenture, all for the benefit of the holders of the Trust
Certificates. The Trust shall not have power to perform any act or engage in
any business whatsoever except for the foregoing purposes and any activity that
is both necessary to the foregoing purposes and, for so long as the Indenture
has not been discharged, within the contemplation of the Indenture. In no
event shall the Owner Trustee or other Person have the power to substitute new
collateral for the Collateral or to reinvest proceeds from the Collateral. The
Owner Trustee hereby is authorized to file a Certificate of Trust and any
appropriate Certificate of Amendment under said Delaware Business Trust Act.
Section 2.2. Transfer of Trust Property to Owner Trustee.
(a) Simultaneously with the execution and delivery of
this Agreement, the Company hereby transfers to the Owner Trustee, its
successors and assigns, forever, all right, title and interest of the Company
in and to the sum of Ten Dollars ($10.00); and effective as of the Closing
Date, the Company hereby transfers to the Owner Trustee, its successors and
assigns, until this Agreement terminates pursuant to Section 9.7 hereof, all
right, title and interest of the Company in the Trust Property, to have and to
hold all of the same, together with all and singular revenues, issues, profits
and proceeds thereof and therefrom and appurtenances thereto to the Owner
Trustee and its successors and its and their assigns until this Agreement
terminates pursuant to Section 9.7 hereof, in trust nevertheless, under and
subject to the conditions and agreements hereinafter set forth, for the common
and equal use, benefit and security of all Persons who shall from time to time
be holders of any of the Trust Certificates and without preference of any of
the Trust Certificates over any of the others by reason of priority in the time
of issue, sale or negotiation thereof.
(b) The Owner Trustee is hereby authorized to execute and
deliver any certificates, representation letters, transfer affidavits and other
documentation as may be necessary to cause the Certificate to be registered in
the name of the Trust in the forms provided to the Owner Trustee by the
Company. In connection therewith, the Company represents and warrants to the
Owner Trustee that the information set forth in such documents is correct. It
is acknowledged and agreed that the Owner Trustee shall have no liability for
the accuracy of the information set forth therein. It is acknowledged that in
connection therewith, the Trust shall assume any liabilities arising from its
status as a holder of the Certificate.
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Section 2.3. Trust Certificates.
(a) The Owner Trustee acknowledges it is holding in trust
on the date hereof the sum of Ten Dollars ($10.00), lawful money of the United
States of America, duly paid by the Company, and that the Company is holding on
the date hereof a Trust Certificate duly executed and delivered to the Company
in exchange therefor in substantially the form attached hereto as ANNEX 1,
evidencing ownership of 100% of the beneficial interest in the Trust.
(b) The minimum beneficial interest in the Trust
evidenced by any one Trust Certificate shall be 3%. Each Trust Certificate
shall be executed by manual signature on behalf of the Trust by a
representative of the Owner Trustee. Trust Certificates bearing the manual
signature of an individual who was, at the time such signature was affixed,
authorized to sign on behalf of the Owner Trustee shall bind the Trust,
notwithstanding that such individual has ceased to be so authorized prior to
the delivery of such Trust Certificates or does not hold such office at the
date of such Trust Certificates. Each Trust Certificate shall be dated the
date of its issuance.
(c) The holders of the Trust Certificates shall be
entitled to all rights provided to them under this Agreement and shall be
subject to the provisions and conditions contained in this Agreement and in the
Trust Certificates. The Trust Certificates shall not be subject to any
pre-emptive or similar rights.
(d) Each Trust Certificate shall bear a legend setting
forth restrictions on transferability substantially as follows:
"THE BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS
TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. THIS TRUST CERTIFICATE MAY BE
DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED
OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF ONLY TO (I) A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR
(II) A PERSON INVOLVED IN THE ORGANIZATION OR OPERATION OF THE
TRUST OR AN AFFILIATE OF SUCH PERSON WITHIN THE MEANING OF
RULE 3A-7 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(INCLUDING BUT NOT LIMITED TO FUND AMERICA INVESTORS
CORPORATION II) IN A TRANSACTION THAT IS REGISTERED UNDER THE
ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS.
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NO PERSON IS OBLIGATED TO REGISTER THIS TRUST CERTIFICATE
UNDER THE ACT OR ANY STATE SECURITIES LAWS. FURTHERMORE, AS
LONG AS TWO OR MORE PERSONS ARE HOLDERS OF TRUST CERTIFICATES,
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS THE CONSENT
OF HOLDERS OF TRUST CERTIFICATES REPRESENTING OWNERSHIP OF
MORE THAN 50% OF THE BENEFICIAL INTEREST IN THE TRUST,
EXCLUDING FOR THIS PURPOSE THE BENEFICIAL INTEREST REPRESENTED
BY ANY TRUST CERTIFICATE OWNED BY THE TRANSFEROR OR (UNLESS
THE TRANSFEROR AND ITS AFFILIATES ARE THE ONLY HOLDERS OF
TRUST CERTIFICATES) ANY AFFILIATE THEREOF, HAS BEEN DELIVERED
TO THE OWNER TRUSTEE; PROVIDED, HOWEVER, THAT NO CONSENT SHALL
BE REQUIRED TO A TRANSFER OF ANY TRUST CERTIFICATE TO THE
COMPANY (AS DEFINED IN THE DEPOSIT TRUST AGREEMENT CREATING
THE TRUST (THE "AGREEMENT")) ON THE CLOSING DATE. THE TRANSFER
OF THIS TRUST CERTIFICATE WILL NOT BE EFFECTIVE UNLESS THE
TRANSFEREE HAS SIGNED AND DELIVERED TO THE OWNER TRUSTEE AN
INSTRUMENT CONTAINING THE TRANSFEREE'S AGREEMENT TO BE BOUND
BY ALL THE TERMS OF THE AGREEMENT, TOGETHER WITH EVIDENCE
SATISFACTORY TO THE OWNER TRUSTEE DEMONSTRATING THE
TRANSFEREE'S COMPLIANCE WITH THE NET WORTH REQUIREMENTS OF
SECTION 2.3(F)(III) OF SAID AGREEMENT. THIS TRUST CERTIFICATE
IS SUBJECT TO OTHER SIGNIFICANT RESTRICTIONS ON TRANSFER AND
OWNERSHIP AS PROVIDED IN THE AGREEMENT."
(e) The Owner Trustee shall maintain a register (the
"Certificate Register") of the names of the holders of the Trust Certificates,
from time to time, which Certificate Register shall show such holders'
respective undivided interests in the Trust. Whenever any Trust Certificates
are surrendered for exchange, the Owner Trustee shall execute and deliver the
Trust Certificates which the holder thereof making the exchange is entitled to
receive. Every Trust Certificate presented or surrendered for transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Owner Trustee, and duly executed by the
holder thereof or his attorney duly authorized in writing. The transferor of
any Trust Certificate shall reimburse the Owner Trustee for any fees and
expenses (including reasonable expenses of counsel) incurred by the Owner
Trustee in connection with such transfer. No holder shall transfer a Trust
Certificate if such transfer would violate any terms of this Agreement, nor
shall any transfer be effective unless an appropriate entry has been made on
the Certificate Register. The Owner Trustee shall, pursuant to the
instructions of each such transferor, enter the name of each such transferee as
substitute holder of such Trust Certificate in the Certificate Register and
issue to each such transferee a new Trust Certificate evidencing such
transferee's Ownership Percentage in exchange and substitution for the
previously issued Trust Certificate representing such ownership interest. Each
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such transferee shall thereupon become a holder of a Trust Certificate for all
purposes hereunder and shall have the beneficial interest in the Trust that was
conveyed by the transferor. The holder of each Trust Certificate as reflected
in the Certificate Register may be treated by the Trust, the Owner Trustee, the
Indenture Trustee, and the Manager as the absolute owner of such Trust
Certificate for all purposes. The Trust, the Owner Trustee, the Indenture
Trustee, and the Manager shall not be affected by any notice to the contrary,
other than a notice pursuant to this Section 2.3(e).
(f) No Trust Certificate may be directly or indirectly
offered or sold or otherwise disposed of (including pledged) except in
compliance with paragraphs (i) - (vi) below:
(i) No transfer of a Trust Certificate shall be made
unless such transfer is made to (A) a "qualified institutional buyer"
as defined in Rule 144A promulgated under the Securities Act ("Rule
144A") in a transaction that is registered under the Securities Act
and applicable state securities laws or that is exempt from the Act
under Rule 144A or (B) to a Person involved in the organization or
operation of the Trust or an affiliate of such a Person within the
meaning of Rule 3a-7 of the Investment Company Act of 1940, as amended
(including but not limited to the Company) in a transaction that is
registered under the Securities Act and applicable state securities
laws or that is exempt from the registration requirements of the
Securities Act and such laws. As a condition to any transfer of a
Trust Certificate, the Owner Trustee will require that the Owner
Trustee or the Manager shall have received a certificate from the
proposed transferee substantially in the form of either ANNEX 2-A or
ANNEX 2-B attached hereto. The Owner Trustee shall not register the
transfer of any Trust Certificate unless the Owner Trustee shall have
determined that, or received written notification from the Manager
that, the foregoing requirements have been complied with. Neither the
Trust, the Owner Trustee, the Company, nor any other Person is
obligated to register the Trust Certificates under the Securities Act
or any other state or federal securities law or to register the Trust
as an "investment company" under the Investment Company Act.
(ii) As long as two or more Persons are holders of Trust
Certificates, the Trust Certificates may only be transferred in
accordance with the following provisions: before any Trust
Certificates may be transferred to any Person, the Owner Trustee shall
have received the consent to such transfer by holders of Trust
Certificates representing ownership of more than 50% of the beneficial
interest in the Trust, excluding for this purpose the beneficial
interest represented by the Trust Certificates owned by the transferor
or (unless the transferor and its Affiliates are the only holders of
Trust Certificates) any Affiliate thereof; provided, however, that no
consent shall be required to a transfer of Trust Certificates to the
Company upon the Closing Date.
(iii) No offer, sale, transfer or other disposition
(including pledge) of any Trust Certificate shall be made to any
transferee unless such transferee certifies to the Owner Trustee that
the net worth of such transferee exceeds the greater of (a) the
product of $15,000,000 and the percentage ownership of the Trust by
the transferee after the proposed transfer and (b) $5,000,000;
provided, however, without regard to the value of such
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transferee's ownership interest in the Trust, the net worth of such
transferee must exceed the greater of (a) the product of $5,000,000
and the percentage ownership of the Trust by the transferee after the
proposed transfer and (b) $1,000,000. No transfer of a Trust
Certificate will be effective unless the transferee has signed and
delivered to the Owner Trustee a certificate containing the
transferee's agreement to be bound by all the terms of this Agreement.
Such certifications are contained in the forms of certificates
attached hereto as ANNEX 2-A and ANNEX 2-B. Notwithstanding the
foregoing, no such certifications must be made or obtained in
connection with the initial transfer of the Trust Certificate to the
Company.
(iv) No offer, sale, transfer or other disposition
(including pledge) of any Trust Certificate shall be made to any
transferee unless, prior to such disposition, the proposed transferee
delivers to the Owner Trustee either (a) a certificate from such
proposed transferee substantially in the form of ANNEX 3 attached
hereto, from such transferee to the effect that such transferee is not
an employee benefit plan, trust or account subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
or subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") or a governmental plan defined in Section 3(32)
of ERISA subject to any federal, state or local law which is, to a
material extent, similar to the foregoing provisions of ERISA or the
Code ("Similar Law") (each a "Benefit Plan") and is not an entity,
including an insurance company separate account or general account,
whose underlying assets include Benefit Plan assets by reason of a
Benefit Plan's investment in the entity (collectively with a Benefit
Plan, a "Benefit Plan Investor"), or (b) an opinion of counsel
satisfactory to the Owner Trustee to the effect that the purchase or
holding of such Trust Certificate will not result in the assets of the
Trust being deemed to be "Plan Assets" subject to the fiduciary
responsibility provisions of ERISA or prohibited transactions
provisions of Section 4975 of the Code or similar law, will not
constitute or result in a prohibited transaction within the meaning of
Section 4.06 or Section 4.07 of ERISA or Section 4975 of the Code or
Similar Law, and will not subject the Manager, the Owner Trustee or
the Company to any obligation or liability (including obligations or
liabilities under ERISA, Section 4975 of the Code or similar law) in
addition to those undertaken herein. Notwithstanding the foregoing,
no such certifications or opinions must be made or obtained in
connection with the initial transfer of the Trust Certificate to the
Company. In addition, notwithstanding the foregoing, the Owner
Trustee will not require such a certificate or opinion if, as a result
of a change of law or otherwise, counsel satisfactory to the Owner
Trustee has rendered an opinion to the effect that the purchase and
holding of a Trust Certificate by a Benefit Plan Investor will not
constitute or result in a prohibited transaction under ERISA or
Section 4975 of the Code or Similar Law. No transfer of a trust
certificate or any beneficial interest therein shall be made to any
person unless the Owner Trustee has received a certificate from such
transferee to the effect that such transferee is not a Benefit Plan
Investor.
(v) No legal or beneficial interest in all or any portion
of a Trust Certificate may be transferred directly or indirectly to
any person unless such transferee (A) is not a
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Non-U.S. Person or (B) is a Non-U.S. Person that will hold such Trust
Certificate in connection with the conduct of a trade or business
within the United States and has furnished the transferor and the
Owner Trustee with an effective Internal Revenue Service Form 4224 or
(C) is a Non-U.S. Person that has delivered to both the transferor and
the Owner Trustee an opinion of a counsel satisfactory to the
transferor to the effect that the transfer of a Trust Certificate to
it is in accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of a Trust
Certificate will not be disregarded for federal income tax purposes.
A certification regarding the matters specified in this paragraph is
contained in the forms of certificate attached hereto as ANNEX 2-A and
ANNEX 2-B. Notwithstanding the foregoing, no such certification must
be made or obtained in connection with the initial transfer of the
Trust Certificate to the Company.
(vi) No offer, sale, transfer or other disposition
(including pledge) of any Trust Certificate shall be made to any
transferee unless, prior to such disposition, the proposed transferor
delivers to the Owner Trustee an Opinion of Counsel to the effect that
such transfer will not cause (i) the Trust to be treated as an
association taxable on a corporation for federal income tax purposes
or (ii) the Trust to be taxable as a taxable mortgage pool as defined
in Section 7701(i) of the Code. Notwithstanding the foregoing, the
provisions of this subsection (vi) shall not apply to the initial
transfer of the Trust Certificate by the Company to IMH Assets Corp.
(vii) Neither the Owner Trustee, the Agent, nor any holder
of a Trust Certificate shall be permitted to apply for a listing of a
Trust Certificate on any "established securities market" as such term
is defined in Treasury Regulation Section 1.7704-1(b) (or any
successor to such provision). Notwithstanding any other provision of
this Section 2.3, the Owner Trustee shall not recognize any transfer
or assignment of a Trust Certificate which is effected on an
established securities market.
Section 2.4. Payments, Distributions and Reports.
(a) Subject to the provisions of subsection (e) below,
any amounts received by the Owner Trustee with respect to the Certificate,
including but not limited to any amounts paid by the Indenture Trustee to the
Owner Trustee pursuant to Sections 4.01 or clause seventh of 8.07(b) of the
Indenture shall be applied no later than one month after receipt thereof in the
following order:
(i) to pay all amounts then due and payable to WTC
pursuant to Sections 7.1 and 7.3 of this Agreement and not theretofore
paid pursuant to the Indenture; and
(ii) to pay any other expenses of the Trust
(including, but not limited to, all amounts then due and payable to
the Manager pursuant to Section 3 of the Management Agreement and not
theretofore paid pursuant to the Indenture) as specified by the Owner
Trustee in the report delivered pursuant to subsection (b) of this
Section 2.4.
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Any amounts remaining after such application shall be distributed to the
holders of the Trust Certificates on the first Business Day after such
application.
(b) Upon making any payment or distribution to the
holders of the Trust Certificates pursuant to this Section 2.4, the Owner
Trustee shall send to each holder of a Trust Certificate a report setting forth
in reasonable detail the amounts received by the Owner Trustee and their
application and distribution. The Owner Trustee shall send copies of such
report to ICI Funding Corporation.
(c) Unless otherwise mutually agreed in writing by the
Agent, the Owner Trustee and the Manager, any distributions pursuant to this
Section 2.4 shall be made in cash. Unless otherwise mutually agreed in writing
by the Agent and the Owner Trustee, the Owner Trustee shall, in connection with
any discharge of the Indenture or the release of any Collateral from the
Indenture pursuant to Section 4.1 thereof, deliver an Issuer Order to the
Indenture Trustee directing the Indenture Trustee to deliver the Collateral to
the Owner Trustee to be held pursuant to this Agreement.
(d) At any time following the discharge of the Indenture,
whether in connection with an optional redemption of the Bonds or otherwise,
the holders of Trust Certificates representing more than 50% of the beneficial
interest in the Trust may direct the Owner Trustee to instruct the Manager to
liquidate to cash all or any portion of the Trust Property held by the Owner
Trustee not consisting of cash. In connection therewith, the Owner Trustee
shall instruct the Manager as to the manner in which such liquidation shall be
effected, as based on instructions furnished by the Agent to the Owner Trustee.
The proceeds from any such liquidation, after application to the payment of the
amounts referred to in clauses (i) and (ii) of subsection (a) above, shall
first be applied to repay amounts provided to cause an optional redemption of
the Bonds, if applicable, and then shall be distributed to the holders of Trust
Certificates.
(e) Holders of Trust Certificates may cause the optional
redemption of the Bonds upon (i) the election of holders of Trust Certificates
representing more than 50% of the beneficial interest in the Trust and (ii) the
payment by or on behalf of each holder of Trust Certificates of such holder's
pro rata share of the redemption price. Any Trust Property released from the
lien of the Indenture following an optional redemption of the Bonds shall be
held by the Owner Trustee, and following the Owner Trustee's receipt thereof,
if the holders of Trust Certificates representing more than 50% of the
beneficial interest in the Trust do not otherwise agree on and instruct the
Owner Trustee regarding the disposition of such Trust Property the Owner
Trustee shall retain any such Trust Property held by the Owner Trustee not
consisting of cash. Thereafter, all cash held by the Owner Trustee, including
any distributions received by the Owner Trustee with respect to the Trust
Property, after application to the payment of the amounts referred to in
clauses (i) and (ii) of subsection (a) above, shall first be applied to repay
amounts provided to cause such optional redemption, and then shall be
distributed to the holders of Trust Certificates.
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(f) Except as otherwise provided in this Section 2.4,
all distributions pursuant to this Section 2.4 shall be divided among the
holders of the Trust Certificates pro rata in accordance with the percentage of
the entire undivided beneficial interest in the Trust owned by each such holder
and shall be made to each such holder in the manner specified in written
instructions from such holder previously delivered to the Owner Trustee in
accordance with Section 9.4.
(g) Notwithstanding anything to the contrary set forth
herein, the Trust may not be revoked at any time prior to the discharge of the
Indenture.
(h) If any withholding tax is due on any distribution to
a holder of a Trust Certificate or on any income allocable to a holder of a
Trust Certificate or if there is any tax imposed on the Trust as a result of
the ownership of a Trust Certificate by a holder of a Trust Certificate, such
tax shall be allocated to, and reduce amounts distributable with respect to,
the Trust Certificate held by such holder of the Trust Certificate.
Section 2.5. Reports to Internal Revenue Service and Others. The
Owner Trustee will (i) cause to be prepared such annual or other reports, (ii)
make such elections and file such tax returns relating to the Trust as may from
time to time be required under any applicable state or Federal statute or rule
or regulation thereunder and (iii) cause to be mailed to any holder of Trust
Certificates any or all of such reports and tax returns when requested to do so
by any such holder or the Agent. The Owner Trustee shall be deemed to be in
compliance with its obligations pursuant to this Section 2.5 if (i) it enters
into the Management Agreement and (ii) it executes and delivers the reports and
documents required hereunder.
Section 2.6. Further Assurances. At the request of the Owners, the
Owner Trustee shall execute and deliver all such other instruments, documents
or certificates and take all such other actions as may be necessary or
advisable to give effect to the transactions contemplated hereby.
Section 2.7. Right to Request Instructions from Holders of Trust
Certificates.
(a) The Owner Trustee shall take such action or shall
refrain from taking such action under this Agreement as it shall be directed
pursuant to a specific provision of this Agreement or, absent such a specific
provision, as it shall be directed in a notice delivered by the holders of
Trust Certificates representing more than 50% of the beneficial interest in the
Trust in accordance with Section 9.4 hereof. In connection with the following
non- ministerial matters, the Owner Trustee shall not act unless it shall be
directed in a notice delivered by the holders of Trust Certificates
representing more than 50% of the beneficial interest in the Trust in
accordance with Section 9.4 hereof:
(i) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of the holders is
required;
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(ii) the initiation of any claim or lawsuit by the Trust and
the compromise of any claim or lawsuit brought by or against the
Trust;
(iii) the appointment of successor Bond Registrars, successor
Paying Agents, successor Indenture Trustees, and any Independent
accountants pursuant to the Indenture;
(iv) the decision to remove the Indenture Trustee; and
(v) the exercise of any optional redemption of the Bonds
pursuant to Section 10.01 of the Indenture.
(b) If in performing its duties under this Agreement the
Owner Trustee (i) is unable to decide between alternative courses of action, or
(ii) is unsure of the application of any provision of this Agreement, the
Indenture or any other Related Agreement, the Owner Trustee may deliver a
notice to the holders of the Trust Certificates and the Agent in accordance
with Section 9.4 requesting written instructions as to the course of action
desired by them and the holders of Trust Certificates shall make any
determination required pursuant to this Section 2.7, as reflected in
instructions to the Owner Trustee delivered in accordance with Section 9.4;
provided, however, that if the Owner Trustee does not receive such instructions
within 10 days after it has delivered such notice, or such shorter period of
time set forth in such notice, it may, but shall be under no duty to, take or
refrain from taking such action not inconsistent with this Agreement as it
shall deem advisable and in the best interests of the holders of the Trust
Certificates and the Owner Trustee shall not be liable for such action or
inaction.
Section 2.8. Activities of Trust. The Trust shall not engage in any
activities other than those required or authorized by the terms of this
Agreement (as in effect on the date hereof) or the Indenture in accordance with
their terms.
Section 2.9. No Implied Duties. The Owner Trustee shall not have any
duty or obligation to manage, control, use, sell, dispose of or otherwise deal
with the Trust Property, or otherwise to take or refrain from taking any action
under or in connection with this Agreement, the Indenture or any other Related
Agreement, except as expressly required by the terms of this Agreement or the
Indenture; and no implied duties or obligations shall be read into this
Agreement against the Owner Trustee. WTC nevertheless agrees that it will at
its own cost and expense, promptly take all actions as may be necessary to
discharge any liens on any part of the Trust Property which result from actions
by or claims against WTC that are not related to the ownership of the Trust
Property or the administration of Trust Property or the transactions
contemplated by the Indenture or Bonds.
Section 2.10. Restrictions. The Owner Trustee shall take no action
(a) that is inconsistent with the purposes and powers of the Trust as set forth
in Section 2.1 or (b) if the Owner Trustee has been notified by the Manager or
the Indenture Trustee that such action would cause or threaten to cause any
nationally recognized statistical rating agency or agencies which rate the
Bonds to
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downgrade its rating thereof. The holders of the Trust Certificates shall not
request the Owner Trustee to take action that would violate the provisions of
the preceding sentence.
Section 2.11. Communications with Holders. If a holder of a Trust
Certificate ("Applicant") applies in writing to the Owner Trustee, and such
application states that the Applicant desires to communicate with other holders
of Trust Certificates and is accompanied by a copy of the form of proxy or
other communication which such Applicant proposes to transmit, then the Owner
Trustee shall, within five Business Days after the receipt of such application,
at its election, either:
(1) afford such Applicant access to the Certificate
Register preserved at the time by the Owner Trustee in accordance with
Section 2.3(c) hereof; or
(2) inform such Applicant as to the approximate number of
holders of Trust Certificates whose names and addresses appear in the
Certificate Register, and as to the approximate cost of mailing to
such holder the form of proxy or other communication, if any,
specified in such application.
If the Owner Trustee elects not to afford such Applicant access to
such information, the Owner Trustee shall, upon the written request of such
Applicant, mail to each holder whose name and address appears in the
Certificate Register, a copy of the form of proxy or other communication that
is specified in such request, with reasonable promptness after a tender to the
Owner Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing.
Section 2.12. Registrar and Transfer Agent. The Company hereby
appoints the Owner Trustee as registrar and transfer agent with respect to the
Trust Certificates and the Owner Trustee hereby accepts such appointment.
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Article III.
Bonds and Issuance Thereof;
Pledge of Collateral
Section 3.1. Execution of Certain Agreements and Documents; Issuance
of the Bonds. The Owner Trustee hereby is directed to execute and deliver the
Indenture, the Management Agreement, the Bonds, and any other Related Agreement
in such forms as shall be specified by the Company, in each case, with such
changes therein as the Owner Trustee and the Company deem appropriate, as
conclusively evidenced by the Owner Trustee's execution thereof in the presence
of the Company or its counsel. If the Management Agreement is terminated or,
notwithstanding the terms of the Management Agreement, the resignation of the
Manager shall become effective before a successor Manager shall have accepted
the assignment of the resigning Manager's rights and duties thereunder pursuant
to Section 9 thereof, the Owner Trustee may, and hereby is authorized to,
appoint a Person to perform substantially the same duties as are assigned to
the Manager in the Management Agreement pursuant to an agreement containing
substantially the same provisions as are contained in the Management Agreement.
The Bonds to be issued by the Trust and authenticated by the Indenture Trustee
under the Indenture shall be issued on the Closing Date in accordance with the
Indenture and shall be in the denominations specified written instructions from
the Company to the Indenture Trustee. The Owner Trustee hereby is authorized
to take all actions required or permitted to be taken by the Trust under any
Related Agreement and hereby is directed to comply with the terms of this
Agreement and each Related Agreement.
Section 3.2. Pledge of Collateral.
(a) On the Closing Date, the Owner Trustee shall Grant to
the Indenture Trustee and its successors and assigns under the Indenture for
the benefit of the Holders of Bonds a first and prior security interest under
the Uniform Commercial Code or any similar applicable law of any state as may
be applicable to the Collateral in and to, and a general first lien upon and
right of set-off against, all of the Owner Trustee's right, title and interest
in and to (i) the Collateral and all Distributions and rights to Distributions
with respect thereto, (ii) the Collection Account and all Eligible Investments
with respect thereto, including all money and income from the investment of
funds in the Collection Account, and (iii) all proceeds of the foregoing,
including without limitation, proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.
(b) On the Closing Date, the Owner Trustee shall satisfy
or cause to be satisfied the requirements of Section 2.09 of the Indenture.
The Indenture Trustee is to have and to hold the Collateral and the rights and
privileges hereby granted, sold, conveyed, assigned, transferred and pledged
and in which a security interest is granted or intended to be granted to the
Indenture Trustee, its successors and assigns, subject to the terms of the
Indenture, for the common and equal use of all Persons who shall from time to
time be holders.
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(c) Upon request, the Owner Trustee shall give, execute,
deliver, file and record any notice, instrument, document, agreement or other
papers that may be necessary or desirable in order to enable the Indenture
Trustee (i) to preserve, perfect, substantiate or validate any security
interest Granted to it by the Owner Trustee under the Indenture and (ii) to
exercise and enforce its rights and the rights of each Holder under the
Indenture with respect to the Collateral.
(d) The Owner Trustee shall not Grant or assign an
interest in the Certificate, or any other Collateral or any distributions with
respect thereto, as long as any Bond is outstanding, to serve as collateral for
any indebtedness, other than the Bonds.
Article IV.
Representations and Warranties of Company
The Company hereby represents and warrants that:
Section 4.1. Title to Trust Property. Upon the sale, assignment or
other transfer by the Company of any of the Trust Property to the Owner Trustee
under this Agreement, the Owner Trustee will have received good title free and
clear of any Lien, and the Owner Trustee will have the right to Grant and
deliver the Collateral to the Indenture Trustee in accordance with the
Indenture and Section 3.2 of this Agreement. Upon the Grant and delivery of
the Collateral by the Owner Trustee to the Indenture Trustee in the manner
contemplated by Section 3.2 of this Agreement and the Indenture, and assuming
the validity and binding effect of the Indenture, the Indenture Trustee will
have obtained a valid first security interest therein, prior to all other
Liens.
Section 4.2. Investment Company. The Trust is not required to
register as an investment company under the Investment Company Act and is not
under the control of a Person required to so register.
Section 4.3. Binding Effect. This Agreement and any Related
Agreements to which the Company is a party have been duly and validly
authorized, executed and delivered by, and constitute valid and binding
agreements of, the Company subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and court decisions with
respect thereto, and no representation or warranty is given as to the
availability of equitable remedies.
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Article V.
Representations and Warranties of WTC
WTC represents and warrants that:
Section 5.1. Good Standing. WTC is a Delaware banking corporation,
validly existing and in good standing under the laws of the State of Delaware
and has all corporate power and all material governmental licenses,
authorizations, consents, and approvals required under the laws of the State of
Delaware to carry on a trust business as now conducted.
Section 5.2. Corporate Power. The execution, delivery and
performance by WTC, in its individual capacity and in its capacity as Owner
Trustee, as the case may be, of this Agreement, the Indenture, the Management
Agreement and the Certificate of Trust referred to in Section 2.1 and the
issuance of the Bonds by the Trust and the Trust Certificates by the Owner
Trustee pursuant to this Agreement are within the corporate power of WTC, have
been duly authorized by all necessary corporate action on the part of WTC (no
action by its shareholders being required) and do not and will not (i) violate
or contravene any judgment, injunction, order or decree binding on WTC or (ii)
violate, contravene or constitute a default under any provision of the
certificate of incorporation or by-laws of WTC or of any material agreement,
contract, mortgage or other instrument binding on WTC or (iii) result in the
creation or imposition of any Lien attributable to WTC on the Trust Property,
other than as contemplated hereunder.
Section 5.3. Consents and Approvals. No consent, approval,
authorization or order of, or filing with, any court or regulatory, supervisory
or governmental agency or body is required under Delaware law by or with
respect to WTC in connection with the execution, delivery and performance by
WTC, in its individual capacity and in its capacity as Owner Trustee, as the
case may be, of this Agreement, the Indenture, the Management Agreement, or the
issuance of the Bonds by the Trust or Trust Certificates by the Owner Trustee
pursuant to this Agreement or the consummation by the Owner Trustee of the
transactions contemplated hereby or thereby (except as may be required by the
Delaware securities laws or as required to perfect the Lien of the Indenture).
Article VI.
Certain Covenants of Company, the Owner Trustee
and Other Holders of Trust Certificates
The Company, the Owner Trustee and any holders of Trust Certificates
hereby agree, for the benefit of each other, and the Holders of the Bonds that:
Section 6.1. Title to Trust Property. The Company at all times
hereafter will use its best efforts to cause the Owner Trustee to have good and
marketable title to the Trust Property, free of
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all Liens (other than the Lien of the Indenture with respect to the Collateral)
and to have lawful authority to assign, transfer and pledge the Collateral to
the Indenture Trustee.
Section 6.2. Notification of Transfer. Immediately upon the sale or
other delivery of any Trust Property to the Owner Trustee pursuant to this
Agreement, the Company will make any appropriate notations on its records to
indicate that the Trust Property has been transferred to the Owner Trustee
pursuant to this Agreement, and, to the extent it constitutes Collateral, has
been pledged by the Owner Trustee to the Indenture Trustee to secure payment of
the Bonds issued under the Indenture.
Section 6.3. Investment Company. Neither the Company nor any holder
of a Trust Certificate shall take any action which would cause the Trust to
become an "investment company" which would be required to register under the
Investment Company Act. If the Trust becomes an investment company required to
register under the Investment Company Act, the Company will use its best
efforts to cause the Trust to become registered under such Act.
Section 6.4. Liability of Holders of Trust Certificates. Subject to
the provisions of Section 7.3(f), each holder of Trust Certificates agrees to
be severally liable with any other holders of Trust Certificates in proportion
to their beneficial interests in the Trust for all fees, expenses, taxes,
indemnity payments and other liabilities of the Trust (other than liability for
the principal and interest on the Bonds and such liabilities as may have been
assumed by the Manager under the Management Agreement) to the extent not
satisfied out of the Trust Property, in accordance with their terms, including
those incurred by WTC in its individual capacity or as Owner Trustee, in the
administration of the Trust hereunder, except that no holder of Trust
Certificates shall be liable for any such liabilities arising prior to the date
on which such holder acquired, or after the date on which such holder
transferred in accordance with the terms hereof, its Trust Certificate, to the
extent such fees, expenses, taxes, indemnity payments and other liabilities of
the Indenture Trustee or the Owner Trustee or WTC, as the case may be, with
respect to the Trust, are not paid out of the Trust Property.
Section 6.5. Minimum Net Worth Requirement. Each holder of Trust
Certificates agrees that, at all times that it shall hold any Trust
Certificates, it will not permit its net worth, after deducting therefrom an
amount equal to the book value of its interest in the Trust, to be less than
the net worth requirement set forth in clause (iii) of Section 2.3(f).
Section 6.6. Reporting of Income. Each holder of Trust Certificates
shall report income received from the Trust consistent with the intent of the
Trust to be excluded from the provisions of Subchapter K of Chapter 1 of
Subtitle A of the Code.
Section 6.7. Bankruptcy Matters. Notwithstanding any other provision
of this Agreement and any provision of law that otherwise so empowers the
Trust, the Trust shall not, without the prior written consent of all of the
Holders of the Bonds, holders of Trust Certificates representing 100% of the
beneficial interests in the Trust, and the Owner Trustee, dissolve in whole or
in part or file a voluntary petition or otherwise initiate proceedings to have
the Trust adjudicated bankrupt or
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insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Trust, or file a petition seeking or consenting to
reorganization or relief of the Trust as debtor under any applicable federal or
state law relating to bankruptcy, insolvency, or other relief for debtors with
respect to the Trust; or seek or consent to the appointment of any trustee,
receiver, conservator, assignee, sequestrator, custodian, liquidator (or other
similar official) of the Trust or of all or any substantial part of the
properties and assets of the Trust, or make any general assignment for the
benefit of creditors of the Trust, or admit in writing the inability of the
Trust to pay its debts generally as they become due or declare or effect a
moratorium on the Trust debt or take any action in furtherance of any of the
above actions.
Article VII.
Concerning the Owner Trustee
Section 7.1. General Matters Relating to the Owner Trustee.
(a) Subject to the terms of the Indenture and Section 7.3
of this Agreement, all monies deposited with or received by the Owner Trustee
hereunder shall be held by it without interest in trust as part of the Trust
Property until distributed to the holders of Trust Certificates in accordance
with Section 2.4 above or pledged to the Indenture Trustee in accordance with
the Indenture. The Owner Trustee shall not have the power to invest any monies
held by it as a part of the Trust Property, unless authorized to do so by
holders of Trust Certificates representing more than 50% of the beneficial
interests in the Trust.
(b) WTC, in its individual capacity and in its capacity as
Owner Trustee, shall be under no liability for any action taken by the Owner
Trustee in good faith in reliance upon any paper, order, list, demand, request,
consent, affidavit, notice, opinion, direction, endorsement, assignment,
resolution, draft or other document, prima facie properly executed, or for the
disposition of monies or Collateral pursuant to this Agreement. Subject to the
requirements in Section 2.7(b), the Owner Trustee may construe any of the
provisions of this Agreement, insofar as the same may appear to be ambiguous or
inconsistent with any other provisions hereof, and any such construction by the
Owner Trustee made in good faith shall be binding upon the parties hereto and
the holders of Trust Certificates.
(c) WTC, in its individual capacity and in its capacity as
Owner Trustee, shall not be liable with respect to any action taken or omitted
to be taken by the Owner Trustee in accordance with instructions of the Company
or holders of Trust Certificates or with respect to any action taken or omitted
to be taken by the Manager under the Management Agreement, and WTC, in its
individual capacity and in its capacity as Owner Trustee, shall not be liable
for performing any obligations or duties under this Agreement or under any
Related Agreement which are to be performed by the Manager under the Management
Agreement.
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(d) WTC, in its individual capacity and in its capacity as
Owner Trustee, shall not be responsible for or in respect of the recitals
herein, the validity or sufficiency of this Agreement or for the due execution
hereof by the Company or for the form, character, genuineness, sufficiency,
value or validity of any Collateral or for or in respect of the validity or
sufficiency of the Trust Certificates (except for the due execution thereof by
the Owner Trustee), and WTC, in its individual capacity and in its capacity as
Owner Trustee, shall in no event assume or incur any liability, duty or
obligation to any Holder of the Bonds or to the Company or to any other holder
of a Trust Certificate, other than as expressly provided for herein or in the
Indenture.
(e) WTC, in its individual capacity and in its capacity
as Owner Trustee, shall not be under any obligation to appear in, prosecute or
defend any action, which in its opinion may require it to incur any
out-of-pocket expense or any liability unless it shall be furnished with such
reasonable security and indemnity against such expense or liability including
such advances as it may require, and any out-of-pocket cost of the Owner
Trustee as a result of such actions shall be deductible from and a charge
against the Trust Property to the extent that such Trust Property is not
subject to the Lien of the Indenture. The Owner Trustee may, but shall be
under no duty to, undertake such action as it may deem necessary at any and all
times, without any further action by any holder of Trust Certificates, to
protect the Trust Property and the rights and interests of the holders of the
Trust Certificates pursuant to the terms of this Agreement and the Indenture;
provided, however, that WTC may obtain reimbursement for the out-of-pocket
expenses and costs of such actions, undertakings or proceedings from the Trust
Property to the extent that such portion of the Trust Property is not subject
to the Lien of the Indenture.
(f) In the exercise or administration of the trusts and
powers hereunder, including its obligations under Section 2.5 and Section
3.2(c) or with respect to any duties or obligations under the Indenture, the
Owner Trustee may, at the expense of the holders of the Trust Certificates,
employ and consult with agents, attorneys, accountants and auditors and enter
into agreements with any of them, in addition to the Management Agreement, and
WTC, in its individual capacity and in its capacity as Owner Trustee, shall not
be answerable for the default or misconduct of any such agents, attorneys,
accountants or auditors or for any action taken by the Owner Trustee in
accordance with advice given as a result of such employment or consultation if
such agents, attorneys, accountants or auditors shall have been selected by it
with reasonable care.
(g) In furtherance, but not in limitation of, the
provisions of clauses (b) through (f) of this Section 7.1, WTC (in either its
individual capacity or its capacity as Owner Trustee) shall not be subject to
liability under this Agreement except for reason of (i) willful misconduct or
gross negligence in the performance of its duties, (ii) the inaccuracy of any
representation or warranty contained in Article V, (iii) the failure by WTC to
perform the obligations expressly undertaken by it in the last sentence of
Section 2.9 or (iv) for taxes, fees or other charges on, based on, or measured
by, any fees, commissions or compensation received by WTC in either its
individual capacity or in its capacity as Owner Trustee in connection with any
of the transactions contemplated by this Agreement, the Indenture or the Bonds.
(h) WTC, in its individual capacity and in its capacity
as Owner Trustee, shall not purchase or hold any Trust Certificates.
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(i) In no event shall WTC be liable for any indebtedness under the Bonds.
Section 7.2. Books and Records; Mailings to Trust Certificateholders.
The Owner Trustee shall keep proper books of record and account of all the
transactions under this Agreement at its Corporate Trust Office, including the
Certificate Register, and such books and records shall be open to inspection by
any holder of a Trust Certificate at all reasonable times during usual business
hours of the Owner Trustee.
Section 7.3. Compensation of WTC.
(a) Subject to the provisions of paragraph (f) below, WTC
shall be entitled to receive as compensation for the services of the Owner
Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) such ordinary fees as are fair,
reasonable and customary for the performance of such services and as may from
time to time hereafter be agreed upon between the holders of Trust Certificates
and the Owner Trustee and reimbursement from the holders of the Trust
Certificates for all reasonable out- of-pocket expenses, disbursements and
advances incurred or made by the Owner Trustee in accordance with any of the
provisions of this Agreement and the Indenture (including the reasonable
compensation and the reasonable expenses and disbursements of its counsel and
of all persons not regularly in its employ), except any such expense,
disbursement or advance as may arise from any of the matters referred to in
Section 7.1(g) or for the Owner Trustee's failure to use ordinary care to
dispense funds pursuant to Section 2.4.
(b) Subject to the provisions of paragraph (f) below, the
holders of Trust Certificates covenant to indemnify WTC for, and to hold it
harmless against, any loss, liability, obligations, damages, penalties, taxes
(excluding any taxes payable by WTC on or measured by any compensation for
services rendered by the Owner Trustee under this Agreement), actions, claims,
suits or out-of-pocket expenses or costs incurred or arising out of or in
connection with the acceptance or administration of this trust, including the
reasonable costs and out-of-pocket expenses of defending itself against any
claim of liability in the premises, except for expenses resulting from the
matters referred to in Section 7.1(g) or for the Owner Trustee's failure to use
ordinary care to dispense funds pursuant to Section 2.4. The obligations of
the holders of Trust Certificates to indemnify WTC hereunder shall be several
(and not joint) and in proportion to their beneficial interests in the Trust;
provided, however, that in taking any action pursuant to instructions from the
holders of less than 100% of the Trust Certificates, WTC shall be fully
indemnified pursuant to this subsection (b) by the holders of Trust
Certificates directing such action, pro rata. The obligations of the holders
of Trust Certificates to indemnify WTC, and its right to be compensated and be
reimbursed for the reasonable out-of-pocket expenses, disbursements and
advances of the Owner Trustee from the Trust Property pursuant to Sections
7.1(e) and 7.3(a), shall survive the termination of this Agreement pursuant to
Section 9.7. Such obligations shall be secured by a claim prior to that of the
Trust Certificates upon any Trust Property that is not subject to the lien of
the Indenture.
(c) The Owner Trustee shall not be required to take or
refrain from taking any action under this Agreement or any Related Agreement
(other than the giving of notices) unless
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WTC shall have been indemnified by the holders of the Trust Certificates, in
manner and form satisfactory to WTC, against any liability, fee, cost or
expense (including attorneys' fees) which may be incurred or charged in
connection therewith. The Owner Trustee shall not be required to take any
action if WTC shall reasonably determine, or shall have been advised by
counsel, that such action is likely to result in personal liability, or is
contrary to the terms hereof or of any document contemplated hereby to which
the Owner Trustee is a party or otherwise contrary to law.
(d) If properly paid pursuant to the terms of this
Agreement and the Indenture, any amounts paid to WTC pursuant to Section 7.1
and this Section 7.3 shall not be deemed to be part of the Trust Property
immediately after such payment.
(e) Notwithstanding anything to the contrary contained
herein, no holder of Trust Certificates shall be liable under Section 7.3 to
the extent such fees, expenses, disbursements, advances, indemnity payments and
other liabilities arose prior to the date on which such holder acquired or
after the date on which such holder transferred in accordance with the terms
hereof, its Trust Certificate.
(f) Notwithstanding the provisions of paragraph (a)
above, the Owner Trustee agrees that, so long as the Bonds are outstanding (i)
the fees payable to the Owner Trustee pursuant to paragraph (a) above shall be
payable solely as provided in Section 8.07(b) of the Indenture and (ii) the
expenses, disbursements and advances referred to in paragraph (a) above shall
not include routine administrative expenses, disbursements or advances such as
postage, courier charges, or telephone and facsimile charges, and such routine
administrative expenses shall not be recoverable by the Owner Trustee under
this Agreement.
Section 7.4. Resignation, Discharge or Removal of Owner Trustee;
Successor.
(a) The Owner Trustee may resign and be discharged of the
trust created by this Agreement by executing an instrument in writing, filing
the same with the Company and the Indenture Trustee and mailing a copy of a
notice of resignation to all holders of Trust Certificates then of record and
to the Agent, not less than sixty days before the date specified in such
instrument when, subject to Section 7.4(c), such resignation is to take effect.
Upon receiving such notice of resignation, the holders of the Trust
Certificates shall use their best efforts promptly to appoint a successor Owner
Trustee in the manner and meeting the qualifications hereinafter provided by
written instrument or instruments delivered to such resigning Owner Trustee and
the successor Owner Trustee. Holders of the Trust Certificates representing
more than 50% of the beneficial interest in the Trust may remove the Owner
Trustee and appoint a successor Owner Trustee by written instrument or
instruments delivered to the Owner Trustee so removed and the successor Owner
Trustee.
(b) In case at any time the Owner Trustee shall resign
and no successor Owner Trustee shall have been appointed within thirty days
after notice of such resignation has been filed and mailed as required by
Section 7.4(a), the resigning Owner Trustee may forthwith apply to a court of
competent jurisdiction for the appointment of a successor Owner Trustee. Such
court may
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thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor Owner Trustee.
(c) Any successor Owner Trustee appointed hereunder shall
promptly execute and deliver to the holders of Trust Certificates, the Agent,
the retiring Owner Trustee and the Indenture Trustee an instrument accepting
such appointment hereunder, and the successor Owner Trustee without any further
act, deed or conveyance shall become vested with all the rights, powers, duties
and obligations of its predecessor hereunder with like effect as if originally
named the Owner Trustee herein and shall be bound by all the terms and
conditions of this Agreement. Upon the request of the successor Owner Trustee,
the retiring Owner Trustee shall, upon payment of all amounts due the retiring
Owner Trustee, execute and deliver an instrument transferring to the successor
Owner Trustee all the rights and powers of the retiring Owner Trustee; and the
retiring Owner Trustee shall transfer, deliver and pay over to the successor
Owner Trustee all of the Trust Property at the time held by it, if any,
together with all necessary instruments of transfer and assignment or other
documents properly executed necessary to effect such transfer and such of the
records or copies thereof maintained by the retiring Owner Trustee in the
administration hereof as may be requested by the successor Owner Trustee and
shall thereupon be discharged from all duties and responsibilities under this
Agreement. Any resignation or removal of an Owner Trustee and appointment of a
successor Owner Trustee pursuant to this Section 7.4 shall become effective
upon such acceptance of appointment by the successor Owner Trustee.
(d) Any corporation into which the Owner Trustee may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Owner Trustee shall be a party, shall
be the successor Owner Trustee under this Agreement without the execution,
delivery or filing of any paper, instrument or further act to be done on the
part of the parties hereto, anything herein, or in any agreement relating to
such merger or consolidation, by which the predecessor corporation may seek to
retain certain powers, rights and privileges theretofore obtaining for any
period of time following such merger or consolidation, to the contrary
notwithstanding; provided that such corporation resulting from any such merger
or consolidation shall meet the qualifications set forth in Section 7.5.
Section 7.5 Qualification of Owner Trustee. The Owner Trustee shall
at all times be a banking corporation organized and doing business under the
laws of the United States, or any state thereof, having all corporate powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on a trust business and having at all times an aggregate
capital, surplus, and undivided profits of not less than $5,000,000.
Section 7.6 Appointment of Additional Trustees. At any time or
times, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Property may at the time be located, the Owner
Trustee, by an instrument in writing, may appoint one or more individuals or
corporations to act as separate trustee or separate trustees of all or any part
of the Trust Property to the full extent that local law makes it necessary for
such separate trustee or separate trustees to act alone.
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Section 7.7. Not Acting in Individual Capacity. In acting hereunder,
WTC acts solely as trustee and not in its individual capacity; all persons
having any claim against WTC by reason of the transactions contemplated hereby
shall look only to the Trust Property for payment or satisfaction thereof;
provided, however, that nothing contained herein shall protect WTC (in either
capacity) against any liability to which it would otherwise be subject by
reason of willful misconduct or gross negligence in the performance of its
duties or with respect to the matters contained in Section 7.1(g).
Section 7.8. Reimbursement of Owner Trustee for Amounts Paid to
Manager. Holders of the Trust Certificates shall reimburse the Owner Trustee
for amounts required to be paid by the Owner Trustee to the Manager pursuant to
Section 3 of the Management Agreement.
Article VIII.
Concerning the Agent
Section 8.1. Appointment as Agent. The Company shall act as Agent
for the holders of Trust Certificates (in such capacity, the "Agent") until its
resignation or removal pursuant to Section 8.4.
Section 8.2. Instructions to Owner Trustee. The right to (i) direct
the Owner Trustee to sell the Trust Property pursuant to Section 2.1, (ii)
instruct the Owner Trustee as provided in Section 2.4(d) and (e), (iii)
instruct the Owner Trustee pursuant to Section 2.7, (iv) authorize the Owner
Trustee to invest monies as provided in Section 7.1(a), (v) agree to
compensation for the Owner Trustee pursuant to Section 7.3(a), (vi) appoint a
successor Owner Trustee or to remove the Owner Trustee pursuant to Section
7.4(a), (vii) consent to amendments and waivers pursuant to Section 9.3, and
(viii) revoke the Trust as provided in Section 9.7, in each case as reserved to
the holders of Trust Certificates pursuant to this Agreement, shall be
exercised by the Agent on behalf of the holders of Trust Certificates as
directed by such holders pursuant to Section 8.3 and the Sections referred to
in this sentence. The Agent shall promptly respond to every request for
instructions addressed to it by the Owner Trustee.
Section 8.3. Direction of Agent. In performing its duties
hereunder, the Agent shall act in accordance with any written instruction
signed on behalf of a holder or holders of Trust Certificates representing more
than 50% of the beneficial interest in the Trust. Before taking any
non-ministerial action, the Agent shall request written instructions from the
holders of Trust Certificates.
Section 8.4. Replacement of Agent. The Agent may resign its duties
at any time on notice to the holders of Trust Certificates and the Owner
Trustee. The Agent may be removed, and in the event of the removal or
resignation of the Agent, a successor Agent may be appointed, by holders of
Trust Certificates holding, in the aggregate, a majority of the ownership
interest in the Trust. No removal of the Agent shall be effective until a
notice of such removal meeting the requirements of this Section is delivered to
the Owner Trustee.
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<PAGE> 25
Section 8.5 No Agent. If at any time there is no Agent appointed
under this Article, holders of Trust Certificates representing more than 50% of
the beneficial interests in the Trust shall give such directions or consents or
take such other actions as are reserved herein to the Agent or to the holders
of Trust Certificates.
Article IX.
Miscellaneous
Section 9.1 Benefit of Agreement. Whenever any of the parties to
this Agreement is referred to, such reference shall be deemed to include the
successors and assigns of such party. All the representations, warranties,
covenants and agreements contained in this Agreement and all requests, notices,
directions, consents, waivers or other actions made or taken, by or on behalf
of the Company, the other holders of the Trust Certificates or the Owner
Trustee shall bind, and inure to the benefit of, their respective successors
and assigns and the holders of the Trust Certificates from time to time,
whether so expressed or not.
Section 9.2 Severability. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be held invalid for any
reason whatsoever, then such covenants, agreements, provisions or terms shall
be deemed severable from the remaining covenants, agreements, provisions or
terms of this agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Trust
Certificates or the rights of the holders thereof or of the Holders of the
Bonds.
Section 9.3 Amendments and Waivers. This Agreement may not be
amended, and compliance with any provision hereof may not be waived by the
Owner Trustee or the holders of Trust Certificates, including the Company,
unless such amendment or waiver is consented to by (i) the Owner Trustee and
(ii) holders of Trust Certificates representing more than 50% of the beneficial
interests in the Trust; provided that, after the issuance and sale of the
Bonds, any amendment or waiver of Sections 2.1, 2.2, 2.3(f)(vi) and (vii),
2.4(g), 2.8, 2.10, Articles III and IV, Sections 6.1, 6.3, 6.4, 6.7, 7.3(b),
9.3, 9.5, 9.7 and 9.8 shall also require the consent of the Indenture Trustee;
provided, however, that Section 2.3(f)(i) may not be amended in any manner such
that transfers of Trust Certificates in accordance with such Section would
cause the Trust to become an "investment company" required to register under
the Investment Company Act; and, provided further, that Sections 2.3(f)(ii) and
6.4 may not be amended unless the Owner Trustee is furnished with an Opinion of
Counsel reasonably satisfactory to it, and upon which the Indenture Trustee may
rely, that such amendment will not result in the Trust being characterized as
an association taxable as a corporation.
Section 9.4 Notices. Any notice, demand, direction or instruction
to be given to the Owner Trustee under this Agreement shall be in writing and
shall be duly given if mailed or delivered to the Owner Trustee at: Wilmington
Trust Company, Rodney Square North, 110 North Market Street, Wilmington,
Delaware 19890, Attention: Corporate Trust Administration, or such other
address as shall be specified by the Owner Trustee in a notice to the holders
of Trust
-25-
<PAGE> 26
Certificates and the Agent given in accordance with this Section 9.4. Any
notice, demand, direction or instruction to be given to the Company or the
Agent under this Agreement shall be in writing and shall be duly given if
mailed or delivered to the Company at: Plaza Tower One, Suite 1200A, 6400 South
Fiddler's Green Circle, Englewood, Colorado 80111, Attention: Howard J.
Glicksman, Esq. (w/ copy to Ms. Helen M. Dickens), or at such other address as
shall be specified by the Company in a notice to the Owner Trustee and the
holders of Trust Certificates given in accordance with this Section 9.4. Any
notice to be given to holders of Trust Certificates (other than the Company)
under this Agreement shall be in writing and shall be duly given if mailed or
delivered to each holder of a Trust Certificate outstanding at the time such
notice is given at the address for such holder contained in the records
maintained by the Owner Trustee pursuant to Section 7.2 with a copy thereof
provided to the Agent. Any notice, demand, direction or instruction to be
given to the Indenture Trustee under this Agreement shall be in writing and
shall be duly given if mailed or delivered to the Indenture Trustee at: 3 Park
Plaza, 16th Floor, Irvine, California 92714, or at such other address as shall
be specified by the Indenture Trustee in a notice to the Company and the Owner
Trustee given in accordance with this Section 9.4. If mailed, any notice shall
be effective 72 hours after being deposited in the United States mail,
registered and postage prepaid.
Section 9.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, and all laws
or rules of construction of such state shall govern the rights of the parties
to this Agreement and the interpretation of the provisions of this Agreement;
provided that as to Collateral located in any jurisdiction other than the State
of Delaware, the Indenture Trustee on behalf of the Holders of the Bonds shall
have all the rights to which a secured party is entitled under the laws of such
jurisdiction.
Section 9.6 Counterparts. This Agreement may be executed and
delivered in any number of counterparts, and such counterparts taken together
shall constitute one and the same instrument.
Section 9.7 Termination of this Agreement; No Power to Revoke or
Withdraw Trust Property.
(a) The Trust shall terminate following the final
distribution with respect to the Trust Property pursuant to Section 2.4, and in
any event shall not terminate prior to the discharge of the Indenture. The
bankruptcy, death or other incapacity of any holder of a Trust Certificate
shall not operate to terminate this Agreement, nor entitle such holder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Property,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of the holders of Trust Certificates.
(b) Except as expressly provided in Sections 9.7(a) and
2.4(d), neither the Company nor any other holder of Trust Certificates shall be
entitled to revoke the Trust established hereunder. Subject to Section 2.4,
neither the Company nor any other holder of Trust Certificates may withdraw any
of the Trust Property from the Trust.
Section 9.8 Nature of Interest in Trust Property. Neither the
Company nor the holders of the Trust Certificates shall have legal title to any
part of the Trust Property so long as the Trust
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<PAGE> 27
Property is pledged to the Indenture Trustee. No transfer, by operation of law
or otherwise, of any right, title and interest of the Company or of any other
holder of a Trust Certificate in and to the undivided beneficial ownership
interest in the Trust represented by the Trust Certificate held by the Company
or such other holder shall operate to terminate this Agreement or the trust
created hereunder or entitle any successor transferee to an accounting or to
the transfer to it of legal title to any part of the Trust Property.
-27-
<PAGE> 28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
FUND AMERICA INVESTORS CORPORATION II
By:___________________________________
Name: Jamie R. Gross
Title: Vice President
WILMINGTON TRUST COMPANY
By:___________________________________
Name: Denise M. Geran
Title: Financial Services Officer
-28-
<PAGE> 29
ANNEX 1
THE BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS TRUST CERTIFICATE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THIS TRUST CERTIFICATE MAY
BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING
PLEDGED) BY THE HOLDER HEREOF TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) A PERSON
INVOLVED IN THE ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH
A PERSON WITHIN THE MEANING OF RULE 3A-7 OF THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED (INCLUDING BUT NOT LIMITED TO FUND AMERICA INVESTORS CORPORATION) IN
A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH
LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS TRUST CERTIFICATE UNDER THE ACT
OR ANY STATE SECURITIES LAWS. FURTHERMORE, AS LONG AS TWO OR MORE PERSONS ARE
HOLDERS OF TRUST CERTIFICATES, NO TRANSFER OF THIS CERTIFICATE MAY BE MADE
UNLESS THE CONSENT OF HOLDERS OF TRUST CERTIFICATES REPRESENTING OWNERSHIP OF
MORE THAN 50% OF THE BENEFICIAL INTEREST IN THE TRUST, EXCLUDING FOR THIS
PURPOSE THE BENEFICIAL INTEREST REPRESENTED BY ANY TRUST CERTIFICATE OWNED BY
THE TRANSFEROR OR (UNLESS THE TRANSFEROR AND ITS AFFILIATES ARE THE ONLY
HOLDERS OF TRUST CERTIFICATES) ANY AFFILIATE THEREOF, HAS BEEN DELIVERED TO THE
OWNER TRUSTEE; PROVIDED, HOWEVER, THAT NO CONSENT SHALL BE REQUIRED TO A
TRANSFER OF ANY TRUST CERTIFICATE TO THE COMPANY (AS DEFINED IN THE DEPOSIT
TRUST AGREEMENT CREATING THE TRUST (THE "AGREEMENT")) ON THE CLOSING DATE. THE
TRANSFER OF THIS TRUST CERTIFICATE WILL NOT BE EFFECTIVE UNLESS THE TRANSFEREE
HAS SIGNED AND DELIVERED TO THE OWNER TRUSTEE AN INSTRUMENT CONTAINING THE
TRANSFEREE'S AGREEMENT TO BE BOUND BY ALL THE TERMS OF THE AGREEMENT, TOGETHER
WITH EVIDENCE SATISFACTORY TO THE OWNER TRUSTEE DEMONSTRATING THE TRANSFEREE'S
COMPLIANCE WITH THE NET WORTH REQUIREMENTS OF SECTION 2.3(F)(III) OF SAID
AGREEMENT. THIS TRUST CERTIFICATE IS SUBJECT TO OTHER SIGNIFICANT RESTRICTIONS
ON TRANSFER AND OWNERSHIP AS PROVIDED IN THE AGREEMENT.
<PAGE> 30
TRUST CERTIFICATE
Fund America Investors Trust V
THIS CERTIFIES THAT __________________________________ (the "Owner")
is the registered owner of a _____% undivided interest in Fund America
Investors Trust V (the "Trust") existing under the laws of the State of
Delaware and created pursuant to the Deposit Trust Agreement (such Deposit
Trust Agreement being referred to herein as the "Agreement") dated as of April
__, 1996 between FUND AMERICA INVESTORS CORPORATION II and WILMINGTON TRUST
COMPANY, not in its individual capacity but solely in its fiduciary capacity as
trustee under the Agreement (the "Owner Trustee"). Initially capitalized terms
used but not defined herein have the meanings assigned to them in the
Agreement. The Owner Trustee has executed this Trust Certificate by one of its
duly authorized signatories as set forth below. This Trust Certificate is one
of the Trust Certificates referred to in the Agreement and is issued under and
is subject to the terms, provisions and conditions of the Agreement to which
the holder of this Trust Certificate by virtue of the acceptance hereof agrees
and by which the holder hereof is bound. Reference is hereby made to the
Agreement for a statement of the rights of the holder of this Trust
Certificate, as well as for a statement of the terms and conditions of the
Trust created by the Agreement.
The holder hereof agrees (i) that the holder is severally liable based
upon the holder's proportionate beneficial interest in the Trust for all fees,
expenses, taxes, indemnity payments and other charges or obligations of the
Trust (other than the principal of and interest on the Bonds and certain
expenses agreed to be paid by the Manager pursuant to the Management Agreement)
to the extent not satisfied out of the Trust Property and (ii) not to transfer
this Trust Certificate except in accordance with the Agreement.
-2-
<PAGE> 31
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Certificate to be executed as of the date hereof on behalf of the Trust by an
authorized representative of the Owner Trustee by his signature. This Trust
Certificate shall not be valid or enforceable for any purpose until it shall
have been so signed by a Vice President or Assistant Vice President.
Dated: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By:___________________________________
Name:
Title:
-3-
<PAGE> 32
ANNEX 2-A
TRANSFER CERTIFICATE
Wilmington Trust Company, as Owner Trustee
11 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, California 92714
Re: Proposed Transfer of Trust Certificates
Gentlemen:
This certification is being made by _______________ (the "Proposed
Transferee") in connection with the proposed Transfer to the Proposed
Transferee of a trust certificate (the "Trust Certificate") representing __%
fractional undivided interest in Fund America Investors Trust V (the "Trust")
created pursuant to a Deposit Trust Agreement, dated as of April __, 1996 (such
agreement, as amended, being referred to herein as the "Deposit Trust
Agreement") between Fund America Investors Corporation II and Wilmington Trust
Company, as Owner Trustee. Initially capitalized terms used but not defined
herein have the meanings assigned to them in the Deposit Trust Agreement. The
Proposed Transferee hereby certifies as follows:
1. The undersigned is a qualified institutional buyer (as defined in
Rule 144A under the Securities Act of 1933, as amended), as follows:
(i) It owned and/or invested on a discretionary basis eligible
securities (excluding affiliate's securities, bank deposit
notes and CD's, loan participations, repurchase agreements,
securities owned but subject to a repurchase agreement and
swaps), as described below:
Date: _____________, 19__ (must be on or after the close of its most
recent year)
Amount: $_________________; and
(ii) The dollar amount set forth above is [check as applicable]:
(A) [ ] greater than $100 million and the undersigned is one
of the following entities:
<PAGE> 33
(I) [ ] an insurance company as defined in
Section 2(13) of the Securities Act; or(1)
(II) [ ] an investment company registered under
the Investment Company Act or any
business development company as defined
in Section 2(a)(48) of the Investment
Company Act; or
(III) [ ] a Small Business Investment Company
licensed by the U.S. Small Business
Administration under Section 301(c) or
(d) of the Small Business Investment Act
of 1958; or
(IV) [ ] a plan established and maintained by a
state, its political subdivisions, or any
agency or instrumentality of a state or
its political subdivisions, for the
benefit of its employees; or
(V) [ ] a trust fund whose trustee is a bank or
trust company and whose participants are
exclusively plans of the types identified
in paragraph (4) or (5) of this section,
except trust funds that include as
participants individual retirement
accounts or H.R. 1 plans; or
(VI) [ ] a business development company as defined
in Section 202(a)(22) of the Investment
Advisers Act of 1940; or
(VII) [ ] a corporation (other than a U.S. bank,
savings and loan association or
equivalent foreign institution),
partnership, Massachusetts or similar
business trust, or an organization
described in Section 501(c)(3) of the
Code; or
(VIII) [ ] a U.S. bank, savings and loan association
or equivalent foreign institution, which
has an audited net worth of at least $25
million as demonstrated in its latest
annual financial statements; or
(IX) [ ] an investment adviser registered under
the Investment Advisers Act; or
(B) [ ] greater than $10 million, and the undersigned
is a broker-dealer registered with the SEC;
or
__________________________________
(1) A purchase by an insurance company for one or more of its separate
accounts, as defined by section 2(a)(37) of the Investment Company
Act, which are neither registered nor required to be registered, shall
be deemed to be a purchase for the account of such insurance company.
-2-
<PAGE> 34
(C) [ ] less than $10 million, and the undersigned is
a broker-dealer registered with the SEC and
will only purchase Rule 144A securities in
transactions in which it acts as a riskless
principal (as defined in Rule 144A); or
(D) [ ] less than $100 million, and the undersigned
is an investment company registered under the
Investment Company Act, which, together with
one or more registered investment companies
having the same or an affiliated investment
adviser, owns at least $100 million of
eligible securities; or
(E) [ ] less than $100 million, and the undersigned
is an entity, all the equity owners of which
are qualified institutional buyers.
2. The Proposed Transferee will only purchase a Trust Certificate for
its own account or for the accounts of others that independently qualify as
"Qualified Institutional Buyers" as defined in Rule 144A (including any buyers
listed on Schedule I hereto).
3. The net worth of the Proposed Transferee exceeds the greater of
(a) the product of $15,000,000 and the percentage ownership of the Trust by the
Proposed Transferee after the proposed transfer and (b) $5,000,000; provided,
however, without regard to the value of such transferee's ownership interest in
the Trust, the net worth of such transferee must exceed the greater of (a) the
product of $5,000,000 and the percentage ownership of the Trust by the
transferee after the proposed transfer and (b) $1,000,000.
-3-
<PAGE> 35
4. The Proposed Transferee is [check as applicable]: (a) [ ] not a
Non-U.S. Person or (b) [ ] is a Non-U.S. Person that will hold the Trust
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor of such Trust Certificate and
the Owner Trustee with an effective Internal Revenue Service Form 4224 or (c) [
] is a Non-U.S. Person that has delivered to both the transferor of the Trust
Certificate and the Owner Trustee an opinion of counsel satisfactory to such
transferor to the effect that the Transfer of such Trust Certificate to it is
in accordance with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of the Trust Certificate will not be
disregarded for federal income tax purposes.
Date:
------------------- --------------------------------------
Name of Proposed Transferee
--------------------------------------
Signature
--------------------------------------
Name
--------------------------------------
Title(2)
__________________________________
(2) Must be President, Chief Financial Officer, or other executive
officer.
-4-
<PAGE> 36
ANNEX 2-B
TRANSFER CERTIFICATE
Wilmington Trust Company, as Owner Trustee
11 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, California 92714
Re: Proposed Transfer of Trust Certificates
Gentlemen:
This certification is being made by _______________ (the "Proposed Transferee")
in connection with the proposed Transfer to the Proposed Transferee of a trust
certificate (the "Trust Certificate") representing __% fractional undivided
interest in Fund America Investors Trust V (the "Trust") created pursuant to a
Deposit Trust Agreement, dated as of April __, 1996 (such agreement, as
amended, being referred to herein as the "Deposit Trust Agreement") between
Fund America Investors Corporation II and Wilmington Trust Company, as Owner
Trustee. Initially capitalized terms used but not defined herein have the
meanings assigned to them in the Deposit Trust Agreement. The Proposed
Transferee hereby certifies as follows:
1. The undersigned is a Person involved in the organization or
operation of the Trust or an affiliate of such a Person within the meaning of
Rule 3a-7 of the Investment Company Act.
2. The Proposed Transferee understands that (a) the Trust
Certificates have not been and will not be registered or qualified under the
Securities Act, or the securities laws of any state, (b) neither the Trust nor
the Owner Trustee is required, and neither intends, to so register or qualify
the Trust Certificates, and (c) the Trust Certificates cannot be resold unless
(i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available.
3. The Proposed Transferee is acquiring the Trust Certificate for its
own account for investment only and not with a view to or for sale or other
transfer in connection with any distribution of the Trust Certificate in any
manner that would violate the Securities Act or any applicable state securities
laws.
4. The Proposed Transferee (a) is an accredited investor having such
knowledge and experience in financial and business matters, and in particular
in such matters related to securities
<PAGE> 37
similar to the Trust Certificate, such that it is capable of evaluating the
merits and risks of investment in the Trust Certificate and (b) is able to bear
the economic risks of such an investment.
5. The Proposed Transferee will not authorize nor has it authorized
any person (a) to offer, pledge, sell, dispose of or otherwise transfer any
Trust Certificate, any interest in any Trust Certificate or any other similar
security to any person in any manner, (b) to solicit any offer to buy or to
accept a pledge, disposition or other transfer of any Trust Certificate, any
interest in any Trust Certificate or any other similar security from any person
in any manner, (c) otherwise to approach or negotiate with respect to any Trust
Certificate, any interest in any Trust Certificate or any other similar
security with any person in any manner, (d) to make any general solicitation by
means of general advertising or in any other manner, or (e) to take any other
action that would constitute a distribution of any Trust Certificate under the
Securities Act, that would render the disposition of any Trust Certificate a
violation of Section 5 of the Securities Act or any state securities law, or
that could require registration or qualification pursuant thereto. Neither the
Proposed Transferee nor anyone acting on its behalf has offered any Trust
Certificate for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Trust Certificate. The
Proposed Transferee will not sell or otherwise transfer any Trust Certificates,
except in compliance with the provisions of the Deposit Trust Agreement.
6. The net worth of the Proposed Transferee (or a guarantee of the
obligations of such transferee to the Owner Trustee under the Deposit Trust
Agreement) exceeds the greater of (a) the product of $15,000,000 and the
percentage ownership of the Trust by the Proposed Transferee after the proposed
Transfer and (b) $5,000,000; provided, however, without regard to the value of
such transferee's ownership interest in the Trust, the net worth of such
transferee must exceed the greater of (a) the product of $5,000,000 and the
percentage ownership of the Trust by the transferee after the proposed transfer
and (b) $1,000,000.
7. The Proposed Transferee is [check as applicable]: (a) [ ] not a
Non-U.S. Person or (b) [ ] is a Non-U.S. Person that will hold the Trust
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor of such Trust Certificate and
the Owner Trustee with an effective Internal Revenue Service Form 4224 or (c) [
] is a Non-U.S. Person that has delivered to both the transferor of the Trust
Certificate and the Owner Trustee an opinion of counsel satisfactory to such
transferor to the effect that the Transfer of such Trust
-2-
<PAGE> 38
Certificate to it is in accordance with the requirements of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder
and that such Transfer of the Trust Certificate will not be disregarded for
federal income tax purposes.
Date:
------------------- --------------------------------------
Name of Proposed Transferee
--------------------------------------
Signature
--------------------------------------
Name
--------------------------------------
Title(2)
-3-
<PAGE> 39
ANNEX 3
TRANSFER CERTIFICATE AS TO ERISA MATTERS
FOR ERISA RESTRICTED CERTIFICATES
Wilmington Trust Company, as Owner Trustee
11 North Market Street
Rodney Square North
Wilmington, Delaware 19890
The Undersigned, hereby certifies that:
1. He is ______________________ of _______________ (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. The Investor is not, and on ________________________, 1993 will
not be, and on such date will not be investing the funds of, an employee
benefit plan, trust or account subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or a plan subject to Section
4975 of the Internal Revenue Code of 1986, as amended (the "Code") or a
governmental plan defined in Section 3(32) of ERISA subject to any federal,
state or local law which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code ("Similar Law") (each a "Benefit Plan") and is
not an entity, including an insurance company separate account, whose
underlying assets include Benefit Plan assets by reason of a Benefit Plan's
investment in the entity (collectively, with a Benefit Plan, a "Benefit Plan
Investor").
3. The Investor hereby acknowledges that under the terms of the
Deposit Trust Agreement (the "Agreement") between Fund America Investors
Corporation II (the "Company") and Wilmington Trust Company, as Owner Trustee,
dated as of April __, 1996, no transfer of a Trust Certificate shall be
permitted to be made to any person unless the proposed transferee delivers to
the Owner Trustee either (i) a certificate from such transferee to the effect
that such transferee is not an employee benefit plan, trust or account subject
to ERISA or subject to Section 4975 of the Code or a governmental plan subject
to any Similar Law and is not an entity, including an insurance company
separate account or general account, whose underlying assets include Benefit
Plan assets by reason of a Benefit Plan's investment in the entity
(collectively, with a Benefit Plan, a "Benefit Plan Investor")and is not using
the assets of a Benefit Plan to acquire any such Trust Certificate or (ii) an
opinion of counsel satisfactory to the Owner Trustee to the effect that the
purchase and holding of such Trust Certificate will not constitute or result in
the assets of the Trust being deemed to be "Plan Assets" subject to the
fiduciary responsibility provisions of ERISA or a prohibited transaction within
the meaning of Section 4.06 of Section 4.07 of ERISA or Section 4975 of the
Code or Similar Law, and will not subject the Manager, the Owner Trustee or the
Company to any obligation or liability (including obligations or liabilities
under ERISA, Section 4975 of the Code or Similar Law) in addition to those
undertaken in the Agreement. Notwithstanding the foregoing the Owner Trustee
will not require such opinion if, as a result of change of law or otherwise,
counsel satisfactory to the
<PAGE> 40
Owner Trustee has rendered an opinion to the effect that the purchase and
holding of such Trust Certificate by a Benefit Plan Investor will not
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code or Similar Law).
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 hereunder attached, attested by
its [Assistant] Secretary, this ____ day of ________, 199_.
By:_______________________________________
[Corporate Seal]
Attest:
___________________________
[Assistant] Secretary
-2-
<PAGE> 1
EXHIBIT 10.3
FUND AMERICA INVESTORS TRUST V,
as the Trust
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Manager
________________________________________________________________________________
MANAGEMENT AGREEMENT
Dated as of April 25, 1996
________________________________________________________________________________
Fund America Investors Trust V,
Collateralized Mortgage Obligations
Series 1996-A
<PAGE> 2
MANAGEMENT AGREEMENT (this "Agreement"), dated as of April 25, 1996,
by and between the Trust referred to below and Bankers Trust Company of
California, N.A., a national banking association (the "Manager").
W I T N E S S E T H :
WHEREAS, Fund America Investors Trust V (the "Trust"), is a business
trust under the Delaware Business Trust Act (12 Del.C. Section 3801 et seq.)
created by a Deposit Trust Agreement relating to the Trust (the "Trust
Agreement"), between Fund America Investors Corporation II (the "Company") and
Wilmington Trust Company (the "Owner Trustee");
WHEREAS, the Trust will issue Collateralized Mortgage Obligations,
Series 1996-A, Class A (the "Bonds"), secured by certain collateral, as more
particularly set forth in the Indenture (the "Series 1996-A Indenture"),
between the Trust and Bankers Trust Company of California, N.A., as trustee
(the "Indenture Trustee");
WHEREAS, the Trust wishes to engage the Manager to perform on its
behalf and on behalf of the Owner Trustee certain duties of the Trust and the
Owner Trustee pursuant to the Trust Agreement and the Series 1996-A Indenture,
and to provide such additional services in connection with the Bonds and the
Trust Certificates issued by the Trust (the "Trust Certificates," and together
with the Bonds, the "Securities"), consistent with the terms of this Agreement,
as the Owner Trustee may request from time to time; and
WHEREAS, the Manager is prepared to perform such services for the
benefit of the Owner Trustee, the Trust and the holders of the Securities;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the parties hereto agree as
follows:
1. Definitions.
Capitalized terms not otherwise defined in this Agreement shall have
the meanings set forth in the Series 1996- A Indenture.
2. Powers and Duties of the Manager.
(a) The Manager shall consult with the Owner Trustee
regarding the duties of the Trust pursuant to the Series 1996-A
Indenture, notify the Owner Trustee when action is required to be
taken by the Owner Trustee or the Trust under the Trust Agreement or
the Series 1996-A Indenture, and advise and assist the Owner Trustee
in performing such duties. The Manager shall perform, on behalf of
the Trust and the Owner Trustee, such of said duties as by their
nature may appropriately and effectively be so performed and as the
Owner Trustee may from time to time request. Without limiting the
generality of the foregoing, the
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Manager shall take all appropriate action with respect to the
following matters inter alia (section references are to sections of
the Series 1996-A Indenture):
(i) the determination of the form of the
Bonds. (Section 2.02)
(ii) execution of the Bonds for the
Trust and delivery thereof to the Indenture Trustee for
authentication and delivery. (Section 2.03)
(iii) if a successor to the Bond Registrar
is to be appointed, the solicitation and review of bids,
examination of the qualification of bidders, and submission to
the Owner Trustee of a list of qualified candidates from which
such appointment may be made by the Owner Trustee. (Section
2.04)
(iv) if an additional Paying Agent is to
be appointed, the solicitation and review of bids, examination
of the qualifications of bidders, and submission to the Owner
Trustee of a list of candidates from which such appointment may
be made by the Owner Trustee; preparation and submission to
each such Paying Agent for execution of an agreement to the
effect that such Paying Agent holds funds in trust; if
requested by the Owner Trustee, the direction of a Paying Agent
to remit all funds it is holding to the Indenture Trustee; and
the direction of the Indenture Trustee to deposit monies with
such Paying Agent. (Section 3.03)
(v) the provision to the Indenture
Trustee of calculations pertaining to original issue discount,
if any, on the Bonds and, if applicable, the accrual of market
discount or the amortization of premium on the Bonds to the
extent the Manager has received from Salomon Brothers Inc
sufficient information to calculate such amounts. (Section
3.03)
(vi) the preparation, submission to the
Owner Trustee for execution, and delivery of all supplements,
amendments, financing statements, continuation statements,
instruments of further assurance and other instruments
necessary under Section 3.05 of the Series 1996-A Indenture;
and advising the Owner Trustee when the Manager becomes aware
of a necessity to take action to protect the Trust Estate.
(Section 3.05)
(vii) causing opinions of counsel to be
prepared by counsel and causing such opinions of counsel to be
delivered to the Owner Trustee for delivery to the Indenture
Trustee. (Section 3.13)
(viii) the monitoring of the Trust's
obligations under Section 3.07 of the Series 1996-A Indenture.
(Section 3.07)
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(ix) if necessary, the preparation and,
upon execution by the Owner Trustee, delivery and (as
necessary) filing of documents necessary for the satisfaction
and discharge of the Series 1996-A Indenture. (Section 4.01)
(x) the preparation, submission to the
Owner Trustee for execution, and delivery of consents, should
the Owner Trustee so elect, to the Indenture Trustee's taking
action to preserve the Trust Estate, and causing related
opinions of counsel to be prepared and delivered. (Section
5.05)
(xi) if an Authenticating Agent is to be
appointed, the solicitation and review of bids, examination of
the qualifications of bidders, and submission to the Owner
Trustee of a list of qualified candidates from which such
appointment may be made by the Owner Trustee. (Section 6.13)
(xii) furnishing to the Indenture Trustee
the names and addresses of bondholders to the extent required
by Section 7.01. (Section 7.01)
(xiii) establishment of the Collection
Account and direction of the Indenture Trustee as to
investments of funds on deposit therein as provided in
paragraph (c) below. (Section 8.02)
(xiv) advising the Owner Trustee when the
Manager is of the opinion that a Supplemental Indenture or
amendment to the Trust Agreement may be necessary or
appropriate and causing Supplemental Indentures and amendments
to the Trust Agreement, and documents required to accompany
them, to be prepared for execution by the Owner Trustee.
(Sections 9.01-9.06)
(xv) advising the Owner Trustee regarding
the exercise of an optional redemption of the Bonds pursuant
to the Series 1996-A Indenture, including determining when
such option may be exercised. (Section 10.01)
(xvi) the preparation of certificates or
opinions of counsel with respect to compliance with the Series
1996-A Indenture, submitting them to the Owner Trustee for
execution, if necessary, and delivery thereof. (Section
11.01)
(xvii) the Manager will prepare and file
with the Commission monthly current reports on Form 8-K,
provided the Company will prepare and file the initial current
report on Form 8-K and the annual report on Form 10-K until
such time as the Trust is eligible to deregister. The Company
shall, promptly upon filing with the Commission, provide a
copy of the Form 15-D to the Manager.
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<PAGE> 5
(b) The Manager shall, subject at all times to Section 7
of this Management Agreement, take all appropriate action with respect
to the following tasks inter alia:
(i) the preparation and delivery of the
income tax returns, tax elections, financial statements and
such annual or other reports of the Trust pursuant to Section
2.05 of the Trust Agreement; provided, however, that the
Manager shall not be required to compute the Trust's gross
income except to the extent it can do so without unreasonable
effort or expense based upon income statements furnished to
it.
(ii) the preparation and filing,
recordation or delivery of such statements, instruments,
notices, documents, agreements and certificates or other
papers required of the Owner Trustee pursuant to Section
3.02(c) of the Trust Agreement.
(iii) the review of documentation in
connection with transfers of Securities, in the preparation
and delivery of Securities and the determination of whether a
proposed transfer of a Bond is permissible under the terms of
the Series 1996-A Indenture and whether a proposed transfer of
a Trust Certificate is permissible under the terms of the
Trust Agreement.
(c) The Manager shall carry out in timely fashion and in
accordance with the provisions of the Series 1996-A Indenture, all
duties which the Manager is required to perform under the Series
1996-A Indenture on behalf of the Owner Trustee pursuant to the terms
of this Agreement, including without limitation (references are to
sections of the Series 1996-A Indenture), the direction of the
investment of funds in the Collection Account and the Expense Fund
(subject to a standing order from the Owner Trustee as to which
Eligible Investments such funds are to be invested in), and the
issuance of certain Issuer Orders in connection therewith (Sections
8.02, 8.03 and 8.07). The Manager shall have absolute discretion in
the performance of the functions set forth in this subsection (c) and
shall have no obligation to notify the Owner Trustee of its actions
except as set forth in the Series 1996-A Indenture. Notwithstanding
the foregoing or any other provision of this Agreement, the Manager
shall not have any responsibility with respect to Sections 3.04(a),
3.05 or 3.08 of the Series 1996-A Indenture. In connection with each
annual statement to be delivered by the Issuer pursuant to Section
3.09 of the Series 1996-A Indenture, the Manager shall provide to the
Owner Trustee certifying that it has fulfilled all of its obligations
hereunder throughout the applicable year, or if it has failed to so
fulfill its obligations, specifying such failure and the nature and
status thereof.
3. Compensation: Payment of Certain Expenses.
The Manager will provide the services called for under the enumerated
subparagraphs of paragraphs 2(a) and 2(b) above without any separate
compensation therefor for so long as the Series
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<PAGE> 6
1996-A Indenture remains in effect, and thereafter for such compensation as
shall be agreed upon between the Manager and the Owner Trustee. The fees of
the attorneys delivering the Opinion of Counsel and any other amounts of
out-of-pocket expenses incurred by the Manager pursuant to the Series 1996-A
Indenture shall be paid by the Owner Trustee, but solely from funds received by
the Owner Trustee from the Owners pursuant to the Trust Agreement. The Manager
shall perform any other services, including such services as are referred to in
the first sentence of paragraph 2(a) above, as may be agreed between the
Manager and the Owner Trustee for such compensation as may be agreed between
the Manager and the Owner Trustee; provided that such compensation shall be
paid to the Manager by the Owner Trustee solely from funds received by the
Owner Trustee from the Owners pursuant to the Trust Agreement.
4. The Manager and the Owners.
The Manager undertakes, for the benefit of the holders of beneficial
interests in the Trust ("Owners"), to furnish to each Owner from time to time
such information regarding the Trust Agreement and the Bonds and Trust
Certificates as such Owner shall reasonably request; provided, however, that
the Manager shall not be required (except pursuant to Section 2(b)(i) hereof)
to prepare information regarding the Trust for purposes of the tax return of
any Owner or any reporting requirement to which an Owner may be subject. The
Manager, in its discretion, may require an Owner to reimburse the Manager for
the cost of furnishing information pursuant to this paragraph.
5. Instruction of the Owner Trustee.
If in performing its duties under this Agreement, the Manager is
required to determine any matter or perform any function which is
non-ministerial in nature, then the Manager shall properly deliver notice to
the Owner Trustee requesting written instructions as to the course of action to
be taken. The Owner Trustee, after consulting with the Owners if it so
desires, shall instruct the Manager in writing as to the action to be taken by
the Manager. If the Manager does not receive such instructions within ten days
after it has delivered such notice, it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement, the
Trust Agreement or the Series 1996-A Indenture as it shall deem advisable in
the best interest of the holders of the Bonds, the Owners and the Trust.
6. Benefit of the Agreement.
It is expressly agreed that in performing its duties pursuant to
Section 2 of this Agreement the Manager will act for the benefit of holders of
the Securities as well as for the benefit of Trust, and that such obligations
on the part of the Manager shall be enforceable at the instance of the
Indenture Trustee and the Trust.
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<PAGE> 7
7. Limitation of Responsibility of the Manager.
(a) The Manager will have no responsibility under this
Agreement other than to render the services called for hereunder in
good faith. The Manager, its affiliates, its directors, officers,
shareholders and employees will not be liable to the Trust, the Owner
Trustee, the Owners, the Series 1996-A Indenture Trustee, the
Bondholders or others, except by reason of acts constituting bad
faith, willful misfeasance, gross negligence or reckless disregard of
their duties. The Owner Trustee will reimburse, indemnify and hold
harmless the Manager and its affiliates, shareholders, directors,
officers, and employees with respect to all expenses, losses, damages,
liabilities, demands, charges and claims of any nature in respect of
any acts or omissions performed or omitted by the Manager in good
faith and in accordance with the standard set forth above.
(b) The Trust undertakes to pay or cause to be paid any
amount due the Manager or its affiliates, shareholders, directors,
officers and employees under Section 3 or Section 7(a) and such
amounts shall be paid as provided for under the Series 1996-A
Indenture or out of the assets of the Trust that are free of the lien
of the Series 1996-A Indenture (and in no event by Wilmington Trust
Company in its individual capacity).
8. Term.
This Agreement shall continue in effect until the termination of the
Trust Agreement. If the date of such termination is not a date on which the
Manager is entitled to be paid hereunder, the Manager shall be paid the amount
due it pursuant to Sections 3 and 7(a) as of such termination promptly after
such date of termination.
9. Termination.
(a) The Manager, at its election, may resign as Manager
hereunder and be discharged of its duties hereunder upon at least 30
days' prior notice to the Owner Trustee and the Indenture Trustee;
provided, however, that at any time while the Bonds are outstanding no
such resignation and discharge shall become effective until a Person
selected by the Manager in its discretion and acceptable to the Owners
and the Rating Agency shall have assumed and agreed to perform the
duties of the Manager hereunder as evidenced by a written instrument
to such effect delivered to the Owner Trustee; and provided, however,
that the Manager hereunder shall at all times be the same Person as
the Indenture Trustee. Upon delivery of such written instrument to
the Owner Trustee, the Trust shall promptly deliver to the successor
Manager a written instrument acknowledging and accepting the
assignment of the resigning Manager's rights hereunder to the
successor Manager. Each such successor Manager shall be deemed to be
the Manager for all purposes of this Agreement.
(b) If any of the following events shall occur and be
continuing:
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<PAGE> 8
(i) The Manager shall violate any
provision of this Agreement and such default is not cured
within ten days after notice thereof is given to the Manager
by the Owner Trustee or the Indenture Trustee;
(ii) A court having jurisdiction in the
premises shall enter a decree or order for relief in respect
of the Manager in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter
in effect, or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official)
of the Manager or for any substantial part of its property, or
order the winding-up or liquidation of its affairs; or
(iii) The Manager shall commence a
voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or shall consent
to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official)
of the Manager or for any substantial part of its property, or
shall make any general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they
become due;
then in any such event this Agreement may be terminated by the Owner
Trustee upon notice to the Manager.
(c) Following receipt of instructions from
the Owners and upon 30 days written notice to the Manager, the Owner
Trustee may remove the Manager.
10. Amendments.
This Agreement may not be amended, changed, modified or terminated
(except as otherwise expressly provided herein) without the prior written
consent of each of the parties hereto and the Indenture Trustee.
11. Governing Law.
This Agreement shall be governed by and construed under the internal
laws of the State of New York, without giving effect to principles of conflict
of laws.
12. Notices.
All notices, requests and other communications permitted or required
hereunder shall be in writing and shall be deemed to have been duly given when
received.
-8-
<PAGE> 9
If to the Manager, to:
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, California 92714
Attention: Fund America/ICI 1996-A
Facsimile Number: (714) 253-7577
If to the Owner Trustee, to:
Wilmington Trust Company, as trustee for
Fund America Investors Trust V
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Facsimile Number: (302) 651-8882
13. Successors and Assigns.
This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of each of the Trust and the Manager; provided, however,
that the Manager may assign its rights and obligations hereunder to an
affiliate thereof but may not otherwise assign its rights and obligations
hereunder without the prior written consent of the Owner Trustee.
14. No Liability of Wilmington Trust Company.
The Owner Trustee is entering into this Agreement solely as Trustee
under the Trust Agreement and not in its individual capacity and in no case
whatsoever shall Wilmington Trust Company have any liability for the
representation, warranties, covenants or agreements of the Trust hereunder as
to which the parties hereto agree to look solely to the Trust Estate.
<PAGE> 10
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in New York, New York effective as of the day first above written.
FUND AMERICA INVESTORS TRUST V
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee
By:
----------------------------------
Name: Denise M. Geran
Title: Financial Services Officer
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Manager
By:
----------------------------------------
Name: Michelle Lambott
Title: Assistant Vice President
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