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ICIFC SECURED ASSETS CORP.,
Depositor,
ICI FUNDING CORPORATION
Master Servicer,
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Trustee
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 1997
---------------------------------
Mortgage Pass-Through Certificates
Series 1997-3
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TABLE OF CONTENTS
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PAGE
ARTICLE I
DEFINITIONS .............................................................. 2
1.01. Defined Terms ..................................................... 2
Accrued Certificate Interest ............................................. 2
Advance .................................................................. 3
Agreement ................................................................ 3
Anniversary .............................................................. 3
Assignment ............................................................... 3
Balloon Loan ............................................................. 3
Balloon Payment .......................................................... 3
Available Distribution Amount ............................................ 3
Bankruptcy Amount ........................................................ 3
Bankruptcy Code .......................................................... 4
Bankruptcy Loss .......................................................... 4
Book-Entry Certificate ................................................... 4
Business Day ............................................................. 4
Certificate .............................................................. 4
Certificate .............................................................. 4
Certificate Account Deposit Date ......................................... 5
Certificateholder" or "Holder ............................................ 5
Certificate Owner ........................................................ 5
Certificate Principal Balance ............................................ 5
Certificate Register ..................................................... 6
Class .................................................................... 6
Class A Certificate ...................................................... 6
Class B Percentage ....................................................... 6
Class B-1 Certificate .................................................... 6
Class B-1 Percentage ..................................................... 7
Class B-1 Prepayment Distribution Trigger ................................ 7
Class B-2 Certificate .................................................... 7
Class B-2 Percentage ..................................................... 7
Class B-2 Prepayment Distribution Trigger ................................ 7
Class B-3 Certificate .................................................... 7
Class B-3 Percentage ..................................................... 8
Class B-3 Prepayment Distribution Trigger ................................ 8
Class M Certificate ...................................................... 8
Class M Percentage ....................................................... 8
Class M-1 Percentage ..................................................... 8
Class M-2 Percentage ..................................................... 8
Class M-2 Prepayment Distribution Trigger ................................ 9
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Class M-3 Percentage ..................................................... 9
Class M-3 Prepayment Distribution Trigger ................................ 9
Class R Certificate ...................................................... 9
Closing Date ............................................................. 9
Code ..................................................................... 9
Collateral Value ......................................................... 9
Compensating Interest .................................................... 9
Corporate Trust Office ................................................... 10
Curtailment .............................................................. 10
Custodial Account ........................................................ 10
Credit Support Depletion Date ............................................ 10
Cut-off Date ............................................................. 10
DCR ...................................................................... 10
Debt Service Reduction ................................................... 10
Defaulted Mortgage Loan .................................................. 10
Defaulted Mortgage Loss .................................................. 10
Deficient Valuation ...................................................... 11
Definitive Certificate ................................................... 11
Deleted Mortgage Loan .................................................... 11
Delivery Date ............................................................ 11
Depositor ................................................................ 11
Depository ............................................................... 11
Depository Participant ................................................... 11
Determination Date ....................................................... 11
Discount Fraction ........................................................ 11
Discount Mortgage Loan ................................................... 11
Disqualified Organization ................................................ 12
Distribution Date ........................................................ 12
Due Date ................................................................. 12
Due Period ............................................................... 12
Eligible Account ......................................................... 12
Eligible Funds ........................................................... 13
Event of Default ......................................................... 13
Excess Bankruptcy Loss ................................................... 13
Excess Fraud Loss ........................................................ 13
Excess Proceeds .......................................................... 13
Excess Special Hazard Loss ............................................... 13
Extraordinary Events ..................................................... 13
Extraordinary Losses ..................................................... 14
FDIC ..................................................................... 14
Final Disposition ........................................................ 14
FHLMC .................................................................... 14
FNMA ..................................................................... 14
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Fraud Loss Amount ........................................................ 14
Fraud Losses ............................................................. 15
Funding Date ............................................................. 15
Initial Certificate Principal Balance .................................... 15
Initial Notional Amount .................................................. 15
Insurance Policy ......................................................... 15
Insurance Proceeds ....................................................... 15
Late Collections ......................................................... 16
Liquidation Proceeds ..................................................... 16
Loan-to-Value Ratio ...................................................... 16
Lockout Certificates ..................................................... 16
Master Servicer .......................................................... 16
Monthly Payment .......................................................... 16
▇▇▇▇▇'▇ .................................................................. 16
Mortgage ................................................................. 16
Mortgage File ............................................................ 16
Mortgage Loan ............................................................ 17
Mortgage Loan Accrued Interest ........................................... 17
Mortgage Loan Purchase Agreement ......................................... 17
Mortgage Loan Schedule ................................................... 17
Mortgage Note ............................................................ 18
Mortgage Rate ............................................................ 18
Mortgaged Property ....................................................... 18
Mortgagor ................................................................ 18
Net Mortgage Rate ........................................................ 19
Non-Discount Mortgage Loan ............................................... 19
Nonrecoverable Advance ................................................... 19
Non-United States Person ................................................. 19
Notional Amount .......................................................... 19
Officers' Certificate .................................................... 19
Opinion of Counsel ....................................................... 19
Original Senior Percentage ............................................... 19
OTS ...................................................................... 20
Outstanding Mortgage Loan ................................................ 20
Ownership Interest ....................................................... 20
Pass-Through Rate ........................................................ 20
Percentage Interest ...................................................... 20
Permitted Investment ..................................................... 20
Permitted Transferee ..................................................... 22
Person ................................................................... 22
Pool Strip Rate .......................................................... 22
Prepayment Assumption .................................................... 22
Prepayment Distribution Percentage ....................................... 22
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PAGE
Prepayment Distribution Trigger .......................................... 23
Prepayment Interest Shortfall ............................................ 23
Prepayment Period ........................................................ 24
Primary Hazard Insurance Policy .......................................... 24
Primary Mortgage Insurance Policy ........................................ 24
Principal Only Certificates .............................................. 24
Principal Prepayment ..................................................... 24
Principal Prepayment in Full ............................................. 24
Purchase Price ........................................................... 24
Qualified Insurer ........................................................ 24
Qualified Substitute Mortgage Loan ....................................... 25
Rating Agency ............................................................ 25
Realized Loss ............................................................ 26
Record Date .............................................................. 26
Regular Certificate ...................................................... 26
Relief Act ............................................................... 26
REMIC .................................................................... 26
REMIC Provisions ......................................................... 26
Remittance Report ........................................................ 26
REO Acquisition .......................................................... 26
REO Disposition .......................................................... 26
REO Imputed Interest ..................................................... 27
REO Proceeds ............................................................. 27
REO Property ............................................................. 27
Request for Release ...................................................... 27
Residual Certificate ..................................................... 27
Responsible Officer ...................................................... 27
Lockout Distribution Percentage .......................................... 27
Seller ................................................................... 28
Senior Accelerated Distribution Percentage ............................... 28
Senior Interest Distribution Amount ...................................... 29
Senior Percentage ........................................................ 29
Senior Principal Distribution Amount ..................................... 29
Senior Support Lockout Certificates ...................................... 29
Servicing Account ........................................................ 29
Servicing Advances ....................................................... 29
Servicing Fees ........................................................... 30
Servicing Fee Rate ....................................................... 30
Servicing Officer ........................................................ 30
Single Certificate ....................................................... 30
Special Hazard Amount .................................................... 30
Special Hazard Loss ...................................................... 31
Special Hazard Percentage ................................................ 31
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PAGE
Standard & Poor's ........................................................ 31
Startup Day .............................................................. 31
Stated Principal Balance ................................................. 31
Subordinate Certificate .................................................. 32
Subordinate Percentage ................................................... 32
Subordinate Principal Distribution Amount ................................ 32
Sub-Servicer ............................................................. 32
Sub-Servicer Remittance Date ............................................. 32
Sub-Servicing Account .................................................... 32
Sub-Servicing Agreement .................................................. 33
Super Senior Lockout Certificates ........................................ 33
Super Senior Optimal Percentage .......................................... 33
Super Senior Optimal Principal Distribution Amount ....................... 33
Tax Returns .............................................................. 33
Transfer ................................................................. 33
Transferor ............................................................... 33
Trust Fund ............................................................... 33
Trustee .................................................................. 34
Trustee's Fee ............................................................ 34
Trustee Fee Rate ......................................................... 34
Uninsured Cause .......................................................... 34
United States Person ..................................................... 34
Unscheduled Payment Lockout Distribution Percentage ...................... 34
Variable Strip Certificates .............................................. 35
Voting Rights ............................................................ 35
Wendover ................................................................. 35
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES ........................................ 36
2.01. Conveyance of Mortgage Loans .................................... 36
2.02. Acceptance of the Trust Fund by the Trustee ..................... 39
2.03. Representations, Warranties and Covenants of the Master Servicer
and the Depositor ............................................... 40
2.04. Representations and Warranties of the Seller .................... 42
2.05. Issuance of Certificates Evidencing Interests in the Trust Fund 44
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND ........................................................ 45
3.01. Master Servicer to Act as Master Servicer ....................... 45
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3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers ................................................... 46
3.03. Successor Sub-Servicers ......................................... 47
3.04. Liability of the Master Servicer ................................ 47
3.05. No Contractual Relationship Between Sub-Servicers and Trustee or
Certificateholders .............................................. 48
3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee 48
3.07. Collection of Certain Mortgage Loan Payments .................... 50
3.08. Sub-Servicing Accounts .......................................... 51
3.09. Collection of Taxes, Assessments and Similar Items; Servicing
Account ......................................................... 51
3.10. Custodial Account ............................................... 52
3.11. Permitted Withdrawals From the Custodial Account ................ 53
3.12. Permitted Investments ........................................... 54
3.13. Maintenance of Primary Hazard Insurance ......................... 54
3.14. Enforcement of Due-on-Sale Clauses; Assumption Agreements ....... 56
3.15. Realization Upon Defaulted Mortgage Loans ....................... 58
3.16. Trustee to Cooperate; Release of Mortgage Files ................. 59
3.17. Servicing Compensation .......................................... 60
3.18. Maintenance of Certain Servicing Policies ....................... 60
3.19. Annual Statement as to Compliance ............................... 61
3.20. Annual Independent Public Accountants' Servicing Statement ...... 62
3.21. Access to Certain Documentation ................................. 62
3.22. Title, Conservation and Disposition of REO Property ............. 63
3.23. Additional Obligations of the Master Servicer ................... 65
3.24. Optional Purchase of Defaulted Mortgage Loans ................... 65
3.25. Additional Obligations of the Depositor ......................... 66
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS ........................................... 67
4.01. Certificate Account; Distributions .............................. 67
4.02. Statements to Certificateholders ................................ 77
4.03. Remittance Reports; Advances by the Master Servicer ............. 79
4.04. Allocation of Realized Losses ................................... 81
4.05. Information Reports to Be Filed by the Master Servicer .......... 82
4.06. Compliance with Withholding Requirements ........................ 82
ARTICLE V
THE CERTIFICATES ......................................................... 84
5.01. The Certificates ................................................ 84
5.02. Registration of Transfer and Exchange of Certificates ........... 86
5.03. Mutilated, Destroyed, Lost or Stolen Certificates ............... 91
5.04. Persons Deemed Owners ........................................... 91
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PAGE
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER .................................... 92
6.01. Liability of the Depositor and the Master Servicer .............. 92
6.02. Merger, Consolidation or Conversion of the Depositor or the
Master Servicer ................................................. 92
6.03. Limitation on Liability of the Depositor, the Master Servicer and
Others .......................................................... 92
6.04. Limitation on Resignation of the Master Servicer ................ 93
6.05. Sale and Assignment of Master Servicing ......................... 94
ARTICLE VII
DEFAULT .................................................................. 95
7.01. Events of Default ............................................... 95
7.02. Trustee to Act; Appointment of Successor ........................ 97
7.03. Notification to Certificateholders .............................. 98
7.04. Waiver of Events of Default ..................................... 98
7.05. List of Certificateholders ...................................... 98
ARTICLE VIII
CONCERNING THE TRUSTEE ................................................... 99
8.01. Duties of Trustee ............................................... 99
8.02. Certain Matters Affecting the Trustee ........................... 100
8.03. Trustee Not Liable for Certificates or Mortgage Loans ........... 101
8.04. Trustee May Own Certificates .................................... 102
8.05. Trustee's Fees .................................................. 102
8.06. Eligibility Requirements for Trustee ............................ 103
8.07. Resignation and Removal of the Trustee .......................... 103
8.08. Successor Trustee ............................................... 104
8.09. Merger or Consolidation of Trustee .............................. 104
8.10. Appointment of Co-Trustee or Separate Trustee ................... 105
ARTICLE IX
TERMINATION .............................................................. 107
9.01. Termination Upon Repurchase or Liquidation of All Mortgage
Loans or upon Purchase of Certificates .......................... 107
9.02. Additional Termination Requirements ............................. 110
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ARTICLE X
REMIC PROVISIONS ......................................................... 112
10.01. REMIC Administration ............................................ 112
10.02. Prohibited Transactions and Activities .......................... 115
10.03. Master Servicer and Trustee Indemnification ..................... 115
ARTICLE XI
MISCELLANEOUS PROVISIONS ................................................. 116
11.01. Amendment ....................................................... 116
11.02. Recordation of Agreement; Counterparts .......................... 117
11.03. Limitation on Rights of Certificateholders ...................... 118
11.04. Governing Law ................................................... 119
11.05. Notices ......................................................... 119
11.06. Severability of Provisions ...................................... 119
11.07. Successors and Assigns; Third Party Beneficiary ................. 119
11.08. Article and Section Headings .................................... 119
11.09. Notice to Rating Agencies ....................................... 120
Signatures
Acknowledgments
Exhibit A Form of Class A Certificate
Exhibit B-1 Form of Subordinate Certificate
Exhibit B-2 Form of Class R Certificate
Exhibit C Form of Trustee Initial Certification
Exhibit D Form of Trustee Final Certification
Exhibit E Form of Remittance Report
Exhibit F-1 Request for Release
Exhibit F-2 Request for Release for Mortgage Loans Paid in Full
Exhibit G-1 Form of Investor Representation Letter
Exhibit G-2 Form of Transferor Representation Letter
Exhibit G-3 Form of Rule 144A Investment Representation
Exhibit G-4 Transferor Certificate for Transfers of Residual
Certificates
Exhibit G-5 Transfer Affidavit and Agreement for Transfers of
Residual Certificates
Exhibit G-6 Form of Investor Representation Letter for Insurance
Companies
Exhibit H Mortgage Loan Schedule
Exhibit I Seller Representations and Warranties
Exhibit J Form of Notice Under Section 3.24
Exhibit K Schedule of Discount Fractions
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This Pooling and Servicing Agreement, dated and effective as
of September 1, 1997, among ICIFC Secured Assets Corp., as depositor (the
"Depositor"), ICI Funding Corporation, as master servicer (the "Master
Servicer"), and Bankers Trust Company of California, N.A., as trustee (the
"Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
multiple classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein). As provided
herein, the Trustee will cause an election to be made to treat the entire
segregated pool of assets described in the definition of Trust Fund (as defined
herein) subject to this Agreement (including the Mortgage Loans) as a real
estate mortgage investment conduit (a "REMIC") for federal income tax purposes.
The Certificates, other than the Class R Certificates, will be the "regular
interests" in the REMIC, and the Class R Certificates will be the sole Class of
"residual interests" therein.
The following table sets forth the designation, initial
Pass-Through Rate, aggregate initial Certificate Principal Balance and certain
features for each Class of Certificates comprising
the certificated interests in the Trust Fund created hereunder.
Aggregate Initial
Certificate Initial
Pass-Through Principal Maturity Ratings
Designation Type Rate Balance Features Date S&p Dcr
----------- ---- ------ --------- -------- ------ ----- ---
Class A-1 Senior 7.25% $152,291,000.00 Senior September 25, 2027 AAA AAA
Class A-2 Senior 7.25% $ 45,634,000.00 Senior September 25, 2027 AAA AAA
Class A-3 Senior 7.25% $ 27,873,000.00 Senior September 25, 2007 AAA AAA
Class A-4 Senior 7.25% $ 4,114,000.00 Senior September 25, 2027 AAA AAA
Class A-5 Senior 7.25% $ 12,841,000.00 Senior September 25, 2027 AAA AAA
Class A-6 Senior 7.25% $ 20,052,000.00 Lockout/Senior September 25, 2027 AAA AAA
Class A-7 Senior 7.25% $ 37,673,000.00 Lockout/Super Senior September 25, 2027 AAA AAA
Class A-8 Senior 7.25% $ 4,186,000.00 Lockout/Senior Support September 25, 2027 AAA AAA
Class A-9 Senior 0.00% $ 11,474.25 Senior/Principal Only September 25, 2027 AAAr AAA
Class A-10 Senior Variable Rate $ 0.00 Senior/Interest Only September 25, 2027 AAAr AAA
Class R Senior 7.25% $ 100.00 Residual/Senior September 25, 2027 AAA AAA
Class M-1 Mezzanine 7.25% $ 7,292,000.00 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇
Class M-2 Mezzanine 7.25% $ 3,241,000.00 Mezzanine September 25, 2027 A A
Class M-3 Mezzanine 7.25% $ 2,431,000.00 Mezzanine September 25, 2027 BBB BBB
Class B-1 Subordinate 7.25% $ 3,241,000.00 Subordinate September 25, 2027 BB BB
Class B-2 Subordinate 7.25% $ 1,620,000.00 Subordinate September 25, 2027 B B
Class B-3 Subordinate 7.25% $ 1,623,054.29 Subordinate September 25, 2027 N/A N/A
Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Mortgage Pool has been
designated as the "latest possible maturity date" for
the Certificates.
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As of the Cut-off Date, the Mortgage Loans have an aggregate Stated
Principal Balance equal to $324,123,629.54.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article.
"Accrued Certificate Interest": With respect to each
Distribution Date, (a) as to any Certificate other than the Variable Strip
Certificates and the Principal Only Certificates, one month's interest accrued
at the related Pass-Through Rate on the Certificate Principal Balance thereof
immediately prior to such Distribution Date and (b) as to the Variable Strip
Certificates, one month's interest accrued at the then applicable Pass-Through
Rate on the related Notional Amount thereof. Accrued Certificate Interest will
be calculated on the basis of a 360-day year consisting of twelve 30-day months.
In each case Accrued Certificate Interest on any Class of Certificates will be
reduced by the amount of (i) Prepayment Interest Shortfalls, if any, which are
not covered by the Master Servicer with a payment of Compensating Interest
pursuant to Section 3.23 with respect to such Distribution Date, (ii) the
interest portion (adjusted to the related Net Mortgage Rate) of Realized Losses
(including Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
Losses and Extraordinary Losses) not allocated solely to one or more Classes of
Certificates pursuant to Section 4.04 and (iii) any other interest shortfalls
not covered by the subordination provided by the Class M Certificates or Class B
Certificates, including interest that is not collectible from the Mortgagor
pursuant to the Relief Act or similar legislation or regulations as in effect
from time to time with all such reductions allocated among all of the
Certificates in proportion to their respective amounts of Accrued Certificate
Interest payable on such Distribution Date which would have resulted absent such
reductions. In addition to that portion of the reductions described in the
preceding sentence that are allocated to any Class of Class M Certificates or
Class B Certificates, Accrued Certificate Interest on any Class of the Class M
Certificates or Class B Certificates, as applicable, will be reduced by the
interest portion (adjusted to the related Net Mortgage Rate) of the portion of
Realized Losses that are allocated solely to the Class M and Class B
Certificates, as applicable, pursuant to Section 4.04. The Principal Only
Certificates do not have a Pass-Through Rate and are not entitled to Accrued
Certificate Interest.
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"Advance": As to any Mortgage Loan, any advance made by the
Master Servicer on any Distribution Date pursuant to Section 4.03.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof.
"Anniversary": Each anniversary of September 1, 1997.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Balloon Loan": Each of the Mortgage Loans identified in the
Mortgage Loan Schedule as having an original term to maturity that is shorter
than the related amortization term.
"Balloon Payment": With respect to any Balloon Loan, the
related Monthly Payment payable on the stated maturity date of such Balloon
Loan.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (a) the sum of (i) the balance on deposit
in the Custodial Account as of the close of business on the related
Determination Date and (ii) the aggregate amount of any Advances made and all
amounts required to be paid by the Master Servicer pursuant to Sections 3.13 and
3.23 by deposits into the Certificate Account on the immediately preceding
Certificate Account Deposit Date, reduced by (b) the sum, as of the close of
business on the related Determination Date, of (i) Monthly Payments collected
but due during a Due Period subsequent to the Due Period ending on the first day
of the month of the related Distribution Date, (ii) all interest or other income
earned on deposits in the Custodial Account or the Certificate Account, (iii)
any other amounts reimbursable or payable to the Master Servicer or any
Sub-Servicer pursuant to Section 3.11, (iv) the Servicing Fees payable on such
Distribution Date and (v) Insurance Proceeds, Liquidation Proceeds, Principal
Prepayments, REO Proceeds and the proceeds of Mortgage Loan purchases made
pursuant to Section 2.02, 2.04, 3.14, 3.22 or 3.24, in each case received or
made in the month of such Distribution Date.
"Bankruptcy Amount": As of any date of determination prior to
the first Anniversary, an amount equal to the excess, if any, of (A) $148,332
over (B) the aggregate amount of Bankruptcy Losses allocated solely to one or
more specific Classes of Certificates in accordance with Section 4.04. As of any
date of determination on or after the first Anniversary, an amount equal to the
excess, if any, of the lesser of (a) the Bankruptcy Amount calculated as of the
close of business on the Business Day immediately preceding the most recent
Anniversary coinciding with or preceding such date of determination (or, if such
date of determination is an Anniversary, the Business Day immediately preceding
such date of determination) (for purposes
-4-
of this definition, the "Relevant Anniversary") and (b) the greater of (i)
$75,000 and (ii) 0.0006 times the aggregate principal balance of all the
Mortgage Loans in the Mortgage Pool as of the Relevant Anniversary having a
Loan-to-Value Ratio at origination which exceeds 75%.
The Bankruptcy 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, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
"Bankruptcy Code": The Bankruptcy Code of 1978, as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Deficient Valuation or Debt Service Reduction.
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in California or New York (and such other
state or states in which the Custodial Account or the Certificate Account are at
the time located) or in the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive
order to close.
"Cash Liquidation": As to any defaulted Mortgage Loan other
than a Mortgage Loan as to which an REO Acquisition occurred, a determination by
the Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with
respect to such Mortgage Loan.
"Certificate": Any Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2, Class B-3, or Class R Certificate.
"Certificate Account": The trust account or accounts created
and maintained pursuant to Section 4.01, which shall be entitled "Bankers Trust
Company of California, N.A., in trust for registered holders of ICIFC Secured
Assets Corp., Mortgage Pass-Through Certificates, Series 1997-2, and which
account or accounts must each be an Eligible Account.
-5-
"Certificate Account Deposit Date": With respect to any
Distribution Date, the Business Day immediately preceding such Distribution
Date.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that, neither a
Disqualified Organization nor a NonUnited States Person shall be a holder of a
Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee shall be entitled to rely upon
a certification of the Depositor or the Master Servicer in determining if any
Certificates are registered in the name of the respective affiliate. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as they may indirectly exercise such rights through the
Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee shall be required to recognize as a
"Holder" or "Certificateholder" only the Person in whose name a Certificate is
registered in the Certificate Register.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.
"Certificate Principal Balance": With respect to any
Certificate other than a Variable Strip Certificate, on any date of
determination, an amount equal to (i) the Initial Certificate Principal Balance
of such Certificate as specified on the face thereof, minus (ii) the sum of (a)
the aggregate of all amounts previously distributed with respect to such
Certificates (or any predecessor Certificate) and applied to reduce the
Certificate Principal Balance thereof pursuant to Section 4.01, and (b) the
aggregate of all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were previously allocated to
such Certificate (or any predecessor Certificate) pursuant to Section 4.04. With
respect to each Class M Certificate, on any date of determination, an amount
equal to (i) the Initial Certificate Principal Balance of such Class M
Certificate as specified on the face thereof, minus (ii) the sum of (x) the
aggregate of all amounts previously distributed with respect to such Certificate
(or any predecessor Certificate) and applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.01 and (y) the aggregate of all reductions
in Certificate Principal Balance deemed to have occurred in connection with
Realized Losses which were previously allocated to such Certificate (or any
predecessor Certificate) pursuant to Section 4.04; provided, that if the
Certificate Principal Balances of the Class B Certificates have been reduced to
zero, the Certificate Principal Balance
-6-
of each Class M Certificate of those Class M Certificates outstanding with the
highest numerical designation at any given time shall thereafter be calculated
to equal the Percentage Interest evidenced by such Certificate times the excess,
if any, of (A) the then aggregate Stated Principal Balance of the Mortgage Loans
over (B) the then aggregate Certificate Principal Balance of all other Classes
of Certificates then outstanding. With respect to each Class B Certificate, on
any date of determination, an amount equal to (i) the Initial Certificate
Principal Balance of such Class B Certificate as specified on the face thereof,
minus (ii) the sum of (x) the aggregate of all amounts previously distributed
with respect to such Certificate (or any predecessor Certificate) and applied to
reduce the Certificate Principal Balance thereof pursuant to Section 4.01 and
(y) the aggregate of all reductions in Certificate Principal Balance deemed to
have occurred in connection with Realized Losses which were previously allocated
to such Certificate (or any predecessor Certificate) pursuant to Section 4.04;
provided, that the Certificate Principal Balance of each Class B Certificate of
those Class B Certificates outstanding with the highest numerical designation at
any given time shall be calculated to equal the Percentage Interest evidenced by
such Certificate times the excess, if any, of (A) the then aggregate Stated
Principal Balance of the Mortgage Loans over (B) the then aggregate Certificate
Principal Balance of all other Classes of Certificates then outstanding. The
Variable Strip Certificates have no Certificate Principal Balance.
"Certificate Register": The register maintained pursuant to
Section 5.02.
"Class": Collectively, all of the Certificates bearing the
same designation.
"Class A Certificate": Any one of the Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 or
Class A-10 Certificates, each executed, authenticated and delivered by the
Trustee substantially in the form annexed hereto as Exhibit A and each
evidencing an interest designated as a "regular interest" in the Trust Fund for
purposes of REMIC Provisions.
"Class A-9 Collection Shortfalls": With respect to the Cash
Liquidation or REO Disposition of a Discount Mortgage Loan and any Distribution
Date, the excess of the amount described in Section 4.01(d)(i)(C)(1) over the
amount described in Section 4.01(d)(i)(C)(2).
"Class A-9 Principal Distribution Amount": As defined in
Section 4.01(d)(i).
"Class B Percentage": The Class B-1 Percentage, Class B-2
Percentage and Class B-3 Percentage.
"Class B-1 Certificate": Any one of the Class B-1 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B- 1, subordinate to the Class A Certificates and the
Class M Certificates with respect to distributions
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and the allocation of Realized Losses as set forth in Section 4.04 and
evidencing an interest designated as a "regular interest" in the Trust Fund for
purposes of the REMIC Provisions.
"Class B-1 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-1
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or
related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date.
"Class B-1 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-1 Certificates, Class B-2 Certificates and Class B-3 Certificates
immediately prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date is greater than or equal to 2.00%.
"Class B-2 Certificate": Any one of the Class B-2 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-1, subordinate to the Class A Certificates, Class M
Certificates and Class B-1 Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.04 and evidencing an
interest designated as a "regular interest" in the Trust Fund for purposes of
the REMIC Provisions.
"Class B-2 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or
related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date.
"Class B-2 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-2 Certificates and Class B-3 Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans (or related REO Properties) immediately prior to such
Distribution Date is greater than or equal to 1.00%.
"Class B-3 Certificate": Any one of the Class B-3 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-1,
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subordinate to the Class A Certificates, Class M Certificates, Class B-1
Certificates and Class B-2 Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.04 and evidencing an
interest designated as a "regular interest" in the Trust Fund for
purposes of the REMIC Provisions.
"Class B-3 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-3
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or
related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date.
"Class B-3 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the aggregate Certificate Principal Balance of the
Class B-3 Certificates immediately prior to such Distribution Date divided by
the aggregate Stated Principal Balance of all of the Mortgage Loans (or related
REO Properties) immediately prior to such Distribution Date is greater than or
equal to 0.50%.
"Class M Certificate": Any one of the Class M-1 Certificates,
Class M-2 Certificates or Class M-3 Certificates executed, authenticated and
delivered by the Trustee substantially in the form annexed hereto as Exhibit B
and evidencing an interest designated as a "regular interest" in the REMIC for
purposes of the REMIC Provisions.
"Class M Percentage": The Class M-1 Percentage, Class M-2
Percentage and Class M-3 Percentage.
"Class M-1 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class M-1
Certificates immediately prior to such date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
"Class M-2 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class M-2
Certificates immediately prior to such date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
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"Class M-2 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the sum of the Certificate Principal Balances of the
Class M-2 Certificates, Class M-3 Certificates, Class B-1 Certificates, Class
B-2 Certificates and Class B-3 Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans (or related REO Properties) immediately prior to such
Distribution Date is greater than or equal to 3.75%.
"Class M-3 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class M-3
Certificates immediately prior to such date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
"Class M-3 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the sum of the Certificate Principal Balances of the
Class M-3 Certificates, Class B-1 Certificates, Class B-2 Certificates and Class
B-3 Certificates immediately prior to such Distribution Date divided by the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date is greater than or equal
to 2.75%.
"Class R Certificate": Any one of the Class R Certificates
executed and delivered by the Trustee substantially in the form annexed hereto
as Exhibit B-2 and evidencing an interest designated as a "residual interest" in
the Trust Fund for purposes of the REMIC Provisions.
"Closing Date": September 29, 1997.
"Code": The Internal Revenue Code of 1986.
"Collateral Value": The appraised value of a Mortgaged
Property based upon the lesser of (i) the appraisal (as reviewed and approved by
the Seller) made at the time of the origination of the related Mortgage Loan, or
(ii) the sales price of such Mortgaged Property at such time of origination.
With respect to a Mortgage Loan the proceeds of which were used to refinance an
existing mortgage loan, the appraised value of the Mortgaged Property based upon
the appraisal (as reviewed and approved by the Seller) obtained at the time of
refinancing.
"Compensating Interest": With respect to any Distribution
Date, an amount equal to Prepayment Interest Shortfalls resulting from Principal
Prepayments during the related Prepayment Period, but not more than the lesser
of (a) one-twelfth of 0.125% of the Stated
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Principal Balance of the Mortgage Loans immediately preceding such Distribution
Date and (b) the Servicing Fee.
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business
related to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ICIFC Secured Assets Corp. Series 1997- 3.
"Curtailment": Any Principal Prepayment made by a Mortgagor
which is not a Principal Prepayment in Full.
"Custodial Account": The custodial account or accounts created
and maintained pursuant to Section 3.10 in the name of a depository institution,
as custodian for the holders of the Certificates, for the holders of certain
other interests in mortgage loans serviced or sold by the Master Servicer and
for the Master Servicer, into which the amounts set forth in Section 3.10 shall
be deposited directly. Any such account or accounts shall be an Eligible
Account.
"Credit Support Depletion Date": The first Distribution Date
on which the Senior Percentage equals 100%.
"Cut-off Date": September 1, 1997.
"DCR": Duff & ▇▇▇▇▇▇ Credit Rating Co., and its successors in
interest.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
"Defaulted Mortgage Loan" means any Mortgage Loan as to which
the Mortgagor has failed to make unexcused three or more consecutive scheduled
Monthly Payments.
"Defaulted Mortgage Loss": With respect to any Mortgage Loan,
any loss that is attributable to the Mortgagor's failure to make any payment of
principal or interest as required under the Mortgage Note, except that such loss
shall not include any Special Hazard Loss, Fraud Loss, Bankruptcy Loss,
Extraordinary Loss or other loss resulting from damage to the related Mortgaged
Property.
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"Deficient Valuation": With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
scheduled Monthly Payment that constitutes a permanent forgiveness of principal,
which valuation or reduction results from a proceeding under the Bankruptcy
Code.
"Definitive Certificate": Any definitive, fully registered
Certificate.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced with a Qualified Substitute Mortgage Loan.
"Delivery Date": September 29, 1997.
"Depositor": ICIFC Secured Assets Corp., or its successor in
interest.
"Depository" The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering those Certificates that are to be Book-Entry Certificates is Cede
& Co. The Depository shall at all times be a "clearing corporation" as defined
in Section 8-102(3) of the Uniform Commercial Code of the State of New York and
a "clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
"Depository Participant": A broker, dealer, bank or other
financial institutions or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": The 15th day (or if such 15th day is not
a Business Day, the Business Day immediately preceding such 15th day) of the
month of the related Distribution Date.
"Discount Fraction": With respect to each Discount Mortgage
Loan, the fraction expressed as a percentage, the numerator of which is 7.250%
minus the Net Mortgage Rate (or the initial Net Mortgage Rate with respect to
any Discount Mortgage Loans as to which the Mortgage Rate is modified pursuant
to Section 3.07(a)) for such Mortgage Loan and the denominator of which is
7.250%. The Discount Fraction with respect to each Discount Mortgage Loan is set
forth on Exhibit K attached hereto.
"Discount Mortgage Loan": Any Mortgage Loan having a Net
Mortgage Rate (or the initial Net Mortgage Rate) of less than 7.25% per annum
and any Mortgage Loan deemed to be a Discount Mortgage Loan pursuant to the
definition of Qualified Substitute Mortgage
Loan.
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"Disqualified Organization": Any organization defined as a
"disqualified organization" under Section 860E(e)(5) of the Code, which includes
any of the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the FHLMC, a majority
of its board of directors is not selected by such governmental unit), (ii) a
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code and (v) any other Person so designated by the Trustee based upon an Opinion
of Counsel that the holding of an Ownership Interest in a Class R Certificate by
such Person may cause the REMIC or any Person having an Ownership Interest in
any Class of Certificates (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Class R Certificate to such Person.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.
"Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in October 1997.
"Due Date": The first day of the month of the related
Distribution Date.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month preceding the month of such
Distribution Date (or, with respect to the first Due Period, the day following
the Cut-off Date) and ending on the related Due Date.
"Eligible Account": An account maintained with a federal or
state chartered depository institution (i) the short-term obligations of which
are rated by each of the Rating Agencies in its highest rating at the time of
any deposit therein, or (ii) insured by the FDIC (to the limits established by
such Corporation), the uninsured deposits in which account are otherwise secured
such that, as evidenced by an Opinion of Counsel (obtained by the Person
requesting that the account be held pursuant to this clause (ii)) delivered to
the Trustee prior to the establishment of such account, the Certificateholders
will have a claim with respect to the funds in such account and a perfected
first priority security interest against any collateral (which shall be limited
to Permitted Investments, each of which shall mature not later than the Business
Day immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Investment is an obligation of the institution that maintains the
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Certificate Account or Custodial Account) securing such funds that is superior
to claims of any other depositors or general creditors of the depository
institution with which such account is maintained or (iii) a trust account or
accounts maintained with a federal or state chartered depository institution or
trust company with trust powers acting in its fiduciary capacity or (iv) an
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Custodial Account or the Certificate Account will not have an
adverse effect on the then-current ratings assigned to the Classes of the
Certificates then rated by the Rating Agencies). Eligible Accounts may bear
interest.
"Eligible Funds": On any Distribution Date, the portion, if
any, of the Available Distribution Amount remaining after reduction by the sum
of (i) the aggregate amount of Accrued Certificate Interest on the Class A and
Class R Certificates, (ii) the Senior Principal Distribution Amount, (iii) the
Class A-9 Principal Distribution Amount (determined without regard to Section
4.01(d)(i)(D) hereof) and (iv) the aggregate amount of Accrued Certificate
Interest on the Class M, Class B-1 and Class B-2 Certificates.
"Event of Default": One or more of the events described in
Section 7.01.
"Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion
thereof, which exceeds the then applicable Bankruptcy Amount.
"Excess Fraud Loss": Any Fraud Loss, or portion thereof, which
exceeds the then applicable Fraud Loss Amount.
"Excess Proceeds": As defined in Section 3.22.
"Excess Special Hazard Loss": Any Special Hazard Loss, or
portion thereof, that exceeds the then applicable Special Hazard Amount.
"Extraordinary Events": Any of the following conditions with
respect to a Mortgaged Property or Mortgage Loan causing or resulting in a loss
which causes the liquidation of such Mortgage Loan:
(a) losses which are otherwise covered by the fidelity bond
and the errors and omissions insurance policy maintained pursuant to
Section 3.18, but are in excess of the coverage maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all whether controlled or uncontrolled, or remote or be
in whole or in part caused by,
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contributed to or aggravated by a peril covered by the definition of
the term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war,
including action in hindering, combating or defending against an
actual, impending or expected attack;
1. by any government or sovereign power, de jure or
de facto, or by any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(d) any weapon of war employing atomic fission or radioactive
force whether in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority; or risks of contraband or illegal
transportation or trade.
"Extraordinary Losses": Any loss incurred on a Mortgage Loan
caused by or resulting from an Extraordinary Event.
"FDIC": Federal Deposit Insurance Corporation or any
successor.
"Final Disposition": With respect to a defaulted Mortgage Loan
is deemed to have occurred upon a determination by the Master Servicer that it
has received all Insurance Proceeds, Liquidation Proceeds and other payments or
cash recoveries which the Master Servicer reasonably and in good faith expects
to be finally recoverable with respect to such Mortgage Loan.
"FHLMC": Federal Home Loan Mortgage Corporation or any
successor.
"FNMA": Federal National Mortgage Association or any
successor.
"Fraud Loss Amount": As of any date of determination after the
Cut-off Date, an amount equal to: (Y) prior to the first Anniversary, an amount
equal to 2.00% of the aggregate outstanding principal balance of all of the
Mortgage Loans as of the Cut-off Date minus the aggregate amount of Fraud Losses
allocated solely to one or more specific Classes of Certificates
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in accordance with Section 4.04 since the Cut-off Date up to such date of
determination and (Z) from the first to the fifth Anniversary, an amount equal
to the lesser of (a) the Fraud Loss Amount as of the most recent anniversary of
the Cut-off Date and (b) 1.00% of the aggregate outstanding principal balance of
all of the Mortgage Loans as of the most recent Anniversary minus (2) the Fraud
Losses allocated solely to one or more specific Classes of Certificates in
accordance with Section 4.04 since the most recent Anniversary up to such date
of determination. On and after the fifth Anniversary, the Fraud Loss Amount
shall be zero.
The Fraud 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, the Master Servicer shall (i) obtain
written confirmation from each Rating Agency that such reduction shall not
reduce the rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency and (ii) provide a
copy of such written confirmation to the Trustee.
"Fraud Losses": Losses on Mortgage Loans as to which there was
fraud in the origination of such Mortgage Loan.
"Funding Date": With respect to each Mortgage Loan, the date
on which funds were advanced by or on behalf of the Seller and interest began to
accrue thereunder.
"Initial Certificate Principal Balance": With respect to each
Class of Regular Certificates, the Certificate Principal Balance of such Class
of Certificates as of the Cut-off Date as set forth in the Preliminary Statement
hereto.
"Initial Notional Amount": With respect to the Class A-10
Certificates, the aggregate Initial Certificate Principal Balance of all of the
Certificates as set forth in the Preliminary Statement hereto.
"Insurance Policy": With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement in respect of such Mortgage Loan.
"Insurance Proceeds": Proceeds paid in respect of the Mortgage
Loans pursuant to any Primary Hazard Insurance Policy, any title insurance
policy or any other insurance policy covering a Mortgage Loan, to the extent
such proceeds are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account.
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"Late Collections": With respect to any Mortgage Loan, all
amounts received during any Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.
"Liquidation Proceeds": Amounts (other than Insurance
Proceeds) received by the Master Servicer in connection with the taking of an
entire Mortgaged Property by exercise of the power of eminent domain or
condemnation or in connection with the liquidation of a defaulted Mortgage Loan
through trustee's sale, foreclosure sale or otherwise, other than amounts
received in respect of any REO Property.
"Loan-to-Value Ratio": As of any date, the fraction, expressed
as a percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Collateral Value of the related Mortgaged Property.
"Lockout Certificates": Any one of the Class A-6, Class A-7 or
Class A-8 Certificates executed by the Trustee and authenticated by the Trustee
substantially in the form annexed hereto as Exhibit A and evidencing an interest
designated as a "regular interest" in the
REMIC for purposes of the REMIC Provisions.
"Master Servicer": ICI Funding Corporation, or any successor
master servicer appointed as herein provided.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by a Mortgagor from time to time under the related Mortgage Note as
originally executed (after adjustment, if any, for Principal Prepayments and for
Deficient Valuations occurring prior to such Due Date, and after any adjustment
by reason of any bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period).
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., or its successor
in interest.
"Mortgage": The mortgage, deed of trust or any other
instrument securing the Mortgage Loan.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement; provided, that
whenever the term "Mortgage File" is used to refer to
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documents actually received by the Trustee, such term shall not be deemed to
include such additional documents required to be added unless they are actually
so added.
"Mortgage Loan": Each of the mortgage loans, transferred and
assigned to the Trustee pursuant to Section 2.01 or Section 2.04 and from time
to time held in the Trust Fund (including any Qualified Substitute Mortgage
Loans), the Mortgage Loans so transferred, assigned and held being identified in
the Mortgage Loan Schedule. As used herein, the term "Mortgage Loan" includes
the related Mortgage Note and Mortgage.
"Mortgage Loan Accrued Interest": With respect to each
Mortgage Loan and each Due Date, the aggregate amount of interest accrued at the
Mortgage Rate in respect of such Mortgage Loan since the preceding Due Date (or
in the case of the initial Due Date, since the Cutoff Date) to but not including
such Due Date with respect to which the Mortgage Loan Accrued Interest is being
calculated in accordance with the terms of such Mortgage Loan, after giving
effect to any previous Principal Prepayments, Deficient Valuation or Debt
Service Reduction in respect of such Mortgage Loan.
"Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
Agreement dated as of September 29, 1997, among ICI Funding Corporation, as
seller, Imperial Credit Mortgage Holdings, Inc., as guarantor, and the Depositor
as purchaser, and all amendments thereof and supplements thereto.
"Mortgage Loan Schedule": As of any date of determination, the
schedule of Mortgage Loans included in the Trust Fund. The initial schedule of
Mortgage Loans with accompanying information transferred on the Closing Date to
the Trustee as part of the Trust Fund for the Certificates, attached hereto as
Exhibit H (as amended from time to time to reflect the addition of Qualified
Substitute Mortgage Loans) (and, for purposes of the Trustee pursuant to Section
2.02, in computer-readable form as delivered to the Trustee), which list shall
set forth the following information with respect to each Mortgage Loan:
(i) the loan number and name of the Mortgagor;
(ii) ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇ and zip code of the
Mortgaged Property;
(iii) (A) the original term to maturity and (B) if such
Mortgage Loan is a Balloon Loan, the amortization
term thereof;
(iv) the original principal balance and the original
Mortgage Rate;
(v) the first payment date;
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(vi) whether the Mortgage Loan is a Balloon Mortgage Loan
or a Mortgage Loan the terms of which do not provide
for a Balloon Payment;
(vii) the type of Mortgaged Property;
(viii) the Monthly Payment in effect as of the Cut-off Date;
(ix) the principal balance as of the Cut-off Date;
(x) the Mortgage Rate as of the Cut-off Date and the Pool
Strip Rate;
(xi) the occupancy status;
(xii) the purpose of the Mortgage Loan;
(xiii) the Collateral Value of the Mortgaged Property;
(xiv) the original term to maturity;
(xv) the paid-through date of the Mortgage Loan;
(xvi) the Servicing Fee Rate;
(xvii) the Net Mortgage Rate for such Mortgage Loan;
(xviii) the documentation type.
The Mortgage Loan Schedule may be in the form of more than one
schedule, collectively setting forth all of the information required.
"Mortgage Note": The note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Rate": With respect to any Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan, as adjusted from time to
time in accordance with the provisions of the Mortgage Note.
"Mortgaged Property": The underlying property securing a
Mortgage Loan.
"Mortgagor": The obligor or obligors on a Mortgage Note.
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"Net Mortgage Rate": With respect to each Mortgage Loan Due
Date, a per annum rate of interest equal to the then-applicable Mortgage Rate on
such Mortgage Loan less the sum of the Servicing Fee Rate and the Trustee Fee
Rate..
"Non-Discount Mortgage Loan": The Mortgage Loans other than
the Discount Mortgage Loans.
"Nonrecoverable Advance": Any Advance previously made or
proposed to be made in respect of a Mortgage Loan 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 from related Late Collections, Insurance
Proceeds, Liquidation Proceeds or REO Proceeds. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance
would constitute a Nonrecoverable Advance, shall be evidenced by a certificate
of a Servicing Officer delivered to the Depositor and the Trustee.
"Non-United States Person": Any Person other than a United
States Person.
"Notional Amount": With respect to the Variable Strip
Certificates as of any Distribution Date, an amount equal to the aggregate
Stated Principal Balance of the Mortgage Loans immediately prior to such date.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
and by the Treasurer, the Secretary, or one of the assistant treasurers or
assistant secretaries of the Master Servicer or of the Sub-Servicer and
delivered to the Depositor and Trustee.
"Opinion of Counsel": A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to the
Trustee; except that any opinion of counsel relating to (a) the qualification of
any account required to be maintained pursuant to this Agreement as an Eligible
Account, (b) qualification of the Trust Fund as a REMIC, (c) compliance with the
REMIC Provisions or (d) resignation of the Master Servicer pursuant to Section
6.04 must be an opinion of counsel who (i) is in fact independent of the
Depositor and the Master Servicer, (ii) does not have any direct financial
interest or any material indirect financial interest in the Depositor or the
Master Servicer or in an affiliate of either and (iii) is not connected with the
Depositor or the Master Servicer as an officer, employee, director or person
performing similar functions.
"Original Senior Percentage": The fraction, expressed as a
percentage, the numerator of which is the aggregate Initial Certificate
Principal Balance of the Class A Certificates (other than the Class A-9
Certificates) and the Class R Certificates and the denominator of which
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is the aggregate Stated Principal Balance of the Mortgage Loans (other than the
Discount Fraction of the Discount Mortgage Loans), which is approximately 94.00%
as of the Closing Date.
"OTS": Office of Thrift Supervision or any successor.
"Outstanding Mortgage Loan": As to any Due Date, a Mortgage
Loan (including an REO Property) which was not the subject of a Principal
Prepayment in Full, Cash Liquidation or REO Disposition and which was not
purchased prior to such Due Date pursuant to Sections
2.02, 2.04, 3.14 or 3.24.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": A rate equal to, (i) with respect to all
Certificates other than the Variable Strip Certificates and the Principal Only
Certificates, a fixed rate set forth in the Preliminary Statement hereto, (ii)
with respect to the Variable Strip Certificates the weighted average, expressed
as a percentage, of the Pool Strip Rate on each of the Mortgage Loans as of the
Due Date in the month immediately preceding the month in which such Distribution
Date occurs, weighted on the basis of the respective Stated Principal Balances
of the Mortgage Loans, which Stated Principal Balances shall be the Stated
Principal Balances of the Mortgage Loans at the close of business on the
immediately preceding Distribution Date after giving effect to distributions
thereon allocable to principal (or, in the case of the Pass-Through Rate for the
initial Distribution Date, at the close of business on the Cut-off Date). The
Principal Only Certificates do not have a Pass-Through Rate and are not entitled
to Accrued Certificate Interest.
"Percentage Interest": With respect to any Certificate (other
than a Class R Certificate), the undivided percentage ownership interest in the
related Class evidenced by such Certificate, which percentage ownership interest
shall be equal to the Initial Certificate Principal Balance thereof or Initial
Notional Amount (in the case of the Class A-10 Certificates) divided by the
aggregate Initial Certificate Principal Balance or initial Notional Amount, as
applicable, of all of the Certificates of the same Class. With respect to a
Class R Certificate, the interest in distributions to be made with respect to
such Class evidenced thereby, expressed as a percentage, as stated on the face
of each such Certificate.
"Permitted Investment": One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
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(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated by each Rating
Agency in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard
& Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the
depository institution holding company) at the date of acquisition
thereof have been rated by each Rating Agency in its highest short-term
rating available; and provided further that, if the only Rating Agency
is Standard & Poor's and if the depository or trust company is a
principal subsidiary of a bank holding company and the debt obligations
of such subsidiary are not separately rated, the applicable rating
shall be that of the bank holding company; and, provided further that,
if the original maturity of such short-term obligations of a domestic
branch of a foreign depository institution or trust company shall
exceed 30 days, the short-term rating of such institution shall be A-1+
in the case of Standard & Poor's if Standard & Poor's is the Rating
Agency;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by DCR in its highest short-term rating available and by
Standard & Poor's at least A-1; provided that such commercial paper
shall have a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated
by each Rating Agency in its highest long-term rating available; and
(vi) other obligations or securities that are acceptable to
each Rating Agency as a Permitted Investment hereunder and will not
reduce the rating assigned to any Class of Certificates by such Rating
Agency below the lower of the then-current rating or the rating
assigned to such Certificates as of the Closing Date by such Rating
Agency, as evidenced in writing;
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PROVIDED, HOWEVER, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations.
"Permitted Transferee": Any transferee of a Residual
Certificate other than a Disqualified Organization or a Non-United States
Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pool Strip Rate": With respect to any Distribution Date and
any Mortgage Loan, the Net Mortgage Rate thereon minus 7.25%, but not less than
0.00%.
"Prepayment Assumption": A prepayment assumption of 100% of
the standard prepayment assumption, used for determining the accrual of original
issue discount and market discount and premium on the Certificates for federal
income tax purposes. The standard prepayment assumption assumes a constant rate
of prepayment of mortgage loans of 4.0% per annum of the then outstanding
principal balance of such mortgage loans in the first month of the life of the
mortgage loans and an additional approximate 1.0909% (precisely 12/11)
(expressed as a percentage per annum) in each month thereafter until the twelfth
month, and a constant 16.0% per annum rate of prepayment thereafter for the life
of the mortgage loans.
"Prepayment Distribution Percentage": With respect to any
Distribution Date and each Class of Class M Certificates and Class B
Certificates, under the applicable circumstances set forth below, the respective
percentages set forth below:
(i) For any Distribution Date on which any Class of Class M or
Class B Certificates are outstanding:
(a) in the case of the Class of Class M Certificates
then outstanding with the lowest numerical designation, or in
the event the Class M Certificates are no longer outstanding,
the Class of Class B Certificates then outstanding with the
lowest numerical designation and each other Class of Class M
Certificates and Class B Certificates for which the related
Prepayment Distribution Trigger has been satisfied, a
fraction, expressed as a percentage, the numerator of which is
the Certificate Principal Balance of such Class immediately
prior to such date and the denominator of which is the sum of
the Certificate Principal Balances immediately prior to such
date of (1) the Class of Class M Certificates then outstanding
with the
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lowest numerical designation, or in the event the Class M
Certificates are no longer outstanding, the Class of Class B
Certificates then outstanding with the lowest numerical
designation and (2) all other Classes of Class M Certificates
and Class B Certificates for which the respective Prepayment
Distribution Triggers have been satisfied; and
(b) in the case of each other Class of Class M
Certificates and Class B Certificates for which the Prepayment
Distribution Triggers have not been satisfied, 0%; and
(ii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date as provided in Section
4.01 (determined without regard to the proviso to the definition of
"Subordinate Principal Distribution Amount") would result in a
distribution in respect of principal of any Class or Classes of Class M
Certificates and Class B Certificates in an amount greater than the
remaining Certificate Principal Balance thereof (any such class, a
"Maturing Class"), then: (a) the Prepayment Distribution Percentage of
each Maturing Class shall be reduced to a level that, when applied as
described above, would exactly reduce the Certificate Principal Balance
of such Class to zero; (b) the Prepayment Distribution Percentage of
each other Class of Class M Certificates and Class B Certificates (any
such Class, a "Non-Maturing Class") shall be recalculated in accordance
with the provisions in paragraph (i) above, as if the Certificate
Principal Balance of each Maturing Class had been reduced to zero (such
percentage as recalculated, the "Recalculated Percentage"); (c) the
total amount of the reductions in the Prepayment Distribution
Percentages of the Maturing Class or Classes pursuant to clause (a) of
this sentence, expressed as an aggregate percentage, shall be allocated
among the Non-Maturing Classes in proportion to their respective
Recalculated Percentages (the portion of such aggregate reduction so
allocated to any Non-Maturing Class, the "Adjustment Percentage"); and
(d) for purposes of such Distribution Date, the Prepayment Distribution
Percentage of each Non-Maturing Class shall be equal to the sum of (1)
the Prepayment Distribution Percentage thereof, calculated in
accordance with the provisions in paragraph (i) above as if the
Certificate Principal Balance of each Maturing Class had not been
reduced to zero, plus (2) the related Adjustment Percentage.
"Prepayment Distribution Trigger": The Class M-2 Prepayment
Distribution Trigger, Class M-3 Prepayment Distribution Trigger, Class B-1
Prepayment Distribution Trigger, Class B-2 Prepayment Distribution Trigger or
Class B-3 Prepayment Distribution Trigger.
"Prepayment Interest Shortfall": As to any Distribution Date
and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property)
that was the subject of (a) a Principal Prepayment in Full during the related
Prepayment Period, an amount equal to the excess
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of one month's interest at the Net Mortgage Rate on the Stated Principal Balance
of such Mortgage Loan over the amount of interest (adjusted to the Net Mortgage
Rate) paid by the Mortgagor for such Prepayment Period to the date of such
Principal Prepayment in Full or (b) a Curtailment during the prior calendar
month, an amount equal to one month's interest at the Net Mortgage Rate on the
amount of such Curtailment.
"Prepayment Period": As to any Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.
"Primary Hazard Insurance Policy": Each primary hazard
insurance policy required to be maintained pursuant to Section 3.13.
"Primary Mortgage Insurance Policy": A policy of primary
mortgage guaranty insurance issued by an insurer meeting the FNMA and FHLMC
qualifications.
"Principal Only Certificates": Any one of the Class A-9
Certificates.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment.
"Principal Prepayment in Full": Any Principal Prepayment made
by a Mortgagor of the entire Principal Balance of the Mortgage Loan.
"Purchase Price": With respect to any Mortgage Loan (or REO
Property) required to be purchased pursuant to Section 2.02, 2.04 or 3.14 or
that the Master Servicer is entitled to repurchase pursuant to Section 3.24, an
amount equal to the sum of (i) 100% of the Stated Principal Balance thereof,
(ii) unpaid accrued interest (or REO Imputed Interest) at the applicable Net
Mortgage Rate on the Stated Principal Balance thereof outstanding during each
Due Period that such interest was not paid or advanced, from the date through
which interest was last paid by the Mortgagor or advanced and distributed to
Certificateholders together with unpaid Servicing Fees from the date through
which interest was last paid by the Mortgagor, in each case to the first day of
the month in which such Purchase Price is to be distributed, plus (iii) the
aggregate of all Advances made in respect thereof that were not previously
reimbursed.
"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
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claims paying ability of which is acceptable to the Rating Agencies for
pass-through certificates having the same rating as the Certificates rated by
the Rating Agencies as of the Closing Date.
"Qualified Substitute Mortgage Loan": A Mortgage Loan
substituted by the Depositor for a Deleted Mortgage Loan which must, on the date
of such substitution, as confirmed in an Officers' Certificate delivered to the
Trustee, (i) have an outstanding principal balance, after deduction of the
principal portion of the monthly payment due in the month of substitution (or in
the case of a substitution of more than one Mortgage Loan for a Deleted Mortgage
Loan, an aggregate outstanding principal balance, after such deduction), not in
excess of the Stated Principal Balance of the Deleted Mortgage Loan (the amount
of any shortfall to be paid to the Master Servicer for deposit in the Custodial
Account in the month of substitution); (ii) have a Mortgage Rate and a Net
Mortgage Rate no lower than and not more than 1% per annum higher than the
Mortgage Rate and Net Mortgage Rate, respectively, of the Deleted Mortgage Loan
as of the date of substitution; (iii) have a Loan-to-Value Ratio at the time of
substitution no higher than that of the Deleted Mortgage Loan at the time of
substitution; (iv) have a remaining term to stated maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan; (v)
comply with each representation and warranty set forth in Section 2.04 hereof;
and (vi) have a Pool Strip Rate equal to or greater than that of the Deleted
Mortgage Loan. Notwithstanding any other provisions herein, (x) with respect to
any Qualified Substitute Mortgage Loan substituted for a Deleted Mortgage Loan
which was a Discount Mortgage Loan, such Qualified Substitute Mortgage Loan
shall be deemed to be a Discount Mortgage Loan and to have a Discount Fraction
equal to the Discount Fraction of the Deleted Mortgage Loan and (y) in the event
that the "Pool Strip Rate" of any Qualified Substitute Mortgage Loan as
calculated pursuant to the definition of "Pool Strip Rate" is greater than the
Pool Strip Rate of the related Deleted Mortgage Loan (i) the Pool Strip Rate of
such Qualified Substitute Mortgage Loan shall be equal to the Pool Strip Rate of
the related Deleted Mortgage Loan for purposes of calculating the Pass- Through
Rate for the Class A-10 Certificates and (ii) the excess of the Pool Strip Rate
on such Qualified Substitute Mortgage Loan as calculated pursuant to the
definition of "Pool Strip Rate" over the Pool Strip Rate on the related Deleted
Mortgage Loan shall be payable to the Class R Certificates pursuant to Section
4.01 hereof.
"Rating Agency": DCR and Standard & Poor's or each of their
successors. If such agencies and their successors are no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating agency,
or other comparable Person, designated by the Depositor, notice of which
designation shall be given to the Trustee and Master Servicer. References herein
to the two highest long term debt rating categories of a Rating Agency shall
mean "AA" or better in the case of DCR, and "AA" or better in the case of
Standard & Poor's and references herein to the highest short-term debt rating of
a Rating Agency shall mean "A-1+" in the case of Standard & Poor's, and "D-1" in
the case of DCR, and in the case of any other Rating Agency such references
shall mean such rating categories without regard to any plus or minus.
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"Realized Loss": With respect to each Mortgage Loan or REO
Property as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan as of the date of Cash Liquidation or REO Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the Net Mortgage Rate from the
Due Date as to which interest was last paid or advanced to Certificateholders up
to the date of the Cash Liquidation or REO Disposition on the Stated Principal
Balance of such Mortgage Loan outstanding during each Due Period that such
interest was not paid or advanced, minus (iii) the proceeds, if any, received
during the month in which such Cash Liquidation or REO Disposition occurred, to
the extent applied as recoveries of interest at the Net Mortgage Rate and to
principal of the Mortgage Loan, net of the portion thereof reimbursable to the
Master Servicer or any Sub-Servicer with respect to related Advances not
previously reimbursed. With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.
"Record Date": The last Business Day of the month immediately
preceding the month of the related Distribution Date.
"Regular Certificate": Any of the Certificates other than a
Residual Certificate.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
"Remittance Report": A report prepared by the Master Servicer
providing the information set forth in Exhibit E attached hereto.
"REO Acquisition": The acquisition by the Master Servicer on
behalf of the Trustee for the benefit of the Certificateholders of any REO
Property pursuant to Section 3.15.
"REO Disposition": The receipt by the Master Servicer of
Insurance Proceeds, Liquidation Proceeds and other payments and recoveries
(including proceeds of a final sale) which
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the Master Servicer expects to be finally recoverable from the sale or other
disposition of the REO Property.
"REO Imputed Interest": As to any REO Property, for any
period, an amount equivalent to interest (at the Mortgage Rate that would have
been applicable to the related Mortgage Loan had it been outstanding) on the
unpaid principal balance of the Mortgage Loan as of the date of acquisition
thereof (as such balance is reduced pursuant to Section 3.15 by any income from
the REO Property treated as a recovery of principal).
"REO Proceeds": Proceeds, net of directly related expenses,
received in respect of any REO Property (including, without limitation, proceeds
from the rental of the related Mortgaged Property and of any REO Disposition),
which proceeds are required to be deposited
into the Custodial Account as and when received.
"REO Property": A Mortgaged Property acquired by the Master
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibits F-1 or F-2 attached hereto.
"Residual Certificate": Any of the Class R Certificates.
"Responsible Officer": When used with respect to the Trustee,
the Chairman or Vice Chairman of the Board of Directors or Trustees, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, the Chairman of the Committee on Trust
Matters, any vice president, any assistant vice president, the Secretary, any
assistant secretary, the Treasurer, any assistant treasurer, the Cashier, any
assistant cashier, any trust officer or assistant trust officer, the Controller
and any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers 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.
"Scheduled Payment Lockout Distribution Percentage" With
respect to any Distribution Date occurring prior to the Distribution Date in
October 2002 will be equal to 0% and for any Distribution Date thereafter will
be equal to 100%. Notwithstanding the foregoing, if the Certificate Principal
Balances of the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5
Certificates have been reduced to zero, the Scheduled Payment Lockout
Distribution Percentage will be equal to 100%.
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"Seller": ICI Funding Corporation, or its successor in
interest.
"Senior Accelerated Distribution Percentage": With respect to
any Distribution Date, the percentage indicated below:
Senior Accelerated
Distribution Date Distribution Percentage
------------------------------------------------------
October 1997 through 100%
September 2002
October 2002 through Senior Percentage, plus 70% of
September 2003 the difference between 100% and the Senior
Percentage
October 2003 through Senior Percentage, plus 60% of
September 2004 the difference between 100% and the Senior
Percentage
October 2004 through Senior Percentage, plus 40% of
September 2005 the difference between 100% and the Senior
Percentage
October 2005 through Senior Percentage, plus 20% of
September 2006 the difference between 100% and the Senior
Percentage
October 2006 and Senior Percentage;
thereafter
provided, however, (i) that any scheduled reduction to the Senior Accelerated
Distribution Percentage described above shall not occur as of any Distribution
Date unless either (a)(1)(x) the outstanding principal balance of Mortgage Loans
delinquent 60 days or more (including foreclosure and REO Property) averaged
over the last six months as a percentage of the aggregate outstanding
Certificate Principal Balance of the Class M Certificates and the Class B
Certificates, is less than 50%, or (y) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date
for such Distribution Date if occurring during the sixth, seventh, eighth, ninth
or tenth year (or
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any year thereafter) after the Delivery Date are less than 30%, 35%, 40%, 45%
and 50%, respectively, of the sum of the Initial Certificate Principal Balances
of the Class M Certificates and Class B Certificates or (b) (1) the aggregate
outstanding principal balance of the Mortgage Loans delinquent 60 days or more
(including foreclosure and REO Property) averaged over the last six months, as a
percentage of the aggregate outstanding principal balance of all Mortgage Loans
averaged over the last six months, does not exceed 4% and (2) Realized Losses on
the Mortgage Loans to date are less than 10% of the sum of the Initial
Certificate Principal Balances of the Class M Certificates and Class B
Certificates and (ii) that for any Distribution Date on which the Senior
Percentage is greater than the Original Senior Percentage, the Senior
Accelerated Distribution Percentage for such Distribution Date shall be 100%.
Notwithstanding the foregoing, upon the reduction of the aggregate Certificate
Principal Balance of the Class A Certificates (other than the Certificate
Principal Balance of the Principal Only Certificates) and the Class R
Certificates to zero, the Senior Accelerated Distribution Percentage will equal
0%.
"Senior Interest Distribution Amount": As defined in Section
4.01(c)(i).
"Senior Percentage": As of any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class A Certificates (other than
the Class A-9 Certificates) and Class R Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate Stated Principal
Balance of all of the Mortgage Loans or related REO Properties (other than the
Discount Fraction of the Discount Mortgage Loans) immediately prior to such
Distribution Date.
"Senior Principal Distribution Amount": As to any Distribution
Date, the lesser of (a) the balance of the Available Distribution Amount
remaining after the distribution of all amounts required to be distributed
pursuant to Section 4.01(c)(i) and (ii)(X) and (b) the sum of the amounts
required to be distributed to the Class A Certificates and Class R Certificates
on such Distribution Date pursuant to Section 4.01(c)(ii)(Y), (xv) and (xvi).
"Senior Support Lockout Certificates": The Class A-8
Certificates.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in connection with a default,
delinquency or other unanticipated event in the performance by the Master
Servicer of its servicing obligations, including, but not limited to, the cost
of (i) the preservation, restoration and protection of a Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation
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of any REO Property and (iv) compliance with the obligations under the second
paragraph of Section 3.01 and Section 3.09.
"Servicing Fees": As to each Mortgage Loan, an amount, payable
out of any payment of interest on the Mortgage Loan, equal to interest at the
Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan for the
calendar month preceding the month in which the payment is due (alternatively,
in the event such payment of interest accompanies a Principal Prepayment in full
made by the Mortgagor, interest for the number of days covered by such payment
of interest).
"Servicing Fee Rate": With respect to each Mortgage Loan, the
per annum rate of 0.25%.
"Servicing Officer": Any officer of the Master Servicer
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.
"Single Certificate": A Certificate of any Class evidencing an
Initial Certificate Principal Balance of $1,000.
"Special Hazard Amount": As of any Distribution Date, an
amount equal to $2,314,000 (the initial "Special Hazard Amount") minus the sum
of (i) the aggregate amount of Special Hazard Losses allocated solely to one or
more Classes of Certificates in accordance with Section 4.04 and (ii) the
Adjustment Amount (as defined below) as most recently calculated. For each
Anniversary, the Adjustment Amount shall be calculated and 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 (i) twice the outstanding principal
balance of the Mortgage Loan in the Trust Fund which has the largest outstanding
principal balance on the Distribution Date immediately preceding such
anniversary, (ii) the product of 1.00% multiplied by the outstanding principal
balance of all Mortgage Loans on the Distribution Date immediately preceding
such anniversary and (iii) the aggregate outstanding principal balance (as of
the immediately preceding Distribution Date) of the Mortgage Loans in any single
five-digit California zip code area with the largest amount of Mortgage Loans by
aggregate principal balance as of such anniversary and (B) the greater of (i)
the product of 0.50% multiplied by the outstanding principal balance of all
Mortgage Loans on the Distribution Date immediately preceding such anniversary
multiplied by a fraction, the numerator of which is equal to the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of all of the Mortgage Loans secured by Mortgaged Properties located in
the State of California divided by the aggregate outstanding principal balance
(as of the
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immediately preceding Distribution Date) of all of the Mortgage Loans, expressed
as a percentage, and the denominator of which is equal to 32.13% (which
percentage is equal to the percentage of Mortgage Loans initially secured by
Mortgaged Properties located in the State of California) and (ii) the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of the largest Mortgage Loan secured by a Mortgaged Property located in
the State of California.
The Special Hazard Amount may be further reduced by the Master
Servicer (including accelerating the manner in which coverage is reduced)
provided that prior to any such reduction, the Master Servicer shall (i) obtain
written confirmation from each Rating Agency that such reduction shall not
reduce the rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency and (ii) provide a
copy of such written confirmation to the Trustee.
"Special Hazard Loss": Any Realized Loss not in excess of the
cost of the lesser of repair or replacement of a Mortgaged Property suffered by
such Mortgaged Property on account of direct physical loss, exclusive of (i) any
loss of a type covered by a hazard policy or a flood insurance policy required
to be maintained in respect of such Mortgaged Property pursuant to Section
3.12(a), except to the extent of the portion of such loss not covered as a
result of any coinsurance provision and (ii) any Extraordinary Loss.
"Special Hazard Percentage": As of each Anniversary, the
greater of (i) 1.00% and (ii) the largest percentage obtained by dividing the
aggregate outstanding principal balance (as of the immediately preceding
Distribution Date) of the Mortgage Loans secured by Mortgaged Properties located
in a single, five-digit zip code area in the State of California by the
outstanding principal balance of all the Mortgage Loans as of such immediately
preceding Distribution Date.
"Standard & Poor's": Standard & Poor's, a division of The
McGraw Hill Companies, Inc., or its successor in interest.
"Startup Day": The day designated as such pursuant to Article
X hereof.
"Stated Principal Balance": With respect to any Mortgage Loan
or related REO Property at any given time, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut-off Date, after application of principal
payments due on or before such date, whether or not received, minus (ii) the sum
of (a) the principal portion of the Monthly Payments due with respect to such
Mortgage Loan or REO Property during each Due Period ending prior to the most
recent Distribution Date which were received or with respect to which an Advance
was made, and (b) all Principal Prepayments with respect to such Mortgage Loan
or REO Property, and all Insurance Proceeds, Liquidation Proceeds and net income
from a REO Property to the extent applied by the
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Master Servicer as recoveries of principal in accordance with Section 3.15 with
respect to such Mortgage Loan or REO Property, which were distributed pursuant
to Section 4.01 on any previous Distribution Date, and (c) any Realized Loss
with respect thereto allocated pursuant to Section
4.04 for any previous Distribution Date.
"Subordinate Certificate": Any of the Class M, Class B-1,
Class B-2 or Class B-3 Certificates.
"Subordinate Percentage": As of any date of determination, a
percentage equal to 100% minus Senior Percentage as of such date.
"Subordinate Principal Distribution Amount": With respect to
any Distribution Date and each Class of Class M Certificates and Class B
Certificates, (a) the sum of (i) the product of (x) the related Class M
Percentage or Class B Percentage for such Class and (y) the aggregate of the
amounts calculated for such Distribution Date under clauses (1), (2) and (3) of
Section 4.01(c)(ii)(Y)(A); (ii) such Class's pro rata share, based on the
Certificate Principal Balance of each Class of Class M Certificates and Class B
Certificates then outstanding, of the principal collections described in Section
4.01(c)(ii)(Y)(B)(b) to the extent such collections are not otherwise
distributed to the Senior Certificates; (iii) the product of (x) the related
Prepayment Distribution Percentage and (y) the aggregate of all Principal
Prepayments in Full and Curtailments received in the related Prepayment Period
(other than the related Discount Fraction of such Principal Payments in Full and
Curtailments with respect to a Discount Mortgage Loan) to the extent not payable
to the Senior Certificates; and (iv) any amounts described in clauses (i), (ii)
and (iii) as determined for any previous Distribution Date, that remain
undistributed to the extent that such amounts are not attributable to Realized
Losses which have been allocated to a subordinate Class of Class M or Class B
Certificates; PROVIDED, HOWEVER, that such amount shall in no event exceed the
outstanding Certificate Principal Balance of such Class of Certificates
immediately prior to such date.
"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-Servicer Remittance Date": The 18th day of each month, or
if such day is not a Business Day, the immediately preceding Business Day.
"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.
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"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.
"Super Senior Lockout Certificates": The Class A-7
Certificates.
"Super Senior Optimal Percentage": As of any Distribution Date
occurring on or after the Credit Support Depletion Date, a fraction expressed as
a percentage, the numerator of which is the aggregate Certificate Principal
Balance of the Super Senior Lockout Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate Certificate
Principal Balance of each class of Certificates (other than the Principal Only
Certificates) immediately prior to such Distribution Date.
"Super Senior Optimal Principal Distribution Amount": As of
any Distribution Date occurring on or after the Credit Support Depletion Date,
the product of (a) the then-applicable Super Senior Optimal Percentage for such
class and (b) the Senior Principal Distribution Amount.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to their classification as a REMIC
under the REMIC Provisions, together with any and all other information, reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) each
Mortgage Loan (exclusive of payments of principal and interest due on or before
the Cut-off Date, if any, received by the Master Servicer which shall not
constitute an asset of the Trust Fund) as from time to time are subject to this
Agreement and all payments under and proceeds of such Mortgage Loans (exclusive
of any prepayment fees and late payment charges received on the Mortgage Loans),
together with all documents included in the related Mortgage File, subject to
Section 2.01; (ii) such funds or assets as from time to time are
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deposited in the Custodial Account or the Certificate Account and belonging to
the Trust Fund; (iii) any REO Property; (iv) the Primary Hazard Insurance
Policies, if any, the Primary Insurance Policies, if any, and all other
Insurance Policies with respect to the Mortgage Loans; and (v) the Depositor's
interest in respect of the representations and warranties made by the Seller in
the Mortgage Loan Purchase Agreement as assigned to the Trustee pursuant to
Section 2.04 hereof.
"Trustee": Bankers Trust Company of California, N.A., or its
successor in interest, or any successor trustee appointed as herein provided.
"Trustee's Fee": As to each Mortgage Loan and as the
Distribution Date, an amount, payable out of any payment or advance of interest
on the Mortgage Loan, equal to interest at the Trustee Fee Rate on the Stated
Principal Balance of such Mortgage Loan as of the Due Date immediately preceding
the month in which such Distribution Date occurs.
"Trustee Fee Rate": With respect to each Mortgage Loan, the
per annum rate of 0.015%.
"Uninsured Cause": Any cause of damage to property subject to
a Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 3.13.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States fiduciaries have the authority to control all substantial
decisions of the trust. To the extent prescribed in regulations by the Secretary
of the Treasury, which have not yet been issued, a trust which was in existence
on August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part I of subchapter J of chapter 1 of the Code), and which was
treated as a United States person on August 20, 1996 may elect to continue to be
treated as a United States person notwithstanding the previous sentence.
"Unscheduled Payment Lockout Distribution Percentage" With
respect to any Distribution Date, the percentage indicated below:
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Unscheduled Payment
-------------------
Distribution Date Lockout Distribution Percentage
----------------- -------------------------------
October 1997 through September 2002........ 0%
October 2002 through September 2003........ 30%
October 2003 through September 2004........ 40%
October 2004 through September 2005........ 60%
October 2005 through September 2006........ 80%
October 2006 and thereafter................ 100%
Notwithstanding the foregoing, if the Certificate Principal Balances of the
Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Certificates have been
reduced to zero, the Unscheduled Payment Lockout Distribution Percentage will be
equal to 100%.
"Variable Strip Certificates": Any one of the Class A-10
Certificates.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times during the
term of this Agreement, 98% of all of the Voting Rights shall be allocated among
Holders of the Regular Certificates other than the Class A-10 Certificates in
proportion to their respective then outstanding Certificate Principal Balances;
1% of all Voting Rights shall be allocated to the Holders of the Class A-10
Certificates; and 1% of all of the Voting Rights shall be allocated among the
Holders of the Residual Certificates in proportion to their respective
Percentage Interests.
"Wendover": Wendover Funding, Inc.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, as of the Closing Date, and concurrently with
the execution and delivery hereof, does hereby assign, transfer, sell, set over
and otherwise convey to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Mortgage Loans identified on the
Mortgage Loan Schedule (exclusive of any prepayment fees and late payment
charges received thereon) and all other assets included or to be included in the
Trust Fund for the benefit of the Certificateholders. Such assignment includes
all principal and interest received by the Master Servicer on or with respect to
the Mortgage Loans (other than payment of principal and interest due on or
before the Cut-off Date).
In connection with such transfer and assignment, the Depositor
has caused the Seller to deliver to, and deposit with the Trustee, as described
in the Mortgage Loan Purchase Agreement the following documents or instruments:
(i) the original Mortgage Note, endorsed "Bankers Trust Company
of California, N.A., as trustee under the Pooling and Servicing
Agreement relating to ICIFC Secured Assets Corp., Mortgage Pass-Through
Certificates, Series 1997-3" with all intervening endorsements showing
a complete chain of endorsements from the originator to the Person
endorsing it to the Trustee;
(ii) the original recorded Mortgage or, if the original Mortgage
has not been returned from the applicable public recording office, a
copy of the Mortgage certified by the Seller to be a true and complete
copy of the original Mortgage submitted for recording;
(iii) a duly executed original Assignment of the Mortgage, without
recourse, in recordable form to "Bankers Trust Company of California,
N.A., as trustee," or to "Bankers Trust Company of California, N.A., as
trustee for holders of ICIFC Secured Assets Corp., Mortgage
Pass-Through Certificates";
(iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the originator
thereof to the Person assigning it to the Trustee or, if any such
Assignment has not been returned from the applicable public recording
office, a copy of such Assignment certified by the Seller to be a true
and
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complete copy of the original Assignment submitted to the title
insurance company for recording;
(v) the original title insurance policy, or, if such policy has
not been issued, any one of an original or a copy of the preliminary
title report, title binder or title commitment on the Mortgaged
Property with the original policy of the insurance to be delivered
promptly following the receipt thereof;
(vi) the original of any assumption, modification, extension
or guaranty agreement; and
(vii) the original or a copy of the private mortgage insurance
policy or original certificate of private mortgage insurance for each
Mortgage Loan identified on the Mortgage Loan Schedule as having a
Loan-to-Value Ratio at origination of 80% or
greater.
The Seller is obligated as described in the Mortgage Loan
Purchase Agreement to deliver to the Trustee: (a) either the original recorded
Mortgage, or in the event such original cannot be delivered by the Seller, a
copy of such Mortgage certified as true and complete by the appropriate
recording office, in those instances where a copy thereof certified by the
Seller was delivered to the Trustee pursuant to clause (ii) above; and (b)
either the original Assignment or Assignments of the Mortgage, with evidence of
recording thereon, showing a complete chain of assignment from the originator to
the Seller, or in the event such original cannot be delivered by the Seller, a
copy of such Assignment or Assignments certified as true and complete by the
appropriate recording office, in those instances where copies thereof certified
by the Seller were delivered to the Trustee pursuant to clause (iv) above.
Notwithstanding anything to the contrary contained in this Section 2.01, in
those instances where the public recording office retains the original Mortgage
after it has been recorded, the Seller shall be deemed to have satisfied its
obligations hereunder upon delivery to the Trustee of a copy of such Mortgage
certified by the public recording office to be a true and complete copy of the
recorded original thereof.
If any Assignment is lost or returned unrecorded to the
Trustee because of any defect therein, the Seller is required, as described in
the Mortgage Loan Purchase Agreement, to prepare a substitute Assignment or cure
such defect, as the case may be, and the Seller shall cause
such Assignment to be recorded in accordance with this section.
The Seller is required as described in the Mortgage Loan
Purchase Agreement to exercise its best reasonable efforts to deliver or cause
to be delivered to the Trustee within 120 days of the Closing Date the original
or a photocopy of the title insurance policy with respect to each Mortgage Loan
assigned to the Trustee pursuant to this Section 2.01.
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All original documents relating to the Mortgage Loans which
are not delivered to the Trustee are and shall be held by the Master Servicer in
trust for the benefit of the Trustee on
behalf of the Certificateholders.
Except as may otherwise expressly be provided herein, neither
the Depositor, the Master Servicer nor the Trustee shall (and the Master
Servicer shall ensure that no Sub-Servicer shall) assign, sell, dispose of or
transfer any interest in the Trust Fund or any portion thereof, or permit the
Trust Fund or any portion thereof to be subject to any lien, claim, mortgage,
security interest, pledge or other encumbrance of, any other Person.
It is intended that the conveyance of the Mortgage Loans by
the Depositor to the Trustee as provided in this Section be, and be construed
as, a sale of the Mortgage Loans by the Depositor to the Trustee for the benefit
of the Certificateholders. It is, further, not intended that such conveyance be
deemed a pledge of the Mortgage Loans by the Depositor to the Trustee to secure
a debt or other obligation of the Depositor. However, in the event that the
Mortgage Loans are held to be property of the Depositor, or if for any reason
this Agreement is held or deemed to create a security interest in the Mortgage
Loans, then it is intended that, (a) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in this Section shall be deemed to
be (1) a grant by the Depositor to the Trustee of a security interest in all of
the Depositor's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (A) the Mortgage
Loans, including the Mortgage Notes, the Mortgages, any related insurance
policies and all other documents in the related Mortgage Files, (B) all amounts
payable to the holders of the Mortgage Loans in accordance with the terms
thereof and (C) all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the
Certificate Account or the Custodial Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Depositor
to the Trustee of any security interest in any and all of the Seller's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the property described in the foregoing
clauses (1)(A) through (C); (c) the possession by the Trustee or its agent 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" or possession by a purchaser or a person designated by
such secured party, for purposes of perfecting the security interest pursuant to
the New York Uniform Commercial Code and the Uniform Commercial Code of any
other applicable jurisdiction (including, without limitation, Sections 9-305,
8-313 or 8-321 thereof); 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
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Trustee for the purpose of perfecting such security interest under applicable
law. The Depositor and the Trustee shall, to the extent consistent with this
Agreement, take such actions as may be 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 security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement.
SECTION 2.02. Acceptance of the Trust Fund by the Trustee.
The Trustee acknowledges receipt (subject to any exceptions
noted in the Initial Certification described below), of the documents referred
to in Section 2.01 above and all other assets included in the definition of
"Trust Fund" and declares that it holds and will hold such documents and the
other documents delivered to it constituting the Mortgage Files, and that it
holds or will hold such other assets included in the definition of "Trust Fund"
(to the extent delivered or assigned to the Trustee), in trust for the exclusive
use and benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders,
to review or cause to be reviewed on its behalf, each Mortgage File on or before
the Closing Date to ascertain that all documents required to be delivered to it
are in its possession, and the Trustee agrees to execute and deliver, or cause
to be executed and delivered, to the Depositor and the Master Servicer on the
Closing Date, an Initial Certification in the form annexed hereto as Exhibit C
to the effect that, as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in such certification as not covered by such
certification), (i) all documents required to be delivered to it pursuant to
this Agreement with respect to such Mortgage Loan are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and
relate to such Mortgage Loan and (iii) based on its examination and only as to
the foregoing documents, the information set forth in items (i), (ii), (iii)(A)
and (iv) of the definition of the "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. Neither the Trustee nor the Master
Servicer shall be under any duty to determine whether any Mortgage File should
include any of the documents specified in clause (vi) or (vii) of Section 2.01.
Neither the Trustee nor the Master Servicer shall be under any duty or
obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine, enforceable
or appropriate for the represented purpose or that they have actually been
recorded, or they are in recordable form or that they are other than what they
purport to be on their face.
Within 90 days of the Closing Date the Trustee shall deliver
to the Depositor and the Master Servicer a Final Certification in the form
annexed hereto as Exhibit D evidencing the completeness of the Mortgage Files,
with any applicable exceptions noted thereon.
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If in the process of reviewing the Mortgage Files and
preparing the certifications referred to above the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective in
any material respect, the Trustee shall promptly notify the Seller, the Master
Servicer and the Depositor. The Trustee shall promptly notify the Seller of such
defect and request that the Seller cure any such defect within 60 days from the
date on which the Seller was notified of such defect, and if the Seller does not
cure such defect in all material respects during such period, request on behalf
of the Certificateholders that the Seller purchase such Mortgage Loan from the
Trust Fund at the Purchase Price within 90 days after the date on which the
Seller was notified of such defect. It is understood and agreed that the
obligation of the Seller to cure a material defect in, or purchase any Mortgage
Loan as to which a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders. The Purchase
Price for the purchased Mortgage Loan shall be deposited or caused to be
deposited upon receipt by the Master Servicer in the Custodial Account and, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall release or cause to be released to the
Seller the related Mortgage File and shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as the Seller shall
require as necessary to vest in the Seller ownership of any Mortgage Loan
released pursuant hereto and at such time the Trustee shall have no further
responsibility with respect to the related Mortgage File.
SECTION 2.03. Representations, Warranties and Covenants of
the Master Servicer and the Depositor.
(a) The Master Servicer hereby represents and warrants to and
covenants with the Depositor and the Trustee for the benefit of
Certificateholders that:
(i) The Master Servicer is, and throughout the term
hereof shall remain, a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation
(except as otherwise permitted pursuant to Section 6.02), the Master
Servicer is, and shall remain, in compliance with the laws of each
state in which any Mortgaged Property is located to the extent
necessary to perform its obligations under this Agreement, and the
Master Servicer is, and shall remain, approved to sell mortgage loans
to and service mortgage loans for FNMA and FHLMC;
(ii) The execution and delivery of this Agreement by the
Master Servicer, and the performance and compliance with the terms of
this Agreement by the Master Servicer, will not violate the Master
Servicer's articles of incorporation or bylaws or constitute a default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material
agreement or other instrument to which it is a party or which is
applicable to it or any of its assets;
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(iii) The Master Servicer has the full power and authority
to enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance
of this Agreement, and has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization,
execution and delivery by the Depositor and the Trustee, constitutes a
valid, legal and binding obligation of the Master Servicer, enforceable
against the Master Servicer in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights generally, and (B) general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law;
(v) The Master Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation is likely to
affect materially and adversely either the ability of the Master
Servicer to perform its obligations under this Agreement or the
financial condition of the Master Servicer;
(vi) Except for the lawsuit FORTUNE MORTGAGE, ETC., ET.
AL. V. ICI FUNDING CORPORATION, IMPERIAL CREDIT MORTGAGE HOLDINGS,
INC., ICI FUNDING CORP., ET AL., (O.C.S.C. No 776153) and a potential
claim by Bank One, Arizona against the Master Servicer, no litigation
is pending or, to the best of the Master Servicer's knowledge,
threatened against the Master Servicer which would prohibit its
entering into this Agreement or performing its obligations under this
Agreement or is likely to affect materially and adversely either the
ability of the Master Servicer to perform its obligations under this
Agreement or the financial condition of the Master Servicer;
(vii) The Master Servicer will comply in all material
respects in the performance of this Agreement with all reasonable rules
and requirements of each insurer under each Insurance Policy;
(viii) The execution of this Agreement and the performance
of the Master Servicer's obligations hereunder do not require any
license, consent or approval of any state or federal court, agency,
regulatory authority or other governmental body having jurisdiction
over the Master Servicer, other than such as have been obtained; and
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(ix) No information, certificate of an officer, statement
furnished in writing or report delivered to the Depositor, any
affiliate of the Depositor or the Trustee by the Master Servicer in its
capacity as Master Servicer, and not in its capacity as a Seller
hereunder, will, to the knowledge of the Master Servicer, contain any
untrue statement of a material fact or omit a material fact necessary
to make the information, certificate, statement or report not
misleading.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.03(a) shall survive the
execution and delivery of this Agreement, and shall inure to the benefit of the
Depositor, the Trustee and the Certificateholders. Upon discovery by the
Depositor, the Trustee or the Master Servicer of a breach of any of the
foregoing representations, warranties and covenants that materially and
adversely affects the interests of the Depositor or the Trustee, the party
discovering such breach shall give prompt written notice to the other parties.
(b) The Depositor hereby represents and warrants to the Master
Servicer and the Trustee for the benefit of Certificateholders that as of the
Closing Date, the representations and warranties of the Seller with respect to
the Mortgage Loans and the remedies therefor that are contained in the Mortgage
Loan Purchase Agreement are as set forth in Exhibit I hereto.
It is understood and agreed that the representations and warranties set forth in
this Section 2.03(b) shall survive delivery of the respective Mortgage Files to
the Trustee.
Upon discovery by either the Depositor, the Master Servicer or
the Trustee of a breach of any representation or warranty set forth in this
Section 2.03 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties.
SECTION 2.04. Representations and Warranties of the Seller.
The Depositor hereby assigns to the Trustee for the benefit of
Certificateholders its interest in respect of the representations and warranties
made by the Seller in the Mortgage Loan Purchase Agreement or the exhibits
thereto. Insofar as the Mortgage Loan Purchase Agreement relates to such
representations and warranties and any remedies provided thereunder for any
breach of such representations and warranties, such right, title and interest
may be enforced by the Trustee on behalf of the Certificateholders. Upon the
discovery by the Depositor, the Master Servicer or the Trustee of a breach of
any of the representations and warranties made in the Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially and adversely affects
the interests of the Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.
The Trustee shall
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promptly notify the Seller of such breach and request that the Seller shall,
within 90 days from the date that the Seller was notified or otherwise obtained
knowledge of such breach, either (i) cure such breach in all material respects
or (ii) purchase such Mortgage Loan from the Trust Fund at the Purchase Price
and in the manner set forth in Section 2.02; provided that in the case of a
breach under the Mortgage Loan Purchase Agreement, subject to the approval of
the Depositor the Seller shall have the option to substitute a Qualified
Substitute Mortgage Loan or Loans for such Mortgage Loan if such substitution
occurs within two years following the Closing Date, except that if the breach
would cause the Mortgage Loan to be other than a "qualified mortgage" as defined
in Section 860G(a)(3) of the Code, any such substitution must occur within 90
days from the date the Seller was notified of the breach if such 90 day period
expires before two years following the Closing Date. In the event that the
Seller elects to substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage Loan pursuant to this Section 2.04, the Seller shall deliver to
the Trustee for the benefit of the Certificateholders with respect to such
Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note, the
Mortgage, an Assignment of the Mortgage in recordable form, and such other
documents and agreements as are required by Section 2.01, with the Mortgage Note
endorsed as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
shall not be part of the Trust Fund and will be retained by the Master Servicer
and remitted by the Master Servicer to the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Monthly Payment due on a Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Depositor shall
amend or cause to be amended the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Qualified Substitute Mortgage Loan or Loans and the
Depositor shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Qualified Substitute Mortgage Loan or Loans shall be
subject to the terms of this Agreement in all respects, the Seller shall be
deemed to have made the representations and warranties with respect to the
Qualified Substitute Mortgage Loan contained in the Mortgage Loan Purchase
Agreement as of the date of substitution, and the Depositor shall be deemed to
have made with respect to any Qualified Substitute Mortgage Loan or Loans, as of
the date of substitution, the representations and warranties set forth in
Section 2.03 hereof.
In connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (in each case after application of the principal portion
of the Monthly Payments due in the month of substitution that are to be
distributed to Certificateholders in the month of substitution). The Seller
shall provide the Master Servicer on the day of substitution for
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immediate deposit into the Custodial Account the amount of such shortfall,
without any reimbursement therefor. The Seller shall give notice in writing to
the Trustee of such event, which notice shall be accompanied by an Officers'
Certificate as to the calculation of such shortfall and by an Opinion of Counsel
to the effect that such substitution will not cause (a) any federal tax to be
imposed on the Trust Fund, including without limitation, any federal tax imposed
on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code or
(b) any portion of the Trust Fund to fail to qualify as a REMIC at any time that
any Certificate is outstanding. The costs of any substitution as described
above, including any related assignments, opinions or other documentation in
connection therewith shall be borne by the Seller.
Except as expressly set forth herein neither the Trustee nor
the Master Servicer is under any obligation to discover any breach of the above
mentioned representations and warranties. It is understood and agreed that the
obligation of the Seller to cure such breach, purchase or to substitute for such
Mortgage Loan as to which such a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to
Certificateholders or the Trustee on behalf of Certificateholders.
SECTION 2.05. Issuance of Certificates Evidencing Interests
in the Trust Fund.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery of the Mortgage Files to it together with the assignment
to it of all other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor, executed by an
officer of the Depositor, has executed and caused to be authenticated and
delivered to, or upon the order of, the Depositor the Certificates in authorized
denominations which evidence ownership of the entire Trust Fund.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01. Master Servicer to Act as Master Servicer.
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 shall 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 Subservicer acting on its behalf,
shall include, without limitation, the power to (i) consult with and advise any
Subservicer regarding administration of a related Mortgage Loan, (ii) approve
any recommendation by a Subservicer 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 transfer 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 Subservicer acting on its behalf may, and is hereby
authorized, and empowered by the Trustee to, execute and deliver, on behalf of
itself, the Certificateholders or 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 Subservicer.
In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment
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of taxes and assessments on the Mortgaged Properties, which advances shall be
reimbursable in the first instance from related collections from the Mortgagors
pursuant to Section 3.09, and further as provided in Section 3.11. No costs
incurred by the Master Servicer or by Sub-Servicers in effecting the payment of
taxes and assessments on the Mortgaged Properties shall, for the purpose of
calculating distributions to Certificateholders, be added to the amount owing
under the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.
Notwithstanding anything in this Agreement to the contrary,
the Master Servicer shall not (unless the Mortgagor is in default with respect
to the Mortgage Loan or such default is, in the judgment of the Master Servicer,
reasonably foreseeable) make or permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (i) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury
regulations promulgated thereunder) and (ii) cause the Trust Fund to fail to
qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions" after the startup date under the REMIC
Provisions.
The relationship of the Master Servicer (and of any successor
to the Master Servicer under this Agreement) to the Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.
SECTION 3.02. Sub-Servicing Agreements Between Master
Servicer and Sub-Servicers.
(a) The Master Servicer may enter into Subservicing Agreements
with Subservicers for the servicing and administration of the Mortgage Loans and
for the performance of any and all other activities of the Master Servicer
hereunder. Each Subservicer 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 comparable to the 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
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, and in either case shall be a FHLMC or FNMA approved mortgage
servicer. Any Subservicing 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 or (y)
without cause in which case the Master Servicer shall be responsible for any
termination fee or penalty resulting therefrom. In addition, each Subservicing
Agreement shall provide for servicing of the Mortgage Loans consistent with the
terms of this Servicing Agreement. With the consent of the Trustee, the Master
Servicer and the Subservicers may enter into Subservicing Agreements and make
amendments to the Subservicing Agreements or enter into different forms of
Subservicing Agreements providing for, among other things, the
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delegation by the Master Servicer to a Subservicer of additional duties
regarding the administration of the Mortgage Loans; provided, however, that any
such amendments or different forms shall be consistent with and not violate the
provisions of this Servicing 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 Holders of Certificates entitled to at least 51% of the Voting
Rights. The parties hereto acknowledge that the initial Sub-Servicer shall be
Wendover Funding Inc.
The Master Servicer has entered into Subservicing Agreements with the
Initial Subservicer for the servicing and administration of the Mortgage Loans
and may enter into additional Subservicing Agreements with Subservicers
acceptable to the Trustee for the servicing and
administration of certain of the Mortgage Loans.
(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 Subservicer under the related Subservicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing 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 such recovery exceeds all
amounts due in respect of the related Mortgage Loan or (ii) from a specific
recovery of costs, expenses or attorneys' fees against the party against whom
such enforcement is directed.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accor dance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.
SECTION 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-
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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 and Certificateholders for the servicing and administering
of the Mortgage Loans and any REO Property in accordance with the provisions of
Section 3 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on Mortgage Loans when the Sub-Servicer has received such
payments. The Master Servicer shall be entitled to enter into any agreement with
a Sub-Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and Trustee or
Certificateholders.
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 and
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 3.06. The Master Servicer (or Subservicer) shall
be liable for the payment of any franchise taxes which may be assessed by the
California Franchise Tax Board in connection with the activities of the Trust
under this Agreement.
SECTION 3.06. 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 7.02
below, the Trustee, to the extent necessary to permit the Trustee to carry out
the provisions of Section 7.02 with respect to the Mortgage Loans, shall succeed
to all of the rights and obligations of the Master Servicer under each of the
Subservicing 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 Subservicing Agreements to the same extent as if
such Subservicing Agreements had been assigned to the Trustee or its designee as
a successor master servicer, except 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 Advances) and the Master Servicer shall not thereby
be relieved of any liability or obligations under such
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Subservicing 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 3.17 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 7.02, 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, files and records, electronic or otherwise,
relating to the Subservicing 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 Subservicing Agreements, or
responsibilities hereunder to the Trustee, or at its written request to such
designee as successor master servicer.
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SECTION 3.07. Collection of Certain 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 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 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 an 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 or related Sub-Servicer to make an 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 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.
The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Insurance Policy, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. The Master
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note, Primary
Hazard Insurance Policy or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that it is prohibited by applicable law from enforcing the provision of the
Mortgage or other instrument pursuant to which such payment is required. The
Master Servicer shall be
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responsible for preparing and distributing all information statements relating
to payments on the Mortgage Loans, in accordance with all applicable federal and
state tax laws and regulations.
SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Master Servicer. All amounts held in a
Sub-Servicing Account shall be held in trust for the Trustee for the benefit of
the Certificateholders. The Sub-Servicer will be required to deposit into the
Sub-Servicing Account no later than the first Business Day after receipt all
proceeds of Mortgage Loans received by the Sub-Servicer, less its servicing
compensation and any unreimbursed expenses and advances, to the extent permitted
by the Sub-Servicing Agreement. On each Sub-Servicer Remittance Date the
Sub-Servicer will be required to remit to the Master Servicer for deposit in the
Custodial Account all funds held in the Sub-Servicing Account with respect to
any Mortgage Loan as of the Sub- Servicer Remittance Date, after deducting from
such remittance an amount equal to the servicing compensation (including
interest on Eligible Investments) and unreimbursed expenses and advances to
which it is then entitled pursuant to the related Sub-Servicing Agreement, to
the extent not previously paid to or retained by it. In addition, on each
Sub-Servicer Remittance Date the Sub-Servicer will be required to remit to the
Master Servicer any amounts required to be advanced pursuant to the related
Sub-Servicing Agreement. The Sub-Servicer will also be required to remit to the
Master Servicer, within one Business Day of receipt, the proceeds of any
Principal Prepayment made by the Mortgagor and any Insurance Proceeds or
Liquidation Proceeds.
SECTION 3.09. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Master Servicer and the Sub-Servicers shall establish and
maintain one or more accounts (the "Servicing Accounts"), and shall deposit and
retain therein all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, Primary Hazard Insurance
Policy premiums, and comparable items for the account of the Mortgagors, to the
extent that the Master Servicer customarily escrows for such amounts.
Withdrawals of amounts so collected from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, Primary Hazard Insurance Policy
premiums and comparable items; (ii) reimburse the Master Servicer (or a
Sub-Servicer to the extent provided in the related Sub- Servicing Agreement) out
of related collections for any payments made pursuant to Sections 3.01 (with
respect to taxes and assessments), and 3.13 (with respect to Primary Hazard
Insurance Policies); (iii) refund to Mortgagors any sums as may be determined to
be overages; or (iv) clear and terminate the Servicing Account at the
termination of this Agreement pursuant to Section 9.01.
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As part of its servicing duties, the Master Servicer or Sub-Servicers shall, if
and to the extent required by law, pay to the Mortgagors interest on funds in
Servicing Accounts from its or their
own funds, without any reimbursement therefor.
SECTION 3.10. Custodial Account.
(a) The Master Servicer shall establish and maintain one or
more accounts (collectively, the "Custodial Account") in which the Master
Servicer shall deposit or cause to be deposited on a daily basis, or as and when
received from the Sub-Servicers, the following payments and collections received
or made by or on behalf of it subsequent to the Cut-off Date, or received by it
prior to the Cut-off Date but allocable to a period subsequent thereto (other
than in respect of principal and interest on the Mortgage Loans due on or before
the Cut-off Date):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans,
net of any portion thereof retained by the Master Servicer or any
Subservicer as Servicing Fees;
(iii) all Insurance Proceeds, other than proceeds that represent
reimbursement of costs and expenses incurred by the Master Servicer in
connection with presenting claims under the related Insurance Policies,
Liquidation Proceeds and REO Proceeds;
(iv) all proceeds of any Mortgage Loan or REO Property
repurchased or purchased in accordance with Sections 2.02, 2.04 , 3.14,
3.22, 3.24 or 9.01; and all amounts required to be deposited in
connection with the substitution of a Qualified Substitute Mortgage
Loan pursuant to Section 2.04; and
(v) any amounts required to be deposited pursuant to Section
3.12 or 3.13.
The foregoing requirements for deposit in the Custodial
Account shall be exclusive. In the event the Master Servicer shall deposit in
the Custodial Account any amount not required to be deposited therein, it may
withdraw such amount from the Custodial Account, any provision herein to the
contrary notwithstanding. The Custodial Account shall be maintained as a
segregated account, separate and apart from trust funds created for mortgage
pass-through certificates of other series, and the other accounts of the Master
Servicer.
(b) Funds in the Custodial Account may be invested in
Permitted Investments in accordance with the provisions set forth in Section
3.12. The Master Servicer shall give notice to the Trustee and the Depositor of
the location of the Custodial Account after any change
thereof.
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SECTION 3.11. Permitted Withdrawals From the Custodial
Account.
The Master Servicer may, from time to time as provided herein,
make withdrawals from the Custodial Account of amounts on deposit therein
pursuant to Section 3.10 that are attributable to the Mortgage Loans for the
following purposes:
(i) to make deposits into the Certificate Account in
the amounts and in the manner provided for in Section 4.01;
(ii) to pay to itself, the Depositor, the Seller or any
other appropriate person, as the case may be, with respect to each
Mortgage Loan that has previously been purchased or repurchased
pursuant to Sections 2.02, 2.04, 3.14, 3.24 or 9.01 all amounts
received thereon and not yet distributed as of the date of purchase or
repurchase;
(iii) to reimburse itself or any Sub-Servicer for
Advances not previously reimbursed, the Master Servicer's or any
Sub-Servicer's right to reimbursement pursuant to this clause (iii)
being limited to amounts received which represent Late Collections (net
of the related Servicing Fees) of Monthly Payments on Mortgage Loans
with respect to which such Advances were made and as further provided
in Section 3.15;
(iv) to reimburse or pay itself, the Trustee or the
Depositor for expenses incurred by or reimbursable to the Master
Servicer, the Trustee or the Depositor pursuant to Sections 3.22, 6.03,
8.05 or 10.01(g), except as otherwise provided in such
Sections;
(v) to reimburse itself or any Sub-Servicer for costs
and expenses incurred by or reimbursable to it relating to the
prosecution of any claims pursuant to Section 3.13 that are in excess
of the amounts so recovered;
(vi) to reimburse itself or any Sub-Servicer for unpaid
Servicing Fees and unreimbursed Servicing Advances, the Master
Servicer's or any Sub-Servicer's right to reimbursement pursuant to
this clause (vi) with respect to any Mortgage Loan being limited to
late recoveries of the payments for which such advances were made
pursuant to Section 3.01 or Section 3.09 and any other related Late
Collections;
(vii) to pay itself as servicing compensation (in
addition to the Servicing Fee), on or after each Distribution Date, any
interest or investment income earned on funds deposited in the
Custodial Account for the period ending on such Distribution Date;
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(viii) to reimburse itself or any Sub-Servicer for any
Advance previously made, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Advance was not reimbursed
pursuant to clauses (iii) and (vi); and
(ix) to clear and terminate the Custodial Account at
the termination of this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate
accounting records on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Custodial Account pursuant to such subclauses
(ii) through (viii).
SECTION 3.12. Permitted Investments.
Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account in Permitted
Investments, each of which shall mature not later than (i) the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon and shall not be sold or disposed of prior to its
maturity. All income and gain realized from any such investment as well as any
interest earned on deposits in the Custodial Account shall be for the benefit of
the Master Servicer. The Master Servicer shall deposit in the Custodial Account
an amount equal to the amount of any loss incurred in respect of any such
investment immediately upon realization of such loss without right of
reimbursement.
SECTION 3.13. Maintenance of Primary Hazard Insurance.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan primary hazard insurance by a Qualified Insurer or other insurer
satisfactory to the Rating Agencies with extended coverage on the related
Mortgaged Property in an amount equal to the lesser of (i) 100% of the
replacement value of the improvements, as determined by the insurance company,
on such Mortgaged Property or (ii) the unpaid principal balance of the Mortgage
Loan. The Master Servicer shall also cause to be maintained on property acquired
upon foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount equal to the replacement value of
the improvements thereon. Pursuant to Section 3.10, any amounts collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.11. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for
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the purpose of calculating monthly distributions to Certificateholders, be added
to the amount owing under the Mortgage Loan, notwithstanding that the terms of
the Mortgage Loan so permit. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
The Master Servicer shall, or shall cause the related
Subservicer 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 first
lien Mortgage Loan as to which as of the Cut-Off 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 Collateral Value in an amount at least equal to the excess
of such original principal amount over 75% of such Collateral Value until the
principal amount of any such first lien Mortgage Loan is reduced below 80% of
the Collateral Value or, based upon a new appraisal, the principal amount of
such first lien Mortgage Loan represents less than 80% of the new appraised
value. The Master Servicer shall, or shall cause the related Subservicer to,
effect the timely payment of the premium on each Primary Insurance Policy. The
Master Servicer and the related Subservicer 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 it will not cause the ratings on the Certificates to be
downgraded or withdrawn, as evidenced in writing from each Rating Agency.
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 Collateral Value on
which the Mortgage Loan was based, and shall be in an amount equal to the lesser
of (i) the Stated Principal Balance of the related 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
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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.
In the event that the Master Servicer shall obtain and
maintain a blanket fire insurance policy with extended coverage insuring against
hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first two sentences of this Section 3.13 and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Master Servicer shall
be made on the Certificate Account Deposit Date next preceding the Distribution
Date which occurs in the month following the month in which payments under any
such policy would have been deposited in the Custodial Account. In connection
with its activities as administrator and servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.
SECTION 3.14. Enforcement of Due-on-Sale Clauses;
Assumption Agreements.
The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance by any Mortgagor of the Mortgaged
Property (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note or the
Mortgage), exercise or cause to be exercised its rights to accele rate the
maturity of such Mortgage Loan under any "due-on-sale" clause applicable
thereto; provided, however, that the Master Servicer shall not exercise any such
rights if it reasonably believes that it is prohibited by law from doing so. The
Master Servicer or the related Sub-Servicer may repurchase a Mortgage Loan at
the Purchase 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 is unable to enforce such
"due-on-sale" clause (as provided in the second preceding sentence) or if no
"due-on-sale" clause is applicable, the Master Servicer or the Sub-Servicer will
use its best efforts to enter into an assumption and modification agreement with
the Person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such Person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon; provided, however, that the Master Servicer shall not enter into
any assumption and modification
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agreement if the coverage provided under the Primary Insurance Policy, if any,
would be impaired by doing so. 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. In
connection with any such assumption agreement, the interest rate on the related
Mortgage Loan shall not be changed and no other material alterations in the
Mortgage Loan shall be made unless such material alteration would not cause the
REMIC to fail to qualify as a REMIC for federal income tax purposes, as
evidenced by an Opinion of Counsel. The Master Servicer is also authorized to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as the Mortgagor and becomes liable under the Mortgage Note. Any fee
collected by or on behalf of the Master Servicer for entering into an assumption
or substitution of liability agreement will be retained by or on behalf of the
Master Servicer as additional servicing compensation. In connection with any
such assumption, no material term of the Mortgage Note (including but not
limited to the Mortgage Rate, the amount of the Monthly Payment and any other
term affecting the amount or timing of payment on the Mortgage Loan) may be
changed. The Master Servicer shall not enter into any substitution or assumption
if such substitution or assumption shall (i) both constitute a "significant
modification" effecting an exchange or reissuance of such Mortgage Loan under
the Code (or Treasury regulations promulgated thereunder) and cause the Trust
Fund to fail to qualify as a REMIC under the REMIC Provisions or (ii) cause the
imposition of any tax on "prohibited transactions" or "contributions" after the
Startup Day under the REMIC Provisions. The Master Servicer shall notify the
Trustee that any such substitution or assumption agreement has been completed by
forwarding to the Trustee the original copy of such substitution or assumption
agreement, which copy shall be added to the related Mortgage File and 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. A portion equal
to up to 2% of the Collateral Value of the related Mortgage Loan, of any fee or
additional interest collected by the related Sub-Servicer for consenting in any
such conveyance or entering into any such assumption agreement may be retained
by the related Sub- Servicer as additional servicing compensation.
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 assumption that the
Master Servicer may be restricted by law from preventing, for any reason
whatsoever. For purposes of this Section 3.14, the term "assumption" is deemed
to also include a sale of a Mortgaged Property that is not accompanied by an
assumption or substitution of liability agreement.
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SECTION 3.15. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall exercise reasonable efforts,
consistent with the procedures that the Master Servicer would use in servicing
loans for its own account, to foreclose upon or otherwise comparably convert
(which may include an REO Acquisition) the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from the Trust Fund
pursuant to any other provision hereof. The Master Servicer shall use reasonable
efforts to realize proceeds from such defaulted Mortgage Loans in such manner as
will maximize the receipt of principal and interest by Certificateholders,
taking into account, among other things, the timing of foreclosure proceedings.
The foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in its sole discretion (i) that such
restoration will increase the net proceeds of liquidation of the related
Mortgage Loan to Certificateholders after reimbursement to itself for such
expenses, and (ii) that such expenses will be recoverable by the Master Servicer
through Insurance Proceeds or Liqui dation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. 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 from the related property, as contemplated in Section 3.11.
The proceeds of any Cash Liquidation or REO Disposition, as
well as any recovery resulting from a partial collection of Insurance Proceeds
or Liquidation Proceeds or any income from an REO Property, will be applied in
the following order of priority: first, to reimburse the Master Servicer or any
Sub-Servicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11(vi) or 3.22; second, to accrued and unpaid interest on the Mortgage
Loan or REO Imputed Interest, at the Mortgage Rate, to the date of the Cash
Liquidation or REO Disposition, or to the Due Date prior to the Distribution
Date on which such amounts are to be distributed if not in connection with a
Cash Liquidation or REO Disposition; and third, as a recovery of principal of
the Mortgage Loan. If the amount of the recovery so allocated to interest is
less than a full recovery thereof, that amount will be allocated as follows:
first, to unpaid Servicing Fees; and second, to interest at the Net Mortgage
Rate. The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(vi). The portions of the recovery so allocated to interest at the Net
Mortgage Rate and to principal of the Mortgage Loan shall be applied as follows:
first, to reimburse the Master Servicer or any Sub-Servicer for any related
unreimbursed Advances in accordance with Section 3.11(iii) or 3.22, and second,
for distribution in accordance with the provisions of Section 4.01, subject to
Section 3.22 with respect to certain recoveries from an REO Disposition
constituting Excess Proceeds.
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SECTION 3.16. Trustee to Cooperate; Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by a certification (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 Custodial
Account pursuant to Section 3.10 have been or will be so deposited) of a
Servicing Officer and shall request delivery to it of the Mortgage File in the
form of the Request for Release attached hereto as Exhibit F-2. Upon receipt of
such certification and request, the Trustee shall promptly release the related
Mortgage File to the Master Servicer. Subject to the receipt by the Master
Servicer of the proceeds of such payment in full and the payment of all related
fees and expenses, the Master Servicer shall arrange for the release to the
Mortgagor of the original cancelled Mortgage Note. All other documents in the
Mortgage File shall be retained by the Master Servicer to the extent required by
applicable law. The Master Servicer shall provide for preparation of the
appropriate instrument of satisfaction covering any Mortgage Loan which pays in
full and the Trustee shall cooperate in the execution and return of such
instrument to provide for its delivery or recording as may be required. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Custodial Account or the Certificate
Account.
From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loan, the Trustee shall, upon
request of the Master Servicer and delivery to the Trustee of a Request for
Release in the form attached hereto as Exhibit F-1, release the related Mortgage
File to the Master Servicer, and the Trustee shall execute such documents as the
Master Servicer shall prepare and request as being necessary to the prosecution
of any such proceedings. Such Request for Release shall obligate the Master
Servicer to return each document previously requested from the Mortgage File to
the Trustee when the need therefor by the Master Servicer no longer exists; and
in any event within 21 days of the Master Servicer's receipt thereof, unless the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Custodial Account or 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, for purposes of initiating or pursuing
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. Upon receipt of a Request for
Release stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation which are
required to be deposited into the Custodial Account have been or will be so
deposited, or that such
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Mortgage Loan has become an REO Property, a copy of the Request for Release
shall be released by the Trustee to the Master Servicer.
Upon written request of a Servicing Officer, the Trustee shall
execute and deliver to the Master Servicer any court pleadings, requests for
trustee's sale or other documents prepared by the Master Servicer that are
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or to any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by the Mortgage Note or Mortgage
or otherwise available at law or in equity. Each such request that such
pleadings or documents be executed by the Trustee shall include a certification
signed by a Servicing Officer as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon com pletion of the foreclosure or trustee's
sale.
SECTION 3.17. Servicing Compensation.
As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain, from deposits to the Custodial Account of
amounts representing payments or recoveries of interest, the Servicing Fees with
respect to each Mortgage Loan (less any portion of such amounts retained by any
Sub-Servicer). In addition, the Master Servicer shall be entitled to recover
unpaid Servicing Fees out of related Late Collections to the extent permitted in
Section 3.11.
The Master Servicer also shall be entitled pursuant to Section
3.11 to receive from the Custodial Account and the Certificate Account as
additional servicing compensation interest or other income earned on deposits
therein, subject to Section 3.23, as well as any prepayment charges, assumption
fees, late payment charges and reconveyance fees. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of the premiums for any blanket policy
insuring against hazard losses pursuant to Section 3.13, servicing compensation
of the Sub-Servicer to the extent not retained by it and the fees and expenses
of the Trustee), and shall not be entitled to reimbursement therefor except as
specifically provided in Section 3.11. The Servicing Fee may not be transferred
in whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement.
SECTION 3.18. Maintenance of Certain Servicing Policies.
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
Subservicer to obtain and maintain an
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errors and omissions insurance policy covering such Subservicer'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 in order to be 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.
SECTION 3.19. Annual Statement as to Compliance.
Within 120 days after December 31 of each year, commencing
December 1997, the Master Servicer at its own expense shall deliver to the
Trustee, with a copy to the Rating Agencies, a certificate signed by a Servicing
Officer stating, as to the signers thereof, that (i) a review of the activities
of the Master Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officers' supervision, (ii) to the
best of such officers' knowledge, based on such review, the Master Servicer has
fulfilled 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 Subservicer during the Subservicer's most
recently ended fiscal year on or prior to such December 31 and its performance
under its Subservicing 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 Subservicer (unless the Servicing
Officer has reason to believe that reliance on such certification is not
justified), either each Subservicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement and its Subservicing
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.
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SECTION 3.20. Annual Independent Public Accountants'
Servicing Statement.
(a) Within 120 days after December 31 of each year, commencing
December, 1997, 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 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 calendar year, nothing came to their
attention that indicated that the Master Servicer was not in compliance with the
provisions of this Agreement 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 1997, the Master Servicer, at its expense, shall or shall cause each
Subservicer to cause a nationally recognized firm of independent certified
public accountants to furnish to the Master Servicer or such Subservicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer or such Subservicer
which includes an assertion that the Master Servicer or such Subservicer has
complied with certain minimum mortgage loan servicing standards (to the extent
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 Subservicer to furnish a copy of such report
to the Trustee and the Rating Agencies.
SECTION 3.21. Access to Certain Documentation.
The Master Servicer shall provide, and shall cause any
Subservicer to provide, to the Trustee, 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 Subservicers that are designated by these
entities; PROVIDED, HOWEVER, that, unless otherwise required by law, the
Trustee, the Master Servicer or the Subservicer shall not be
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required to provide access to such documentation if the provision thereof would
violate the legal right to privacy of any Mortgagor; PROVIDED, FURTHER, HOWEVER,
that the Trustee shall coordinate its requests for such access so as not to
impose an unreasonable burden on, or cause an unreasonable interruption of, the
business of the Master Servicer or any Subservicer. The Master Servicer, the
Subservicers 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 3.22. Title, Conservation and Disposition of REO
Property.
This Section shall apply only to REO Properties acquired for
the account of the Trust Fund and shall not apply to any REO Property relating
to a Mortgage Loan which was purchased or repurchased from the Trust Fund
pursuant to Sections 2.02, 2.04, 3.14 or 3.24. In the event that title to any
such REO Property is acquired, the deed or certificate of sale shall be issued
to the Trustee, or to its nominee, on behalf of the Certificateholders. The
Master Servicer, on behalf of the Trust Fund, shall either sell any REO Property
within two years after the Trust Fund acquires ownership of such REO Property
for purposes of Section 860G(a)(8) of the Code or, at the expense of the Trust
Fund, request, more than 60 days before the day on which the two-year grace
period would otherwise expire an extension of the two-year grace period, unless
the Master Servicer has delivered to the Trustee an Opinion of Counsel,
addressed to the Trustee and the Master Servicer, to the effect that the holding
by the Trust Fund of such REO Property subsequent to two years after its
acquisition will not result in the imposition on the Trust Fund of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause the Trust Fund to fail to qualify as a REMIC under the REMIC Provisions or
comparable provisions of the laws of the State of California at any time that
any Certificates are outstanding. The Master Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) or result in the receipt by the Trust Fund of any "income
from non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the
Code or any "net income from foreclosure property" which is subject to taxation
under the REMIC Provisions. Pursuant to its efforts to sell such REO Property,
the Master Servicer shall either itself or through an agent selected by the
Master Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Master Servicer
deems to be in the best interest of the Certificateholders for the period prior
to the sale of such REO Property.
Any REO Disposition shall be for cash only (unless changes in
the REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).
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The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets. The Master Servicer
shall deposit, or cause to be deposited, on a daily basis in the Custodial
Account all revenues received with respect to the REO Properties, net of any
directly related expenses incurred or withdraw therefrom funds necessary for the
proper operation, management and maintenance of the REO Property.
If as of the date of acquisition of title to any REO Property
there remain outstanding unreimbursed Servicing Advances with respect to such
REO Property or any outstanding Advances allocated thereto the Master Servicer,
upon an REO Disposition, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances and any unreimbursed related Advances as well as
any unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.15.
The REO Disposition shall be carried out by the Master
Servicer at such price and upon such terms and conditions as the Master Servicer
shall determine.
The Master Servicer shall deposit the proceeds from the REO
Disposition, net of any payment to the Master Servicer as provided above, in the
Custodial Account upon receipt thereof for distribution in accordance with
Section 4.01; provided, that any such net proceeds received by the Master
Servicer which are in excess of the applicable Stated Principal Balance plus all
unpaid REO Imputed Interest thereon through the last day of the month in which
the REO Disposition occurred ("Excess Proceeds") shall be retained by the Master
Servicer as additional servicing compensation.
With respect to any Mortgage Loan as to which the Master
Servicer has received notice of, or has actual knowledge of, the presence of any
toxic or hazardous substance on the Mortgaged Property, the Master Servicer
shall not, on behalf of the Trustee, either (i) obtain title to the related
Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or
(ii) otherwise acquire possession of, the related Mortgaged Property, unless the
Master Servicer has, at least 30 days prior to taking such action, obtained and
delivered to the Trustee an environmental audit report prepared by a Person who
regularly conducts environmental audits using customary industry standards. The
Master Servicer shall take such action as it deems to be in the best economic
interest of the Trust Fund (other than proceeding against the Mortgaged
Property) and is hereby authorized at such time as it deems appropriate to
release such Mortgaged Property from the lien of the related Mortgage.
The cost of the environmental audit report contemplated by
this Section 3.22 shall be advanced by the Master Servicer as an expense of the
Trust Fund, and the Master Servicer shall be reimbursed therefor from the
Custodial Account as provided in Section 3.11, any such right
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of reimbursement being prior to the rights of the Certificateholders to receive
any amount in the Custodial Account.
If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property in compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Master Servicer as
an expense of the Trust Fund, and the Master Servicer shall be entitled to be
reimbursed therefor from the Custodial Account as provided in Section 3.11, any
such right of reimbursement being prior to the rights of the Certificateholders
to receive any amount in the Custodial Account.
SECTION 3.23. Additional Obligations of the Master
Servicer.
On each Certificate Account Deposit Date, the Master Servicer
shall deliver to the Trustee for deposit in the Certificate Account from its own
funds and without any right of reimbursement therefor, a total amount equal to
the amount of Compensating Interest for the related Distribution Date.
SECTION 3.24 Optional Purchase of Defaulted Mortgage
Loans.
The Master Servicer or any affiliate of the Master Servicer, in its
sole discretion, shall have the right to elect (by written notice sent to the
Master Servicer, and the Trustee), but shall not be obligated, to purchase for
its own account from the Trust Fund any Mortgage Loan which is
90
days or more delinquent in the manner and at the price specified in Section
2.04. The purchase price for any Mortgage Loan purchased hereunder shall be
deposited in the Certificate Account and the Trustee, upon receipt of such
deposit, shall release or cause to be released to the purchaser of such Mortgage
Loan the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment prepared by the purchaser of such Mortgage Loan, in each
case without recourse, as shall be necessary to vest in the purchaser of such
Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser of
such Mortgage Loan shall succeed to all the Trustee's right, title and interest
in and to such Mortgage Loan and all security and documents related thereto.
Such assignment shall be an assignment outright and not for security. The
purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and all
security and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
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SECTION 3.25. Additional Obligations of the Depositor.
The Depositor agrees that on or prior to the tenth day after
the Closing Date, the Depositor shall provide the Trustee with a written
notification, substantially in the form of Exhibit K attached hereto, relating
to each Class of Certificates, setting forth (i) in the case of each Class of
such Certificates, (a) if less than 10% of the aggregate Certificate Principal
Balance of such Class of Certificates has been sold as of such date, the value
calculated pursuant to clause (b)(iii) of Exhibit K hereto, or, (b) if 10% or
more of such Class of Certificates has been sold as of such date but no single
price is paid for at least 10% of the aggregate Certificate Principal Balance of
such Class of Certificates, then the weighted average price at which the
Certificates of such Class were sold and the aggregate percentage of
Certificates of such Class sold, (c) the first single price at which at least
10% of the aggregate Certificate Principal Balance of such class of Certificates
was sold, or (d) if any Certificates of each Class of Certificates are retained
by the Depositor or an affiliate corporation, or are delivered to the Seller,
the fair market value of such Certificates as of the Closing Date, (ii) the
prepayment assumption used in pricing the Certificates, and (iii) such other
information as to matters of fact as the Trustee may reasonably request to
enable it to comply with its reporting requirements with respect to each Class
of such Certificates to the extent such information can in the good faith
judgment of the Depositor be determined by it.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Certificate Account; Distributions.
(a) The Trustee shall establish and maintain a Certificate
Account, in which the Master Servicer shall cause to be deposited on behalf of
the Trustee on or before 5:00 P.M. New York time on each Certificate Account
Deposit Date by wire transfer of immediately available funds an amount equal to
the sum of (i) any Advance for the immediately succeeding Distribution Date,
(ii) any amount required to be deposited in the Certificate Account pursuant to
Sections 3.11, 3.13, 3.22 or 3.23 and (iii) all other amounts constituting the
Available Distribution Amount for the immediately succeeding Distribution Date.
(b) On each Distribution Date, prior to making any other
distributions referred to in Section 4.01, the Trustee shall withdraw from the
Certificate Account and pay itself the Trustee's Fee for such Distribution Date.
(c) On each Distribution Date the Trustee shall distribute to
each Certificateholder of record as of the next preceding Record Date (other
than as provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least 5
Business Days prior to the related Record Date and such Certificateholder is the
registered owner of Certificates the aggregate Initial Certificate Principal
Balance of which is not less than $2,500,000, or otherwise by check mailed to
such Certificateholder at the address of such Holder appearing in the
Certificate Register, such Certificateholder's share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the following amounts, in the following order of
priority, in each case to the extent of the remaining Available Distribution
Amount:
(i) to the Class A Certificateholders (other than the
Class A-9 Certificateholders) and the Class R
Certificateholders, on a pro rata basis based on Accrued
Certificate Interest payable on such Certificates with respect
to such Distribution Date, Accrued Certificate Interest on
such Classes of Certificates, as applicable, for such
Distribution Date, plus any Accrued Certificate Interest
thereon remaining unpaid from any previous Distribution Date
(the "Senior Interest Distribution Amount");
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(ii) (X) to the Class A-9 Certificateholders, the
Class A-9 Principal Distribution Amount; and
(Y) to the Class A Certificateholders (other
than Class A-9 and Class A-10 Certificateholders) and Class R
Certificateholders, in the priorities and amounts set forth in
Section 4.01(d)(ii) through (ix) and Sections 4.01(e) and (f),
the sum of the following (applied to reduce the Certificate
Principal Balances of such Class A Certificates or Class R
Certificates, as applicable):
(A) the Senior Percentage for such
Distribution Date times the sum of the following:
(1) the principal portion of each
Monthly Payment due during the related Due
Period on each Outstanding Mortgage Loan
(other than the related Discount Fraction of
the principal portion of such payment with
respect to a Discount Mortgage Loan),
whether or not received on or prior to the
related Determination Date, minus the
principal portion of any Debt Service
Reduction (other than the related Discount
Fraction of the principal portion of such
Debt Service Reductions with respect to each
Discount Mortgage Loan) which together with
other Bankruptcy Losses exceeds the
Bankruptcy Amount;
(2) the Stated Principal Balance of
any Mortgage Loan repurchased during the
related Prepayment Period pursuant to
Section 2.02, 2.04, 3.14 or 3.24 and the
amount of any shortfall deposited in the
Custodial Account in connection with the
substitution of a Deleted Mortgage Loan
pursuant to Section 2.04 during the related
Prepayment Period (other than the related
Discount Fraction of such Stated Principal
Balance or shortfall with respect to a
Discount Mortgage Loan); and
(3) the principal portion of all
other unscheduled collections (other than
Principal Prepayments in Full and
Curtailments and amounts received in
connection with a Cash Liquidation or REO
Disposition of a Mortgage Loan described in
Section 4.01(c)(ii)(Y)(B), including without
limitation Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) received during
the related Prepayment Period to the extent
applied by the Master Servicer as recoveries
of principal of the related Mortgage Loan
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pursuant to Section 3.15 (other than the
related Discount Fraction of the principal
portion of such unscheduled collections with
respect to a Discount Mortgage Loan);
(B) with respect to each Mortgage Loan for
which a Cash Liquidation or a REO Disposition
occurred during the related Prepayment Period and did
not result in any Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses, an amount equal to the lesser
of (a) the Senior Percentage for such Distribution
Date times the Stated Principal Balance of such
Mortgage Loan (other than the related Discount
Fraction of such Stated Principal Balance, with
respect to a Discount Mortgage Loan) and (b) the
Senior Accelerated Distribution Percentage for such
Distribution Date times the related unscheduled
collections (including without limitation Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) to
the extent applied by the Master Servicer as
recoveries of principal of the related Mortgage Loan
pursuant to Section 3.15 (in each case other than the
portion of such unscheduled collections, with respect
to a Discount Mortgage Loan included in Section
4.01(d)(i)(C)));
(C) the Senior Accelerated Distribution
Percentage for such Distribution Date times the
aggregate of all Principal Prepayments in Full and
Curtailments received in the related Prepayment
Period (other than the related Discount Fraction of
such Principal Prepayments in Full and Curtailments,
with respect to a Discount Mortgage Loan); and
(D) any amounts described in subsection
(ii)(Y), clauses (A), (B) or (C) of this Section
4.01(c), as determined for any previous Distribution
Date, which remain unpaid after application of
amounts previously distributed pursuant to this
clause (D) to the extent that such amounts are not
attributable to Realized Losses which have been
allocated to the Class M Certificates or Class B
Certificates;
(iii) to the Holders of the Class M-1 Certificates,
the Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided
below;
(iv) to the Holders of the Class M-1 Certificates, an
amount equal to (x) the Subordinate Principal
Distribution Amount for such Class of Certificates
for
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such Distribution Date, minus (y) the amount of any Class A-9
Collection Shortfalls for such Distribution Date or remaining
unpaid for all previous Distribution Dates, to the extent the
amounts available pursuant to clause (x) of Sections
4.01(c)(vi), (viii), (x), (xii), (xiii) and (xiv) are
insufficient therefor, applied in reduction of the Certificate
Principal Balance of the Class M-1 Certificates;
(v) to the Holders of the Class M-2 Certificates, the
Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided
below;
(vi) to the Holders of the Class M-2 Certificates, an
amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date, minus (y) the amount of any Class A-9 Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts
available pursuant to clause (x) of Sections 4.01(c)(viii),
(x), (xii), (xiii) and (xiv) are insufficient therefor,
applied in reduction of the Certificate Principal Balance of
the Class M-2 Certificates;
(vii) to the Holders of the Class M-3 Certificates,
the Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided
below;
(viii) to the Holders of the Class M-3 Certificates,
an amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date minus (y) the amount of any Class A-9 Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts
available pursuant to clause (x) of Sections 4.01(c)(x),
(xii), (xiii) and (xiv) are insufficient therefor, applied in
reduction of the Certificate Principal Balance of the Class
M-3 Certificates;
(ix) to the Holders of the Class B-1 Certificates,
the Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided
below;
(x) to the Holders of the Class B-1 Certificates, an
amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for
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such Distribution Date minus (y) the amount of any Class A-9
Collection Shortfalls for such Distribution Date or remaining
unpaid for all previous Distribution Dates, to the extent the
amounts available pursuant to clause (x) of Sections
4.01(c)(xii), (xiii) and (xiv) are insufficient therefor,
applied in reduction of the Certificate Principal Balance of
the Class B-1 Certificates;
(xi) to the Holders of the Class B-2 Certificates,
the Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided
below;
(xii) to the Holders of the Class B-2 Certificates,
an amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date minus (y) the amount of any Class A-9 Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts
available pursuant to clause (x) of Sections 4.01(c)(xiii) and
(xiv) are insufficient therefor, applied in reduction of the
Certificate Principal Balance of the Class B-2 Certificates;
(xiii) to the Holders of the Class B-3 Certificates,
an amount equal to (x) the Accrued Certificate Interest
thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any
previous Distribution Date, except as provided below minus (y)
the amount of any Class A-9 Collection Shortfalls for such
Distribution Date or remaining unpaid for all previous
Distribution Dates to the extent the amounts available
pursuant to clause (x) of Section 4.01(c)(xiv) are
insufficient therefor;
(xiv) to the Holders of the Class B-3 Certificates,
an amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date minus (y) the amount of any Class A-9 Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates applied in reduction of the
Certificate Principal Balance of the Class B-3 Certificates;
(xv) to the Class A Certificateholders and Class R
Certificateholders in the priority set forth in Section
4.01(d), the portion, if any, of the Available Distribution
Amount remaining after the foregoing distributions, applied to
reduce the Certificate Principal Balances of such Class A and
Class R Certificates, but in no event more than the aggregate
of the outstanding Certificate Principal Balances of each such
Class of Class A and Class R Certificates, and thereafter, to
each
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Class of Class M Certificates then outstanding beginning with
such Class with the lowest numerical designation, any portion
of the Available Distribution Amount remaining after the Class
A Certificates and Class R Certificates have been retired,
applied to reduce the Certificate Principal Balance of each
such Class of Class M Certificates, but in no event more than
the outstanding Certificate Principal Balance of each such
Class of Class M Certificates; and thereafter to each such
Class of Class B Certificates then outstanding beginning with
such Class with the lowest numerical designation, any portion
of the Available Distribution Amount remaining after the Class
M Certificates have been retired, applied to reduce the
Certificate Principal Balance of each such Class of Class B
Certificates, but in no event more than the outstanding
Certificate Principal Balance of each such Class of Class B
Certificates; and
(xvi) to the Class R Certificateholders, the balance,
if any, of the Available Distribution Amount.
(d) Distributions of principal on the Class A Certificates
(other than the Class A-10 Certificates) and Class R Certificates on each
Distribution Date occurring prior to the occurrence of the Credit Support
Depletion Date will be made as follows:
(i) first, to the Class A-9 Certificates, until the
Certificate Principal Balance thereof is reduced to zero, an
amount (the "Class A-9 Principal Distribution Amount") equal
to the aggregate of:
(A) the related Discount Fraction of the
principal portion of each Monthly Payment on each
Discount Mortgage Loan due during the related Due
Period, whether or not received on or prior to the
related Determination Date, minus the Discount
Fraction of the principal portion of any related Debt
Service Reduction which together with other
Bankruptcy Losses exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the
principal portion of all unscheduled collections on
each Discount Mortgage Loan received during the
preceding calendar month (other than amounts received
in connection with a Cash Liquidation or REO
Disposition of a Discount Mortgage Loan described in
clause (C) below), including Principal Prepayments in
Full, Curtailments and repurchases of Discount
Mortgage Loans (or, in the case of a substitution of
a Deleted Mortgage Loan, the Discount Fraction of the
amount of any shortfall deposited in the Custodial
Account in connection with such substitution);
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(C) in connection with the Final Disposition
of a Discount Mortgage Loan that did not result in
any Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary
Losses, an amount equal to the lesser of (1) the
applicable Discount Fraction of the Stated Principal
Balance of such Discount Mortgage Loan immediately
prior to such Distribution Date and (2) the
aggregate amount of the collections on such Discount
Mortgage Loan to the extent applied as recoveries of
principal;
(D) any amounts allocable to principal for
any previous Distribution Date (calculated pursuant
to clauses (A) through (C) above) that remain
undistributed; and
(E) the amount of any Class A-9 Collection
Shortfalls for such Distribution Date and the amount
of any Class A-9 Collection Shortfalls remaining
unpaid for all previous Distribution Dates, but only
to the extent of the Eligible Funds for such
Distribution Date;
(ii) second, from the Senior Principal Distribution
Amount, concurrently to the Lockout Certificates in reduction
of the Certificate Principal Balances thereof, until the
Certificate Principal Balances thereof have been reduced to
zero, an amount equal to the Unscheduled Payment Lockout
Distribution Percentage (or, with respect to the amount
described in clause (i)(Y)(A)(1) of Section 4.01(c), the
Scheduled Payment Lockout Distribution Percentage) of such
Certificates' pro rata share (based on the aggregate
Certificate Principal Balances thereof relative to the
aggregate Certificate Principal Balance of all classes of
Certificates (other than the Class A-9 Certificates)) of the
aggregate of the amounts described in clause (i)(Y) of Section
4.01(c) (but without application of either the Senior
Percentage or the Senior Accelerated Distribution Percentage
described therein) shall be distributed to such Lockout
Certificates; provided that if the aggregate of the amounts
set forth in clause (ii)(Y) of Section 4.01(c) is more than
the balance of the Available Distribution Amount remaining
after the Senior Interest Distribution Amount and Principal
Only Distribution Amount have been distributed, the amount
paid to such Certificates pursuant to this clause (ii) shall
be reduced by an amount equal to such Certificates' pro rata
share, based on the aggregate Certificate Principal Balance
thereof relative to the aggregate Certificate Principal
Balance of the Senior Certificates (other than the Class A-9
Certificates) of such difference;
(iii) third, the balance of the Senior Principal
Distribution Amount, if any, remaining after the distribution
described in clause (ii) above shall be distributed
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to the to the Class R Certificates, in reduction of the
Certificate Principal Balance thereof, until the Certificate
Principal Balance thereof has been reduced to zero;
(iv) fourth, concurrently, 91.0000000034%,
8.5229999968% and 0.4769999998% of the Senior Principal
Distribution Amount remaining after the distribution in clause
(iii) above shall be distributed to the Class A-1, Class A-3
and Class A-4 Certificates, respectively, in reduction of the
Certificate Principal Balances thereof, until the Certificate
Principal Balance of the Class A-1 Certificates has been
reduced to $93,364,532.32;
(v) fifth, concurrently, 47.4999963375%,
44.9824965317%, 4.7350069367% and 2.7825001941% of the Senior
Principal Distribution Amount remaining after the distribution
in clause (iv) above shall be distributed to the Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates, respectively,
in reduction of the Certificate Principal Balances thereof,
until the Certificate Principal Balance of the Class A-2
Certificates has been reduced to zero;
(vi) sixth, concurrently, 90.9999296212%,
8.5230666488% and 0.4770037301% of the Senior Principal
Distribution Amount remaining after the distribution in clause
(v) above shall be distributed to the Class A-1, Class A-3 and
Class A-4 Certificates, respectively, in reduction of the
Certificate Principal Balances thereof, until the Certificate
Principal Balance of the Class A-1 Certificates has been
reduced to zero;
(vii) seventh, concurrently, 94.▇▇▇▇▇▇▇▇▇▇% and
5.3006185416% of the Senior Principal Distribution Amount
remaining after the distribution in clause (vi) above shall be
distributed to the Class A-3 and Class A-4 Certificates,
respectively, in reduction of the Certificate Principal
Balances thereof, until the Certificate Principal Balances of
the Class A-3 Certificates and Class A-4 Certificates have
been reduced to zero;
(viii) eighth, from the balance, if any, of the
Senior Principal Distribution Amount remaining after the
distribution described in clause (vii) above, to the Class A-5
Certificates in reduction of the Certificate Principal Balance
thereof, until the Certificate Principal Balance thereof has
been reduced to zero;
(ix) ninth, from the balance, if any, of the Senior
Principal Distribution Amount remaining after the distribution
described in clause (viii) above, to the Lockout Certificates,
on a pro rata basis, based on the Certificate Principal
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Balances thereof, in reduction of the Certificate Principal
Balances thereof, until the Certificate Principal Balances
thereof have been reduced to zero.
(e) On or after the occurrence of the Credit Support Depletion
Date but prior to the reduction of the Certificate Principal Balance of the
Senior Support Lockout Certificates to zero, all priorities relating to
distributions as described above in respect of principal among the various
classes of Senior Certificates (other than the Class A-9 Certificates) will be
disregarded and an amount equal to the Discount Fraction of the principal
portion of scheduled or unscheduled payments received or advanced in respect of
Discount Mortgage Loans will be distributed to the Class A-9 Certificates and
the Senior Principal Distribution Amount will be distributed among all classes
of Senior Certificates (other than the Class A-9 Certificates) pro rata in
accordance with their respective outstanding Certificate Principal Balances and
the Senior Interest Distribution Amount will be distributed as set forth in
Section 4.01(c)(i) above; provided that the aggregate amount distributable to
the Super Senior Lockout Certificates and the Senior Support Lockout
Certificates in respect of the aggregate Accrued Certificate Interest thereon
and in respect of their collective pro rata portion of the Senior Principal
Distribution Amount will be distributed among such Certificates in the following
priority: first, to the Super Senior Lockout Certificates, up to an amount equal
to the Accrued Certificate Interest thereon; second, to the Super Senior Lockout
Certificates, up to an amount equal to the Super Senior Optimal Principal
Distribution Amount thereof, in reduction of the Certificate Principal Balances
thereof; third, to the Senior Support Lockout Certificates, up to an amount
equal to the Accrued Certificate Interest thereon; and fourth, to the Senior
Support Lockout Certificates, until the Certificate Principal Balance thereof is
reduced to zero.
(f) On or after the occurrence of the Credit Support Depletion
Date and upon reduction of the Certificate Principal Balance of the Senior
Support Lockout Certificates to zero, all priorities relating to distributions
as described above in respect of principal among the various classes of Senior
Certificates (other than the Principal Only Certificates) will be disregarded,
an amount equal to the Discount Fraction of the principal portion of scheduled
payments and unscheduled collections received or advanced in respect of Discount
Mortgage Loans will be distributed to the Principal Only Certificates, and the
Senior Principal Distribution Amount will be distributed to all classes of
Senior Certificates (other than the Principal Only Certificates) pro rata in
accordance with their respective outstanding Certificate Principal Balances.
(g) Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each
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brokerage firm shall be responsible for disbursing funds to the Certificate
Owners that it represents. None of the Trustee, the Company or the Master
Servicer shall have any responsibility therefor except as otherwise provided by
this Agreement or applicable law.
(h) The Trustee shall, upon written direction from the Master
Servicer, invest or cause the institution maintaining the Certificate Account to
invest the funds in the Certificate Account in Permitted Investments designated
in the name of the Trustee for the benefit of the Certificateholders, which
shall mature not later than the Business Day next preceding the Distribution
Date next following the date of such investment (except that (i) any investment
in the institution with which the Certificate Account is maintained may mature
on such Distribution Date and (ii) any other investment may mature on such
Distribution Date if the Trustee shall advance funds on such Distribution Date
to the Certificate Account in the amount payable on such investment on such
Distribution Date, pending receipt thereof to the extent necessary to make
distributions on the Certificates) and shall not be sold or disposed of prior to
maturity. All income and gain realized from any such investment shall be for the
benefit of the Master Servicer and shall be subject to its withdrawal or order
from time to time. The amount of any losses incurred in respect of any such
investments shall be deposited in the Certificate Account by the Master Servicer
out of its own funds immediately as realized without any right of reimbursement.
(i) Except as otherwise provided in Section 9.01, if the
Master Servicer anticipates that a final distribution with respect to any Class
of Certificates will be made on the next Distribution Date, the Master Servicer
shall, no later than the Determination Date in the month of such final
distribution, notify the Trustee and the Trustee shall, no later than two (2)
Business Days after such Determination Date, mail on such date to each Holder of
such Class of Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of
Certificates will be made on such Distribution Date but only upon presentation
and surrender of such Certificates at the office of the Trustee or as otherwise
specified therein, and (ii) no interest shall accrue on such Certificates from
and after the end of the prior calendar month.
Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust and credited to the account of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has been
given pursuant to this Section 4.01(i) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non- tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within six months after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall take reasonable
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steps as directed by the Depositor, or appoint an agent to take reasonable
steps, to contact the remaining non-tendering Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining the funds
in trust and of contacting such Certificateholders shall be paid out of the
assets remaining in the Trust Fund. If within nine months after the second
notice any such Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets which remain subject hereto. No interest shall accrue or be payable
to any Certificateholder on any amount held in trust as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(i).
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date the Trustee shall forward or cause
to be forwarded by mail to each Holder of a Certificate and to the Depositor,
the Master Servicer and the Rating Agencies, a statement based on information
provided by the Master Servicer as to such distribution
setting forth:
(i) (a) the amount of such distribution to the
Certificateholders of each Class applied to reduce the Certificate
Principal Balance thereof, and (b) the aggregate amount included
therein representing Principal Prepayments;
(ii) the amount of such distribution to Holders of each Class
of Certificates allocable to interest;
(iii) if the distribution to the Holders of any Class of
Certificates is less than the full amount that would be distributable
to such Holders if there were sufficient funds available therefor, the
amount of the shortfall;
(iv) the aggregate amount of Advances included in such
distribution as of the close of business on such Distribution Date;
(v) the number and aggregate Stated Principal Balance of the
Mortgage Loans at the close of business on such Distribution Date;
(vi) the aggregate Certificate Principal Balance of each Class
of Certificates, and each of the Senior, Class M and Class B
Percentages, after giving effect to the amounts distributed on such
Distribution Date, separately identifying any reduction thereof due to
Realized Losses other than pursuant to an actual distribution of
principal;
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(vii) the related Subordinate Principal Distribution Amount
and Prepayment Distribution Percentage, if applicable;
(viii) the number and aggregate Stated Principal Balance of
Mortgage Loans (a) delinquent 31 to 60 days, (b) delinquent 61 to 90
days, (c) delinquent 91 days or more;
(ix) the number, aggregate principal balance and book value of
any REO Properties;
(x) the aggregate Accrued Certificate Interest remaining
unpaid, if any, for each Class of Certificates, after giving effect to
the distribution made on such Distribution Date;
(xi) the Special Hazard Amount, Fraud Loss Amount and
Bankruptcy Amount as of the close of business on such Distribution Date
and a description of any change in the calculation of such amounts;
(xii) the weighted average Pool Strip Rate for such
Distribution Date and the Pass-Through Rate on the Class A-9
Certificates;
(xiii) the occurrence of the Credit Support Depletion Date;
(xiv) the Senior Accelerated Distribution Percentage
applicable to such distribution;
(xv) the Senior Percentage, Scheduled Payment Lockout
Distribution Percentage and Unscheduled Payment Lockout Distribution
Percentage for such Distribution Date;
(xvi) the aggregate amount of Realized Losses for such
Distribution Date;
(xvii) the aggregate amount of any recoveries on previously
foreclosed loans from the Seller due to a breach of representation or
warranty;
(xviii) the weighted average remaining term to maturity of the
Mortgage Loans after giving effect to the amounts distributed on such
Distribution Date; and
(xix) the weighted average Mortgage Rates of the Mortgage
Loans after giving effect to the amounts distributed on such
Distribution Date.
In the case of information furnished pursuant to subclauses
(i)-(iii) above, the amounts shall also be expressed as a dollar amount per
Single Certificate.
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Within a reasonable period of time after the end of each
calendar year, the Trustee shall prepare and forward, to each Person who at any
time during the calendar year was a Holder of a Senior, Subordinate Certificate
a statement containing the information set forth in subclauses (i) - (iii)
above, aggregated for such calendar year or applicable portion thereof during
which such person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satis fied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code and regulations thereunder as from time to time are in force.
On each Distribution Date the Trustee shall prepare and
forward, to each Holder of a Residual Certificate a copy of the reports
forwarded to the other Certificateholders on such
Distribution Date.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall prepare and forward, to each Person who at any
time during the calendar year was a Holder of a Residual Certificate a statement
containing the information provided pursuant to the previous paragraph
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satis fied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time are in force.
SECTION 4.03. Remittance Reports; Advances by the Master
Servicer.
(a) On the Business Day following each Determination Date, the
Master Servicer shall deliver to the Trustee a report, prepared as of the close
of business on the Determination Date (the "Determination Date Report"), in the
form of an electromagnetic tape or disk. The Determination Date Report and any
written information supplemental thereto shall include such information with
respect to the Mortgage Loans that is required by the Trustee for purposes of
making the calculations and preparing the statement described in Sections 4.01
and 4.02, as set forth in written specifications or guidelines issued by the
Trustee from time to time. Not later than 11:00 A.M. California time on each
Certificate Account Deposit Date, the Trustee shall furnish by telecopy to the
Master Servicer a statement setting forth (i) the Available Distribution Amount
and (ii) the amounts required to be withdrawn from the Custodial Account and
deposited into the Certificate Account with respect to the immediately
succeeding Distribution Date pursuant to clause (iii) of Section 4.01(a). The
Trustee shall have no obligation to recompute, recalculate or verify any
information provided to it by the Master Servicer. The determination by the
Trustee of such amounts shall, in the absence of obvious error, be presumptively
deemed to be correct for all purposes hereunder.
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(b) Not later than 2:00 P.M. New York time on each Certificate
Account Deposit Date, the Trustee shall notify the Master Servicer of the
aggregate amount of Advances required to be made for the related Distribution
Date, which shall be in an aggregate amount equal to the sum of (1) the
aggregate amount of Monthly Payments (with each interest portion thereof
adjusted to the Mortgage Rate less the Servicing Fee Rate), other than Balloon
Payments, less the amount of any related Debt Service Reductions or reductions
in the amount of interest collectable from the Mortgagor pursuant to the Relief
Act, on the Outstanding Mortgage Loans as of the related Due Date, which Monthly
Payments were delinquent as of the close of business as of the related
Determination Date plus (2) with respect to each Balloon Loan delinquent in
respect of its Balloon Payment as of the close of business on the related
Determination Date, an amount equal to the excess, if any, of interest on the
unpaid principal balance thereof (net of related Servicing Fees), over any
payments of interest (net of related Servicing Fees) received from the related
Mortgagor as of the close of business on the related Determination Date and
allocable to the Due Date during the related Due Period for each month until
such Balloon Loan is finally liquidated; provided that following the reduction
of the Certificate Principal Balances of the Subordinate Certificates to zero no
Advance shall be made if it would be a Nonrecoverable Advance. On or before 4:00
P.M. New York time on each Certificate Account Deposit Date, the Master Servicer
shall either (i) deposit in the Certificate Account from its own funds, or funds
received therefor from the Sub-Servicers, an amount equal to the Advances to be
made by the Master Servicer in respect of the related Distribution Date, (ii)
withdraw from amounts on deposit in the Custodial Account and deposit in the
Certificate Account all or a portion of the amounts held for future distribution
in discharge of any such Advance, or (iii) make advances in the form of any
combination of (i) and (ii) aggregating the amount of such Advance. Any portion
of the amounts held for future distribution so used shall be replaced by the
Master Servicer by deposit in the Certificate Account on or before 1:00 P.M. New
York time on any future Certificate Account Deposit Date to the extent that
funds attributable to the Mortgage Loans that are available in the Custodial
Account for deposit in the Certificate Account on such Certificate Account
Deposit Date shall be less than payments to Certificateholders required to be
made on the following Distribution Date. The amount of any reimbursement
pursuant to Section 3.11 in respect of outstanding Advances on any Distribution
Date shall be allocated to specific Monthly Payments due but delinquent for
previous Due Periods, which allocation shall be made, to the extent practicable,
to Monthly Payments which have been delinquent for the longest period of time.
Such allocations shall be conclusive for purposes of reimbursement to the Master
Servicer from recoveries on related Mortgage Loans pursuant to Section 3.11. The
determination by the Master Servicer that it has made a Nonrecoverable Advance
or that any proposed Advance, if made, would constitute a Nonrecoverable
Advance, shall be evidenced by a certificate of a Servicing Officer delivered to
the Seller and the Trustee with the Determination Date Report. The Trustee shall
deposit all funds it receives pursuant to this Section 4.03 into the Certificate
Account.
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(c) In the event that the Master Servicer determines as of any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date in the amount determined by the Trustee
pursuant to paragraph (b) above, it shall give notice to the Trustee of its
inability to advance (such notice may be given by telecopy), not later than 4:00
P.M., New York time, on such date, specifying the portion of such amount that it
will be unable to deposit. Not later than 4:00 P.M., New York time, on the
earlier of (x) two Business Days following such Certificate Account Deposit Date
or (y) the Business Day preceding the related Distribution Date, unless by such
time the Master Servicer shall have directly or indirectly deposited in the
Certificate Account the entire amount of the Advances required to be made for
the related Distribution Date, pursuant to Section 7.01, the Trustee shall (a)
terminate all of the rights and obligations of the Master Servicer under this
Agreement in accordance with Section 7.01 and (b) assume the rights and
obligations of the Master Servicer hereunder, including the obligation to
deposit in the Certificate Account an amount equal to the Advance for the
immediately succeeding Distribution Date.
SECTION 4.04. Allocation of Realized Losses.
Prior to each Distribution Date, the Master Servicer shall
determine the total amount of Realized Losses, if any, that resulted from any
Cash Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition
that occurred during the related Prepayment Period. The amount of each Realized
Loss shall be evidenced by an Officers' Certificate. All Realized Losses, other
than Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy
Losses or Excess Fraud Losses, shall be allocated as follows: first, to the
Class B-3 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; second, to the Class B-2 Certificates until the Certificate
Principal Balance thereof has been reduced to zero; third, to the Class B-1
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; fourth, to the Class M-3 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; fifth, to the Class M-2 Certificates
until the Certificate Principal Balance thereof has been reduced to zero; sixth,
to the Class M-1 Certificates until the Certificate Principal Balance thereof
has been reduced to zero; and, thereafter, if such Realized Losses are on a
Discount Mortgage Loan, to the Class A-9 Certificates, in an amount equal to the
Discount Fraction of the principal portion thereof, and the remainder of such
Realized Losses and the entire amount of such Realized Losses on Non-Discount
Mortgage Loans among all the Class A Certificates (other than the Class A-9
Certificates) and Class R Certificates, on a pro rata basis, as described below.
Any Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses
and Extraordinary Losses on Non-Discount Mortgage Loans will be allocated among
the Class A (other than the Class A-9 Certificates), Class M, Class B and Class
R Certificates, on a pro rata basis, as described below. The principal portion
of such losses on Discount Mortgage Loans will be allocated to the Class A-9
Certificates in an amount equal to the related Discount
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Fraction thereof, and the remainder of such losses on Discount Mortgage Loans
will be allocated among the Class A Certificates (other than the Class A-9
Certificates), Class M, Class B and Class R Certificates on a pro rata basis, as
described below; except that the principal portion of Defaulted Mortgage Losses
otherwise allocable to the Super Senior Lockout Certificates will be allocated
to the Senior Support Lockout Certificates until the Certificate Principal
Balance thereof is reduced to zero.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date in the case of the principal portion of a Realized Loss or based on the
Accrued Certificate Interest thereon payable on such Distribution Date (without
regard to any Compensating Interest for such Distribution Date) in the case of
an interest portion of a Realized Loss. Any allocation of the principal portion
of Realized Losses (other than Debt Service Reductions) to the Class B
Certificates or, after the Certificate Principal Balances of the Class B
Certificates have been reduced to zero, to the Class of Class M Certificates
then outstanding with the highest numerical designation shall be made by
operation of the definition of "Certificate Principal Balance" and by operation
of the provisions of Section 4.01. Allocations of the interest portions of
Realized Losses shall be made by operation of the definition of "Accrued
Certificate Interest" and by operation of the provisions of Section 4.01.
Allocations of the principal portion of Debt Service Reductions shall be made by
operation of the provisions of Section 4.01. All Realized Losses and all other
losses allocated to a Class of Certificates hereunder will be allocated among
the Certificates of such Class in proportion to the Percentage Interests
evidenced thereby.
SECTION 4.05. Information Reports to Be Filed by the Master
Servicer.
The Master Servicer or the Sub-Servicers shall file
information reports with respect to the receipt of mortgage interest received in
a trade or business, foreclosures and abandonments of any Mortgaged Property and
the information returns relating to cancellation of indebtedness income with
respect to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of
the Code, respectively, and deliver to the Trustee an Officers' Certificate
stating that such reports have been filed. Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by such Sections
6050H, 6050J and 6050P of the Code.
SECTION 4.06. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount on the
Mortgage Loans, that the Trustee reasonably believes are applicable
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under the Code. The consent of Certificateholders shall not be required for such
withholding. In the event the Trustee withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee shall, together with
its monthly report to such Certificateholders pursuant to Section 4.02 hereof,
indicate such amount withheld.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates will be substantially in the respective
forms annexed hereto as Exhibits ▇-▇, ▇-▇, ▇-▇ and B-3. The Certificates will be
issuable in registered form only. The Class A Certificates (other than the
Principal Only Certificates and the Variable Strip Certificates) and the Class M
Certificates will be issued in minimum denominations of $25,000 and integral
multiples of $1 in excess thereof. The Principal Only Certificates will be
issued in a minimum denomination of $11,474.25. The Class B Certificates of each
Class will be offered in registered, certificated form in minimum denominations
of $25,000 and integral multiples of $1,000 in excess thereof, with one
Certificate of each such Class evidencing the remainder of the aggregate initial
Certificate Principal Balance of such Class. The Variable Strip Certificates and
the Residual Certificates will each be issuable in denominations of any
Percentage Interest representing 5% and multiples of 0.01% in excess thereof.
Upon original issue, the Certificates shall, upon the written
request of the Depositor executed by an officer of the Depositor, be executed
and delivered by the Trustee, authenticated by the Trustee and delivered to or
upon the order of the Depositor upon receipt by the Trustee of the documents
specified in Section 2.01. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee in its capacity as trustee
hereunder by a Responsible Officer. Certificates bearing the manual or facsimile
signatures of individuals who were at the time they signed the proper officers
of the Trustee shall bind the Trustee, notwithstanding that such indivi duals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates issued on the Closing Date shall be dated the Closing Date and any
Certificates delivered thereafter shall be dated the date of their
authentication.
(b) The Class A Certificates shall initially be issued as one
or more Certificates registered in the name of the Depository or its nominee
and, except as provided below, registration of such Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to each of the Class
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A Certificates (except for such remainders) through the book-entry facilities of
the Depository and, except as provided below, shall not be entitled to
Definitive Certificates in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall transfer the Ownership Interests only in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures.
The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the respective Classes of
Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes
of Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect to
the respective Classes of Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of any Class of Book-Entry Certificates with respect to any particular
matter shall not be deemed inconsistent if they are made with respect to
different Certificate Owners. The Trustee may establish a reasonable record date
in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor or (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall, at the expense of the Depositor, issue the
Definitive Certificates. Neither the Depositor, the Master Servicer nor the
Trustee shall be liable for any actions taken by the Depository or its nominee,
including, without limitation, any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates the Trustee and the
Master Servicer shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
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SECTION 5.02. Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall maintain a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certif icates and of transfers and
exchanges of Certificates as herein provided.
(b) Except as provided in Section 5.02(c), no transfer, sale,
pledge or other disposition of a Subordinate Certificate shall be made unless
such transfer, sale, pledge or other disposition is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"), and any
applicable state securities laws or is made in accordance with said Act and
laws. In the event that a transfer of a Subordinate Certificate is to be made
under this Section 5.02(b), (i) the Trustee shall require an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee that such
transfer shall be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Depositor or the Master Servicer, provided that such Opinion
of Counsel will not be required in connection with the initial transfer of any
such Certificate by the Depositor or any affiliate thereof, to a non-affiliate
of the Depositor and (ii) the Trustee shall require the transferee to execute a
representation letter, substantially in the form of Exhibit G-1 hereto, and the
Trustee shall require the transferor to execute a representation letter,
substantially in the form of Exhibit G-2 hereto, each acceptable to and in form
and substance satisfactory to the Trustee certifying to the Depositor and the
Trustee the facts surrounding such transfer, which representation letters shall
not be an expense of the Trustee, the Depositor or the Master Servicer; provided
however that such representation letters will not be required in connection with
any transfer of any such Certificate by the Depositor to an affiliate of the
Depositor and the Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Trustee, shall be a written
representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor. Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor
and the Master Servicer against any liability that may result if the transfer is
not so exempt or is not made in accordance with such applicable federal and
state laws.
(c) Notwithstanding the requirements of Section 5.02(b),
transfers of Subordinate Certificates may be made in accordance with this
Section 5.02(c) if the prospective transferee of a Certificate provides the
Trustee and the Depositor with an investment letter substantially in the form of
Exhibit G-3 attached hereto, which investment letter shall not be an expense of
the Trustee, the Depositor or the Master Servicer, and which investment letter
states that, among other things, such transferee is a "qualified institutional
buyer" as defined under Rule 144A. Such transfers shall be deemed to have
complied with the requirements of Section 5.02(b) hereof; provided, however,
that no Transfer of any of the Subordinate Certificates may be made
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pursuant to this Section 5.02(c) by the Depositor. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in
accordance with such applicable federal and state laws.
(d) The Trustee shall require an Opinion of Counsel from a
prospective transferee prior to the transfer of any Subordinate Certificate to
any employee benefit plan or other retirement arrangement, including individual
retirement accounts and ▇▇▇▇▇ plans, that is subject to Section 406 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section
4975 of the Code (any of the foregoing, a "Plan"), to a trustee or other Person
acting on behalf of any Plan, or to any other person who is using "plan assets"
of any Plan to effect such acquisition (including any insurance company using
funds in its general or separate accounts that may constitute "plan assets").
Such Opinion of Counsel must establish to the satisfaction of the Trustee that
such disposition will not violate the prohibited transaction provisions of
Section 406 of ERISA and Section 4975 of the Code. Neither the Depositor, the
Master Servicer nor the Trustee will be required to obtain such Opinion of
Counsel on behalf of any prospective transferee. In lieu of such Opinion of
Counsel, the Trustee shall require a certification in the form of Exhibit G-6
(or in a form substantially similar to such Exhibit G-6 as shall be agreed upon
by the Trustee), in the case of the transfer of any of the foregoing
Certificates to a person capable of providing such certification, substantially
to the effect that all funds used by such transferee to purchase such
Certificates will be funds held by it in its general account which it reasonably
believes do not constitute "plan assets" of any Plan (as defined above);
provided however that such certification will not be required in connection with
any transfer of any such Certificate by the Depositor to an affiliate of the
Depositor and the Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Trustee, shall be a written
representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor. The permission of any transfer in violation of the
restriction on transfer set forth in this paragraph shall not constitute a
default or an Event of Default.
Any person purchasing a Senior Support Lockout, Class M or Residual
Certificate shall be deemed to have represented that either: (i) such person is
not a Plan subject to ERISA or the Code (or comparable provisions of any
subsequent enactments) and is not acting, directly or indirectly, on behalf of
any such Plan or acquiring such Certificate with Plan Assets; or (ii) the
purchase of such Certificate is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the Company, the Trustee or the
Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement and the exemptive relief granted by the DOL
pursuant to Prohibited Transaction Class Exemption 95-60 is available with
respect to the purchase, sale and holding of such Certificate.
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(e) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of transfer and to do all other
things necessary in connection with any such sale. The rights of each Person
acquiring any Ownership Interest in a Residual Certificate are expressly subject
to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of any Residual Certificate
until its receipt of (I) an affidavit and agreement (a "Transfer
Affidavit and Agreement" in the form attached hereto as Exhibit G-5)
from the proposed Transferee, in form and substance satisfactory to the
Trustee representing and warranting, among other things, that it is a
Permitted Transferee, that it is not acquiring its Ownership Interest
in the Residual Certificate that is the subject of the proposed
Transfer as a nominee, trustee or agent for any Person who is not a
Permitted Transferee, that for so long as it retains its Ownership
Interest in a Residual Certificate, it will endeavor to remain a
Permitted Transferee, and that it has reviewed the provisions of this
Section 5.02 and agrees to be bound by them, and (II) a certificate, in
the form attached hereto as Exhibit G-4, from the Holder wishing to
transfer the Residual Certificate, in form and substance satisfactory
to the Trustee representing and warranting, among other things, that no
purpose of the proposed Transfer is to impede the assessment or
collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Trustee assigned to this transaction has
actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest in a Residual
Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall agree (x) to require a Transfer Affidavit
and Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest in a Residual Certificate and (y) not
to transfer its Ownership Interest unless it provides a certificate to
the Trustee in the form attached hereto as Exhibit G-4.
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(E) Each Person holding or acquiring an Ownership Interest in
a Residual Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of Temporary Treasury
Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Residual Certificate, if it is "a pass-through
interest holder", or is holding an Ownership Interest in a Residual
Certificate on behalf of a "pass-through interest holder."
(ii) The Trustee will register the Transfer of any Residual
Certificate only if it shall have received the Transfer Affidavit and Agreement
in the form attached hereto as Exhibit G-5, a certificate of the Holder
requesting such transfer in the form attached hereto as Exhibit G-4 and all of
such other documents as shall have been reasonably required by the Trustee as a
condition to such registration. Transfers of the Residual Certificates to
Non-United States Persons and Disqualified Organizations are prohibited.
(iii) (A) If any Disqualified Organization shall become a
Holder of a Residual Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such Transfer of
such Residual Certificate. If a Non-United States Person shall become a Holder
of a Residual Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Residual Certificate. If a transfer of a Residual Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for any
registration of Transfer of a Residual Certificate that is in fact not permitted
by this Section 5.02 or for making any payments due on such Certificate to the
holder thereof or for taking any other action with respect to such holder under
the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the restrictions in this Section 5.02 and
to the extent that the retroactive restoration of the rights of the Holder of
such Residual Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Trustee shall have the right,
without notice to the holder or any prior holder of such Residual Certificate,
to sell such Residual Certificate to a purchaser selected by the Trustee on such
terms as the Trustee may choose. Such purported Transferee shall promptly
endorse and deliver each Residual Certificate in accordance with the
instructions of the Trustee. Such purchaser may be the Trustee itself. The
proceeds of such sale, net of the commissions (which may include commissions
payable to the Trustee), expenses and taxes due, if any, will be remitted by the
Trustee to such purported Transferee. The
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terms and conditions of any sale under this clause (iii)(B) shall be determined
in the sole discretion of the Trustee, and the Trustee shall not be liable to
any Person having an Ownership Interest in a Residual Certificate as a result of
its exercise of such discretion.
(iv) The Trustee shall make available to the Internal Revenue
Service and those Persons specified by the REMIC Provisions, all information
necessary to compute any tax imposed (A) as a result of the transfer of an
ownership interest in a Residual Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of such
Residual Certificates required to be provided to the Internal Revenue Service
and certain Persons as described in Treasury Regulations Sections 1.860D-1(b)(5)
and 1.860E-2(a)(5), and (B) as a result of any regulated investment company,
real estate investment trust, common trust fund, partnership, trust, estate or
organization described in Section 1381 of the Code that holds an Ownership
Interest in a Residual Certificate having as among its record holders at any
time any Person who is a Disqualified Organization. The Trustee may charge and
shall be entitled to reasonable compensation for providing such information as
may be required from those Persons which may have had a tax imposed upon them as
specified in clauses (A) and (B) of this paragraph for providing such
information.
(f) Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate at the office of the Trustee
maintained for such purpose, the Trustee shall execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest. Every Certificate surrendered for transfer shall be
accompanied by notifica tion of the account of the designated transferee or
transferees for the purpose of receiving distri butions pursuant to Section 4.01
by wire transfer, if any such transferee desires and is eligible for
distribution by wire transfer.
(g) At the option of the Certificateholders, Certificates may
be exchanged for other Certificates of authorized denominations of the same
Class of a like aggregate Percentage Interest, upon surrender of the
Certificates to be exchanged at the office of the Trustee. Whenever any
Certificates are so surrendered for exchange the Trustee shall execute,
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfac tory
to the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(h) No service charge shall be made to the Certificateholders
for any transfer or exchange of Certificates, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
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(i) All Certificates surrendered for transfer and exchange
shall be cancelled 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
and 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 may be required by it to save it harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Class and Percentage Interest. Upon
the issuance of any new Certificate under this Section, the Trustee may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
SECTION 5.04. Persons Deemed Owners.
The Depositor, the Master Servicer, the Trustee and any agent
of any of them 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 4.01 and for all other purposes whatsoever, and neither the
Depositor, the Master Servicer, the Trustee nor any agent of any of them shall
be affected by notice to the contrary.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Liability of the Depositor and the Master
Servicer.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Depositor and the Master Servicer 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 6.02. Merger, Consolidation or Conversion of the
Depositor or the Master Servicer.
The Depositor and the Master Servicer each will keep in full
effect its existence, rights and franchises as a corporation under the laws of
the state of its incorporation, and each 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 respective duties under this Agreement.
Any Person into which the Depositor or the Master Servicer may
be merged, consolidated or converted, or any corporation resulting from any
merger or consolidation to which the Depositor or the Master Servicer shall be a
party, or any Person succeeding to the business of the Depositor or the Master
Servicer, shall be the successor of the Depositor or the Master Servicer, as the
case may be, hereunder, 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; provided, however, that the successor or surviving
Person to the Master Servicer shall be qualified to sell mortgage loans to and
service mortgage loans for FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the
Master Servicer and Others.
Neither the Depositor, the Master Servicer nor any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor or the Master Servicer (but this
provision shall
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protect the above described persons) against any breach of warranties or
representations made herein, or against any specific liability imposed on the
Master Servicer pursuant to Section 3.01 or any other Section hereof; and
provided further that this provision shall not protect the Depositor, the Master
Servicer or any such person, against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or 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. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates (including reasonable legal fees
and disbursements of counsel), other than (a) any loss, liability or expense
related to Master Servicer's servicing obligations with respect to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) or related to the
Master Servicer's obligations under Section 3.01, or (b) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its respective duties under this Agreement and which
in its opinion may involve it in any expense or liability; provided, however,
that the Depositor or the Master Servicer may in its sole 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 (except any action or
liability related to the Master Servicer's obligations under Section 3.01) shall
be expenses, costs and liabilities of the Trust Fund, and the Depositor and the
Master Servicer shall be entitled to be reimbursed therefor from the Certificate
Account as provided in Section 3.11, any such right of reimbursement being prior
to the rights of Certificateholders to receive any amount in the Certificate
Account.
SECTION 6.04. Limitation on Resignation of the Master
Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (a) upon appointment of a successor servicer
reasonably acceptable to the Trustee upon receipt by the Trustee of a letter
from the Rating Agency that such a resignation and appointment will not, in and
of itself, result in a downgrading of the Certificates or (b) upon determination
that its 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 Counsel (at the expense of the resigning Master
Servicer) to such effect delivered to the
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Trustee. No such resignation shall become effective until the Trustee or a
successor servicer shall have assumed the Master Servicer's responsibilities,
duties, liabilities and obligations hereunder.
SECTION 6.05. 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 (as evidenced in a writing
signed by the Trustee) as having a comparable servicing ability to that of the
Master Servicer on the Closing Date; (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, 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 and any custodial
agreement, 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
Certificates 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 (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer's Certificate and
an Opinion of 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 VII
DEFAULT
SECTION 7.01. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to remit to the Trustee
for distribution to the Certificateholders any payment (other than an
Advance) required to be made under the terms of the Certificates or
this Agreement which continues unremedied for two (2) Business Days
after such amount was required to be remitted; or
(ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Master Servicer contained in the
Certificates or in this Agreement (including any breach of the Master
Servicer's representations and warranties pursuant to Section 2.03(a)
which materially and adversely affects the interests of the
Certificateholders) which continues unremedied for a period of 60 days
after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by
the Trustee, or to the Master Servicer and the Trustee by the Holders
of Certificates entitled to at least 25% of the Voting Rights; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in an involuntary case under any present
or future federal or state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer and such
decree or order shall have remained in force undischarged or unstayed
for a period of 60 consecutive days; or
(iv) the Master Servicer shall consent 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 of or relating to
all or substantially all of its property; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of or otherwise voluntarily commence a case or proceeding
under any applicable bankruptcy, insolvency,
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reorganization or other similar statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) the Master Servicer shall fail to deposit in the Certificate
Account on any Certificate Account Deposit Date an amount equal to any
required Advance which continues unremedied for the earlier of (a) a
period of two (2) Business Days or (b) the Business Day immediately
preceding the Distribution Date.
If an Event of Default described in clauses (i) - (v) of this Section shall
occur, then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Trustee or the Holders of Certificates
entitled to at least 51% of the Voting Rights, by notice in writing to the
Master Servicer (and to the Trustee if given by such Holders of Certificates),
with a copy to the Rating Agencies, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; provided, however, that the successor to the Master
Servicer appointed pursuant to Section 7.02 shall have accepted the duties of
Master Servicer effective upon the resignation or termination of the Master
Servicer. If an Event of Default described in clause (vi) hereof shall occur,
the Trustee shall, by notice to the Master Servicer, and the Depositor,
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; provided, however, that if the Trustee determines
(in its sole discretion) that the failure by the Master Servicer to make any
required Advance was due to circumstances beyond its control, and the required
Advance was otherwise made, the Trustee shall not terminate the Master Servicer.
On or after the receipt by the Master Servicer of such notice, all authority and
power of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a holder thereof) or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section, 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 at the
expense of the Master Servicer. The Master Servicer agrees to cooperate (and pay
any related costs and expenses) with the Trustee in effecting the termination of
the Master Servicer's respon sibilities and rights hereunder, including, without
limitation, the transfer to the Trustee or its appointed agent for
administration by it of (i) the property and amounts which are then or should be
part of the Trust Fund or which thereafter become part of the Trust Fund; (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;
(iii) the rights and obligations of the Master Servicer under the Sub- Servicing
Agreements with respect to the Mortgage Loans; and (iv) all cash amounts which
shall at the time be deposited by the Master Servicer or should have been
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deposited to the Custodial or the Certificate Account or thereafter be received
with respect to the Mortgage Loans. The Trustee shall not be deemed to have
breached any obligation hereunder as a result of a failure to make or delay in
making any distribution as and when required hereunder caused by the failure of
the Master Servicer to remit any amounts received on it or to deliver any
documents held by it with respect to the Mortgage Loans. For purposes of this
Section 7.01, the Trustee shall not be deemed to have knowledge of an Event of
Default unless a Responsible Officer of the Trustee assigned to and working in
the Trustee's corporate trust division has actual knowledge thereof or unless
notice of any event which is in fact such an Event of Default is received by the
Trustee and such notice references the Certificates, the Trust Fund or this
Agreement.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 (i)-(v), the Trustee or its appointed agent
shall be the successor in all respects to the Master Servicer in its capacity as
Master Servicer under this Agreement and the transactions set forth or provided
for herein and shall be subject thereafter to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer including the
obligation to make Advances which have been or will be required to be made
(except for the responsibilities, duties and liabilities contained in Section
2.03 and its obligations to deposit amounts in respect of losses pursuant to
Section 3.12 and 4.01(h)) by the terms and provisions hereof; and provided
further, that any failure to perform such duties or responsibilities caused by
the Master Servicer's failure to provide information required by Section 4.03
shall not be considered a default by the Trustee hereunder. 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 charge to the
Custodial Account and the Certificate Account if the Master Servicer had
continued to act hereunder. If the Trustee has become the successor to the
Master Servicer in accordance with Section 6.04 or Section 7.02, then
notwithstanding the above, if the Trustee shall be unwilling to so act, or shall
be unable to so act, the Trustee may appoint, or petition a court of competent
jurisdiction or appoint, any established housing and home finance institution,
which is also a FNMA- or FHLMC-approved mortgage servicing institution, having a
net worth of not less than $10,000,000 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 herein above provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer hereunder. Each the Seller, the Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
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Any successor, including the Trustee, to the Master Servicer
shall maintain in force during its term as master servicer hereunder policies
and fidelity bonds to the same extent as the
Master Servicer is so required pursuant to Section 3.18.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to
the Master Servicer, the Trustee shall give prompt notice thereof to
Certificateholders and to the Rating Agencies.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Holders of Certificates
notice of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived.
SECTION 7.04. Waiver of Events of Default.
The Holders representing at least 51% of the Voting Rights of
Certificates affected by a default or Event of Default hereunder, may waive such
default or Event of Default (other than an Event of Default set forth in Section
7.01 (vi)); PROVIDED, HOWEVER, that (a) a default or Event of Default under
clause (i) of Section 7.01 may be waived only by all of the Holders of
Certificates affected by such default or Event of Default and (b) no waiver
pursuant to this Section 7.04 shall affect the Holders of Certificates in the
manner set forth in the second paragraph of Section 11.01 or materially
adversely affect any non-consenting Certificateholder. Upon any such waiver of a
default or Event of Default by the Holders representing the requisite percentage
of Voting Rights of Certificates affected by such default or Event of Default,
such default or Event of Default shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to
any subsequent or other default or Event of 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 7.05. 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 VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
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. If an Event of Default occurs, is continuing and has
not been 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 man would exercise or use under the circumstances in the
conduct of his own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them in accordance with the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, the Trustee shall
take such action as it deems appropriate to have the instrument corrected, and
if the instrument is not corrected to the Trustee's satisfaction, the Trustee
will provide notice thereof to the Certificateholders. Notwithstanding the
foregoing, 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 or any Opinion of
Counsel required hereunder.
The Trustee shall prepare and file or cause to be filed on
behalf of the Trust Fund any tax return that is required with respect to the
REMIC or the Trust Fund pursuant to applicable
federal, state or local tax laws.
The Trustee covenants and agrees that it shall perform its
obligations hereunder in a manner so as to maintain the status of the Trust Fund
as a REMIC under the REMIC Provisions and to prevent the imposition of any
federal, state or local income, prohibited transaction, contribution or other
tax on the Trust Fund to the extent that maintaining such status and avoiding
such taxes are reasonably within the control of the Trustee and are reasonably
within the scope of its duties under this Agreement.
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:
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(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; and
(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 direction of the Holders of
Certificates entitled to at least 25% of the Voting Rights
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(a) The Trustee may rely upon and shall be protected in acting
or refraining from acting in reliance upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably believed
by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance therewith;
(c) 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 notice pursuant to this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation
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hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default of which a Responsible Office of the
Trustee's corporate trust department has actual knowledge (which has
not been waived or cured), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and
skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(d) 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;
(e) 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 Holders of Certificates entitled to at least 25% of the Voting
Rights; provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee, reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement reasonable expense of
every such examination shall be paid by the Certificateholders
requesting the investigation;
(f) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys; and
(g) 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.
SECTION 8.03. Trustee Not Liable for Certificates or
Mortgage Loans.
The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Trustee on the
Certificates, the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 8.12) shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency
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of this Agreement (other than as specifically set forth in Section 8.12) or of
the Certificates (other than the signature and authentication of the Trustee on
the Certificates) or of any Mortgage Loan or related document. The Trustee shall
not be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Custodial Account by
the Master Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity (other
than as Trustee hereunder) may become the owner or pledgee of Certificates with
the same rights it would have if it were not
Trustee and may otherwise deal with the parties hereto.
SECTION 8.05. Trustee's Fees.
On each Distribution Date, the Trustee shall be entitled to
withdraw from the Certificate Account as compensation hereunder the Trustee
Fees. Such compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) shall be paid for
all services rendered by it in the execution of the trusts hereby created and in
the exercise and performance of any of the powers and duties hereunder or of the
Trustee. Except as otherwise provided in this Agreement, the Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified and
held harmless by the Trust Fund against any claim, loss, liability, fee or
expense incurred in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) relating to the acceptance or administration of its
trusts hereunder or the Certificates, other than any claim, loss, liability or
expense (i) sustained in connection with this Agreement related to the willful
misfeasance, bad faith or negligence of the Master Servicer in the performance
of its duties hereunder or (ii) incurred in connection with a breach
constituting willful misfeasance, bad faith or negligence of the Trustee in the
performance of its duties hereunder or by reason of reckless disregard of its
obligations and duties hereunder.
The Master Servicer shall indemnify the Trustee and any
director, officer, employee or agent of the Trustee against any such claim or
legal action (including any pending or threatened claim or legal action), loss,
liability, fee or expense that may be sustained in connection with this
Agreement related to the willful misfeasance, bad faith, or negligence in the
performance of the Master Servicer's duties hereunder.
The provisions of this Section 8.05 shall survive the
termination of this Agreement.
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SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a
national banking association organized and doing business under the laws of any
state or the United States of America or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. In addition, the Trustee shall at all times be
acceptable to the Rating Agency rating the Certificates. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation
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, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07. The corporation or national banking association serving as Trustee
may have normal banking and trust relationships with the Seller and their affili
ates or the Master Servicer and its affiliates; provided, however, that such
corporation cannot be an affiliate of the Master Servicer other than the Trustee
in its role as successor to the Master Servicer.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Master Servicer;
with a copy to the Rating Agencies; provided, that such resignation shall not be
effective until a successor trustee is appointed and accepts appointment in
accordance with the following provisions. Upon receiving such notice of
resignation, the Master Servicer shall promptly appoint a successor trustee who
meets the eligibility requirements of Section 8.06 by written instrument, in
triplicate, one copy of which instrument shall be delivered to each of the
resigning Trustee and to 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;
provided, however, that the resigning Trustee shall not resign and be discharged
from the trusts hereby created until such time as the Rating Agency rating the
Certificates approves the successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Master Servicer, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged 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, Master
Servicer may remove the Trustee and appoint
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a successor trustee who meets the eligibility requirements of Section 8.06 by
written instrument, in triplicate, which instrument shall be delivered to the
Trustee so removed and to the successor
trustee.
The Holders of Certificates entitled to at least 51% of the
Voting Rights, may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to the Master Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. A copy of
such instrument shall be delivered to the Certificateholders and the Depositor
by the Master Servicer.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Master Servicer and to its
predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the prede cessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the 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 Fund held by it hereunder, and the Master
Servicer and the predecessor trustee shall execute and deliver all 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.
No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section
8.06.
Upon acceptance of appointment by a successor trustee as
provided in this Section, the Master Servicer shall mail notice of the
succession of such trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register. If the Master Servicer fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Master Servicer.
SECTION 8.09. Merger or Consolidation of Trustee.
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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 Section 8.06 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 8.10. Appointment of Co-Trustee or Separate
Trustee.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing 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 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 Fund, and to vest in such Person or Per sons, in such capacity, such title
to the Trust Fund, or any part thereof, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request so to do, or in case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment without the Master Servicer. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 8.06 hereunder and no notice to Holders of Certificates of
the appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred or 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 Fund 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.
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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 VIII. 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.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of
All Mortgage Loans or upon Purchase of
Certificates.
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Depositor, the Master Servicer and the Trustee created
hereby (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders of all amounts held by or on
behalf of the Trustee and required to be paid to them hereunder following the
earlier to occur of (i) the repurchase by the Master Servicer or its designee of
all Mortgage Loans and each REO Property in respect thereof remaining in the
Trust Fund at a price equal to (a) 100% of the unpaid principal balance of each
Mortgage Loan (other than one as to which a REO Property was acquired) on the
day of repurchase together with accrued interest on such unpaid principal
balance at the Net Mortgage Rate to the first day of the month in which the
proceeds of such repurchase are to be distributed, plus (b) the appraised value
of any REO Property (but not more than the unpaid principal balance of the
related Mortgage Loan, together with accrued interest on that balance at the Net
Mortgage Rate to the first day of the month such repurchase price is
distributed), 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 conducted by an appraiser mutually agreed upon by the Master Servicer and
the Trustee at the expense of the Master Servicer, and (ii) 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 REO Property in
respect thereof); provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the last
survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the
United States to the Court of St. ▇▇▇▇▇, living on the date hereof. In the case
of any repurchase by the Master Servicer pursuant to clause (i), the Master
Servicer shall include in such repurchase price the amount of any Advances that
will be reimbursed to the Master Servicer pursuant to Section 3.11(iii) and the
Master Servicer shall exercise reasonable efforts to cooperate fully with the
Trustee in effecting such repurchase and the transfer of the Mortgage Loans and
related Mortgage Files and related records to the Master Servicer.
The right of the Master Servicer or its designee to repurchase
all Mortgage Loans pursuant to (i) above shall be conditioned upon the aggregate
Stated Principal Balance of such Mortgage Loans at the time of any such
repurchase aggregating an amount equal to or less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date. If such
right is exercised, the Master Servicer upon such repurchase shall provide to
the Trustee, notice
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of such exercise prior to the Determination Date in the month preceding the
month of purchase and the certification required by Section 3.16.
Notice of any termination, specifying the Distribution Date
upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distri bution and cancellation, shall be given
promptly by the Trustee by letter to the Certificateholders mailed (a) in the
event such notice is given in connection with the Master Servicer's election to
repurchase, not earlier than the 15th day and not later than the 25th day of the
month next preceding the month of such final distribution or (b) otherwise
during the month of such final distribution on or before the Determination Date
in such month, in each case specifying (i) the Distribution Date upon which
final payment of the Certificates will be made upon presentation and surrender
of 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. In the event such notice is given in connection with the
Master Servicer or its designee's election to repurchase, the Master Servicer or
its designee shall deliver to the Trustee for deposit in the Certificate Account
on the Business Day immediately preceding the Distribution Date specified in
such notice an amount equal to the above-described repurchase price payable out
of its own funds. Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall distribute to the Certificateholders (i)
the amount otherwise distributable on such Distribution Date, if not in
connection with the Master Servicer's election to repurchase, or (ii) if the
Master Servicer elected to so repurchase, an amount deter mined as follows: with
respect to each Class A Certificate and Subordinate Certificate, the outstanding
Certificate Principal Balance thereof, plus one month's interest thereon at the
appli cable Pass-Through Rate and any previously unpaid Accrued Certificate
Interest; and with respect to the Residual Certificates, the Percentage Interest
evidenced thereby multiplied by the difference, if any, between the above
described repurchase price and the aggregate amount to be distributed to the
Holders of the Class A Certificates and Subordinate Certificates, subject to the
priorities set forth in Section 4.01(c). Upon certification to the Trustee by a
Servicing Officer, following such final deposit, the Trustee shall promptly
release the Mortgage Files as directed by the Master Servicer for the remaining
Mortgage Loans, and the Trustee shall execute all assignments, endorsements and
other instruments required by the Master Servicer as being necessary to effectu
ate such transfer.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the time
specified in the above-mentioned notice, the Trustee shall give a second 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 all of the Certificates shall not have been
surrendered for cancellation, the Trustee shall take reasonable steps as
directed by the Depositor, or appoint an
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agent to take reasonable 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 hereto. If within nine
months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Residual Certificateholders shall be entitled
to all unclaimed funds and other assets which remain subject hereto.
(b) On any Distribution Date on which the Stated Principal Balance of
the Mortgage Loans is less than ten percent of the Cut-off Date Stated Principal
Balance of the Mortgage Loans, either the Master Servicer or the Depositor,
whichever gives notice first, shall have the right, at its option, to purchase
the Certificates in whole, but not in part, at a price equal to the outstanding
Certificate Principal Balance of such Certificates plus the sum of one month's
Accrued Certificate Interest thereon and any previously unpaid Accrued
Certificate Interest.
The Master Servicer or the Depositor, as applicable, shall
give the Trustee not less than 60 days' prior notice of the Distribution Date on
which the Master Servicer or the
Company,
as applicable, anticipates that it will purchase the Certificates pursuant to
Section 9.01(b). Notice of any such purchase, specifying the Distribution Date
upon which the Holders may surrender their Certificates to the Trustee for
payment in accordance with this Section 9.01(b), shall be given promptly by the
Master Servicer or the Company, as applicable, by letter to Certificateholders
(with a copy to the Trustee and each Rating Agency) 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, specifying:
(i) the Distribution Date upon which purchase of the
Certificates is anticipated to be made upon presentation and surrender
of such Certificates at the office or agency of the Trustee therein
designated,
(ii) the purchase price therefor, if known, 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 or agency of the Trustee therein specified.
If either the Master Servicer or the Depositor gives the notice specified above,
the Master Servicer or the Depositor, as applicable, shall deposit in the
Certificate Account before the Distribution Date on which the purchase pursuant
to Section 9.01(b) is to be made, in immediately available funds, an amount
equal to the purchase price for the Certificates computed as provided above.
Upon presentation and surrender of the Certificates to be purchased
pursuant to Section 9.01(b) by the Holders thereof, the Trustee shall distribute
to such Holders an amount equal to the
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outstanding Certificate Principal Balance thereof plus the sum of one month's
Accrued Certificate Interest thereon and any previously unpaid Accrued
Certificate Interest with respect thereto.
In the event that any Certificateholders do not surrender
their Certificates on or before the Distribution Date on which a purchase
pursuant to this Section 9.01(b) is to be made, the Trustee shall on such date
cause all funds in the Certificate Account deposited therein by the Master
Servicer or the Depositor, as applicable, pursuant to this Section 9.01(b) to be
withdrawn therefrom and deposited in a separate escrow account for the benefit
of such Certificateholders, and the Master Servicer or the Depositor, as
applicable, shall give a second written notice to such Certificateholders to
surrender their Certificates for payment of the purchase price therefor. If
within six months after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee shall take appropriate steps as
directed by the Master Servicer or the Depositor, as applicable, to contact the
Holders of such Certificates concerning surrender of their Certificates. The
costs and expenses of maintaining the escrow account and of contacting
Certificateholders shall be paid out of the assets which remain in the escrow
account. No interest shall accrue or be payable to any Certificateholder on any
amount held in the escrow account or by the Master Servicer or the Depositor, as
applicable, as a result of such Certificateholder's failure to surrender its
Certificate(s) for payment in accordance with this Section 9.01. Any Certificate
that is not surrendered on the Distribution Date on which a purchase pursuant to
this Section 9.01 occurs as provided above will be deemed to have been purchased
and the Holder as of such date will have no rights with respect thereto except
to receive the purchase price therefor minus any costs and expenses associated
with such escrow account and notices allocated thereto. Any Certificates so
purchased or deemed to have been purchased on such Distribution Date shall
remain outstanding hereunder. The Master Servicer or the Depositor, as
applicable, shall be for all purposes the Holder thereof as of such date.
SECTION 9.02. Additional Termination Requirements.
(a) In the event the Master Servicer repurchases the Mortgage
Loans as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Master
Servicer, at its own expense, obtains for the Trustee an Opinion of Counsel to
the effect that the failure of the Trust Fund to comply with the require ments
of this Section 9.02 will not (i) result in the imposition of taxes on the net
income derived from "prohibited transactions" of the Trust Fund as defined in
Section 860F of the Code or (ii) cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are out standing:
(i) The Trustee shall establish a 90-day liquidation period for
the Trust Fund and specify the first day of such period in a statement
attached to the Trust Fund's final Tax Return pursuant to Treasury
Regulation Section 1.860F-1. The Trustee shall satisfy
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all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of
Counsel obtained at the expense of the Master Servicer;
(ii) During such 90-day liquidation period, and at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell all of the assets of the Trust Fund for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the Residual Certificates
all cash on hand (other than cash retained to meet claims), and the
Trust Fund shall terminate at that time.
(b) By their acceptance of the Residual Certificates, the
Holders thereof hereby agree to authorize the Trustee to specify the 90-day
liquidation period for the Trust Fund, respectively, which authorization shall
be binding upon all successor Residual
Certificateholders.
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ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Trustee will make an election to treat the Trust Fund
as a REMIC under the Code and, if necessary, under applicable state law. Such
election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
purposes of the REMIC election in respect of the Trust Fund, the Class A
Certificates, the Class M Certificates and the Class B Certificates shall be
designated as the "regular interests" and the Class R Certificates shall be
designated as the sole Class of "residual interest" in the Trust Fund. The
Master Servicer and the Trustee shall not permit the creation of any "interests"
in the Trust Fund (within the meaning of Section 860G of the Code) other than
the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day"
of the Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect to the Trust Fund that
involve the Internal Revenue Service or state tax authorities), other than the
expense of obtaining any tax related Opinion of Counsel except as specified
herein. The Trustee, as agent for the Trust Fund's tax matters person, shall (i)
act on behalf of the Trust Fund in relation to any tax matter or controversy
involving the Trust Fund and (ii) represent the Trust Fund in any administrative
or judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. By their acceptance thereof, the holder
of the largest Percentage Interest of the Residual Certificates hereby agrees to
irrevocably appoint the Trustee or an Affiliate as its agent to perform all of
the duties of the tax matters person for the Trust Fund.
(d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of the REMIC created hereunder. The expenses of preparing and
filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
Trust Fund as is in its possession and reasonably required by the Trustee to
enable it to perform its obligations under this Article X.
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(e) The Trustee shall perform on behalf of the Trust Fund all
reporting and other tax compliance duties that are the responsibility of the
REMIC under the Code, the REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other such
compliance guidance, the Trustee shall provide (i) to any Transferor of a
Residual Certificate such information as is necessary for the application of any
tax relating to the transfer of a Residual Certificate to any Person who is not
a Permitted Transferee, (ii) to the Certificateholders such information or
reports as are required by the Code or the REMIC Provisions including reports
relating to interest, original issue discount and market discount or premium
(using the Prepayment Assumption as required) and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who will
serve as the representative of the Trust Fund. The Master Servicer shall provide
on a timely basis to the Trustee such information with respect to the assets of
the Trust Fund, including, without limitation, the Mortgage Loans, as is in its
possession and reasonably required by the Trustee to enable it to perform its
obligations under this subsection. In addition, the Depositor shall provide or
cause to be provided to the Trustee, within ten (10) days after the Closing
Date, all information or data that the Trustee reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f) The Trustee shall take such action and shall cause the
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of the Trust Fund as a REMIC or (ii) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee has received an Opinion of
Counsel, addressed to the Trustee (at the expense of the party seeking to take
such action but in no event at the expense of the Trustee) to the effect that
the contemplated action will not, with respect to the REMIC created hereunder,
endanger such status or result in the imposition of such a tax, nor shall the
Master Servicer take or fail to take any action (whether or not authorized
hereunder) as to which the Trustee has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action. In addition, prior to taking any action with
respect to the Trust Fund or the assets of the Trust Fund, or causing the Trust
Fund to take any action, which is not contemplated under the terms of this
Agreement, the Master Servicer will consult with the Trustee or its designee, in
writing, with respect to whether such action could cause an Adverse REMIC Event
to occur with respect to the Trust Fund, and the
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Master Servicer shall not take any such action or cause the Trust Fund to take
any such action as to which the Trustee has advised it in writing that an
Adverse REMIC Event could occur. The Trustee may consult with counsel to make
such written advice, and the cost of same shall be borne by the party seeking to
take the action not permitted by this Agreement, but in no event shall such cost
be an expense of the Trustee. At all times as may be required by the Code, the
Trustee will ensure that substantially all of the assets of the REMIC created
hereunder will consist of "qualified mortgages" as defined in Section 860G(a)(3)
of the Code and "permitted investments" as defined in Section 860G(a)(5) of the
Code.
(g) In the event that any tax is imposed on "prohibited
transactions" of the REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of the REMIC as defined
in Section 860G(c) of the Code, on any contributions to the REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise, (iii) to the Master Servicer as provided in Section 3.05 and (iv)
against amounts on deposit in the Certificate Account and shall be paid by
withdrawal therefrom.
(h) On or before April 15 of each calendar year, commencing
April 15, 1998, the Trustee shall deliver to the Master Servicer and each Rating
Agency a Certificate from a Responsible Officer of the Trustee stating the
Trustee's compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to the Trust Fund on a calendar year and
on an accrual basis.
(j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to the Trust Fund other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the REMIC will not cause the REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
the REMIC to any tax under the REMIC Provisions or other applicable provisions
of federal, state and local law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which the Trust Fund will receive a fee or other
compensation for services nor permit the REMIC to receive any income from assets
other than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.
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SECTION 10.02. Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of the Trust Fund pursuant to Article IX of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any
assets for the Trust Fund (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain, nor accept any
contributions to the Trust Fund after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee (at the expense of
the party seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of the Trust Fund as a REMIC or (b) cause the Trust Fund to
be subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC Provisions.
SECTION 10.03. Master Servicer and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the
Depositor, and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a
breach of the Trustee's covenants set forth in this Article X.
(b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in Article III or this Article X.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee, without the consent of any of
the Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein which may be defective or incon sistent with any other
provisions herein or to correct any error, (iii) to amend this Agreement in any
respect subject to the provisions in clauses (A) and (B) below, or (iv) if such
amendment, as evidenced by an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, is reasonably necessary to
comply with any requirements imposed by the Code or any successor or amendatory
statute or any temporary or final regulation, revenue ruling, revenue procedure
or other written official announcement or interpretation relating to federal
income tax laws or any proposed such action which, if made effective, would
apply retroactively to the Trust Fund at least from the effective date of such
amendment; provided that such action (except any amendment described in (iv)
above) shall not adversely affect in any material respect the interests of any
Certificateholder (other than Certificateholders who shall consent to such
amendment), as evidenced by (A) an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, and (B) a letter from each
Rating Agency, confirming that such amendment shall not cause it to lower its
rating on any of the Certificates.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee and Holders of Certificates
entitled to at least 66-2/3% of the Voting Rights 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 Holders of
Certificates; 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, (ii) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner
other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66-2/3% of the Voting Rights of
such Class, or (iii) reduce the aforesaid percentage of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all Certificates then outstanding. Notwithstand ing any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Seller or the Master Servicer or any affiliate thereof shall be entitled to
Voting Rights with respect to matters described in (i), (ii) and (iii) of this
paragraph.
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Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (provided by the Person requesting
such amendment) to the effect that such amendment will not result in the
imposition of any tax on the Trust Fund pursuant to the REMIC Provisions or
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment or a written statement describing the
amendment to each Certificate holder, with a copy to the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Prior to executing any amendment pursuant to this Section, the
Trustee shall be entitled to receive an Opinion of Counsel (provided by the
Person requesting such amendment) to the effect that such amendment is
authorized or permitted by this Agreement. The cost of an Opinion of Counsel
delivered pursuant to this Section 11.01 shall be an expense of the party
requesting such amendment, but in any case shall not be an expense of the
Trustee.
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement; Counterparts.
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 properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counter parts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
-118-
SECTION 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, 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 Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, 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 constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
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 or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a notice of an Event of
Default, or of a default by the Seller or the Trustee in the performance of any
obligation hereunder, and of the continuance thereof, as hereinbefore provided,
and unless also the Holders of Certificates entitled to at least 51% of the
Voting Rights 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, expenses and liabilities to be incurred therein or thereby, and 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. It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue of any provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, 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, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
-119-
SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall
be determined in accordance with such laws.
SECTION 11.05. Notices.
All demands, notices and direction hereunder shall be in
writing and shall be deemed effective upon receipt when delivered to (a) in the
case of the Depositor, ICI Funding, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or such other address as may
hereafter be furnished to the other parties hereto in writing; (b) in the case
of ICI Funding, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or such other address as may hereafter be furnished
to the other parties hereto in writing; (c) in the case of the Trustee, at its
Corporate Trust Office, or such other address as may hereafter be furnished to
the other parties hereto in writing; or (d) in the case of the Rating Agencies,
S&P, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Residential Mortgage
Surveillance Group and DCR, Duff & ▇▇▇▇▇▇ Credit Rating Company, ▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: MBS Monitoring. Any
notice required or permitted to be mailed to a Certificateholder shall be given
by first class mail, postage prepaid, at the address of such Holder 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 Certificate holder receives such notice.
SECTION 11.06. 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 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 Certificates or the rights of the Holders thereof.
SECTION 11.07. Successors and Assigns; Third Party
Beneficiary.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to
the benefit of the Trustee and the Certificateholders.
SECTION 11.08. Article and Section Headings.
-120-
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.09. Notice to Rating Agencies.
The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency referred to below with respect to each of the
following of which it has actual knowledge:
1. Any material 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 pursuant
to Section 2.03;
5. The final payment to Certificateholders; and
6. Any change in the location of the Custodial Account or the
Certificate Account.
In addition, the Trustee and the Master Servicer shall
promptly furnish to the Rating Agency copies of the following:
1. Each report to Certificateholders described in Section
4.02; and
2. Each annual independent public accountants' servicing
report received as described in Section 3.20.
Any such notice pursuant to this Section 11.09 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
(i) in the case of DCR, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Structured Finance Group, (ii) in the case of Standard & Poor's, ▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or, in each case, such other address as
either such Rating Agency may designate in writing to the parties thereto.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized all as of the day and year first above written.
ICIFC SECURED ASSETS CORP.,
Depositor
By:__________________________________
ICI FUNDING CORPORATION,
Master Servicer
By:__________________________________
BANKERS TRUST COMPANY OF
CALIFORNIA,
N.A.,
Trustee
By:__________________________________
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of September, 1997 before me, a notary public
in and for said State, personally appeared _______________________, known to me
to be the [Senior] Vice President of ICIFC Secured Assets Corp., the corporation
that executed the within instrument, and also known to me to be the persons 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]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ____________ )
On the ____ day of September, 1997 before me, a notary public
in and for said State, personally appeared , known to me to be the of ICI
Funding Corporation, and also known to me to be the person who executed the
within instrument as a duly authorized officer of said corporation 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]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On the ____ day of September, 1997, before me, a notary public
in and for said State, personally appeared __________________, known to me to be
a _______________ of Bankers Trust Company of California, N.A., 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]
EXHIBIT A
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS SEPTEMBER 29, 1997.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT ___% OF THE STANDARD PREPAYMENT
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT
PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $_____ OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $_______ PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
[NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
5.02(D) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE
THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.]
-2-
Certificate No. __ [_____%] [Adjustable][Variable] Pass-Through
Rate
Class A-__ Senior
Date of Pooling and Servicing Percentage Interest: ____%
Agreement and Cut-off Date:
September 1, 1997
First Distribution Date: Aggregate Initial [Certificate Principal Balance]
October 25, 1997 [Notional Amount] of the Class A-__ Certificates:
$____________
Master Servicer: Initial [Certificate Principal
Residential Funding Corporation Balance] [Notional Amount] of this Certificate:
$____________
Assumed Final CUSIP _________
Distribution Date:
September 25, 2027
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1997-3
evidencing a percentage interest in the distributions allocable to the
Class A-__ Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate first mortgage loans formed and sold by ICIFC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in ICIFC Secured
Assets Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by ICIFC
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that _____________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the Initial [Certificate Principal Balance] [Notional
Amount] of this Certificate by the aggregate Initial [Certificate Principal
Balance] [Notional Amount] of all Class A-___ Certificates, both as specified
above) in certain distributions with respect to the Trust Fund consisting
primarily of an interest in a pool of conventional one- to four-family fixed
interest rate first mortgage loans (the "Mortgage Loans"), formed and sold by
ICIFC Secured Assets Corp. (hereinafter called the "Company," which term
-3-
includes any successor entity under the Agreement referred to below). The Trust
Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Company, the 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, the capitalized terms used herein have the meanings
assigned 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 the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of [interest
and] [principal], if any, required to be distributed to Holders of Class A-__
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the
Master Servicer acting on behalf of the Trustee or by a Paying Agent appointed
by the Trustee in immediately available funds (by wire transfer or otherwise)
for the account of the Person entitled thereto if such Person shall have so
notified the Master Servicer or such Paying Agent, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice 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 in the City and State of New
York. The Initial [Certificate Principal Balance] [Notional Amount] of this
Certificate is set forth above. The [Certificate Principal Balance] [Notional
Amount] hereof will be reduced to the extent of distributions allocable to
principal and any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
-4-
As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Company and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein
provided, the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Company, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Company, the Master Servicer, the Trustee nor any such agent shall be affected
by notice to the contrary.
-5-
This Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer or
the Company from the Trust Fund of all remaining Mortgage Loans and all property
acquired in respect of such Mortgage Loans, thereby effecting early retirement
of the Certificates. The Agreement permits, but does not require, the Master
Servicer or the Company to (i) purchase at a price determined as provided in the
Agreement all remaining Mortgage Loans and all property acquired in respect of
any Mortgage Loan or (ii) purchase in whole, but not in part, all of the
Certificates from the Holders thereof; provided, that any such option may only
be exercised if the Pool Stated Principal Balance of the Mortgage Loans as of
the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance of
the Mortgage Loans.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
-6-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September 29, 1997 BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-__ Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Certificate Registrar
By:_______________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:______________________________
________________________________________________________________________________
Dated: ____________________________________________
Signature by or on behalf of assignor
___________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________________________ for
the account of ___________________________ account number _______________ , or,
if mailed by check, to ______________________________ Applicable statements
should be mailed to _____________________________________________.
This information is provided by ___________________, the
assignee named above, or _____________________________, as its agent.
EXHIBIT B-1
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, CLASS R CERTIFICATES AND CLASS M CERTIFICATES AS DESCRIBED IN THE
AGREEMENT (AS DEFINED HEREIN).
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
[NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(D) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE
OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS SEPTEMBER 29, 1997. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT 235% OF THE STANDARD PREPAYMENT ASSUMPTION (AS
DESCRIBED IN THE PROSPECTUS SUPPLEMENT), THIS CERTIFICATE HAS BEEN ISSUED WITH
NO MORE THAN $___ OF OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
THE YIELD TO MATURITY IS ____% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL
ACCRUAL PERIOD IS NO MORE THAN $____ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL
BALANCE, COMPUTED UNDER THE APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT
THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE STANDARD PREPAYMENT
ASSUMPTION OR AT ANY OTHER RATE.
-2-
Certificate No. __ _____ % Pass-Through Rate
Class B-__ Subordinate Aggregate Certificate
Principal Balance
of the Class B-__
Certificates as of
Date of Pooling and Servicing the Cut-off Date:
Agreement and Cut-off Date: $_______________
September 1, 1997
Initial Certificate Principal
Balance of this Certificate:
First Distribution Date: $_______________
October 25, 1997
Master Servicer:
Residential Funding Corporation
Assumed Final Distribution Date:
September 25, 2027
MORTGAGE PASS-THROUGH CERTIFICATE,
Series 1997-3
evidencing a percentage interest in any distributions allocable to the
Class B-__ Certificates with respect to the Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate first mortgage loans formed and sold by ICIFC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in ICIFC Secured
Assets Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by ICIFC
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that ICIFC Secured Assets Corp. is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the Certificate Principal Balance of this Certificate by
the aggregate Certificate Principal Balance of all Class B-__ Certificates, both
as specified above) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family fixed
interest rate first mortgage loans (the "Mortgage Loans"), formed and sold by
ICIFC Secured Assets Corp. (hereinafter called the "Company," which term
includes any successor entity under the Agreement referred to below). The Trust
Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified
-3-
above (the "Agreement") among the Company, the 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, the capitalized terms used herein have the meanings assigned 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 the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such last
day) of the month next preceding the month of such distribution (the "Record
Date"), from the Available Distribution Amount in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount (of
interest and principal, if any) required to be distributed to Holders of Class B
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the
Master Servicer acting on behalf of the Trustee or by a Paying Agent appointed
by the Trustee in immediately available funds (by wire transfer or otherwise)
for the account of the Person entitled thereto if such Person shall have so
notified the Master Servicer or such Paying Agent, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice 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 in the City and State of New
York. The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent of
the distributions allocable to principal and any Realized Losses allocable
hereto.
No transfer of this Class B Certificate will be made unless
such transfer is exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Trustee or the Company may require an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Company that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable
statute of any state and (ii) the transferee shall execute an investment letter
in the form described by the Agreement. The Holder hereof desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Company, the Master Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with such Federal and state laws. In
connection with any such transfer, the Trustee will also require either (i) an
opinion of counsel acceptable to and in form and substance satisfactory to the
Trustee, the Company and the Master Servicer with respect
-4-
to the permissibility of such transfer under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and Section 4975 of the Internal
Revenue Code (the "Code") and stating, among other things, that the transferee's
acquisition of a Class B Certificate will not constitute or result in a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code or (ii) a representation letter, in the form as described by the
Agreement, either stating that the transferee is not an employee benefit or
other plan subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code (a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
Plan, or stating that the transferee is an insurance company, the source of
funds to be used by it to purchase the Certificate is an "insurance company
general account" (within the meaning of Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60), and the purchase is being made in
reliance upon the availability of the exemptive relief afforded under Section
III of PTCE 95-60.
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Company and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein
provided, the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
-5-
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Company, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Company, the Master Servicer, the Trustee nor any such agent shall be affected
by notice to the contrary.
This Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer or
the Company from the Trust Fund of all remaining Mortgage Loans and all property
acquired in respect of such Mortgage Loans, thereby effecting early retirement
of the Certificates. The Agreement permits, but does not require, the Master
Servicer or the Company to (i) purchase at a price determined as provided in the
Agreement all remaining Mortgage Loans and all property acquired in respect of
any Mortgage Loan or (ii) purchase in whole, but not in part, all of the
Certificates from the Holders thereof; provided, that any such option may only
be exercised if the Pool Stated Principal Balance of the Mortgage Loans as of
the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance of
the Mortgage Loans.
-6-
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
-7-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:_______________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-__ Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Certificate Registrar
By:_______________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:______________________________
________________________________________________________________________________
Dated: ____________________________________________
Signature by or on behalf of assignor
___________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________ for the
account of _________________________ account number _____________, or, if
mailed by check, to ___________________________________ Applicable statements
should be mailed to __________________________________________________.
This information is provided by _________________, the
assignee named above, or ____________________, as its agent.
-1-
FORM OF CLASS M CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
CLASS A CERTIFICATES [AND CLASS M-1 CERTIFICATES] AS DESCRIBED IN THE
AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
[NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(D) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE
OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS SEPTEMBER 29, 1997.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT 235% OF THE STANDARD PREPAYMENT
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $ OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS % AND THE AMOUNT OF OID ATTRIBUTABLE
TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $
PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED
UNDER THE APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE STANDARD
PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.]
-2-
Certificate No. ___ ____% Pass-Through Rate
Class M- Subordinate Aggregate Certificate
Principal Balance
of the Class M Certificates:
Date of Pooling and Servicing $_______________
Agreement and Cut-off Date:
September 1, 1997 Initial Certificate Principal
Balance of this Certificate:
First Distribution Date: $_______________
October 25, 1997
CUSIP: ____________
Master Servicer:
Residential Funding Corporation
Assumed Final Distribution Date:
September 25, 2027
MORTGAGE PASS-THROUGH CERTIFICATE,
Series 1997-3
evidencing a percentage interest in any distributions allocable to the
Class M-__ Certificates with respect to the Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate first mortgage loans formed and sold by ICIFC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in ICIFC Secured
Assets Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by ICIFC
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that _________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the Certificate Principal Balance of this Certificate by
the aggregate Certificate Principal Balance of all Class M-__ Certificates, both
as specified above) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family fixed
interest rate first mortgage loans (the "Mortgage Loans"), formed and sold by
ICIFC Secured Assets Corp. (hereinafter called the "Company," which term
includes any successor entity under the Agreement referred to below). The Trust
Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Company, the Master Servicer and
Bankers Trust Company
-3-
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, the capitalized terms used herein have the meanings assigned 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 the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class M-__
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the
Master Servicer acting on behalf of the Trustee or by a Paying Agent appointed
by the Trustee in immediately available funds (by wire transfer or otherwise)
for the account of the Person entitled thereto if such Person shall have so
notified the Master Servicer or such Paying Agent, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice 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 in the City and State of New
York. The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent of
the distributions allocable to principal and any Realized Losses allocable
hereto.
No transfer of this Class M Certificate will be made unless
the Trustee has received either (i) an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee, the Company and the Master
Servicer with respect to the permissibility of such transfer under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and Section 4975 of
the Internal Revenue Code (the "Code") and stating, among other things, that the
transferee's acquisition of a Class M Certificate will not constitute or result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code or (ii) a representation letter, in the form as described by
the Agreement, either stating that the transferee is not an employee benefit or
other plan subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code (a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
Plan, or stating that the transferee is an insurance company, the source of
funds to be used by it to purchase the Certificate is an "insurance company
general account" (within the meaning of Department of Labor Prohibited
Transaction Class Exemption ("PTCE")
-4-
95-60), and the purchase is being made in reliance upon the availability of the
exemptive relief afforded under Section III of PTCE 95-60.
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Company and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein
provided, the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and
-5-
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of authorized denominations evidencing the same Class and
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Company, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Company, the Master Servicer, the Trustee nor any such agent shall be affected
by notice to the contrary.
This Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer or
the Company from the Trust Fund of all remaining Mortgage Loans and all property
acquired in respect of such Mortgage Loans, thereby effecting early retirement
of the Certificates. The Agreement permits, but does not require, the Master
Servicer or the Company to (i) purchase at a price determined as provided in the
Agreement all remaining Mortgage Loans and all property acquired in respect of
any Mortgage Loan or (ii) purchase in whole, but not in part, all of the
Certificates from the Holders thereof; provided, that any such option may only
be exercised if the Pool Stated Principal Balance of the Mortgage Loans as of
the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance of
the Mortgage Loans.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
-6-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:_________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-__ Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
as Certificate Registrar
By:_________________________________________
Authorized Signatory
-7-
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Mortgage Pass-Through Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:______________________________
________________________________________________________________________________
Dated: _________________________________________
Signature by or on behalf of assignor
_________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________ for the
account of _______________________ account number ____________ , or, if mailed
by check, to _____________________________________ Applicable statements should
be mailed to ___________________________________________.
This information is provided by __________________, the
assignee named above, or _______________________, as its agent.
EXHIBIT B-2
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED
BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(E) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE
COMPANY AND THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT (THE
"AGREEMENT").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
-2-
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
-3-
Certificate No. ___ _____% Pass-Through Rate
Class R Senior Aggregate Initial Certificate Principal
Balance of the Class R Certificates:
$100.00
Date of Pooling and Servicing Percentage Interest: ______%
Agreement and Cut-off Date:
September 1, 1997
First Distribution Date: Initial Certificate Principal
October 25, 1997 Balance of this Certificate:
$_______________
Master Servicer:
Residential Funding Corporation
Assumed Final Distribution Date: CUSIP ____________
September 25, 2027
MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-3
evidencing a percentage interest in any distributions allocable to the
Class R Certificates with respect to a Trust Fund consisting primarily
of a pool of conventional one- to four-family fixed interest rate first
mortgage loans formed and sold by ICIFC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in ICIFC Secured
Assets Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by ICIFC
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that _________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the aggregate Initial Certificate Principal Balance of all Class
R Certificates, both as specified above) in certain distributions with respect
to a Trust Fund, consisting primarily of a pool of conventional one- to
four-family fixed interest rate first mortgage loans (the "Mortgage Loans"),
formed and sold by ICIFC Secured Assets Corp. (hereinafter called the "Company,"
which term includes any successor entity under the Agreement referred to below).
-4-
The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") among the Company, the Master Servicer and
The First National Bank of Chicago, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned 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 the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class R
Certificates on such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice 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 in the City and State of New
York. The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
Notwithstanding the reduction of the Certificate Principal Balance hereof to
zero, this Certificate will remain outstanding under the Agreement and the
Holder hereof may have additional obligations with respect to this Certificate,
including tax liabilities, and may be entitled to certain additional
distributions hereon, in accordance with the terms and provisions of the
Agreement.
-5-
No transfer of this Class R Certificate will be made unless
the Trustee has received either (i) an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee, the Company and the Master
Servicer with respect to the permissibility of such transfer under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and Section 4975 of
the Internal Revenue Code (the "Code") and stating, among other things, that the
transferee's acquisition of a Class R Certificate will not constitute or result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code or (ii) a representation letter, in the form as described by
the Agreement, stating that the transferee is not an employee benefit or other
plan subject to the prohibited transaction provisions of ERISA or Section 4975
of the code (a "Plan"), or any other person (including an investment manager, a
named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Company and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein
provided, the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
-6-
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Company, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Company, the Master Servicer, the Trustee nor any such agent shall be affected
by notice to the contrary.
This Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer or
the Company from the Trust Fund of all remaining Mortgage Loans and all property
acquired in respect of such Mortgage Loans, thereby effecting early retirement
of the Certificates. The Agreement permits, but does not require, the Master
Servicer or the Company to (i) purchase at a price determined as provided in the
Agreement all remaining Mortgage Loans and all property acquired in respect of
any Mortgage Loan or (ii) purchase in whole, but not in part, all of the
Certificates from the Holders thereof; provided, that any such option may only
be exercised if the Pool Stated Principal Balance of the Mortgage Loans as of
the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance of
the Mortgage Loans.
-7-
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purpose have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
-8-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September 29, 1997 BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Certificate Registrar
By:________________________________________
Authorized Signatory
-9-
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: ___________________________________________
Signature by or on behalf of assignor
__________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________________________________ for the
account of ______________________ account number ______________, or, if mailed
by check, to______________________________________ Applicable statements should
be mailed to __________________________________________________________.
This information is provided by ____________________, the
assignee named above, or ____________________, as its agent.
-1-
EXHIBIT C
FORM OF TRUSTEE INITIAL CERTIFICATION
[Closing Date]
[Master Servicer]
[Depositor]
_____________________
_____________________
Re: Pooling and Servicing Agreement, dated as of September 1, 1997
among ICIFC Secured Assets Corp., ICI Funding Corporation and
Bankers Trust Company of California, N.A. Mortgage Pass-
Through Certificates, Series ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto) it has reviewed
the Mortgage File and the Mortgage Loan Schedule and has determined that: (i)
all documents required to be included in the Mortgage File are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan; and (iii) based on examination by
it, and only as to such documents, the information set forth in items (i) -
(vii), (xi) - (xiii), (xvi) and (xxi) of the definition or description of
"Mortgage Loan Schedule" is correct.
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 clause (vi) of Section
2.01 should be included in any Mortgage File. The Trustee makes no
representations as to and shall not be responsible to verify: (i) the validity,
legality, sufficiency, enforceability, due authorization, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan, or (iii) the existence of any assumption, modification, written assurance
or substitution agreement with respect to any Mortgage File if no such documents
appear in the Mortgage File delivered to the Trustee.
-2-
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:____________________________
-1-
EXHIBIT D
FORM OF TRUSTEE FINAL CERTIFICATION
[date]
[Master Servicer]
[Depositor]
_________________________
_________________________
Re: Pooling and Servicing Agreement, dated as of September 1, 1997
among ICIFC Secured Assets Corp., ICI Funding Corporation and
Bankers Trust Company of California, N.A. Mortgage Pass-
Through Certificates, Series ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (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.
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 clause (vi) of Section
2.01 should be included in any Mortgage File. The Trustee makes no
representations as to and shall not be responsible to verify: (i) the validity,
legality, sufficiency, enforceability, due authorization, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) the existence of any assumption, modification, written assurance
or substitution agreement with respect to any Mortgage File if no such documents
appear in the Mortgage File delivered to the Trustee.
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:______________________________
EXHIBIT E
[RESERVED]
EXHIBIT F-1
REQUEST FOR RELEASE
(for Trustee)
LOAN INFORMATION
Name of Mortgagor: _____________________________
Master Servicer
Loan No.: _____________________________
TRUSTEE
Name: _____________________________
Address: _____________________________
_____________________________
Trustee
Mortgage File No.: _____________________________
REQUEST FOR REQUESTING DOCUMENTS (check one):
1. Mortgage Loan Liquidated.
(The Master Servicer hereby certifies that all proceeds
of foreclosure, insurance or other liquidation have been
finally received and deposited into the Custodial Account
to the extent required pursuant to the Pooling and
Servicing Agreement.)
2. Mortgage Loan in Foreclosure.
3. Mortgage Loan Repurchased Pursuant to Section 9.01 of the Pooling
and Servicing Agreement.
4. Mortgage Loan Repurchased Pursuant to Article II of the Pooling
and Servicing Agreement.
(The Master Servicer hereby certifies that the repurchase
price has been deposited into the Custodial Account
pursuant to the Pooling and Servicing Agreement.)
5. Other (explain).
-2-
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from _____________________________________, as Trustee for the Holders
of Mortgage Pass- Through Certificates, Series 1997-3, 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 September 1, 1997 (the "Pooling and Servicing
Agreement"), among ICIFC Secured Assets Corp., ICI Funding Corporation and the
Trustee.
( ) Promissory 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 _____________.
( ) 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 ____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) _____________________________________________
( ) _____________________________________________
( ) _____________________________________________
( ) _____________________________________________
-3-
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall 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 knowingly
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 setoff to or against the Documents
or any proceeds thereof.
(3) The Master Servicer shall return each and every
Document previously requested from the Mortgage File to the
Trustee when the need therefor no longer exists, unless the
Mortgage Loan relating to the Documents has been liquidated and
the proceeds thereof have been remitted to the Custodial Account
and except as expressly provided in the Agreement.
(4) 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
Master Servicer's possession, custody or control.
ICI FUNDING CORPORATION
By:_________________________________
Its:________________________________
Date: _____________________, 19__
EXHIBIT F-2
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1997-3
______________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN
MADE.
LOAN NUMBER: _______________ BORROWER'S NAME:_____________
COUNTY:_____________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE CUSTODIAL ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
___________ ______________________ DATED:______________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
EXHIBIT G-1
FORM OF INVESTOR REPRESENTATION LETTER
________, 19__
[Depositor]
Bankers Trust Company of California, N.A.
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ICIFC Secured Assets Corp. Series 1997-3
Re: ICIFC Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 1997-3, Class __
Dear Sirs:
____________________ (the "Purchaser") intends to purchase
from (the "Seller") $ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 1997-3, Class (the "Certificates"), issued
pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of September 1, 1997 among ICIFC Secured Assets Corp. as
seller (the "Company"), ICI Funding Corporation, as master servicer, and Bankers
Trust Company, as trustee (the "Trustee"). All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
1. The Purchaser understands that (a) the
Certificates have not been and will not be registered or
qualified under the Securities Act of 1933, as amended (the
"Act") or any state securities law, (b) the Company is not
required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and
qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the
Certificates and (e) the Certificates will bear a legend to
the foregoing effect.
2. The Purchaser is acquiring the Certificates for
its own account for investment only and not with a view to or
for sale in connection with any distribution thereof in any
manner that would violate the Act or any applicable state
securities laws.
-2-
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such
matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor"
within the meaning of Rule 501(a) promulgated pursuant to the
Act.
4. The Purchaser has been furnished with, and has had
an opportunity to review (a) [a copy of the Private Placement
Memorandum, dated ___________________, 19__, relating to the
Certificates (b)] a copy of the Pooling and Servicing
Agreement and [b] [c] such other information concerning the
Certificates, the Mortgage Loans and the Company as has been
requested by the Purchaser from the Company or the Seller and
is relevant to the Purchaser's decision to purchase the
Certificates. The Purchaser has had any questions arising from
such review answered by the Company or the Seller to the
satisfaction of the Purchaser. [If the Purchaser did not
purchase the Certificates from the Seller in connection with
the initial distribution of the Certificates and was provided
with a copy of the Private Placement Memorandum (the
"Memorandum") relating to the original sale (the "Original
Sale") of the Certificates by the Company, the Purchaser
acknowledges that such Memorandum was provided to it by the
Seller, that the Memorandum was prepared by the Company solely
for use in connection with the Original Sale and the Company
did not participate in or facilitate in any way the purchase
of the Certificates by the Purchaser from the Seller, and the
Purchaser agrees that it will look solely to the Seller and
not to the Company with respect to any damage, liability,
claim or expense arising out of, resulting from or in
connection with (a) error or omission, or alleged error or
omission, contained in the Memorandum, or (b) any information,
development or event arising after the date of the
Memorandum.]
5. The Purchaser has not and will not nor has it
authorized or will it authorize any person to (a) offer,
pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any
offer to buy or to accept a pledge, disposition of other
transfer of any Certificate, any interest in any Certificate
or any other similar security from any person in any manner,
(c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in any
other manner or (e) take any other action, that (as to any of
(a) through (e) above) would constitute a distribution of any
Certificate under the Act, that would render the disposition
of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or
qualification pursuant thereto. The Purchaser will not sell or
otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing
Agreement.
-3-
[6. The Purchaser
(a) is not an employee benefit or other plan
subject to the prohibited transaction provisions of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") (a "Plan"), or any other person
(including an investment manager, a named fiduciary or a
trustee of any Plan) acting, directly or indirectly, on behalf
of or purchasing any Certificate with "plan assets" of any
Plan within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R. ss.2510.3- 101; or
(b) is an insurance company, the source of
funds to be used by it to purchase the Certificates is an
"insurance company general account" (within the meaning of DOL
Prohibited Transaction Class Exemption ("PTCE") 95-60), and
the purchase is being made in reliance upon the availability
of the exemptive relief afforded under Sections I and III of
PTCE 95-60; or
(c) has provided the Trustee, the Company
and the Master Servicer with an opinion of counsel acceptable
to and in form and substance satisfactory to the Trustee, the
Company and the Master Servicer to the effect that the
purchase of Certificates is permissible under applicable law,
will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will
not subject the Trustee, the Company or the Master Servicer to
any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in
addition to those undertaken in the Pooling and Servicing
Agreement.
In addition, the Purchaser hereby certifies, represents and
warrants to, and covenants with, the Company, the Trustee and the Master
Servicer that the Purchaser will not transfer such Certificates to any Plan or
person unless either such Plan or person meets the requirements set forth in
either (a), (b) or (c) above.
Very truly yours,
_______________________________________
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT G-2
Form of Transferor Representation Letter
__________, 19__
[Depositor]
Bankers Trust Company of California, N.A.
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ICIFC Secured Assets Corp. Series 1997-3
Re: ICIFC Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 1997-3, Class __
Dear Sirs:
In connection with the sale by ____________ (the "Seller") to
_______________ (the "Purchaser") of $___________ Initial Certificate Principal
Balance of Mortgage Pass-Through Certificates, Series 1997-3, Class ___ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of September 1, 1997 among ICIFC
Secured Assets Corp., as seller (the "Company"), ICI Funding Corporation, as
master servicer, and Bankers Trust Company of California, N.A., as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act in any manner set forth in the foregoing sentence with
-2-
respect to any Certificate. The Seller has not and will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
Very truly yours,
____________________________________________
(Seller)
By:_________________________________________
Name:_______________________________________
Title:______________________________________
EXHIBIT G-3
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
ICIFC Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 1997-3, Class ___, No. ___
The undersigned seller, as registered holder (the
"Transferor"), intends to transfer the Rule 144A Securities described above to
the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Transferor hereby certifies the following facts: Neither the Transferor nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with,
the Transferor, the Trustee and the Master Servicer pursuant to Section 5.02 of
the Pooling and Servicing Agreement as follows:
a. The Buyer understands that the Rule 144A
Securities have not been registered under the 1933 Act or the
securities laws of any state.
b. The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Rule 144A
Securities.
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Transferor, the Trustee or the Master Servicer.
-2-
d. Neither the Buyer nor anyone acting on its behalf
has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of the
1933 Act or require registration pursuant thereto, nor will it act, nor
has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the account of other qualified
institutional buyers, understands that such Rule 144A Securities may be
resold, pledged or transferred only (i) to a person reasonably believed
to be a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the 1933 Act.
3. The Buyer warrants and represents to, and covenants with,
the Transferor, the Servicer and the Depositor that either (1) the Buyer is not
an employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
(the "Code") (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer's
purchase of the Rule 144A Securities will not result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code.
4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
-3-
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
___________________________________ _________________________________
Print Name of Transferor Print Name of Buyer
By:________________________________ By:______________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No._________________________ No.___________________________
Date:_______________________ Date:_________________________
ANNEX 1 TO EXHIBIT G-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $______________________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ BANK. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statement, a copy of which is attached hereto.
___ SAVINGS AND LOAN. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements.
___ BROKER-DEALER. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
--------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
-2-
___ INSURANCE COMPANY. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State, territory or the District of
Columbia.
___ STATE OR LOCAL PLAN. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA PLAN. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ INVESTMENT ADVISER. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is 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.
___ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or
H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such
-3-
securities were not included if the Buyer is a majority-owned, consolidated
subsidiary of another enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party that at
the time is a "qualified institutional buyer" within the meaning of Rule 144A.
In addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
______________________________________
Print Name of Buyer
By: _______________________________
Name:
Title:
Date:_________________________________
ANNEX 2 TO EXHIBIT G-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other
than the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each
of the parties to which this certification is made are relying and will continue
to rely on the statements made herein
-2-
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
_________________________________________
Print Name of Buyer
By:_________________________________
Name:
Title:
IF AN ADVISER:
_________________________________________
Print Name of Buyer
Date:____________________________________
EXHIBIT G-4
Form of Transferor Certificates
____________, 19__
[Depositor]
Bankers Trust Company of California, N.A.
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ICIFC Secured Assets Corp. Series 1997-3
Re: ICIFC Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 1997-3, Class __
Dear Sirs:
This letter is delivered to you in connection with the sale by
___________________________ (the "Seller") to _____________________________ (the
"Purchaser") of a ___% Percentage Interest in the Mortgage Pass-Through
Certificates, Series
1997-3, Class R (the "Certificates"), issued pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of September 1, 1997, among ICIFC Secured Assets Corp., as seller (the
"Company"), ICI Funding Corporation, as master servicer, and Bankers Trust
Company of California, N.A., as trustee (the "Trustee"). All terms used herein
and not otherwise defined shall have the meaning set forth in the Pooling and
Servicing Agreement. The Seller hereby certifies, represents and warrants to,
and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the sale of the
Certificates by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee and the Master Servicer a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit G-3. The Seller does
not know or believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result
of that investigation, the Seller has determined that the Purchaser has
historically paid its debts as they have become due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Seller understands that the transfer of the
Certificates may not be respected for United States
-2-
income tax purposes (and the Seller may continue to be liable for United States
income taxes associated therewith) unless the Seller has conducted such an
investigation.
4. The Seller has no actual knowledge that the proposed Transferee
is a Disqualified Organization, an agent of a Disqualified Organization or a
Non-United States Person.
Very truly yours,
_____________________________________
(Seller)
By:______________________________
Name:_____________________________
Title:_____________________________
EXHIBIT G-5
TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
: ss.:
COUNTY OF )
___________________, being first duly sworn, deposes, represents
and warrants:
1. That he is [Title of Officer] of [Name of Owner], a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of ___________] [the United States], (the "Owner"), (record or beneficial
owner of the Class R Certificates on behalf of which he makes this affidavit and
agreement). This Class R Certificate was issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") dated as of
September 1, 1997 among ICIFC Secured Assets Corp., as depositor, ICI Funding
Corporation, as master servicer (the "Master Servicer"), and Bankers Trust
Company of California, N.A., as trustee (the "Trustee").
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) will
endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Class R Certificates, and (iii) is
acquiring the Class R Certificates for its own account or for the account of
another Owner from which it has received an affidavit and agreement in
substantially the same form as this affidavit and agreement. (For this purpose,
a "disqualified organization" means the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality all of the activities of which are subject to tax
and, except for the Federal Home Loan Mortgage Corporation, a majority of whose
board of directors is not selected by any such governmental entity) or any
foreign government, international organization or any agency or instrumentality
of such foreign government or organization, any rural electric or telephone
cooperative, or any organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such organization is subject
to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that the Class R Certificates may be "noneconomic
residual interests" within the meaning of Treasury regulations promulgated
pursuant
-2-
to the Code and that the transferor of a noneconomic residual interest will
remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class R Certificates if at any time during the taxable year of
the pass-through entity a disqualified organization is the record holder of an
interest in such entity. (For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. That the Owner is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.
6. That the Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(f) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event the Owner holds such Certificates in
violation of Section 5.02(f)). The Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.
8. The Owner's Taxpayer Identification Number is ______________.
9. This affidavit and agreement relates only to the Class R
Certificates held by the Owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R Certificates.
10. That no purpose of the Owner relating to the transfer of any of
the Class R Certificates by the Owner is or will be to impede the assessment or
collection of any tax.
11. That the Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R Certificate
that the Owner intends to pay taxes associated with holding such Class R
Certificate as they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class R Certificate.
-3-
12. That the Owner has no present knowledge or expectation that it
will become insolvent or subject to a bankruptcy proceeding for so long as any
of the Class R Certificates remain outstanding.
13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
14. (a) The Certificates (i) are not being acquired by, and will
not be transferred to, any employee benefit plan within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or other retirement arrangement, including individual retirement
accounts and annuities, ▇▇▇▇▇ plans and bank collective investment funds and
insurance company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101
or otherwise under ERISA, and (iii) will not be transferred to any entity that
is deemed to be investing in plan assets within the meaning of the DOL
regulation, 29 C.F.R. ss. 2510.3-101 or otherwise under ERISA; or
(b) The purchase of Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the Company, the Trustee or the
Master Servicer to any obligation in addition to those undertaken in the Pooling
and Servicing Agreement and, with respect to each source of funds ("Source")
being used by the Purchaser to acquire the Certificates, each of the following
statements are accurate: (a) the Purchaser is an insurance company; (b) the
Source is assets of the Purchaser's "general account;" (c) the conditions set
forth in Sections I and III of Prohibited Transaction Class Exemption ("PTCE")
95-60 issued by the DOL have been satisfied and the purchase, holding and
transfer of Certificates by or on behalf of the Purchaser are exempt under PTCE
95-60; and (d) the amount of reserves and liabilities for such general account
contracts held by or on behalf of any Plan do not exceed 10% of the total
reserves and liabilities of such general account plus surplus as of the date
hereof (for purposes of this clause, all Plans maintained by the same employer
(or affiliate thereof) or employee organization are deemed to be a single Plan)
in connection with its purchase and holding of such Certificates; or
(c) The Owner will provide the Trustee, the Company and the Master
Servicer with an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Company and the Master Servicer to the effect
that the purchase of Certificates is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Trustee, the Company or the
Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Pooling and Servicing Agreement.
-4-
In addition, the Owner hereby certifies, represents and warrants to, and
covenants with, the Company, the Trustee and the Master Servicer that the Owner
will not transfer such Certificates to any Plan or person unless either such
Plan or person meets the requirements set forth in either (a), (b) or (c) above.
Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
-5-
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this ____ day of ____________,
____.
[NAME OF OWNER]
By:___________________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
_________________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer],
known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and acknowledged to me
that such person executed the same as such person's free act and deed and the
free act and deed of the Owner.
Subscribed and sworn before me this ___ day of _____________, 19__.
_____________________________________
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the ____ day
of _______, 19__.
EXHIBIT G-6
FORM OF INVESTOR REPRESENTATION LETTER FOR INSURANCE COMPANIES
________, 199__
[Depositor]
Bankers Trust Company of California, N.A.
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ICIFC Secured Assets Corp. Series 1997-3
Re: ICIFC Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 1997-3, Class __
Dear Sirs:
_______________ (the "Purchaser") intends to purchase from
__________ (the "Seller") $____________ Initial Certificate Principal Balance of
Mortgage Pass-Through Certificates, Series 1997-3, Class __ (the "Certificate"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of September 1, 1997, among ICIFC Secured Assets
Corp., as seller (the "Company"), ICI Funding Corporation, as master servicer,
and Bankers Trust Company of California, N.A., as trustee (the "Trustee"). All
terms used herein and not otherwise defined shall have the meanings set forth in
the Pooling and Servicing Agreement. The Purchaser hereby certifies, represents
and warrants to, and covenants with, the Company and the Trustee that:
1. The Certificates purchased pursuant hereto will not be
transferred to any employee benefit plan or other retirement
arrangement including individual retirement accounts and ▇▇▇▇▇
plans that is subject to Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or Section 4975
of the Internal Revenue Code of 1986 (the "Code") (any of the
foregoing, a "Plan").
-1-
2. The Purchaser is an insurance company and the source of
funds used to purchase the Certificates is an "insurance company
general account" (as such term is defined in Prohibited Transaction
Class Exemption 95-60 issued by the U.S. Department of Labor ("PTCE
95-60") and there is no plan with respect to which the amount of
such general account's reserves and liabilities for the contract(s)
held by or on behalf of such Plan and all other plans maintained by
the same employer (or affiliate thereof as defined in PTCE 95-60)
or by the same employee organization, exceed 10% of the total of
all reserves and liabilities of such general account (as such
amounts are determined under PTCE 95-60) as of the date of
acquisition of such Certificates.
Very truly yours,
_________________________________
By:______________________________
Name:____________________________
Title:___________________________
-2-
EXHIBIT H
MORTGAGE LOAN SCHEDULE
EXHIBIT I
SELLER REPRESENTATIONS AND WARRANTIES
Seller's Representations Assigned by Depositor to Trustee
Representations and Warranties. Pursuant to the Mortgage Loan
Purchase Agreement, the Seller has made certain representations and warranties
to the Depositor. The Seller shall confirm such representations and warranties
and shall deliver a Seller's Warranty Certificate and an Officers' Certificate
on the Closing Date (i) reaffirming such representations and warranties and (ii)
specifically restating and reaffirming the following representations and
warranties as of such date. The following representations are, pursuant to the
Pooling and Servicing Agreement, assigned by the Depositor to the Trustee for
the benefit of the Certificateholders, together with the related repurchase
rights specified in the Mortgage Loan Purchase Agreement. Pursuant to the
Mortgage Loan Purchase Agreement, the Seller's Warranty Certificate and related
Officer's Certificate, the Seller affirms each such representation and warranty
and agrees, consents to and acknowledges the assignment thereof to the Trustee.
All capitalized terms herein shall have the meanings assigned in the Pooling and
Servicing Agreement and the Seller's Warranty Certificate, as applicable.
The Seller hereby represents and warrants to the Depositor and
Trustee, as to each Mortgage Loan, that as of the Closing Date or as of such
other date specifically provided herein:
(a) the information set forth in the Mortgage Loan Schedule hereto 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, (i) if required by law in the jurisdiction
where the Mortgaged Property is located, or (ii) to protect the
interests of the Trustee on behalf of the Certificateholders;
(c) except as otherwise set forth in the Mortgage Loan Schedule, the
Mortgage File for each Mortgage Loan contains a true and complete
copy of each of the documents contained in such Mortgage File,
including all amendments, modifications and, if applicable, waivers
and assumptions that have been executed in connection with such
Mortgage
Loan;
(d) immediately prior to the transfer to the Purchaser, the Seller was
the sole owner of beneficial title and holder of each Mortgage and
Mortgage Note relating to the Mortgage Loans and is conveying the
same free and clear of any and all liens, claims, encumbrances,
participation interests, equities, pledges, charges or security
interests of any nature and the Seller has full right and authority
to sell or assign the same pursuant to this Agreement;
(e) each Mortgage is a valid and enforceable first lien 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
-2-
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 and (iii) 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) no payment of principal of or interest on or in respect of any
Mortgage Loan is 30 or more days past due;
(g) 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;
(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, (ii)
no Mortgage Loan had been delinquent for 60 days or more during the
preceding 12 months and (iii) 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, defense or counterclaim to any Mortgage
Note or Mortgage, including the obligation of the Mortgagor to pay
the unpaid principal and interest on such Mortgage Note;
(j) to Seller's knowledge, 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 threatened for the total or partial
condemnation of any Mortgaged Property;
(k) to the best of Seller's knowledge, each Mortgage Loan at the time
it was made complied in all material respects with applicable state
and federal laws, including, without limitation, usury, equal
credit opportunity and disclosure laws; provided, however, that the
Seller makes no representation or warranty with respect to the
legality or illegality of any fees, overages, yield spread
premiums, servicing release premiums or back-end points that may
have been paid to a broker or brokers in connection with the any
Mortgage Loan; each Mortgage Loan is being serviced in all material
respects in accordance with applicable state and federal laws,
including, without limitation, usury, equal credit opportunity and
disclosure laws;
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(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 that each Mortgage Loan was created by a title
insurance company which, to the best of Seller's knowledge, was
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 first priority lien
on the related Mortgaged Property in the original principal amount
of the Mortgage Loan. Seller is the sole insured under such
lender's title insurance policy, and such policy, binder or
assurance is valid and remains 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 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) (i) the original principal amount of each Mortgage Loan is not more
than 95% of the Original Value; (ii) with the exception of Mortgage
Loans with an aggregate Cut-off Date Balance of approximately
$419,351, each Mortgage Loan for which the outstanding principal
balance 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 outstanding principal balance of such
Mortgage Loan is reduced below 80% of the Original Value or, based
upon a new appraisal, the principal balance of such Mortgage Loan
represents less than 80% of the new appraised value; (iii) each
Mortgage Loan originated under the Seller's "Progressive Express"
program for which the outstanding principal balance as of the
Cut-Off Date of the related Mortgage Note is between 80% and up to
and including 85% of the Original Value is covered by a Primary
Mortgage Insurance Policy in an amount equal to 22% of the Original
Value and for which the outstanding principal balance as of the
Cut-Off Date of the related Mortgage Note exceeded 85% of the
Original Value is covered by Primary Mortgage Insurance Policy in
an amount equal to 30% of the Original Value; and (iv) all of the
insurers which have Primary Mortgage Insurance Policies with
respect to the Mortgage Loans meet the Rating Agencies' standards.
Notwithstanding the foregoing, certain Mortgage Loans are not
covered by a Primary Mortgage Insurance Policy, and therefore,
0.13% of Mortgage Loans for which the outstanding principal as of
the Cut-Off Date of the related Mortgage Note exceeded 80% of the
Original Value are not covered by a Primary Mortgage Insurance
Policy as set forth in the preceding sentence. The weighted average
Loan-to- Value Ratio of the Mortgage Loans does not exceed 81.74%.
The percentage (by
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aggregate principal balance) of Mortgage Loans having Loan-to-Value
Ratios in excess of 80% does not exceed 51.36%;
(o) at the time of origination, each Mortgaged Property was the subject
of an appraisal which conforms to the originator's underwriting
requirements, and a 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 94.77% of the Mortgage
Loans (by aggregate principal balance) will be secured by Mortgages
on owner-occupied primary residence properties;
(q) 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;
(r) 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, to the best of Seller's knowledge, 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;
(s) to the extent required under applicable law, each conduit seller
and subsequent mortgagee or servicer of the Mortgage Loans was
authorized to transact and do business in the jurisdiction in which
the related Mortgaged Property is located at all times when it held
or serviced the Mortgage Loan; and any obligations of the holder of
the related Mortgage Note, Mortgage and other loan documents have
been complied with in all material respects; 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 the creation of such Mortgage Loan
and servicing was done by the Seller, its affiliates, or any third
party which created the Mortgage Loan on behalf of, or sold the
Mortgage Loan to, any of them, or any servicing agent of any of the
foregoing;
(t) 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, to
Seller's knowledge, there is no
-5-
homestead or other exemption available to the Mortgagor which would
interfere with such right to foreclosure;
(u) except with respect to holdbacks required by certain Mortgage Loans
which holdbacks create a fund for (i) the repair of Mortgaged
Property due to damage from adverse weather conditions, or (ii) the
completion of new construction, or both, the proceeds of the
Mortgage Loans have been fully disbursed, there is no requirement
for 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 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;
(v) as of the Closing Date, the improvements on each Mortgaged Property
securing a Mortgage Loan is insured (by an insurer which is
acceptable to the 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 the maximum insurable value of
the improvements securing such Mortgage Loan or the outstanding
principal balance of the 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 least of (i) the outstanding principal balance of the
Mortgage Loan, (ii) the restorable cost of improvements located on
such Mortgaged Property or (iii) the maximum coverage available
under federal law; and each Mortgage obligates the Mortgagor
thereunder to maintain the insurance referred to above at the
Mortgagor's cost and expense;
(w) 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 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 material default, breach or event of acceleration; no
foreclosure action is threatened or has been commenced with respect
to the Mortgage Loan;
(x) to Seller's knowledge, no Mortgagor, at the time of origination of
the applicable Mortgage, was a debtor in any state or federal
bankruptcy or insolvency proceeding;
(y) each Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union, insurance
company or similar institution which is
-6-
supervised and examined by a federal or State authority, or by a
mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National
Housing Act;
(z) 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;
(aa) to Seller's knowledge, the Mortgaged Property and all
improvements thereon comply with all requirements of any applicable zoning
and subdivision laws and ordinances;
(bb) 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;
(cc) except as otherwise provided in the Mortgage Loan
Schedule, no Mortgage Loan provides for a balloon payment and each Mortgage
Note 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;
(dd) 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;
(ee) 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, or an individual condominium
unit in a condominium project or a townhouse, or an individual unit in a
planned unit development.
(ff) 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 conforms with Progressive Loan
Series Program requirements regarding such dwellings or is covered by a
waiver confirming that such condominium unit or planned unit development is
acceptable to Seller.
(gg) as of the Cut-Off Date, the Net Mortgage Rate of each
Mortgage Loan was not more than 13.360% per annum and not less than 6.735%
per annum, and the weighted average Net Mortgage Rate of the Mortgage Loans
was approximately 8.726% per annum;
(hh) measured by principal balance, no more than 5.83% of the
Mortgage Loans are secured by an individual unit in a condominium project,
and at least 85.47% of the Mortgage
-7-
Loans are secured by real property with a detached single-family residence
erected thereon, including DE MINIMIS PUDs.
(ii) as of the Cut-Off Date, the remaining scheduled term of
each 30-Year Mortgage Loan is not more than 360 months and not less than
315 months;
(jj) as of the Cut-Off Date, no more than 12.70% (by aggregate
principal balance) of the Mortgage Loans are cash-out refinances;
(kk) as of the Cut-Off Date, no more than 10.92% (by aggregate
principal balance) of the Mortgage Loans are rate and term refinances;
(ll) as of the Cut-Off Date, no fewer than 76.38% (by
aggregate principal balance) of the Mortgage Loans are purchase money
loans;
(mm) as of the Cut-Off Date, no more than 32.13% of the
Mortgage Loans (by principal balance) are secured by properties located in
the state of California;
(nn) the original principal balances of the Mortgage Loans
ranged from approximately $22,750 to approximately $650,000. The maximum
outstanding principal balance of any Mortgage Loan as of the Cut-off Date
was approximately $650,000 and the average outstanding principal balance
was approximately $149,022.
(oo) with respect to Mortgaged Properties at the time of
origination of the related Mortgage Loans, measured by aggregate unpaid
principal balance as of the Cut-off Date, at least 94.77% of the Mortgaged
Properties are owner occupied primary residences, no more than 2.90% of the
Mortgaged Properties are second homes and approximately 2.33% of the
Mortgaged Properties are investor owned properties;
(pp) as of the Cut-off Date, approximately 94.46% (by
principal balance) of the Mortgage Loans are 30-Year Mortgage Loans;
(qq) as of the Cut-off Date, approximately 40.01% (by
principal balance) of the Mortgage Loans were originated under, or in
accordance with the standards of, Series I of the Progressive Loan Series
Program;
(rr) as of the Cut-off Date, approximately 3.74% (by principal
balance) of the Mortgage Loans were originated under, or in accordance with
the standards of, Series II of the
Progressive Loan Series Program;
(ss) as of the Cut-off Date, approximately 2.28% (by principal
balance) of the Mortgage Loans were originated under, or in accordance with
the standards of, Series III of the
Progressive Loan Series Program;
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(tt) as of the Cut-off Date, approximately 0.38% (by principal
balance) of the Mortgage Loans were originated under, or in accordance with
the standards of, Series III+ of the
Progressive Loan Series Program;
(uu) as of the Cut-off Date, approximately 0.06% (by principal
balance) of the Mortgage Loans, respectively, were originated under, or in
accordance with the standards of, Series IV of the Progressive Loan Series
Program;
(vv) as of the Cut-off Date, approximately 0.03% (by principal
balance) of the Mortgage Loans, respectively, were originated under, or in
accordance with the standards of, Series V of the Progressive Loan Series
Program;
(ww) as of the Cut-off Date, approximately 53.41% (by
principal balance) of the Mortgage Loans were originated under, or in
accordance with the standards of, the Progressive Express Loan Series
Program;
(xx) each Mortgage Loan constitutes a "qualified mortgage"
under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(yy) No selection procedure reasonably believed by the Seller
to be adverse to the interests of the Certificateholders was utilized in
selecting the Mortgage Loans; and
(zz) the Mortgage Loans in the aggregate conform to the
requirements of Duff & ▇▇▇▇▇▇ Credit Rating Co. for a 6.00% credit
enhancement level for the Class A Certificates.
EXHIBIT J
Form of Notice Under Section 3.24
________, 1997
[Trustee]
Re: MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-3
Pursuant to Section 3.25 of the Pooling and Servicing Agreement, dated
as of September 1, 1997, relating to the Certificates referenced above, the
undersigned does hereby notify you
that:
(a) The prepayment assumption used in pricing the Certificates was a
Constant Prepayment Rate ("CPR") of __% per annum.
(b) With respect to each Class of the captioned Certificates, set forth
below is (i), the first price, as a percentage of the Certificate Principal
Balance of each Class of Certificates, at which 10% of the aggregate Certificate
Principal Balance of each such Class of Certificates was first sold at a single
price, if applicable, or (ii) if more than 10% of a Class of Certificates have
been sold but no single price is paid for at least 10% of the aggregate
Certificate Principal Balance of such Class of Certificates, then the weighted
average price at which the Certificates of such Class were sold expressed as a
percentage of the Certificate Principal Balance of such Class of Certificates,
(iii) if less than 10% of the aggregate Certificate Principal Balance of a Class
of Certificates has been sold, the purchase price for each such Class of
Certificates paid by ▇▇▇▇▇▇ Brothers Inc. (the "Underwriter") expressed as a
percentage of the Certificate Principal Balance of such Class of Certificates
calculated by: (1) estimating the fair market value of each such Class of
Certificates as of September 29, 1997; (2) adding such estimated fair market
value to the aggregate purchase prices of each Class of Certificates described
in clause (i) or (ii) above; (3) dividing each of the fair market values
determined in clause (1) by the sum obtained in clause (2); (4) multiplying the
quotient obtained for each Class of Certificates in clause (3) by the purchase
price paid by the Underwriter for all the Certificates purchased by it; and (5)
for each Class of Certificates, dividing the product obtained from such Class of
Certificates in clause (4) by the
-2-
initial Principal Balance of such Class of Certificates or (iv) the fair market
value (but not less than zero) as of the Closing Date of each Certificate of
each Class of Certificates retained by the
Depositor or an affiliate corporation, or delivered to the seller:
Class A-1: _______________
Class A-2: _______________
Class A-3: _______________
Class A-4: _______________
Class A-5: _______________
Class A-6: _______________
Class A-7: _______________
Class A-8: _______________
Class A-9: _______________
Class A-10: _______________
Class B-1: _______________
Class B-2: _______________
Class B-3: _______________
Class M-1: _______________
Class M-2: _______________
Class M-3: _______________
Class R: _______________
The prices and values set forth above do not include accrued interest
with respect to periods before the closing.
ICIFC SECURED ASSETS CORP.
By:________________________________
Name:
Title:
EXHIBIT K
Schedule of Discount Fractions