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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 30, 1997
IMC Home Equity Loan Owner Trust 1997-8
(Exact name of registrant as specified in its charter)
Delaware 333-31197-03 Being Applied For
(State or Other Jurisdiction) (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
c/o Wilmington Trust Company, as Owner Trustee
1100 North Market Street
Wilmington, Delaware 19890
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (302) 651-1000
No Change
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Reference is hereby made to the Registration Statement on Form S-3
(Registration File No. 333-31197), as amended, filed by IMC Securities, Inc.
(the "Depositor") with the Securities and Exchange Commission (the "Commission")
on July 31, 1997, pursuant to which the Depositor registered $3,000,000,000
aggregate principal amount of its mortgage asset-backed certificates and notes,
issuable in various series, for sale in accordance with the provisions of the
Securities Act of 1933, as amended (the "Act"). Reference is also hereby made to
the Prospectus dated August 18, 1997, and the related Prospectus Supplement,
dated December 23, 1997, which were previously filed with the Commission
pursuant to Rule 424(b)(5), with respect to the IMC HOME EQUITY LOAN OWNER TRUST
1997-8 Adjustable Rate Home Equity Loan Asset Backed Notes, Series 1997-8 (the
"Notes").
The Notes were sold on December 30, 1997 to PaineWebber Incorporated,
as representative for the several underwriters pursuant to the terms of an
underwriting agreement dated December 23, 1997 (the "Underwriting Agreement")
among IMC Securities, Inc., the IMC Home Equity Loan Owner Trust 1997-8 (the
"Registrant" or the "Trust") and PaineWebber Incorporated, acting on its own
behalf and as a representative of Bear, Stearns & Co. Inc. A copy of the
Underwriting Agreement is filed herewith as Exhibit 1.1.
The Notes were issued pursuant to an Indenture dated as of December 1,
1997 (the "Indenture") between the Registrant and The Chase Manhattan Bank, as
Indenture Trustee. A copy of the Indenture is filed herewith as Exhibit 4.1.
The Notes are secured by the assets of the Trust pursuant to the
Indenture. The assets of the Trust primarily include a pool of adjustable rate
home equity loans (the "Home Equity Loans") secured by first lien mortgages or
deeds of trust on one-to-four family residential properties.
Beneficial interests in the Trust are represented by certificates
issued pursuant to the Owner Trust Agreement dated as of December 1, 1997 (the
"Trust Agreement") between the Depositor and Wilmington Trust Company, as Owner
Trustee. A copy of the Trust Agreement is filed herewith as Exhibit 4.2.
The Home Equity Loans were sold by IMC Mortgage Company (the
"Seller/Servicer") to the Depositor pursuant to the terms of a Loan Sale
Agreement dated as of December 1, 1997 (the "Loan Sale Agreement") and were
simultaneously sold by the Depositor to the Registrant pursuant to the Sale and
Servicing Agreement (defined below). A copy of the Loan Sale Agreement is filed
herewith as Exhibit 10.1.
The Home Equity Loans will be serviced by the Seller/Servicer pursuant
to the terms of a Sale and Servicing Agreement dated as of December 1, 1997 (the
"Sale and Servicing Agreement") among IMC Mortgage Company as Seller and
Servicer, the Depositor, the
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Registrant and The Chase Manhattan Bank as Indenture Trustee. A copy of the Sale
and Servicing Agreement is filed herewith as Exhibit 10.2
As of the Closing Date, the Home Equity Loans possessed the
characteristics described in the Prospectus dated August 18, 1997 and the
Prospectus Supplement dated December 23, 1997 filed pursuant to Rule 424(b)(5)
of the Act on December 30, 1997.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not applicable
(b) Not applicable
(c) Exhibits:
1.1 Underwriting Agreement dated December 23, 1997, among IMC
Securities, Inc., IMC Home Equity Loan Owner Trust 1997-8 and
PaineWebber Incorporated, acting on its own behalf and as a
representative of Bear, Stearns & Co. Inc.
4.1 Indenture, dated as of December 1, 1997, between IMC Home
Equity Loan Owner Trust 1997-8, as Issuer and The Chase
Manhattan Bank, as Indenture Trustee.
4.2 Owner Trust Agreement, dated as of December 1, 1997 between
IMC Securities, Inc., as Depositor, and Wilmington Trust
Company, as Owner Trustee.
10.1 Loan Sale Agreement, dated as of December 1, 1997 between IMC
Securities, Inc., as Depositor, and IMC Mortgage Company, as
Seller.
10.2 Sale and Servicing Agreement dated as of December 1, 1997,
among IMC Securities, Inc., as Depositor, IMC Home Equity Loan
Owner Trust 1997-8, as Issuer, IMC Mortgage Company, as Seller
and Servicer, and The Chase Manhattan Bank, as Indenture
Trustee.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IMC HOME EQUITY LOAN OWNER TRUST 1997-8
By: IMC SECURITIES, INC.,
as Depositor
By: /s/ Thomas Middleton
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Name: Thomas Middleton
Title: President and Chief
Operating Officer
Dated: January 12, 1998
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
1.1 Underwriting Agreement dated December 23, 1997, among
IMC Securities, Inc., IMC Home Equity Loan Owner Trust
1997-8 and PaineWebber Incorporated, acting on its own
behalf and as a representative of Bear, Stearns & Co.
Inc.
4.1 Indenture, dated as of December 1, 1997, between IMC
Home Equity Loan Owner Trust 1997-8, as Issuer and The
Chase Manhattan Bank, as Indenture Trustee.
4.2 Owner Trust Agreement, dated as of December 1, 1997
between IMC Securities, Inc., as Depositor, and Wilmington
Trust Company, as Owner Trustee.
10.1 Loan Sale Agreement, dated as of December 1, 1997
between IMC Securities, Inc., as Depositor and IMC
Mortgage Company, as Seller.
10.2 Sale and Servicing Agreement dated as of December 1,
1997, among IMC Securities, Inc., as Depositor, IMC Home
Equity Loan Owner Trust 1997-8, as Issuer, IMC Mortgage
Company, as Seller and Servicer, and The Chase Manhattan
Bank, as Indenture Trustee.
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EXECUTION COPY
$307,785,257
IMC HOME EQUITY LOAN OWNER TRUST 1997-8
Adjustable Rate Home Equity Loan Asset Backed Notes,
Series 1997-8
UNDERWRITING AGREEMENT
December 23, 1997
PAINEWEBBER INCORPORATED
As representative of the several underwriters
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
IMC Securities, Inc. (the "Depositor"), a Delaware corporation, has
authorized (i) the creation of IMC Home Equity Loan Owner Trust 1997-8, a
Delaware business trust (the "Issuer"), pursuant to the Owner Trust Agreement,
dated as of December 1, 1997 (the "Trust Agreement"), between the Depositor and
Wilmington Trust Company ("Wilmington Trust"), as owner trustee (the "Owner
Trustee") and (ii) the issuance and sale of $307,785,257 aggregate original
principal amount of the Issuer's Adjustable Rate Home Equity Loan Asset Backed
Notes Series 1997-8 (the "Notes"). The Notes will evidence non-recourse
obligations of, and will be issued by, the Issuer pursuant to the terms of the
Indenture, dated as of December 1, 1997 (the "Indenture"), between the Issuer
and The Chase Manhattan Bank, as indenture trustee (the "Indenture Trustee").
Pursuant to the Trust Agreement, the Issuer also will issue certificates
evidencing the residual interest in the Issuer (the "Residual Interest"). The
Residual Interest and the Notes are sometimes collectively referred to as the
"Securities."
The Notes will be secured by a trust estate (the "Trust Estate")
consisting primarily of a pool of adjustable-rate home equity loans secured by
mortgages or deeds of trust creating first and second liens on primarily one- to
four-family residential properties (the "Home Equity Loans") and such amounts as
may be held by the Indenture Trustee in any accounts for the Owners. The Notes
will be secured by the Home Equity Loans in an amount of $307,785,257 as of the
close of business on December 1, 1997 (the "Cut-Off Date"). The Home Equity
Loans will be sold by IMC Mortgage Company, ("IMC") to the Depositor pursuant to
the Loan Sale Agreement, dated as of December 1, 1997 (the "Loan Sale
Agreement") between IMC and the Depositor, and by the Depositor to the Issuer
pursuant to the Sale and Servicing Agreement, dated as of December 1, 1997 (the
"Sale and Servicing Agreement"), among IMC, as seller
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(the "Seller") and as servicer (the "Servicer"), the Depositor, the Indenture
Trustee and the Issuer. Pursuant to the Sale and Servicing Agreement, the
Servicer will service the Home Equity Loans on behalf of the Issuer.
The Notes will have the benefit of a financial guaranty insurance
policy (the "Insurance Policy") issued by MBIA Insurance Corporation (the "Note
Insurer"), issued pursuant to the Insurance Agreement, dated as of December 1,
1997 (the "Insurance Agreement") among the Seller, the Servicer, the Depositor,
the Indenture Trustee and the Note Insurer. The Note Insurer, the Seller, the
Depositor, PaineWebber Incorporated and Bear, Stearns & Co. Inc., as
Underwriters, also will enter into an Indemnification Agreement, dated as of
December 23, 1997 (the "Indemnification Agreement"). This Agreement, the Trust
Agreement, the Sale and Servicing Agreement, the Indenture, the Indemnification
Agreement, the Loan Sale Agreement and the Insurance Agreement are sometimes
referred to herein collectively as the "Agreements". A form of each of the Trust
Agreement, the Indenture and the Sale and Servicing Agreement has been filed as
an exhibit to the Registration Statement (hereinafter defined).
The Notes are more fully described in a Registration Statement which the
Depositor has furnished to the Underwriters. Capitalized terms used but not
defined herein shall have the meanings given to them in the Agreements.
The Notes are being purchased by the Underwriters named in Schedule A
hereto (the "Underwriters"), and the Underwriters are purchasing, severally,
only the Notes set forth opposite their names in Schedule A, except that the
amounts purchased by the Underwriters may change in accordance with Section 10
of this Agreement. PaineWebber Incorporated (the "Representative") is acting for
itself and as representative of the other Underwriters.
SECTION 1 Representations and Warranties of the Depositor. The Depositor
represents and warrants to, and agrees with the Underwriters that:
A. A Registration Statement on Form S-3 (No. 333-31197) has (i) been
prepared by the Depositor in conformity with the requirements of the
Securities Act of 1933 (the "Securities Act"), the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and the rules and regulations
(the "Rules and Regulations") of the United States Securities and Exchange
Commission (the "Commission") under the Securities Act and the Trust
Indenture Act, (ii) been filed with the Commission under the Securities
Act and (iii) become effective under the Securities Act. Copies of such
Registration Statement have been delivered by the Depositor to the
Underwriters. As used in this Agreement, "Effective Time" means the date
and the time as of which such Registration Statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time;
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"Registration Statement" means such registration statement, at the
Effective Time, including any documents incorporated by reference therein
at such time; and "Basic Prospectus" means such final prospectus dated
August 18, 1997; and "Prospectus Supplement" means the final prospectus
supplement relating to the Notes, to be filed with the Commission pursuant
to paragraph (2), (3) or (5) of Rule 424(b) of the Rules and Regulations.
"Prospectus" means the Basic Prospectus together with the Prospectus
Supplement. Reference made herein to the Prospectus shall be deemed to
refer to and include any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, as of the date
of the Prospectus and any reference to any amendment or supplement to the
Prospectus shall be deemed to refer to and include any document filed
under the Securities Exchange Act of 1934 (the "Exchange Act") after the
date of the Prospectus, and incorporated by reference in the Prospectus
and any reference to any amendment to the Registration Statement shall be
deemed to include any report of the Depositor filed with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act after the Effective
Time that is incorporated by reference in the Registration Statement. The
Commission has not issued any order preventing or suspending the use of
the Prospectus. There are no contracts or documents of the Depositor which
are required to be filed as exhibits to the Registration Statement
pursuant to the Securities Act, the Rules and Regulations or the Trust
Indenture Act which have not been so filed or incorporated by reference
therein on or prior to the Effective Date of the Registration Statement
other than such documents or materials, if any, as any Underwriter
delivers to the Depositor pursuant to Section 8(D) hereof for filing on
Form 8-K. The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
B. The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus
will, when they become effective or are filed with the Commission, as the
case may be, conform in all respects to the requirements of the Securities
Act, the Trust Indenture Act and the Rules and Regulations. The
Registration Statement, as of the Effective Date thereof and of any
amendment thereto, did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus as
of its date, and as amended or supplemented as of the Closing Date, does
not and will not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Depositor in writing by the Underwriters expressly for
use therein. The only information furnished by the Underwriters or on
behalf of the Underwriters for use in connection with the preparation of
the Registration Statement or the Prospectus is described in Section 8(I)
hereof.
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C. The documents incorporated by reference to the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that no representation is made as to documents deemed to be
incorporated by reference in the Prospectus as the result of filing a Form
8-K at the request of the Underwriters except to the extent such documents
reflect information furnished by the Depositor to the Underwriters for the
purpose of preparing such documents.
D. Since the respective dates as of which information is given in the
Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition, or results of operations of the
Depositor, otherwise than as set forth or contemplated in the Prospectus
as supplemented or amended as of the Closing Date.
E. The Depositor has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
is in good standing as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the conduct of its business requires
such qualification, and has all power and authority necessary to own or
hold its properties, to conduct the business in which it is engaged and to
enter into and perform its obligations under each Agreement to which it is
a party and to cause the Securities to be issued.
F. There are no actions, proceedings or investigations pending with
respect to which the Depositor has received service of process before or
threatened by any court, administrative agency or other tribunal to which
the Depositor is a party or of which any of its properties is the subject
(a) which if determined adversely to the Depositor would have a material
adverse effect on the business or financial condition of the Depositor,
(b) asserting the invalidity of any of the Agreements or the Securities,
(c) seeking to prevent the issuance of the Securities or the consummation
by the Depositor of any of the transactions contemplated by the
Agreements, or (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, the Agreements or the Securities.
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G. This Agreement has been, and each other Agreement to which the
Depositor is a party when executed and delivered as contemplated hereby
and thereby will have been, duly authorized, executed and delivered by the
Depositor, and this Agreement constitutes, and each such other Agreement
when executed and delivered as contemplated herein, will constitute,
legal, valid and binding instruments enforceable against the Depositor in
accordance with their respective terms, subject as to enforceability to
(x) applicable bankruptcy, reorganization, insolvency moratorium or other
similar laws affecting creditors' rights generally, (y) general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and (z) with respect to rights of indemnity under this
Agreement and the Indemnification Agreement, limitations of public policy
under applicable securities laws.
H. The execution, delivery and performance of each Agreement to which the
Depositor is a party and the consummation of the transactions contemplated
hereby and thereby, and the issuance and delivery of the Notes do not and
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Depositor is a party, by which the Depositor is bound or to
which any of the properties or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a material
adverse effect on the business, operations or financial condition of the
Depositor, nor will such actions result in any violation of the provisions
of the articles of incorporation or by-laws of the Depositor or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Depositor or any of its
properties or assets, which breach or violation would have a material
adverse effect on the business, operations or financial condition of the
Depositor.
I. The Depositor has no reason to believe that Coopers & Lybrand L.L.P.
are not independent public accountants with respect to the Depositor as
required by the Securities Act and the Rules and Regulations.
J. The direction by the Depositor to the Owner Trustee to execute, issue
and deliver and the direction by the Depositor to the Indenture Trustee to
authenticate the Notes has been duly authorized by the Depositor, and
assuming the Owner Trustee and the Indenture Trustee have been duly
authorized to do so, when executed, authenticated, issued and delivered in
accordance with the Indenture, the Notes will be validly issued and
outstanding and will be entitled to the benefits provided by the
Indenture.
K. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the
United States is required for the issuance of the Securities and the sale
of the Notes to the Underwriters, or the consummation by the Depositor of
the other transactions contemplated by the
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Agreements except such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or blue sky
laws in connection with the purchase and distribution of the Notes by the
Underwriters or as have been obtained.
L. The Depositor possesses all material licenses, certificates,
authorities or permits issued by the appropriate State, Federal or foreign
regulatory agencies or bodies necessary to conduct the business now
conducted by it and as described in the Prospectus, and the Depositor has
not received notice of any proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which
if decided adversely to the Depositor would, singly or in the aggregate,
materially and adversely affect the conduct of its business, operations or
financial condition.
M. At the time of execution and delivery of the Sale and Servicing
Agreement, the Depositor will: (i) have good title to the Home Equity
Loans conveyed by the Seller, free and clear of any lien, mortgage,
pledge, charge, encumbrance, adverse claim or other security interest
(collectively, "Liens"); (ii) not have assigned to any person any of its
right or title in the Home Equity Loans, in the Sale and Servicing
Agreement or in the Notes being issued pursuant to the Indenture and (iii)
have the power and authority to sell its interest in the Home Equity Loans
to the Issuer and to sell the Notes to the Underwriters. Upon execution
and delivery of the Sale and Servicing Agreement by the Issuer, the Issuer
will have acquired beneficial ownership of all of the Depositor's right,
title and interest in and to the Home Equity Loans. Upon execution and
delivery of the Indenture by the Issuer and the Indenture Trustee, the
Indenture Trustee will have a valid and perfected security interest in the
Trust Estate free of any other Liens. Upon delivery to the Underwriters of
the Notes, the Underwriters will have good title to the Notes, free of any
Liens.
N. [RESERVED]
O. As of the Cut-Off Date, each of the Home Equity Loans will meet the
eligibility criteria described in the Prospectus and will conform to the
descriptions thereof contained in the Prospectus.
P. [RESERVED]
Q. Neither the Depositor nor the Issuer is an "investment company" within
the meaning of such term under the Investment Company Act of 1940 (the
"1940 Act") and the rules and regulations of the Commission thereunder.
R. At the Closing Date, the Notes and each Agreement will conform in all
material respects to the descriptions thereof contained in the Prospectus.
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S. At the Closing Date, the Notes shall have been rated in the respective
rating categories by the nationally recognized rating agencies, as
described in the Prospectus Supplement under "Ratings".
T. Any taxes, fees and other governmental charges in connection with the
execution, delivery and issuance of each Agreement and the Securities have
been paid or will be paid at or prior to the Closing Date.
U. At the Closing Date, each of the representations and warranties of the
Depositor set forth in each Agreement to which it is a party will be true
and correct in all material respects.
Any certificate signed by an officer of the Depositor and delivered to an
Underwriter or counsel for the Underwriters in connection with an offering of
the Notes shall be deemed, and shall state that it is, a representation and
warranty as to the matters covered thereby to each person to whom the
representations and warranties in this Section 1 are made.
SECTION 2 Purchase and Sale. The commitment of the Underwriters to
purchase the Notes pursuant to this Agreement shall be deemed to have been made
on the basis of the representations and warranties herein contained and shall be
subject to the terms and conditions herein set forth. The Depositor agrees to
instruct the Issuer to issue the Notes and agrees to sell to each Underwriter,
and each Underwriter agrees (except as provided in Sections 10 and 11 hereof)
severally and not jointly to purchase from the Depositor the aggregate initial
principal amounts of the Notes set forth opposite their names on Schedule A, at
the purchase price or prices set forth in Schedule A. The Underwriters may offer
the Notes to certain dealers at such price less a concession not in excess of
the amount set forth in Schedule A. The Underwriters may allow and such dealers
may reallow a discount to certain dealers not in excess of the amount set forth
in Schedule A.
SECTION 3 Delivery and Payment. Delivery of and payment for the Notes to
be purchased by the Underwriters shall be made at the offices of Stroock &
Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038, or at such other
place as shall be agreed upon by the Representative and the Depositor at 10:00
A.M. New York City time on December 30, 1997, or at such other time or date as
shall be agreed upon in writing by the Representative and the Depositor (such
date being referred to as the "Closing Date"). Payment shall be made to the
Depositor by wire transfer of same day funds payable to the account of the
Depositor. Delivery of the Notes shall be made to the Representative for the
accounts of the applicable Underwriters against payment of the purchase price
thereof. The Notes shall be in such authorized denominations and registered in
such names as the Representative may request in writing at least two business
days prior to the Closing Date. The Notes will be made available for examination
by the Representative no later than 2:00 P.M. New York City time on the first
business day prior to the Closing Date.
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SECTION 4 Offering by the Underwriters. It is understood that, subject to
the terms and conditions hereof, the Underwriters propose to offer the Notes for
sale to the public as set forth in the Prospectus.
SECTION 5 Covenants of the Depositor and IMC. The Depositor and, to the
extent the provisions of Section I. below relate to IMC, IMC each agrees as
follows:
A. To prepare the Prospectus in a form approved by the Underwriters and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business day
following the availability of the Prospectus to the Underwriters to make
no further amendment or any supplement to the Registration Statement or to
the Prospectus prior to the Closing Date except as permitted herein; to
advise the Underwriters, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or
becomes effective prior to the Closing Date or any supplement to the
Prospectus or any amended Prospectus has been filed prior to the Closing
Date and to furnish the Underwriters with copies thereof; to file promptly
all reports and any definitive proxy or information statements required to
be filed by the Depositor with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and, for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Notes; to promptly advise the
Underwriters of its receipt of notice of the issuance by the Commission of
any stop order or of: (i) any order preventing or suspending the use of
the Prospectus; (ii) the suspension of the qualification of the Notes for
offering or sale in any jurisdiction; (iii) the initiation of or threat of
any proceeding for any such purpose; (iv) any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information. In the event of the issuance of
any stop order or of any order preventing or suspending the use of the
Prospectus or suspending any such qualification, the Depositor promptly
shall use its best efforts to obtain the withdrawal of such order by the
Commission.
B. To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and of each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriters such number of the following
documents as the Underwriters shall reasonably request: (i) conformed
copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case including exhibits);
(ii) the Prospectus and any amended or supplemented Prospectus; and (iii)
any document incorporated by reference in the Prospectus (including
exhibits thereto). If the delivery of a prospectus is required at any
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time prior to the expiration of nine months after the Effective Time in
connection with the offering or sale of the Notes, and if at such time any
events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, the Depositor shall notify the
Underwriters and, upon the Underwriters' request, shall file such document
and prepare and furnish without charge to the Underwriters and to any
dealer in securities as many copies as the Underwriters may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which corrects such statement or omission or effects such
compliance, and in case the Underwriters are required to deliver a
Prospectus in connection with sales of any of the Notes at any time nine
months or more after the Effective Time, upon the request of the
Underwriters but at their expense, the Depositor shall prepare and deliver
to the Underwriters as many copies as the Underwriters may reasonably
request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Securities Act.
D. To file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may,
in the judgment of the Depositor or the Underwriters, be required by the
Securities Act, the Trust Indenture Act or requested by the Commission.
E. The Depositor will cause any Computational Materials (as defined below)
with respect to the Offered Certificates which are delivered by any
Underwriter to the Depositor to be filed with the Commission on a Current
Report on Form 8-K (the "Form 8-K -- Computational Materials") at or
before the time of filing of the Prospectus pursuant to Rule 424(b) under
the 1933 Act; provided, however, that the Depositor shall have no
obligation to file any materials which, in the reasonable determination of
the Depositor after consultation with such Underwriter, (i) are not
required to be filed pursuant to the Kidder Letters (as defined below) or
(ii) contain any erroneous information or untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; it being
understood, however, that the Depositor shall have no obligation to review
or pass upon the accuracy or adequacy of, or to correct, any Computational
Materials provided by any Underwriter to the Depositor as aforesaid. For
purposes hereof, as to each Underwriter, the term "Computational
Materials" shall mean those materials delivered by an Underwriter to the
Depositor within the meaning of the no-action letter dated May 20, 1994
issued by the Division of Corporation Finance of the Commission to Kidder,
Peabody Acceptance Corporation I and certain affiliates and the no-action
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letters dated May 27, 1994 and February 17, 1995, each issued by the
Division of Corporation Finance of the Commission to the Public Securities
Association (all three of such letters, the "Kidder Letters") for which
the filing of such material is a condition of the relief granted in such
letters.
F. To furnish the Underwriters and counsel for the Underwriters, prior to
filing with the Commission, and to obtain the consent of the Underwriters
for the filing of the following documents relating to the Notes: (i)
amendment to the Registration Statement or supplement to the Prospectus,
or document incorporated by reference in the Prospectus, or (ii)
Prospectus pursuant to Rule 424 of the Rules and Regulations.
G. To make generally available to holders of the Notes as soon as
practicable, but in any event not later than 90 days after the close of
the period covered thereby, a statement of earnings of the Issuer (which
need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the Depositor,
Rule 158) and covering a period of at least twelve consecutive months
beginning not later than the first day of the first fiscal quarter
following the Closing Date.
H. To use its best efforts, in cooperation with the Underwriters, to
qualify the Notes for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States or
elsewhere as the Underwriters may designate, and maintain or cause to be
maintained such qualifications in effect for as long as may be required
for the distribution of the Notes. The Depositor will file or cause the
filing of such statements and reports as may be required by the laws of
each jurisdiction in which the Notes have been so qualified.
I. Unless the Underwriters shall otherwise have given their written
consent, no pass-through certificates or debt instruments backed by home
equity loans or other similar securities representing interest in or
secured by other mortgage-related assets originated or owned by the
Depositor or IMC shall be publicly offered, sold nor shall the Depositor
or IMC enter into any contractual arrangements that contemplate the public
offering or sale of such securities for a period of seven (7) business
days following the commencement of the offering of the Notes to the
public.
J. So long as the Notes shall be outstanding the Depositor shall cause the
Indenture Trustee, pursuant to the Sale and Servicing Agreement, to
deliver to the Underwriters as soon as such statements are furnished to
the Owners: (i) the annual statement as to compliance delivered to the
Indenture Trustee pursuant to Section 4.16 of the Sale and Servicing
Agreement; (ii) the annual statement of a firm of independent public
accountants furnished to the Indenture Trustee pursuant to Section 4.17 of
the Sale and Servicing Agreement; (iii) the monthly servicing report
furnished to the Trustee
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pursuant to Section [3.08] of the Sale and Servicing Agreement; and (iv)
the monthly reports furnished to the Noteholders pursuant to Section 3.09
of the Indenture.
K. To apply the net proceeds from the sale of the Notes in the manner set
forth in the Prospectus.
SECTION 6 Conditions to the Underwriters' Obligations. The obligations of
the Underwriters to purchase the Notes pursuant to this Agreement are subject
to: (i) the accuracy on and as of the Closing Date of the representations and
warranties on the part of the Depositor and IMC herein contained; (ii) the
performance by the Depositor of all of its obligations hereunder; and (iii) the
following conditions as of the Closing Date:
A. The Underwriters shall have received confirmation of the effectiveness
of the Registration Statement. No stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or threatened
by the Commission. Any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus
shall have been complied with.
B. The Underwriters shall not have discovered and disclosed to the
Depositor on or prior to the Closing Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact or omits to state a fact which, in the opinion
of Stroock & Stroock & Lavan LLP, counsel for the Underwriters, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
C. All corporate proceedings and other legal matters relating to the
authorization, form and validity of the Agreements, the Issuer, the Notes,
the Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be satisfactory in all respects to the Underwriters and their counsel, and
the Depositor shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
D. Arter & Hadden shall have furnished to the Underwriters their written
opinion, as counsel to the Depositor, addressed to the Underwriters and
dated the Closing Date, in form and substance satisfactory to the
Underwriters, to the effect that:
1. The conditions to the use by the Depositor of a registration
statement on Form S-3 under the Securities Act, as set forth in the
General Instructions to Form S-3, have been satisfied with respect
to the Registration Statement and the Prospectus.
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<PAGE> 12
2. The Registration Statement and any amendments thereto have become
effective under the Securities Act; to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or threatened and
not terminated; and the Registration Statement, the Prospectus and
each amendment or supplement thereto, as of their respective
effective or issue dates (other than the financial and statistical
information contained therein, as to which such counsel need express
no opinion), complied as to form in all material respects with the
applicable requirements of the Securities Act and the rules and
regulations thereunder.
3. To the best of such counsel's knowledge, there are no material
contracts, indentures or other documents of a character required to
be described or referred to in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
4. The statements set forth in the Basic Prospectus under the
captions "Description of The Securities", "Servicing of Mortgage
Loan" and "The Indenture" and in the Prospectus Supplement under the
captions "Description of the Notes" and "Administration," to the
extent such statements purport to summarize certain provisions of
the Notes or of the Agreements, are fair and accurate in all
material respects.
5. The statements set forth in the Prospectus and the Prospectus
Supplement under the captions "ERISA Considerations" and "Federal
Income Tax Consequences" to the extent that they constitute matters
of federal law, provide a fair and accurate summary of such law or
conclusions.
6. The Agreements conform in all material respects to the
descriptions thereof contained in the Prospectus. The Indenture has
been duly qualified under the Trust Indenture Act of 1939, as
amended and complies with the requirements of the Trust Indenture
Act and the applicable Rules and Regulations.
7. Neither the Depositor nor the Issuer is an "investment company"
or under the "control" of an "investment company" as such terms are
defined in the 1940 Act.
8. For federal income tax purposes, the Notes will be treated as
debt obligations of the Issuer, and the Issuer will not be
characterized as an association (or publicly traded partnership)
taxable as a corporation.
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<PAGE> 13
9. The Notes will, when issued, conform to the descriptions thereof
contained in the Prospectus.
10. The Notes, when duly and validly executed, authenticated and
delivered in accordance with the Indenture and delivered to the
Underwriters and paid for in accordance with the Underwriting
Agreement, will be entitled to the benefits of the Indenture
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the closing Date, in
form and substance satisfactory to the Underwriters to the effect that no
facts have come to the attention of such counsel which lead them to
believe that: (a) the Registration Statement, at the time such
Registration Statement became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (except
as to financial or statistical data contained in the Registration
Statement); (b) the Prospectus, as of its date and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; or (c) any document
incorporated by reference in the Prospectus or any further amendment or
supplement to any such incorporated document made by the Depositor prior
to the Closing Date contained, as of the time it became effective or was
filed with the Commission, as the case may be, an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
E. The Underwriters shall have received the favorable opinion, dated the
Closing Date, of Arter & Hadden, special counsel to the Depositor,
addressed to the Depositor and satisfactory to Standard & Poor's, a
division of the McGraw-Hill Companies, Moody's Investors Service, Inc. and
the Underwriters, with respect to certain matters relating to the transfer
of the Home Equity Loans to the Depositor and from the Depositor to the
Issuer, and such counsel shall have consented to the reliance on such
opinion by Standard & Poor's, a division of the McGraw-Hill Companies,
Moody's Investors Service, Inc. and the Underwriters as though such
opinion had been addressed to each such party.
F. Mitchell W. Legler, P.A., special counsel for IMC, in IMC's capacity as
both Seller and Servicer under the Sale and Servicing Agreement, shall
have furnished to the Underwriters their written opinion, addressed to the
Underwriters and the Depositor and dated the Closing Date, in form and
substance satisfactory to the Underwriters, to the effect that:
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<PAGE> 14
1. IMC has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Florida
and has duly authorized all actions contemplated hereby.
2. IMC has full power and authority to serve in the capacity of
seller and servicer of the Home Equity Loans as contemplated in the
Sale and Servicing Agreement and to transfer the Home Equity Loans
to the Depositor as contemplated in the Loan Sale Agreement and has
the requisite power and authority and legal right to own the
Residual Interest.
3. This Agreement, the Loan Sale Agreement and the Sale and
Servicing Agreement have been duly authorized, executed and
delivered by IMC and, assuming the due authorization, execution and
delivery of such agreements by the other parties thereto, constitute
the legal, valid and binding agreements of IMC, enforceable against
IMC in accordance with their terms, subject as to enforceability to
(x) bankruptcy, insolvency, reorganization, moratorium, receivership
or other similar laws now or hereafter in effect relating to
creditors' rights generally and (y) the qualification that the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion, with respect to such remedies, of the court before which
any proceedings with respect thereto may be brought.
4. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
having jurisdiction over IMC is required for the consummation by the
Servicer of the transactions contemplated by the Sale and Servicing
Agreement, except such consents, approvals, authorizations,
registrations and qualifications as have been obtained.
5. Neither the transfer of the Home Equity Loans by IMC to the
Depositor, nor the execution, delivery or performance by IMC of the
Loan Sale Agreement and the Sale and Servicing Agreement and the
transactions contemplated thereby (A) conflict with or result in a
breach of, or constitute a default under, (i) any term or provision
of the formation documents of IMC, as applicable; (ii) any term or
provision of any material agreement, deed of trust, mortgage loan
agreement, contract, instrument or indenture, or other agreement to
which IMC is a party or is bound or to which any of the property or
assets of IMC or any of its subsidiaries is subject; (iii) to the
best of such firm's knowledge without independent investigation any
order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over IMC; or (iv) any
law, rule or regulations applicable to IMC; or (B) to the best of
such firm's knowledge without independent investigation, results in
the creation or imposition of any lien, charge or encumbrance upon
the Trust Estate or upon the
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<PAGE> 15
Notes.
6. There are, to the best of such counsel's knowledge without
independent investigation, no actions, proceedings or investigations
pending with respect to which IMC has received service of process or
threatened against IMC before any court, administrative agency or
other tribunal (a) asserting the invalidity of any of the Agreements
or the Notes, (b) seeking to prevent the consummation of any of the
transactions contemplated by the Agreements or (c) which would
materially and adversely affect the performance by IMC of its
obligations under, or the validity or enforceability of, the Sale
and Servicing Agreement or this Agreement.
G. Arter & Hadden, special counsel for the Depositor, shall have furnished
to the Underwriters their written opinion, addressed to the Underwriters
and dated the Closing Date, in form and substance satisfactory to the
Underwriters, to the effect that:
1. The Depositor has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of
Delaware and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the
conduct of its business so requires. The Depositor has all power and
authority necessary to own or hold its properties and to conduct the
business in which it is engaged and to enter into and perform its
obligations under the Agreements and to cause the Securities to be
issued.
2. The Depositor has the requisite power and authority and legal
right to own the Certificates.
3. The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Depositor is
a party or by which it or its properties may be bound, which default
might result in any material adverse changes in the financial
condition, earnings, affairs or business of the Depositor or which
might materially and adversely affect the properties or assets,
taken as a whole, of the Depositor.
4. The Agreements to which the Depositor is a party have been duly
authorized, and when duly executed and delivered by the Depositor
and, assuming the due authorization, execution and delivery of such
agreements by the other parties thereto, such agreements constitute
valid and binding obligations, enforceable against the Depositor in
accordance with their respective terms, subject as to enforceability
to (x) bankruptcy, insolvency,
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<PAGE> 16
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, (y) general
principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law) and (z) with respect to rights of
indemnity under this Agreement and the Indemnification Agreement,
limitations of public policy under applicable securities laws.
5. The execution, delivery and performance of the Agreements to
which the Depositor is a party by the Depositor, the consummation of
the transactions contemplated hereby and thereby, and the issuance
and delivery of the Notes do not and will not conflict with or
result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Depositor is a party or by which the Depositor is bound or to which
any of the property or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a
material adverse effect on the business, operations or financial
condition of the Depositor, nor will such actions result in a
violation of the provisions of the certificate of incorporation or
by-laws of the Depositor or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Depositor or any of its properties or assets,
which breach or violation would have a material adverse effect on
the business, operations or financial condition of the Depositor.
6. The directions by the Depositor to the Trustees to execute,
issue, authenticate and deliver the Notes have been duly authorized
by the Depositor and, assuming that the Trustees have been duly
authorized to do so, when executed, authenticated and delivered by
the Indenture Trustee in accordance with the Indenture, the Notes
will be validly issued and outstanding and will be entitled to the
benefits of the Indenture.
7. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of
the United States is required for the issuance of the Securities,
and the sale of the Notes to the Underwriters, or the consummation
by the Depositor of the other transactions contemplated by the
Agreements, except such consents, approvals, authorizations,
registrations or qualifications as may be required State securities
or Blue Sky laws in connection with the purchase and distribution of
the Notes by the Underwriters or as have been previously obtained.
8. There are not, to the best of such counsel's knowledge, after
reasonable independent investigation, any actions, proceedings or
investigations pending with respect to which the Depositor has
received service of process before or,
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<PAGE> 17
threatened by any court, administrative agency or other tribunal to
which the Depositor is a party or of which any of its properties is
the subject: (a) which if determined adversely to the Depositor
would have a material adverse effect on the business, results of
operations or financial condition of the Depositor; (b) asserting
the invalidity of the Agreements or the Notes; (c) seeking to
prevent the issuance of the Notes or the consummation by the
Depositor of any of the transactions contemplated by the Agreements;
or (d) which might materially and adversely affect the performance
by the Depositor of its obligations under, or the validity or
enforceability of, the Agreements or the Notes.
9. The execution of the Loan Sale Agreement is sufficient to convey
all of IMC's right, title and interest in the Home Equity Loans to
the Depositor and following the consummation of the transaction
contemplated by Section 2 of the Loan Sale Agreement, the transfer
of the Home Equity Loans by IMC to the Depositor is a sale thereof.
H. The documents listed in Schedule B hereto shall have been executed and
delivered and the Underwriters shall be entitled to rely on any such
opinions as though the same were addressed to the Underwriters.
I. The Underwriters shall have received an opinion of Richards, Layton &
Finger, counsel to the Owner Trustee, dated the Closing Date, in form and
substance satisfactory to the Underwriters and counsel for the
Underwriters, to the effect that:
1. The Owner Trustee is a Delaware banking corporation duly
incorporated and validly existing under the laws of the State of
Delaware.
2. The Owner Trustee has the full power and authority to accept the
office of owner trustee under the Trust Agreement and to enter into
and perform its obligations under the Trust Agreement and the
transactions contemplated thereby.
3. The execution and delivery of the Trust Agreement by the Owner
Trustee and the performance by the Owner Trustee of its obligations
under the Trust Agreement have been duly authorized by all necessary
action of the Owner Trustee and the Trust Agreement has been duly
executed and delivered by the Owner Trustee.
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4. The Trust Agreement constitutes valid and binding obligations of
the Owner Trustee enforceable against the Owner Trustee in
accordance with its terms, except as the enforceability thereof may
be (a) limited by bankruptcy, insolvency, reorganization,
moratorium, liquidation or other similar laws affecting the rights
of creditors generally, and (b) subject to general principals of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5. The execution and delivery by the Owner Trustee of the Trust
Agreement and the consummation of the transactions contemplated
thereby do not require any consent, approval or authorization of, or
any registration or filing with, any applicable governmental
authority of the State of Delaware which has not been obtained or
done.
6. Neither the consummation by the Owner Trustee of the transactions
contemplated in the Trust Agreement, nor the fulfillment of the
terms thereof by the Owner Trustee will conflict with, result in a
breach or violation of, or constitute a default under the Articles
of Association, By-Laws or other organizational documents of the
Owner Trustee
J. The Underwriters shall have received an opinion of Richards, Layton &
Finger, special Delaware counsel for the Issuer dated the Closing Date, in
form and substance satisfactory to the Underwriters and counsel for the
Underwriters, to the effect that:
1. The Trust Agreement is the legal, valid and binding agreement of
the Owner Trustee, and the Depositor, enforceable against the Owner
Trustee, and the Depositor in accordance with its terms subject to
(i) applicable bankruptcy, insolvency, moratorium, receivership,
reorganization, fraudulent conveyance and similar laws relating to
and affecting the rights and remedies of creditors generally, (ii)
principles of equity (regardless of whether considered and applied
in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions
relating to indemnification or contribution.
2. The Certificate of Trust has been duly filed with the Secretary
of State of the State of Delaware. The Issuer as been duly formed
and is validly existing as a business trust under the Delaware
Business Trust Act.
3. The Issuer has the power and authority under the Trust
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<PAGE> 19
Agreement and the Delaware Business Trust Act to execute, deliver
and perform its obligations under the Trust Agreement, the
Indenture, the Sale and Servicing Agreement, the Notes and the
Residual Interests and to issue the Securities.
4. The Issuer has duly authorized and executed the Trust Agreement,
the Indenture, the Sale and Servicing Agreement, the Notes and the
Residual Interests.
5. The Trust has the power under the Trust Agreement and the
Delaware Business Trust Act to pledge the Trust Estate to the
Indenture Trustee as security for the Notes.
6. The Notes have been executed, authorized and delivered by the
Owner Trustee upon the order of the Depositor in accordance with the
Trust Agreement and the Indenture.
7. To the extent that Article 9 of the Uniform Commercial Code as in
effect in the State of Delaware (the "Delaware UCC") is applicable
(without regard to conflicts of laws principles), and assuming that
the security interest created by the Indenture in the Collateral has
been duly created and has attached, upon the filing of a UCC-1
financing statement with the Secretary of State of the State of
Delaware, the Indenture Trustee will have a perfected security
interest in such Collateral and the proceeds thereof; and such
security interest will be prior to any other security interest
granted by the Trust that is perfected solely by the filing of
financing statements under the Delaware UCC, excluding purchase
money security interests under Section 9-312 of the Delaware UCC and
temporarily perfected security interests in proceeds under
Section 9-306 of the Delaware UCC.
8. No re-filing or other action is necessary under the Delaware UCC
in the State of Delaware in order to maintain the perfection of the
security interest referenced above except for the filing of
continuation statements at five-year intervals.
9. Under Section 3805(b) of the Delaware Business Trust Act, no
creditor of any holder of the Residual Interest shall have any right
to obtain possession of, or otherwise exercise legal or equitable
remedies with respect to, the property of the Trust except in
accordance with the terms of the Trust Agreement subject to (i)
applicable bankruptcy, insolvency, moratorium, receivership,
reorganization, fraudulent conveyance and
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similar laws relating to and affecting the rights and remedies of
creditors generally, (ii) principles of equity (regardless of
whether considered and applied in a proceeding in equity or at law),
and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution.
10. Under Section 3805(c) of the Delaware Business Trust Act, and
assuming that the Sale and Servicing Agreement conveys good title to
the Home Equity Loans to the Issuer as a true sale and not as a
security arrangement, the Issuer, rather than the holders of the
Residual Interest, is the owner of the Home Equity Loans subject to
(i) applicable bankruptcy, insolvency, moratorium, receivership,
reorganization, fraudulent conveyance and similar laws relating to
and affecting the rights and remedies of creditors generally, (ii)
principles of equity (regardless of whether considered and applied
in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions
relating to indemnification or contribution.
11. The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Issuer, of the Indenture and the
Sale and Servicing Agreement do not require any consent, approval or
authorization of, or any registration or filing with, any
governmental authority of the State of Delaware, except for the
filing of the Certificate of Trust with the Secretary of State.
12. Neither the consummation by the Owner Trustee of the
transactions contemplated by the Trust Agreement or, on behalf of
the Trust, the transactions contemplated by the Trust Agreement,
Indenture and the Sale and Servicing Agreement nor the fulfillment
of the terms thereof by the Owner Trustee will conflict with or
result in a breach or violation of any law of the State of Delaware.
Such opinion may contain such assumptions, qualifications and limitations
as are customary in opinions of this type and are reasonably acceptable to
counsel to the Underwriters. In rendering such opinion, such counsel may state
that they express no opinion as to the laws of any jurisdiction other than the
Federal law of the United States of America and the laws of the State of
Delaware.
K. The Underwriters shall have received the favorable opinion dated the
Closing Date, from in-house counsel to the Note Insurer, in form and scope
satisfactory to counsel for the Underwriters, substantially to the effect
that:
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1. The Note Insurer is a monoline insurance company duly
incorporated, validly existing, and in good standing under the laws
of the State of New York. The Note Insurer is validly licensed and
authorized to issue the Insurance Policy and perform its obligations
under the Insurance Agreement in accordance with the terms thereof,
under the laws of the State of New York.
2. The Note Insurer has the corporate power to execute and deliver,
and to take all action required of it under the Insurance Agreement
and the Insurance Policy.
3. The execution, delivery and performance by the Note Insurer of
the Insurance Policy, the Indemnification Agreement and Insurance
Agreement does not require the consent or approval of, the giving of
notice to, the prior registration with, or the taking of any other
action in respect of any state or other governmental agency or
authority which has not previously been obtained or
effected.
4. The Insurance Policy, the Indemnification Agreement and Insurance
Agreement have been duly authorized, executed and delivered by the
Note Insurer and constitute the legal, valid and binding agreement
of the Note Insurer, enforceable against the Note Insurer in
accordance with its terms subject, as to enforcement, to (x)
bankruptcy, reorganization, insolvency, moratorium and other similar
laws relating to or affecting the enforcement of creditors' rights
generally, including, without limitation, laws relating to
fraudulent transfers or conveyances, preferential transfers and
equitable subordination, presently or from time to time in effect
and general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law), as
such laws may be applied in any such proceeding with respect to the
Note Insurer and (y) the qualification that the remedy of specific
performance and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which
any proceedings with respect thereto may be brought.
5. To the extent the Insurance Policy constitutes a security within
the meaning of Section 2(1) of the Securities Act, it is a security
that is exempt from the registration requirements of the Act.
6. The information set forth under the caption, "The Note Insurer"
in the Prospectus Supplement, insofar as such information
constitutes a description of the Insurance Policy, accurately
summarizes such Insurance Policy.
L. The Underwriters shall have received the favorable opinion of
counsel to the
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Indenture Trustee, dated the Closing Date, addressed to the Underwriters
and in form and scope satisfactory to counsel to the Underwriters, to the
effect that:
1. The Indenture Trustee is a banking corporation duly incorporated
and validly existing under the laws of the State of New York.
2. The Indenture Trustee has the full corporate trust power to
execute, deliver and perform its obligations under the Indenture
3. The execution and delivery by the Indenture Trustee of the
Indenture and the performance by the Indenture Trustee of its
obligations under the Indenture have been duly authorized by all
necessary corporate action of the Indenture Trustee.
4. The Indenture is a valid and legally binding obligation of the
Indenture Trustee enforceable against the Trustee.
5. The execution and delivery by the Indenture Trustee of the
Indenture does not (a) violate the Organization Certificate of the
Trustee or the Bylaws of the Indenture Trustee, (b) to such
counsel's knowledge, violate any judgment, decree or order of any
New York or United States federal court or other New York or United
States federal governmental authority by which the Indenture Trustee
is bound or (c) assuming the non-existence of any judgment, decree
or order of any court or other governmental authority that would be
violated by such execution and delivery, violate any New York or
United States federal statute, rule or regulation or require any
consent, approval or authorization of any New York or United States
federal court or other New York or United States federal
governmental authority.
6. The Notes have been duly authenticated and delivered by the
Indenture Trustee.
7. If the Indenture Trustee were acting as Servicer under Sale and
Servicing Agreement as of the date of such opinion, the Indenture
Trustee would have the full corporate trust power to perform the
obligations of the Servicer under the Sale and Servicing Agreement;
and
8. To the best of such counsel's knowledge, there are no actions,
proceedings or investigations pending or threatened against or
affecting the Indenture Trustee before or by any court, arbitrator,
administrative agency or other governmental authority which, if
decided adversely to the Indenture Trustee, would materially and
adversely affect the ability of the Indenture
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<PAGE> 23
Trustee to carry out the transactions contemplated in the Indenture.
M. The Underwriters shall have received the favorable opinion or opinions,
dated the date of the Closing Date, of counsel for the Underwriters, with
respect to the issue and sale of the Notes, the Registration Statement,
this Agreement, the Prospectus and such other related matters as the
Underwriters may reasonably require.
N. The Depositor and IMC shall each have furnished to the Underwriters a
certificate, dated the Closing Date and signed by the Chairman of the
Board, the President or a Vice President of the Depositor and IMC,
respectively, stating as it relates to each such entity:
1. The representations and warranties made by such entity in the
Agreements to which it is a party are true and correct as of the
Closing Date; and such entity has complied with all agreements
contained herein which are to have been complied with on or prior to
the Closing Date.
2. The information contained in the Prospectus relating to such
entity and the Home Equity Loans is true and accurate in all
material respects and nothing has come to his or her attention that
would lead such officer to believe that the Registration statement
or the Prospectus includes any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
therein not misleading.
3. There has been no amendment or other document filed affecting the
Certificate of Incorporation or bylaws of the Depositor since
November 10, 1994 or the formation documents of IMC since October
19, 1990 and no such amendment has been authorized. No event has
occurred since December 1, 1997 which has affected the good standing
of such entities under the laws of the State of Delaware.
4. There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of such entity from September 30, 1997.
In addition to the foregoing, the IMC certificate shall state that the
representations and warranties set forth in Sections 1 D, E, F, G, H, L,
M, P and Q of this Agreement are made by IMC instead of the Depositor and
are true as to IMC as though such representations and warranties were
fully set forth in such certificate.
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<PAGE> 24
O. The Indenture Trustee shall have furnished to the Underwriters a
certificate of the Indenture Trustee, signed by one or more duly
authorized officers of the Indenture Trustee, dated the Closing Date, as
to the due authorization, execution and delivery of the Indenture by the
Indenture Trustee and the acceptance by the Indenture Trustee of the
trusts created thereby and the due authentication and delivery of the
Notes by the Indenture Trustee thereunder and such other matters as the
Representative shall reasonably request.
P. The Notes shall have been rated in the respective rating categories and
by the nationally recognized statistical rating organizations described in
the Prospectus Supplement under "Ratings."
Q. The Depositor shall have furnished to the Underwriters such further
information, certificates and documents as the Underwriters may reasonably
have requested not less than three full business days prior to the Closing
Date.
R. Prior to the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Notes as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained,
and all proceedings taken by the Depositor in connection with the issuance
and sale of the Notes as herein contemplated shall be satisfactory in form
and substance to the Underwriters and counsel for the Underwriters.
S. Subsequent to the execution and delivery of this Agreement none of the
following shall have occurred: (i) trading in securities generally on the
New York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or minimum prices shall
have been established on either of such exchanges or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction; (ii) a banking moratorium
shall have been declared by federal or state authorities; (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation of hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the United States; or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets of the United States
shall be such) as to make it in each of the instances set forth in clauses
(i), (ii), (iii) and (iv) herein, in the reasonable judgment of the
Underwriters, impractical or inadvisable to proceed with the public
offering or delivery of the Notes on the terms and in the manner
contemplated in the Prospectus.
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<PAGE> 25
T. The Underwriters shall have received from Coopers & Lybrand LLP and
Deloitte & Touche LLP, certified public accountants, a letter dated the
date of the Prospectus Supplement and a letter dated the date hereof and
satisfactory in form and substance to the Underwriters and their counsel,
to the effect that they have performed certain specified procedures, all
of which have been agreed to by the Underwriters, as a result of which
they determined that certain information of an accounting, financial or
statistical nature set forth in the Prospectus Supplement on the cover
page thereof and under the captions "Summary of Terms - The Home Equity
Loans", "Risk Factors Risk of Home Equity Loan Coupon Rates Reducing the
Note Rate," "The Seller and Servicer - General", "The Seller and Servicer
- Delinquency, Loan Loss and Foreclosure Information" and "The Home Equity
Loan Pool - General," agrees with the records of the Depositor excluding
any questions of legal interpretation.
If any condition specified in this Section 6 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notice to the Depositor at any time at or prior to the closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Section 7.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to the Underwriters and their counsel.
SECTION 7 Payment of Expenses. The Depositor agrees to pay: (a) the costs
incident to the authorization, issuance, sale and delivery of the Notes and any
taxes payable in connection therewith; (b) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto; (c) the costs of distributing
the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each case, exhibits), the
Prospectus and any amendment or supplement to the Prospectus or any document
incorporated by reference therein, all as provided in this Agreement; (d) the
costs of reproducing and distributing this Agreement; (e) the fees and expenses
of qualifying the Notes under the securities laws of the several jurisdictions
designated by the Underwriters as provided in Section 5(H) hereof and of
preparing, printing and distributing a Blue Sky Memorandum and a Legal
Investment Survey (including related fees and expenses of counsel to the
Underwriters); (f) any fees charged by securities rating services for rating the
Notes; (g) the costs of the accountant's letters referred to in Section 6(R)
hereof; and (h) all other costs and expenses incident to the performance of the
obligations of the Depositor (including costs and expenses of your counsel);
provided that, except as provided in this Section 7, the Underwriters shall pay
their own costs and expenses, including the costs and expenses of their counsel,
any transfer taxes on the Notes which they may sell and the expenses of
advertising any offering of the Notes made by the Underwriters, and the
Underwriters shall pay the cost of any accountant's letters relating to any
Computational Materials (as defined in Section 5(E) hereof).
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<PAGE> 26
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 6 or Section 11, the Depositor shall cause the
Underwriters to be reimbursed for all reasonable out-of-pocket expenses,
including fees and disbursements of Stroock & Stroock & Lavan LLP, counsel for
the Underwriters.
SECTION 8 Indemnification and Contribution. A. The Depositor agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act
from and against any and all loss, claim, damage or liability, joint or several,
or any action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of the
Notes), to which such Underwriter or any such controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereof or supplement thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (iii)
any untrue statement or alleged untrue statement of a material fact contained in
the Prospectus, or any amendment thereof or supplement thereto, or (iv) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and shall reimburse
such Underwriter and each such controlling person promptly upon demand for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Depositor shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in the Prospectus, or any
amendment thereof or supplement thereto, or the Registration Statement, or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
written information furnished to the Depositor by or on behalf of such
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Depositor may otherwise have
to any Underwriter or any controlling person of any of such Underwriter. The
only information furnished by the Underwriters or on behalf of the Underwriters
for use in connection with the preparation of the Registration Statement or the
Prospectus is described in Section 8(I) hereof.
B. Each Underwriter severally agrees to indemnify and hold harmless the
Depositor, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Depositor
within the meaning of Section 15 of the Securities Act against any and all loss,
claim, damage or liability, or any action in respect thereof, to which the
Depositor or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a
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<PAGE> 27
material fact contained in the Registration Statement, or any amendment thereof
or supplement thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus, or any amendment thereof or
supplement thereto, or (iv) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Depositor by or
on behalf of such Underwriter specifically for inclusion therein, and shall
reimburse the Depositor and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Depositor or any
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Depositor or any such director, officer or controlling person. The only
information furnished by the Underwriters or on behalf of the Underwriters for
use in connection with the preparation of the Registration Statement or the
Prospectus is described in Section 8(I) hereof.
C. Promptly after receipt by any indemnified party under this Section 8 of
notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify any
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, except to the extent provided in the
next following paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been
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<PAGE> 28
specifically authorized by the indemnifying party in writing; (ii) such
indemnified party shall have been advised by such counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable judgment of such
counsel it is advisable for such indemnified party to employ separate counsel;
or (iii) the indemnifying party has failed to assume the defense of such action
and employ counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in writing that
it elects to employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to one local counsel per jurisdiction) at any time for all such
indemnified parties, which firm shall be designated in writing by the related
Underwriter, if the indemnified parties under this Section 8 consist of one or
more Underwriters or any of its or their controlling persons, or the Depositor,
if the indemnified parties under this Section 8 consist of the Depositor or any
of the Depositor's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 8(A) and (B), shall use its best efforts to cooperate with
the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing paragraph, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
D. Each Underwriter agrees to provide the Depositor no later than two
Business Days prior to the day on which the Prospectus Supplement is required to
be filed pursuant to Rule 424 with a copy of any Computational Materials (as
defined in Section 5(E) hereof) produced by such Underwriter for filing with the
Commission on Form 8-K.
E. Each Underwriter severally agrees, assuming all Seller Provided
Information is
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accurate and complete in all material respects, to indemnify and hold harmless
the Depositor, each of the Depositor's officers and directors and each person
who controls the Depositor within the meaning of Section 15 of the Securities
Act against any and all losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of a material fact
contained in the Computational Materials provided by such Underwriter and agrees
to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability or
action as such expenses are incurred. The obligations of an Underwriter under
this Section 8(E) shall be in addition to any liability which such Underwriter
may otherwise have.
The procedures set forth in Section 8(C) shall be equally applicable to
this Section 8(E).
F. If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(A), (B) or (E) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Depositor on the one hand and the related Underwriter on the
other from the offering of the related Notes or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law or if the indemnified
party failed to give the notice required under Section 8(C), in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Depositor on the one hand
and the related Underwriter on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.
The relative benefits of the Depositor and an Underwriter shall be deemed
to be in such proportion as the total net proceeds from the offering (before
deducting expenses) received by the Depositor bear to the total underwriting
discounts and commissions as set forth on the cover page of the Prospectus
Supplement received by such Underwriter.
The Depositor and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(F) were to be determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purposes) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 8(F)
shall be deemed to include, for purposes of this Section 8(F), any legal or
other expenses reasonably incurred by
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<PAGE> 30
such indemnified party in connection with investigating or defending any such
action or claim.
For purposes of this Section 8, in no case shall any Underwriter be
responsible for any amount in excess of the amount of the underwriting discounts
and commissions received by such Underwriter in connection with its purchase of
the Notes. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
G. For purposes of this Section 8, as to each Underwriter the term
"Computational Materials" means such portion, if any, of the information
delivered to the Depositor by such Underwriter pursuant to Section 8(D) for
filing with the Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking into account
information incorporated therein by reference through a Form 8-K --
Computational Materials; and
(ii) does not constitute Seller-Provided Information.
"Seller-Provided Information" means any computer tape (or other information)
furnished to any Underwriter by or on behalf of the Seller and Servicer
concerning the assets comprising the Trust Estate.
H. The Seller and Servicer agrees to indemnify each indemnified party
referred to in Section 8(A) hereof with respect to Seller Provided Information
to the same extent as the indemnity granted under such section. The procedures
set forth in Section 8(C) shall be equally applicable to this Section 8(H).
I. Each Underwriter confirms that the information regarding such
Underwriter set forth in the last paragraph on the cover page of the Prospectus
Supplement, the information regarding such Underwriter set forth under the
caption "Underwriting" in the Prospectus Supplement and the Computational
Materials (other than to the extent such information is based on Seller Provided
Information) furnished by such Underwriter is correct, and the parties hereto
acknowledge that such information constitutes the only information furnished in
writing by or on behalf of any Underwriter for use in connection with the
preparation of the Registration Statement or the Prospectus.
SECTION 9 Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Depositor submitted pursuant hereto
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or controlling persons
thereof, or by or on behalf of the Depositor and shall survive delivery of any
Notes to the Underwriters.
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<PAGE> 31
SECTION 10 Default by One or More of the Underwriters. If one or more of
the Underwriters participating in the public offering of the Notes shall fail at
the Closing Date to purchase the Notes which it is (or they are) obligated to
purchase hereunder (the "Defaulted Notes"), then the non-defaulting Underwriters
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Notes in such amounts as
may be agreed upon and upon the terms herein set forth. If, however, the
Underwriters have not completed such arrangements within such 24-hour period,
then:
(i) if the aggregate principal amount of Defaulted Notes does not exceed
10% of the aggregate principal amount of the Notes to be purchased
pursuant to this Agreement, the non-defaulting Underwriters named in this
Agreement shall be obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear
to the underwriting obligations of all such non-defaulting Underwriters,
or
(ii) if the aggregate principal amount of Defaulted Certificates exceeds
10% of the aggregate principal amount of the Notes to be purchased
pursuant to this Agreement, this Agreement shall terminate, without any
liability on the part of any non-defaulting Underwriters.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from the liability with respect to any default of such Underwriter
under this Agreement.
In the event of a default by any Underwriter as set forth in this Section
10, each of the Underwriters and the Depositor shall have the right to postpone
the Closing Date for a period not exceeding five Business Days in order that any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements may be effected.
SECTION 11 Termination of Agreement. The Underwriters may terminate this
Agreement immediately upon notice to the Depositor, at any time at or prior to
the Closing Date if any of the events or conditions described in Section 6(S) of
this Agreement shall occur and be continuing. In the event of any such
termination, the covenant set forth in Section 5(G), the provisions of Section
7, the indemnity agreement set forth in Section 8, and the provisions of
Sections 9 and 15 shall remain in effect.
SECTION 12 Obligations of IMC. IMC agrees with the Underwriters, for the
sole and exclusive benefit of each such Underwriter and each person controlling
such Underwriter within the meaning of the Securities Act and not for the
benefit of any assignee thereof or any other person or persons dealing with such
Underwriter, in consideration of and as an inducement to their agreement to
purchase the Notes from the Depositor, to indemnify and hold harmless each
Underwriter against any failure by the Depositor to perform its obligations to
the
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<PAGE> 32
Underwriters hereunder, including, without limitation, any failure by the
Depositor to honor any obligation to any Underwriter pursuant to Section 8
hereof.
SECTION 13 Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
A. if to the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission to PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019 Attention: Barbara Dawson, 11th Floor
(Fax: 212-713-8376) with a copy to John Fearey, 12th Floor, at the same
address ;and
B. if to the Depositor, shall be delivered or sent by mail, telex or
facsimile transmission to care of IMC Securities, Inc., 5901 East Fowler
Avenue, Tampa, Florida 33617-2362 Attention: Thomas Middleton (Fax: (813)
935-0227).
SECTION 14 Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriters and
the Depositor, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any of the Underwriters within the meaning of Section 15 of
the Securities Act, and for the benefit of directors of the Depositor, officers
of the Depositor who have signed the Registration Statement and any person
controlling the Depositor within the meaning of Section 15 of the Securities
Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 14, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
SECTION 15 Survival. The respective indemnities, representations,
warranties and agreements of the Depositor and the Underwriters contained in
this Agreement, or made by or on behalf of them, respectively, pursuant to the
shall survive the delivery of and payment for the Notes and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
SECTION 16 Definition of the Term "Business Day". For purposes of this
Agreement, "Business Day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
SECTION 17 Governing Law; Submission to Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York without giving effect to the conflict of law rules thereof.
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The parties hereto hereby submit to the jurisdiction of the United States
District Court for the Southern District of New York and any court in the State
of New York located in the city and County of New York, and appellate court from
any thereof, in any action, suit or proceeding brought against it or in
connection with this Agreement or any of the related documents or the
transactions contemplated hereunder or for recognition or enforcement of any
judgment, and the parties hereto hereby agree that all claims in respect of any
such action or proceeding may be heard or determined in New York State court or,
to the extent permitted by law, in such federal court.
SECTION 18 Counterparts. This Agreement may be executed in counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
SECTION 19 Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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<PAGE> 34
If the foregoing correctly sets forth the agreement between the Depositor,
IMC and the Underwriters, please indicate your acceptance in the space provided
for the purpose below.
Very truly yours,
IMC SECURITIES, INC.
By: /s/ George Nicholas
-----------------------
Name: George Nicholas
Title: Chief Executive Officer
IMC MORTGAGE COMPANY
By: /s/ George Nicholas
-----------------------
Name: George Nicholas
Title: Chief Executive Office
CONFIRMED AND ACCEPTED, as
of the date first above written:
PAINEWEBBER INCORPORATED
Acting on its own behalf and as
Representative of the several Underwriters
By: /s/ Barbara J. Dawson
--------------------------
Name: Barbara J. Dawson
Title: Managing Director
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<PAGE> 35
SCHEDULE A
----------
Underwriters Principal Amount
------------ ----------------
PaineWebber Incorporated. $153,892,629
Bear, Stearns & Co. Inc. $153,892,628
Total $307,785,257
Purchase Price Percentage
-------------------------
99.75%
Selling Concession Reallowance Discount
------------------ --------------------
0.18% 0.04%
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<PAGE> 36
SCHEDULE B
(a) An Issuer Order authorizing the authentication and delivery of the
Notes by the Indenture Trustee.
(b) All of the items of Collateral which shall be delivered to the
Indenture Trustee or its designee.
(c) An executed counterpart of the Trust Agreement.
(d) Opinions of Counsel addressed to the Indenture Trustee and the Note
Insurer to the effect that:
(i) all instruments furnished to the Indenture Trustee as
conditions precedent to the authentication of the Notes by the
Indenture Trustee pursuant to the Indenture conform to the
requirements of the Indenture and constitute all the documents
required to be delivered thereunder for the Indenture Trustee
to authenticate the Notes;
(ii) all conditions precedent provided for in the Indenture
relating to the authentication of the Notes have been complied
with;
(iii) the Owner Trustee has power and authority to execute, deliver
and perform its obligations under the Trust Agreement;
(iv) the Issuer has been duly formed, is validly existing as a
business trust under the laws of the State of Delaware, 12
Del. C. Section 3801, et seq., and has power, authority and
legal right to execute and deliver the Indenture, the
Insurance Agreement and the Sale and Servicing Agreement;
(v) assuming due authorization, execution and delivery thereof by
the Indenture Trustee, the Indenture is the valid, legal and
binding obligation of the Issuer, enforceable in accordance
with its terms, subject to bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent or
preferential conveyance and other similar laws of general
application affecting the rights of creditors generally and to
general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at
law);
(vi) the Notes, when executed and authenticated as provided herein
and delivered against payment therefor, will be the valid,
legal and binding
-36-
<PAGE> 37
obligations of the Issuer pursuant to the terms of the
Indenture, entitled to the benefits of the Indenture, and will
be enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent or preferential conveyance and other
similar laws of general application affecting the rights of
creditors generally and to general principles of equity
(regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(vii) the Trust Agreement authorizes the Issuer to Grant the
Collateral to the Indenture Trustee as security for the Notes
and the Owner Trustee has taken all necessary action under the
Trust Agreement to Grant the Collateral to the Indenture
Trustee;
(viii)the Indenture has been duly qualified under the Trust
Indenture Act and the Notes have been registered under the
Securities Act;
(ix) the Indenture, together with the Grant of the Collateral to
the Indenture Trustee, creates a valid security interest in
the Collateral in favor of the Indenture Trustee for the
benefit of the Owners;
(x) such action has been taken with respect to delivery of
possession of the Collateral, and with respect to the
execution and filing of the Indenture and any financing
statements as are necessary to make effective and to perfect a
first priority security interest created by the Indenture in
the Collateral in favor of the Indenture Trustee, except that
with respect to the Mortgage Notes, possession of such
Mortgage Notes must be maintained by the Indenture Trustee or
an agent of the Indenture Trustee (other than the Issuer, an
Affiliate of the Issuer, or a "securities intermediary," as
defined in Section 8.102 of the UCC); and
(xi) no authorization, approval or consent of any governmental body
having jurisdiction in the premises which has not been
obtained by the Issuer is required to be obtained by the
Issuer for the valid issuance and delivery of the Notes,
except that no opinion need be expressed with respect to any
such authorizations, approvals or consents as may be required
under any state securities "blue sky" laws.
(e) An Officer's Certificate complying with the requirements of Section
11.1 of the Indenture and stating that:
(i) the Issuer is not in Default under this Indenture and the
issuance of the Notes applied for will not result in any
breach of any of the terms,
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<PAGE> 38
conditions or provisions of, or constitute a default under,
the Trust Agreement, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Issuer is a party
or by which it is bound, or any order of any court or
administrative agency entered in any proceeding to which the
Issuer is a party or by which it may be bound or to which it
may be subject, and that all conditions precedent provided in
the Indenture relating to the authentication and delivery of
the Notes applied for have been complied with;
(ii) the Issuer is the owner of all of the Home Equity Loans, has
not assigned any interest or participation in the Home Equity
Loans (or, if any such interest or participation has been
assigned, it has been released) and has the right to Grant all
of the Home Equity Loans to the Indenture Trustee;
(iii) the Issuer has Granted to the Indenture Trustee all of its
right, title, and interest in the Collateral, and has
delivered or caused the same to be delivered to the Indenture
Trustee;
(iv) attached thereto are true and correct copies of letters signed
by Moody's and Standard & Poor's confirming that the Notes
have been rated "Aaa" and "AAA" by Moody's and Standard &
Poor's, respectively; and
(v) all conditions precedent provided for in the Indenture
relating to the authentication of the Notes have been complied
with.
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<PAGE> 1
INDENTURE
between
IMC HOME EQUITY LOAN OWNER TRUST 1997-8,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Dated as of December 1, 1997
IMC HOME EQUITY LOAN OWNER TRUST 1997-8
Adjustable Rate Home Equity Loan Asset Backed Notes, Series 1997-8
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE............................. 1
SECTION 1.1 Definitions.............................................. 1
SECTION 1.2 Incorporation by Reference of Trust Indenture Act........ 7
ARTICLE II
THE NOTES.............................................................. 8
SECTION 2.1 Form..................................................... 8
SECTION 2.2 Execution, Authentication, Delivery and Dating........... 8
SECTION 2.3 Registration; Registration of Transfer and Exchange...... 9
SECTION 2.4 Mutilated, Destroyed, Lost or Stolen Notes............... 10
SECTION 2.5 Persons Deemed Owners.................................... 10
SECTION 2.6 Payment of Principal and Interest; Defaulted Interest.... 11
SECTION 2.7 Cancellation............................................. 11
SECTION 2.8 Authentication of Notes.................................. 12
SECTION 2.9 Release of Collateral.................................... 12
SECTION 2.10 Book-Entry Notes......................................... 12
SECTION 2.11 Notices to Clearing Agency............................... 13
SECTION 2.12 Definitive Notes......................................... 13
SECTION 2.13 Tax Treatment............................................ 14
ARTICLE III
COVENANTS.............................................................. 14
SECTION 3.1 Payment of Principal and Interest........................ 14
SECTION 3.2 Maintenance of Office or Agency.......................... 14
SECTION 3.3 Money for Payments To Be Held in Trust................... 14
SECTION 3.4 Existence................................................ 16
SECTION 3.5 Protection of Collateral................................. 17
SECTION 3.6 Annual Opinions as to Collateral......................... 17
SECTION 3.7 Performance of Obligations; Servicing of Home Equity
Loans.................................................... 17
SECTION 3.8 Negative Covenants....................................... 19
SECTION 3.9 Annual Statement as to Compliance........................ 20
SECTION 3.10 Covenants of the Issuer.................................. 20
SECTION 3.11 Reserved................................................. 20
SECTION 3.12 Restricted Payments...................................... 20
SECTION 3.13 Treatment of Notes as Debt for Tax Purposes.............. 20
SECTION 3.14 Notice of Events of Default.............................. 21
SECTION 3.15 Further Instruments and Acts............................. 21
ARTICLE IV
SATISFACTION AND DISCHARGE............................................. 21
SECTION 4.1 Satisfaction and Discharge of Indenture.................. 21
SECTION 4.2 Application of Trust Money............................... 22
SECTION 4.3 Repayment of Moneys Held by Paying Agent................. 22
<PAGE> 3
ARTICLE V
REMEDIES............................................................... 22
SECTION 5.1 Events of Default........................................ 22
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment....... 23
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee........................................ 24
SECTION 5.4 Remedies; Priorities..................................... 26
SECTION 5.5 Optional Preservation of the Collateral.................. 28
SECTION 5.6 Limitation of Suits...................................... 28
SECTION 5.7 Unconditional Rights of Owners To Receive Principal and
Interest................................................. 28
SECTION 5.8 Restoration of Rights and Remedies....................... 29
SECTION 5.9 Rights and Remedies Cumulative........................... 29
SECTION 5.10 Delay or Omission Not a Waiver........................... 29
SECTION 5.11 Control by Owners........................................ 29
SECTION 5.12 Waiver of Past Defaults.................................. 30
SECTION 5.13 Undertaking for Costs.................................... 30
SECTION 5.14 Waiver of Stay or Extension Laws......................... 30
SECTION 5.15 Action on Notes.......................................... 30
SECTION 5.16 Performance and Enforcement of Certain Obligations....... 31
ARTICLE VI
THE INDENTURE TRUSTEE.................................................. 31
SECTION 6.1 Duties of Indenture Trustee.............................. 31
SECTION 6.2 Rights of Indenture Trustee.............................. 32
SECTION 6.3 Individual Rights of Indenture Trustee................... 33
SECTION 6.4 Indenture Trustee's Disclaimer........................... 33
SECTION 6.5 Notice of Defaults....................................... 33
SECTION 6.6 Reports by Indenture Trustee to Owners................... 33
SECTION 6.7 Compensation and Indemnity............................... 33
SECTION 6.8 Replacement of Indenture Trustee......................... 34
SECTION 6.9 Successor Indenture Trustee by Merger.................... 35
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee........................................ 35
SECTION 6.11 Eligibility; Disqualification............................ 36
SECTION 6.12 Preferential Collection of Claims Against Issuer......... 36
ARTICLE VII
OWNERS' LISTS AND REPORTS.............................................. 36
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses
of Owners................................................ 36
SECTION 7.2 Preservation of Information; Communications to Owners.... 37
SECTION 7.3 Reports by Issuer........................................ 37
SECTION 7.4 Reports by Indenture Trustee............................. 37
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES................................... 37
SECTION 8.1 Collection of Money...................................... 37
SECTION 8.2 Accounts; Distributions.................................. 38
SECTION 8.3 General Provisions Regarding Accounts.................... 39
<PAGE> 4
SECTION 8.4 Servicer's Monthly Statements............................ 39
SECTION 8.5 Release of Collateral.................................... 39
SECTION 8.6 Opinion of Counsel....................................... 40
ARTICLE IX
SUPPLEMENTAL INDENTURES................................................ 40
SECTION 9.1 Supplemental Indentures Without Consent of Owners........ 40
SECTION 9.2 Supplemental Indentures with Consent of Owners........... 41
SECTION 9.3 Execution of Supplemental Indentures..................... 42
SECTION 9.4 Effect of Supplemental Indenture......................... 42
SECTION 9.5 Conformity with Trust Indenture Act...................... 43
SECTION 9.6 Reference in Notes to Supplemental Indentures............ 43
SECTION 9.7 Amendments to Trust Agreement............................ 43
ARTICLE X
REDEMPTION OF NOTES.................................................... 43
SECTION 10.1 Redemption. ............................................. 43
SECTION 10.2 Form of Redemption Notice................................ 44
SECTION 10.3 Notes Payable on Redemption Date; Provision for Payment
of Indenture Trustee and Note Insurer.................... 44
ARTICLE XI
MISCELLANEOUS.......................................................... 44
SECTION 11.1 Compliance Certificates and Opinions, etc................ 44
SECTION 11.2 Form of Documents Delivered to Indenture Trustee......... 45
SECTION 11.3 Acts of Owners........................................... 46
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer, Rating
Agencies and Note Insurer................................ 46
SECTION 11.5 Notices to Owners; Waiver................................ 46
SECTION 11.6 [RESERVED]............................................... 47
SECTION 11.7 Conflict with Trust Indenture Act........................ 47
SECTION 11.8 Effect of Headings and Table of Contents................. 47
SECTION 11.9 Successors and Assigns................................... 47
SECTION 11.10 Separability............................................. 47
SECTION 11.11 Benefits of Indenture.................................... 47
SECTION 11.12 Legal Holidays........................................... 47
SECTION 11.13 Governing Law............................................ 47
SECTION 11.14 Counterparts............................................. 48
SECTION 11.15 Recording of Indenture................................... 48
SECTION 11.16 Trust Obligation......................................... 48
SECTION 11.17 No Petition.............................................. 48
SECTION 11.18 Inspection............................................... 48
SECTION 11.19 Grant of Owner Rights to Note Insurer.................... 49
SECTION 11.20 Third Party Beneficiary.................................. 49
SECTION 11.21 Suspension and Termination of Note Insurer's Rights...... 49
<PAGE> 5
EXHIBITS
SCHEDULE A - Schedule of Home Equity Loans
EXHIBIT A - Form of Note
<PAGE> 6
INDENTURE (this "Indenture" or this "Agreement") dated as of December 1,
1997, between IMC HOME EQUITY LOAN OWNER TRUST 1997-8, a Delaware business trust
(the "Issuer"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as
trustee and not in its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Owners of the Notes and the Note Insurer.
GRANTING CLAUSE
Subject to the terms of this Indenture, the Issuer hereby Grants to the
Indenture Trustee on the Closing Date, as Indenture Trustee for the benefit of
the Owners of the Notes and the Note Insurer, all of the Issuer's right, title
and interest in and to: (i) the Trust Estate; (ii) all right, title and interest
of the Issuer in the Sale and Servicing Agreement (including the Issuer's right
to cause the Seller to repurchase Home Equity Loans from the Issuer under
certain circumstances described therein); (iii) all present and future claims,
demands, causes of action and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing; (iv) all funds on deposit from time to time in the Accounts
(including the Note Account) and (v) all other property of the Trust from time
to time (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes, equally
and ratably without prejudice, priority or distinction, and to secure compliance
with the provisions of this Indenture, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Owners of the
Notes and the Note Insurer, acknowledges such Grant, accepts the trusts
hereunder and agrees to perform its duties required in this Indenture to the
best of its ability to the end that the interests of the Owners of the Notes and
the Note Insurer may be adequately and effectively protected. The Indenture
Trustee agrees and acknowledges that the Files will be held by the Custodian, as
agent of the Indenture Trustee, in trust, for the use and benefit of the Issuer,
the Note Insurer and all present and future Owners of the Notes in Tampa,
Florida. The Indenture Trustee further agrees and acknowledges that each other
item of Collateral that is physically delivered to the Indenture Trustee will be
held by the Indenture Trustee in New York, New York.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 (a) Definitions. Except as otherwise specified herein or as the
context may otherwise require, the following terms have the respective meanings
set forth below for all purposes of this Indenture.
"Act": The meaning specified in Section 11.3(a) hereof.
1
<PAGE> 7
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Authorized Officer": With respect to the Issuer, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters relating to
the Issuer and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
"Book-Entry Notes": A beneficial interest in the Notes, the ownership and
transfer of which shall be made through book entries by a Clearing Agency as
described in Section 2.10.
"Book-Entry Owner": With respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Business Day": Any day other than a Saturday, Sunday or a day on which
commercial banking institutions in The City of New York, Tampa, Florida, the
city in which the Corporate Trust Office is located or the city in which the
principal office of the Note Insurer is located are authorized or obligated by
law or executive order to be closed.
"Certificate of Trust": The certificate of trust of the Issuer
substantially in the form of Exhibit A to the Trust Agreement.
"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date": December 30, 1997.
"Code": The Internal Revenue Code of 1986, as amended from time to time,
and the Treasury Regulations promulgated thereunder.
"Collateral": The meaning specified in the Granting Clause of this
Indenture.
"Corporate Trust Office": The principal office of the Indenture Trustee at
which at any particular time its corporate trust business shall be administered,
which office at date of execution of this Agreement is located at 450 W. 33rd
Street, 15th Floor, New York, New York 10001, Attention: Structured Financial
Services, or at such other address as the Indenture Trustee may designate from
time to time by notice to the Owners and the Issuer, or the principal corporate
trust office of any successor Indenture Trustee at the address designated by
such successor Indenture Trustee by notice to the Owners, the Note Insurer and
the Issuer.
2
<PAGE> 8
"Default": Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
"Definitive Notes": The meaning specified in Section 2.12.
"Depositor": IMC Securities, Inc., a Delaware corporation.
"Event of Default": The meaning specified in Section 5.1 hereof.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Final Payment Date": December 20, 2028.
"Grant": To mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the granting party or otherwise, and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Indenture Trustee": The Chase Manhattan Bank, a New York banking
corporation, as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.
"Independent": When used with respect to any specified Person, that the
Person (a) is in fact independent of the Issuer, any other obligor on the Notes,
the Depositor, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Depositor, the Seller or any
Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Depositor, the Seller or any Affiliate of
any of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
"Independent Certificate": A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1, made by an Independent
appraiser or other expert appointed by an Issuer Order and approved by the
Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.
"Issuer": IMC Home Equity Loan Owner Trust 1997-8 until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.
3
<PAGE> 9
"Issuer Order" and "Issuer Request": A written order or request signed in
the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"Moody's": Moody's Investor Service, Inc., or any successor thereto.
"Note": The Issuer's Adjustable Rate Home Equity Loan Asset Backed Notes,
Series 1997-8, substantially in the Form of Exhibit A hereto.
"Note Register" and "Note Registrar": The respective meanings specified in
Section 2.3.
"Officer's Certificate": A certificate signed by any Authorized Officer of
the Issuer, under the circumstances described in, and otherwise complying with,
the applicable requirements of Section 11.1, and delivered to the Indenture
Trustee.
"Opinion of Counsel": One or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Issuer and who shall be satisfactory to the Indenture Trustee and
the Note Insurer, and which opinion or opinions shall be addressed to the
Indenture Trustee, as Indenture Trustee, and the Note Insurer and shall comply
with any applicable requirements of Section 11.1 and shall be in form and
substance satisfactory to the Indenture Trustee and the Note Insurer.
"Outstanding": With respect to any Note and as of the date of
determination, any Note theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Owners of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision for such
notice has been made, satisfactory to the Indenture Trustee);
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser; provided, that in determining whether the
Owners of the requisite Outstanding Amount of the Notes have given any
request, demand, authorization, direction, notice, consent, or waiver
hereunder or under any Operative Document, Notes owned by the Issuer, any
other obligor upon the Notes, the Depositor, the Seller or any Affiliate
of any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent, or waiver, only Notes that the
Indenture Trustee knows to be so owned shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Indenture Trustee
the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the
Depositor, the Seller or any Affiliate of any
4
<PAGE> 10
of the foregoing Persons;
(iv) Notes alleged to have been destroyed, lost or stolen for which
replacement Notes have been issued as provided for in Section 2.4 thereof;
and
(v) Notes as to which the Indenture Trustee has made the final
distribution thereon, whether or not such Notes are ever returned to the
Indenture Trustee.
"Outstanding Amount": The aggregate principal amount of all Notes that are
Outstanding at the date of determination.
"Owner": The Person in whose name a Note is registered on the Note
Register; provided that the exercise of any rights of such Owner under this
Indenture shall at all times be subject to Section 11.19 hereto.
"Owner Trustee": Wilmington Trust Company, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement, or any successor Owner
Trustee under the Trust Agreement.
"Paying Agent": The Indenture Trustee or any other Person that meets the
eligibility standards for the Indenture Trustee specified in Section 6.11 and is
authorized by the Issuer to make payments to and distributions from the Note
Account, including payment of principal of or interest on the Notes on behalf of
the Issuer.
"Payment Date": The 20th day of any month or if such day is not a Business
Day, the next Business Day thereafter, commencing in January 1998.
"Predecessor Note": With respect to any particular Note, every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 2.4 in lieu of a mutilated, lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Note.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency": Either or both of (i) Standard & Poor's or (ii) Moody's.
If no such organization or successor is any longer in existence, "Rating Agency"
shall be a nationally recognized statistical rating organization or other
comparable Person designated by the Note Insurer, notice of which designation
shall be given to the Issuer, the Depositor, the Indenture Trustee, the Owner
Trustee and the Servicer.
"Rating Agency Condition": With respect to any action to which a Rating
Agency Condition applies, that each Rating Agency shall have been given 10 days
(or such shorter period as is acceptable to each Rating Agency) prior notice
thereof and that each of the Rating Agencies shall have notified the Depositor,
the Seller, the Servicer, the Note Insurer and the Issuer in writing that such
action will not result in a reduction or withdrawal of the then current rating
of the Notes.
"Record Date": With respect to any Payment Date, the last Business Day
immediately preceding such Payment Date.
5
<PAGE> 11
"Redemption Price": In the case of a redemption of the Notes pursuant to
Section 10.1, an amount equal to the unpaid principal amount of the Notes
redeemed plus accrued and unpaid interest thereon at the Note Rate to but
excluding the Redemption Date, plus any Available Funds Cap Carry-Forward
Amounts plus any unpaid Trust Fees and Expenses and all other amounts owed to
the Note Insurer pursuant to the Insurance Agreement.
"Registered Owner": The Person in whose name a Note is registered on the
Note Register on the applicable Record Date.
"Responsible Officer": With respect to the Indenture Trustee, any officer
within the Corporate Trust Office of the Indenture Trustee, including any Vice
President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or
any other officer of the Indenture 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.
"Sale and Servicing Agreement": The Sale and Servicing Agreement dated as
of December 1, 1997, among the Issuer, IMC Securities, Inc., as Depositor, IMC
Mortgage Company, as Seller and Servicer, and the Indenture Trustee, as
Indenture Trustee.
"Securities Act": The Securities Act of 1933, as amended.
"Seller": IMC Mortgage Company, in its capacity as seller under the Sale
and Servicing Agreement, and its successor in interest.
"Servicer": IMC Mortgage Company, in its capacity as servicer under the
Sale and Servicing Agreement, and any Successor Servicer thereunder.
"Standard & Poor's": Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"State": Any one of the 50 States of the United States of America or the
District of Columbia.
"Successor Servicer": The meaning specified in Section 3.7(e).
"Trust Estate": The assets subject to this Agreement, the Sale and
Servicing Agreement and the Trust Agreement and assigned to the Trust, which
assets consist of (a) the Home Equity Loans listed in Schedule I to the Sale and
Servicing Agreement, including the related Files that the Seller and the
Depositor cause to be delivered to the Indenture Trustee, all payments of
principal received, collected or otherwise recovered after the Cut-Off Date for
each Home Equity Loan (other than any principal payments due thereon on or prior
to the Cut-Off Date), all payments of interest accruing on each Home Equity Loan
after the Cut-Off Date therefor (other than any interest payments due thereon on
or prior to the Cut-Off Date) and all other proceeds received in respect of such
Home Equity Loans, (b) the Note Insurance Policy, (c) any Insurance Policies,
(d) all cash, instruments or other property held or required to be deposited in
the Principal and Interest Account, the Note Account, the Available Funds Cap
Carry Forward Amount Account, and the Policy Payments Account, including all
investments made with funds in such accounts (but not including any income on
funds deposited in, or investments made with funds deposited in, the Principal
and Interest
6
<PAGE> 12
Account, which income shall belong to and be for the account of the Servicer,
and not including any income on funds deposited in, or investments made with
funds deposited in, the Note Account or Available Funds Cap Carry-Forward Amount
Account, or the Capitalized Interest Account, which income shall belong to and
be for the account of the Issuer), (e) the Issuer's rights under the Sale and
Servicing Agreement, and (f) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid assets,
including, without limitation, all insurance proceeds and condemnation awards.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as
amended, as in force on the date hereof, unless otherwise specifically provided.
"UCC": Unless the context otherwise requires, the Uniform Commercial Code,
as in effect in the relevant jurisdiction, as amended from time to time.
(b) Except as otherwise specified herein or as the context may otherwise
require, for all purposes of this Indenture capitalized terms used but not
otherwise defined herein have the respective meanings set forth in the Sale and
Servicing Agreement or, if not defined therein, in the Trust Agreement.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security Owner" means an Owner.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the Indenture securities means the Issuer and any other
obligor on the Indenture securities.
All other TIA terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.3 Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
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(v) words in the singular include the plural and words in the plural
include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to time
amended, modified or supplemented (as provided in such agreements) and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
THE NOTES
SECTION 2.1 Form. The Notes shall be designated as the "IMC Adjustable
Rate Home Equity Loan Asset Backed Notes, Series 1997-8" and, together with the
Indenture Trustee's certificate of authentication, shall be in substantially the
form set forth in Exhibit A hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution thereof. Any portion of the text of any Note may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.
The terms of the Notes set forth in Exhibit A are part of the terms of
this Indenture.
The Notes may be marked as temporary, and any Note being so marked may be
cancelled and destroyed for substitution by a replacement Note, subject to the
provisions of Section 2.2.
SECTION 2.2 Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee. The signature of any such Authorized Officer on the Notes may be manual
or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Owner Trustee shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
Subject to the satisfaction of the conditions set forth in Section 2.8,
the Indenture Trustee shall authenticate and deliver Notes for original issue in
an aggregate principal amount of $307,785,257. The aggregate principal amount of
Notes Outstanding at any time may not exceed such amount.
The Notes that are authenticated and delivered by the Indenture Trustee to
or upon the order of the
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Issuer on the Closing Date shall be dated December 30, 1997. All other Notes
that are authenticated after the Closing Date for any other purpose under this
Indenture shall be dated the date of their authentication. The Notes shall be
issuable as registered Notes in the minimum denomination of $25,000 and integral
multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.3 Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee initially shall be the "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar with the consent of the Note Insurer, the Issuer will give the
Indenture Trustee prompt written notice of the appointment of such Note
Registrar and of the location, and any change in the location, of the Note
Register, and the Indenture Trustee shall have the right to inspect the Note
Register at all reasonable times and to obtain copies thereof, and the Indenture
Trustee and the Note Insurer shall have the right to rely upon a certificate
executed on behalf of the Note Registrar by an Authorized Officer thereof as to
the names and addresses of the Owners of the Notes and the principal amounts and
number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.2, the Issuer
shall execute, and the Indenture Trustee shall authenticate and the Owner shall
obtain from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations, of a like
aggregate principal amount.
At the option of any Owner, Notes owned by such Owner may be exchanged for
other Notes in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Owner shall obtain from the
Indenture Trustee, the Notes which the Owner making the exchange is entitled to
receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by the
Owner thereof or such Owner's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in
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addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.
No service charge shall be made to an Owner for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.4 or Section 9.6 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to such Note.
SECTION 2.4 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer, the Note Insurer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note;
provided, however, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within seven days shall be due and payable,
or shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer, the Note Insurer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer, the Note Insurer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Owner of such Note, other than the Note Insurer,
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable expenses (including the
fees and expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.5 Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Note Insurer, the
Indenture Trustee and any agent of the Issuer, the Note Insurer
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or the Indenture Trustee may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Note Insurer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.6 Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest at the Note Rate as set forth in the
Sale and Servicing Agreement, and such interest shall be payable on each Payment
Date as specified therein, subject to Section 3.1 hereof. Any installment of
interest or principal, if any, payable on any Note that is punctually paid or
duly provided for by the Issuer on the applicable Payment Date shall be paid to
the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the Record Date by check mailed first-class postage prepaid to
such Person's address as it appears on the Note Register on such Record Date,
except that, unless Definitive Notes have been issued pursuant to Section 2.12,
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payment will
be made by wire transfer in immediately available funds to the account
designated by such nominee and except for the final installment of principal
payable with respect to such Note on a Payment Date or on the applicable Final
Payment Date (and except for the Redemption Price for any Note called for
redemption pursuant to Section 10.1), which shall be payable as provided below.
The funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on each
Payment Date as provided in the Sale and Servicing Agreement and the form of the
Notes set forth in Exhibit A. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable, if not previously paid,
on the earlier of (i) the Final Payment Date, (ii) the Redemption Date or (iii)
the date on which an Event of Default shall have occurred and be continuing, if
the Indenture Trustee or the Owners of Notes representing not less than a
majority of the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.2. All principal
payments on the Notes shall be made pro rata to the Owners. The Indenture
Trustee shall notify the Person in whose name a Note is registered at the close
of business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed or transmitted by facsimile prior to
such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. A copy of such form of notice shall be sent to the Note Insurer by
the Indenture Trustee. Notices in connection with redemptions of Notes shall be
mailed to Owners as provided in Section 10.2.
SECTION 2.7 Cancellation. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly canceled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes canceled
as provided in this Section, except as expressly permitted by this Indenture.
All canceled Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time, unless the Issuer shall direct by an Issuer Order that they be destroyed
or
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returned to it; provided, that such Issuer Order is timely and the Notes have
not been previously disposed of by the Indenture Trustee.
SECTION 2.8 Authentication of Notes. The Notes may be authenticated by the
Indenture Trustee upon Issuer Request.
SECTION 2.9 Release of Collateral.
(a) Subject to subsections (b) and (c) hereof, Section 11.1 hereof and the
terms of the Operative Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(l) or an Opinion
of Counsel in lieu of such Independent Certificates to the effect that the TIA
does not require any such Independent Certificates.
(b) The Servicer, on behalf of the Issuer, shall be entitled to obtain a
release from the lien of this Indenture for any Home Equity Loan and the related
Property at any time (i) after a payment by the Seller or the Issuer of the Loan
Purchase Price of the Home Equity Loan, (ii) after a Qualified Replacement
Mortgage is substituted for such Home Equity Loan and payment of the
Substitution Amount if any, (iii) after liquidation of the Home Equity Loan in
accordance with Section 4.13 of the Sale and Servicing Agreement and the deposit
of all Liquidation Proceeds thereon in the Principal and Interest Account, or
(iv) upon the termination of a Home Equity Loan (due to, among other causes, a
prepayment in full of the Home Equity Loan and sale or other disposition of the
related Property), if the Issuer delivers to the Indenture Trustee and the Note
Insurer an Issuer Request (A) identifying the Home Equity Loan and the related
Property to be released, (B) requesting the release thereof, (C) setting forth
the amount deposited in the Principal and Interest Account with respect thereto,
and (D) certifying that the amount deposited in the Principal and Interest
Account (x) equals the Loan Purchase Price of the Home Equity Loan, in the event
a Home Equity Loan and the related Property are being released from the lien of
this Indenture pursuant to item (i) above, (y) equals the Substitution Amount
related to the Qualified Replacement Mortgage and the Home Equity Loan being
released from the lien of this Indenture pursuant to item (ii) above, or (z)
equals the entire amount of recoveries received with respect to such Home Equity
Loan and the related Property in the event of a release from the lien of this
Indenture pursuant to items (iii) or (iv) above.
(c) The Indenture Trustee shall, if requested in writing by the Servicer,
temporarily release or cause the Custodian to temporarily release to the
Servicer the File pursuant to the provisions of Section 4.14 of the Sale and
Servicing Agreement upon compliance by the Servicer of the provisions thereof
provided that the Indenture Trustee's File shall have been stamped to signify
the Issuer's pledge to the Indenture Trustee under this Indenture.
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance, will be
issued in the form of typewritten Notes representing the Book-Entry Notes, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Issuer. The Book-Entry Notes shall be registered initially on
the Note Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Owner of any Note will receive a definitive Note representing
such Book-Entry Owner's interest in such Note, except as provided in Section
2.12. Unless and until definitive, fully registered Notes (the "Definitive
Notes") have been issued to such Book-Entry Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
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(ii) the Note Registrar, the Note Insurer and the Indenture Trustee
shall be entitled to deal with the Clearing Agency for all purposes
of this Indenture (including the payment of principal of and
interest on the Notes and the giving of instructions or directions
hereunder) as the sole Owner of the Notes, and shall have no
obligation to the Book-Entry Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Book-Entry Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Book-Entry Owners and the Clearing
Agency and/or the Clearing Agency Participants. Unless and until
Definitive Notes are issued pursuant to Section 2.12, the initial
Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal
of and interest on the Notes to such Clearing Agency Participants;
and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Owners of Notes evidencing
a specified percentage of the Outstanding Amount of the Notes, the
Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from
Book-Entry Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the
beneficial interest in the Notes and has delivered such instructions
to the Indenture Trustee.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Owners is required under this Indenture, unless and until
Definitive Notes shall have been issued to such Book-Entry Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Owners of the Notes to the
Clearing Agency, and shall have no obligation to such Book-Entry Owners.
SECTION 2.12 Definitive Notes. If (i) the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Book-Entry Notes and the Issuer is unable to locate a qualified successor, (ii)
the Issuer at its option advises the Indenture Trustee in writing that it elects
to terminate the book-entry system through the Clearing Agency or (iii) after
the occurrence of an Event of Default, Owners of the Book-Entry Notes
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of such Notes advise the Clearing Agency in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of such Book-Entry Owners, then the Clearing Agency shall
notify all Book-Entry Owners and the Indenture Trustee of the occurrence of such
event and of the availability of Definitive Notes to Book-Entry Owners
requesting the same. Upon surrender to the Indenture Trustee of the typewritten
Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of
the Clearing Agency. None of the Issuer, the Note Registrar, the Note Insurer or
the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the Owners of the Definitive Notes as Owners.
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SECTION 2.13 Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer secured by the Collateral. The Issuer, by entering
into this Indenture, and each Owner, by its acceptance of a Note (and each
Book-Entry Owner by its acceptance of an interest in the applicable Book-Entry
Note), agree to treat the Notes for federal, state and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer will duly and
punctually pay (or will cause to be duly and punctually paid) the principal of
and interest, if any, on the Notes in accordance with the terms of the Notes and
this Indenture. Without limiting the foregoing, subject to and in accordance
with Section 8.2(c), on each Payment Date the Issuer will cause to be
distributed all amounts on deposit in the Note Account deposited or retained
therein pursuant to the Sale and Servicing Agreement for the benefit of the
Notes, to the Owners and the Note Insurer. Amounts properly withheld under the
Code by any Person from a payment to any Owner of interest and/or principal
shall be considered as having been paid by the Issuer to such Owner for all
purposes of this Indenture.
The Notes shall be non-recourse obligations of the Issuer and shall be
limited in right of payment to amounts available from the Collateral and any
amounts received by the Indenture Trustee under the Note Insurance Policy in
respect of the Notes, as provided in this Indenture and the Sale and Servicing
Agreement. The Issuer shall not otherwise be liable for payments on the Notes.
If any other provision of this Indenture shall be deemed to conflict with the
provisions of this Section 3.1, the provisions of this Section 3.1 shall
control.
SECTION 3.2 Maintenance of Office or Agency. The Issuer will maintain in
the Borough of Manhattan, The City of New York, an office or agency where Notes
may be surrendered for registration of transfer or exchange, and where notices
and demands to or upon the Issuer in respect of the Notes and this Indenture may
be served. The Issuer will give prompt written notice to the Indenture Trustee
and the Note Insurer of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as
its agent to receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust. As provided in Section
8.2 (a ) and (b), all payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Principal and Interest
Account or retained in the Note Account pursuant to Section 8.2(c) shall be made
on behalf of the Issuer by the Indenture Trustee or by the Paying Agent, and no
amounts so withdrawn from the Principal and Interest Account or retained in the
Note Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section.
On or before the third Business Day preceding each Payment Date and
Redemption Date, the Indenture Trustee shall deposit or cause to be deposited in
the Note Account an aggregate sum sufficient to pay the amounts due on such
Payment Date under the Notes, such sum to be held in trust for the benefit of
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the Persons entitled thereto.
Subject to the prior consent of the Note Insurer, any Paying Agent shall
be appointed by Issuer Order with written notice thereof to the Indenture
Trustee and the Note Insurer. Any Paying Agent appointed by the Issuer shall be
a Person who would be eligible to be Indenture Trustee hereunder as provided in
Section 6.11. The Issuer shall not appoint any Paying Agent (other than the
Indenture Trustee) which is not, at the time of such appointment, a Designated
Depository Institution.
The Issuer will cause each Paying Agent to execute and deliver to the
Indenture Trustee an instrument in which such Paying Agent shall agree with the
Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Owners entitled
thereto until such sums shall be paid to such Owners or otherwise
disposed of as herein provided and pay such sums to such Owners as
herein provided;
(ii) give the Indenture Trustee and the Note Insurer notice of any
default by the Issuer (or any other obligor upon the Notes) of which
it has actual knowledge in the making of any payment required to be
made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be
met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; provided,
however, that with respect to withholding and reporting requirements
applicable to original issue discount (if any) on the Notes, the
Issuer shall have first provided the calculations pertaining thereto
to the Indenture Trustee.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds or abandoned
property, any money held by the Indenture Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Note and remaining
unclaimed for two years after such amount has become due and payable shall be
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discharged from such trust and be paid to the Issuer on Issuer Request; and the
Owner of such Note shall thereafter, as an unsecured general creditor, look only
to the Issuer for payment thereof (but only to the extent of the amounts so paid
to the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; provided, however, that
the Indenture Trustee or such Paying Agent, before being required to make any
such repayment, shall at the expense and direction of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee shall also adopt and employ, at the expense and direction
of the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Owners whose
Notes have been called but have not been surrendered for redemption or whose
right to or interest in moneys due and payable but not claimed is determinable
from the records of the Indenture Trustee or of any Paying Agent, at the last
address of record for each such Owner).
SECTION 3.4 Existence.
(a) Subject to subsection (b) of this Section 3.4, the Issuer will keep in
full effect its existence, rights and franchises as a business trust under the
laws of the State of Delaware (unless it becomes, or any successor Issuer
hereunder is or becomes, organized under the laws of any other State or of the
United States of America, in which case the Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes and the Collateral.
(b) Any successor to the Owner Trustee appointed pursuant to Section 10.2
of the Trust Agreement shall be the successor Owner Trustee under this Indenture
without the execution or filing of any paper, instrument or further act to be
done on the part of the parties hereto.
(c) Upon any consolidation or merger of or other succession to the Owner
Trustee, the Person succeeding to the Owner Trustee under the Trust Agreement
may exercise every right and power of the Owner Trustee under this Indenture
with the same effect as if such Person had been named as the Owner Trustee
herein.
SECTION 3.5 Protection of Collateral. The Issuer will from time to time
and upon the direction of the Note Insurer execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) provide further assurance with respect to the Grant of all or
any portion of the Collateral;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
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(iv) enforce any rights with respect to the Collateral; or
(v) preserve and defend title to the Collateral and the rights of
the Indenture Trustee, the Owners and the Note Insurer in such
Collateral against the claims of all persons and parties.
SECTION 3.6 Annual Opinions as to Collateral. On or before December 15 in
each calendar year, beginning in 1998, the Issuer shall furnish to the Indenture
Trustee and the Note Insurer an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
is necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until December 15 of the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Home Equity Loans.
(a) The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Collateral or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) Subject to the prior consent of the Note Insurer, the Issuer may
contract with or otherwise obtain the assistance of other Persons to assist it
in performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee and the Note Insurer in
an Officer's Certificate of the Issuer shall be deemed to be action taken by the
Issuer. Initially, the Issuer has contracted with the Servicer to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Operative Documents and in the
instruments and agreements included in the Collateral, including but not limited
to (i) filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture and
the Sale and Servicing Agreement and (ii) recording or causing to be recorded
all Mortgages, Assignments of Mortgage, all intervening Assignments of Mortgage
and all assumption and modification agreements required to be recorded by the
terms of the Sale and Servicing Agreement, in accordance with and within the
time periods provided for in this Indenture and/or the Sale and Servicing
Agreement, as applicable. Except as otherwise expressly provided therein, the
Issuer shall not waive, amend, modify, supplement or terminate any Operative
Document or any provision thereof without the consent of the Indenture Trustee,
the Note Insurer, and the Owners of at least a majority of the Outstanding
Amount of the Notes.
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(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Termination Event under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee, the Note Insurer and the Rating Agencies
thereof, and shall specify in such notice the action, if any, the Issuer is
taking with respect of such default. If such Servicer Termination Event shall
arise from the failure of the Servicer to perform any of its duties or
obligations under the Sale and Servicing Agreement with respect to the Home
Equity Loans, the Issuer shall take all reasonable steps available to it to
remedy such failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers pursuant to Section 4.20 of the
Sale and Servicing Agreement, the Issuer, upon the prior written consent of or
upon the direction of the Note Insurer, shall appoint a successor servicer (the
"Successor Servicer") in accordance with the provisions of Section 4.20 of the
Sale and Servicing Agreement.
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee and the Note Insurer. As soon as a Successor Servicer is appointed
pursuant to Section 4.20 of the Sale and Servicing Agreement, the Issuer shall
notify the Indenture Trustee of such appointment, specifying in such notice the
name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees (i) that it will not, without the prior
written consent of the Indenture Trustee and the Note Insurer, or, if a Note
Insurer Default has occurred and is continuing, the Owners of at least a
majority in Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral (except to the
extent otherwise provided in the Sale and Servicing Agreement) or the Operative
Documents, or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement; and (ii) that any such amendment
shall not (A) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, distributions that are required to be made for the benefit
of the Owners or (B) reduce the aforesaid percentage of the Notes that is
required to consent to any such amendment, without the consent of the Owners of
all the outstanding Notes. If any such amendment, modification, supplement or
waiver shall be so consented to by the Indenture Trustee and the Note Insurer,
the Issuer agrees, promptly following a request by the Indenture Trustee or the
Note Insurer to do so, to execute and deliver, in its own name and at its own
expense, such agreements, instruments, consents and other documents as the
Indenture Trustee or the Note Insurer may deem necessary or appropriate in the
circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture, the Loan Sale
Agreement or the Sale and Servicing Agreement, sell, transfer,
exchange or otherwise dispose of any of the properties or
assets of the Issuer, including those included in the
Collateral, unless directed to do so by the Indenture Trustee
or the Note Insurer;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code)
or assert any claim against any present or former Owner by
reason of the payment of the taxes levied or assessed upon any
part of the Collateral;
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(iii) engage in any business or activity other than as permitted by
the Trust Agreement or other than in connection with, or
relating to, the issuance of Notes pursuant to this Indenture,
or amend the Trust Agreement as in effect on the Closing Date
other than in accordance with Section 11.1 thereof,
(iv) issue debt obligations under any other indenture;
(v) incur or assume any indebtedness or guaranty any indebtedness
of any Person, except for such indebtedness as may be incurred
by the Issuer in connection with the issuance of the Notes
pursuant to this Indenture;
(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person;
(vii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged,
or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, (B) permit any
lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden
the Collateral or any part thereof or any interest therein or
the proceeds thereof (other than tax liens, mechanics' liens
and other liens that arise by operation of law, in each case
on any of the Properties and arising solely as a result of an
action or omission of the related Mortgagor) or (C) permit the
lien of this Indenture not to constitute a valid first
priority (other than with respect to any such tax, mechanics'
or other lien) security interest in the Collateral;
(viii)take any other action or fail to take any action which may
cause the Issuer to be taxable as (a) an association pursuant
to Section 7701 of the Code and the corresponding regulations
or (b) as a taxable mortgage pool pursuant to Section 7701(i)
of the Code and the corresponding regulations.
SECTION 3.9 Annual Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee and the Note Insurer, within 120 days after the end of
each fiscal year of the Issuer (commencing with the fiscal year 1998), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and
of its performance under this Indenture has been made under
such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and
covenants under the Indenture throughout such year, or, if
there has been a default in its compliance with any such
condition or covenant, specifying each such default known to
such Authorized Officer and the nature and status thereof.
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SECTION 3.10 Covenants of the Issuer. All covenants of the Issuer in the
Indenture are covenants of the Issuer and are not covenants of the Owner
Trustee. The Owner Trustee is, and any successor Owner Trustee under the Trust
Agreement will be, entering into this Indenture solely as Owner Trustee under
the Trust Agreement and not in its respective individual capacity, and in no
case whatsoever shall the Owner Trustee or any such successor Owner Trustee be
personally liable on, or for any loss in respect of, any of the statements,
representations, warranties or obligations of the Issuer hereunder, as to all of
which the parties hereto agree to look solely to the property of the Issuer.
SECTION 3.11 Reserved.
SECTION 3.12 Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
to the Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer, the
Owners and the Certificateholders as contemplated by, and to the extent funds
are available for such purpose under, the Sale and Servicing Agreement or the
Trust Agreement. The Issuer will not, directly or indirectly, make or cause to
be made payments to or distributions from the Principal and Interest Account
except in accordance with this Indenture and the Operative Documents.
SECTION 3.13 Treatment of Notes as Debt for Tax Purposes. The Issuer shall
treat the Notes as indebtedness for all federal, state and local income and
franchise tax purposes.
SECTION 3.14 Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Note Insurer and the Rating Agencies prompt written
notice of each Event of Default hereunder, each default on the part of the
Servicer or the Seller of its obligations under the Sale and Servicing Agreement
and each default on the part of the Depositor or the Seller of its obligations
under the Loan Sale Agreement.
SECTION 3.15 Further Instruments and Acts. Upon request of the Indenture
Trustee or the Note Insurer, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Notes (except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Owners to receive payments of
principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8 and
3.10 hereof, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.7 and
the obligations of the Indenture Trustee under Section 4.2) and (vi) the rights
of Owners as beneficiaries hereof with respect to the property so deposited with
the Indenture Trustee payable to all or any of them), and the Indenture Trustee,
on demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes,
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when all of the following have occurred:
(A) either
(1) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.4 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.3) have been delivered to the Indenture Trustee for
cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name, and at the expense, of the
Issuer, and the Issuer, in the case of a. or b. above, has irrevocably deposited
or caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Indenture Trustee for cancellation
when due to the Final Payment Date or Redemption Date (if Notes shall have been
called for redemption pursuant to Section 10.1), as the case may be;
(B) the later of (a) eighteen months after payment in full of all
outstanding obligations under the Notes, (b) the payment in full of all unpaid
Trust Fees and Expenses and all sums owing to the Note Insurer under the
Insurance Agreement and (c) the date on which the Issuer has paid or caused to
be paid all other sums payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of Section 11.1 and, subject to Section
11.2, each stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture with respect to the Notes have
been complied with.
SECTION 4.2 Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Sections 3.3 and 4.3 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Owners of the Notes for the payment or
redemption of which such moneys have been deposited with the Indenture Trustee,
of all sums due and to become due thereon for principal and interest; but such
moneys need not be segregated from other funds except to the extent required
herein or in the Sale and Servicing Agreement or required by law.
SECTION 4.3 Repayment of Moneys Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon
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demand of the Issuer, be paid to the Indenture Trustee to be held and applied
according to Section 3.3 and thereupon such Paying Agent shall be released from
all further liability with respect to such moneys.
ARTICLE V
REMEDIES
SECTION 5.1 Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest on any Note when the same
becomes due and payable (it being understood that any Available Funds Cap Carry
Forward Amount does not constitute interest due and payable); or
(b) default in the payment of the principal of or any installment of the
principal of any Note when the same becomes due and payable; or
(c) default in the observance or performance of any covenant or agreement
of the Issuer made in this Indenture (other than a covenant or agreement, a
default in the observance or performance of which is elsewhere in this Section
specifically dealt with), or any representation or warranty of the Issuer made
in this Indenture, the Insurance Agreement, the Sale and Servicing Agreement or
in any certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the time
when the same shall have been made, and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 30 days after there shall have been given, by
registered or certified mail, to the Issuer by the Indenture Trustee or to the
Issuer and the Indenture Trustee by the Owners of at least 25% of the
Outstanding Amount of the Notes, a written notice specifying such default or
incorrect representation or warranty and requiring it to be remedied and stating
that such notice is a notice of Default hereunder; or
(d) default in the observance or performance of any covenant or agreement
of the Depositor made in the Trust Agreement or any representation or warranty
of the Depositor made in the Trust Agreement, proving to have been incorrect in
any material respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or condition in
respect of which such misrepresentation or warranty was incorrect shall not have
been eliminated or otherwise cured, for a period of 30 days after there shall
have been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Owners of at least 25%
of the Outstanding Amount of the Notes, a written notice specifying such default
or incorrect representation or warranty and requiring it to be remedied and
stating that such notice is a notice of Default hereunder;
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Collateral in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Collateral, or
ordering the winding-up or liquidation of the Issuer's affairs, and such
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decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the Issuer
to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Collateral, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer generally
to pay its debts as such debts become due, or the taking of any action by the
Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee and the Note Insurer,
within five days after the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under clauses (c) and (d) above, its
status and what action the Issuer is taking or proposes to take with respect
thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee, at the direction or upon the prior written consent of the
Note Insurer or the Owners of Notes representing not less than a majority of the
Outstanding Amount of the Notes may, with the prior written consent of the Note
Insurer, declare all the Notes to be immediately due and payable, by a notice in
writing to the Issuer (and to the Indenture Trustee if given by Owners), and
upon any such declaration the unpaid principal amount of such Notes, together
with accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Note Insurer or the Owners of Notes representing a majority of the Outstanding
Amount of the Notes, with the prior written consent of the Note Insurer, by
written notice to the Issuer and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) all payments of principal of and interest on all Notes and all
other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration
had not occurred; and
(ii) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel;
and
(iii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section
5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
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SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if (i) default is made in the payment of any
interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment of
the principal of or any installment of the principal of any Note when the same
becomes due and payable, the Issuer will, upon demand of the Indenture Trustee
and at the direction of the Note Insurer, pay to the Indenture Trustee, for the
benefit of the Owners of the Notes and the Note Insurer, the whole amount then
due and payable on such Notes for principal and interest, with interest upon the
overdue principal and, to the extent payment at such rate of interest shall be
legally enforceable, upon overdue installments of interest at the rate borne by
the Notes and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
the Note Insurer and their respective agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, shall at the direction of the Note Insurer, and if a Note Insurer Default
has occurred and is continuing, the Indenture Trustee may, in its discretion,
and shall at the direction of the Owners of the Notes representing a majority of
the Outstanding Amount of the Notes, institute a Proceeding for the collection
of the sums so due and unpaid, and may prosecute such Proceeding to judgment or
final decree, and may enforce the same against the Issuer or other obligor upon
such Notes and collect in the manner provided by law out of the property of the
Issuer or other obligor upon such Notes, wherever situated, the moneys adjudged
or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
shall, at the direction of the Note Insurer, and if a Note Insurer Default has
occurred and is continuing, the Indenture Trustee may and shall at the direction
of the Owners of the Notes representing a majority of the Outstanding Amount of
the Notes, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Note Insurer and
the Owners, by such appropriate Proceedings as the Indenture Trustee shall deem
most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Collateral, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, upon the direction of the Note Insurer, by intervention
in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the
Notes and to file such other papers or documents
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as may be necessary or advisable in order to have the claims
of the Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee, each predecessor
Indenture Trustee and the Note Insurer, and their respective
agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by
the Indenture Trustee and each predecessor Indenture Trustee
(except as a result of negligence or bad faith), the Note
Insurer and of the Owners allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Owners of Notes in any election of a trustee,
a standby trustee or Person performing similar functions in
any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Owners, the Note
Insurer and the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of
the Indenture Trustee, the Note Insurer or the Owners of Notes
allowed in any judicial proceedings relative to the Issuer,
its creditors and its property; and any trustee, receiver,
liquidator, custodian or other similar official in any such
Proceeding is hereby authorized by each of such Owners and the
Note Insurer to make payments to the Indenture Trustee and, in
the event that the Indenture Trustee shall consent to the
making of payments directly to such Owners and the Note
Insurer, to pay to the Indenture Trustee such amounts as shall
be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by
the Indenture Trustee and each predecessor Indenture Trustee
except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Owner or the Note Insurer any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Owner thereof
or the Note Insurer or to authorize the Indenture Trustee to vote in respect of
the claim of any Owner in any such proceeding except, as aforesaid, to vote for
the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Owners of the Notes and the Note Insurer.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the
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Indenture Trustee shall be held to represent all the Owners, and it shall not be
necessary to make any Owner a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, at the direction of the Note Insurer, and if a Note
Insurer Default has occurred and is continuing, the Indenture Trustee may and at
the direction of the Owners of the Notes representing a majority of the
Outstanding Amount of the Notes shall, upon receipt of satisfactory indemnity
and assurances, do one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable
on the Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor
upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the
Collateral;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee, the Note Insurer
or the Owners; and
(iv) sell the Collateral or any portion thereof or rights or
interest therein in a commercially reasonable manner, at one
or more public or private sales called and conducted in any
manner permitted by law; provided, however, that the Indenture
Trustee may not sell or otherwise liquidate the Collateral
following an Event of Default, unless (A) the Owners of 100%
of the Outstanding Amount of the Notes consent thereto, (B)
the proceeds of such sale or liquidation distributable to the
Owners are sufficient to discharge in full all amounts then
due and unpaid upon such Notes for principal and interest or
(C) the Indenture Trustee determines that the Collateral will
not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have
become due if the Notes had not been declared due and payable,
and the Indenture Trustee obtains the consent of Owners of
66-2/3% of the Outstanding Amount of the Notes. In determining
such sufficiency or insufficiency with respect to clauses (B)
and (C), the Indenture Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility
of such proposed action and as to the sufficiency of the
Collateral for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for the Indenture Trustee Fee then due and
any costs or expenses incurred by it in connection with the enforcement of the
remedies provided for in this Article V
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and to the Owner Trustee for the Owner Trustee Fee then due;
SECOND: to the Note Insurer for the Premium Amount then due and unpaid;
THIRD: to the Servicer for the Servicing Fee then due and unpaid;
FOURTH: to Owners for amounts due and unpaid on the Notes for Current
Interest (including any premium), pro rata, according to the amounts due and
payable on the Notes for interest (including any premium);
FIFTH: to Owners of the Notes for amounts due and unpaid on the Notes for
principal, pro rata;
SIXTH: to the Note Insurer for any amounts then due and payable under the
Insurance Agreement; and
SEVENTH: to Owners of the Notes for any Available Funds Cap Carry Forward
Amount then unpaid; and
EIGHT: to the Owner Trustee, for any amounts to be distributed, pro rata,
to the Certificateholders.
The Indenture Trustee may fix a record date and payment date for any
payment to be made to the Owners pursuant to this Section. At least 15 days
before such record date, the Indenture Trustee shall mail to each Owner, the
Note Insurer and the Issuer a notice that states the record date, the payment
date and the amount to be paid.
SECTION 5.5 Optional Preservation of the Collateral. If the Notes have
been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Collateral. It is the desire of the parties hereto and the Owners that
there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and the Indenture Trustee shall take such desire into
account when determining whether or not to maintain possession of the
Collateral. In determining whether to maintain possession of the Collateral, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.
SECTION 5.6 Limitation of Suits. No Owner of any Note shall have any right
to institute any Proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder for so long as a Note Insurer Default has not occurred or is
not continuing and if a Note Insurer Default has occurred and is continuing,
unless:
(a) such Owner has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Owners of not less than 25% of the Outstanding Amount of the Notes
have made written request to the Indenture Trustee to institute such Proceeding
in respect of such Event of Default in its own
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name as Indenture Trustee hereunder;
(c) such Owner or Owners have offered to the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such Proceedings; and
(e) no direction inconsistent with such written request has been given to
the Indenture Trustee during such 60-day period by the Owners of a majority of
the Outstanding Amount of the Notes.
It is understood and intended that no one or more Owners of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Owners of Notes or to obtain or to seek to obtain priority or preference
over any other Owners or to enforce any right under this Indenture, except in
the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Owners of Notes,
each representing less than a majority of the Outstanding Amount of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7 Unconditional Rights of Owners To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Owner of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective Final Payment Date thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Owner.
SECTION 5.8 Restoration of Rights and Remedies. If the Indenture Trustee,
the Note Insurer or any Owner has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee, the Note Insurer or to such Owner, then and in every such case the
Issuer, the Indenture Trustee, the Note Insurer and the Owners shall, subject to
any determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Owners shall continue as though no such Proceeding had
been instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Note Insurer or to the
Owners is intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee, the Note Insurer or any Owner of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
V or by law to the
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Indenture Trustee, the Note Insurer or to the Owners may be exercised from time
to time, and as often as may be deemed expedient, by the Indenture Trustee, the
Note Insurer or by the Owners, as the case may be, subject, in each case,
however, to the right of the Note Insurer to control any such right and remedy,
except as provided in Section 11.21.
SECTION 5.11 Control by Owners. The Owners of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture;
(b) subject to the express terms of Section 5.4, any direction to the
Indenture Trustee to sell or liquidate the Collateral shall be by Owners of
Notes representing not less than 100% of the Outstanding Amount of the Notes;
(c) if the conditions set forth in Section 5.5 have been satisfied and the
Indenture Trustee elects to retain the Collateral pursuant to such Section, then
any direction to the Indenture Trustee by Owners of Notes representing less than
100% of the Outstanding Amount of the Notes to sell or liquidate the Collateral
shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of the Note Insurer and the Owners set forth in
this Section, subject to Section 6.1, the Indenture Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Owners not consenting to such action.
SECTION 5.12 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2, the Owners
of Notes representing not less than a majority of the Outstanding Amount of the
Notes may waive any past Default or Event of Default and its consequences except
a Default (a) in the payment of principal of or interest on any of the Notes or
(b) in respect of a covenant or provision hereof that cannot be modified or
amended without the consent of the Note Insurer or the Owner of each Note, as
applicable. In the case of any such waiver, the Issuer, the Indenture Trustee,
the Note Insurer and the Owners of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture agree,
and each Owner of any Note by such Owner's acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any
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party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to (a) any suit
instituted by the Indenture Trustee or the Note Insurer, (b) any suit instituted
by any Owner, or group of Owners, in each case holding in the aggregate more
than 10% of the Outstanding Amount of the Notes or (c) any suit instituted by
any Owner for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Owners shall be impaired by the recovery of any
judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Collateral or upon any of
the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.4(b).
SECTION 5.16 Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so, the
Issuer shall take all such lawful action as the Indenture Trustee may request to
compel or secure the performance and observance by the Depositor, the Seller and
the Servicer, as applicable, of each of their obligations to the Issuer under or
in connection with the Sale and Servicing Agreement or by the Depositor or the
Seller of their respective obligations under or in connection with the Loan Sale
Agreement, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale and
Servicing Agreement to the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of default on the part of the
Depositor, the Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Depositor, the Seller or the Servicer of each of their obligations under the
Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the written direction (which direction shall be in writing
or by telephone, confirmed in writing promptly thereafter) of the Owners of
66-2/3% of the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Depositor, the
Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, or against the Depositor or the Seller under or in connection with
the Loan Sale Agreement, including the right or power to take any action to
compel or secure performance or observance by the Depositor, the Seller or the
Servicer, as the case may be, of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension, or waiver under the Sale and Servicing Agreement or the Loan Sale
Agreement, as the case may
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be, and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.
(a) If an Event of Default of which a Responsible Officer of the Indenture
Trustee shall have actual knowledge has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates (or
similar documents) or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the Indenture
Trustee shall examine the certificates (or similar documents) and opinions
to determine whether or not they conform to the requirements of this
Indenture; provided that the Indenture Trustee shall not be responsible
for the accuracy or content of any certificate (or similar document) or
opinion furnished to it pursuant to the terms of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Indenture Trustee shall not be personally liable for any
error of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be personally liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 5.11 or for
exercising or omitting to exercise any trust or power conferred upon the
Indenture Trustee under this Indenture.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer and except to the extent of income or other gain
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on investments which are deposits in or certificates of deposit of the Indenture
Trustee in its commercial capacity.
(f) Money held in trust by the Indenture Trustee shall be segregated from
other funds except to the extent permitted by law or the terms of this Indenture
or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it; provided, however, that the Indenture Trustee shall
not refuse or fail to perform any of its duties hereunder solely as a result of
nonpayment of its normal fees and expenses and further provided that nothing in
this Section 6.1(g) shall be construed to limit the exercise by the Indenture
Trustee of any right or remedy permitted under this Indenture or otherwise in
the event of the Issuer's failure to pay the Indenture Trustee's fees and
expenses pursuant to Section 6.7. In determining that such repayment or
indemnity is not reasonably assured to it, the Indenture Trustee must consider
not only the likelihood of repayment or indemnity by or on behalf of the Issuer
but also the likelihood of repayment or indemnity from amounts payable to it
from the Collateral pursuant to Section 6.7.
(h) Every provision of this Indenture relating to the conduct of,
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
SECTION 6.2 Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Indenture
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel, which shall not be at
the expense of the Indenture Trustee. The Indenture Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on an
Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of any such
agent or attorney or custodian appointed by the Indenture Trustee with due care.
(d) The Indenture Trustee shall not be liable for (i) any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that such action or omission by the
Indenture Trustee does not constitute willful misconduct, negligence or bad
faith; or (ii) any willful misconduct or gross negligence on the part of the
Custodian.
SECTION 6.3 Individual Rights of Indenture Trustee. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Paying Agent, Note
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Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, shall not be accountable for the
Issuer's use of the proceeds from the Notes, or responsible for any statement of
the Issuer in this Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's certificate
of authentication.
SECTION 6.5 Notice of Defaults. If a Default occurs and is continuing and
if it is known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to the Note Insurer and each Owner notice of the Default
within 90 days after it occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note), the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of Owners.
SECTION 6.6 Reports by Indenture Trustee to Owners. The Indenture Trustee
shall deliver to each Owner such information as may be required to enable such
Owner to prepare its federal and state income tax returns.
SECTION 6.7 Compensation and Indemnity. The Indenture Trustee shall
receive compensation for fees and reimbursement for expenses pursuant to Section
3.03(b)(i) and Section 3.03(b)(iv)(D) of the Sale and Servicing Agreement. The
Indenture Trustee and any director, officer, employee or agent of the Indenture
Trustee shall be indemnified by the Trust and held harmless against any loss,
liability, or "unanticipated out-of-pocket" expense incurred or paid to third
parties (which expenses shall not include salaries paid to employees, or
allocable overhead, of the Indenture Trustee) in connection with the acceptance
or administration of its trusts hereunder or the Notes, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. All such amounts described in the
preceding sentence shall be payable as provided in (A) Section 3.03(b)(i) of the
Sale and Servicing Agreement with respect to such amounts that are Indenture
Trustee Reimbursable Expenses and (B) Section 3.03(b)(iv)(D) with respect to the
remainder of such amounts, subject in the case of clause (B), to Section 6.1(g)
of this Indenture. The provisions of this Section 6.7 shall survive the
termination of this Indenture.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(e) or (f) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.8 Replacement of Indenture Trustee. No resignation or removal of
the Indenture Trustee and no appointment of a successor Indenture Trustee shall
become effective until the acceptance of appointment by the successor Indenture
Trustee pursuant to this Section. The Indenture Trustee may resign at any time
by so notifying the Issuer and the Note Insurer. The Owners of a majority of the
Outstanding Amount of the Notes (with the consent of the Note Insurer) may
remove the Indenture Trustee by so notifying the Indenture Trustee and may
appoint a successor Indenture Trustee. The Note Insurer (or the Issuer upon the
prior written consent of the Note Insurer) shall remove the Indenture Trustee
if:
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(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed, or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee acceptable to the Note
Insurer. A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Note Insurer and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to the Owners.
The retiring Indenture Trustee shall promptly transfer all property held by it
as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Owners of a majority of the Outstanding Amount of the
Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Owner may
petition any court of competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under Section 6.7 shall continue for the
benefit of the retiring Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Note
Insurer and the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
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(a) Notwithstanding any other provisions of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Collateral may at the time be located, the Indenture Trustee
shall have the power, with the prior written consent of the Note Insurer, and
may execute and deliver all instruments to appoint one or more Persons to act as
a co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Owners, such title to the Collateral, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.11 and no notice to Owners of the appointment of any co-trustee or separate
trustee shall be required under Section 6.8 hereof; provided that the Indenture
Trustee shall deliver notice of any such co-trustee or separate trustee to the
Note Insurer.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee is not authorized to act
separately without the Indenture Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Indenture 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 Collateral or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture 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 Indenture and
the conditions of this Article VI. 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, jointly with the Indenture
Trustee, subject to all the provisions of this Indenture, specifically including
every provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture 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 Indenture 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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SECTION 6.11 Eligibility; Disqualification. The Indenture Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of A3 or better by Moody's or shall otherwise
be acceptable to Moody's. The Indenture Trustee shall comply with TIA Section
310(b), including the optional provision permitted by the second sentence of TIA
Section 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VII
OWNERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of
Owners. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Owners as of such Record Date, (b) at such other times as the Indenture
Trustee may request in writing, within 30 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that so
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished.
SECTION 7.2 Preservation of Information; Communications to Owners.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Owners contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.1
and the names and addresses of Owners received by the Indenture Trustee in its
capacity as Note Registrar. The Indenture Trustee may destroy any list furnished
to it as provided in such Section 7.1 upon receipt of a new list so furnished.
(b) Owners may communicate pursuant to TIA Section 312(b) with other
Owners with respect to their rights under this Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.3 Reports by Issuer. The Issuer shall:
(a) file with the Indenture Trustee and the Note Insurer, within 15 days
after the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) that the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
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(b) file with the Indenture Trustee and the Note Insurer and the
Commission in accordance with the rules and regulations prescribed from time to
time by the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations;
and
(c) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Owners described in TIA Section 313(c)) such summaries
of any information, documents and reports required to be filed by the Issuer
pursuant to clauses (i) and (ii) of this Section 7.3(a) and by rules and
regulations prescribed from time to time by the Commission.
SECTION 7.4 Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each December 1, beginning with December 1, 1998,
the Indenture Trustee shall mail to the Note Insurer and to each Owner as
required by TIA Section 313(c) a brief report dated as of such date that
complies with TIA Section 313(a). The Indenture Trustee also shall comply with
TIA Section 313(b).
A copy of each report at the time of its mailing to Owners shall be filed
by the Indenture Trustee with the Commission and each securities exchange, if
any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any securities exchange.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money.
(a) General. Except as otherwise expressly provided herein, the Indenture
Trustee may demand payment or delivery of, and shall receive and collect,
directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply
all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
Collateral, the Indenture Trustee may, and upon written request of the Note
Insurer shall, take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
(b) Claims Under Note Insurance Policy. The Notes will be insured by the
Note Insurance Policy pursuant to the terms set forth therein, notwithstanding
any provisions to the contrary contained in this Indenture or the Sale and
Servicing Agreement. All amounts received under the Note Insurance Policy shall
be used solely for the payment to Owners of Insured Payments.
SECTION 8.2 Accounts; Distributions.
(a) On or prior to the Closing Date, the Issuer shall cause the Servicer
to establish and maintain, in the name of the Indenture Trustee for the benefit
of the Owners and the Note Insurer, the Accounts as provided in the Sale and
Servicing Agreement. The Indenture Trustee shall deposit amounts into the
Accounts in accordance with the terms hereof and the Sale and Servicing
Agreement.
(b) On or before the Monthly Remittance Date prior to each Payment Date,
the Indenture Trustee shall withdraw from the Principal and Interest Account the
amounts specified in Section 3.03(a) of the Sale and Servicing Agreement and
will deposit such amount into the Note Account. No later than the Business Day
prior to each Payment Date, to the extent funds are available in the Note
Account, the Indenture Trustee shall either retain funds in the Note Account or
make the withdrawals from the Note Account and deposits into the other Accounts
for distribution on such Payment Date as required pursuant to Section 3.03(b) of
the Sale and Servicing Agreement.
(c) On each Payment Date and the Redemption Date, to the extent funds are
available in the Note Account, the Indenture Trustee shall make the following
distributions from the amounts on deposit in the Note Account in the following
order of priority (except as otherwise provided in Section 5.4(b)):
(i) to the Owners of the Notes, the Current Interest for such
Payment Date; provided, that if there are not sufficient funds
in the Note Account to pay the entire amount of accrued and
unpaid interest then due on the Notes, the amount in the Note
Account shall be applied to the payment of such interest on
the Notes pro rata on the basis of the total such interest due
on the Notes; and
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(ii) to the Owners of the Notes, the Principal Distribution Amount
for such Payment Date.
(d) The Indenture Trustee shall make claims under the Note Insurance
Policy pursuant to Section 7.02 of the Sale and Servicing Agreement and in
accordance with the Note Insurance Policy. The Indenture Trustee shall deposit
any Insured Payment received from the Note Insurer in the Note Account. All
amounts received under the Note Insurance Policy shall be used solely for the
payment to Owners of principal and interest on the Notes.
SECTION 8.3 General Provisions Regarding Accounts.
(a) So long as no Default or Event of Default shall have occurred and be
continuing, all or a portion of the funds in the Accounts shall be invested in
Eligible Investments and reinvested by the Indenture Trustee at the direction of
the Seller in accordance with the provisions of Section 3.05 of the Sale and
Servicing Agreement. The Issuer will not direct the Indenture Trustee to make
any investment of any funds or to sell any investment held in any of the
Accounts unless the security interest Granted and perfected in such Account will
continue to be perfected in such investment or the proceeds of such sale, in
either case without any further action by any Person, and, in connection with
any direction to the Indenture Trustee to make any such investment or sale.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any way
be held liable by reason of any insufficiency in any of the Accounts resulting
from any loss on any Eligible Investment included therein except for losses
attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Seller shall have failed to give investment directions for
any funds on deposit in the Accounts to the Indenture Trustee by 11:00 a.m.
Eastern Time (or such other time as may be agreed by the Issuer and Indenture
Trustee) on any Business Day or (ii) a Default or Event of Default shall have
occurred and be continuing with respect to the Notes but the Notes shall not
have been declared due and payable pursuant to Section 5.2 or (iii) if such
Notes shall been declared due and payable following an Event of Default, amounts
collected or receivable from the Collateral are being applied in accordance with
Section 5.5 as if there had not been such a declaration, then the Indenture
Trustee shall, to the fullest extent practicable, invest and reinvest funds in
the Accounts in one or more Eligible Investments.
SECTION 8.4 Servicer's Monthly Statements. On each Payment Date (to the
extent it receives the supporting documentation from the Servicer on a timely
basis), the Indenture Trustee shall deliver the report required by Section 3.09
of the Sale and Servicing Agreement with respect to such Payment Date to the
Depositor, the Rating Agencies, and the Note Insurer.
SECTION 8.5 Release of Collateral.
(a) Subject to the payment of its fees and expenses pursuant to Section
6.7, the Indenture Trustee may, and when required by the provisions of this
Indenture and the Sale and Servicing Agreement shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are not
inconsistent with the
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provisions of this Indenture. No party relying upon an instrument executed by
the Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due to the Note Insurer, the Indenture Trustee and the
Owner Trustee have been paid, release any remaining portion of the Collateral
that secured the Notes from the lien of this Indenture and release to the Issuer
or any other Person entitled thereto any funds then on deposit in the Accounts.
The Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Subsection (b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.1.
SECTION 8.6 Opinion of Counsel. The Indenture Trustee and the Note Insurer
shall receive at least seven Business Days notice when requested by the Issuer
to take any action pursuant to Section 8.5(a), accompanied by copies of any
instruments involved, and the Indenture Trustee shall also require, as a
condition to such action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding that
all conditions precedent to the taking of such action have been complied with
and such action will not materially and adversely impair the security for the
Notes or the rights of the Owners in contravention of the provisions of this
Indenture; provided, however, that such Opinion of Counsel shall not be required
to express an opinion as to the fair value of the Collateral. Counsel rendering
any such opinion may rely, without independent investigation, on the accuracy
and validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Owners.
(a) Without the consent of the Owners of any Notes but with prior notice
to the Rating Agencies and with the prior written consent of the Note Insurer,
the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any
time and from time to time, may enter into one or more indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to
assure, convey and confirm unto the Indenture Trustee any
property subject or required to be subjected to the lien of
this Indenture, or to subject to the lien of this Indenture
additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the
Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Owners of the Notes, or
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to surrender any right or power herein conferred upon the
Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any
supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture
or in any supplemental indenture; provided, that such action
shall not adversely affect the interests of the Owners of the
Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and
to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the
trusts hereunder by more than one trustee, pursuant to the
requirements of Article VI;
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of the Indenture under the TIA or under any
similar federal statute hereafter enacted and to add to the
Indenture such other provisions as may be expressly required
by the TIA; or
(viii) to modify or alter the provisions of the definition of the
term "Outstanding".
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, with the prior written consent
of the Note Insurer, when authorized by an Issuer Order, may, upon satisfaction
of the Rating Agency Condition but without the consent of any of the Owners ,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Owners of the Notes under this Indenture; provided, however, that such action
shall not, as evidenced by (i) an Opinion of Counsel or (ii) satisfaction of the
Rating Agency Condition, adversely affect in any material respect the interests
of any Owner.
SECTION 9.2 Supplemental Indentures with Consent of Owners. The Issuer and
the Indenture Trustee, when authorized by an Issuer Order, also may, with the
prior consent of the Note Insurer and with the consent of the Owners of not less
than a majority of the Outstanding Amount of the Notes, by Act of such Owners
delivered to the Issuer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Owners of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Owner of each Note affected thereby and the Note Insurer if
affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof or, the Note Rate,
change the provisions of this Indenture relating to the
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application of collections on, or the proceeds of the sale of, the Collateral to
payment of principal of or interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the interest thereon is
payable, or impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due on the
Notes on or after the respective due dates thereof (or, in the case of
redemption, on or after the Redemption Date);
(b) reduce the percentage of the Outstanding Amount of the Notes, the
consent of the Owners of which is required for any such supplemental indenture,
or the consent of the Owners of which is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture;
(c) reduce the percentage of the Outstanding Amount of the Notes required
to direct the Indenture Trustee to direct the Issuer to sell or liquidate the
Collateral pursuant to Section 5.4;
(d) modify any provision of this Section except to increase any percentage
specified herein or to provide that certain additional provisions of this
Indenture or the Operative Documents cannot be modified or waived without the
consent of the Owner of each Note affected thereby;
(e) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest or principal due
on any Note on any Payment Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the Owners
of Notes to the benefit of any provisions for the mandatory redemption of the
Notes contained herein; or
(f) permit the creation of any lien ranking prior to or on a parity with
the lien of this Indenture with respect to any part of the Collateral or, except
as otherwise permitted or contemplated herein, terminate the lien of this
Indenture on any property at any time subject hereto or deprive the Owner of any
Note of the security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Owners of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
In connection with requesting the consent of the Owners pursuant to this
Section, the Indenture Trustee shall mail to the Owners of the Notes to which
such amendment or supplemental indenture relates a notice setting forth in
general terms the substance of such supplemental indenture. It shall not be
necessary for any Act of Owners under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such
Act shall approve the substance thereof.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
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SECTION 9.4 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Owners of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Notes.
SECTION 9.7 Amendments to Trust Agreement. Subject to Section 11.1 of the
Trust Agreement, the Indenture Trustee shall, upon Issuer Order, consent to any
proposed amendment to the Trust Agreement or an amendment to or waiver of any
provision of any other document relating to the Trust Agreement, such consent to
be given without the necessity of obtaining the consent of the Owners of any
Notes upon satisfaction of the requirements under Section 11.1 of the Trust
Agreement.
Nothing in this Section shall be construed to require that any Person
obtain the consent of the Indenture Trustee to any amendment or waiver or any
provision of any document where the making of such amendment or the giving of
such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption. The holders of a majority of the Percentage
Interests represented by the Certificates then outstanding may effect an early
redemption of the Notes on or after any Monthly Remittance Date after the
Redemption Date pursuant to Section 5.02 of the Sale and Servicing Agreement. If
the holders of the Certificates decline to exercise such option to purchase the
Collateral and redeem the Notes, the Note Insurer may do so as provided in
Section 5.02(c) of the Sale and Servicing Agreement. If the holders of the
Certificates decline to exercise such option to purchase the Collateral and
redeem the Notes, the Note Insurer may do so as provided in Section 5.02(c) of
the Sale and Servicing Agreement.
Any such redemption by the Holders of the Certificates or the Note
Insurer, as applicable, shall be accomplished by the Holders of the Certificates
or the Note Insurer, as applicable, depositing or causing to
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be deposited into the Principal and Interest Account by 10:00 A.M. New York City
time on the on the Monthly Remittance Date prior to the Redemption Date the
amount of the Redemption Price. On the Payment Date after the date that the
Redemption Price is deposited into the Principal and Interest Account, the
Redemption Price shall be transferred to the Note Account for distribution to
the Owners on the Redemption Date; and any amounts received with respect to the
Home Equity Loans and REO Properties subsequent to such transfer shall belong to
the Servicer or the Note Insurer, as applicable.
The Servicer or the Issuer shall furnish the Indenture Trustee, the Rating
Agencies and the Note Insurer notice of any such redemption in accordance with
Section 10.2 no later than 15 days prior to the Redemption Date.
SECTION 10.2 Form of Redemption Notice
(a) Notice of redemption under Section 10.1 shall be given by the
Indenture Trustee by first-class mail, postage prepaid, or by facsimile mailed
or transmitted not later than 10 days prior to the applicable Redemption Date to
each Owner of Notes, as of the close of business on the Record Date preceding
the applicable Redemption Date, at such Owner's address or facsimile number
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 3.2).
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name of the Issuer and at the expense of the Servicer. Failure to give
notice of redemption, or any defect therein, to any Owner of any Note shall not
impair or affect the validity of the redemption of any other Note
SECTION 10.3 Notes Payable on Redemption Date; Provision for Payment of
Indenture Trustee and Note Insurer. The Notes or portions thereof to be redeemed
shall, following notice of redemption as required by Section 10.2 (in the case
of redemption pursuant to Section 10.1), on the Redemption Date become due and
payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price. The Issuer may not redeem the
Notes unless, (i) all outstanding obligations under the Notes have been paid in
full and (ii) the Indenture Trustee has been paid all amounts to which it is
entitled hereunder and the Note Insurer has been paid all Reimbursement Amounts
to which it is entitled as of the applicable Redemption Date.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and (ii) (if required by the TIA) an
Independent Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion
has read or has caused to be read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; and
(3) a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with.
SECTION 11.2 Form of Documents Delivered to Indenture Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer, the Seller, the Issuer or the Depositor, stating that the information
with respect to such factual matters is in the possession of the Servicer, the
Seller, the Issuer or the Depositor, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be
45
<PAGE> 51
consolidated and form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.3 Acts of Owners.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Owners may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Owners in person or by agents duly appointed in writing;
and except as herein otherwise expressly provided such action shall become
effective when such instrument or instruments are delivered in writing to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Owners signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Owner of any Notes shall bind the Owner of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer, Rating Agencies
and Note Insurer. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Owners or other documents provided or permitted by
this Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or act of Owners is to be made upon, given or
furnished to or filed with:
(a) the Indenture Trustee by any Owner or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office, or
(b) in the case of the Issuer, Rating Agencies or Note Insurer as provided
in Section 6.12 of the Sale and Servicing Agreement.
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<PAGE> 52
SECTION 11.5 Notices to Owners; Waiver. Where this Indenture provides for
notice to Owners of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class,
postage prepaid to each Owner affected by such event, at his address as it
appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Owners is given by mail ,neither the failure to mail such notice
nor any defect in any notice so mailed to any particular Owner shall affect the
sufficiency of such notice with respect to other Owners, and any notice that is
mailed in the manner herein provided shall conclusively be presumed to have been
duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Owners shall be filed with the Indenture Trustee but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Owners when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
SECTION 11.6 [RESERVED].
SECTION 11.7 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10 Separability. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Owners, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the
47
<PAGE> 53
Collateral, any benefit or any legal or equitable right, remedy or claim under
this Indenture, except that the Note Insurer is an express third party
beneficiary to this Indenture as provided in Section 11.20.
SECTION 11.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13 Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Owners or any other Person secured
hereunder or for the enforcement of any right or remedy granted to the Indenture
Trustee under this Indenture.
SECTION 11.16 Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any Owner of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17 No Petition. The Indenture Trustee, by entering into this
Indenture, and each Owner, by accepting a Note, hereby covenant and agree that
they will not at any time institute against the Seller, the Servicer, the
Depositor or the Issuer, or join in any institution against the Seller, the
Servicer, the Depositor or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Operative
Documents.
48
<PAGE> 54
SECTION 11.18 Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or the Note
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
SECTION 11.19 Grant of Owner Rights to Note Insurer. In consideration for
the guarantee of the Notes by the Note Insurer pursuant to the Note Insurance
Policy, the Owners hereby grant to the Note Insurer the right to act as the
Owner of 100% of the outstanding Notes for the purpose of exercising the rights
of the Owners of the Notes hereunder, including the voting rights of such
Owners, but excluding those rights requiring the consent of all such Owners
under Section 9.2 and any rights of such Owners to distributions under Section
8.2 hereof; provided that the preceding grant of rights to the Note Insurer by
the Owners shall be subject to Section 11.21 hereof. The rights of the Note
Insurer to direct certain actions and consent to certain actions of the Owners
hereunder will terminate at such time as the Principal Balance has been reduced
to zero and the Note Insurer has been reimbursed for all Insured Payments and
any other amounts owed under the Note Insurance Policy and the Insurance
Agreement and the Note Insurer has no further obligation under the Note
Insurance Policy.
SECTION 11.20 Third Party Beneficiary. The parties hereto acknowledge that
the Note Insurer is an express third party beneficiary hereof entitled to
enforce any rights reserved to it hereunder as if it were actually a party
hereto.
SECTION 11.21 Suspension and Termination of Note Insurer's Rights.
(a) During the continuation of a Note Insurer Default, rights granted or
reserved to the Note Insurer hereunder shall vest instead in the Owners;
provided that the Note Insurer shall be entitled to any distributions in
reimbursement of the Reimbursement Amount, and the Note Insurer shall retain
those rights under Section 9.2 hereof to consent to any supplement to this
Indenture.
(b) At such time as either (i) the Note Principal Balance has been reduced
to zero or (ii) the Note Insurance Policy has been terminated following a Note
Insurer Default, and in either case of (i) or (ii) the Note Insurer has been
reimbursed for all Insured Payments and any other amounts owed under the Note
Insurance Policy and the Insurance Agreement t(and the Note Insurer no longer
has any obligation under the Note Insurance Policy, except for breach thereof by
the Note Insurer), then the rights and benefits granted or reserved to the Note
Insurer hereunder (including the rights to direct certain actions and receive
certain notices) shall terminate and the Owners shall be entitled to the
exercise of such rights and to receive such benefits of the Note Insurer
following such termination to the extent that such rights and benefits are
applicable to the Owners.
49
<PAGE> 55
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
IMC HOME EQUITY LOAN OWNER TRUST 1997-8
By: Wilmington Trust Company
not in its individual capacity but solely as Owner Trustee
By: /s/ Donald G. MacKelcan
-------------------------------
Name: Donald G. MacKelcan
Title:Assistant Vice President
THE CHASE MANHATTAN BANK
as Indenture Trustee
By: /s/ Ann Marie Jose
-------------------------------
Name Ann Marie Jose
Title:Trust Officer
50
<PAGE> 56
STATE OF DELAWARE
COUNTY OF NEW CASTLE
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Donald G. MacKelcan, known to
me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Owner
Trustee on behalf of IMC HOME EQUITY LOAN OWNER TRUST 1997-8, a Delaware
business trust, and that such person executed the same as the act of said
business trust for the purpose and consideration therein expressed, and in the
capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 22nd day of December, 1997.
/s/ Kathleen A. Pedelini
-------------------------------
Notary Public in and for the State of Delaware
(Seal)
My commission expires:
October 31, 1998
51
<PAGE> 57
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned authority, a Notary Public in and for said county and
state, on this day personally appeared Ann Marie Jose, known to me to be the
person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of THE CHASE MANHATTAN BANK, a
national banking association, and that such person executed the same as the act
of said corporation for the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of December, 1997.
/s/ James A. Nash
-------------------------------
Notary Public in and for the State of New York
(Seal)
My commission expires:
March 30, 1999
52
<PAGE> 58
SCHEDULE A
Available Upon Request to the Indenture Trustee
<PAGE> 59
EXHIBIT A - Form of Note
<PAGE> 1
OWNER TRUST AGREEMENT
between
IMC SECURITIES, INC.,
as Depositor
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated as of December 1, 1997
IMC HOME EQUITY LOAN OWNER TRUST 1997-8
<PAGE> 2
CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE.............................1
SECTION 1.1 Capitalized Terms..........................................1
SECTION 1.2 Other Definitional Provisions..............................3
ARTICLE II
ORGANIZATION...........................................................5
SECTION 2.1 Name.......................................................5
SECTION 2.2 Office.....................................................5
SECTION 2.3 Purpose and Powers.........................................5
SECTION 2.4 Appointment of Owner Trustee...............................6
SECTION 2.5 Initial Capital Contribution of the Owner Trust Estate.....6
SECTION 2.6 Declaration of Trust.......................................6
SECTION 2.7 Liability of the Holders...................................6
SECTION 2.8.Title to Trust Property....................................6
SECTION 2.9 Situs of Trust.............................................7
SECTION 2.10 Representations and Warranties of the Depositor...........7
SECTION 2.11 Covenant of the Depositor.................................8
SECTION 2.12 Federal Income Tax Allocations............................8
ARTICLE III
THE CERTIFICATES.......................................................9
SECTION 3.1 Initial Certificate Ownership..............................9
SECTION 3.2 Form of the Certificates...................................9
SECTION 3.3 Execution, Authentication and Delivery.....................9
SECTION 3.4 Registration; Registration of Transfer and Exchange of
Certificates...............................................9
SECTION 3.5 Mutilated; Destroyed; Lost or Stolen Certificates.........10
SECTION 3.6 Persons Deemed Owners.....................................11
SECTION 3.7 Access to List of Holders' Names and Addresses............11
SECTION 3.8 Maintenance of Office For Surrenders......................11
SECTION 3.9 Appointment of Trust Paying Agent.........................12
SECTION 3.10 Ownership by Depositor of the Depositor's Certificate....12
SECTION 3.11 Restriction on Transfers of Certificate..................12
ARTICLE IV
ACTIONS BY OWNER TRUSTEE..............................................15
SECTION 4.1 Prior Notice to Owners with Respect to Certain Matters....15
SECTION 4.2 Action by Holders with Respect to Certain Matters.........16
SECTION 4.3 Action by Holders with Respect to Bankruptcy..............17
SECTION 4.4 Restrictions on Holders' Power............................17
SECTION 4.5 Majority Control..........................................17
i
<PAGE> 3
ARTICLE V
APPLICATION OF OWNER TRUST ESTATE; CERTAIN DUTIES.....................18
SECTION 5.1 Establishment of Certificate Distribution Account.........18
SECTION 5.2 Application of Trust Funds................................18
SECTION 5.3 Method of Payment.........................................19
SECTION 5.4 Segregation of Moneys; No Interest........................19
SECTION 5.5 Accounting and Reports to the Certificateholders, the
Internal Revenue Service and Others.......................19
SECTION 5.6 Signature on Returns; Tax Matters Partner.................19
ARTICLE VI
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE.............................20
SECTION 6.1 General Authority.........................................20
SECTION 6.2.General Duties............................................20
SECTION 6.3 Action upon Instruction by Owners.........................20
SECTION 6.4 No Duties Except as Specified in this Agreement, the
Documents or in Instructions..............................21
SECTION 6.5 No Action Except Under Specified Documents or
Instructions..............................................21
SECTION 6.6 Restrictions..............................................22
ARTICLE VII
CONCERNING THE OWNER TRUSTEE..........................................23
SECTION 7.1 Acceptance of Trusts and Duties...........................23
SECTION 7.2 Furnishing of Documents...................................24
SECTION 7.3 Representations and Warranties of Owner Trustee...........25
SECTION 7.4 Reliance; Advice of Counsel...............................25
SECTION 7.5 Owner Trustee May Own Certificates and Notes..............26
SECTION 7.6 Licenses..................................................26
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE.........................................27
SECTION 8.1 Owner Trustee's Fee and Expenses..........................27
SECTION 8.2 Indemnification...........................................27
SECTION 8.3 Payments to the Owner Trustee.............................27
ARTICLE IX
TERMINATION OF TRUST AGREEMENT........................................28
SECTION 9.1 Termination of Trust Agreement............................28
SECTION 9.2 Reserved..................................................29
ii
<PAGE> 4
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES................29
SECTION 10.1 Eligibility Requirements for Owner Trustee...............29
SECTION 10.2 Resignation or Removal of Owner Trustee..................29
SECTION 10.3 Successor Owner Trustee..................................30
SECTION 10.4 Merger or Consolidation of Owner Trustee.................30
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee............30
ARTICLE XI
MISCELLANEOUS.........................................................33
SECTION 11.1 Amendments Without Consent of Certificateholders or
Owners of the Notes......................................33
SECTION 11.2 Amendments With Consent of Certificateholders............33
SECTION 11.3 Form of Amendments.......................................33
SECTION 11.4 No Legal Title to Owner Trust Estate.....................34
SECTION 11.5 Limitations on Rights of Others..........................34
SECTION 11.6 Notices..................................................34
SECTION 11.7 Severability.............................................35
SECTION 11.8 Counterparts.............................................35
SECTION 11.9 Successors and Assigns...................................35
SECTION 11.10 No Petition Covenant....................................35
SECTION 11.11 No Recourse.............................................35
SECTION 11.12 Headings................................................35
SECTION 11.13 Governing Law...........................................36
SECTION 11.14 Reserved................................................36
SECTION 11.15 Third-Party Beneficiary.................................36
SECTION 11.16 Suspension and Termination of Note Insurer's Rights.....36
iii
<PAGE> 5
OWNER TRUST AGREEMENT, dated as of December 1, 1997, between IMC
SECURITIES, INC., a Delaware corporation (the "Depositor") and WILMINGTON TRUST
COMPANY, a Delaware banking corporation, not in its individual capacity but
solely as Owner Trustee (the "Owner Trustee").
The Depositor and the Owner Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Capitalized Terms. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Agreement" shall mean this Owner Trust Agreement, as the same may
be amended and supplemented from time to time.
"Bankruptcy Action" shall have the meaning assigned to such term in
Section 4.1 hereof.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of I the
Delaware Code, 12 Del. Code Section 3801 et seq., as the same may be amended
from time to time.
"Certificate" shall mean a certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form attached
hereto as Exhibit B-1.
"Certificate Distribution Account" shall have the meaning assigned
to such term in Section 5.1.
"Certificate of Trust" shall mean the Certificate of Trust in the
form of Exhibit A to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.
"Certificateholder" or "Holder" shall mean a Person in whose name a
Certificate is registered.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
Rodney Square North, 1100 North Market Street, Wilmington, DE 19890-0001; or at
such other address in the State of Delaware as the Owner
<PAGE> 6
Trustee may designate by notice to the Owners and the Depositor, or the
principal corporate trust office of any successor Owner Trustee (the address
(which shall be in the State of Delaware) of which the successor owner trustee
will notify the Owners, the Holders and the Depositor).
"Depositor" shall mean IMC Securities, Inc., a Delaware Corporation.
"Depositor's Certificate" shall mean the Certificate in
substantially the form attached hereto as Exhibit B-2 representing a 1%
Percentage Interest of the Certificates that the Depositor is receiving pursuant
to Section 3.10.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"Indenture" shall mean the Indenture, dated as of December 1, 1997,
between the Issuer and the Indenture Trustee.
"Indenture Trustee" means The Chase Manhattan Bank, as Indenture
Trustee under the Indenture.
"Insurance Agreement" shall mean the Insurance Agreement, dated as
of December 1, 1997, among the Depositor, the Seller, the Servicer, the
Indenture Trustee and the Note Insurer.
"Issuer" shall mean IMC Home Equity Loan Owner Trust 1997-8, the
Delaware business trust created pursuant to this Agreement.
"Non-permitted Foreign Holder" shall have the meaning set forth in
Section 3.11.
"Non-U.S. Person" shall mean an individual, corporation, partnership
or other person other than 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 that is subject to U.S. federal income tax regardless of the source of its
income.
"Note Insurer" shall mean MBIA Insurance Corporation and its
successors and assigns.
"Operative Documents" shall mean this Agreement, the Custodial
Agreement, the Indenture, the Insurance Agreement, the Loan Sale Agreement, the
Sale and Servicing Agreement and the other documents and certificates delivered
in connection therewith.
"Owner" shall mean each holder of a Note.
"Owner Trust Estate" shall mean the Trust Estate (as defined in the
Indenture), including the contribution of $1 referred to in Section 2.5 hereof.
2
<PAGE> 7
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor owner trustee hereunder.
"Percentage Interest" shall mean with respect to each Certificate,
the percentage portion of all of the Certificates evidenced thereby as stated on
the face of such Certificate.
"Prospective Holder" shall have the meaning set forth in Section
3.11(a).
"Rating Agency Condition" means, with respect to any action to which
a Rating Agency Condition applies, that each Rating Agency shall have been given
10 days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each of the Rating Agencies shall have notified the
Seller, the Servicer, the Note Insurer, the Owner Trustee and the Issuer in
writing that such action will not result in a reduction or withdrawal of the
then current rating of the Notes.
"Record Date" shall mean as to each Payment Date the last Business
Day of the month immediately preceding the month in which such Payment Date
occurs.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement dated as of the date hereof, among the Issuer, the Depositor, the
Seller, the Servicer and the Indenture Trustee.
"Secretary of State" shall mean the Secretary of State of the State
of Delaware.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Paying Agent" shall mean the Indenture Trustee or any
successor in interest thereto or any other paying agent or co-paying agent
appointed pursuant to Section 3.9 and authorized by the Issuer to make payments
to and distributions from the Certificate Distribution Account, including
payment of principal of or interest on the Certificates on behalf of the Issuer.
SECTION 1.2 Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Sale and Servicing Agreement or, if
not defined therein, in the Indenture.
3
<PAGE> 8
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(d) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
4
<PAGE> 9
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The Trust created hereby shall be known as "IMC Home
Equity Loan Owner Trust 1997-8", in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued on behalf of the Trust.
SECTION 2.2 Office. The office of the Trust shall be in care of the Owner
Trustee at the Corporate Trust Office or at such other address in Delaware as
the Owner Trustee may designate by written notice to the Certificateholders, the
Note Insurer, the Owners and the Depositor.
SECTION 2.3 Purpose and Powers. The purpose of the Trust is to engage in
the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement;
(ii) with the proceeds of the sale of the Notes and the
Certificates, to pay the organizational, start-up and transactional
expenses of the Trust and to pay the balance to the Depositor and the
Seller, as their interests may appear pursuant to the Sale and Servicing
Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey
the Owner Trust Estate pursuant to the terms of the Indenture and to hold,
manage and distribute to the Certificateholders pursuant to the terms of
the Sale and Servicing Agreement any portion of the Owner Trust Estate
released from the lien of, and remitted to the Trust pursuant to, the
Indenture;
(iv) to enter into and perform its obligations under the
Operative Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Operative Documents, to
engage in such other activities as may be required in connection with
conservation of the assets of the Trust and the making of distributions to
the Certificateholders and the Owners of the Notes.
The Trust is hereby authorized to engage in the foregoing activities and
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the
Operative Documents.
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SECTION 2.4 Appointment of Owner Trustee. The Depositor hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein. The Owner Trustee
hereby accepts its appointment subject to the terms and conditions hereof.
SECTION 2.5 Initial Capital Contribution of the Owner Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution which shall constitute the initial Owner Trust Estate and
shall be deposited in the Certificate Distribution Account. The Depositor or the
Seller shall pay the organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares that
it shall hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholders, subject to
the obligations of the Trust under the Operative Documents. It is the intention
of the parties hereto that the Trust shall constitute a business trust under the
Business Trust Statute and that this Agreement shall constitute the governing
instrument of such business trust. Effective as of the date hereof, the Owner
Trustee shall have the rights, powers and duties set forth herein and in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee shall file the Certificate of Trust pursuant to the Business
Trust Statute with the Secretary of State.
SECTION 2.7 Liability of the Holders. No Certificateholder shall have any
personal liability for any liability or obligation of the Trust.
SECTION 2.8. Title to Trust Property.
(a) Subject to the Indenture, legal title to all of the Owner Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Owner Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
(b) The Certificateholders shall not have legal title to any part of
the Owner Trust Estate. No transfer by operation of law or otherwise of any
interest of the Certificateholders shall operate to terminate this Agreement or
the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of any part of the Owner Trust Estate.
SECTION 2.9 Situs of Trust. The Trust shall be located and administered in
the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
New York. The Trust shall not have any employees; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware. Payments shall be received by
the Trust only
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in Delaware or New York, and payments will be made by the Trust only from
Delaware or New York. The only office of the Trust shall be the Corporate Trust
Office in Delaware.
SECTION 2.10 Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee and the Note
Insurer that:
(a) The Depositor has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its business
as such properties are presently owned and such business is presently
conducted.
(b) The Depositor is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualifications.
(c) The Depositor has the power and authority to execute and deliver
this Agreement and to carry out its terms; the Depositor has full power
and authority to sell and assign the property to be sold and assigned to
and deposited with the Trust, and the Depositor has duly authorized such
sale and assignment to the Trust by all necessary corporate action; and
the execution, delivery and performance of this Agreement have been duly
authorized by the Depositor by all necessary corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms of this Agreement do not
conflict with, result in any breach of any of the terms and provisions of
or constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or by-laws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a party
or by which it is bound; nor result in the creation or imposition of any
lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the
Operative Documents); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to the
Depositor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or any of its properties.
(e) There are no proceedings or investigations pending or notice of
which has been received in writing before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties: (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or (iii) seeking
any determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
(f) The representations and warranties of the Depositor in Section
2.01 of the Sale and Servicing Agreement are true and correct.
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SECTION 2.11 Covenant of the Depositor. The Depositor covenants with the
Owner Trustee and the Note Insurer that during the continuance of this Agreement
it will comply in all respects with the provisions of its Certificate of
Incorporation in effect from time to time.
SECTION 2.12 Federal Income Tax Allocations. Net income of the Trust for
any month, as determined for Federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof), shall
be allocated to the Certificateholders, pro rata.
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ARTICLE III
THE CERTIFICATES
SECTION 3.1 Initial Certificate Ownership. Upon the formation of the Trust
by the contribution by the Depositor pursuant to Section 2.5 and until the
issuance of the Certificates, the Depositor shall be the sole owner of the
Trust.
SECTION 3.2 Form of the Certificates.
(a) The Certificates shall be issued without a principal amount. The
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of an authorized signatory of the Owner Trustee. Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the
Trust shall be valid, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of authentication and
delivery of such Certificates.
(b) The Certificates shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders) all as determined by the authorized signatory of the Owner
Trustee or the Owner Trustee's authenticating agent executing such Certificates,
as evidenced by their execution of such Certificates.
(c) A transferee of a Certificate shall become a Certificateholder,
and shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder, upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 3.4.
SECTION 3.3 Execution, Authentication and Delivery. Concurrently with the
initial sale of the Home Equity Loans by the Depositor to the Trust pursuant to
the Sale and Servicing Agreement, the Owner Trustee shall execute, or cause its
authenticating agent to execute the Certificates representing 100% of the
Percentage Interests of the Trust to be executed on behalf of the Trust,
authenticated and delivered to or upon the written order of the Depositor,
signed by an Authorized Officer of the Depositor, without further corporate
action by the Depositor. No Certificate shall entitle its Holder to any benefit
under this Agreement, or shall be valid for any purpose, unless there shall
appear on such Certificate a certificate of authentication substantially in the
form set forth in Exhibit B-1, executed by the Owner Trustee or the Owner
Trustee's authenticating agent, by manual or facsimile signature. Such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
SECTION 3.4 Registration; Registration of Transfer and Exchange of
Certificates.
The Certificate Registrar shall cause to be kept at its office or agency
in New York, New York, or at its designated agent, a Certificate Register in
which, subject to such reasonable
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regulations as it may prescribe, it shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon any resignation of a Certificate Registrar, the Owner Trustee shall
promptly appoint a successor or, if it elects not to make such an appointment,
assume the duties of the Certificate Registrar. The Owner Trustee shall be the
initial Certificate Registrar.
Subject to Section 3.11, upon surrender for registration of transfer of
any Certificate at the office or agency of the Owner Trustee maintained pursuant
to Section 3.8, the Owner Trustee shall execute, and the Owner Trustee or its
authenticating agent shall authenticate and deliver in the name of the
designated transferee or transferees, a new Certificate or Certificates of the
same Percentage Interest and dated the date of authentication by the Owner
Trustee or such authenticating agent.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of a like aggregate Percentage Interest, upon surrender of
the Certificates to be exchanged at such office. Whenever any Certificates are
so surrendered for exchange, the Owner Trustee or its authenticating agent shall
execute, authenticate and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be marked "canceled" by the Owner Trustee.
The preceding provisions of this Section notwithstanding, the Owner
Trustee shall not make, and the Certificate Registrar shall not register
transfers or exchanges of Certificates for a period of 15 days preceding the due
date for any payment with respect to the Certificates.
SECTION 3.5 Mutilated; Destroyed; Lost or Stolen Certificates.
(a) If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Certificate Registrar, the Owner Trustee and the Trust
such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to the Certificate Registrar or the
Owner Trustee that such Certificate has been acquired by a bona fide purchaser,
the Owner Trustee shall execute on behalf of the Trust and the Owner Trustee or
the Owner Trustee's authenticating agent shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a replacement Certificate of a like Percentage Interest; provided,
however, that if any such destroyed, lost or stolen Certificate, but not a
mutilated Certificate, shall have become or within seven days shall be due and
payable, then instead of issuing a replacement Certificate the Owner Trustee may
pay such destroyed, lost or stolen Certificate when so due or payable.
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(b) In connection with the issuance of any replacement Certificate
under this Section 3.5, the Owner Trustee or the Certificate Registrar may
require the payment by the Holder of such Certificate of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Owner Trustee and the Certificate Registrar) connected therewith.
(c) Any duplicate Certificate issued pursuant to this Section 3.5 in
replacement of any mutilated, destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the Trust, whether
or not the mutilated, destroyed, lost or stolen Certificate shall be found at
any time or be enforced by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Certificates
duly issued hereunder.
(d) The provisions of this Section 3.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.6 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar or any Paying Agent may treat the Person in whose name any Certificate
shall be registered in the Certificate Registrar as the owner of such
Certificate for the purpose of receiving distributions pursuant to Article V and
for all other purposes whatsoever, and neither the Owner Trustee, nor the
Certificate Registrar nor the Trust Paying Agent shall be affected by any notice
to the contrary.
SECTION 3.7 Access to List of Holders' Names and Addresses. The Owner
Trustee shall furnish or cause to be furnished to the Servicer and the
Depositor, within 15 days after receipt by the Owner Trustee of a request
therefor from the Servicer or the Depositor in writing, a list, in such form as
the Servicer or the Depositor may reasonably require, of the names and addresses
of the Certificateholders as of the most recent Record Date. If three or more
Certificateholders or one or more Holders of Certificates together evidencing a
Percentage Interest totaling not less than 25% apply in writing to the Owner
Trustee, and such application states that the applicants desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Owner Trustee
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Certificateholders. Each Certificateholder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Servicer, the
Depositor, the Certificate Registrar or the Owner Trustee accountable by reason
of the disclosure of its name and address, regardless of the source from which
information was derived.
SECTION 3.8 Maintenance of Office For Surrenders. The Owner Trustee shall
maintain an office or offices or agency or agencies where Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Owner Trustee in respect of the Certificates and the
Operative Documents may be served. The Owner Trustee initially designates
Wilmington Trust Company as its principal office for such purposes. The Owner
Trustee shall give
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prompt written notice to the Depositor and to the Certificateholders and Owners
of any change in the location of the Certificate Register or any such office or
agency.
SECTION 3.9 Appointment of Trust Paying Agent. The Owner Trustee hereby
appoints The Chase Manhattan Bank as the Trust Paying Agent under this
Agreement. The Trust Paying Agent shall make distributions to Certificateholders
from the Certificate Distribution Account pursuant to Section 5.2 and shall
report the amounts of such distributions to the Owner Trustee and the Servicer.
The Trust Paying Agent shall have the revocable power to withdraw funds from the
Certificate Distribution Account for the purpose of making the distributions
referred to above. The Owner Trustee may revoke such power and remove the Trust
Paying Agent if the Owner Trustee determines in its sole discretion that the
Trust Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. If The Chase Manhattan Bank shall no longer
be the Trust Paying Agent, the Owner Trustee shall appoint a successor to act as
Trust Paying Agent (which shall be a bank or trust company acceptable to the
Depositor, the Note Insurer and the Rating Agencies). The Owner Trustee shall
cause such successor Trust Paying Agent or any additional Trust Paying Agent
appointed by the Owner Trustee to execute and deliver to the Owner Trustee an
instrument in which such successor Trust Paying Agent or additional Trust Paying
Agent shall agree with the Owner Trustee that as Trust Paying Agent, such
successor Trust Paying Agent or additional Trust Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Holders. The Trust Paying Agent shall return all unclaimed funds to the
Owner Trustee and upon removal of a Trust Paying Agent such Trust Paying Agent
shall also return all funds in its possession to the Owner Trustee. The
provisions of Article VI shall apply to the Owner Trustee also in its role as
Trust Paying Agent, for so long as the Owner Trustee shall act as Trust Paying
Agent and, to the extent applicable, to any other Trust Paying Agent (including
The Chase Manhattan Bank) appointed hereunder. Any reference in this Agreement
to the Trust Paying Agent shall include any co-paying agent unless the context
requires otherwise.
SECTION 3.10 Ownership by Depositor of the Depositor's Certificate. On the
Closing Date, the Depositor shall receive from the Trust and thereafter shall
retain beneficial and record ownership of the Depositor's Certificate
representing at least a 1% Percentage Interest of the Certificates. The
Depositor's Certificate shall be non-transferable. Any attempted transfer of any
Depositor's Certificate shall be null and void. The Owner Trustee shall cause
the Depositor's Certificate issued to the Depositor to contain a legend
substantially to such effect.
SECTION 3.11 Restriction on Transfers of Certificate.
(a) Each prospective purchaser and any subsequent transferee of a
Certificate (each, a "Prospective Holder"), other than the Depositor or the
Seller, shall represent and warrant, in writing, to the Owner Trustee and the
Certificate Registrar and any of their respective successors that:
(i) Such Person is (A) a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"), and is aware that the seller of the
Certificate may be relying on the exemption from the
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registration requirements of the Securities Act provided by Rule
144A and is acquiring such Certificate for its own account or for
the account of one or more qualified institutional buyers for whom
it is authorized to act, or (B) a Person involved in the
organization or operation of the Trust or an affiliate of such
Person within the meaning of Rule 3a-7 of the Investment Company Act
of 1940, as amended (including, but not limited to, the Depositor or
the Seller).
(ii) Such Person understands that the Certificate has not been
and will not be registered under the Securities Act and may be
offered, sold, pledged or otherwise transferred only to a person
whom the seller reasonably believes is (A) a qualified institutional
buyer or (B) a Person involved in the organization or operation of
the Trust or an affiliate of such Person, in a transaction meeting
the requirements of Rule 144A under the Securities Act and in
accordance with any applicable securities laws of any state of the
United States.
(iii) Such Person understands that the Certificate bears a
legend to the following effect:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR
INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING
PLEDGED) BY THE HOLDER HEREOF ONLY TO (I) A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT, IN
A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) A PERSON
INVOLVED IN THE ORGANIZATION OR OPERATION OF THE TRUST OR AN
AFFILIATE OF SUCH A PERSON WITHIN THE MEANING OF RULE 3a-7 OF
THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (INCLUDING, BUT
NOT LIMITED TO, IMC SECURITIES, INC.) IN A TRANSACTION THAT IS
REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS
OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS
CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS."
(b) Each Prospective Holder, other than the Depositor or the Seller,
shall either:
(i) represent and warrant, in writing, to the Owner Trustee
and the Certificate Registrar and any of their respective successors
that (1) the Prospective Holder 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"), or a
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"plan" within the meaning of Section 4975(e)(1) of the Code (any
such plan or employee benefit plan, a "Plan") and is not directly or
indirectly purchasing such Certificate on behalf of, as investment
manager of, as named fiduciary of, as trustee of, or with assets of
a Plan, or (2) either (I) the Prospective Holder is acquiring such
Certificate for its own account and no part of the assets used to
acquire such Certificate constitutes assets of a Plan, or (II) the
source of funds to be used to acquire such Certificate is an
"insurance company general account," within the meaning of
Prohibited Transaction Class Exemption 95-60, 60 Fed. Reg. 35925
(July 12, 1995) (the "Exemption"), and there is no Plan with respect
to which the amount of such general account's reserves for the
contract(s) held by or on behalf of such Plan (determined under
Section 807(d) of the Code), together with the amount of the
reserves of the contract(s) held by or on behalf of any other Plans
(determined under section 807(d) of the Code) maintained by the same
employer (or an affiliate thereof as defined in Section V(a)(1) of
the Exemption) or by the same employee organization, exceed 10% of
the total of all liabilities of such general account; or
(ii) furnish to the Owner Trustee and the Certificate Registrar and
any of their respective successors an opinion of counsel acceptable to
such persons that (A) the proposed issuance or transfer of the Certificate
to such Prospective Holder will not cause any assets of the Trust to be
deemed assets of a Plan, or (B) the proposed issuance or transfer of the
Certificate will not cause the Owner Trustee or the Certificate Registrar
or any of their respective successors to be a fiduciary of a Plan within
the meaning of Section 3(21) of ERISA and will not give rise to a
transaction described in Section 406 of ERISA or Section 4975(c)(1) of the
Code for which a statutory or administrative exemption is unavailable.
(c) By its acceptance of a Certificate, each Prospective Holder
agrees and acknowledges that no legal or beneficial interest in all or any
portion of any Certificate may be transferred directly or indirectly to (i) an
entity that holds residual securities as nominee to facilitate the clearance and
settlement of such securities through electronic book-entry changes in accounts
of participating organizations (a "Book-Entry Nominee"), or (ii) an individual,
corporation, partnership or other person unless such transferee is not a
Non-U.S. Person (any such person being referred to herein as a "Non-permitted
Foreign Holder"), and any such purported transfer shall be void and have no
effect.
(d) The Owner Trustee shall not execute, and shall not countersign
and deliver, a Certificate in connection with any transfer thereof unless the
transferor shall have provided to the Owner Trustee a certificate, signed by the
transferee, that it is not a Book-Entry Nominee or a Non-permitted Foreign
Holder, which certificate shall contain the consent of the transferee to any
amendments of this Agreement as may be required to effectuate further the
foregoing restrictions on transfer of the Certificate to Book-Entry Nominees or
Non-permitted Foreign Holders, and an agreement by the transferee that it will
not transfer a Certificate without providing to the Owner Trustee a certificate
in the form provided above.
(e) The Certificates shall bear an additional legend referring to
the restrictions contained in paragraph (b) above.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Owners with Respect to Certain Matters. The
Owner Trustee shall not take action with respect to the following matters,
unless (i) the Owner Trustee shall have notified the Certificateholders and the
Note Insurer in writing of the proposed action at least 30 days before the
taking of such action, and (ii) neither the Certificateholders nor the Note
Insurer shall have notified the Owner Trustee in writing prior to the 30th day
after such notice is given that such Certificateholders or the Note Insurer have
withheld consent or provided alternative direction (any directions by the
Certificateholders shall require the prior consent of the Note Insurer):
(a) the initiation of any claim or lawsuit by the Trust (except
claims and law suits brought in connection with the collection of the Home
Equity Loans) or the compromise of any action, claim or lawsuit brought by or
against the Trust (except claims and law suits brought in connection with the
collection of the Home Equity Loans);
(b) the election by the Trust to file an amendment to the
Certificate of Trust, (except to the extent such amendment is required under the
Business Trust Statute);
(c) the amendment or other change to this Agreement or any Operative
Documents in circumstances where the consent of any Owner of a Note or the Note
Insurer is required;
(d) the amendment or other change to this Agreement or any Operative
Documents in circumstances where the consent of any Owner of a Note or the Note
Insurer is not required and such amendment materially adversely affects the
interest of the Certificateholders;
(e) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a
successor Certificate Registrar or Trust Paying Agent, or the consent to the
assignment by the Note Registrar, Paying Agent or Indenture Trustee or
Certificate Registrar or Trust Paying Agent of its obligations under the
Indenture or this Agreement, as applicable;
(f) the consent to the calling or waiver of any default of any
Operative Document;
(g) the consent to the assignment of the Indenture Trustee or
Servicer of their respective obligations under the Operative Document;
(h) except as provided in Article IX hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(i) merge or consolidate the Trust with or into any other entity, or
convey or transfer all or substantially all of the Trust's assets to any other
entity;
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(j) cause the Trust to incur, assume or guaranty any indebtedness
other than as set forth in this Agreement;
(k) do any act that conflicts with any other Operative Document;
(l) do any act which would make it impossible to carry on the
ordinary business of the Trust as described in Section 2.3 hereof;
(m) confess a judgment against the Trust;
(n) possess Trust assets, or assign the Trust's right to property,
for other than a Trust purpose;
(o) cause the Trust to lend any funds to any entity; or
(p) change the Trust's purpose and powers from those set forth in
this Agreement.
In addition the Trust shall not commingle its assets with those of any
other entity. The Trust shall maintain its financial and accounting books and
records separate from those of any other entity. Except as expressly set forth
herein, the Trust shall pay its indebtedness and any operating expenses from its
own funds, and the Trust shall not pay the indebtedness, operating expenses or
liabilities of any other entity. The Trust shall maintain appropriate minutes or
other records of all appropriate actions and shall maintain its office separate
from the offices of the Depositor, the Seller and the Servicer.
The Owner Trustee shall not have the power, except upon the direction of
the Certificateholders with the consent of the Note Insurer, and to the extent
otherwise consistent with the Operative Documents, to (i) remove or replace the
Servicer or the Indenture Trustee, (ii) institute proceedings to have the Trust
declared or adjudicated a bankruptcy or insolvent, (iii) consent to the
institution of bankruptcy or insolvency proceedings against the Trust, (iv) file
a petition or consent to a petition seeking reorganization or relief on behalf
of the Trust under any applicable federal or state law relating to bankruptcy,
(v) consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or any similar official) of the Trust or a substantial portion of
the property of the Trust, (vi) make any assignment for the benefit of the
Trust's creditors, (vii) cause the Trust to admit in writing its inability to
pay its debts generally as they become due, (viii) take any action, or cause the
Trust to take any action, in furtherance of any of the foregoing (any of the
above, a "Bankruptcy Action"). So long as the Indenture remains in effect and no
Note Insurer Default exists, no Certificateholder shall have the power to take,
and shall not take, any Bankruptcy Action with respect to the Trust or the
Depositor or direct the Owner Trustee to take any Bankruptcy Action with respect
to the Trust or the Depositor.
SECTION 4.2 Action by Holders with Respect to Certain Matters. The Owner
Trustee shall not have the power, except upon the direction of the
Certificateholders and with the consent of the Note Insurer, to remove the
Servicer under the Sale and Servicing Agreement. The Owner Trustee
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shall take the actions referred to in the preceding sentence only upon written
instructions signed by the Certificateholders and only after obtaining the
consent of the Note Insurer.
SECTION 4.3 Action by Holders with Respect to Bankruptcy. The Owner
Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the consent and approval of the Note
Insurer, the unanimous prior approval of all Certificateholders and the delivery
to the Owner Trustee by each such Certificateholder of a certificate certifying
that such Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.4 Restrictions on Holders' Power. The Certificateholders shall
not direct the Owner Trustee to take or refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the Owner
Trustee under this Agreement or any of the Operative Documents or would be
contrary to Section 2.3, nor shall the Owner Trustee be obligated to follow any
such direction, if given.
SECTION 4.5 Majority Control. Except as expressly provided herein any
action that may be taken or consent that may be given or withheld or written
notice delivered by the Certificateholders under this Agreement may be taken by
Holders of Certificates representing more than a majority of the Certificates.
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ARTICLE V
APPLICATION OF OWNER TRUST ESTATE; CERTAIN DUTIES
SECTION 5.1 Establishment of Certificate Distribution Account. The Owner
Trustee shall cause the Servicer, for the benefit of the Certificateholders, to
establish and maintain with The Chase Manhattan Bank for the benefit of the
Owner Trustee a Trust Account which while the Trust Paying Agent holds such
Account shall be entitled "CERTIFICATE DISTRIBUTION ACCOUNT, THE CHASE MANHATTAN
BANK AS TRUST PAYING AGENT, IN TRUST FOR THE IMC ADJUSTABLE RATE HOME EQUITY
LOAN ASSET BACKED CERTIFICATES, SERIES 1997-8." Funds shall be deposited in the
Certificate Distribution Account as required by the Sale and Servicing
Agreement.
All of the right, title and interest of the Owner Trustee in all funds on
deposit from time to time in the Certificate Distribution Account and in all
proceeds thereof shall be held for the benefit of the Certificateholders. Except
as otherwise expressly provided herein or in the Sale and Servicing Agreement,
the Certificate Distribution Account shall be under the sole dominion and
control of the Owner Trustee for the benefit of the Certificateholders.
SECTION 5.2 Application of Trust Funds.
(a) On each Payment Date, the Owner Trustee shall direct the Trust Paying
Agent to distribute to the Certificateholders from amounts on deposit in the
Certificate Distribution Account the distributions as provided in Section
3.03(b)(v) of the Sale and Servicing Agreement with respect to such Payment
Date.
(b) Reserved.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section. The Owner Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Holder at the time it is withheld by the Trust and remitted to the appropriate
taxing authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-U.S. Holder), the
Owner Trustee may in its sole discretion withhold such amounts in accordance
with this paragraph (c). In the event that a Certificateholder wishes to apply
for a refund of any such withholding tax, the Owner Trustee shall reasonably
cooperate with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Owner Trustee for any out-of-pocket
expenses incurred.
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SECTION 5.3 Method of Payment. Distributions required to be made to
Certificateholders on any Payment Date shall be made to each Certificateholder
of record on the immediately preceding Record Date either by wire transfer, in
immediately available funds, to the account of such Certificateholder at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions at least five Business Days prior to such Payment Date, or,
if not, by check mailed to such Certificateholder at the address of such
Certificateholder appearing in the Certificate Register.
SECTION 5.4 Segregation of Moneys; No Interest. Subject to Sections 5.1
and 5.2, moneys received by the Trust Paying Agent hereunder and deposited into
the Certificate Distribution Account will be segregated except to the extent
required otherwise by law and shall be invested in Eligible Investments maturing
no later than one Business Day prior to the related Payment Date at the
direction of the Depositor. The Trust Paying Agent shall not be liable for
payment of any interest or losses in respect of such moneys. Investment gains
shall be for the account of and paid to the Certificateholders.
SECTION 5.5 Accounting and Reports to the Certificateholders, the Internal
Revenue Service and Others. The Owner Trustee shall (a) maintain (or cause to be
maintained) the books of the Trust on a calendar year basis on the accrual
method of accounting, and such books shall be maintained separately from those
of any other entity and reflect the separate interest of the Trust, (b) deliver
to each Certificateholder, as may be required by the Code and applicable
Treasury Regulations, such information as may be required (including Schedule
K-1) to enable such Certificateholder to prepare its federal and state income
tax returns, (c) file such tax returns relating to the Trust (including a
partnership information return, IRS Form 1065), and make such elections as may
from time to time be required or appropriate under any applicable state or
federal statute or rule or regulation thereunder so as to maintain the Trust's
characterization as a partnership for federal income tax purposes, (d) cause
such tax returns to be signed in the manner required by law and (e) collect or
cause to be collected any withholding tax with respect to income or
distributions to Certificateholders. The Owner Trustee shall elect under Section
1278 of the Code to include in income currently any market discount that accrues
with respect to the Home Equity Loans. The Owner Trustee shall not make the
election provided under Section 754 of the Code.
SECTION 5.6 Signature on Returns; Tax Matters Partner.
(a) The Owner Trustee shall sign on behalf of the Trust the tax
returns of the Trust, unless applicable law requires a Certificateholder to sign
such documents, in which case such documents shall be signed by the Depositor.
(b) The Depositor shall be designated the "tax matters partner" of
the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury
Regulations.
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ARTICLE VI
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE
SECTION 6.1 General Authority. The Owner Trustee is authorized and
directed to execute and deliver or cause to be executed and delivered the
Certificates and the Operative Documents to which the Trust is to be a party and
each certificate or other document attached as an exhibit to or contemplated by
the Operative Documents to which the Trust is to be a party and any amendment or
other agreement or instrument described in Article III, in each case, in such
form as the Depositor shall approve, as evidenced conclusively by the Owner
Trustee's execution thereof, and, on behalf of the Trust, to direct the
Indenture Trustee to authenticate and deliver the Notes in the aggregate
principal amount of $307,785,257. In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust, pursuant to the Operative Documents.
SECTION 6.2. General Duties. It shall be the duty of the Owner Trustee:
(a) to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and the Operative
Documents to which the Trust is a party and to administer the Trust in the
interest of the Certificateholders, and in accordance with the provisions of
this Agreement; and
(b) to obtain and preserve, the Trust's qualification to do business
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Indenture, the Notes, and each
other instrument and agreement included in the Owner Trust Estate.
SECTION 6.3 Action upon Instruction by Owners.
(a) Subject to Article IV, the Certificateholders may by written
instruction direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Article IV.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any Operative Document if the
Owner Trustee shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the part of the
Owner Trustee or is contrary to the terms hereof or of any Operative Document or
is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Operative Document, or is unsure as to the application, intent,
interpretation or meaning of any provision of this agreement or the Operative
Documents, the Owner Trustee shall promptly give notice (in such form as shall
be appropriate under the circumstances) to the Note Insurer and the
Certificateholders requesting instruction as to the course of action to be
adopted, and, to the extent the Owner Trustee acts in good
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faith in accordance with any such instruction received, the Owner Trustee shall
not be liable on account of such action to any Person. If the Owner Trustee
shall not have received appropriate instructions within ten days of such notice
(or within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be under
no duty to, take or refrain from taking such action which is consistent, in its
view, with this Agreement or the Operative Documents, and as it shall deem to be
the best interests of the Certificateholders, and the Owner Trustee shall have
no liability to any Person for any such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Operative Document or any
such provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Operative
Documents, as it shall deem to be in the best interest of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
SECTION 6.4 No Duties Except as Specified in this Agreement, the Documents
or in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement, any Operative Document or in any document or written
instruction received by the Owner Trustee pursuant to Section 6.3; and no
implied duties or obligations shall be read into this Agreement or any Operative
Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or file any
Securities and Exchange Commission filing for the Trust or to record this
Agreement or any Operative Document. The Owner Trustee nevertheless agrees that
it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any liens on any part of the Owner Trust Estate that
result from actions by, or claims against, the Owner Trustee that are not
related to the ownership or the administration of the Owner Trust Estate.
SECTION 6.5 No Action Except Under Specified Documents or Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Owner Trust Estate except (i) in accordance with the
powers granted to and the authority conferred upon
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the Owner Trustee pursuant to this Agreement, (ii) in accordance with the
Operative Documents and (iii) in accordance with any document or instruction
delivered to the Owner Trustee pursuant to Section 6.3.
SECTION 6.6 Restrictions. The Owner Trustee shall not take any action (a)
that is inconsistent with the purposes of the Trust set forth in Section 2.3 or
(b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take action that would
violate the provisions of this Section.
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ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.1 Acceptance of Trusts and Duties. Except as otherwise provided
in this Article VII, in accepting the trusts hereby created Wilmington Trust
Company acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Operative Document shall
look only to the assets of the Trust for payment or satisfaction thereof. The
Owner Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the assets of the Trust upon the terms of the Operative
Documents and this Agreement. The Owner Trustee shall not be liable or
accountable hereunder or under any Operative Document under any circumstances,
except (i) for its own gross negligent action, its own gross negligent failure
to act or its own willful misconduct or (ii) in the case of the inaccuracy of
any representation or warranty contained in Section 7.3 and expressly made by
the Owner Trustee. In particular, but not by way of limitation (and subject to
the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Home Equity Loan, or the perfection and priority of any security interest
created by any Home Equity Loan in any Property or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the assets
of the Trust or their ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Owners of the Notes under the
Indenture, including, without limitation: the existence, condition and ownership
of any Property; the existence and enforceability of any insurance thereon; the
existence and contents of any Home Equity Loan on any computer or other record
thereof; the validity of the assignment of any Home Equity Loan to the Trust or
of any intervening assignment; the completeness of any Home Equity Loan; the
performance or enforcement of any Home Equity Loan; the compliance by the
Depositor or the Servicer with any warranty or representation made under any
Operative Document or in any related document or the accuracy of any such
warranty or representation or any action of the Indenture Trustee, the Custodian
or the Servicer or any subservicer taken in the name of the Owner Trustee.
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Note Insurer or any Certificateholder;
(c) no provision of this Agreement or any Operative Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Operative Document, if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
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(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Operative Documents,
including the Note Principal Balance and the interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of
and makes no representation as to the validity or sufficiency of any provision
of this Agreement or for the due execution hereof by the Depositor or for the
form, character, genuineness, sufficiency, value or validity of any of the Owner
Trust Estate or for or in respect of the validity or sufficiency of the
Operative Documents, the Underwriting Agreement, the Notes, the Certificates
(other than the certificate of authentication on the Certificates) or of any
Home Equity Loans or any related documents, and the Owner Trustee shall in no
event assume or incur any liability, duty or obligation to any Owner of a Note
or to any Certificateholder, other than as expressly provided for herein and in
the Operative Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Indenture Trustee, the Custodian, the Depositor or the
Servicer under any of the Operative Documents or otherwise and the Owner Trustee
shall have no obligation or liability to perform the obligations of the Trust
under this Agreement or the Operative Documents that are required to be
performed by the Indenture Trustee under the Indenture, the Custodian under the
Custodial Agreement or the Servicer under the Sale and Servicing Agreement;
(g) the Owner Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation under this Agreement or otherwise or in relation to
this Agreement, the Underwriting Agreement or any Operative Document, at the
request, order or direction of any of the Note Insurer or any of the
Certificateholders, unless the Note Insurer or such Certificateholders have
offered to the Owner Trustee security or indemnity satisfactory to it against
the costs, expenses and liabilities that may be incurred by the Owner Trustee
therein or thereby. The right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any Operative Document shall not be
construed as a duty, and the Owner Trustee shall not be answerable for other
than its negligence or willful misconduct in the performance of any such act;
(h) The Owner Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare, execute or file any Securities and
Exchange Commission filing or tax return for the Trust or to record this
Agreement or any Operative Document.
SECTION 7.2 Furnishing of Documents. The Owner Trustee shall furnish (a)
to the Certificateholders, promptly upon receipt of a written request therefor,
duplicate or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Operative Documents, and (b) to the Note Insurer, copies of any
reports, notices, requests, demands, certificates, financial statements, and any
other instruments relating to the Trust, the Certificates or the Notes in the
possession of the Owner Trustee, that the Note Insurer shall request in writing.
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SECTION 7.3 Representations and Warranties of Owner Trustee. Wilmington
Trust Company hereby represents and warrants to the Depositor, for the benefit
of the Certificateholders and the Note Insurer, that:
(a) It is a banking corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) It has full power, authority and legal right to execute, deliver
and perform its obligations under this Agreement, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Agreement.
(c) The execution, delivery and performance by it of this Agreement
(i) shall not violate any provision of any law or regulation governing the
banking and trust powers of Wilmington Trust Company or any order, writ,
judgment or decree of any court, arbitrator or governmental authority applicable
to the Wilmington Trust Company or any of its assets, (ii) shall not violate any
provision of the corporate charter or by-laws of Wilmington Trust Company, or
(iii) shall not violate any provision of, or constitute, with or without notice
or lapse of time, a default under, or result in the creation or imposition of
any lien on any properties included in the Trust pursuant to the provisions of
any mortgage, indenture, contract, agreement or other undertaking to which it is
a party, which violation, default or lien could reasonably be expected to have a
materially adverse effect on Wilmington Trust Company's performance or ability
to perform its duties as Owner Trustee under this Agreement or on the
transactions contemplated in this Agreement.
(d) This Agreement has been duly executed and delivered by
Wilmington Trust Company and constitutes the legal, valid and binding agreement
of Wilmington Trust Company, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar law affecting the enforcement of creditors' rights in general and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
SECTION 7.4 Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, note or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties and
need not investigate any fact or matter in any such document. The Owner Trustee
may accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which is
not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer or other authorized officers of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
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(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Operative Documents, the Owner Trustee: (i) may act directly or through its
agents, attorneys, custodians or nominees, and the Owner Trustee shall not be
liable for the conduct or misconduct of such agents, attorneys, custodians or
nominees if such agents, attorneys, custodians or nominees shall have been
selected by the Owner Trustee with reasonable care and (ii) may consult with
counsel, accountants and other skilled professionals to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
opinion or advice of any such counsel, accountants or other such Persons and not
contrary to this Agreement or any of the Operative Documents.
SECTION 7.5 Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with the Depositor, the Indenture Trustee
and the Servicer in transactions in the same manner and with the same rights as
it would have if it were not the Owner Trustee.
SECTION 7.6 Licenses. The Owner Trustee shall cause the Trust to use its
best efforts to obtain and maintain the effectiveness of any licenses required
in connection with this Agreement and the Operative Documents and the
transactions contemplated hereby and thereby until such time as the Trust shall
terminate in accordance with the terms hereof.
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ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1 Owner Trustee's Fee and Expenses. The Owner Trustee shall
receive from the Depositor as compensation for its services hereunder such fees
as have been separately agreed upon before the date hereof between the Depositor
and the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed
by the Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents, custodians,
nominees, representatives, experts and counsel as the Owner Trustee may employ
in connection with the exercise and performance of its rights and its duties
hereunder.
SECTION 8.2 Indemnification. The Depositor shall be liable as primary
obligor, and the Seller shall be liable as secondary obligor pursuant to the
Sale and Servicing Agreement for, and shall indemnify the Owner Trustee and its
successors, assigns, agents and servants (collectively, the "Indemnified
Parties") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever (collectively, "Expenses") which may at any time be
imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Operative Documents, the Owner Trust Estate, the administration of the Trust or
the action or inaction of the Owner Trustee hereunder, except only that the
Depositor shall not be liable for or required to indemnify the Owner Trustee
from and against Expenses arising or resulting from the gross negligence, bad
faith or willful misconduct of the Owner Trustee. The indemnities contained in
this Section 8.2 shall survive the resignation of the Owner Trustee, termination
of the Trust or the termination of this Agreement.
SECTION 8.3 Payments to the Owner Trustee. Any amounts paid to the Owner
Trustee pursuant to this Article VIII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment.
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ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.1 Termination of Trust Agreement.
(a) This Agreement (other than Article VIII) and the Trust shall
terminate and be of no further force or effect on the earlier of: (i) the final
distribution by the Indenture Trustee of all moneys or other property or
proceeds of the assets of the Trust in accordance with the terms of the
Indenture and (ii) the expiration of 21 years from the death of the last
survivor of the descendants of Joseph P. Kennedy (the late ambassador of the
United States to the Court of St. James's). The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder shall not (x) operate
to terminate this Agreement or the Trust, nor (y) 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 all
or any part of the Trust or the Owner Trust Estate or (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.
(b) The Certificates shall be subject to an early redemption or
termination at the option of the majority of Certificateholders, and in certain
instances the Note Insurer, in the manner and subject to the provisions of
Section 5.02 of the Sale and Servicing Agreement.
(c) Except as provided in paragraphs (a) and (b) of this Section
9.1, none of the Depositor, the Servicer, the Note Insurer or any
Certificateholder shall be entitled to revoke or terminate the Trust.
(d) Notice of any termination of the Trust, specifying the Payment
Date upon which the Certificateholders shall surrender their Certificates to the
Owner Trustee for payment of the final distribution and cancellation, shall be
given by the Owner Trustee by letter to the Note Insurer, the Rating Agencies
and the Trust Paying Agent mailed within five Business Days of receipt of notice
of such termination, stating: (i) the Payment Date upon or with respect to which
final payment of the Certificates shall be made upon presentation and surrender
of the Certificates at the office of the Owner Trustee therein designated; (ii)
the amount of any such final payment; and (iii) that the Record Date otherwise
applicable to such Payment Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Owner
Trustee therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Trust Paying
Agent at the time such notice is given to Certificateholders. The Owner Trustee
will give notice to the Trust Paying Agent of each presentation and surrender of
the Certificates and the Trust Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Payment Date pursuant to
Section 5.03 of the Sale and Servicing Agreement.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3820 of the Business Trust Statute.
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SECTION 9.2 Reserved.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 Eligibility Requirements for Owner Trustee. The Owner Trustee
shall at all times be a corporation satisfying the provisions of Section 3807(a)
of the Business Trust Statute; authorized to exercise corporate powers; having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by Federal or state authorities; and having (or having a parent
which has) a rating of at least "Baa3" by Moody's and "A-1" by Standard & Poor's
and being acceptable to the Note Insurer. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose 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 Owner Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.2.
SECTION 10.2 Resignation or Removal of Owner Trustee. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Depositor, the Indenture Trustee and the
Note Insurer. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Owner Trustee (acceptable to the Note Insurer) by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Note Insurer may petition any
court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 10.1 and shall fail to resign after written
request therefor by the Indenture Trustee, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Note Insurer, or the Indenture Trustee with the consent of
the Note Insurer, may remove the Owner Trustee. If the Indenture Trustee or the
Note Insurer shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Note Insurer, or the Servicer with the
consent of the Note Insurer, shall promptly appoint a successor Owner Trustee by
written instrument in duplicate, one copy of which instrument shall be delivered
to the outgoing Owner Trustee so removed and one copy to the successor Owner
Trustee and payment of all fees owed to the outgoing Owner Trustee.
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Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3, written approval by the Note Insurer and
payment of all fees and expenses owed to the outgoing Owner Trustee. The
Depositor shall provide notice of such resignation or removal of the Owner
Trustee to each of the Rating Agencies and the Note Insurer.
SECTION 10.3 Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Depositor, the Indenture Trustee, the Note Insurer and to its predecessor Owner
Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall
become effective and such successor Owner Trustee (if acceptable to the Note
Insurer), without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties, and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses deliver to
the successor Owner Trustee all documents and statements and monies held by it
under this Agreement; and the Depositor and the predecessor Owner Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Owner Trustee all such rights, powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Depositor shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Indenture Trustee, the Owners, the Note
Insurer and the Rating Agencies. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor Owner Trustee,
the successor Owner Trustee shall cause such notice to be mailed at the expense
of the Depositor.
SECTION 10.4 Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 10.1, and without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto; provided, however, that the Owner Trustee shall mail notice
of such merger or consolidation to the Note Insurer and each of the Rating
Agencies.
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Owner Trust
30
<PAGE> 35
Estate or any Property may at the time be located, the Owner Trustee (with the
consent of the Note Insurer) shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Owner Trustee and
the Note Insurer to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or trustees, of all or any part of the assets of the Trust, and
to vest in such Person, in such capacity, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Note Insurer and the Owner Trustee
may consider necessary or desirable. No co-trustee or separate trustee under
this Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 10.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.3.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised
or performed by the Owner Trustee, and such separate trustee or
co-trustee jointly (it being understood that such separate trustee
or co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to
be performed, the Owner Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Owner Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Owner 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. 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 Owner
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 Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Note Insurer.
(d) Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to
31
<PAGE> 36
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 Owner Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
32
<PAGE> 37
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Amendments Without Consent of Certificateholders or Owners of
the Notes. This Agreement may be amended by the Depositor and the Owner Trustee
without the consent of any of the Certificateholders (but with the prior written
consent of the Note Insurer and prior notice to each of the Rating Agencies), to
(i) cure any ambiguity, (ii) correct or supplement any provision in this
Agreement that may be defective or inconsistent with any other provision in this
Agreement, (iii) add or supplement any credit enhancement for the benefit of the
Owners of the Notes or the Certificateholders, (iv) add to the covenants,
restrictions or obligations of the Depositor or the Owner Trustee and (v) add,
change or eliminate any other provision of this Agreement in any manner that
shall not, adversely affect in any material respect the interests of the Owners
of the Notes or the Certificateholders. An amendment described above shall be
deemed not to adversely affect in any material respect the interests of any
Certificateholder or Owner of a Note if (i) an opinion of counsel is obtained to
such effect or (ii) the party requesting the amendment satisfies the Rating
Agency Condition with respect to such amendment.
SECTION 11.2 Amendments With Consent of Certificateholders. This Agreement
may be amended from time to time by the Depositor and the Owner Trustee with the
consent of the Note Insurer and more than a majority in Percentage Interests of
the Certificates for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, or of modifying
in any manner the rights of the Certificateholders; provided, however, that no
such amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Home Equity Loans
or distributions that shall be made for the benefit of the Certificateholders or
(b) reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the Holders of all of the Certificates then outstanding.
SECTION 11.3 Form of Amendments.
(a) Promptly after the execution of any amendment, supplement or
consent pursuant to Section 11.1 or 11.2, The Owner Trustee shall furnish
written notification of the substance of such amendment or consent to each
Certificateholder, the Indenture Trustee, the Note Insurer and each Rating
Agency.
(b) It shall not be necessary for the consent of the
Certificateholders, pursuant to Section 11.2 to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents (and
any other consents of Certificateholders provided for in this Agreement or in
any other Operative Document) and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
33
<PAGE> 38
(c) Promptly after the execution of any amendment to the Certificate
of Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
(d) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 11.4 No Legal Title to Owner Trust Estate. The Certificateholders
shall not have legal title to any part of the assets of the Owner Trust Estate.
The Certificateholders shall be entitled to receive distributions with respect
to their undivided ownership interest therein only in accordance with Articles V
and IX. No transfer, by operation of law or otherwise, of any right, title, and
interest of the Certificateholders to and in their ownership interest in the
assets of the Trust shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the assets of the Trust.
SECTION 11.5 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Note Insurer, the Owner Trustee, the
Depositor, the Certificateholders and, to the extent expressly provided herein,
the Indenture Trustee and the Owners of the Notes, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the assets of the Trust
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.6 Notices.
(a) All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by overnight mail, certified mail or registered mail, postage prepaid,
to (i) in the case of the Servicer, IMC Mortgage Company, 5901 East Fowler Ave.,
Tampa, Florida 33617-2362, Attention: Laurie Williams, or such other addresses
as may hereafter be furnished to the Certificateholders in writing by the
Servicer, (ii) in the case of the Depositor, IMC Securities, Inc. 5901 East
Fowler Ave., Tampa, Florida 33617-2362, Attention: Laurie Williams, or such
other addresses as may hereafter be furnished to the Certificateholders in
writing by the Depositor, (iii) in the case of the Owner Trustee, Wilmington
Trust Company, Rodney Square North, 1100 N. Market Street, Wilmington, Delaware
19890, Attention: IMC Home Equity Loan Owner Trust 1997-8, (iv) in the case of
the Certificateholders, as set forth in the Certificate Register, (v) in the
case of the Indenture Trustee, The Chase Manhattan Bank, 450 West 33rd Street,
New York, New York 10001, Attention: IMC Home Equity Loan Owner Trust 1997-8,
(vi) in the case of Moody's, 99 Church Street, New York, New York 10007,
Attention: Home Equity Monitoring Group, (vii) in the case of Standard & Poor's,
26 Broadway, New York, New York 10004, Attention: Residential Mortgage Group,
and (viii) in the case of the Note Insurer, MBIA Insurance Corporation 113 King
Street, Armonk, N.Y. 10504, Attention: IMC Home Equity Loan Owner Trust 1997-8.
Any such notices shall be deemed to be effective with
34
<PAGE> 39
respect to any party hereto upon the receipt of such notice by such party,
except that notices to the Certificateholders shall be effective upon mailing or
personal delivery.
(b) Any notice required or permitted to be given 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 Certificateholder receives
such notice.
SECTION 11.7 Severability. 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 11.8 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
SECTION 11.9 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor, the Owner Trustee, the Note Insurer and each Certificateholder and
their respective successors and permitted assigns, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 11.10 No Petition Covenant. Notwithstanding any prior termination
of this Agreement, the Trust (or the Owner Trustee on behalf of the Trust), each
Certificateholder and the Indenture Trustee shall not acquiesce, petition or
otherwise invoke or cause the Depositor or the Trust to invoke the process of
any court or governmental authority for the purpose of commencing or sustaining
a case against the Depositor or the Trust under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Depositor or
the Trust or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Depositor or the Trust.
SECTION 11.11 No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Depositor, the Servicer, the Owner Trustee, the Indenture
Trustee or any affiliate thereof and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated in this
Agreement, the Certificates or the Operative Documents.
SECTION 11.12 Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
35
<PAGE> 40
SECTION 11.13 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Reserved.
SECTION 11.15 Third-Party Beneficiary. The parties hereto acknowledge that
the Note Insurer is an express third party beneficiary hereof entitled to
enforce the provisions hereunder as if it were actually a party hereto. Nothing
in this section, however, shall be construed to mitigate in any way, the
fiduciary responsibilities of the Owner Trustee to the Certificateholders nor to
create a fiduciary responsibility of the Owner Trustee to the Note Insurer.
SECTION 11.16 Suspension and Termination of Note Insurer's Rights. During
the continuation of a Note Insurer Default, rights granted or reserved to the
Note Insurer hereunder shall vest instead in the Certificateholders; provided
that the Note Insurer shall be entitled to any distributions in reimbursement of
the Note Insurer Reimbursement Amount, and the Note Insurer shall retain those
rights under Section 11.1 to consent to any amendment of this Agreement.
At such time as either (i) the Note Principal Balance has been
reduced to zero or (ii) the Insurance Policy has been terminated and in either
case of (i) or (ii) the Note Insurer has been reimbursed for all Insured
Payments and any other amounts owed under the Insurance Policy and the Insurance
Agreement (and the Note Insurer no longer has any obligation under the Insurance
Policy, except for breach thereof by the Note Insurer), then the rights and
benefits granted or reserved to the Note Insurer hereunder (including the rights
to direct certain actions and receive certain notices) shall terminate and the
Certificateholders shall be entitled to the exercise of such rights and to
receive such benefits of the Note Insurer following such termination to the
extent that such rights and benefits are applicable to the Certificateholders.
36
<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
WILMINGTON TRUST COMPANY,
as Owner Trustee
By:/s/ Donald G. MacKelcan
-----------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
IMC SECURITIES, INC.,
as Depositor
By:/s/ Thomas G. Middleton
-----------------------
Name: Thomas G. Middleton
Title: President
Acknowledged and Accepted:
IMC MORTGAGE COMPANY,
as Servicer
By:/s/ Thomas G. Middleton
-----------------------
Name: Thomas G. Middleton
Title: President
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By:/s/ Ann Marie Jose
------------------
Name: Ann Marie Jose
Title: Trust Officer
<PAGE> 42
EXHIBIT A
CERTIFICATE OF TRUST OF
IMC Home Equity Loan Trust 1997-8
THIS Certificate of Trust of IMC Home Equity Loan Owner Trust 1997-8 (the
"Trust") dated as of December 1, 1997, is being duly executed and filed by
Wilmington Trust Company, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. Code, Section 3801
et seq.).
1. Name. The name of the business trust formed hereby is IMC Home Equity Loan
Owner Trust 1997-8.
2. Delaware Trustee. The name and business address of the trustee of the Trust
in the State of Delaware is Wilmington Trust Company, Rodney Square North, 1100
N. Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration.
3. This Certificate of Trust shall be effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust, has
executed this Certificate of Trust as of the date first above written.
Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By: ____________________________
Name:
Title:
<PAGE> 43
EXHIBIT B-1
TO THE TRUST AGREEMENT
(FORM OF CERTIFICATE)
THE EQUITY INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR
INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OR (INCLUDING PLEDGED) BY THE
HOLDER HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) A PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN
THE MEANING OR RULE 3A-7 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(INCLUDING BUT NOT LIMITED TO, IMC MORTGAGE COMPANY AND IMC SECURITIES, INC.) IN
A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH
LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS EQUITY INTEREST UNDER THE ACT OR
ANY STATE SECURITIES LAWS.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST THEREIN SHALL BE MADE
TO ANY PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED EITHER
(A) A CERTIFICATE FROM THE TRANSFEREE TO THE EFFECT THAT
SUCH TRANSFEREE (1) 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"), OR A "PLAN" WITHIN THE MEANING OF SECTION
4975(e)(1) OF THE CODE (ANY SUCH PLAN OR EMPLOYEE BENEFIT
PLAN, A "PLAN") AND IS NOT DIRECTLY OR INDIRECTLY
PURCHASING SUCH CERTIFICATE ON BEHALF OF, AS INVESTMENT
MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN, OR (2) EITHER (I) SUCH TRANSFEREE IS
ACQUIRING THE CERTIFICATE FOR ITS OWN ACCOUNT AND NO
PART OF THE ASSETS USED TO ACQUIRE THE CERTIFICATE
CONSTITUTES ASSETS OF A PLAN, OR (II) THE SOURCE OF FUNDS TO
BE USED TO ACQUIRE SUCH CERTIFICATE IS AN "INSURANCE
COMPANY GENERAL ACCOUNT," WITHIN THE MEANING OF
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, 60 FED. REG.
<PAGE> 44
35925 (JULY 12, 1995) (THE "EXEMPTION"), AND THERE IS NO PLAN WITH
RESPECT TO WHICH THE AMOUNT OF SUCH GENERAL ACCOUNT'S RESERVES FOR
THE CONTRACT(S) HELD BY OR ON BEHALF OF SUCH PLAN (DETERMINED UNDER
SECTION 807(d) OF THE CODE), TOGETHER WITH THE AMOUNT OF THE
RESERVES OF THE CONTRACT(S) HELD BY OR ON BEHALF OF ANY OTHER PLANS
(DETERMINED UNDER SECTION 807(d) OF THE CODE) MAINTAINED BY THE SAME
EMPLOYER (OR AN AFFILIATE THEREOF AS DEFINED IN SECTION V(a)(1) OF
THE EXEMPTION) OR BY THE SAME EMPLOYEE ORGANIZATION, EXCEED 10% OF
THE TOTAL OF ALL LIABILITIES OF SUCH GENERAL ACCOUNT; OR
(B) AN OPINION OF COUNSEL ACCEPTABLE TO SUCH PERSONS THAT (A) THE
PROPOSED ISSUANCE OR TRANSFER OF THE CERTIFICATE TO SUCH TRANSFEREE
WILL NOT CAUSE ANY ASSETS OF THE TRUST TO BE DEEMED ASSETS OF A
PLAN, OR (B) THE PROPOSED ISSUANCE OR TRANSFER OF THE CERTIFICATE
WILL NOT CAUSE THE OWNER TRUSTEE OR THE CERTIFICATE REGISTRAR OR ANY
OF THEIR RESPECTIVE SUCCESSORS TO BE A FIDUCIARY OF A PLAN WITHIN
THE MEANING OF SECTION 3(21) OF ERISA AND WILL NOT GIVE RISE TO A
TRANSACTION DESCRIBED IN SECTION 406 OF ERISA OR SECTION 4975(c)(1)
OF THE CODE FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS
UNAVAILABLE.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS,
PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE OWNER TRUSTEE
AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT SUCH TRANSFEREE (A)
AGREES TO BE BOUND BY AND TO ABIDE BY THE TRANSFER RESTRICTIONS APPLICABLE TO
THIS CERTIFICATE; (B) IS NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS
NOMINEE TO FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH SECURITY THROUGH THIS
CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT IS A
NON-U.S. PERSON. THE TERM "NON-U.S. PERSON" MEANS A PERSON WHO IS NOT ONE OF THE
FOLLOWING: A CITIZEN OR RESIDENT OF THE UNITED STATES, A CORPORATION,
PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN OR UNDER THE LAWS OF THE
UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, AN ESTATE THAT IS SUBJECT TO
U.S. FEDERAL INCOME TAX REGARDLESS OF THE SOURCE OF ITS INCOME OR A TRUST IF (I)
A COURT IN THE UNITED STATES IS ABLE TO EXERCISE PRIMARY SUPERVISION OVER THE
ADMINISTRATION OF THE TRUST AND (II) ONE OR MORE UNITED STATES FIDUCIARIES HAVE
THE AUTHORITY TO CONTROL ALL SUBSTANTIAL DECISIONS OF THE TRUST.
B-1-2
<PAGE> 45
IMC HOME EQUITY LOAN OWNER TRUST 1997-8
CERTIFICATE
No. 0001
THIS CERTIFIES THAT IMC Mortgage Company (the "Owner") is the registered
owner of a 99% Percentage Interest in IMC Home Equity Loan Owner Trust 1997-8
(the "Trust") existing under the laws of the State of Delaware and created
pursuant to the Owner Trust Agreement, dated as of December 1, 1997 (the "Trust
Agreement"), between IMC Securities, Inc., as Depositor, and Wilmington Trust
Company, in its individual capacity and in its fiduciary capacity as owner
trustee under the Trust Agreement (the "Owner Trustee"). Capitalized terms used
but not otherwise defined herein have the meanings assigned to such terms in the
Trust Agreement. The Owner Trustee, on behalf of the Issuer and not in its
individual capacity, has executed this Certificate by one of its duly authorized
signatories as set forth below. This Certificate is one of the Certificates
referred to in the Trust Agreement and is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement to which the holder of
this Certificate by virtue of the acceptance hereof agrees and by which the
holder hereof is bound. Reference is hereby made to the Trust Agreement for the
rights of the holder of this Certificate, as well as for the terms and
conditions of the Trust created by the Trust Agreement.
The holder, by its acceptance hereof, agrees not to transfer this
Certificate except in accordance with terms and provisions of the Agreement.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
IMC HOME EQUITY LOAN OWNER TRUST
1997-8
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
By: ____________________________________
Authorized Signatory
DATED: December 30, 1997
B-1-3
<PAGE> 46
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY
as Owner Trustee
By: ____________________________________
Authorized Signatory
B-1-4
<PAGE> 47
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
the within Instrument, and all rights thereunder, hereby irrevocably
constituting and appointing
______________________________________________________________ Attorney to
transfer said Instrument on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated: _____________________
__________________________________________*/
Signature Guaranteed:
__________________________________________*/
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Instrument in every particular,
without alteration, enlargement or any change whatever. Such
signature must be guaranteed by a member firm of the New York Stock
Exchange or a commercial bank or trust company.
B-1-5
<PAGE> 48
EXHIBIT B-2
TO THE TRUST AGREEMENT
(FORM OF CERTIFICATE ISSUED TO THE DEPOSITOR)
THE EQUITY INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR
INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE
HOLDER HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) A PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN
THE MEANING OF RULE 3A-7 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(INCLUDING, BUT NOT LIMITED TO, IMC MORTGAGE COMPANY AND IMC SECURITIES, INC.)
IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND SUCH LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS RESIDUAL INTEREST UNDER
THE ACT OR ANY STATE SECURITIES LAWS.
THIS CERTIFICATE IS NONTRANSFERABLE. NOTWITHSTANDING ANYTHING HEREIN OR IN THE
TRUST AGREEMENT TO THE CONTRARY, ANY ATTEMPTED TRANSFER OF THIS CERTIFICATE
SHALL BE NULL AND VOID FOR ALL PURPOSES.
IMC HOME EQUITY LOAN OWNER TRUST 1997-8
CERTIFICATE
No. 0002
THIS CERTIFIES THAT IMC SECURITIES, INC. (the "Owner") is the registered
owner of a 1% Percentage Interest of the IMC Home Equity Loan Owner Trust 1997-8
(the "Trust") existing under the laws of the State of Delaware and created
pursuant to the Trust Agreement, dated as of December 1, 1997 (the "Trust
Agreement") between IMC Securities, inc., as Depositor and Wilmington Trust
Company, not in its individual capacity but solely in its fiduciary capacity as
owner trustee under the Trust Agreement (the "Owner Trustee"). Capitalized terms
used but not otherwise defined herein have the meanings assigned to them in the
Trust Agreement. The Owner Trustee, on behalf of the Issuer and not in its
individual capacity, has executed this Certificate by
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one of its duly authorized signatories as set forth below. This Certificate is
one of the Certificates referred to in the Trust Agreement and is issued under
and is subject to the terms, provisions and conditions of the Trust Agreement to
which the holder of this Certificate by virtue of acceptance hereof agrees and
by which the holder hereof is bound. Reference is hereby made to the trust
Agreement for the rights of the holder of this Certificate, as well as for the
terms and conditions of the Trust created by the Trust Agreement.
The holder, by its acceptance Certificate hereof, agrees not to transfer
this Certificate.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the trust and not in
its individual capacity, has caused this Certificate to be duly executed.
IMC HOME EQUITY LOAN OWNER TRUST
1997-8
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
By: ____________________________________
Authorized Signatory
DATED: December 30, 1997
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CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
By: ____________________________________
Authenticating Agent
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LOAN SALE AGREEMENT
This LOAN SALE AGREEMENT dated as of December 1, 1997 (the
"Agreement"), is made and entered into by and between IMC SECURITIES, INC., as
purchaser (together with its successors and assigns, being referred to herein as
the "Depositor") and IMC MORTGAGE COMPANY, as seller (together with its
successors and assigns, being referred to herein as the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller is engaged in the business of originating,
purchasing and servicing home equity loans secured by first lien mortgages and
deeds of trust on residential property;
WHEREAS, the Seller desires to sell to the Depositor and the Depositor
desires to purchase from the Seller on a whole loan basis the Home Equity Loans
and all monies due and to become due thereunder after December 1, 1997;
WHEREAS, the Depositor intends to transfer the Home Equity Loans to IMC
Home Equity Loan Owner Trust 1997-8 (the "Trust") in order to facilitate the
issuance by the Trust of a series of asset backed notes (the "Notes");
NOW, THEREFORE, in consideration of these premises and of the mutual
agreements herein set forth, the Depositor and the Seller each agree as follows:
SECTION 1. Representations and Warranties.
The Seller hereby represents, warrants and covenants to the Depositor
that as of the Closing Date:
(i) The information with respect to each Home Equity Loan set
forth in the Schedule of Home Equity Loans is true and correct as of
the Cut-Off Date;
(ii) All the original or certified documentation set forth in
Section 2.05 of the Sale and Servicing Agreement, dated as of
December 1, 1997 (the "Sale and Servicing Agreement"), by and
between the Seller, the Servicer, the Depositor, the Trust, as
Issuer and The Chase Manhattan Bank, as Indenture Trustee (including
all material documents related thereto) with respect to each Home
Equity Loan has been or will be delivered to the Custodian (on
behalf of the Depositor) on the Closing Date or as otherwise
provided in Section 2.05 of the Sale and Servicing Agreement;
(iii) Each Home Equity Loan being transferred to the Depositor
is secured by a Mortgage;
(iv) Each Property is improved by a single (one-to-four)
family residential dwelling (except for 3.30% of the Home Equity
Loans in the amount of $297,642,381), that are condominiums, planned
unit developments, townhouses, manufactured housing or multifamily
residential, provided that no more than 0.13% of the Properties are
secured by manufactured homes, each of which is considered to be
real property under the applicable local law;
(v) As of the Cut-Off Date, no Home Equity Loan has a
Loan-to-Value Ratio in excess of 85%, except for 394 Home Equity
Loans in the amount of $44,743,895 that had a Loan-to-Value Ratio
not greater than 100%;
(vi) Each Home Equity Loan is being serviced by the Servicer
in accordance with the terms of the Sale and Servicing Agreement;
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(vii) The Mortgage Note related to each Home Equity Loan bears
a current Coupon Rate of at least 7.10% per annum;
(viii) Each Mortgage Note with respect to the Home Equity
Loans will provide for a schedule of substantially level and equal
Monthly Payments which are sufficient to amortize fully the
principal balance of such Mortgage Note on or before its maturity
date, except for 9 Home Equity Loans in the amount of $997,384
representing 0.32% of the aggregate Loan Balance of the Home Equity
Loans as of the Cut-Off Date, which may provide for a "balloon"
payment due at the end of the 15th year (except for 1 Home Equity
Loan in the amount of $108,361, which provide for a "balloon"
payment at the end of the 10th year);
(ix) As of the Closing Date, each Mortgage is a valid and
subsisting first lien of record (or is in the process of being
recorded) on the Property as noted on Schedule I to the Sale and
Servicing Agreement subject in all cases to the exceptions to title
set forth in the title insurance policy or attorney's opinion of
title, with respect to the related Home Equity Loan, which
exceptions are generally acceptable to banking institutions in
connection with their regular mortgage lending activities, and such
other exceptions to which similar properties are commonly subject
and which do not individually, or in the aggregate, materially and
adversely affect the benefits of the security intended to be
provided by such Mortgage;
(x) Immediately prior to the transfer and assignment of the
Home Equity Loans by the Seller to the Depositor herein
contemplated, the Seller held good and indefeasible title to, and
was the sole owner of, each Home Equity Loan (including the related
Mortgage Note) conveyed by the Seller subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth in
clause (ix) or other liens which will be released simultaneously
with such transfer and assignment; and immediately upon the transfer
and assignment herein contemplated, the Depositor will hold good and
indefeasible title to, and be the sole owner of, each Home Equity
Loan subject to no liens, charges, mortgages, encumbrances or rights
of others except as set forth in paragraph (ix) or other liens which
will be released simultaneously with such transfer and assignment
and except for the lien of the Indenture;
(xi) As of the opening of business on the Cut-Off Date, no
Home Equity Loan is 30 days or more Delinquent except that there are
83 Home Equity Loans with an outstanding aggregate Loan Balance of
$10,507,857 that are 30 or more days Delinquent but not more than 59
days Delinquent;
(xii) There is no delinquent tax or assessment lien on any
Property, and each Property is free of substantial damage and is in
good repair;
(xiii) There is no valid and enforceable offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the
obligation of the related Mortgagor to pay the unpaid principal of
or interest on such Mortgage Note;
(xiv) There is no mechanics' lien or claim for work, labor or
material affecting any Property which is or may be a lien prior to,
or equal with, the lien of the related Mortgage except those which
are insured against by any title insurance policy referred to in
paragraph (xvi) below;
(xv) Each Home Equity Loan at the time it was made complied in
all material respects with applicable state and federal laws and
regulations, including, without limitation, the federal
Truth-in-Lending Act (as amended by the Riegle Community Development
and Regulatory Improvement Act of 1994) and other consumer
protection laws, usury, equal credit opportunity, disclosure and
recording laws;
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(xvi) With respect to each Home Equity Loan either (a) an
attorney's opinion of title has been obtained but no lender's title
insurance policy has been obtained, or (b) a lender's title
insurance policy, issued in standard American Land Title Association
form by a title insurance company authorized to transact business in
the state in which the related Property is situated, in an amount at
least equal to the original balance of such Home Equity Loan,
insuring the mortgagee's interest under the related Home Equity Loan
as the holder of a valid first mortgage lien of record on the real
property described in the related Mortgage, as the case may be,
subject only to exceptions of the character referred to in paragraph
(ix) above, was effective on the date of the origination of such
Home Equity Loan, and, as of the Closing Date, such policy is valid
and thereafter such policy shall continue in full force and effect
(provided that an attorney's opinion of title without a lender's
title insurance policy has been obtained with respect to no more
than 2% of the Original Aggregate Loan Balance);
(xvii) The improvements upon each Property are covered by a
valid and existing hazard insurance policy with a carrier generally
acceptable to the Servicer that provides for fire and extended
coverage representing coverage not less than the least of (A) the
outstanding principal balance of the related Home Equity Loan, (B)
the minimum amount required to compensate for damage or loss on a
replacement cost basis or (C) the full insurable value of the
Property;
(xviii) If any Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form
meeting the requirements of the current guidelines of the Flood
Insurance Administration is in effect with respect to such Property
with a carrier generally acceptable to the Servicer in an amount
representing coverage not less than the least of (A) the outstanding
principal balance of the related Home Equity Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement
cost basis or (C) the maximum amount of insurance that is available
under the Flood Disaster Protection Act of 1973;
(xix) Each Mortgage and Mortgage Note are the legal, valid and
binding obligation of the maker thereof and are enforceable in
accordance with their terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether considered in
a proceeding or action in equity or at law), and all parties to each
Home Equity Loan had full legal capacity to execute all documents
relating to such Home Equity Loan and convey the estate therein
purported to be conveyed;
(xx) The Seller has caused and will cause to be performed any
and all acts required to be performed to preserve the rights and
remedies of the Indenture Trustee in any Insurance Policies
applicable to any Home Equity Loans delivered by the Seller
including, without limitation, any necessary notifications of
insurers, assignments of policies or interests therein, and
establishments of co-insured, joint loss payee and mortgagee rights
in favor of the Depositor;
(xxi) As of the Closing Date, no more than 0.27% of the
aggregate Loan Balance of the Home Equity Loans will be secured by
Properties located within any single zip code area;
(xxii) Each original Mortgage was recorded or is in the
process of being recorded, and all subsequent assignments of the
original Mortgage have been delivered for recordation or have been
recorded in the appropriate jurisdictions wherein such recordation
is necessary to perfect the lien thereof as against creditors of or
purchasers from the Seller (or, subject to Section 2.05 of the Sale
and Servicing Agreement, are in the process of being recorded); each
Mortgage and
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assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the property
securing such Mortgage is located;
(xxiii) The terms of each Mortgage Note and each Mortgage have
not been impaired, altered or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect
the interest of the Owners and the Note Insurer and which has been
delivered to the Depositor. The substance of any such alteration or
modification is reflected on the related Schedule of Home Equity
Loans;
(xxiv) The proceeds of each Home Equity Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee
to make future advances thereunder. Any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing or
recording such Home Equity Loans were paid;
(xxv) The related Mortgage Note is not and has not been
secured by any collateral, pledged account or other security except
the lien of the corresponding Mortgage;
(xxvi) No Home Equity Loan has a shared appreciation feature,
or other contingent interest feature;
(xxvii) Each Property is located in the state identified in
the respective Schedule of Home Equity Loans and consists of one or
more parcels of real property with a residential dwelling erected
thereon;
(xxviii) Each Mortgage contains a provision for the
acceleration of the payment of the unpaid principal balance of the
related Home Equity Loan in the event the related Property is sold
without the prior consent of the mortgagee thereunder;
(xxix) Any advances made after the date of origination of a
Home Equity Loan but prior to the Cut-Off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on
the Schedule of Home Equity Loans. The consolidated principal amount
does not exceed the original principal amount of the related Home
Equity Loan. No Mortgage Note permits or obligates the Servicer to
make future advances to the related Mortgagor at the option of the
Mortgagor;
(xxx) There is no proceeding pending or threatened for the
total or partial condemnation of any Property, nor is such a
proceeding currently occurring, and each Property is undamaged by
waste, fire, water, flood, earthquake or earth movement;
(xxxi) All of the improvements which were included for the
purposes of determining the Appraised Value of any Property lie
wholly within the boundaries and building restriction lines of such
Property, and no improvements on adjoining properties encroach upon
such Property, and are stated in the title insurance policy and
affirmatively insured;
(xxxii) No improvement located on or being part of any
Property is in violation of any applicable zoning law or regulation.
All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of each Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities and such Property is lawfully occupied under the
applicable law;
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(xxxiii) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will become
payable by the Depositor to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the
related Mortgagor;
(xxxiv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder
thereof adequate for the realization against the related Property of
the benefits of the security, including (A) in the case of a
Mortgage designated as a deed of trust, by trustee's sale and (B)
otherwise by judicial foreclosure. There is no homestead or other
exemption other than any applicable Mortgagor redemption rights
available to the related Mortgagor which would materially interfere
with the right to sell the related Property at a trustee's sale or
the right to foreclose the related Mortgage;
(xxxv) Other than with respect to the Delinquencies noted in
item (xi) hereof, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Mortgage
Note and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; and neither the
Servicer nor the Seller has waived any default, breach, violation or
event of acceleration;
(xxxvi) No instrument of release or waiver has been executed
in connection with any Home Equity Loan, and no Mortgagor has been
released, in whole or in part, except in connection with an
assumption agreement which has been approved by the primary mortgage
guaranty insurer, if any, and which has been delivered to the
Depositor;
(xxxvii) Reserved;
(xxxviii) Each Home Equity Loan was underwritten in accordance
with the credit underwriting guidelines of the Seller as set forth
in the Seller's Policies and Procedures Manual, as in effect on the
date hereof and such Manual conforms in all material respects to the
description thereof set forth in the Prospectus Supplement;
(xxxix) Each Home Equity Loan was originated based upon a full
appraisal, which included an interior inspection of the subject
property;
(xl) The Home Equity Loans were not selected for sale to the
Depositor by the Seller on any basis intended to adversely affect
the Depositor;
(xli) No more than 6.53% of the aggregate Loan Balance of the
Home Equity Loans are secured by Properties that are non-owner
occupied Properties (i.e., investor-owned and vacation);
(xlii) The Seller has no actual knowledge that there exist any
hazardous substances, hazard wastes or solid wastes, as such terms
are defined in the Comprehensive Environmental Response Compensation
and Liability Act, the Resource Conservation and Recovery Act of
1976, or other federal, state or local environmental legislation on
any Property;
(xliii) The Seller was properly licensed or otherwise
authorized, to the extent required by applicable law, to originate
or purchase each Home Equity Loan; and the consummation of the
transactions herein contemplated including, without limitation, the
ownership of the Home Equity Loans by the Seller will not violate
such laws;
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(xliv) With respect to each Property subject to a ground lease
(i) the current ground lessor has been identified and all ground
rents which have previously become due and owing have been paid;
(ii) the ground lease term extends, or is automatically renewable,
for at least five years beyond the maturity date of the related Home
Equity Loan; (iii) the ground lease has been duly executed and
recorded; (iv) the amount of the ground rent and any increases
therein are clearly identified in the lease and are for
predetermined amounts at predetermined times; (v) the ground rent
payment is included in the borrower's monthly payment as an expense
item in determining the qualification of the borrower for such Home
Equity Loan; (vi) the Depositor has the right to cure defaults on
the ground lease; and (vii) the terms and conditions of the
leasehold do not prevent the free and absolute marketability of the
Property. As of the Cut-Off Date, the Loan Balance of the Home
Equity Loans with related Properties subject to ground leases does
not exceed 1% of the Original Aggregate Loan Balance;
(xlv) Reserved;
(xlvi) No Home Equity Loan is subject to a temporary rate
reduction pursuant to a buydown program;
(xlvii) No more than 4.36% of the aggregate Loan Balance of
the Home Equity Loans was originated under the Seller's non-income
verification program;
(xlviii) The Coupon Rate on each Home Equity Loan is
calculated on the basis of a year of 360 days with twelve 30-day
months;
(xlix) Neither the operation of any of the terms of each
Mortgage Note and each Mortgage nor the exercise of any right
thereunder will render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, nor subject it to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury;
(l) Any adjustment to the Coupon Rate on a Home Equity Loan
has been legal, proper and in accordance with the terms of the
related Mortgage Note;
(li) No Home Equity Loan is subject to negative amortization;
and
(lii) As of the Cut-Off Date, the FTC holder regulation
provided in 16 C.F.R. Part 433 applies to none of the Home Equity
Loans.
SECTION 2. Purchase and Delivery.
In consideration for the sale and transfer of the Home Equity Loans to
the Depositor by the Seller, and upon transfer of such Home Equity Loans to the
Depositor or the Depositor's designee from the Seller on the date hereof with
respect to the Home Equity Loans, the Depositor shall pay or cause to be paid to
the Seller good and valuable consideration, (the "Purchase Price") including
(without limitation) (a) the net proceeds of the sale of the Notes and (b)
certain residual classes of securities subordinate to the Notes. The transfer of
funds from the Depositor to the Seller for the Purchase Price for all Home
Equity Loans purchased shall be made by wire transfer of immediately available
funds to the bank account designated by the Seller.
On the date hereof with respect to the Home Equity Loans, the Seller
shall transfer, assign and convey to the Depositor all of the Seller's right,
title and interest in and to each Home Equity Loan and the related File, free
and clear of any adverse claims, rights or interests therein. The Seller shall,
or shall cause its agent to, deliver to the Depositor or the Depositor's
designee the related File.
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SECTION 3. Sale Treatment.
It is the express intent of the parties hereto that the conveyance of
the Home Equity Loans by the Seller to the Depositor, as contemplated by this
Agreement be and be treated as an absolute transfer and conveyance of all of the
Seller's right, title, ownership and other interest in the Home Equity Loans. In
the event that, notwithstanding the intent of the parties, the Home Equity Loans
are held by a court to be the property of the Seller, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of Articles 8 and
9 of the applicable Uniform Commercial Code; (ii) the transfer of the Home
Equity Loans provided for herein shall be deemed to be a grant by the Seller to
the Depositor of a security interest (and/or an assignment of any security
interest that the Seller may hold) in all of the Seller's right, title,
ownership and other interest in and to the Home Equity Loans and all amounts
payable to the holders of the Home Equity Loans in accordance with the terms
thereof and all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, to the extent
the Depositor would otherwise be entitled to own such Home Equity Loans and
proceeds thereof; (iii) the possession by the Depositor or the Custodian on
behalf of the Indenture Trustee of the Mortgage Note and such other items of
property as constitute instruments, money, negotiable documents or chattel paper
shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 (or comparable
provision) of the applicable Uniform Commercial Code; and (iv) 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 Depositor for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Depositor pursuant to any provision hereof or pursuant to the Sale and
Servicing Agreement shall also be deemed to be an assignment of any security
interest created hereby. The Seller and the Depositor shall, to the extent
consistent with this Agreement, take such actions as may be reasonably necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Home Equity Loans, such security interest would be deemed to be a perfected
first priority security interest under applicable law and will be maintained as
such throughout the term of the Sale and Servicing Agreement.
SECTION 4. Binding Effect.
This Loan Sale Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the Depositor and the Seller.
SECTION 5. Governing Law.
This Loan Sale Agreement shall be governed by and construed under the
laws of the State of New York, without regard to the conflict of laws provisions
thereof.
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SECTION 6. Capitalized Terms.
Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Sale and Servicing Agreement.
SECTION 7. Counterparts.
This Loan Sale Agreement 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 Agreement.
SECTION 8. Third-Party Beneficiary.
The Seller and the Depositor each agree that MBIA Insurance Corporation
and The Chase Manhattan Bank, as Indenture Trustee, shall be deemed to be
third-party beneficiaries of this Loan Sale Agreement as if they were each a
party hereto.
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IN WITNESS WHEREOF, the undersigned have executed this Loan Sale
Agreement as of the 1st day of December, 1997.
IMC MORTGAGE COMPANY, as Seller
By: /s/ George Nicholas
-------------------------
George Nicholas
Chief Executive Officer
IMC SECURITIES, INC., as Depositor
By: /s/ George Nicholas
-------------------------
George Nicholas
Chief Executive Officer
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SALE AND SERVICING AGREEMENT
Dated as of December 1, 1997
Among
IMC HOME EQUITY LOAN OWNER TRUST 1997-8,
as Issuer,
IMC SECURITIES, INC.,
as Depositor,
IMC MORTGAGE COMPANY,
as Seller and Servicer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
IMC HOME EQUITY LOAN OWNER TRUST 1997-8
ADJUSTABLE RATE HOME EQUITY LOAN ASSET BACKED NOTES, SERIES 1997-8
<PAGE> 2
CONTENTS
PAGE
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION....................................1
Section 1.01 Definitions..............................................1
Section 1.02 Use of Words and Phrases................................16
Section 1.03 Captions; Table of Contents.............................16
Section 1.04 Opinions................................................16
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE DEPOSITOR, THE SERVICER AND THE SELLER;
COVENANT OF DEPOSITOR TO CONVEY HOME EQUITY LOANS....................17
Section 2.01 Representations and Warranties of the Depositor.........17
Section 2.02 Representations and Warranties of the Servicer..........19
Section 2.03 Representations and Warranties of the Seller............21
Section 2.04 Covenants of Seller to Take Certain Actions with
Respect to the Home Equity Loans in
Certain Situations....................................24
Section 2.05 Conveyance of the Home Equity Loans and Qualified
Replacement Mortgages.................................31
Section 2.06 Acceptance by Indenture Trustee; Certain
Substitutions of Home Equity Loans; Certification
by Indenture Trustee..................................34
Section 2.07 Reserved................................................36
Section 2.08 Custodian...............................................36
Section 2.09 Books and Records.......................................36
ARTICLE III
ACCOUNTS, DISBURSEMENTS AND RELEASES.................................37
Section 3.01 Reserved................................................37
Section 3.02 Establishment of Accounts...............................37
Section 3.03 Flow of Funds...........................................37
Section 3.04 Reserved................................................39
Section 3.05 Investment of Accounts..................................39
Section 3.06 Payment of Trust Expenses...............................40
Section 3.07 Eligible Investments....................................40
Section 3.08 Accounting and Directions by Indenture Trustee..........42
Section 3.09 Reports by Indenture Trustee to Owners and Note Insurer.42
Section 3.10 Reports by Indenture Trustee............................44
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ARTICLE IV
SERVICING AND ADMINISTRATION
OF HOME EQUITY LOANS.................................................46
Section 4.01 Servicer and Sub-Servicers..............................46
Section 4.02 Collection of Certain Home Equity Loan Payments.........47
Section 4.03 Sub-Servicing Agreements Between Servicer
and Sub-Servicers.....................................47
Section 4.04 Successor Sub-Servicers.................................48
Section 4.05 Liability of Servicer; Indemnification..................48
Section 4.06 No Contractual Relationship Between
Sub-Servicer, Indenture Trustee or the Owners.........48
Section 4.07 Assumption or Termination of Sub-Servicing Agreement
by Indenture Trustee..................................49
Section 4.08 Principal and Interest Account..........................49
Section 4.09 Delinquency Advances and Servicing Advances.............50
Section 4.10 Compensating Interest; Repurchase of Home Equity Loans..51
Section 4.11 Maintenance of Insurance................................52
Section 4.12 Due-on-Sale Clauses; Assumption and
Substitution Agreements...............................52
Section 4.13 Realization Upon Defaulted Home Equity Loans;
Workout of Home Equity Loans..........................53
Section 4.14 Indenture Trustee to Cooperate; Release of Files........54
Section 4.15 Servicing Compensation..................................55
Section 4.16 Annual Statement as to Compliance.......................56
Section 4.17 Annual Independent Certified Public
Accountants' Reports..................................56
Section 4.18 Access to Certain Documentation and
Information Regarding the Home Equity Loans...........56
Section 4.19 Assignment of Agreement.................................56
Section 4.20 Removal of Servicer; Retention of Servicer;
Resignation of Servicer...............................57
Section 4.21 Inspections by Note Insurer; Errors and
Omissions Insurance.....................................60
Section 4.22 Reserved................................................60
Section 4.23 Adjustable Rate Home Equity Loans.......................60
ARTICLE V
TERMINATION..........................................................62
Section 5.01 Termination.............................................62
Section 5.02 Termination Upon Option of Holders of Certificates......62
Section 5.03 Disposition of Proceeds.................................62
ARTICLE VI
MISCELLANEOUS........................................................63
Section 6.01 Acts of Owners..........................................63
Section 6.02 Recordation of Agreement................................63
Section 6.03 Duration of Agreement...................................63
Section 6.04 Successors and Assigns..................................63
Section 6.05 Severability............................................63
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Section 6.06 Governing Law; Submission to Jurisdiction...............63
Section 6.07 Counterparts............................................64
Section 6.08 Amendment...............................................64
Section 6.09 Specification of Certain Tax Matters....................65
Section 6.10 The Note Insurer........................................65
Section 6.11 Third Party Rights......................................65
Section 6.12 Notices.................................................65
Section 6.13 Benefits of Agreement...................................67
Section 6.14 Legal Holidays..........................................67
Section 6.15 Usury...................................................67
Section 6.16 No Petition.............................................68
ARTICLE VII
CERTAIN MATTERS REGARDING THE NOTE INSURER...........................69
Section 7.01 Trust Estate and Accounts Held for Benefit
of the Note Insurer...................................69
Section 7.02 Claims Upon the Policy; Policy Payments Account.........69
Section 7.03 Effect of Payments by the Note Insurer; Subrogation.....70
Section 7.04 Notices to the Note Insurer.............................70
Section 7.05 Rights to the Note Insurer To Exercise Rights of Owners.71
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SCHEDULE I SCHEDULE OF HOME EQUITY LOANS
EXHIBIT A FORM OF CERTIFICATE RE: HOME EQUITY LOANS
PREPAID IN FULL AFTER CUT-OFF DATE
EXHIBIT B-1 FORM OF INDENTURE TRUSTEE'S RECEIPT
EXHIBIT B-2 FORM OF CUSTODIAN'S RECEIPT
EXHIBIT C FORM OF POOL CERTIFICATION
EXHIBIT D HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
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SALE AND SERVICING AGREEMENT dated as of December 1, 1997 by and among
IMC HOME EQUITY LOAN OWNER TRUST 1997-8, a Delaware business trust (the "Issuer"
or the "Trust"), IMC SECURITIES, INC., a Delaware corporation, in its capacity
as Depositor (the "Depositor"), IMC Mortgage Company, a Florida corporation in
its capacities as the Seller and the Servicer (respectively, the "Seller" or the
"Servicer") and THE CHASE MANHATTAN BANK, a New York banking corporation, in its
capacity as the indenture trustee on behalf of the Owners of the Notes (the
"Indenture Trustee").
WHEREAS, the Issuer desires to purchase a pool of Home Equity Loans
which were originated or purchased by the Seller and sold to the Depositor in
the ordinary course of business of the Seller pursuant to the Loan Sale
Agreement;
WHEREAS, the Depositor is willing to sell such Home Equity Loans to the
Issuer;
WHEREAS, the Servicer has agreed to service the Home Equity Loans, in
accordance with the terms of this Agreement;
WHEREAS, The Chase Manhattan Bank, is willing to serve in the capacity
of Indenture Trustee hereunder; and
WHEREAS, MBIA Insurance Corporation (the "Note Insurer") is intended to
be a third party beneficiary of this Agreement and is hereby recognized by the
parties hereto to be a third-party beneficiary of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Issuer, the Depositor, the Seller, the
Servicer, and the Indenture Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01 Definitions.
For all purposes of this Agreement, the following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
"Account": Any account established in accordance with Section 3.02 or
4.08 hereof.
"Accrual Period": With respect to any Payment Date, the period
commencing on the immediately preceding Payment Date (or the Closing Date in the
case of the first Payment Date) to and including the day prior to the current
Payment Date. Calculations of interest will be made on the basis of the actual
number of days elapsed in the related Accrual Period and a year of 360 days.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Sale and Servicing Agreement, as it may be amended
from time to time, including the Exhibits and Schedules hereto.
<PAGE> 7
"Agreement of Limited Partnership": The Third Amended and Restated
Agreement of Limited Partnership of the Seller, dated as of November 1, 1995, as
at any time amended or modified.
"Annual Loss Percentage (Rolling Twelve Month)": As of any date of
determination thereof, a fraction, expressed as a percentage, the numerator of
which is the aggregate of the Realized Losses for each of the twelve immediately
preceding Remittance Periods and the denominator of which is the Original
Aggregate Loan Balance.
"Appraised Value": The appraised value of any Property based upon the
appraisal made at the time of the origination of the related Home Equity Loan,
or, in the case of a Home Equity Loan which is a purchase money mortgage, the
sales price of the Property at such time of origination, if such sales price is
less than such appraised value.
"Authorized Officer": With respect to any Person, any officer of such
Person who is authorized to act for such Person in matters relating to this
Agreement, and whose action is binding upon, such Person; with respect to the
Depositor and the Servicer, initially including those individuals whose names
appear on the lists of Authorized Officers delivered at the Closing; with
respect to the Indenture Trustee, any officer assigned to the Corporate Trust
Division (or any successor thereto), including any Vice President, Assistant
Vice President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Indenture Trustee customarily performing functions similar
to those performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement.
"Available Funds": As defined in Section 3.02(b) hereof.
"Available Funds Cap Carry-Forward Amortization Amount": As of any
Payment Date, any amount distributed from the Available Funds Cap Carry-Forward
Amount Account on such Payment Date pursuant to Section 3.03(c) hereof.
"Available Funds Cap Carry-Forward Amount": As of any Payment Date, the
sum of (I) the excess, if any, of (A) the sum of (i) the aggregate of the
Available Funds Cap Carry-Forward Amounts for all prior Payment Dates and (ii)
the difference between (a) the amount of interest due on the Notes on the
immediately preceding Payment Date calculated at the Formula Note Rate
applicable on such date and (b) the amount of interest due on the Notes on the
immediately preceding Payment Date calculated at the Note Rate applicable on
such date over (B) all Available Funds Cap Carry-Forward Amortization Amounts
actually paid on all prior Payment Dates and (II) the product of (x) one-twelfth
of the Formula Note Rate on such Payment Date and (y) the amount described in
clause (I) of this definition.
"Available Funds Cap Carry-Forward Amount Account": The Available Funds
Cap Carry-Forward Amount Account established in accordance with Section 3.02
hereof and maintained by the Indenture Trustee.
"Available Funds Cap Rate": On each Payment Date the weighted average
of the Coupon Rates of the Home Equity Loans less 0.645% per annum.
"Available Funds Shortfall": As defined in Section 3.03(b)(ii)(A).
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"Backup Servicer": The Indenture Trustee shall initially serve as
Backup Servicer hereunder in the event of the termination of the Servicer,
subject to the right of the Indenture Trustee to assign such duties to a party
acceptable to the Note Insurer and the Owners of the majority of the Percentage
Interests of the Certificates.
"Business Day": Any day other than a Saturday, Sunday or a day on which
commercial banking institutions in The City of New York, Tampa, Florida, the
city in which the Corporate Trust Office is located or the city in which the
principal office of the Note Insurer is located are authorized or obligated by
law or executive order to be closed.
"Carry-Forward Amount": The sum of (x) the amount, if any, by which (i)
the Current Interest for the immediately preceding Payment Date exceeded (ii)
the amount of the actual distribution made to the Owners on such immediately
preceding Payment Date pursuant to Section 3.03(b)(iv)(B) hereof plus (y) 30
days' interest on such excess at the Note Rate.
"Certificate": Any one of the Certificates issued pursuant to the Trust
Agreement.
"Certificate Distribution Account": The Certificate Distribution
Account established in accordance with the Trust Agreement.
"Civil Relief Interest Shortfalls": With respect to any Remittance
Period, for any Home Equity Loans as to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Remittance
Period as a result of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, the amount, if any, by which (i) interest collectible on such Home
Equity Loans during the most recently ended Remittance Period is less than (ii)
the sum of (a) one month's interest on the Loan Balance of such Home Equity
Loans at a rate equal to the Note Rate plus (b) the Servicing Fee and the Trust
Fees and Expenses for such Remittance Period.
"Closing Date": December 30, 1997.
"Code": The Internal Revenue Code of 1986, as amended.
"Compensating Interest": As defined in Section 4.10(a) hereof.
"Corporate Trust Office": The principal office of the Indenture Trustee
at The Chase Manhattan Bank, 450 W. 33rd Street, 15th Floor, New York, NY 10001,
Attention: Corporate Trust Office or the principal office of any successor
Indenture Trustee hereunder.
"Coupon Rate": The rate of interest borne by each Mortgage Note from
time to time.
"Cram Down Loss": With respect to a Home Equity Loan, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the Loan Balance or the Coupon Rate of such Home Equity Loan, the
amount of such reduction. A "Cram Down Loss" shall be deemed to have occurred on
the date of issuance of such order.
"Cumulative Loss Percentage": As of any date of determination thereof,
the aggregate of all Realized Losses since the Closing Date as a percentage of
the Original Aggregate Loan Balance.
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"Current Interest": With respect to any Payment Date, an amount equal
to the amount of interest accrued on the Note Principal Balance immediately
prior to such Payment Date during the related Accrual Period at the Note Rate
plus the Preference Amount owed to the Owners of the Notes as it relates to
interest previously paid on the Notes plus the Carry-Forward Amount; provided,
however, such amount will be reduced by the amount of any Civil Relief Interest
Shortfalls relating to Home Equity Loans.
"Custodial Agreement": The Custodial Agreement dated as of December 1,
1997 among the Custodian, the Issuer, the Indenture Trustee, the Depositor, the
Seller and the Servicer.
"Custodian": BankBoston N.A., as Custodian on behalf of the Indenture
Trustee pursuant to the Custodial Agreement.
"Cut-Off Date": As of the close of business on December 1, 1997.
"Daily Collections": As defined in Section 4.08(c) hereof.
"Delinquency Advance": As defined in Section 4.09(a) hereof.
"Delinquent": A Home Equity Loan is "Delinquent" if any payment due
thereon is not made by the Mortgagor by the close of business on the related Due
Date. A Home Equity Loan is "30 days Delinquent" if such payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days Delinquent," "90
days Delinquent" and so on.
"Depositor": IMC Securities, Inc., a Delaware corporation, or any
successor thereto.
"Depository": The Depository Trust Company, 7 Hanover Square, New York,
New York, 10004, and any successor Depository named herein.
"Designated Depository Institution": With respect to the Principal and
Interest Account, a trust account maintained by the trust department of a
federal or state chartered depository institution acceptable to the Note
Insurer, acting in its fiduciary capacity, having combined capital and surplus
of at least $50,000,000; provided, however, that if the Principal and Interest
Account is not maintained with the Indenture Trustee, (i) such institution shall
have a long-term debt rating of at least "A" by Standard & Poor's and "A2" by
Moody's, (ii) a short-term debt rating of at least "A-1" by Standard & Poor's
and (iii) the Servicer shall provide the Indenture Trustee and the Note Insurer
with a statement, which the Indenture Trustee will send to the Owners,
identifying the location and account information of the Principal and Interest
Account upon a change in the location of such account.
"Determination Date": The 15th day of each month, or if such day is not
a Business Day, on the preceding Business Day, commencing in January 1998.
"Due Date": With respect to any Home Equity Loan, the date on which the
Monthly Payment with respect to such Home Equity Loan is required to be paid
pursuant to the related Mortgage Note exclusive of any days of grace.
"Eligible Investments": Those investments so designated pursuant to
Section 3.07 hereof.
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"Excess Overcollateralization Amount": With respect to any Payment
Date, the excess, if any, of (x) the Overcollateralization Amount that would
apply on such Payment Date after taking into account the payment of the
Principal Distribution Amount on such Payment Date (except for any distributions
of Overcollateralization Reduction Amounts on such Payment Date), over (y) the
Specified Overcollateralization Amount for such Payment Date.
"Fannie Mae": Fannie Mae, a federally-chartered and privately-owned
corporation existing under the Federal National Mortgage Association Charter
Act, as amended, or any successor thereof.
"Fannie Mae Guide": Fannie Mae's Servicing Guide, as the same may be
amended by Fannie Mae from time to time, and the Servicer shall elect to apply
such amendments in accordance with Section 4.01 hereof.
"FDIC": The Federal Deposit Insurance Corporation, a corporate
instrumentality of the United States, or any successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the Emergency Home
Finance Act of 1970, as amended, or any successor thereof.
"File": The documents delivered to the Indenture Trustee pursuant to
Section 2.05(b) hereof pertaining to a particular Home Equity Loan and any
additional documents required to be added to the File pursuant to this
Agreement.
"Final Certification": As defined in Section 2.06(c) hereof.
"Final Payment Date": December, 20, 2028.
"Final Recovery Determination": With respect to any defaulted Home
Equity Loan or REO Property (other than a Home Equity Loan purchased by the
Seller, the Depositor or the Servicer), a determination made by the Servicer
that all Liquidation Proceeds which the Servicer, in its reasonable business
judgment expects to be finally recoverable in respect thereof have been so
recovered or that the Servicer believes in its reasonable business judgment the
cost of obtaining any additional recoveries therefrom would exceed the amount of
such recoveries. The Servicer shall maintain records of each Final Recovery
Determination.
"First Mortgage Loan": A Home Equity Loan which constitutes a first
priority mortgage lien with respect to any Property.
"Formula Note Rate": For any Payment Date, the rate determined by
clause (i) of the definition of "Note Rate" for such Payment Date.
"Highest Lawful Rate": As defined in Section 6.15 hereof.
"Home Equity Loans": Such home equity loans transferred and assigned to
the Trust pursuant to Section 2.05(a) and 2.07(a) hereof, together with any
Qualified Replacement Mortgages substituted therefor in accordance with this
Agreement, as from time to time are held as a part of the Trust Estate, the Home
Equity Loans originally so held being identified in the Schedule of Home Equity
Loans. The term "Home Equity Loan" includes any Home Equity Loan which is
Delinquent, which relates to a foreclosure or which relates to a Property which
is REO Property prior to such Property's disposition by the Trust. Any home
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equity loan which, although intended by the parties hereto to have been, and
which purportedly was, transferred and assigned to the Trust by the Depositor,
in fact was not transferred and assigned to the Trust for any reason whatsoever,
including, without limitation, the incorrectness of the statement set forth in
Section 2.04(b)(x) hereof with respect to such home equity loan, shall
nevertheless be considered a "Home Equity Loan" for all purposes of this
Agreement.
"Indemnification Agreement": The Indemnification Agreement dated as of
December 23, 1997 among the Note Insurer, the Depositor, the Seller and the
Underwriters.
"Indenture": The Indenture, dated December 1, 1997, between the Issuer
and the Indenture Trustee.
"Indenture Trustee": The Chase Manhattan Bank, a New York banking
corporation, the Corporate Trust Department of which is located on the date of
execution of this Agreement at 450 W. 33rd Street, 15th Floor, New York, NY
10001, not in its individual capacity but solely as Indenture Trustee under the
Indenture, and any successor hereunder.
"Indenture Trustee Fee": The fee payable monthly to the Indenture
Trustee on each Payment Date in an amount equal to 0.005% per annum, on the
outstanding aggregate Loan Balances of the Home Equity Loans as of the related
Determination Date.
"Indenture Trustee Reimbursable Expenses": Any amounts payable pursuant
to the second sentence of Section 6.7 of the Indenture provided that the
aggregate amounts payable as Indenture Trustee Reimbursable Expenses shall not
exceed $50,000.
"Insurance Agreement": The Insurance Agreement dated as of December 1,
1997, among the Issuer, the Depositor, the Seller, the Servicer, the Indenture
Trustee and the Note Insurer, as such agreement may be amended from time to
time.
"Insurance Policy": Any hazard, flood, title or primary mortgage
insurance policy relating to a Home Equity Loan plus any amount remitted under
Section 4.11 hereof.
"Insured Payment": As defined in the Note Insurance Policy.
"Interest Remittance Amount": As of any Monthly Remittance Date, the
sum, without duplication, of (i) all interest due during the related Remittance
Period with respect to the Home Equity Loans, (ii) all Compensating Interest
paid by the Servicer on such Monthly Remittance Date, (iii) the portion of the
Substitution Amount relating to interest on the Home Equity Loans, (iv) the
portion of any Loan Purchase Price relating to interest on any Home Equity Loan
repurchased during the related Remittance Period and (v) the portion of Net
Liquidation Proceeds relating to interest.
"Issuer" or "Trust": IMC Home Equity Loan Owner Trust 1997-8, a
Delaware business trust.
"Late Payment Rate": For any Monthly Remittance Date, the rate of
interest as it is publicly announced by Citibank, N.A. at its principal office
in New York, New York as its prime rate (any change in such prime rate of
interest to be effective on the date such change is announced by Citibank, N.A.)
plus 3%. The Late Payment Rate shall be computed on the basis of a year of 365
days calculating the actual number of days elapsed. In no event shall the Late
Payment Rate exceed the maximum rate permissible under any applicable law
limiting interest rates.
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"LIBOR": With respect to any Accrual Period, the rate determined by the
Indenture Trustee on the related LIBOR Determination Date on the basis of the
British Bankers Association "Interest Settlement Rate" for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Indenture Trustee will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are provided, the rate for that date
will be the arithmetic mean of the quotations (rounded upwards if necessary to
the nearest whole multiple of 1/16%). If fewer than two quotations are provided
as requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Servicer, at
approximately 11:00 a.m. (New York City time) on such date for one-month U.S.
dollar loan to leading European banks.
"LIBOR Determination Date": With respect to any Accrual Period the
second London Business Day preceding the commencement of such Accrual Period.
"Liquidated Loan": A Home Equity Loan as to which a Final Recovery
Determination has been made.
"Liquidation Proceeds": With respect to any Liquidated Loan, all
amounts (including the proceeds of any Insurance Policy) recovered by the
Servicer in connection with such Liquidated Loan, whether through trustee's
sale, foreclosure sale or otherwise.
"Loan Balance": With respect to each Home Equity Loan and as of any
date of determination, the actual outstanding principal balance thereof on the
Cut-Off Date excluding payments of principal due on or prior to the Cut-Off
Date, whether or not received, less any principal payments relating to such Home
Equity Loan included in previous Monthly Remittance Amounts, provided, however,
that the Loan Balance for any Home Equity Loan that has become a Liquidated Loan
shall be zero as of the first day of the Remittance Period following the
Remittance Period in which such Home Equity Loan becomes a Liquidated Loan, and
at all times thereafter.
"Loan Purchase Price": With respect to any Home Equity Loan purchased
from the Trust on or prior to a Monthly Remittance Date pursuant to Section
2.03, 2.04, 2.06(b) or 4.10(b) hereof, an amount equal to the Loan Balance of
such Home Equity Loan as of the date of purchase (assuming that the Monthly
Remittance Amount remitted by the Servicer on such Monthly Remittance Date has
already been remitted), plus all accrued and unpaid interest on such Home Equity
Loan at the Coupon Rate to but not including the date of such purchase together
with (without duplication) the aggregate amounts of (i) all unreimbursed
Delinquency Advances and Servicing Advances theretofore made with respect to
such Home Equity Loan, (ii) all Delinquency Advances which the Servicer has
theretofore failed to remit with respect to such Home Equity Loan and (iii) all
reimbursed Delinquency Advances to the extent that reimbursement is not made
from the Mortgagor or from Liquidation Proceeds from the respective Home Equity
Loan.
"Loan Sale Agreement": The Loan Sale Agreement dated as of December 1,
1997 between the Seller and the Depositor.
"Loan-to-Value Ratio": As of any particular date, the percentage
obtained by dividing the Appraised Value into the original principal balance of
the Mortgage Note relating to such Home Equity Loan.
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"London Business Day": Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
"Monthly Distribution Amount": With respect to any Payment Date, the
sum of (x) Current Interest and (y) the Principal Distribution Amount for such
Payment Date.
"Monthly Payment": With respect to any Home Equity Loan and any
Remittance Period, the payment of principal, if any, and interest due on the Due
Date in such Remittance Period pursuant to the related Mortgage Note.
"Monthly Remittance Amount": As of any Monthly Remittance Date, the sum
of (i) the Interest Remittance Amount for such Monthly Remittance Date and (ii)
the Principal Remittance Amount for such Monthly Remittance Date.
"Monthly Remittance Date": The 18th day of each month, or if such day
is not a Business Day, on the preceding Business Day, commencing in January
1998.
"Monthly Reporting Date": The Determination Date.
"Moody's": Moody's Investors Service Inc. or any successor thereto.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple interest in real property securing a
Mortgage Note.
"Mortgage Note": The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Home Equity Loan.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": As to any Liquidated Loan, Liquidation
Proceeds net of expenses incurred by the Servicer (including unreimbursed
Servicing Advances) in connection with the liquidation of any defaulted Home
Equity Loan and unreimbursed Delinquency Advances relating to such Home Equity
Loan. In no event shall Net Liquidation Proceeds with respect to any Liquidated
Loan be less than zero.
"Net Monthly Excess Cashflow": As defined in Section 3.03(b)(iii)
hereof.
"90-Day Delinquent Loan": With respect to any Determination Date
thereof, all REO Properties and each Home Equity Loan, with respect to which any
portion of a Monthly Payment is, as of the last day of the prior Remittance
Period, three months (calculated from Due Date with respect to such Home Equity
Loan to Due Date) or more past due (without giving effect to any grace period).
"90+ Delinquency Percentage (Rolling Six Month)": With respect to any
Determination Date thereof, the average of the percentage equivalents of the
fractions determined for each of the six immediately preceding Remittance
Periods the numerator of each of which is equal to the aggregate Loan Balance of
90-Day Delinquent Loans as of the end of such Remittance Period and the
denominator of which is the Loan Balance of all of the Home Equity Loans as of
the end of such Remittance Period.
"Note": Any one of the Notes substantially in the form attached to the
Indenture as Exhibit A.
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"Note Account": The segregated note account established in accordance
with Section 3.02(a) hereof and maintained at the Corporate Trust Office.
"Note Insurance Policy": The Note Guaranty Insurance Policy (number
25481) dated December 30, 1997 issued by the Note Insurer to the Indenture
Trustee for the benefit of the Owners pursuant to which the Note Insurer
guarantees Insured Payments.
"Note Insurer": MBIA Insurance Corporation, a New York insurance
company and any successor thereto, as issuer of the Note Insurance Policy.
"Note Insurer Default": The existence and continuance of any of the
following:
(a) the Note Insurer fails to make a payment required under
the Note Insurance Policy in accordance with its terms; or
(b)(i) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Note Insurer in
an involuntary case or proceeding under any applicable United States federal or
state bankruptcy, insolvency, rehabilitation, reorganization or other similar
law and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive days; or
(B) a final and nonappealable decree or order adjudging the Note Insurer as
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganizing, rehabilitation, arrangement, adjustment or composition of or in
respect of the Note Insurer under any applicable United States federal or state
law, or appointing a custodian, receiver, liquidator, rehabilitator, assignee,
indenture trustee, sequestrator or other similar official of the Note Insurer or
of any substantial part of its property, or ordering the winding-up or
liquidation of its affairs or
(ii) the commencement by the Note Insurer of a voluntary case
or proceeding under any applicable United States federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated as bankrupt or insolvent, or the consent of the
Note Insurer to the entry of a decree or order for relief in respect of the Note
Insurer in an involuntary case or proceeding under any applicable United States
federal or state bankruptcy, insolvency case or proceeding against the Note
Insurer, or the filing by the Note Insurer to the filing of such petition or to
the appointment of or the taking possession by a custodian, receiver,
liquidator, assignee, indenture trustee, sequestrator or similar official of the
Note Insurer or of any substantial part of its property, or the failure of the
Note Insurer to pay debts generally as they become due, or the admission by the
Note Insurer in writing of its inability to pay its debts generally as they
become due.
"Note Principal Balance": As of any time of determination, the Original
Note Principal Balance less the aggregate of all amounts actually distributed on
account of the Principal Distribution Amount pursuant to Section 3.03(b)(iv)
hereof with respect to principal thereon on all prior Payment Dates; provided,
however, that solely for purposes of determining the Note Insurer's rights, as
subrogee, the Note Principal Balance shall not be reduced by any principal
amount paid to the Owner thereof from Insured Payments.
"Note Rate": For any Payment Date, in any month up to and including the
month in which the Redemption Date occurs, the lesser of (i) LIBOR plus 0.22%
per annum and (ii) the Available Funds Cap Rate for such Payment Date and for
any month following the month in which the Redemption Date occurs, the lesser of
(i) LIBOR plus 0.44% per annum and (ii) the Available Funds Cap Rate for such
Payment Date.
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"Officer's Certificate": A certificate signed by any Authorized Officer
of any Person delivering such certificate and delivered to the Indenture
Trustee.
"Operative Documents": Collectively, this Agreement, the Loan Sale
Agreement, the Indenture, the Certificate of Trust, the Trust Agreement, the
Note Insurance Policy, the Notes, the Custodial Agreement, the Indemnification
Agreement and the Insurance Agreement.
"Original Aggregate Loan Balance": The aggregate Loan Balances of all
Initial Home Equity Loans as of the Cut-Off Date, which is $307,785,257.
"Original Note Principal Balance": $307,785,257.
"Overcollateralization Amount": As of any Payment Date, the excess, if
any, of (x) the aggregate Loan Balances of the Home Equity Loans as of the close
of business on the last day of the immediately proceeding Remittance Period over
(y) the Note Principal Balance for such Payment Date (after taking into account
the payment of the Principal Distribution Amount thereon (except for any
Overcollateralization Deficit and Overcollateralization Increase Amount) on such
Payment Date).
"Overcollateralization Deficiency Amount": With respect to any Payment
Date, the excess, if any, of (i) the Specified Overcollateralization Amount
applicable to such Payment Date over (ii) the Overcollateralization Amount
applicable to such Payment Date prior to taking into account the payment of any
Overcollateralization Increase Amounts on such Payment Date.
"Overcollateralization Deficit": With respect to any Payment Date, the
amount, if any, by which (x) the Note Principal Balance after taking into
account the payment of the Monthly Distribution Amount on such Payment Date
(without regard to any Insured Payment to be made on such Payment Date and
except for any Overcollateralization Deficit), exceeds (y) the aggregate Loan
Balances of the Home Equity Loans as of the close of business on the last day of
the related Remittance Period.
"Overcollateralization Increase Amount": With respect to any Payment
Date, the lesser of (i) the Overcollateralization Deficiency Amount as of such
Payment Date (after taking into account the payment of the Monthly Distribution
Amount on such Payment Date (except for any Overcollateralization Increase
Amount)) and (ii) the aggregate amount of Net Monthly Excess Cashflow pursuant
to Section 3.03(b)(iii)(A) on such Payment Date.
"Overcollateralization Reduction Amount": With respect to any Payment
Date, an amount equal to the lesser of (x) the Excess Overcollateralization
Amount for such Payment Date and (y) the Principal Remittance Amount for the
related Remittance Period.
"Owner": The Person in whose name a Note is registered in the Register,
and the Note Insurer, to the extent described in Sections 7.01 and 7.05.
"Owner Trustee": Wilmington Trust Company, as owner trustee under the
Trust Agreement, and any successor owner trustee under the Trust Agreement.
"Paying Agent": Initially, the Indenture Trustee, and thereafter, the
Indenture Trustee or any other Person that meets the eligibility standards for
the Paying Agent specified in Section 6.11 of the Indenture and is authorized by
the Indenture Trustee and the Depositor to make payments on the Certificates on
behalf of the Indenture Trustee.
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<PAGE> 16
"Payment Date": Any date on which the Indenture Trustee is required to
make distributions to the Owners, which shall be the 20th day of each month or
if such day is not a Business Day, the next Business Day thereafter, commencing
in the month following the Closing Date. The first Payment Date will be January
20, 1998.
"Percentage Interest": With respect to the Notes, a fraction, expressed
as a decimal, the numerator of which is the Original Note Principal Balance
represented by such Note and the denominator of which is the aggregate Original
Note Principal Balance represented by all the Notes. With respect to the
Certificates, the portion evidenced thereby, expressed as a percentage, as
stated on the face of such Certificate, all of which shall total 100% with
respect to the Certificates.
"Person": Any individual, corporation, limited partnership,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Policy Payments Account": The policy payments account maintained by
the Indenture Trustee pursuant to Section 7.02(b) hereof.
"Preference Amount": With respect to the Notes means any amounts of
interest and principal included in previous distributions of the Monthly
Distribution Amount to the Owners of the Notes which are recoverable and sought
to be recovered as a voidable preference by a indenture trustee in bankruptcy
pursuant to the United States Bankruptcy Code (11 U.S.C.) as amended from time
to time in accordance with a final, nonappealable order of a court having
competent jurisdiction. Such amount will be paid in accordance with the terms of
the Note Insurance Policy.
"Preference Claim": As defined in Section 7.02(d) hereafter.
"Premium Amount": As defined in the Insurance Agreement.
"Prepayment": Any payment of principal of a Home Equity Loan which is
received by the Servicer in advance of the scheduled Due Date for the payment of
such principal and which is not accompanied by an amount of interest
representing the full amount of scheduled interest due on any Due Date in any
month or months subsequent to the month of prepayment, Substitution Amounts, the
portion of the purchase price of any Home Equity Loan purchased from the Trust
pursuant to Section 2.03, 2.04, 2.06(b) or 4.10(b) hereof representing principal
and the proceeds of any Insurance Policy which are to be applied as a payment of
principal on the related Home Equity Loan shall be deemed to be Prepayments for
all purposes of this Agreement.
"Preservation Expenses": Expenditures made by the Servicer in
connection with a foreclosed Home Equity Loan prior to the liquidation thereof,
including, without limitation, expenditures for real estate property taxes,
hazard insurance premiums, property restoration or preservation.
"Principal and Interest Account": The principal and interest account
established and maintained by the Servicer pursuant to Section 4.08(a) hereof.
"Principal Distribution Amount": With respect to the Notes for any
Payment Date, the lesser of:
(a) the Total Available Funds plus any Insured Payment minus the
Current Interest and Trust Fees and Expenses for such Payment Date; and
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<PAGE> 17
(b) the excess, if any, of (i) the sum of (without duplication):
(A) the Preference Amount with respect to principal
owed to the Owners of the Notes that remains unpaid as of such
Payment Date,
(B) the principal portion of all scheduled monthly
payments on the Home Equity Loans due on or prior to the
related Due Date thereof, to the extent actually received by
the Servicer during the related Remittance Period and any
Prepayments made by the Mortgagors and actually received by
the Servicer during the related Remittance Period,
(C) the Loan Balance of each Home Equity Loan that
was repurchased by the Seller or purchased by the Servicer on
or prior to the related Monthly Remittance Date, to the extent
such Loan Balance is actually received by the Servicer during
the related Remittance Period,
(D) any Substitution Amounts delivered by the Seller
on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan (to the extent such
Substitution Amounts relate to principal), to the extent such
Substitution Amounts are actually received by the Servicer on
the related Remittance Date,
(E) all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans during
the related Remittance Period (to the extent such Net
Liquidation Proceeds relate to principal),
(F) the amount of any Overcollateralization Deficit
for such Payment Date,
(G) the principal portion of the proceeds received by
the Indenture Trustee from any termination of the Trust (to
the extent such proceeds related to principal),
(H) the amount of any Overcollateralization Increase
Amount for such Payment Date, to the extent of any Net Monthly
Excess Cashflow available for such purpose,
over
(ii) the amount of any Overcollateralization Reduction Amount
for such Payment Date.
"Principal Remittance Amount": As of any Monthly Remittance Date, the
sum, without duplication, of (i) the principal actually collected by the
Servicer with respect to Home Equity Loans during the related Remittance Period,
(ii) the Loan Balance of each such Home Equity Loan that was purchased from the
Trust on or prior to such Monthly Remittance Date, to the extent such Loan
Balance was actually received by the Servicer, (iii) any Substitution Amounts
relating to principal delivered by the Seller in connection with a substitution
of a Home Equity Loan, to the extent such Substitution Amounts were actually
received by the Servicer on or prior to such Monthly Remittance Date, (iv) the
principal portion of all Net Liquidation Proceeds actually collected by the
Servicer with respect to such Home Equity Loans during the related Remittance
Period (to the extent such Net Liquidation Proceeds related to principal) and
(v) the amount of investment losses required to be deposited pursuant to
Sections 3.05(e) and 4.08(b).
"Property": The underlying property securing a Home Equity Loan.
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<PAGE> 18
"Prospectus": The Depositor's Prospectus dated August 18, 1997
constituting part of the Registration Statement.
"Prospectus Supplement": The IMC Home Equity Loan Owner Trust 1997-8
Prospectus Supplement dated December 23, 1997 to the Prospectus.
"Qualified Replacement Mortgage": A Home Equity Loan substituted for
another pursuant to Section 2.03, 2.04 and 2.06(b) hereof, which (i) has a
Coupon Rate at least equal to the Coupon Rate of the Home Equity Loan being
replaced; (ii) is of the same property type or is a single family dwelling and
the same occupancy status or is a primary residence as the Home Equity Loan
being replaced, (iii) shall mature no later than December 1, 2027 (iv) has a
Loan-to-Value Ratio as of the Replacement Cut-Off Date no higher than the
Loan-to-Value Ratio of the replaced Home Equity Loan at such time, (v) shall be
of the same or higher credit quality classification (determined in accordance
with the Seller's credit underwriting guidelines set forth in the Seller's
underwriting manual) as the Home Equity Loan which such Qualified Replacement
Mortgage replaces, (vi) shall be a First Mortgage Loan, (vii) has a Loan Balance
as of the related Replacement Cut-Off Date equal to or less than the Loan
Balance of the replaced Home Equity Loan as of such Replacement Cut-Off Date,
(viii) shall not provide for a "balloon" payment, (ix) shall be an adjustable
rate Home Equity Loan (x) shall adjust based on the same index, have no lower
margin, have the same interval between adjustment dates and have a maximum
Coupon Rate no lower than, and a minimum Coupon Rate no higher than the Home
Equity Loan being replaced. In the event that one or more home equity loans are
proposed to be substituted for one or more Home Equity Loans, the Note Insurer
may allow the foregoing tests to be met on a weighted average basis or other
aggregate basis acceptable to the Note Insurer, as evidenced by a written
approval delivered to the Indenture Trustee by the Note Insurer, except that the
requirements of clauses (i), (iv) and (ix) hereof must be satisfied as to each
Qualified Replacement Mortgage.
"Rating Agencies": Collectively, Moody's and Standard & Poor's or any
successors thereto.
"Realized Loss": As to any Liquidated Loan (or, in the case of a Cram
Down Loss a Home Equity Loan that is not a Liquidated Loan), the amount (not
less than zero), if any, by which (A) the sum of (x) the Loan Balance thereof as
of the date of liquidation, (y) the amount of accrued but unpaid interest
thereon (to the extent that there are no outstanding advances for such interest
by the Servicer) and (z) the amount of any Cram Down Loss with respect thereto
is in excess of (B) the Net Liquidation Proceeds realized thereon applied in
reduction of such Loan Balance.
"Redemption Date": The first Monthly Remittance Date on which the
aggregate Loan Balances of the Home Equity Loans has declined to less than
$30,778,526.
"Redemption Date Pass-Through Rate": As of any date of determination
thereof, a rate equal to the sum of (a) the Note Rate and (b) any portion of the
Premium Amount and the Indenture Trustee Fee (calculated as a percentage of the
outstanding principal amount of the Notes) then accrued and outstanding.
"Reference Banks": Bankers Trust Company, Barclays Bank PLC and
National Westminster Bank PLC, provided that if any of the foregoing banks are
not suitable to serve as a Reference Bank, then any leading banks selected by
the Indenture Trustee which are engaged in transactions in Eurodollar deposits
in the international Eurocurrency market (i) with an established place of
business in London, (ii) not controlling, under the control of or under common
control with the Seller or any affiliate thereof, (iii) whose quotations are
included in the calculation of LIBOR appearing on Telerate Page 3750 on the
relevant LIBOR Determination Date and (iv) which have been designated as such by
the Indenture Trustee.
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<PAGE> 19
"Register": The note register maintained by the Registrar in accordance
with Section 2.3 of the Indenture, in which the names of the Owners are set
forth.
"Registrar": The Indenture Trustee, acting in its capacity as Registrar
appointed pursuant to the Indenture, or any duly appointed and eligible
successor thereto.
"Registration Statement": The Registration Statement filed by the
Depositor with the Securities and Exchange Commission (Registration Number
333-31197), including all amendments thereto and including the Prospectus
relating to the Notes.
"Reimbursement Amount": As of any Payment Date, the sum of (x)(i) all
Insured Payments previously paid to the Indenture Trustee by the Note Insurer
and not previously repaid to the Note Insurer pursuant to Section 3.03(b)(ii)
hereof plus (ii) interest accrued on each such Insured Payment not previously
repaid calculated at the Late Payment Rate and (y)(i) any amounts then due and
owing to the Note Insurer under the Insurance Agreement (including, without
limitation, any unpaid Premium Amount relating to such Payment Date or an
earlier Payment Date) plus (ii) interest on such amounts at the Late Payment
Rate. The Note Insurer shall notify the Indenture Trustee, the Depositor and the
Seller of the amount of any Reimbursement Amount.
"Remittance Period": With respect to each Monthly Remittance Date, the
period commencing the second day of the calendar month immediately preceding
such Monthly Remittance Date and ending the first day of the calendar month in
which such Monthly Remittance Date occurs.
"REO Property": A Property acquired by the Servicer on behalf of the
Trust through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Home Equity Loan.
"Replacement Cut-Off Date": With respect to any Qualified Replacement
Mortgage, the first day of the calendar month in which such Qualified
Replacement Mortgage is conveyed to the Trust.
"Residual Net Monthly Excess Cashflow": With respect to any Payment
Date, the aggregate Net Monthly Excess Cashflow, if any, remaining after the
making of all applications, transfers and disbursements described in Sections
3.03(b)(i), (ii), (iii) and (iv) hereof.
"Schedule of Home Equity Loans": The schedule of Home Equity Loans with
respect to the Home Equity Loans listing each Home Equity Loan to be conveyed on
the Closing Date. Such Schedule of Home Equity Loans shall identify each Home
Equity Loan by the Servicer's loan number, borrower's name and address
(including the state and zip code) of the Property and shall set forth as to
each Home Equity Loan the lien status thereof, the Loan-to-Value Ratio and the
Loan Balance as of the Cut-Off Date, the Coupon Rate thereof, the original Loan
Balance thereof, the current scheduled monthly payment of principal and interest
and the maturity date of the related Mortgage Note, the property type, occupancy
status, Appraised Value and the original term-to-maturity thereof.
"Securities Act": The Securities Act of 1933, as amended.
"Seller": IMC Mortgage Company, a Florida corporation.
"Servicer": IMC Mortgage Company, a Florida corporation, and its
permitted successors and assigns.
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<PAGE> 20
"Servicer Loss Test": The Servicer Loss Test for any period set out
below is satisfied, if the Cumulative Loss Percentage for such period does not
exceed the percentage set out for such period below (provided, that for purposes
of the calculation of the Servicer Loss Test, Realized Losses attributable
solely to Cram Down Losses should be excluded from the calculation of Cumulative
Loss Percentage):
<TABLE>
<CAPTION>
Cumulative Loss
Period Percentage
------ ----------
<S> <C>
December 2, 1997 - December 1, 1998 1.00%
December 2, 1998 - December 1, 1999 1.50%
December 2, 1999 - December 1, 2000 2.25%
December 2, 2000 - December 1, 2001 3.00%
December 2, 2001 - and thereafter 3.75%
</TABLE>
"Servicer Termination Event": As defined in Section 4.20(a) hereof.
"Servicer Termination Test": The Servicer Termination Test is satisfied
for any date of determination thereof, if (x) the 90+ Delinquency Percentage
(Rolling Six Month) is less than 14.00%, (y) the Servicer Loss Test is satisfied
and (z) the Annual Loss Percentage (Rolling Twelve Month) for the twelve month
period immediately preceding the date of determination thereof is not greater
than 1.75%.
"Servicing Advance": As defined in Section 4.09(b) and Section 4.13(a)
hereof.
"Servicing Fee": With respect to any Home Equity Loan, an amount
retained by the Servicer as compensation for servicing and administration duties
relating to such Home Equity Loan pursuant to Section 4.15 and equal to one
month's interest at 0.50% per annum of the then outstanding principal balance of
such Home Equity Loan as of the first day of each Remittance Period payable on a
monthly basis; provided, however, that if a successor Servicer is appointed
pursuant to Section 4.20 hereof, the Servicing Fee shall be the amount as agreed
upon by the Indenture Trustee, the Note Insurer, the successor Servicer and the
Owners of a majority of the Percentage Interests of the Certificates, such
amount not to exceed 0.50% per annum.
"Specified Overcollateralization Amount": As defined in the Insurance
Agreement.
"Standard & Poor's": Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc. or any successor thereto.
"Sub-Servicer": Any Person with whom the Servicer has entered into a
Sub-Servicing Agreement and who satisfies any requirements set forth in Section
4.03 hereof in respect of the qualification of a Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the Servicer
and any Sub-Servicer relating to servicing and/or administration of certain Home
Equity Loans as permitted by Section 4.03.
"Substitution Amount": As defined in Section 2.03 hereof.
"Telerate Page 3750": The display designated as page "3750" on the Dow
Jones Telerate Capital Markets Report (or such other page as may replace page
3750 on that report for the purpose of displaying "Interest Settlement Rates" of
major banks).
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<PAGE> 21
"Termination Price": As defined in Section 5.02(a) hereof.
"Total Available Funds": As defined in Section 3.02(b) hereof.
"Total Monthly Excess Cashflow": As defined in Section 3.03(b)(ii)
hereof.
"Total Monthly Excess Spread": With respect to any Payment Date, the
excess of (i) the aggregate of all interest which is collected on the Home
Equity Loans during the related Remittance Period (net of the Servicing Fee, the
Indenture Trustee Fee and the Indenture Trustee Reimbursable Expenses) plus (x)
any Delinquency Advances and (y) Compensating Interest paid by the Servicer for
such Remittance Period over (ii) the sum of the Current Interest and the Premium
Amount for such Payment Date.
"Trust" or "Issuer": IMC Home Equity Loan Owner Trust 1997-8, a
Delaware business.
"Trust Agreement": The Owner Trust Agreement dated as of December 1,
1997 between the Depositor and the Owner Trustee.
"Trust Estate": As defined in the Indenture.
"Trust Fees and Expenses": As of each Payment Date, an amount equal to
the Premium Amount, the Indenture Trustee Fee and any Indenture Trustee
Reimbursable Expenses.
"Underwriters": PaineWebber Incorporated and Bear, Stearns & Co. Inc.
Section 1.02 Use of Words and Phrases.
"Herein", "hereby", "hereunder", "hereof", "hereinbefore",
"hereinafter" and other equivalent words refer to this Agreement as a whole and
not solely to the particular section of this Agreement in which any such word is
used. The definitions set forth in Section 1.01 hereof include both the singular
and the plural. Whenever used in this Agreement, any pronoun shall be deemed to
include both singular and plural and to cover all genders.
Section 1.03 Captions; Table of Contents.
The captions or headings in this Agreement and the Table of Contents
are for convenience only and in no way define, limit or describe the scope and
intent of any provisions of this Agreement.
Section 1.04 Opinions.
Each opinion with respect to the validity, binding nature and
enforceability of documents or Notes may be qualified to the extent that the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether considered in a
proceeding or action in equity or at law) and may state that no opinion is
expressed on the availability of the remedy of specific enforcement, injunctive
relief or any other equitable remedy. Any opinion required to be furnished by
any Person hereunder must be delivered by counsel upon whose opinion the
addressee of such opinion may reasonably rely, and such opinion may state that
it is given in reasonable reliance upon an opinion of another, a copy of which
must be attached, concerning the laws of a foreign jurisdiction. Any opinion
delivered hereunder shall be addressed to the Rating Agencies, the Note Insurer
and the Indenture Trustee.
END OF ARTICLE I
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<PAGE> 22
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE DEPOSITOR, THE SERVICER AND THE SELLER;
COVENANT OF DEPOSITOR TO CONVEY HOME EQUITY LOANS
Section 2.01 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the
Indenture Trustee, the Owner Trustee, the Issuer, the Seller, the Servicer, the
Note Insurer and the Owners that as of the Closing Date:
(a) The Depositor is a corporation duly organized, validly existing and
in good standing under the laws governing its creation and existence and is in
good standing as a foreign corporation in each jurisdiction in which the nature
of its business, or the properties owned or leased by it make such qualification
necessary. The Depositor has all requisite corporate power and authority to own
and operate its properties, to carry out its business as presently conducted and
as proposed to be conducted and to enter into and discharge its obligations
under this Agreement and the other Operative Documents to which it is a party.
(b) The execution and delivery of this Agreement and the other
Operative Documents to which it is a party by the Depositor and its performance
and compliance with the terms of this Agreement and the other Operative
Documents to which it is a party have been duly authorized by all necessary
corporate action on the part of the Depositor and will not violate the
Depositor's Certificate of Incorporation, or Bylaws or constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in a breach of, any material contract, agreement or
other instrument to which the Depositor is a party or by which the Depositor is
bound or violate any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having jurisdiction over the
Depositor or any of its properties.
(c) This Agreement and the other Operative Documents to which the
Depositor is a party, assuming due authorization, execution and delivery by the
other parties hereto and thereto, each constitutes a valid, legal and binding
obligation of the Depositor, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) The Depositor is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which default would materially and adversely affect the
condition (financial or other) or operations of the Depositor or its properties
or the consequences of which would materially and adversely affect its
performance hereunder and under the other Operative Documents to which the
Depositor is a party.
(e) No litigation is pending with respect to which the Depositor has
received service of process or, to the best of the Depositor's knowledge,
threatened against the Depositor which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative Documents
to which it is a party or that would materially and adversely affect the
condition (financial or otherwise) or operations of the Depositor or its
properties or might have consequences that would materially and adversely affect
its performance hereunder and under the other Operative Documents to which the
Depositor is a party.
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<PAGE> 23
(f) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Depositor contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not misleading.
(g) The statements contained in the Registration Statement which
describe the Depositor or matters or activities for which the Depositor is
responsible in accordance with the Operative Documents or which are attributable
to the Depositor therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement of a material fact
with respect to the Depositor required to be stated therein or necessary to make
the statements contained therein with respect to the Depositor, in light of the
circumstances under which they were made, not misleading. The Registration
Statement does not contain any untrue statement of a material fact required to
be stated therein or omit to state any material fact necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to the Depositor that
materially adversely affects or in the future may (so far as the Depositor can
now reasonably foresee) materially adversely affect the Depositor or the Home
Equity Loans that has not been set forth in the Registration Statement.
(h) Neither the Owner Trustee nor the Depositor has any obligation to
register the Trust as an investment company under the Investment Company Act of
1940, as amended.
(i) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state or federal securities laws, real estate syndication or
"Blue Sky" statutes, as to which the Depositor makes no such representation or
warranty), that are necessary or advisable in connection with the purchase and
sale of the Notes and the execution and delivery by the Depositor of the
Operative Documents to which it is a party, have been duly taken, given or
obtained, as the case may be, are in full force and effect on the date hereof,
are not subject to any pending proceedings or appeals (administrative, judicial
or otherwise) and either the time within which any appeal therefrom may be taken
or review thereof may be obtained has expired or no review thereof may be
obtained or appeal therefrom taken, and are adequate to authorize the
consummation of the transactions contemplated by this Agreement and the other
Operative Documents on the part of the Depositor and the performance by the
Depositor of its obligations under this Agreement and such of the other
Operative Documents to which it is a party.
(j) The transactions contemplated by this Agreement are in the ordinary
course of business of the Depositor.
(k) The Depositor has received fair consideration and reasonably
equivalent value in exchange for the sale of its interest in the Home Equity
Loans.
(l) The Depositor did not sell any interest in any Home Equity Loan
with an intent to hinder, delay or defraud any of its creditors.
(m) The Depositor is not insolvent, nor will it be made insolvent by
the sale of the Home Equity Loans, nor is the Depositor aware of any pending
insolvency.
(n) On the Closing Date, the Issuer will have good title to each
Initial Home Equity Loan and such other items comprising the Trust Estate free
and clear of any lien.
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<PAGE> 24
(o) No material adverse change affecting any security for the Notes has
occurred prior to delivery of and payment for the Notes.
(p) The Depositor is not in default under any agreement involving
financial obligations or on any outstanding obligation which would materially
adversely impact the financial condition or operations of the Depositor or legal
documents associated with the transaction contemplated by this Agreement.
(q) To the best knowledge of the Depositor, there has been no material
adverse change in any information submitted by the Depositor in writing to the
Note Insurer with respect to the transactions contemplated by this Agreement
(unless such information was subsequently supplemented in writing).
It is understood and agreed that the representations and warranties set
forth in this Section 2.01 shall survive delivery of the respective Home Equity
Loans to the Issuer.
Upon discovery by any of the Depositor, the Issuer, the Seller, the
Servicer, the Custodian, any Sub-Servicer, the Note Insurer, any Owner or the
Indenture Trustee (each, for purposes of this paragraph, a party) of a breach of
any of the representations and warranties set forth in this Section 2.01 which
materially and adversely affects the interests of the Owners or of the Note
Insurer, the party discovering such breach shall give prompt written notice to
the other parties. As promptly as practicable, but in any event, within 60 days
of its discovery or its receipt of notice of breach, the Depositor shall cure
such breach in all material respects; provided, however, that if the Depositor
can establish to the reasonable satisfaction of the Note Insurer that it is
diligently pursuing remedial action, then the cure period may be extended for an
additional 90 days with the written approval of the Note Insurer.
Section 2.02 Representations and Warranties of the Servicer.
The Servicer hereby represents, warrants and covenants to the
Depositor, the Issuer, the Owner Trustee, the Indenture Trustee, the Note
Insurer and the Owners that as of the Closing Date:
(a) The Servicer is a corporation duly organized and validly existing
and in good standing under the laws of the State of Florida, is, and each
Sub-Servicer is, in compliance with the laws of each state in which any Property
is located to the extent necessary to enable it to perform its obligations
hereunder and is in good standing in each jurisdiction in which the nature of
its business, or the properties owned or leased by it make such qualification
necessary. The Servicer and each Sub-Servicer have all requisite partnership or
corporate, as the case may be, power and authority to own and operate its or
their properties, to carry out its or their business as presently conducted and
as proposed to be conducted and to enter into and discharge its or their
obligations under this Agreement and the other Operative Documents to which the
Servicer is a party.
(b) The execution and delivery of this Agreement and any other
Operative Document to which it is a party by the Servicer and its performance
and compliance with the terms hereof and thereof have been duly authorized by
all necessary action on the part of the Servicer and will not violate the
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 contract, agreement or other
instrument to which the Servicer is a party or by which the Servicer is bound or
violate any statute or any order, rule or regulation of any court, governmental
agency or body or other tribunal having jurisdiction over the Servicer or any of
its properties.
(c) This Agreement and the Operative Documents to which the Servicer is
a party, assuming due authorization, execution and delivery by the other parties
hereto and thereto, each constitutes a valid,
19
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legal and binding obligation of the Servicer, enforceable against it in
accordance with the terms hereof and thereof, except as the enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and by general
principles of equity (whether considered in a proceeding or action in equity or
at law).
(d) The Servicer is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which might have consequences that would materially and
adversely affect the condition (financial or otherwise) or operations of the
Servicer or its properties or might have consequences that would materially and
adversely affect its performance hereunder or under the other Operative
Documents to which the Servicer is a party.
(e) No litigation is pending with respect to which the Servicer has
received service of process or, to the best of the Servicer's knowledge,
threatened against the Servicer which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative Document
or that would materially and adversely affect the condition (financial or
otherwise) or operations of the Servicer or its properties or might have
consequences that would materially and adversely affect the validity or the
enforceability of the Home Equity Loans or its performance hereunder and the
other Operative Documents to which the Servicer is a party.
(f) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Servicer contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not misleading.
(g) The statements contained in the Registration Statement which
describe the Servicer or matters or activities for which the Servicer is
responsible or which are attributed to the Servicer therein are true and correct
in all material respects, and the Registration Statement does not contain any
untrue statement of a material fact with respect to the Servicer or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein with respect to the Servicer, in light of the
circumstances under which they were made, not misleading.
(h) The Servicing Fee is a "current (normal) servicing fee rate" as
that term is used in Statement of Financial Accounting Standards No. 65 issued
by the Financial Accounting Standards Board. Neither the Servicer nor any
affiliate thereof will report on any financial statements any part of the
Servicing Fee as an adjustment to the sales price of the Home Equity Loans.
(i) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Servicer makes no such representation or warranty),
that are necessary or advisable in connection with the execution and delivery by
the Servicer of the Operative Documents to which it is a party, have been duly
taken, given or obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within which any
appeal therefrom may be taken or review thereof may be obtained has expired or
no review thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by this Agreement
and the other Operative Documents on the part of the Servicer and the
performance by the Servicer of its obligations under this Agreement and such of
the other Operative Documents to which it is a party.
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(j) The collection practices used by the Servicer with respect to the
Home Equity Loans have been, in all material respects, legal, proper, prudent
and customary in the mortgage servicing business and in conformity with relevant
Fannie Mae guidelines.
(k) The transactions contemplated by this Agreement are in the ordinary
course of business of the Servicer.
(l) No material adverse change affecting any security for the Notes has
occurred prior to delivery of and payment for the Notes.
(m) The Servicer is not in default under any agreement involving
financial obligations or on any outstanding obligation which would materially
adversely impact the financial condition or operations of the Servicer or legal
documents associated with the transaction contemplated by this Agreement.
(n) To the best knowledge of the Servicer, there has been no material
adverse change in any information submitted by the Servicer in writing to the
Note Insurer with respect to the transactions contemplated by this Agreement
(unless such information was subsequently supplemented in writing).
It is understood and agreed that the representations and warranties set
forth in this Section 2.02 shall survive delivery of the Home Equity Loans to
the Issuer.
Upon discovery by any of the Depositor, the Seller, the Issuer, the
Custodian, any Sub-Servicer, the Note Insurer, any Owner or the Indenture
Trustee (each, for purposes of this paragraph, a party) of a breach of any of
the representations and warranties set forth in this Section 2.02 which
materially and adversely affects the interests of the Owners or of the Note
Insurer, the party discovering such breach shall give prompt written notice to
the other parties. As promptly as practicable, but in any event, within 60 days
of its discovery or its receipt of notice of breach, the Servicer shall cure
such breach in all material respects and, upon the Servicer's continued failure
to cure such breach, may thereafter be removed by the Note Insurer or by the
Indenture Trustee with the written consent of the Note Insurer pursuant to
Section 4.20 hereof; provided, however, that if the Servicer can establish to
the reasonable satisfaction of the Note Insurer that it is diligently pursuing
remedial action, then the cure period may be extended for an additional 90 days
with the written approval of the Note Insurer.
Section 2.03 Representations and Warranties of the Seller.
The Seller hereby represents, warrants and covenants to the Issuer, the
Depositor, the Owner Trustee, the Indenture Trustee, the Note Insurer and the
Owners that as of the Closing Date:
(a) The Seller is a corporation duly organized and validly existing and
in good standing under the laws governing its creation and existence and is in
good standing in each jurisdiction in which the nature of its business, or the
properties owned or leased by it make such qualification necessary. The Seller
has all requisite authority to own and operate its properties, to carry out its
business as presently conducted and as proposed to be conducted and to enter
into and discharge its obligations under this Agreement and the other Operative
Documents to which it is a party.
(b) The execution and delivery of this Agreement and the other
Operative Documents to which it is a party by the Seller and its performance and
compliance with the terms of this Agreement and the other Operative Documents to
which it is a party have been duly authorized by all necessary corporate action
on the part of the Seller and will not violate the Seller's Articles of
Incorporation and Bylaws or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, or result in a
breach of, any material contract, agreement or other instrument to which the
Seller is a party or by which
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the Seller is bound or violate any statute or any order, rule or regulation of
any court, governmental agency or body or other tribunal having jurisdiction
over the Seller or any of its properties.
(c) This Agreement and the other Operative Documents to which the
Seller is a party, assuming due authorization, execution and delivery by the
other parties hereto and thereto, each constitutes a valid, legal and binding
obligation of the Seller, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(d) The Seller is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default would materially and adversely affect the
condition (financial or other) or operations of the Seller or its properties or
the consequences of which would materially and adversely affect its performance
hereunder and under the other Operative Documents to which the Seller is a
party.
(e) No litigation is pending with respect to which the Seller has
received service of process or, to the best of the Seller's knowledge,
threatened against the Seller which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative Documents
to which it is a party or that would materially and adversely affect the
condition (financial or otherwise) or operations of the Seller or its properties
or might have consequences that would materially and adversely affect its
performance hereunder and under the other Operative Documents to which the
Seller is a party.
(f) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the certificate, statement or report not misleading.
(g) The statements contained in the Registration Statement which
describe the Seller or matters or activities for which the Seller is responsible
in accordance with the Operative Documents or which are attributable to the
Seller therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement of a material fact
with respect to the Seller required to be stated therein or necessary to make
the statements contained therein with respect to the Seller, in light of the
circumstances under which they were made, not misleading. The Registration
Statement does not contain any untrue statement of a material fact required to
be stated therein or omit to state any material fact necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to the Seller that materially
adversely affects or in the future may (so far as the Seller can now reasonably
foresee) materially adversely affect the Seller or the Home Equity Loans that
has not been set forth in the Registration Statement.
(h) Upon the receipt of each Home Equity Loan (including the related
Mortgage Note) and other items of the Trust Estate by the Indenture Trustee, the
Issuer will have good title to such Home Equity Loan (including the related
Mortgage Note) and such other items of the Trust Estate free and clear of any
lien, charge, mortgage, encumbrance or rights of others, except as set forth in
Section 2.04(b)(ix) (other than liens which will be simultaneously released (and
except for the lien of the Indenture)).
(i) Neither the Seller nor any affiliate thereof will report on any
financial statement any part of the Servicing Fee as an adjustment to the sales
price of the Home Equity Loans.
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(j) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Seller makes no such representation or warranty), that
are necessary or advisable in connection with the purchase and sale of the Notes
and the execution and delivery by the Seller of the Operative Documents to which
it is a party, have been duly taken, given or obtained, as the case may be, are
in full force and effect on the date hereof, are not subject to any pending
proceedings or appeals (administrative, judicial or otherwise) and either the
time within which any appeal therefrom may be taken or review thereof may be
obtained has expired or no review thereof may be obtained or appeal therefrom
taken, and are adequate to authorize the consummation of the transactions
contemplated by this Agreement and the other Operative Documents on the part of
the Seller and the performance by the Seller of its obligations under this
Agreement and such of the other Operative Documents to which it is a party.
(k) The origination practices used by the Seller with respect to the
Home Equity Loans have been, in all material respects, legal, proper, prudent
and customary in the mortgage lending business.
(l) The transactions contemplated by this Agreement are in the ordinary
course of business of the Seller.
(m) Neither the Owner Trustee nor the Seller has any obligation to
register the Trust as an investment company under the Investment Company Act of
1940, as amended.
(n) The Seller is not insolvent, nor will it be made insolvent by the
transfer of the Home Equity Loans, nor is the Seller aware of any pending
insolvency.
(o) The Seller received fair consideration and reasonably equivalent
value in exchange for the sale of the interests in the Home Equity Loans.
(p) The Seller did not sell any interest in any Home Equity Loan with
any intent to hinder, delay or defraud any of its creditors.
(q) No material adverse change affecting any security for the Notes has
occurred prior to delivery of and payment for the Notes.
(r) The Seller is not in default under any agreement involving
financial obligations or on any outstanding obligation which would materially
adversely impact the financial condition or operations of the Seller or legal
documents associated with the transaction contemplated by this Agreement.
(s) To the best knowledge of the Seller, there has been no material
adverse change in any information submitted by the Seller in writing to the Note
Insurer with respect to the transactions contemplated by this Agreement (unless
such information was subsequently supplemented in writing).
It is understood and agreed that the representations and warranties set
forth in this Section 2.03 shall survive delivery of the respective Home Equity
Loans to the Indenture Trustee.
Upon discovery by any of the Issuer, the Depositor, the Servicer, the
Custodian, any Sub-Servicer, any Owner, the Seller, the Note Insurer or the
Indenture Trustee (each, for purposes of this paragraph, a "party") of a breach
of any of the representations and warranties set forth in this Section 2.03
which
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materially and adversely affects the interests of the Owners or the interests of
the Note Insurer, the party discovering such breach shall give prompt written
notice to the other parties. The Seller hereby covenants and agrees that within
60 days of its discovery or its receipt of notice of breach, it shall cure such
breach in all material respects or, with respect to a breach of clause (h)
above, the Seller may (or may cause an affiliate of the Seller to) on or prior
to the second Monthly Remittance Date next succeeding such discovery or receipt
of notice (i) substitute in lieu of any Home Equity Loan not in compliance with
clause (h) a Qualified Replacement Mortgage and, if the outstanding principal
amount of such Qualified Replacement Mortgage as of the applicable Replacement
Cut-Off Date is less than the Loan Balance of such Home Equity Loan as of such
Replacement Cut-Off Date, deliver an amount (a "Substitution Amount") equal to
such difference together with the aggregate amount of (A) all Delinquency
Advances and Servicing Advances theretofore made with respect to such Home
Equity Loan and (B) all Delinquency Advances which the Servicer has theretofore
failed to remit with respect to such Home Equity Loan to the Servicer for
deposit in the Principal and Interest Account or (ii) purchase such Home Equity
Loan from the Issuer at the Loan Purchase Price, which purchase price shall be
delivered to the Servicer for deposit in the Principal and Interest Account. The
Seller shall deliver an Officer's Certificate to the Indenture Trustee and the
Note Insurer concurrently with the delivery of a Qualified Replacement Mortgage
pursuant to Sections 2.03, 2.04 and 2.06 stating that such Home Equity Loan
meets the requirements of the definition of a Qualified Replacement Mortgage and
that all other conditions to the substitution thereof have been satisfied. Any
Home Equity Loan as to which repurchase or substitution was delayed pursuant to
this Section shall be repurchased or substituted for (subject to compliance with
Section 2.03, 2.04 or 2.06, as the case may be) upon the occurrence of a default
or imminent default with respect to such Home Equity Loan.
Section 2.04 Covenants of Seller to Take Certain Actions with Respect
to the Home Equity Loans in Certain Situations.
(a) Upon the discovery by the Issuer, the Depositor, the Seller, the
Servicer, the Note Insurer, any Sub-Servicer, any Owner, the Custodian or the
Indenture Trustee that the representations and warranties set forth in clause
(b) below were untrue in any material respect as of the Closing Date with the
result that the interests of the Owners or of the Note Insurer are materially
and adversely affected, the party discovering such breach shall give prompt
written notice to the other parties. Upon the earliest to occur of the Seller's
discovery, its receipt of notice of breach from any one of the other parties or
such time as a situation resulting from an existing statement which is untrue
materially and adversely affects the interests of the Owners or of the Note
Insurer, the Seller hereby covenants and warrants that it shall promptly cure
such breach in all material respects or subject to the last three sentences of
Section 2.03 it shall on or before the second Monthly Remittance Date next
succeeding such discovery, receipt of notice or such time (i) substitute in lieu
of each Home Equity Loan which has given rise to the requirement for action by
the Seller a Qualified Replacement Mortgage and deliver the Substitution Amount
to the Servicer for deposit in the Principal and Interest Account or (ii)
purchase such Home Equity Loan from the Trust at a purchase price equal to the
Loan Purchase Price thereof, which purchase price shall be delivered to the
Servicer for deposit in the Principal and Interest Account; provided, however,
that if the Seller can establish to the reasonable satisfaction of the Note
Insurer that it is diligently pursuing remedial action, the period of time in
which the Seller must substitute a Qualified Replacement Mortgage or purchase
such Home Equity Loan may be extended for an additional 30 days with the written
approval of the Note Insurer. It is understood and agreed that the obligation of
the Seller so to substitute or purchase any Home Equity Loan as to which such a
statement set forth below is untrue in any material respect and has not been
remedied shall constitute the sole remedy respecting a discovery of any such
statement which is untrue in any material respect in this Section 2.04 available
to the Owners and the Indenture Trustee.
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(b) The Seller hereby represents, warrants and covenants to the
Indenture Trustee, the Issuer, the Servicer, the Note Insurer and the Owners
that as of the Closing Date:
(i) The information with respect to each Home Equity Loan set
forth in the Schedule of Home Equity Loans is true and correct as of
the Cut-Off Date;
(ii) All the original or certified documentation set forth in
Section 2.05 (including all material documents related thereto) with
respect to each Home Equity Loan has been or will be delivered to the
Custodian on behalf of the Indenture Trustee on the Closing Date or as
otherwise provided in Section 2.05;
(iii) Each Home Equity Loan being transferred to the Trust is
secured by a Mortgage;
(iv) Each Property is improved by a single (one-to-four)
family residential dwelling (except for 3.30% of the Home Equity Loans
in the amount of $297,642,381), that are condominiums, planned unit
developments, townhouses, manufactured housing, or multifamily
residential, provided that no more than 0.13% of the Properties are
secured by manufactured homes, each of which is considered to be real
property under the applicable local law;
(v) As of the Cut-Off Date, no Home Equity Loan has a
Loan-to-Value Ratio in excess of 85%, except for 394 Home Equity Loans
in the amount of $44,743,895 that had a Loan-to-Value Ratio not greater
than 100%;
(vi) Each Home Equity Loan is being serviced by the Servicer
in accordance with the terms of this Agreement;
(vii) The Mortgage Note related to each Home Equity Loan bears
a current Coupon Rate of at least 7.10% per annum;
(viii) Each Mortgage Note with respect to the Home Equity
Loans will provide for a schedule of substantially level and equal
Monthly Payments which are sufficient to amortize fully the principal
balance of such Mortgage Note on or before its maturity date except for
9 Home Equity Loans in the amount of $997,384 representing 0.32% of the
aggregate Loan Balance of the Home Equity Loans as of the Cut-Off Date,
which may provide for a "balloon" payment due at the end of the 15th
year (except for 1 Home Equity Loan in the amount of $108,361, which
provides for a "balloon" payment at the end of the 10th year);
(ix) As of the Closing Date, each Mortgage is a valid and
subsisting first lien of record (or is in the process of being
recorded) on the Property as noted on Schedule I attached hereto
subject in all cases to the exceptions to title set forth in the title
insurance policy or attorney's opinion of title, with respect to the
related Home Equity Loan, which exceptions are generally acceptable to
banking institutions in connection with their regular mortgage lending
activities, and such other exceptions to which similar properties are
commonly subject and which do not individually, or in the aggregate,
materially and adversely affect the benefits of the security intended
to be provided by such Mortgage;
(x) Immediately prior to the transfer and assignment of the
Home Equity Loans by the Depositor to the Issuer herein contemplated,
the Depositor held good and indefeasible title to, and was the sole
owner of, each Home Equity Loan (including the related Mortgage Note)
subject to
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no liens, charges, mortgages, encumbrances or rights of others except
as set forth in clause (ix) or other liens which will be released
simultaneously with such transfer and assignment; and immediately upon
the transfer and assignment herein contemplated, the Issuer will hold
good and indefeasible title to, and be the sole owner of, each Home
Equity Loan subject to no liens, charges, mortgages, encumbrances or
rights of others except as set forth in paragraph (ix) or other liens
which will be released simultaneously with such transfer and assignment
and except for the lien of the Indenture;
(xi) As of the opening of business on the Cut-Off Date, no
Home Equity Loan is 30 days or more Delinquent except that there are 83
Home Equity Loans with an outstanding aggregate Loan Balance of
$10,507,857 that are 30 or more days Delinquent but not more than 59
days Delinquent;
(xii) There is no delinquent tax or assessment lien on any
Property, and each Property is free of substantial damage and is in
good repair;
(xiii) There is no valid and enforceable offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the related Mortgagor to pay the unpaid principal of or interest on
such Mortgage Note;
(xiv) There is no mechanics' lien or claim for work, labor or
material affecting any Property which is or may be a lien prior to, or
equal with, the lien of the related Mortgage except those which are
insured against by any title insurance policy referred to in paragraph
(xvi) below;
(xv) Each Home Equity Loan at the time it was made complied in
all material respects with applicable state and federal laws and
regulations, including, without limitation, the federal
Truth-in-Lending Act (as amended by the Riegle Community Development
and Regulatory Improvement Act of 1994) and other consumer protection
laws, usury, equal credit opportunity, disclosure and recording laws;
(xvi) With respect to each Home Equity Loan either (a) an
attorney's opinion of title has been obtained but no lender's title
insurance policy has been obtained, or (b) a lender's title insurance
policy, issued in standard American Land Title Association form by a
title insurance company authorized to transact business in the state in
which the related Property is situated, in an amount at least equal to
the original balance of such Home Equity Loan insuring the mortgagee's
interest under the related Home Equity Loan as the holder of a valid
first mortgage lien of record on the real property described in the
related Mortgage, as the case may be, subject only to exceptions of the
character referred to in paragraph (ix) above, was effective on the
date of the origination of such Home Equity Loan, and, as of the
Closing Date, such policy is valid and thereafter such policy shall
continue in full force and effect (provided that an attorney's opinion
of title without a lender's title insurance policy has been obtained
with respect to no more than 2% of the Original Aggregate Loan
Balance);
(xvii) The improvements upon each Property are covered by a
valid and existing hazard insurance policy with a carrier generally
acceptable to the Servicer that provides for fire and extended coverage
representing coverage not less than the least of (A) the outstanding
principal balance of the related Home Equity Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost
basis or (C) the full insurable value of the Property;
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(xviii) If any Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Property with a
carrier generally acceptable to the Servicer in an amount representing
coverage not less than the least of (A) the outstanding principal
balance of the related Home Equity Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis
or (C) the maximum amount of insurance that is available under the
Flood Disaster Protection Act of 1973;
(xix) Each Mortgage and Mortgage Note are the legal, valid and
binding obligation of the maker thereof and are enforceable in
accordance with their terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity (whether considered in a proceeding
or action in equity or at law), and all parties to each Home Equity
Loan had full legal capacity to execute all documents relating to such
Home Equity Loan and convey the estate therein purported to be
conveyed;
(xx) The Seller has caused and will cause to be performed any
and all acts required to be performed to preserve the rights and
remedies of the Indenture Trustee in any Insurance Policies applicable
to any Home Equity Loans delivered by the Seller including, without
limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of co-insured, joint
loss payee and mortgagee rights in favor of the Indenture Trustee;
(xxi) As of the Closing Date, no more than 0.27% of the
aggregate Loan Balance of the Home Equity Loans will be secured by
Properties located within any single zip code area;
(xxii) Each original Mortgage was recorded or is in the
process of being recorded, and all subsequent assignments of the
original Mortgage have been delivered for recordation or have been
recorded in the appropriate jurisdictions wherein such recordation is
necessary to perfect the lien thereof as against creditors of or
purchasers from the Seller (or, subject to Section 2.05 hereof, are in
the process of being recorded); each Mortgage and assignment of
Mortgage is in recordable form and is acceptable for recording under
the laws of the jurisdiction in which the property securing such
Mortgage is located;
(xxiii) The terms of each Mortgage Note and each Mortgage have
not been impaired, altered or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect
the interest of the Owners and the Note Insurer and which has been
delivered to the Indenture Trustee. The substance of any such
alteration or modification is reflected on the related Schedule of Home
Equity Loans;
(xxiv) The proceeds of each Home Equity Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to
make future advances thereunder. Any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing or recording
such Home Equity Loans were paid;
(xxv) The related Mortgage Note is not and has not been
secured by any collateral, pledged account or other security except the
lien of the corresponding Mortgage;
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(xxvi) No Home Equity Loan has a shared appreciation feature,
or other contingent interest feature;
(xxvii) Each Property is located in the state identified in
the respective Schedule of Home Equity Loans and consists of one or
more parcels of real property with a residential dwelling erected
thereon;
(xxviii) Each Mortgage contains a provision for the
acceleration of the payment of the unpaid principal balance of the
related Home Equity Loan in the event the related Property is sold
without the prior consent of the mortgagee thereunder;
(xxix) Any advances made after the date of origination of a
Home Equity Loan but prior to the Cut-Off Date have been consolidated
with the outstanding principal amount secured by the related Mortgage,
and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term reflected on the Schedule of
Home Equity Loans. The consolidated principal amount does not exceed
the original principal amount of the related Home Equity Loan. No
Mortgage Note permits or obligates the Servicer to make future advances
to the related Mortgagor at the option of the Mortgagor;
(xxx) There is no proceeding pending or threatened for the
total or partial condemnation of any Property, nor is such a proceeding
currently occurring, and each Property is undamaged by waste, fire,
water, flood, earthquake or earth movement;
(xxxi) All of the improvements which were included for the
purposes of determining the Appraised Value of any Property lie wholly
within the boundaries and building restriction lines of such Property,
and no improvements on adjoining properties encroach upon such
Property, and are stated in the title insurance policy and
affirmatively insured;
(xxxii) No improvement located on or being part of any
Property is in violation of any applicable zoning law or regulation.
All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of each Property and, with
respect to the use and occupancy of the same, including but not limited
to certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities and such
Property is lawfully occupied under the applicable law;
(xxxiii) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable by
the Owners or the Indenture Trust to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the
related Mortgagor;
(xxxiv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Property of the
benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (B) otherwise by
judicial foreclosure. There is no homestead or other exemption other
than any applicable Mortgagor redemption rights available to the
related Mortgagor which would materially interfere with the right to
sell the related Property at a trustee's sale or the right to foreclose
the related Mortgage;
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(xxxv) Other than with respect to the Delinquencies noted in
item (xi) hereof, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration; and neither the Servicer
nor the Seller has waived any default, breach, violation or event of
acceleration;
(xxxvi) No instrument of release or waiver has been executed
in connection with any Home Equity Loan, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption
agreement which has been approved by the primary mortgage guaranty
insurer, if any, and which has been delivered to the Custodian;
(xxxvii) Reserved;
(xxxviii) Each Home Equity Loan was underwritten in accordance
with the credit underwriting guidelines of the Seller as set forth in
the Seller's Policies and Procedures Manual, as in effect on the date
hereof and such Manual conforms in all material respects to the
description thereof set forth in the Prospectus Supplement;
(xxxix) Each Home Equity Loan was originated based upon a full
appraisal, which included an interior inspection of the subject
property;
(xl) The Home Equity Loans were not selected for sale to the
Issuer by the Depositor on any basis intended to adversely affect the
Issuer;
(xli) No more than 6.53% of the aggregate Loan Balance of the
Home Equity Loans are secured by Properties that are non-owner occupied
Properties (i.e., investor-owned and vacation);
(xlii) The Depositor has no actual knowledge that there exist
any hazardous substances, hazard wastes or solid wastes, as such terms
are defined in the Comprehensive Environmental Response Compensation
and Liability Act, the Resource Conservation and Recovery Act of 1976,
or other federal, state or local environmental legislation on any
Property;
(xliii) The Seller was properly licensed or otherwise
authorized, to the extent required by applicable law, to originate or
purchase each Home Equity Loan and the consummation of the transactions
herein contemplated, including, without limitation, the receipt of
interest by the Owners and the ownership of the Home Equity Loans by
the Issuer will not involve the violation of such laws;
(xliv) With respect to each Property subject to a ground lease
(i) the current ground lessor has been identified and all ground rents
which have previously become due and owing have been paid; (ii) the
ground lease term extends, or is automatically renewable, for at least
five years beyond the maturity date of the related Home Equity Loan;
(iii) the ground lease has been duly executed and recorded; (iv) the
amount of the ground rent and any increases therein are clearly
identified in the lease and are for predetermined amounts at
predetermined times; (v) the ground rent payment is included in the
borrower's monthly payment as an expense item in determining the
qualification of the borrower for such Home Equity Loan; (vi) the
Issuer has the right to cure defaults on the ground lease; and (vii)
the terms and conditions of the leasehold do not prevent the free and
absolute marketability of the Property. As of the Cut-Off Date, the
Loan Balance of
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the Home Equity Loans with related Properties subject to ground leases
does not exceed 1% of the Original Aggregate Loan Balance;
(xlv) Reserved;
(xlvi) No Home Equity Loan is subject to a temporary rate
reduction pursuant to a buydown program;
(xlvii) No more than 4.36% of the aggregate Loan Balance of
the Home Equity Loans was originated under the Seller's non-income
verification program;
(xlviii) The Coupon Rate on each Home Equity Loan is
calculated on the basis of a year of 360 days with twelve 30-day
months;
(xlix) Neither the operation of any of the terms of each
Mortgage Note and each Mortgage nor the exercise of any right
thereunder will render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, nor subject it to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury;
(l) Any adjustment to the Coupon Rate on a Home Equity Loan
has been legal, proper and in accordance with the terms of the related
Mortgage Note;
(li) No Home Equity Loan is subject to negative amortization;
and
(lii) As of the Cut-Off Date, the FTC holder regulation
provided in 16 C.F.R. Part 433 applies to none of the Home Equity
Loans.
(c) In the event that any Qualified Replacement Mortgage is delivered
by the Seller to the Trust pursuant to Section 2.03, Section 2.04 or Section
2.06 hereof, the Seller shall be obligated to take the actions described in
Section 2.04(a) with respect to such Qualified Replacement Mortgage upon the
discovery by any of the Owners, the Seller, the Servicer, the Note Insurer, any
Sub-Servicer, the Custodian or the Indenture Trustee that the statements set
forth in subsection (b) above are untrue in any material respect on the date
such Qualified Replacement Mortgage is conveyed to the Trust such that the
interests of the Owners or the Note Insurer in the related Qualified Replacement
Mortgage are materially and adversely affected; provided, however, that for the
purposes of this subsection (c) the statements in subsection (b) above referring
to items "as of the Cut-Off Date" or "as of the Closing Date" shall be deemed to
refer to such items as of the date such Qualified Replacement Mortgage is
conveyed to the Trust. Notwithstanding the fact that a representation contained
in subsection (b) above may be limited to the Seller's or the Depositor's
knowledge, such limitation shall not relieve the Seller of its repurchase
obligation under this Section and Section 2.05 hereof.
(d) It is understood and agreed that the covenants set forth in this
Section 2.04 shall survive delivery of the respective Home Equity Loans
(including Qualified Replacement Mortgages) to the Indenture Trustee or the
Custodian.
(e) The Indenture Trustee shall have no duty to conduct any affirmative
investigation other than as specifically set forth in this Agreement as to the
occurrence of any condition requiring the repurchase or substitution of any Home
Equity Loan pursuant to this Article II or the eligibility of any Home Equity
Loan for the purpose of this Agreement.
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Section 2.05 Conveyance of the Home Equity Loans and Qualified
Replacement Mortgages.
(a) On the Closing Date the Depositor, concurrently with the execution
and delivery hereof, transfers, assigns, sets over and otherwise conveys without
recourse, to the Issuer, all of its right, title and interest in and to the Home
Equity Loans (other than payments of principal and interest due on the Home
Equity Loans on or before the Cut-Off Date). The transfer by the Depositor of
the Home Equity Loans set forth on the Schedule of Home Equity Loans to the
Issuer is absolute and is intended by all parties hereto to be treated as a sale
by the Depositor. Pursuant to the Indenture, the Issuer will pledge the Trust
Estate to the Indenture Trustee to be held on behalf of the Owners of the Notes.
In the event that such conveyance is deemed to be a loan, the parties
intend that the Depositor shall be deemed to have granted to the Issuer a
security interest in the Trust Estate, and that this Agreement shall constitute
a security agreement under applicable law.
In connection with the sale, transfer, assignment, and conveyance from
the Seller to the Depositor under the Loan Sale Agreement, the Seller has filed,
in the appropriate office or offices in the States of Delaware and Florida, a
UCC-1 financing statement executed by the Seller as debtor, naming the Depositor
as secured party and listing the Home Equity Loans and the other property
described above as collateral. The characterization of the Seller as the debtor
and the Depositor as the secured party in such financing statements is solely
for protective purposes and shall in no way be construed as being contrary to
the intent of the parties that this transaction be treated as a sale of the
Seller's entire right, title and interest in the Trust Estate. In connection
with such filing, the Seller agrees that it shall cause to be filed all
necessary continuation statements thereof and to take or cause to be taken such
actions and execute such documents as are necessary to perfect and protect the
Depositor's interest in the Trust Estate.
In connection with the sale, transfer, assignment, and conveyance from
the Depositor to the Issuer, the Depositor has filed, in the appropriate office
or offices in the States of Delaware and Florida a UCC-1 financing statement
executed by the Depositor as debtor, naming the Issuer as secured party and
listing the Home Equity Loans and the other property described above as
collateral. The characterization of the Depositor as a debtor and the Issuer as
the secured party in such financing statements is solely for protective purposes
and shall in no way be construed as being contrary to the intent of the parties
that this transaction be treated as a sale of the Depositor's entire right,
title and interest in the Trust Estate. In connection with such filing, the
Depositor agrees that it shall cause to be filed all necessary continuation
statements thereof and to take or cause to be taken such actions and execute
such documents as are necessary to perfect and protect the Issuer's, the Owners'
and the Note Insurer's interest in the Trust Estate.
In connection with the pledge of the Trust Estate from the Issuer to
the Indenture Trustee, on behalf of the Owners of the Notes, the Issuer has
filed, in the appropriate office or offices in the State of Delaware, a UCC-1
Financing Statement executed by the Issuer as debtor, naming the Indenture
Trustee, on behalf of the Owners of the Notes, as the secured party and listing
the Home Equity Loans and the other property described above as collateral. In
connection with such filing, the Issuer agrees that it shall cause to be filed
all necessary continuation statements thereof and to take or cause to be taken
such actions and execute such documents as are necessary to perfect and protect
the Indenture Trustee's interest in the Trust Estate on behalf of the Owners of
the Notes.
(b) In connection with the transfer and assignment of the Initial Home
Equity Loans, or on each Subsequent Transfer Date with respect to the Subsequent
Home Equity Loan, the Seller and the Depositor agree to:
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(i) deliver without recourse to the Custodian, on behalf of
the Indenture Trustee, on the Closing Date with respect to each Home
Equity Loan, (A) the original Mortgage Notes endorsed in blank or to
the order of "The Chase Manhattan Bank, as Indenture Trustee for the
IMC Adjustable Rate Home Equity Loan Asset Backed Notes, Series 1997-8
without recourse," (B) (I) the original title insurance commitment or a
copy thereof certified as a true copy by the closing agent or the
Seller, and when available, the original title insurance policy or a
copy certified by the issuer of the title insurance policy or (II) the
attorney's opinion of title, (C) originals or copies of all intervening
assignments certified as true copies by the closing agent or the
Seller, showing a complete chain of title from origination to the
Issuer, if any, including warehousing assignments, if recorded, (D)
originals of all assumption and modification agreements, if any and (E)
either: (1) the original Mortgage, with evidence of recording thereon
(if such original Mortgage has been returned to the Seller from the
applicable recording office) or a copy of the Mortgage certified as a
true copy by the closing agent or the Seller, or (2) a copy of the
Mortgage certified by the public recording office in those instances
where the original recorded Mortgage has been lost or retained by the
recording office;
(ii) cause, within 60 days following the Closing Date with
respect to the Home Equity Loans or assignments of the Mortgages to the
"The Chase Manhattan Bank, as the Indenture Trustee for the IMC
Adjustable Rate Home Equity Loan Asset Backed Notes, Series 1997-8
without recourse," to be submitted for recording in the appropriate
jurisdictions; provided, however, that the Seller shall not be required
to prepare an assignment for any Mortgage described in subsection
(b)(i)(E)(2) above with respect to which the original recording
information has not yet been received from the recording office until
such information is received; provided, further, that the Seller shall
not be required to record an assignment of a Mortgage if the Seller
furnishes to the Indenture Trustee and the Note Insurer, on or before
the Closing Date, with respect to the Home Equity Loans, at the
Seller's expense, an opinion of counsel with respect to the relevant
jurisdiction that such recording is not necessary to perfect the
Indenture Trustee's interest in the related Home Equity Loans (in form
and substance satisfactory to the Indenture Trustee, and the Note
Insurer and the Rating Agencies); provided further, however,
notwithstanding the delivery of any legal opinions, each assignment of
Mortgage shall be recorded upon the earliest to occur of: (i)
reasonable direction by the Note Insurer or (ii) the occurrence of a
Servicer Termination Event;
(iii) deliver the title insurance policy or title searches,
the original Mortgages and such recorded assignments, together with
originals or duly certified copies of any and all prior assignments
(other than unrecorded warehouse assignments), to the Custodian, on
behalf of the Indenture Trustee, within 15 days of receipt thereof by
the Seller (but in any event, with respect to any Mortgage as to which
original recording information has been made available to the Seller,
within one year after the Closing Date with respect to the Home Equity
Loans).
Notwithstanding anything to the contrary contained in this Section
2.05, in those instances where the public recording office retains the original
Mortgage, the assignment of a Mortgage or the intervening assignments of the
Mortgage after it has been recorded, the Seller and the Depositor shall be
deemed to have satisfied their obligations hereunder upon delivery to the
Custodian, on behalf of the Indenture Trustee of a copy of such Mortgage, such
assignment or assignments of Mortgage certified by the public recording office
to be a true copy of the recorded original thereof.
Not later than ten days following the end of the 60-day period referred
in clause (ii) of this subsection (b), the Seller shall deliver to the
Custodian, on behalf of the Indenture Trustee a list of all Mortgages for which
no Mortgage assignment has yet been submitted for recording by the Seller, which
list
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shall state the reason why the Seller has not yet submitted such Mortgage
assignments for recording. With respect to any Mortgage assignment disclosed on
such list as not yet submitted for recording for a reason other than a lack of
original recording information, the Custodian, on behalf of the Indenture
Trustee shall make an immediate demand on the Seller to prepare such Mortgage
assignments, and shall inform the Note Insurer, in writing, of the Seller's
failure to prepare such Mortgage assignments. Thereafter, the Custodian, on
behalf of the Indenture Trustee shall cooperate in executing any documents
prepared by the Note Insurer and submitted to the Custodian, on behalf of the
Indenture Trustee in connection with this provision. Following the expiration of
the 60-day period referred to in clause (ii) of this subsection (b), the Seller
shall promptly prepare a Mortgage assignment for any Mortgage for which original
recording information is subsequently received by the Seller, and shall promptly
deliver a copy of such Mortgage assignment to the Custodian, on behalf of the
Indenture Trustee. The Seller agrees that it will follow its normal servicing
procedures and attempt to obtain the original recording information necessary to
complete a Mortgage assignment. In the event that the Seller is unable to obtain
such recording information with respect to any Mortgage prior to the end of the
18th calendar month following the Closing Date and has not provided to the
Custodian, on behalf of the Indenture Trustee a Mortgage assignment with
evidence of recording thereon relating to the assignment of such Mortgage to the
Indenture Trustee, the Custodian, on behalf of the Indenture Trustee shall
notify the Seller of the Seller's obligation to provide a completed assignment
(with evidence of recording thereon) on or before the end of the 20th calendar
month following the Closing Date. A copy of such notice shall be sent by the
Custodian, on behalf of the Indenture Trustee to the Note Insurer. If no such
completed assignment (with evidence of recording thereon) is provided before the
end of such 20th calendar month, the related Home Equity Loan shall be deemed to
have breached the representation contained in clause (xxii) of Section 2.04(b)
hereof; provided, however, that if as of the end of such 20th calendar month the
Seller demonstrates to the satisfaction of the Note Insurer that it is
exercising its best efforts to obtain such completed assignment and, during each
month thereafter until such completed assignment is delivered to the Custodian,
on behalf of the Indenture Trustee, the Seller continues to demonstrate to the
satisfaction of the Note Insurer that it is exercising its best efforts to
obtain such completed assignment, the related Home Equity Loan will not be
deemed to have breached such representation. The requirement to deliver a
completed assignment with evidence of recording thereon will be deemed satisfied
upon delivery of a copy of the completed assignment certified by the applicable
public recording office.
Copies of all Mortgage assignments received by the Custodian, on behalf
of the Indenture Trustee shall be retained in the related File.
All recording required pursuant to this Section 2.05 shall be
accomplished at the expense of the Seller.
(c) In the case of Home Equity Loans which have been prepaid in full
after the Cut-Off Date and prior to the Closing Date, the Seller, in lieu of the
foregoing, will deliver within six (6) days after the Closing Date to the
Indenture Trustee a certification of an Authorized Officer in the form set forth
in Exhibit A.
(d) The Seller shall transfer, assign, set over and otherwise convey
without recourse, to the Depositor and the Depositor shall transfer, assign, set
over and otherwise convey without recourse, to Issuer all right, title and
interest of the Seller in and to any Qualified Replacement Mortgage delivered to
the Custodian, on behalf of the Indenture Trustee on behalf of the Issuer by the
Seller pursuant to Section 2.03, 2.04 or 2.06 hereof and all its right, title
and interest to principal and interest due on such Qualified Replacement
Mortgage after the applicable Replacement Cut-Off Date; provided, however, that
the Seller shall reserve and retain all right, title and interest in and to
payments of principal and interest due on such Qualified Replacement Mortgage on
or prior to the applicable Replacement Cut-Off Date.
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(e) As to each Home Equity Loan released from the lien of the Indenture
in connection with the conveyance of a Qualified Replacement Mortgage therefor,
the Indenture Trustee will transfer, assign, set over and otherwise convey
without recourse or representation, on the Seller's order, all of its and the
Issuer's right, title and interest in and to such released Home Equity Loan and
all the Trust's right, title and interest to principal and interest due on such
released Home Equity Loan after the applicable Replacement Cut-Off Date;
provided, however, that the Trust shall reserve and retain all right, title and
interest in and to payments of principal and interest due on such released Home
Equity Loan on or prior to the applicable Replacement Cut-Off Date.
(f) In connection with any transfer and assignment of a Qualified
Replacement Mortgage to the Issuer, the Seller agrees to (i) deliver without
recourse to the Custodian, on behalf of the Indenture Trustee on the date of
delivery of such Qualified Replacement Mortgage the original Mortgage Note
relating thereto, endorsed in blank or to the order of "The Chase Manhattan
Bank, as Indenture Trustee for IMC Adjustable Rate Home Equity Loan Asset Backed
Notes, Series 1997-8 without recourse," (ii) cause promptly to be recorded an
assignment in the appropriate jurisdictions, (iii) deliver the original
Qualified Replacement Mortgage and such recorded assignment, together with
original or duly certified copies of any and all prior assignments, to the
Custodian, on behalf of the Indenture Trustee within 15 days of receipt thereof
by the Seller (but in any event within 60 days after the date of conveyance of
such Qualified Replacement Mortgage) and (iv) deliver the title insurance
policy, or where no such policy is required to be provided under Section
2.05(b)(i)(B), the other evidence of title in same required in Section
2.05(b)(i)(B).
(g) As to each Home Equity Loan released from the Trust in connection
with the conveyance of a Qualified Replacement Mortgage the Custodian, on behalf
of the Indenture Trustee shall deliver on the date of conveyance of such
Qualified Replacement Mortgage and on the order of the Seller (i) the original
Mortgage Note relating thereto, endorsed without recourse or representation, to
the Seller, (ii) the original Mortgage so released and all assignments relating
thereto and (iii) such other documents as constituted the File with respect
thereto.
(h) If a Mortgage assignment is lost during the process of recording,
or is returned from the recorder's office unrecorded due to a defect therein,
the Seller shall prepare a substitute assignment or cure such defect, as the
case may be, and thereafter cause each such assignment to be duly recorded.
Section 2.06 Acceptance by Indenture Trustee; Certain Substitutions of
Home Equity Loans; Certification by Indenture Trustee.
(a) The Indenture Trustee agrees to execute and deliver and to cause
the Custodian to execute and deliver on the Closing Date an acknowledgment of
receipt of the items delivered by the Seller or the Depositor in the forms
attached as Exhibit B-1 and Exhibit B-2 hereto, and declares through the
Custodian that it will hold such documents and any amendments, replacement or
supplements thereto, as well as any other assets included in the definition of
Trust Estate and delivered to the Custodian, on behalf of the Indenture Trustee,
as Indenture Trustee in trust upon and subject to the conditions set forth
herein and in the Indenture for the benefit of the Owners. The Indenture Trustee
agrees, for the benefit of the Owners, to cause the Custodian to review such
items within 45 days after the Closing Date (or, with respect to any document
delivered after the Closing Date, within 45 days of receipt and with respect to
any Qualified Replacement Mortgage, within 45 days after the assignment thereof)
and to deliver to the Depositor, the Seller, the Servicer, the Issuer and the
Note Insurer a certification in the form attached hereto as Exhibit C (a "Pool
Certification") to the effect that, as to each Home Equity Loan listed in the
Schedule of Home Equity Loans (other than any Home Equity Loan paid in full or
any Home Equity Loan specifically identified in such Pool Certification as not
covered by such Pool Certification), (i) all documents required to be
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delivered to it pursuant to Section 2.05(b)(i) of this Agreement are in its
possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn and relate to such Home Equity Loan and (iii) based
on its examination and only as to the foregoing documents, the information set
forth on the Schedule of Home Equity Loans accurately reflects the information
set forth in the File. Neither the Custodian on behalf of the Indenture Trustee,
nor the Indenture Trustee shall have any responsibility for reviewing any File
except as expressly provided in this subsection 2.06(a). Without limiting the
effect of the preceding sentence, in reviewing any File, the Custodian or the
Indenture Trustee shall have no responsibility for determining whether any
document is valid and binding, whether the text of any assignment is in proper
form (except to determine if the Indenture Trustee is the assignee), whether any
document has been recorded in accordance with the requirements of any applicable
jurisdiction or whether a blanket assignment is permitted in any applicable
jurisdiction, but shall only be required to determine whether a document has
been executed, that it appears to be what it purports to be, and, where
applicable, that it purports to be recorded. Neither the Custodian on behalf of
the Indenture Trustee, nor the Indenture Trustee shall be under any duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable, or
appropriate for the represented purpose or that they are other than what they
purport to be on their face, nor shall the Custodian or the Indenture Trustee be
under any duty to determine independently whether there are any intervening
assignments or assumption or modification agreements with respect to any Home
Equity Loan.
(b) If the Custodian, on behalf of the Indenture Trustee during such
45-day period finds any document constituting a part of a File which is not
executed, has not been received, or is unrelated to the Home Equity Loans
identified in the Schedule of Home Equity Loans, or that any Home Equity Loan
does not conform to the description thereof as set forth in the Schedule of Home
Equity Loans, the Custodian, on behalf of the Indenture Trustee shall promptly
so notify the Depositor, the Seller, the Issuer, the Owners and the Note
Insurer. In performing any such review, the Custodian, on behalf of the
Indenture Trustee may conclusively rely on the Seller as to the purported
genuineness of any such document and any signature thereon. It is understood
that the scope of the review of the items delivered by the Seller pursuant to
Section 2.05(b)(i) is limited solely to confirming that the documents listed in
Section 2.05(b)(i) have been executed and received, relate to the Files
identified in the Schedule of Home Equity Loans and conform to the description
thereof in the Schedule of Home Equity Loans. The Seller agrees to use
reasonable efforts to remedy a material defect in a document constituting part
of a File of which it is so notified by the Custodian, on behalf of the
Indenture Trustee. If, however, within 90 days after such notice to it
respecting such defect the Seller has not remedied the defect and the defect
materially and adversely affects the interest in the related Home Equity Loan of
the Owners or the Note Insurer, the Seller will (or will cause an affiliate of
the Seller to) on the next succeeding Monthly Remittance Date (i) substitute in
lieu of such Home Equity Loan a Qualified Replacement Mortgage and deliver the
Substitution Amount to the Servicer for deposit in the Principal and Interest
Account or (ii) purchase such Home Equity Loan at a purchase price equal to the
Loan Purchase Price thereof, which purchase price shall be delivered to the
Servicer for deposit in the Principal and Interest Account.
(c) In addition to the foregoing, the Indenture Trustee also agrees to
cause the Custodian to make a review during the 12th month after the Closing
Date indicating the current status of the exceptions previously indicated on the
Pool Certification (the "Final Certification"). After delivery of the Final
Certification, the Custodian, on behalf of the Indenture Trustee and the
Servicer shall provide to the Note Insurer no less frequently than monthly
updated certifications indicating the then current status of exceptions, until
all such exceptions have been eliminated.
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Section 2.07 Reserved.
Section 2.08 Custodian.
Notwithstanding anything to the contrary in this Agreement, the parties
hereto acknowledge that the functions of the Indenture Trustee with respect to
the custody, acceptance, inspection and release of the Files pursuant to
Sections 2.05, 2.06, 2.07 and 4.14 and the related Pool Certification and Final
Certification shall be performed by the Custodian pursuant to the Custodial
Agreement. The fees and expenses of the Custodian will be paid by the Seller.
Section 2.09 Books and Records.
The sale of each Home Equity Loan shall be reflected in the Depositor's
balance sheets and other financial statements as a sale of assets by the
Depositor under generally accepted accounting principles.
END OF ARTICLE II
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ARTICLE III
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 3.01 Reserved.
Section 3.02 Establishment of Accounts.
(a) The Depositor shall cause to be established on the Closing Date,
and the Indenture Trustee shall maintain, at the Corporate Trust Office, the
Note Account, and the Available Funds Cap Carry-Forward Amount Account each to
be held by the Indenture Trustee in the name of the Indenture Trustee, in trust
for the Owners of the IMC Adjustable Rate Home Equity Loan Asset Backed Notes,
Series 1997-8 and the Note Insurer as their interests may appear.
(b) On each Determination Date the Indenture Trustee shall determine
(based solely on information provided to it by the Servicer) with respect to the
immediately following Payment Date, the amounts that are expected to be on
deposit in the Note Account (inclusive of any investment earnings on Eligible
Investments held in the Note Account) as of such date on such Payment Date
(disregarding the amounts of any Insured Payments) and equal to the sum of (x)
such amounts excluding the amount of any Total Monthly Excess Cashflow included
in such amounts plus (y) any amounts of related Total Monthly Excess Cashflow to
be applied on such Payment Date. The amount described in clause (x) of the
preceding sentence with respect to each Payment Date is the "Available Funds"
and the sum of the amounts described in clauses (x) and (y) of the preceding
sentence with respect to each Payment Date is the "Total Available Funds."
Section 3.03 Flow of Funds.
(a) The Indenture Trustee shall deposit in the Note Account without
duplication, upon receipt, any Insured Payments from the Policy Payment Account
pursuant to Section 7.02(b) hereof, the proceeds of any liquidation of the
assets of the Trust, all remittances made to the Indenture Trustee pursuant to
Section 4.08(d)(ii) and the Monthly Remittance Amount remitted by the Servicer.
(b) With respect to funds on deposit in the Note Account, on each
Payment Date, the Indenture Trustee shall make the following allocations,
disbursements and transfers from amounts deposited therein pursuant to
subsection (a) in the following order of priority, and each such allocation,
transfer and disbursement shall be treated as having occurred only after all
preceding allocations, transfers and disbursements have occurred:
(i) first, on each Payment Date from amounts then on deposit in
the Note Account, (A) to, itself, the Indenture Trustee Fee
and the Indenture Trustee Reimbursable Expenses, and (B)
provided that no Note Insurer Default has occurred and is
continuing the Premium Amount for such Payment Date shall be
paid to the Note Insurer;
(ii) second, on each Payment Date, the Indenture Trustee shall
allocate an amount equal to the sum of (x) the Total Monthly
Excess Spread with respect to such Payment Date plus (y) any
Overcollateralization Reduction Amount with respect to such
Payment Date (such sum being the "Total Monthly Excess
Cashflow" with respect to such Payment Date) in the following
order of priority:
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(A) first, such Total Monthly Excess Cashflow shall be
allocated to the payment of the Principal
Distribution Amount pursuant to clause (b)(iv) below
(excluding any Overcollateralization Increase Amount)
in an amount equal to the amount, if any, by which
(x) the Principal Distribution Amount (excluding any
Overcollateralization Increase Amount) exceeds (y)
the Available Funds (net of the Current Interest and
the Trust Fees and Expenses) and shall be paid as
part of the Principal Distribution Amount pursuant to
clause (iv)(C) below (the amount of such difference
being the "Available Funds Shortfall"); and
(B) second, any portion of the Total Monthly Excess
Cashflow remaining after the allocations described in
clause (A) above shall be allocated to the payment to
the Note Insurer in respect of amounts owed on
account of any Reimbursement Amount pursuant to
clause (b)(iv)(A)(I).
(iii) third, the amount, if any, of the Total Monthly Excess
Cashflow on a Payment Date remaining after the allocations and
payments described in clause (ii) above (the "Net Monthly
Excess Cashflow" for such Payment Date) is required to be
applied in the following order or priority:
(A) first, such Net Monthly Excess Cashflow shall be used
to reduce to zero, through the payment to the Owners
of the Notes of an Overcollateralization Increase
Amount included in the Principal Distribution Amount,
which shall be retained pursuant to clause (iv)(C)
below, any Overcollateralization Deficiency Amount as
of such Payment Date;
(B) second, an amount equal to the lesser of (i) any
portion of the Net Monthly Excess Cashflow remaining
after the applications described in clause (A) and
(ii) the excess of (a) the Available Funds Cap
Carry-Forward Amount for such Payment Date over (b)
the amount then on deposit in the Available Funds Cap
Carry-Forward Amount Account shall be deposited into
the Available Funds Cap Carry-Forward Amount Account;
(C) third, any Net Monthly Excess Cashflow remaining
after the application described in clauses (A) and
(B) above shall be allocated to the payment to the
Servicer pursuant to clause (iv)(A)(II) below to the
extent of any unreimbursed Delinquency Advances and
unreimbursed Servicing Advances;
(iv) fourth, following the making by the Indenture Trustee of all
allocations, transfers and disbursements described above from
amounts (including any related Insured Payment) then on
deposit in the Note Account, the Indenture Trustee shall:
(A) distribute (I) to the Note Insurer the amounts
described in clause (ii)(B) above and (II) to the
Servicer the amounts described in clause (iii)(C)
above;
(B) retain in the Note Account, the Current Interest
(including the proceeds of any Insured Payments
relating to interest made by the Note Insurer);
(C) retain in the Note Account, the Principal
Distribution Amount (including the proceeds of any
Insured Payments relating to principal made by the
Note Insurer);
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(D) distribute to the Indenture Trustee, for the
reimbursement of expenses of the Indenture Trustee
not reimbursed pursuant to clause (b)(i) above which
expenses were incurred in connection with its duties
and obligations hereunder; and
(v) fifth, following the making by the Indenture Trustee of all
allocations, transfers and disbursements described above, the
Indenture Trustee shall distribute to the Certificate
Distribution Account, the Residual Net Monthly Excess
Cashflow, if any, for such Payment Date.
(c) On each Payment Date, the Indenture Trustee shall distribute to the
Owners, the amount, if any, then on deposit in the Available Funds Cap
Carry-Forward Amount Account.
(d) Notwithstanding any of the foregoing provisions, the aggregate
amounts distributed on all Payment Dates to the Owners of the Notes on account
of principal pursuant to clause (b)(iv)(C) shall not exceed the original Note
Principal Balance.
(e) Upon receipt of Insured Payments from the Note Insurer on behalf of
Owners of the Notes, the Indenture Trustee shall deposit such Insured Payments
in the Policy Payments Account. On each Payment Date, pursuant to Section
7.02(b) hereof, such amounts will be transferred from the Policy Payment Account
to the Note Account and the Indenture Trustee shall distribute such Insured
Payments, or the proceeds thereof in accordance with Section 3.03(b), to the
Owners of such Notes.
(f) The Indenture Trustee or Paying Agent shall (i) receive for each
Owner of the Notes any Insured Payment from the Note Insurer and (ii) disburse
the same to the Owners of the Notes as set forth in Section 3.03(b). Insured
Payments disbursed by the Indenture Trustee or Paying Agent from proceeds of the
Note Insurance Policy shall not be considered payment by the Trust, nor shall
such payments discharge the obligation of the Trust with respect to such Notes
and the Note Insurer shall be entitled to receive the Reimbursement Amount
pursuant to Section 3.03(b)(ii)(B) hereof. Nothing contained in this paragraph
shall be construed so as to impose duties or obligations on the Indenture
Trustee that are different from or in addition to those expressly set forth in
this Agreement.
Section 3.04 Reserved.
Section 3.05 Investment of Accounts.
(a) Consistent with any requirements of the Code, all or a portion of
any Account held by the Indenture Trustee for the benefit of the Owners shall be
invested and reinvested by the Indenture Trustee in trust for the benefit of the
Owners and the Note Insurer, as directed in writing by the Seller, in one or
more Eligible Investments bearing interest or sold at a discount. The bank
serving as Indenture Trustee or any affiliate thereof may be the obligor on any
investment which otherwise qualifies as an Eligible Investment. No investment in
any Account shall mature later than the Business Day immediately preceding the
next Payment Date.
(b) If any amounts are needed for disbursement from any Account held by
the Indenture Trustee and sufficient uninvested funds are not available to make
such disbursement, the Indenture Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such Account. No
investments will be liquidated prior to maturity unless the proceeds thereof are
needed for disbursement.
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(c) Subject to the terms of the Indenture, the Indenture Trustee shall
not in any way be held liable by reason of any insufficiency in any Account held
by the Indenture Trustee resulting from any loss on any Eligible Investment
included therein (except to the extent that the bank serving as Indenture
Trustee is the obligor thereon).
(d) The Indenture Trustee shall invest and reinvest funds in the
Accounts held by the Indenture Trustee, in accordance with the written
instructions delivered to the Indenture Trustee on the Closing Date, but only in
one or more Eligible Investments bearing interest or sold at a discount.
If the Seller shall have failed to give investment directions to the
Indenture Trustee then the Indenture Trustee shall invest in money market funds
described in Section 3.07(j) to be redeemable without penalty no later than the
Business Day immediately preceding the next Payment Date.
(e) All income or other gain from investments in any Account held by
the Indenture Trustee shall be deposited in such Account immediately on receipt,
and any loss resulting from such investments shall be charged to such Account,
as appropriate, subject to the requirement of Section 4.08(b) that the Servicer
contribute funds in an amount equal to such loss in the case of the Principal
and Interest Account.
Section 3.06 Payment of Trust Expenses.
(a) The Seller shall pay the amount of the expenses of the Trust (other
than payments of premiums to the Note Insurer) (including the Indenture
Trustee's fees and expenses not covered or paid by Section 3.03(b)(i) and
3.03(b)(iv)(D)), and the Seller shall promptly pay such expenses directly to the
Persons to whom such amounts are due.
(b) The Seller shall pay directly on the Closing Date the reasonable
fees and expenses of counsel to the Indenture Trustee and the Owner Trustee.
(c) In the event the Depositor fails to do so, the Seller shall pay the
fees and expenses (including any "Expenses" (as defined in the Trust Agreement)
of the Owner Trustee.
Section 3.07 Eligible Investments.
The following are Eligible Investments:
(a) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and interest
by, the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United States, FHLMC
senior debt obligations, and Fannie Mae senior debt obligations, but excluding
any of such securities whose terms do not provide for payment of a fixed dollar
amount upon maturity or call for redemption;
(b) Federal Housing Administration debentures;
(c) FHLMC participation certificates which guaranty timely payment
of principal and interest and senior debt obligations;
(d) Consolidated senior debt obligations of any Federal Home Loan
Banks;
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(e) Fannie Mae mortgage-backed securities (other than stripped mortgage
securities which are valued greater than par on the portion of unpaid principal)
and senior debt obligations;
(f) Federal funds, certificates of deposit, time deposits, and bankers'
acceptances (having original maturities of not more than 365 days) of any
domestic bank, the short-term debt obligations of which have been rated A-1 by
Standard & Poor's and P-1 by Moody's;
(g) Deposits of any bank or savings and loan association (the long-term
deposit rating of which is Baa3 or better by Moody's and BBB by Standard &
Poor's) which has combined capital, surplus and undivided profits of at least
$50,000,000 which deposits are insured by the FDIC and held up to the limits
insured by the FDIC;
(h) Repurchase agreements collateralized by securities described in
(a), (c), or (e) above with any registered broker/dealer subject to the
Securities Investors Protection Corporation's jurisdiction and subject to
applicable limits therein promulgated by Securities Investors Protection
Corporation or any commercial bank, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed short-term or long-term obligation rated
P-1 or Aa2, respectively, or better by Moody's and A-1+ or AA, respectively, or
better by Standard & Poor's, provided:
a. A master repurchase agreement or specific written
repurchase agreement governs the transaction, and
b. The securities are held free and clear of any lien by the
Indenture Trustee or an independent third party acting solely as agent
for the Indenture Trustee, and such third party is (a) a Federal
Reserve Bank, (b) a bank which is a member of the FDIC and which has
combined capital, surplus and undivided profits of not less than $125
million, or (c) a bank approved in writing for such purpose by the Note
Insurer, and the Indenture Trustee shall have received written
confirmation from such third party that it holds such securities, free
and clear of any lien, as agent for the Indenture Trustee, and
c. A perfected first security interest under the Uniform
Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1
et seq. or 31 CFR 350.0 et seq., in such securities is created for the
benefit of the Indenture Trustee, and
d. The repurchase agreement has a term of thirty days or less
and the Indenture Trustee will value the collateral securities no less
frequently than weekly and will liquidate the collateral securities if
any deficiency in the required collateral percentage is not restored
within two business days of such valuation, and
e. The fair market value of the collateral securities in
relation to the amount of the repurchase obligation, including
principal and interest, is equal to at least 106%.
(i) Commercial paper (having original maturities of not more than 270
days) rated in the highest short-term rating categories of Standard & Poor's and
Moody's;
(j) Investments in no load money market funds registered under the
Investment Company Act of 1940 whose shares are registered under the Securities
Act and rated AAAm or AAAm-G by Standard & Poor's and Aaa by Moody's; and
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(k) Any other investment permitted by each of the Rating Agencies
and the Note Insurer;
provided that no instrument described above shall evidence either the right to
receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that all instruments described hereunder shall mature at par on or prior to the
next succeeding Payment Date unless otherwise provided in this Agreement and
that no instrument described hereunder may be purchased at a price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price prior to stated maturity.
Section 3.08 Accounting and Directions by Indenture Trustee.
By 12:00 noon, New York time, on each Payment Date (or such earlier
period as shall be agreed by the Seller and the Indenture Trustee), the
Indenture Trustee shall notify (based solely on information provided to the
Indenture Trustee by the Servicer and upon which the Indenture Trustee may rely)
the Seller, the Depositor, each Owner and the Note Insurer, of the following
information with respect to the next Payment Date (which notification may be
given by facsimile, or by telephone promptly confirmed in writing):
(1) The aggregate amount on deposit in the Note Account
as of the related Determination Date;
(2) The Monthly Distribution Amount, on the next Payment
Date;
(3) The amount of any Overcollateralization Increase
Amount;
(4) The amount of any Insured Payment to be made by the
Note Insurer on such Payment Date;
(5) The application of the amounts described in clauses (1),
(3) and (4) above in respect of the distribution of the Monthly
Distribution Amount on such Payment Date in accordance with Section
3.03 hereof;
(6) The Note Principal Balance;
(7) The amount, if any, of any Realized Losses for the
related Remittance Period; and
(8) The amount of any Overcollateralization Reduction
Amount.
Section 3.09 Reports by Indenture Trustee to Owners and Note
Insurer.
(a) On the Business Day preceding each Payment Date the Indenture
Trustee shall transmit a report in writing to each Owner, the Owner Trustee, the
Note Insurer, Standard & Poor's and Moody's, which report shall contain the
following:
(i) the amount of the distribution with respect to such
Owners' Notes (based on a Note in the original principal amount of
$1,000);
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(ii) the amount of such Owner's distributions allocable to
principal, separately identifying the aggregate amount of any
Prepayments in full or other Prepayments or other recoveries of
principal included therein and any related Overcollateralization
Increase Amount;
(iii) the amount of such Owner's distributions allocable to
interest (based on a Note in the original principal amount of $1,000);
(iv) if the interest portion of the Monthly Distribution
Amount (net of any Insured Payment) paid to the Owners of the Notes on
such Payment Date was less than the Current Interest on such Payment
Date, the Carry Forward Amount resulting therefrom;
(v) the amount of any Insured Payment included in the amounts
distributed to the Owners of Notes on such Payment Date;
(vi) the principal amount of the Notes which will be
Outstanding and the aggregate Loan Balance after giving effect to any
payment of principal on such Payment Date;
(vii) the Overcollateralization Amount and
Overcollateralization Deficit, if any, remaining after giving effect to
all distributions and transfers on such Payment Date;
(viii) based upon information furnished by the Servicer, such
information as may be required by Section 6049(d)(7)(C) of the Code and
the regulations promulgated thereunder to assist the Owners in
computing their market discount;
(ix) the total of any Substitution Amounts and any Loan
Purchase Price amounts included in such distribution;
(x) the weighted average Coupon Rate of the Home Equity Loans;
(xi) such other information as the Note Insurer or any Owner
may reasonably request with respect to Delinquent Home Equity Loans;
(xii) the weighted average gross margin of the Home Equity
Loan;
(xiii) the Loan Balance of each of the three largest Home
Equity Loans outstanding;
(xiv) the Note Rate; and
(xv) the Available Funds Cap Carry Forward Amortization
Amount, if any, and the Available Funds Cap Carry Forward Amount, if
any.
The Servicer shall provide to the Indenture Trustee the information
described in Section 4.08(d)(iii) and in clause (b) below to enable the
Indenture Trustee to perform its reporting obligations under this Section, and
such obligations of the Indenture Trustee under this Section are conditioned
upon such information being received and the information provided in clauses
(ii), (ix) and (x) shall be based solely upon information contained in the
monthly servicing report provided by the Servicer to the Indenture Trustee
pursuant to Section 4.08 hereof.
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(b) In addition, on the Business Day preceding each Payment Date the
Indenture Trustee will distribute to each Owner, the Owner Trustee, the Note
Insurer, Standard & Poor's and Moody's, together with the information described
in Subsection (a) preceding, the following information which is hereby required
to be prepared by the Servicer and furnished to the Indenture Trustee for such
purpose on or prior to the related Monthly Reporting Date:
(i) the number and aggregate principal balances of Home Equity
Loans (a) 30-59 days Delinquent, (b) 60-89 days Delinquent and (c) 90
or more days Delinquent, as of the close of business on the last
Business Day of the calendar month immediately preceding the Payment
Date, (d) the numbers and aggregate Loan Balances of all Home Equity
Loans as of such Payment Date and (e) the percentage that each of the
amounts represented by clauses (a), (b) and (c) represent as a
percentage of the respective amounts in clause (d);
(ii) the status and the number and dollar amounts of all Home
Equity Loans in foreclosure proceedings as of the close of business on
the last Business Day of the calendar month immediately preceding such
Payment Date, separately stating, for this purpose, all Home Equity
Loans with respect to which foreclosure proceedings were commenced in
the immediately preceding calendar month;
(iii) the number of Mortgagors and the Loan Balances of (a)
the related Mortgages involved in bankruptcy proceedings as of the
close of business on the last Business Day of the calendar month
immediately preceding such Payment Date and (b) Home Equity Loans that
are "balloon" loans;
(iv) the existence and status of any REO Properties, as of the
close of business of the last Business Day of the month immediately
preceding the Payment Date;
(v) the book value of any REO Property as of the close of
business on the last Business Day of the calendar month immediately
preceding the Payment Date;
(vi) the Cumulative Loss Percentage, the amount of cumulative
Realized Losses, the current period Realized Losses, and the Annual
Loss Percentage (Rolling Twelve Month); and
(vii) the 90+ Delinquency Percentage (Rolling Six Month) and
the amount of 90-Day Delinquent Loans.
Section 3.10 Reports by Indenture Trustee.
(a) The Indenture Trustee shall report to the Depositor, the Seller,
the Note Insurer and each Owner, with respect to the amount on deposit in the
Note Account and the identity of the investments included therein, as the
Depositor, the Seller, any Owner or the Note Insurer may from time to time
reasonably request. Without limiting the generality of the foregoing, the
Indenture Trustee shall, at the reasonable request of the Issuer, the Seller,
any Owner or the Note Insurer transmit promptly to the Issuer, the Seller, any
Owner and the Note Insurer copies of all accountings of receipts in respect of
the Home Equity Loans furnished to it by the Servicer and shall notify the
Seller and the Note Insurer if any Monthly Remittance Amount has not been
received by the Indenture Trustee when due.
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(b) The Indenture Trustee shall report to the Note Insurer and each
Owner with respect to any written notices it may from time to time receive which
provide an Authorized Officer with actual knowledge that any of the statements
set forth in Section 2.04(b) hereof are inaccurate.
END OF ARTICLE III
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ARTICLE IV
SERVICING AND ADMINISTRATION
OF HOME EQUITY LOANS
Section 4.01 Servicer and Sub-Servicers.
Acting directly or through one or more Sub-Servicers as provided in
Section 4.03, the Servicer shall service and administer the Home Equity Loans in
accordance with this Agreement, the terms of the respective Home Equity Loans,
and the servicing standards set forth in the Fannie Mae Guide and shall have
full power and authority, acting alone, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable but without regard to: (i) any relationship that the
Servicer, any Sub-Servicer or any Affiliate of the Servicer or any Sub-Servicer
may have with the related Mortgagor; (ii) the ownership of any Note by the
Servicer or any Affiliate of the Servicer; (iii) the Servicer's obligation to
make Delinquency Advances or Servicing Advances; or (iv) the Servicer's or any
Sub-Servicer's right to receive compensation for its services hereunder or with
respect to any particular transaction. It is the intent of the parties hereto
that the Servicer shall have all of the servicing obligations hereunder which a
lender would have under the Fannie Mae Guide (as such provisions relate to
second lien mortgages); provided, however, that to the extent that such
standards, such obligations or the Fannie Mae Guide are amended by Fannie Mae
after the date hereof and the effect of such amendment would be to impose upon
the Servicer any material additional costs or other burdens relating to such
servicing obligations, the Servicer may, at its option, in accordance with the
servicing standards set forth herein, determine not to comply with such
amendment.
Subject to Section 4.03 hereof, the Servicer may, and is hereby
authorized to, perform any of its servicing responsibilities with respect to all
or certain of the Home Equity Loans through a Sub-Servicer as it may from time
to time designate, but no such designation of a Sub-Servicer shall serve to
release the Servicer from any of its obligations under this Agreement. Such
Sub-Servicer shall have the rights and powers of the Servicer which have been
delegated to such Sub-Servicer with respect to such Home Equity Loans under this
Agreement.
Without limiting the generality of the foregoing, but subject to
Sections 4.13 and 4.14, the Servicer in its own name or in the name of a
Sub-Servicer may be authorized and empowered pursuant to a power of attorney
executed and delivered by the Indenture Trustee to execute and deliver, and may
be authorized and empowered by the Indenture Trustee, to execute and deliver, on
behalf of itself, the Owners, the Issuer and the Indenture Trustee or any of
them, (i) any and all instruments of satisfaction or cancellation or of partial
or full release or discharge and all other comparable instruments with respect
to the Home Equity Loans and with respect to the Properties, (ii) to institute
foreclosure proceedings or obtain a deed in lieu of foreclosure so as to effect
ownership of any Property in the name of the Servicer on behalf of the Issuer
and Indenture Trustee, and (iii) to hold title to any Property upon such
foreclosure or deed in lieu of foreclosure on behalf of the Issuer and Indenture
Trustee; provided, however, that to the extent any instrument described in
clause (i) preceding would be delivered by the Servicer outside of its usual
procedures for home equity loans held in its own portfolio the Servicer shall,
prior to executing and delivering such instrument, obtain the prior written
consent of the Note Insurer, and provided further, however, that Section 4.13(a)
and Section 4.14(a) shall each constitute a revocable power of attorney from the
Issuer and Indenture Trustee to the Servicer to execute an instrument of
satisfaction (or assignment of mortgage without recourse) with respect to any
Home Equity Loan held by the Indenture Trustee hereunder paid in full or
foreclosed (or with respect to which payment in full has been escrowed).
Revocation of the power of attorney created by the final proviso of the
preceding sentence shall take effect upon (i) the receipt by the Servicer of
written notice thereof from the
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Indenture Trustee, (ii) a Servicer Termination Event or (iii) the termination of
the Notes. The Indenture Trustee shall execute any documentation furnished to it
by the Servicer for recordation by the Servicer in the appropriate
jurisdictions, as shall be necessary to effectuate the foregoing. Subject to
Sections 4.13 and 4.14, the Indenture Trustee shall execute a power of attorney
to the Servicer or any Sub-Servicer and furnish them with any other documents as
the Servicer or such Sub-Servicer shall reasonably request to enable the
Servicer and such Sub-Servicer to carry out their respective servicing and
administrative duties hereunder.
Upon the request of the Indenture Trustee or the Issuer, the Servicer
shall send to the Indenture Trustee or the Issuer, the details concerning the
servicing of the Home Equity Loans on computer generated tape, diskette or other
machine readable format.
The Servicer shall give prompt notice to the Indenture Trustee and the
Issuer of any action, of which the Servicer has actual knowledge, to (i) assert
a claim against the Trust or (ii) assert jurisdiction over the Trust.
Servicing Advances incurred by the Servicer or any Sub-Servicer in
connection with the servicing of the Home Equity Loans (including any penalties
in connection with the payment of any taxes and assessments or other charges) on
any Property shall be recoverable by the Servicer or such Sub-Servicer to the
extent described in Section 4.09(b) hereof.
Section 4.02 Collection of Certain Home Equity Loan Payments.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Home Equity Loans, and shall,
to the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any applicable Insurance Policy, follow collection
procedures for all Home Equity Loans at least as rigorous as those described in
the Fannie Mae Guide. Consistent with the foregoing, the Servicer may in its
discretion waive or permit to be waived any late payment charge, prepayment
charge, assumption fee or any penalty interest in connection with the prepayment
of a Home Equity Loan or any other fee or charge which the Servicer would be
entitled to retain hereunder as servicing compensation. In the event the
Servicer shall consent to the deferment of the due dates for payments due on a
Mortgage Note, the Servicer shall nonetheless make payment of any required
Delinquency Advance with respect to the payments so extended to the same extent
as if such installment were due, owing and Delinquent and had not been deferred,
and shall be entitled to reimbursement therefor in accordance with Section
4.09(a) hereof.
Section 4.03 Sub-Servicing Agreements Between Servicer and
Sub-Servicers.
The Servicer may, with the prior written consent of the Note Insurer,
enter into Sub-Servicing Agreements for any servicing and administration of Home
Equity Loans with any institution which is acceptable to the Note Insurer and
which, (x) is in compliance with the laws of each state necessary to enable it
to perform its obligations under such Sub-Servicing Agreement, (y) has
experience servicing home equity loans that are similar to the Home Equity Loans
and (z) has equity of not less than $5,000,000 (as determined in accordance with
generally accepted accounting principles). The Servicer shall give notice to the
Indenture Trustee, the Owners, the Note Insurer and the Rating Agencies of the
appointment of any Sub-Servicer (and shall receive the confirmation of the
Rating Agencies that such Sub-Servicer shall not result in a withdrawal or
downgrading by any Rating Agency of the rating or the shadow rating of the
Notes). For purposes of this Agreement, the Servicer shall be deemed to have
received payments on Home Equity Loans when any Sub-Servicer has received such
payments. Each Sub-Servicer shall be required to service the Home Equity Loans
in accordance with this Agreement and any such Sub-Servicing Agreement shall be
consistent with
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and not violate the provisions of this Agreement. Each Sub-Servicing Agreement
shall provide that the Indenture Trustee (if acting as successor Servicer) or
any other successor Servicer shall have the option to terminate such agreement
without payment of any fees if the original Servicer is terminated or resigns.
The Servicer shall deliver to the Indenture Trustee and the Note Insurer copies
of all Sub-Servicing Agreements, and any amendments or modifications thereof
promptly upon the Servicer's execution and delivery of such instrument.
Section 4.04 Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing Agreement
in accordance with the terms and conditions of such Sub-Servicing Agreement and
to either itself directly service the related Home Equity Loans or enter into a
Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under
Section 4.03.
Section 4.05 Liability of Servicer; Indemnification.
(a) The Servicer shall not be relieved of its obligations under this
Agreement notwithstanding any Sub-Servicing Agreement or any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Sub-Servicer and the Servicer shall be obligated to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Home Equity Loans. The Servicer shall be entitled to enter
into any agreement with a Sub-Servicer for indemnification of the Servicer by
such Sub-Servicer; provided, however, that nothing contained in such
Sub-Servicing Agreement shall be deemed to limit or modify this Agreement.
(b) The Servicer (except The Chase Manhattan Bank if it is required to
succeed the Servicer hereunder) agrees to indemnify and hold the Issuer, the
Indenture Trustee, the Note Insurer, the Depositor and each Owner harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Issuer, the Indenture Trustee, the Note Insurer and any Owner may sustain in any
way related to the failure of the Servicer to perform its duties and service the
Home Equity Loans in compliance with the terms of this Agreement. The Servicer
shall immediately notify the Issuer, the Indenture Trustee, the Depositor, the
Note Insurer and each Owner if a claim is made by a third party with respect to
this Agreement, and the Servicer shall assume (with the consent of the Indenture
Trustee and the Note Insurer) the defense of any such claim and pay all expenses
in connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Issuer, the Servicer, the Indenture Trustee, the Depositor, the Note Insurer
and/or Owner in respect of such claim. The Indenture Trustee shall, in
accordance with instructions received from the Servicer, reimburse the Servicer
only from amounts otherwise distributable on the Notes for all amounts advanced
by it pursuant to the preceding sentence, except when a final nonpayable
adjudication determines that the claim relates directly to the failure of the
Servicer to perform its duties in compliance with the Agreement. The provisions
of this Section 4.05(b) shall survive the termination of this Agreement and the
payment of the outstanding Notes.
Section 4.06 No Contractual Relationship Between Sub-Servicer,
Indenture Trustee or the Owners.
Any Sub-Servicing Agreement and any other transactions or services
relating to the Home Equity Loans involving a Sub-Servicer shall be deemed to be
between the Sub-Servicer and the Servicer alone and the Indenture Trustee and
the Owners shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to any Sub-Servicer except as
set forth in Section 4.07.
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Section 4.07 Assumption or Termination of Sub-Servicing Agreement
by Indenture Trustee.
In connection with the assumption of the responsibilities, duties and
liabilities and of the authority, power and rights of the Servicer hereunder by
the Indenture Trustee pursuant to Section 4.20, it is understood and agreed that
the Servicer's rights and obligations under any Sub-Servicing Agreement then in
force between the Servicer and a Sub-Servicer shall be assumed simultaneously by
the Indenture Trustee without act or deed on part of the Indenture Trustee;
provided, however, that the Indenture Trustee (if acting as successor Servicer)
or any other successor Servicer may terminate the Sub-Servicer as provided in
Section 4.03.
The Servicer shall, upon the reasonable request of the Indenture
Trustee, but at the expense of the Servicer, deliver to the assuming party
documents and records relating to each Sub-Servicing Agreement and an accounting
of amounts collected and held by it and otherwise use its best reasonable
efforts to effect the orderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party.
Section 4.08 Principal and Interest Account.
(a) The Servicer shall establish and maintain at one or more Designated
Depository Institutions the Principal and Interest Account to be held as a trust
account. Each Principal and Interest Account shall be identified on the records
of the Designated Depository Institution as follows: The Chase Manhattan Bank,
as Indenture Trustee in trust for the benefit of the Owners of the IMC
Adjustable Rate Home Equity Loan Asset Backed Notes, Series 1997-8. If the
institution at any time holding the Principal and Interest Account ceases to be
eligible as a Designated Depository Institution hereunder, then the Servicer
shall immediately be required to name a successor institution meeting the
requirements for a Designated Depository Institution hereunder. If the Servicer
fails to name such a successor institution, then the Principal and Interest
Account shall thenceforth be held as a trust account with a qualifying
Designated Depository Institution selected by the Indenture Trustee. The
Servicer shall notify the Indenture Trustee, the Note Insurer and the Owners if
there is a change in the name, account number or institution holding the
Principal and Interest Account.
Subject to subsection (c) below, the Servicer shall deposit all
receipts required pursuant to subsection (c) below and related to the Home
Equity Loans to the Principal and Interest Account on a daily basis (but no
later than the first Business Day after receipt).
(b) All funds in the Principal and Interest Account shall be held (i)
uninvested up to the amount insured by the FDIC or (ii) invested in Eligible
Investments. Any investments of funds in the Principal and Interest Account
shall mature or be withdrawable at par on or prior to the immediately succeeding
Monthly Remittance Date. Any investment earnings on funds held in the Principal
and Interest Account shall be for the account of the Servicer and may only be
withdrawn from the Principal and Interest Account by the Servicer immediately
following the remittance of the Monthly Remittance Amount (and the Total Monthly
Excess Spread included therein) by the Servicer. Any investment losses on funds
held in the Principal and Interest Account shall be for the account of the
Servicer and promptly upon the realization of such loss shall be contributed by
the Servicer to the Principal and Interest Account. Any references herein to
amounts on deposit in the Principal and Interest Account shall refer to amounts
net of such investment earnings.
(c) The Servicer shall deposit to the Principal and Interest Account on
the Business Day after receipt all principal and interest collections on the
Home Equity Loans due after the Cut-Off Date, including any Prepayments and Net
Liquidation Proceeds, other recoveries or amounts related to the Home Equity
Loans received by the Servicer and any income from REO Properties, but net of
(i) Net Liquidation Proceeds to the extent such Net Liquidation Proceeds exceed
the sum of (I) the Loan Balance of the related Home Equity Loan immediately
prior to liquidation, plus (II) accrued and unpaid interest on such Home Equity
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Loan (net of the related Servicing Fee) to the date of such liquidation and
(III) any Realized Losses incurred during the related Remittance Period, (ii)
principal and interest due (and Prepayments collected) on the Home Equity Loans
on or prior to the Cut-Off Date, (iii) reimbursements for Delinquency Advances
and (iv) reimbursements for amounts deposited in the Principal and Interest
Account representing payments of principal and/or interest on a Mortgage Note by
a Mortgagor which are subsequently returned by a depository institution as
unpaid (all such net amount herein referred to as "Daily Collections").
(d) (i) The Servicer may make withdrawals for its own account
from the Principal and Interest Account, only in the following priority and for
the following purposes:
(A) on each Monthly Remittance Date, to pay
itself the related Servicing Fees;
(B) to withdraw investment earnings on amounts
on deposit in the Principal and Interest
Account;
(C) to withdraw amounts that have been deposited
to the Principal and Interest Account in
error;
(D) to reimburse itself pursuant to Section
4.09(a) for unrecovered Delinquency Advances
and for any excess interest collected from a
Mortgagor; and
(E) to clear and terminate the Principal and
Interest Account following the termination
of the Trust pursuant to Article V.
(ii) The Servicer shall (a) remit to the Indenture Trustee for deposit
in the Note Account by wire transfer, or otherwise make funds available in
immediately available funds, without duplication, the Daily Collections
allocable to a Remittance Period not later than the related Monthly Remittance
Date and Loan Purchase Prices and Substitution Amounts two Business Days
following the related purchase or substitution, and (b) on each Monthly
Reporting Date, deliver to the Indenture Trustee and the Note Insurer, a monthly
servicing report containing (without limitation) the following information:
principal and interest collected in respect of the Home Equity Loans, scheduled
principal and interest that was due on the Home Equity Loans, relevant
information with respect to Liquidated Loans, if any, summary and detailed
delinquency reports, Liquidation Proceeds and other similar information
concerning the servicing of the Home Equity Loans. In addition, the Servicer
shall inform the Indenture Trustee and the Note Insurer in writing on each
Monthly Reporting Date, of the amounts of any Loan Purchase Prices or
Substitution Amounts so remitted during the related Remittance Period, and of
the Loan Balance of the Home Equity Loan having the largest Loan Balance as of
such date.
(iii) The Servicer shall provide to the Indenture Trustee in writing
the information described in Section 4.08(d)(ii)(b) and in Section 4.09(b) to
enable the Indenture Trustee to perform its reporting requirements under Section
3.09.
Section 4.09 Delinquency Advances and Servicing Advances.
(a) On each Monthly Remittance Date, the Servicer shall be required to
remit to the Indenture Trustee for deposit to the Note Account out of the
Servicer's own funds any Delinquent payment of interest with respect to each
Delinquent Home Equity Loan, which payment was not received on or prior to the
related Remittance Date and was not theretofore advanced by the Servicer. Such
amounts of the Servicer's own funds so deposited are "Delinquency Advances".
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The Servicer shall be permitted to reimburse itself on any Business Day
for any Delinquency Advances paid from the Servicer's own funds, from
collections on any Home Equity Loans that are not required to be distributed on
the Payment Date occurring during the month in which such reimbursement is made
(all or any portion of such amount to be replaced on future Monthly Remittance
Dates to the extent required for distribution) or as provided in Section
3.03(b)(iii)(C).
Notwithstanding the foregoing, in the event that the Servicer
determines in its reasonable business judgment in accordance with the servicing
standards set out herein that any proposed Delinquency Advance would not be
recoverable, the Servicer shall not be required to make Delinquency Advances
with respect to such Home Equity Loan. To the extent that the Servicer
previously has made Delinquency Advances with respect to a Home Equity Loan that
the Servicer subsequently determines will be nonrecoverable, the Servicer shall
be entitled to reimbursement for such aggregate unreimbursed Delinquency
Advances as provided in the prior paragraph. The Servicer shall give written
notice of such determination as to why such amount would not be recoverable to
the Indenture Trustee and the Note Insurer; the Indenture Trustee shall promptly
furnish a copy of such notice to the Owners of the Notes; provided, further,
that the Servicer shall be entitled to recover any unreimbursed Delinquency
Advances from Liquidation Proceeds for the related Home Equity Loan.
(b) The Servicer will pay all "out-of-pocket" costs and expenses
incurred in the performance of its servicing obligations, including, but not
limited to, (i) Preservation Expenses, (ii) the cost of any enforcement or
judicial proceedings, including foreclosures, (iii) the cost of the management
and liquidation of REO Property and, (iv) advances required by Section 4.13(a),
except to the extent that such amounts are determined by the Servicer in its
reasonable business judgment not to be recoverable. Such costs will constitute
"Servicing Advances". The Servicer may recover a Servicing Advance (x) from the
Mortgagors to the extent permitted by the Home Equity Loans or, if not
theretofore recovered from the Mortgagor on whose behalf such Servicing Advance
was made, from Liquidation Proceeds realized upon the liquidation of the related
Home Equity Loan and (y) as provided in Section 3.03(b)(iii)(C). The Servicer
shall be entitled to recover the Servicing Advances from the aforesaid
Liquidation Proceeds prior to the payment of the Liquidation Proceeds to any
other party to this Agreement. Except as provided in the previous sentence, in
no case may the Servicer recover Servicing Advances from the principal and
interest payments on any other Home Equity Loan except as provided in Section
3.03(b)(iii)(C).
Section 4.10 Compensating Interest; Repurchase of Home Equity
Loans.
(a) If a Prepayment in full of a Home Equity Loan or a Prepayment of at
least six times a Mortgagor's Monthly Payment occurs during any calendar month,
any difference between (x) the interest collected from the Mortgagor in
connection with such payoff, and (y) the full month's interest at the Coupon
Rate that would be due on the related Due Date for such Home Equity Loan
("Compensating Interest") (but not in excess of the aggregate Servicing Fee for
the related Remittance Period) shall be deposited by the Servicer to the
Principal and Interest Account (or if such difference is an excess, the Servicer
shall retain such excess) on the next succeeding Monthly Remittance Date and
shall be included in the Monthly Remittance Amount to be made available to the
Indenture Trustee on such Monthly Remittance Date.
(b) Subject to the clause (c) below, the Servicer has the right and the
option, but not the obligation, to purchase for its own account any Home Equity
Loan which becomes Delinquent, in whole or in part, as to at least three
consecutive monthly installments or any Home Equity Loan as to which enforcement
proceedings have been brought by the Servicer pursuant to Section 4.13. Any such
Home Equity Loan so purchased shall be purchased by the Servicer on or prior to
a Monthly Remittance Date at
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a purchase price equal to the Loan Purchase Price thereof, which purchase price
shall be deposited in the Principal and Interest Account.
(c) If a Home Equity Loan to be repurchased by the Servicer pursuant to
clause (b) above, is the greatest number of days Delinquent of all then
Delinquent Home Equity Loans, the Servicer may repurchase such Home Equity Loans
without having first notified the Note Insurer of such repurchase. In all other
cases, the Servicer must notify the Note Insurer, in writing, of its intent to
repurchase a Home Equity Loan and the Servicer may not repurchase such Home
Equity Loan without the written consent of the Note Insurer; provided, that the
Note Insurer shall be deemed to have consented to such repurchase unless it
notifies the Servicer, in writing, of its objection to such repurchase within 5
days after its receipt of the notice of proposed repurchase.
(d) The Net Liquidation Proceeds from the disposition of any REO
Property shall be deposited in the Principal and Interest Account and remitted
to the Indenture Trustee as part of the Daily Collections remitted by the
Servicer to the Indenture Trustee.
Section 4.11 Maintenance of Insurance.
(a) The Servicer shall cause to be maintained with respect to each Home
Equity Loan a hazard insurance policy with a carrier generally acceptable to the
Servicer that provides for fire and extended coverage, and which provides for a
recovery by the Trust of insurance proceeds relating to such Home Equity Loan in
an amount not less than the least of (i) the outstanding principal balance of
the Home Equity Loan (plus the related senior lien loan, if any), (ii) the
minimum amount required to compensate for damage or loss on a replacement cost
basis and (iii) the full insurable value of the premises. The Servicer shall
maintain the insurance policies required hereunder in the name of the mortgagee,
its successors and assigns, as loss payee. The policies shall require the
insurer to provide the mortgagee with 30 days' notice prior to any cancellation
or as otherwise required by law. The Servicer may also maintain a blanket hazard
insurance policy or policies if the insurer or insurers of such policies are
rated investment grade by Moody's and Standard & Poor's.
(b) If the Home Equity Loan at the time of origination (or if required
by federal law, at any time thereafter) relates to a Property in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, the Servicer will cause to be maintained with
respect thereto a flood insurance policy in a form meeting the requirements of
the then current guidelines of the Federal Insurance Administration with a
carrier generally acceptable to the Servicer in an amount representing coverage,
and which provides for a recovery by the Trust of insurance proceeds relating to
such Home Equity Loan of not less than the least of (i) the outstanding
principal balance of the Home Equity Loan (plus the related senior lien loan, if
any), (ii) the minimum amount required to compensate for damage or loss on a
replacement cost basis and (iii) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973. The Servicer shall
indemnify the Trust out of the Servicer's own funds for any loss to the Trust
resulting from the Servicer's failure to advance premiums for such insurance
required by this Section when so permitted by the terms of the Mortgage as to
which such loss relates.
Section 4.12 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Property has been or is about to be conveyed by the Mortgagor,
the Servicer shall, to the extent it has knowledge of such conveyance or
prospective conveyance, exercise its rights to accelerate the maturity of the
related Home Equity Loan under any "due-on-sale" clause contained in the related
Mortgage or Mortgage Note; provided, however, that the Servicer shall not
exercise any such right if the "due-on-sale"
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clause, in the reasonable belief of the Servicer, is not enforceable under
applicable law. An opinion of counsel, provided at the expense of the Servicer,
to the foregoing effect shall conclusively establish the reasonableness of such
belief. In such event, the Servicer shall enter into an assumption and
modification agreement with the person to whom such property has been or is
about to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, unless prohibited by applicable law or the Mortgage
documents, the Mortgagor remains liable thereon. If the foregoing is not
permitted under applicable law, the Servicer is authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
Mortgagor and becomes liable under the Mortgage Note; provided, however, that to
the extent any such substitution of liability agreement would be delivered by
the Servicer outside of its usual procedures for home equity loans held in its
own portfolio the Servicer shall, prior to executing and delivering such
agreement, obtain the prior written consent of the Note Insurer. The Home Equity
Loan, as assumed, shall conform in all material respects to the requirements,
representations and warranties of this Agreement. The Servicer shall notify the
Indenture Trustee that any such assumption or substitution agreement has been
completed by forwarding to the Indenture Trustee or to the Custodian on the
Indenture Trustee's behalf the original copy of such assumption or substitution
agreement (indicating the File to which it relates) which copy shall be added by
the Indenture Trustee or by the Custodian on the Indenture Trustee's behalf to
the related File and which shall, for all purposes, be considered a part of such
File to the same extent as all other documents and instruments constituting a
part thereof. The Servicer shall be responsible for recording any such
assumption or substitution agreements. In connection with any such assumption or
substitution agreement, no material term of the Home Equity Loan (including,
without limitation, the required monthly payment on the related Home Equity
Loan, the stated maturity, the outstanding principal amount or the Coupon Rate)
shall be changed nor shall any required monthly payments of principal or
interest be deferred or forgiven. Any fee collected by the Servicer or the
Sub-Servicer for consenting to any such conveyance or entering into an
assumption or substitution agreement shall be retained by or paid to the
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Home Equity Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 4.13 Realization Upon Defaulted Home Equity Loans; Workout
of Home Equity Loans.
(a) The Servicer shall foreclose upon or otherwise comparably effect
the ownership in the name of the Indenture Trustee on behalf of the Trust of
Properties relating to defaulted Home Equity Loans as to which no satisfactory
arrangements can be made for collection of Delinquent payments and which the
Servicer has not purchased pursuant to Section 4.10(b). In connection with such
foreclosure or other conversion, the Servicer shall exercise such of the rights
and powers vested in it hereunder, and use the same degree of care and skill in
their exercise or use, as prudent mortgage lenders would exercise or use under
the circumstances in the conduct of their own affairs and consistent with the
servicing standards set forth in the Fannie Mae Guide, including, but not
limited to, advancing funds for the payment of taxes, amounts due with respect
to Senior Liens, and insurance premiums. Any amounts so advanced shall
constitute "Servicing Advances" within the meaning of Section 4.09(b) hereof.
The Servicer shall sell any REO Property within 23 months of its acquisition by
the Trust, at such price as the Servicer in good faith deems necessary to comply
with this covenant unless the Servicer obtains for the Note Insurer and the
Indenture Trustee, an opinion of counsel (the expense of which opinion shall be
a Servicing Advance) experienced in federal income tax matters acceptable to the
Note Insurer and the Indenture Trustee, addressed to the Note Insurer, the
Indenture Trustee and the Servicer, to the effect that the holding by the Trust
of such REO Property for
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any greater period will not result in the imposition of taxes on the Trust.
Pursuant to its efforts to sell such REO Property, the Servicer shall either
itself or through an agent selected by the Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Owners, rent the same, or
any part thereof, as the Servicer deems to be in the best interest of the Owners
for the period prior to the sale of such REO Property. The Servicer shall take
into account the existence of any hazardous substances, hazardous wastes or
solid wastes, as such terms are defined in the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and Recovery
Act of 1976, or other federal, state or local environmental legislation, on a
Property in determining whether to foreclose upon or otherwise comparably
convert the ownership of such Property. The Servicer shall not take any such
action with respect to any Property known by the Servicer to contain such wastes
or substances or to be within one mile of the site of such wastes or substances,
without the prior written consent of the Note Insurer.
(b) The Servicer shall determine, with respect to each defaulted Home
Equity Loan and in accordance with the procedures set forth in the Fannie Mae
Guide, when it has recovered, whether through trustee's sale, foreclosure sale
or otherwise, all amounts it expects to recover from or on account of such
defaulted Home Equity Loan, whereupon such Home Equity Loan shall become a
"Liquidated Loan" and the Servicer shall promptly submit a Liquidation Report
(as defined in the Insurance Agreement) to the Note Insurer.
(c) The Servicer shall not agree to any modification, waiver or
amendment of any provision of any Home Equity Loan unless, in the Servicer's
good faith judgment, such modification, waiver or amendment would minimize the
loss that might otherwise be experienced with respect to such Home Equity Loan
and only in the event of a payment default with respect to such Home Equity Loan
or in the event that a payment default with respect to such Home Equity Loan is
reasonably foreseeable by the Servicer; provided, however, that no such
modification, waiver or amendment shall extend the maturity date of such Home
Equity Loan beyond the Remittance Period related to the Final Payment Date.
Notwithstanding anything set out in this Section 4.13(c) or elsewhere in this
Agreement to the contrary, the Servicer shall be permitted to modify, waive or
amend any provision of a Home Equity Loan if required by statute or a court of
competent jurisdiction to do so.
(d) The Servicer shall provide written notice to the Indenture Trustee
and the Note Insurer prior to the execution of any modification, waiver or
amendment of any provision of any Home Equity Loan; provided that if the Note
Insurer does not object in writing to the modification, waiver or amendment
specified in such notice within 5 Business Days after its receipt thereof, the
Servicer may effectuate such modification, waiver or amendment and shall deliver
to the Custodian, on behalf of the Indenture Trustee for deposit in the related
File, an original counterpart of the agreement relating to such modification,
waiver or amendment, promptly following the execution thereof.
(e) The Servicer has no intent to foreclose on any Mortgage based on
the delinquency characteristics as of the Closing Date; provided, that the
foregoing does not prevent the Servicer from initiating foreclosure proceedings
on any date hereafter if the facts and circumstances of such Mortgage including
delinquency characteristics in the Servicer's discretion so warrant such action.
Section 4.14 Indenture Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Home Equity Loan (including any
liquidation of such Home Equity Loan through foreclosure or otherwise), or the
receipt by the Servicer of a notification that payment
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in full will be escrowed in a manner customary for such purposes, the Servicer
shall deliver to the Custodian, on behalf of the Indenture Trustee the Fannie
Mae "Request for Release of Documents" (Fannie Mae Form 2009). Upon receipt of
such Request for Release of Documents, the Custodian, on behalf of the Indenture
Trustee shall promptly release the related File, in trust, in its reasonable
discretion to (i) the Servicer, (ii) an escrow agent or (iii) any employee,
agent or attorney of the Indenture Trustee. Upon any such payment in full, or
the receipt of such notification that such funds have been placed in escrow, the
Servicer is authorized to give, as attorney-in-fact for the Indenture Trustee
and the mortgagee under the Mortgage which secured the Mortgage Note, an
instrument of satisfaction (or assignment of Mortgage without recourse)
regarding the Property relating to such Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of payment in full, it
being understood and agreed that no expense incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Principal and Interest Account or to the Indenture Trustee. In
lieu of executing any such satisfaction or assignment, as the case may be, the
Servicer may prepare and submit to the Custodian, on behalf of the Indenture
Trustee, a satisfaction (or assignment without recourse, if requested by the
Person or Persons entitled thereto) in form for execution by the Indenture
Trustee with all requisite information completed by the Servicer; in such event,
the Custodian, on behalf of the Indenture Trustee shall execute and acknowledge
such satisfaction or assignment, as the case may be, and deliver the same with
the related File, as aforesaid.
(b) The Servicer shall have the right (upon receiving the prior written
consent of the Note Insurer) to accept applications of Mortgagors for consent to
(i) partial releases of Mortgages, (ii) alterations and (iii) removal,
demolition or division of properties subject to Mortgages. No application for
approval shall be considered by the Servicer unless: (x) the provisions of the
related Mortgage Note and Mortgage have been complied with; (y) the
Loan-to-Value Ratio and debt-to-income ratio after any release does not exceed
the Loan-to-Value Ratio and debt-to-income ratio of such Mortgage Note on the
Cut-Off Date, or Subsequent Cut-Off Date, as applicable, and any increase in the
Loan-to-Value Ratio shall not exceed 5% unless approved in writing by the Note
Insurer; and (z) the lien priority of the related Mortgage is not affected. Upon
receipt by the Indenture Trustee of an Officer's Certificate executed on behalf
of the Servicer setting forth the action proposed to be taken in respect of a
particular Home Equity Loan and certifying that the criteria set forth in the
immediately preceding sentence have been satisfied, the Indenture Trustee shall
execute and deliver to the Servicer the consent or partial release so requested
by the Servicer. A proposed form of consent or partial release, as the case may
be, shall accompany any Officer's Certificate delivered by the Servicer pursuant
to this paragraph. The Servicer shall notify the Note Insurer and the Rating
Agencies if an application is approved under clause (y) above without approval
in writing by the Note Insurer.
Section 4.15 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the related Servicing Fee with respect to each
Home Equity Loan. Additional servicing compensation in the form of prepayment
charges, release fees, bad check charges, assumption fees, late payment charges,
prepayment penalties, or any other servicing-related fees, Net Liquidation
Proceeds not required to be deposited in the Principal and Interest Account
pursuant to Section 4.08(c)(ii) and similar items may, to the extent collected
from Mortgagors, be retained by the Servicer, unless a successor Servicer is
appointed pursuant to Section 4.20 hereof, in which case the successor Servicer
shall be entitled to such fees as are agreed upon by the Indenture Trustee, the
Note Insurer, the successor Servicer and the majority of the Percentage
Interests of the Certificates.
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The right to receive the Servicing Fee may not be transferred in whole
or in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement.
Section 4.16 Annual Statement as to Compliance.
The Servicer, at its own expense, will deliver to the Indenture
Trustee, the Note Insurer, the Depositor, the Issuer, and the Rating Agencies,
on or before April 30 of each year, commencing in 1999, an Officer's Certificate
stating, as to each signer thereof, that (i) a review of the activities of the
Servicer during such preceding calendar year and of performance under this
Agreement has been made under such officers' supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Servicer has fulfilled
all its obligations under this Agreement for such year, or, if there has been a
default in the fulfillment of all such obligations, specifying each such default
known to such officers and the nature and status thereof including the steps
being taken by the Servicer to remedy such default.
The Servicer shall deliver to the Issuer, the Indenture Trustee, the
Note Insurer and the Rating Agencies, promptly after having obtained knowledge
thereof but in no event later than five Business Days thereafter, written notice
by means of an Officer's Certificate of any event which with the giving of
notice or the lapse of time would become a Servicer Termination Event.
Section 4.17 Annual Independent Certified Public Accountants'
Reports.
On or before April 30 of each year, commencing in 1999, the Servicer,
at its own expense (or if the Indenture Trustee is then acting as Servicer, at
the expense of the Seller, which in no event shall exceed $1,000 per annum),
shall cause to be delivered to the Issuer, the Indenture Trustee, the Note
Insurer, the Depositor, and the Rating Agencies a letter or letters of a firm of
independent, nationally recognized certified public accountants reasonably
acceptable to the Note Insurer stating that such firm has examined the
Servicer's overall servicing operations in accordance with the requirements of
the Uniform Single Attestation Procedure for Mortgage Bankers, and stating such
firm's conclusions relating thereto.
Section 4.18 Access to Certain Documentation and Information
Regarding the Home Equity Loans.
The Servicer shall provide to the Indenture Trustee, the Note Insurer,
the Office of Thrift Supervision (the "OTS"), the FDIC and the supervisory
agents and examiners of each of the FDIC and the OTS (which, in the case of
supervisory agents and examiners, may be required by applicable state and
federal regulations) access to the documentation regarding the Home Equity
Loans, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer
designated by it.
Section 4.19 Assignment of Agreement.
Other than with respect to entering into Sub-Servicing Agreements
pursuant to Section 4.03 hereof, the Servicer may not assign its obligations
under this Agreement, in whole or in part, unless it shall have first obtained
the written consent of the Indenture Trustee and the Note Insurer, which such
consent shall not be unreasonably withheld; provided, however, that any assignee
must meet the eligibility requirements set forth in Section 4.20(h) hereof for a
successor servicer.
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Section 4.20 Removal of Servicer; Retention of Servicer;
Resignation of Servicer.
(a) The Note Insurer or the Indenture Trustee (with the prior written
consent of the Note Insurer) (or, except in the case of item (vi) below, the
Owners, with the consent of the Note Insurer) may remove the Servicer upon the
occurrence of any of the following events (each a "Servicer Termination Event"):
(i) The Servicer shall (A) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian or similar
entity with respect to itself or its property, (B) admit in writing its
inability to pay its debts generally as they become due, (C) make a
general assignment for the benefit of creditors, (D) be adjudicated a
bankrupt or insolvent, (E) commence a voluntary case under the federal
bankruptcy laws of the United States of America or file a voluntary
petition or answer seeking reorganization, an arrangement with
creditors or an order for relief or seeking to take advantage of any
insolvency law or file an answer admitting the material allegations of
a petition filed against it in any bankruptcy, reorganization or
insolvency proceeding or (F) take corporate action for the purpose of
effecting any of the foregoing; or
(ii) If without the application, approval or consent of the
Servicer, a proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking in respect of the Servicer
an order for relief or an adjudication in bankruptcy, reorganization,
dissolution, winding up, liquidation, a composition or arrangement with
creditors, a readjustment of debts, the appointment of a trustee,
receiver, liquidator or custodian or similar entity with respect to the
Servicer or of all or any substantial part of its assets, or other like
relief in respect thereof under any bankruptcy or insolvency law, and,
if such proceeding is being contested by the Servicer in good faith,
the same shall (A) result in the entry of an order for relief or any
such adjudication or appointment or (B) continue undismissed or pending
and unstayed for any period of seventy-five (75) consecutive days; or
(iii) The Servicer shall fail to perform any one or more of
its material obligations hereunder and shall continue in default
thereof for a period of thirty (30) days (one (1) Business Day in the
case of a delay in making a payment required of the Servicer under this
Agreement) after the earlier of (A) actual knowledge of an officer of
the Servicer or (B) receipt of notice from the Indenture Trustee or the
Note Insurer of said failure; provided, however, that if the Servicer
can demonstrate to the reasonable satisfaction of the Note Insurer that
it is diligently pursuing remedial action, then the cure period may be
extended with the written approval of the Note Insurer; or
(iv) The Servicer shall fail to cure any breach of any of its
representations and warranties set forth in Section 2.02 which
materially and adversely affects the interests of the Owners or the
Note Insurer for a period of sixty (60) days after the earlier of the
Servicer's discovery or receipt of notice thereof; provided, however,
that if the Servicer can demonstrate to the reasonable satisfaction of
the Note Insurer that it is diligently pursuing remedial action, then
the cure period may be extended with the written approval of the Note
Insurer; or
(v) The merger, consolidation or other combination of the
Servicer with or into any other entity, unless (A) the Servicer or an
Affiliate of the Servicer is the surviving entity of such combination
or (B) the surviving entity (I) is servicing at least $307,785,257 of
home equity loans that are similar to the Home Equity Loans, (II) has
equity of not less than $10,000,000 (as determined in accordance with
generally acceptable account principles), (III) is consented to by the
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Note Insurer (such consent not to be unreasonably withheld) and (IV)
agrees to assume the Servicer's obligations thereunder; or
(vi) The failure of the Servicer (except the Indenture Trustee
in its capacity as successor Servicer) to satisfy the Servicer
Termination Test.
(b) Upon the occurrence of a Servicer Termination Event, the Servicer
shall act as servicer under this Agreement, subject to the right of removal set
forth in subsection (a) hereof, for an initial period commencing on the date on
which such Servicer Termination Event occurred and ending on the last day of the
calendar quarter in which such Servicer Termination Event occurred, which period
shall be extended for a succeeding quarterly period on December 31, March 31,
June 30 and September 30 of each year as provided below (each such quarterly
period for which the Servicer shall be designated to act as servicer hereunder,
a "Term of Service"); provided that nothing in this Section 4.20(b) shall
prohibit the Note Insurer or the Indenture Trustee from removing the Servicer
pursuant to Section 4.20(a). Notwithstanding the foregoing, the Note Insurer
may, in its sole discretion, extend the period for which the Servicer is to act
as such for a period in excess of one quarter (provided such extension shall be
an additional one or more quarters), but any such extension shall be revocable
at any time by the Note Insurer upon written notice delivered to the Indenture
Trustee and the Servicer at least fifteen days prior to the expiration of the
related quarterly period.
(c) The Note Insurer agrees to use its best efforts to inform the
Indenture Trustee of any materially adverse information regarding the Servicer's
servicing activities that comes to the attention of the Note Insurer from time
to time.
(d) The Servicer shall not resign from the obligations and duties
hereby imposed on it, except upon determination that its duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it, the other activities
of the Servicer so causing such a conflict being of a type and nature carried on
by the Servicer at the date of this Agreement. Any such determination permitting
the resignation of the Servicer shall be evidenced by an opinion of counsel
acceptable to the Indenture Trustee and the Note Insurer at the expense of the
Servicer to such effect which shall be delivered to the Indenture Trustee and
the Note Insurer.
(e) No removal or resignation of the Servicer shall become effective
until the Indenture Trustee or a successor Servicer shall have assumed the
Servicer's responsibilities and obligations in accordance with this Section.
(f) Upon removal or resignation of the Servicer, the Servicer at its
own expense also shall promptly deliver or cause to be delivered to a successor
servicer or the Indenture Trustee all the books and records (including, without
limitation, records kept in electronic form) that the Servicer has maintained
for the Home Equity Loans, including all tax bills, assessment notices,
insurance premium notices and all other documents as well as all original
documents then in the Servicer's possession.
(g) Any collections then being held by the Servicer prior to its
removal and any collections received by the Servicer after removal or
resignation shall be endorsed by it to the Indenture Trustee and remitted
directly and immediately to the Indenture Trustee or the successor Servicer.
(h) Upon removal or resignation of the Servicer, the Indenture Trustee
may (i) solicit bids for a successor servicer as described below or (ii) shall
appoint the Backup Servicer as Servicer. If the Indenture Trustee elects to
solicit bids for a successor Servicer, the Indenture Trustee agrees to act as
Backup Servicer
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during the solicitation process and shall assume all duties of the Servicer
(except as otherwise provided in this Agreement). The Indenture Trustee shall,
if it is unable to obtain a qualifying bid and is prevented by law from acting
as Servicer, appoint, or petition a court of competent jurisdiction to appoint,
any housing and home finance institution, bank or mortgage servicing institution
which has been designated as an approved seller-servicer by Fannie Mae or FHLMC
for first and second home equity loans and having equity of not less than
$5,000,000 (or such lower level as may be acceptable to the Note Insurer), as
determined in accordance with generally accepted accounting principles and
acceptable to the Note Insurer as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder. The compensation of any successor Servicer (other than
the Indenture Trustee in its capacity as successor Servicer) so appointed shall
be the amount agreed to between the successor Servicer, the Note Insurer and the
majority of the Percentage Interests of the Certificates, (up to a maximum of
0.50% per annum on each Home Equity Loan) together with the other servicing
compensation in the form of assumption fees, late payment charges or otherwise
as provided in Sections 4.08 and 4.15; provided, however, that if the Indenture
Trustee becomes the successor Servicer it shall receive as its compensation the
same compensation paid to the Servicer immediately prior to the Servicer's
removal or resignation; provided, further, however, that if the Indenture
Trustee acts as successor Servicer then the Servicer agrees to pay to the
Indenture Trustee at such time that the Indenture Trustee becomes such successor
Servicer a set-up fee of twenty-five dollars ($25.00) for each Home Equity Loan
then included in the Trust Estate. The amount payable in excess of twenty-five
dollars ($25.00) per Home Equity Loan, if any, shall be payable to the successor
Servicer and reimbursable pursuant to Section 3.03(b)(iii)(C) hereof. The
Indenture Trustee shall be obligated to serve as successor Servicer whether or
not the fee described in this section is paid by the Servicer, but shall in any
event be entitled to receive, and to enforce payment of, such fee from the
Servicer.
(i) In the event the Indenture Trustee elects to solicit bids as
provided above, the Indenture Trustee shall solicit, by public announcement,
bids from housing and home finance institutions, banks and mortgage servicing
institutions meeting the qualifications set forth above. Such public
announcement shall specify that the successor Servicer shall be entitled to
servicing compensation in accordance with clause (h) above, together with the
other servicing compensation in the form of assumption fees, late payment
charges or otherwise as provided in Sections 4.08 and 4.15. Within thirty days
after any such public announcement, the Indenture Trustee shall negotiate and
effect the sale, transfer and assignment of the servicing rights and
responsibilities hereunder to the qualified party submitting the highest
satisfactory bid as to the price it will pay to obtain servicing. The Indenture
Trustee shall deduct from any sum received by the Indenture Trustee from the
successor to the Servicer in respect of such sale, transfer and assignment all
costs and expenses of any public announcement and of any sale, transfer and
assignment of the servicing rights and responsibilities hereunder. After such
deductions, the remainder of such sum less any amounts due the Indenture Trustee
or the Trust from the Servicer shall be paid by the Indenture Trustee to the
Servicer at the time of such sale, transfer and assignment to the Servicer's
successor.
(j) The Indenture Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession, including the notification to all Mortgagors of the transfer of
servicing. The Servicer agrees to cooperate with the Indenture Trustee and any
successor Servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Indenture
Trustee or such successor Servicer, as applicable, all documents and records
reasonably requested by it to enable it to assume the Servicer's functions
hereunder and shall promptly also transfer to the Indenture Trustee or such
successor Servicer, as applicable, all amounts which then have been or should
have been deposited in the Principal and Interest Account by the Servicer or
which are thereafter received with respect to the Home Equity Loans. Neither the
Indenture Trustee nor any other successor Servicer shall be held liable by
reason of any failure to make, or any delay
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in making, any distribution hereunder or any portion thereof caused by (i) the
failure of the Servicer to deliver, or any delay in delivering, cash, documents
or records to it, or (ii) restrictions imposed by any regulatory authority
having jurisdiction over the Servicer. If the Servicer resigns or is replaced
hereunder, the Servicer agrees to reimburse the Trust, the Owners and the Note
Insurer for the costs and expenses associated with the transfer of servicing to
the replacement Servicer, but subject to a maximum reimbursement to all such
parties in the amount of twenty-five dollars ($25.00) for each Home Equity Loan
then included in the Trust Estate. The amount payable in excess of twenty-five
dollars ($25.00) per Home Equity Loan, if any, shall be payable to the successor
Servicer and reimbursable pursuant to Section 3.03(b)(iii)(C) hereof.
(k) The Indenture Trustee or any other successor Servicer, upon
assuming the duties of Servicer hereunder, shall immediately (i) record all
assignments of Home Equity Loans not previously recorded in the name of the
Indenture Trustee pursuant to Section 2.05(b)(ii) as a result of an opinion of
counsel and (ii) make all Delinquency Advances and Compensating Interest
payments and deposit them to the Principal and Interest Account which the
Servicer has theretofore failed to remit with respect to the Home Equity Loans;
provided, however, that if the Indenture Trustee is acting as successor
Servicer, the Indenture Trustee shall only be required to make Delinquency
Advances (including the Delinquency Advances described in this clause (k)) if,
in the Indenture Trustee's reasonable good faith judgment, such Delinquency
Advances will ultimately be recoverable from the Home Equity Loans.
(l) The Servicer which is being removed or is resigning shall give
notice to the Mortgagors, to Moody's and to Standard & Poor's of the transfer of
the servicing to the successor.
(m) The Indenture Trustee shall give notice to the Note Insurer, the
Owners, the Owner Trustee, the Seller, Moody's and Standard & Poor's of the
occurrence of any event described in paragraph (a) above of which the Indenture
Trustee is aware.
Section 4.21 Inspections by Note Insurer; Errors and Omissions
Insurance.
(a) At any reasonable time and from time to time upon reasonable
notice, the Indenture Trustee, the Note Insurer, any Owner or the Issuer, or any
agents thereof may inspect the Servicer's servicing operations and discuss the
servicing operations of the Servicer during the Servicer's normal business hours
with any of its officers or directors; provided, however, that the costs and
expenses incurred by the Servicer or its agents or representatives in connection
with any such examinations or discussions shall be paid by the Servicer.
(b) The Servicer (including the Indenture Trustee if it shall become
the Servicer hereunder) agrees to maintain errors and omissions coverage and a
fidelity bond, each at least to the extent required by Section 305 of Part I of
Fannie Mae Guide or any successor provision thereof; provided, however, that in
any event that the fidelity bond or the errors and omissions coverage is no
longer in effect, the Indenture Trustee shall promptly give such notice to the
Note Insurer, the Issuer and the Owners.
Section 4.22 Reserved.
Section 4.23 Adjustable Rate Home Equity Loans.
The Servicer shall enforce each Home Equity Loan in accordance with its
terms and shall timely calculate, record, report and apply all interest rate
adjustments in accordance with the related Mortgage Note. The Servicer's records
shall, at all times, reflect the then Coupon Rate and monthly payment and the
Servicer
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shall timely notify the Mortgagor of any changes to the Coupon Rate or the
Mortgagor's monthly payment. If the Servicer fails to make either a timely or
accurate adjustment to the Coupon Rate or monthly payment or to notify the
Mortgagor of such adjustments, upon the Servicer's discovery of such error and
such continued failure, the Servicer shall pay from its own funds any shortage.
If the Servicer's continued failure after notice thereof to make a scheduled
change affects the Trust's rights to make future adjustments under the terms of
such Home Equity Loan, the Servicer shall repurchase such Home Equity Loan in
accordance with the provisions of Article II hereof. Any amounts paid by the
Servicer pursuant to this Section shall not be an advance and shall not be
reimbursable from the proceeds of any Home Equity Loan.
END OF ARTICLE IV
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ARTICLE V
TERMINATION
Section 5.01 Termination.
This Agreement will terminate upon notice to the Indenture Trustee of
either: (a) the later of (i) the satisfaction and discharge of the Indenture
pursuant to Section 4.1 of the Indenture or (ii) the disposition of all funds
with respect to the last Home Equity Loan and the remittance of all funds due
hereunder and the payment of all amounts due and payable to the Indenture
Trustee, the Owner Trustee, the Issuer, the Custodian and the Note Insurer; or
(b) the mutual consent of the Servicer, the Seller, the Depositor, the Note
Insurer and all Owners in writing.
Section 5.02 Termination Upon Option of Holders of Certificates.
(a) On any Monthly Remittance Date after the Redemption Date, the
holders of a majority of the Percentage Interests represented by the
Certificates then Outstanding may effect early redemption or termination of the
Notes by providing notice thereof to the Indenture Trustee, Owner Trustee and
Note Insurer. Such holders may purchase the Trust Estate at a price equal to (x)
in the case of Home Equity Loans 100% of the aggregate Loan Balances of the
related Home Equity Loans and (y) in the case of REO Properties, the appraised
value of such properties (such appraisal to be conducted by an appraiser
mutually agreed upon by the Servicer and the Indenture Trustee) as of the day of
purchase minus amounts remitted from the Principal and Interest Account to the
Note Account representing collections of principal on the Home Equity Loans
during the current Remittance Period, plus one month's interest on such amount
computed at the Redemption Date Pass-Through Rate, plus the Available Funds Cap
Carry-Forward Amount, if any, plus all accrued and unpaid Servicing Fees plus
the aggregate amount of any unreimbursed Delinquency Advances and Servicing
Advances and Delinquency Advances which the Servicer has theretofore failed to
remit plus all amounts owed to the Note Insurer pursuant to the Insurance
Agreement (such price, the "Termination Price") provided, that in any case such
price shall not be less than the then outstanding Note Principal Balance plus
all amounts owed to the Note Insurer pursuant to the Insurance Agreement. In
connection with such purchase, the Servicer shall remit to the Indenture Trustee
all amounts then on deposit in the Principal and Interest Account for deposit to
the Note Account, which deposit shall be deemed to have occurred immediately
preceding such purchase.
(b) Promptly following any purchase described in this Section 5.02, the
Indenture Trustee will release the Files to the holders of such Certificates or
otherwise upon their order, in a manner similar to that described in Section
4.14 hereof.
(c) If the holders of the Certificates decline to exercise the option
to purchase the Home Equity Loans and REO Properties remaining in the Trust
Estate pursuant to Section 5.02(a), then, provided that IMC Mortgage Company is
not then the Servicer, the Note Insurer may do so subject to terms set out in
Section 5.02.
Section 5.03 Disposition of Proceeds.
The Indenture Trustee shall, upon receipt thereof, deposit the proceeds
of any liquidation of the Trust Estate pursuant to this Article V to the Note
Account; provided, however, that any amounts representing unreimbursed
Delinquency Advances and Servicing Advances theretofore funded by the Servicer
from the Servicer's own funds shall be paid by the Indenture Trustee to the
Servicer from the proceeds of the Trust Estate.
END OF ARTICLE V
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ARTICLE VI
MISCELLANEOUS
Section 6.01 Acts of Owners.
Except as otherwise specifically provided herein, whenever Owner
action, consent or approval is required under this Agreement, such action,
consent or approval shall be deemed to have been taken or given on behalf of,
and shall be binding upon, all Owners if the Owners of the majority of the
Percentage Interest of the Notes agree to take such action or give such consent
or approval.
Section 6.02 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of the
counties or other comparable jurisdictions in which any or all of the Properties
are situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicer at the Owners' expense on
direction of the Owners of the majority of the Percentage Interest of the Notes
or the Note Insurer, but only when accompanied by an opinion of counsel to the
effect that such recordation materially and beneficially affects the interests
of the Owners or is necessary for the administration or servicing of the Home
Equity Loans.
Section 6.03 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated
as herein provided.
Section 6.04 Successors and Assigns.
All covenants and agreements in this Agreement by any party hereto
shall bind its successors and assigns, whether so expressed or not.
Section 6.05 Severability.
In case any provision in this Agreement or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 6.06 Governing Law; Submission to Jurisdiction.
(a) In view of the fact that Owners are expected to reside in many
states and outside the United States and the desire to establish with certainty
that this Agreement will be governed by and construed and interpreted in
accordance with the law of a state having a well-developed body of commercial
and financial law relevant to transactions of the type contemplated herein, this
Agreement and each Note shall be construed in accordance with and governed by
the laws of the State of New York applicable to agreements made and to be
performed therein, without giving effect to the conflicts of law principles
thereof.
(b) The parties hereto hereby irrevocably submit to the jurisdiction of
the United States District Court for the Southern District of New York and any
court in the State of New York located in the City and County of New York, and
any appellate court from any thereof, in any action, suit or proceeding brought
against it or in connection with this Agreement or any of the related documents
or the transactions
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contemplated hereunder or for recognition or enforcement of any judgment, and
the parties hereto hereby irrevocably and unconditionally agree that all claims
in respect of any such action or proceeding may be heard or determined in such
New York State court or, to the extent permitted by law, in such federal court.
The parties hereto agree that a final judgment in any such action, suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. To the extent
permitted by applicable law, the parties hereto hereby waive and agree not to
assert by way of motion, as a defense or otherwise in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such courts, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that the
related documents or the subject matter thereof may not be litigated in or by
such courts.
(c) Each of the Depositor, the Issuer, the Seller and the Servicer
hereby irrevocably appoints and designates the Indenture Trustee as its true and
lawful attorney and duly authorized agent for acceptance of service of legal
process with respect to any action, suit or proceeding set forth in paragraph
(b) above. Each of the Issuer, the Seller and the Servicer agrees that service
of such process upon the Indenture Trustee shall constitute personal service of
such process upon it.
(d) Nothing contained in this Agreement shall limit or affect the right
of the Depositor, the Issuer, the Seller, the Servicer or the Note Insurer or
third-party beneficiary hereunder, as the case may be, to serve process in any
other manner permitted by law or to start legal proceedings relating to any of
the Home Equity Loans against any Mortgagor in the courts of any jurisdiction.
Section 6.07 Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 6.08 Amendment.
(a) The Indenture Trustee, the Depositor, the Issuer, the Seller and
the Servicer, may at any time and from time to time, with the prior written
approval of the Note Insurer but without the giving of notice to or the receipt
of the consent of the Owners, amend this Agreement, and the Indenture Trustee
shall consent to the amendment for the purposes of (i) curing any ambiguity,
(ii) correcting or supplementing any provisions of this Agreement which are
inconsistent with any other provisions of this Agreement or adding provisions to
this Agreement which are not inconsistent with the provisions of this Agreement,
(iii) adding any other provisions with respect to matters or questions arising
under this Agreement, or (iv) for any other purpose, provided that such
amendment shall not adversely affect in any material respect any Owner. Any such
amendment shall be deemed not to adversely affect in any material respect any
Owner if there is delivered to the Indenture Trustee written notification from
each Rating Agency that such amendment will not cause such Rating Agency to
reduce its then current rating assigned to the Notes without regard to the Note
Insurance Policy. Notwithstanding anything to the contrary, no such amendment
shall (A) change in any manner the amount of, or delay the timing of, payments
which are required to be distributed to any Owner without the consent of the
Owner of such Note, (B) change the percentages of Percentage Interest which are
required to consent to any such amendments, without the consent of the Owners of
all Notes affected then outstanding or (C) which affects in any manner the terms
or provisions of the Note Insurance Policy.
(b) This Agreement may also be amended from time to time by the Seller,
the Servicer, the Depositor and the Issuer by written agreement, with the prior
written consent of the Owners of the majority
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of the Percentage Interests in the Notes and the Note Insurer, 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
Owners; provided, however, that no such amendment shall (i) reduce in any manner
the amount of, or delay the timing of, collections of payments on Home Equity
Loans or distributions which are required to be made on any Note, without the
consent of the holders of 100% of the Notes, (ii) adversely affect in any
material respect the interests of the holders of the Notes in any manner other
than as described in (i), without the consent of the holders of 100% of the
Notes, or (iii) reduce the percentage of Notes, the holders of which are
required to consent to any such amendment, without the consent of the holders of
100% of the Notes.
(c) The Note Insurer and the Rating Agencies shall be provided by the
Seller with copies of any amendments to this Agreement, together with copies of
any opinions or other documents or instruments executed in connection therewith.
Section 6.09 Specification of Certain Tax Matters.
Each Owner shall provide the Indenture Trustee with a completed and
executed From W-9 prior to purchasing a Note. The Indenture Trustee shall comply
with all requirements of the Code, and applicable state and local law, with
respect to the withholding from any distributions made to any Owner of any
applicable withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
Section 6.10 The Note Insurer.
Any right conferred to the Note Insurer hereunder shall be suspended
and shall run to the benefit of the Owners during any period in which there
exists a Note Insurer Default; provided, that the right of the Note Insurer to
receive the Premium Amount shall not be suspended if such Note Insurer Default
was a default other than a default under clause (a) of the definition thereof.
At such time as the Notes are no longer Outstanding hereunder and the Note
Insurer has received all Reimbursement Amounts, the Note Insurer's rights
hereunder shall terminate.
Section 6.11 Third Party Rights.
The Indenture Trustee, the Seller, the Issuer, the Depositor, the
Servicer, and the Owners agree that the Note Insurer shall be deemed a
third-party beneficiary of this Agreement as if it were a party hereto.
Section 6.12 Notices.
All notices hereunder shall be given as follows, until any superseding
instructions are given to all other Persons listed below:
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The Indenture Trustee: The Chase Manhattan Bank
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attention: Advanced Structured Products
Group
(212) 946-8600
(212) 946-3240 - Fax
The Depositor IMC Securities, Inc.
5901 East Fowler Avenue
Tampa, FL 33617-2362
(813) 984-8801
(813) 984-2595 - Fax
Issuer: IMC Home Equity Loan Owner Trust 1997-8
c/o Wilmington Trust Company, as Owner
Trustee
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Tel: (302)
Fax: (302)
The Servicer
and Seller: IMC Mortgage Company
5901 East Fowler Avenue
Tampa, FL 33617-2362
(813) 984-8801
(813) 984-2595 - Fax
The Note
Insurer: MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio Management -
Structured Finance (IPM-SF) (IMC
Adjustable Rate Home Equity Loan
Asset-Backed Notes, Series 1997-8)
Tel: (914) 765-3784
Fax: (914) 765-3810
The Underwriters PaineWebber Incorporated
1285 Avenue of the Americas
11th Floor
New York, New York 10019
Attention: Barbara Dawson (cc: John Fearey)
Tel: (212) 713-8601
Fax: (212) 713-7999
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Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: Asset-Backed Securities
Tel: (212) 272-2000
Fax: (212) 272-7294
Moody's: Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: The Residential Mortgage
Monitoring Department
Tel: (212) 553-0300
Fax: (212) 553-0355
Standard & Poor's: Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies
26 Broadway
15th Floor
New York, New York 10004
Attention: Residential Mortgage Group
Tel: (212) 208-8000
Fax: (212) 208-8365
Section 6.13 Benefits of Agreement.
Nothing in this Agreement or in the Notes, expressed or implied, shall
give to any Person, other than the Owners, the Note Insurer and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
Section 6.14 Legal Holidays.
In any case where the date of any Payment Date, any other date on which
any distribution to any Owner is proposed to be paid, or any date on which a
notice is required to be sent to any Person pursuant to the terms of this
Agreement (with the exception of any Monthly Remittance Date or any Monthly
Reporting Date) shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Agreement) payment or mailing need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made or mailed on the nominal date of any such Payment
Date, or such other date for the payment of any distribution to any Owner or the
mailing of such notice, as the case may be, and no interest shall accrue for the
period from and after any such nominal date, provided such payment is made in
full on such next succeeding Business Day. In any case where the date of any
Monthly Remittance Date or any Monthly Reporting Date shall not be a Business
Day, then payment or mailing need not be made on such date, but must be made on
the preceding Business Day.
Section 6.15 Usury.
The amount of interest payable or paid on any Note under the terms of
this Agreement shall be limited to an amount which shall not exceed the maximum
nonusurious rate of interest allowed by the applicable laws of the State of New
York or any applicable law of the United States permitting a higher
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maximum nonusurious rate that preempts such applicable New York laws, which
could lawfully be contracted for, charged or received (the "Highest Lawful
Rate"). In the event any payment of interest on any Note exceeds the Highest
Lawful Rate, the Trust stipulates that such excess amount will be deemed to have
been paid to the Owner of such Note as a result of an error on the part of the
Indenture Trustee acting on behalf of the Trust and the Owner receiving such
excess payment shall promptly, upon discovery of such error or upon notice
thereof from the Indenture Trustee on behalf of the Trust, refund the amount of
such excess or, at the option of such Owner, apply the excess to the payment of
principal of such Note, if any, remaining unpaid. In addition, all sums paid or
agreed to be paid to the Indenture Trustee for the benefit of Owners of Notes
for the use, forbearance or detention of money shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such Notes.
Section 6.16 No Petition.
The Indenture Trustee, by entering into this Agreement, and each Owner,
by accepting a Note, hereby covenant and agree that they will not at any time
institute against the Seller, the Servicer, the Depositor or the Issuer, or join
in any institution against the Seller, the Servicer, the Depositor or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Agreement or any of the Operative Documents.
END OF ARTICLE VI
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ARTICLE VII
CERTAIN MATTERS REGARDING THE NOTE INSURER
Section 7.01 Trust Estate and Accounts Held for Benefit of the
Note Insurer.
The Indenture Trustee shall hold the Trust Estate for the benefit of
the related Owners and the Note Insurer and all references in this Agreement and
in the Notes to the benefit of Owners of the Notes shall be deemed to include
the Note Insurer. The Indenture Trustee shall cooperate in all reasonable
respects with any reasonable request by the Note Insurer for action to preserve
or enforce the Note Insurer's rights or interests under this Agreement and the
Notes.
The Servicer hereby acknowledges and agrees that it shall service and
administer the Home Equity Loans and any REO Properties, and shall maintain the
Principal and Interest Account, for the benefit of the Owners and for the
benefit of the Note Insurer, and all references in this Agreement to the benefit
of or actions on behalf of the Owners shall be deemed to include the Note
Insurer. Unless a Note Insurer Default exists, the Servicer shall not terminate
any Sub-Servicing Agreements without cause without the prior consent of the Note
Insurer.
Section 7.02 Claims Upon the Policy; Policy Payments Account.
(a) In the event that an Insured Payment becomes due pursuant
to the terms of the Note Insurance Policy, the Indenture Trustee shall submit a
Notice (in the form attached to such Note Insurance Policy) in accordance with
the terms of such Note Insurance Policy.
(b) The Indenture Trustee shall establish a separate special
purpose trust account for the benefit of the Owners of the Notes and the Note
Insurer referred to herein as the "Policy Payments Account" over which the
Indenture Trustee shall have exclusive control and sole right of withdrawal. The
Indenture Trustee shall deposit any amount paid under a Note Insurance Policy in
the Policy Payments Account and distribute such amount only for purposes of
payment to the Owners of the Notes of the Insured Payments for which a claim was
made and such amount may not be applied to satisfy any costs, expenses or
liabilities of the Servicer, the Seller, the Depositor, the Custodian, the
Indenture Trustee or the Trust. Amounts paid under the Note Insurance Policy
shall be transferred to the Note Account in accordance with the next succeeding
paragraph and disbursed by the Indenture Trustee to Owners of the Notes in
accordance with Section 3.03. It shall not be necessary for such payments to be
made by checks or wire transfers separate from the checks or wire transfers used
to pay the Insured Payments with other funds available to make such payment.
However, the amount of any payment of principal of or interest on the Notes to
be paid from funds transferred from the Policy Payments Account shall be noted
as provided in paragraph (c) below in the Register and in the statement to be
furnished to Owners of the Notes pursuant to Section 3.08. Funds held in the
Policy Payments Account shall not be invested by the Indenture Trustee.
On any Payment Date with respect to which a claim has been
made under the Note Insurance Policy, the amount of funds received by the
Indenture Trustee as a result of any claim under the Note Insurance Policy, to
the extent required to make the Insured Payment on such Payment Date shall be
withdrawn from the Policy Payments Account and deposited in the Note Account and
applied by the Indenture Trustee, together with the other funds to be withdrawn
from the Note Account, directly to the payment in full of the Insured Payment
due on the Notes. Funds received by the Indenture Trustee as a result of any
claim under the Note Insurance Policy shall be deposited by the Indenture
Trustee in the Policy Payments Account and used solely for payment to the Owners
of the Notes may not be applied to satisfy any costs, expenses or liabilities of
the Servicer, the Seller, the Depositor, the Custodian, the Indenture Trustee
69
<PAGE> 75
or the Trust. Any funds remaining in the Policy Payments Account on the first
Business Day following a Payment Date shall be remitted to the Note Insurer,
pursuant to the instructions of the Note Insurer, by the end of such Business
Day.
(c) The Indenture Trustee shall keep a complete and accurate
record of the amount of interest and principal paid in respect of any Note from
moneys received under the Note Insurance Policy. The Note Insurer shall have the
right to inspect such records at reasonable times during normal business hours
upon one Business Day's prior notice to the Indenture Trustee.
(d) The Indenture Trustee shall promptly notify the Note
Insurer and the Fiscal Agent (as defined in the Note Insurance Policy) of any
proceeding or the institution of any action, of which an Authorized Officer of
the Indenture Trustee has actual knowledge, seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership or
similar law (a "Preference Claim") of any distribution made with respect to the
Notes. Each Owner of a Note by its purchase of such Note, the Servicer and the
Indenture Trustee hereby agree that, the Note Insurer (so long as no Note
Insurer Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including without limitation, (i) the direction of any appeal
of any order relating to such Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the Note Insurer shall be subrogated to the
rights of the Servicer, the Indenture Trustee and each Owner of a Note in the
conduct of any such Preference Claim, including, without limitation, all rights
of any party to an adversary proceeding action with respect to any court order
issued in connection with any such Preference Claim.
Section 7.03 Effect of Payments by the Note Insurer; Subrogation.
Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on any of the Notes which is made with
moneys received pursuant to the terms of the Note Insurance Policy shall not be
considered payment of such Notes from the Trust and shall not result in the
payment of or the provision for the payment of the principal of or interest on
such Notes within the meaning of Section 3.03. The Depositor, the Servicer and
the Indenture Trustee acknowledge, and each Owner by its acceptance of a Note
agrees, that without the need for any further action on the part of the Note
Insurer, the Depositor, the Servicer, the Indenture Trustee or the Registrar (a)
to the extent the Note Insurer makes payments, directly or indirectly, on
account of principal of or interest on any Notes to the Owners of such Notes,
the Note Insurer will be fully subrogated to the rights of such Owners to
receive such principal and interest from the Trust and (b) the Note Insurer
shall be paid such principal and interest but only from the sources and in the
manner provided herein for the payment of such principal and interest.
The Indenture Trustee, the Seller, the Depositor and the
Servicer shall cooperate in all respects with any reasonable request by the Note
Insurer for action to preserve or enforce the Note Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests of
the Owners as otherwise set forth therein.
Section 7.04 Notices to the Note Insurer.
All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to any other party hereto or to any of the
Owners shall also be sent to the Note Insurer.
70
<PAGE> 76
Section 7.05 Rights to the Note Insurer To Exercise Rights of
Owners.
By accepting its Note, each Owner agrees that unless a Note
Insurer Default exists, the Note Insurer shall have the right to exercise all
rights of the Owners as specified under this Agreement without any further
consent of the Owners.
END OF ARTICLE VII
71
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IN WITNESS WHEREOF, the Issuer, the Depositor, the Seller, the Servicer
and the Indenture Trustee have caused this Agreement to be duly executed by
their respective officers thereunto duly authorized, all as of the day and year
first above written.
IMC HOME EQUITY LOAN
OWNER TRUST 1997-8
By: Wilmington Trust Company,
as Owner Trustee
By: /s/ Donald G. MacKelcan
Title: Donald G. MacKelcan, Assistant
Vice President
IMC SECURITIES, INC.,
as Depositor
By: /s/ Thomas G. Middleton
Title: Thomas G. Middleton, President
IMC MORTGAGE COMPANY,
as Servicer and Seller
By: /s/ Thomas G. Middleton
Title: Thomas G. Middleton, President
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By: /s/ Ann Marie Jose
Title: Ann Marie Jose, Trust Officer
72
<PAGE> 78
STATE OF FLORIDA )
: ss.:
COUNTY OF HILLSBOROUGH )
On the 30th day of December, 1997, before me personally came Thomas G.
Middleton to me known, who, being by me duly sworn, did depose and say that he
resides at 11508 Orilla del Rio Place, Tampa, FL 33617; that he is President of
IMC Securities, Inc., a Delaware corporation; and that he signed his name
thereto by order of the respective Boards of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ Jennifer L. Ellis
Notary Public
<PAGE> 79
STATE OF FLORIDA )
: ss.:
COUNTY OF HILLSBOROUGH )
On the 30th day of December, 1997, before me personally came Thomas G.
Middleton, to me known, who, being by me duly sworn, did depose and say that
he/she resides at 11508 Orilla del Rio Place, Tampa, FL 33617; that he is
President of IMC Mortgage Company, a Florida corporation; and that he signed his
name thereto by order of the respective Boards of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ Jennifer L. Ellis
Notary Public
<PAGE> 80
STATE OF DELAWARE )
: ss.:
COUNTY OF NEW CASTLE )
On the 22nd day of December, 1997, before me personally came Donald G.
MacKelcan, to me known, who, being by me duly sworn did depose and say that
he/she resides at 1108 Dardel Dr., Wilmington, DE ; that he/she is a Assistant
Vice President of Wilmington Trust Company, a Delaware banking corporation
described in and that executed the above instrument as Owner Trustee; and that
he/she signed his/her name thereto by order of the Board of Directors of said
Delaware banking corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ Kathleen A. Pedelini
Notary Public
<PAGE> 81
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 30th day of December, 1997, before me personally came Ann Marie
Jose, to me known, who, being by me duly sworn did depose and say that he/she
resides at 208 Roosevelt Ave., Mineola, NY 11501; that he/she is a Trust Officer
of The Chase Manhattan Bank, the New York banking corporation described in and
that executed the above instrument as Indenture Trustee; and that he/she signed
his/her name thereto by order of the Board of Directors of said New York banking
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ James A. Nash
Notary Public
<PAGE> 82
SCHEDULE I
SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Indenture Trustee at the
Corporate Trust Office and by the Servicer.
<PAGE> 83
EXHIBIT A
FORM OF CERTIFICATE RE: HOME EQUITY LOANS
PREPAID IN FULL AFTER CUT-OFF DATE
CERTIFICATE RE: PREPAID LOANS
I, __________________________, _______________ of IMC Mortgage Company
("IMC"), hereby certify that between the "Cut-Off Date" (as defined in the Sale
and Servicing Agreement dated as of December 1, 1997 among IMC Securities, Inc.,
as Depositor, IMC, as Seller and Servicer, IMC Home Equity Loan Owner Trust
1997-8, as Issuer and The Chase Manhattan Bank, as Indenture Trustee) and the
"Closing Date," the following schedule of "Home Equity Loans" (each as defined
in the Sale and Servicing Agreement) have been prepaid in full.
<TABLE>
<CAPTION>
Account Original Current Date Paid
Number Name Amount Balance Off
<S> <C> <C> <C> <C>
</TABLE>
Dated: December ____, 1997
IMC MORTGAGE COMPANY,
By: _________________________________
Title:_______________________________
A-1
<PAGE> 84
EXHIBIT B-1
INDENTURE TRUSTEE'S ACKNOWLEDGEMENT OF RECEIPT
The Chase Manhattan Bank, in its capacity as Indenture Trustee (the
"Indenture Trustee") under that certain Sale and Servicing Agreement dated as of
December 1, 1997 (the "Sale and Servicing Agreement") among IMC Securities,
Inc., as Depositor, IMC Mortgage Company, a Florida corporation, as seller and
servicer ("IMC"), IMC Home Equity Loan Owner Trust 1997-8, as Issuer and The
Chase Manhattan Bank, as Indenture Trustee, hereby acknowledges receipt of the
Insurance Policy (Policy No. ________) from MBIA Insurance Corporation and all
other assets of the Trust Estate received by the Indenture Trustee as of the
date hereof.
The Indenture Trustee hereby additionally acknowledges that it shall
cause the Custodian (as defined in the Sale and Servicing Agreement) to review
such items as required by Section 2.06(a) of the Sale and Servicing Agreement.
THE CHASE MANHATTAN BANK, as
Indenture Trustee
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Dated: December ____, 1997
B-1-1
<PAGE> 85
EXHIBIT B-2
CUSTODIAN'S ACKNOWLEDGEMENT OF RECEIPT
BankBoston, N.A., in its capacity as custodian (the "Custodian") under
the Custodial Agreement dated as of December 1, 1997 among the Custodian, IMC
Mortgage Company, as seller and servicer, IMC Securities, Inc., as Depositor,
IMC Home Equity Loan Owner Trust 1997-8, as Issuer and The Chase Manhattan Bank,
in its capacity as Indenture Trustee (the "Indenture Trustee") under that
certain Sale and Servicing Agreement dated as of December 1, 1997 ( the "Sale
and Servicing Agreement") among IMC Securities, Inc., as Depositor, IMC Mortgage
Company, a Delaware limited partnership, as seller and servicer ("IMC"), the
Issuer, and the Indenture Trustee hereby acknowledges receipt (subject to review
as required by Section 2.06(a) of the Sale and Servicing Agreement) of the items
delivered to it by IMC with respect to the Home Equity Loans pursuant to Section
2.05(b)(i) of the Sale and Servicing Agreement, except such items as are listed
on Exhibit D to the Sale and Servicing Agreement.
The Schedules of Home Equity Loans is attached to this Receipt.
The Custodian hereby additionally acknowledges that it shall review
such items as required by Section 2.06(a) of the Sale and Servicing Agreement
and shall otherwise comply with Section 2.06(b) and 2.06(c) of the Sale and
Servicing Agreement as required thereby.
BANKBOSTON, N.A.,
as custodian
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Dated: December _____, 1997
B-2-1
<PAGE> 86
EXHIBIT C
FORM OF POOL CERTIFICATION
POOL CERTIFICATION
WHEREAS, the undersigned is an Authorized Officer of BankBoston, N.A.,
in its capacity as Custodian (the "Custodian") under the Custodial Agreement
dated December 1, 1997 between the Custodian, IMC Mortgage Company, as seller
and servicer, IMC Securities, Inc., as Depositor, IMC Home Equity Loan Owner
Trust 1997-8, as Issuer and The Chase Manhattan Bank, a New York banking
corporation, acting in its capacity as indenture trustee (the "Indenture
Trustee") of a certain pool of mortgage loans (the "Pool") heretofore conveyed
in trust to the Indenture Trustee, pursuant to that certain Sale and Servicing
Agreement dated as of December 1, 1997 (the "Sale and Servicing Agreement")
among IMC Securities, Inc., as Depositor, IMC Mortgage Company, as Seller (the
"Seller") and Servicer, IMC Home Equity Loan Owner Trust 1997-8, as Issuer and
the Indenture Trustee; and
WHEREAS, the Custodian is required, pursuant to Section 2.06(a) of the
Sale and Servicing Agreement, to review the Mortgage Files relating to the Pool
within a specified period following the Closing Date and to notify the Seller
promptly of any defects with respect to the Pool, and the Seller is required to
remedy such defects or take certain other action, all as set forth in Section
2.06(b) of the Sale and Servicing Agreement; and
WHEREAS, Section 2.06(a) of the Sale and Servicing Agreement requires
the Custodian to deliver this Pool Certification upon the satisfaction of
certain conditions set forth therein.
NOW, THEREFORE, the Custodian hereby certifies that it has determined
that all required documents (or certified copies of documents listed in Section
2.05 of the Sale and Servicing Agreement) have been executed or received, and
that such documents relate to the Home Equity Loans identified in the Schedule
of Home Equity Loans pursuant to Section 2.06(a) of the Sale and Servicing
Agreement or, in the event that such documents have not been executed and
received or do not so relate to such Home Equity Loans, any remedial action by
the Seller pursuant to Section 2.06(b) of the Sale and Servicing Agreement has
been completed. The Custodian makes no certification hereby, however, with
respect to any intervening assignments or assumption and modification
agreements.
BANKBOSTON, N.A., as Custodian
By: ___________________________________
Title:_________________________________
Dated: December ______, 1997
C-1
<PAGE> 87
EXHIBIT D TO THE SALE AND SERVICING AGREEMENT
HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
<TABLE>
<CAPTION>
Loan Number Borrower Name Original Loan Amount Exception
<S> <C> <C> <C>
</TABLE>
D-1
