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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): June 28, 1999
IMH ASSETS CORP.
(as depositor under a Series 1999-2 Indenture dated as of June 28, 1999,
providing for, among other things, the issuance of Collateralized Asset-Backed
Bonds Series 1999-2)
IMH ASSETS CORP.
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(Exact name of Depositor as specified in its charter)
CALIFORNIA 333-60707 33-0705301
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1401 Dove Street
Newport Beach, California 92660
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code, is (949) 475-3600
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<PAGE>
Item 2. Acquisition or Disposition of Assets.
------------------------------------
For a description of the Bonds and the Mortgage Pool, refer to the
Indenture.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
------------------------------------------------------------------
(a) Not applicable
(b) Not applicable
(c) Exhibits:
Exhibit No. Description
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3.1 Amended and Restated Trust Agreement, dated
as of June 28, 1999, among IMH Assets Corp.,
as depositor, Wilmington Trust Company, as
owner trustee and Bankers Trust Company of
California, N.A., as Certificate Registrar
and Certificate Paying Agent, Collateralized
Asset-Backed Bonds, Series 1999-2.
4.1 Indenture dated as of June 28, 1999, between
Impac CMB Trust Series 1999-2, as issuer and
Bankers Trust Company of California, N.A., as
indenture trustee, Collateralized Asset-
Backed Bonds, Series 1999-2.
99.1 Servicing Agreement, dated as of June 1,
1999, between Impac Funding Corporation
(formerly known as ICI Funding Corporation),
as master servicer, Impac CMB Trust Series
1999-2, as issuer and Bankers Trust Company
of California, N.A., as Indenture Trustee,
Collateralized Asset-Backed Bonds, Series
1999-2.
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<PAGE>
SIGNATURE
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.
IMH ASSETS CORP.
By: /s/ Richard J. Johnson
----------------------
Name: Richard J. Johnson
Title: Chief Financial Officer
Dated: July 12, 1999
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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3.1 Amended and Restated Trust Agreement, dated as of
June 28, 1999, between IMH Assets Corp., as
depositor, Wilmington Trust Company, as owner
trustee and Bankers Trust Company of California,
N.A., as Certificate Registrar and Certificate
Paying Agent, Collateralized Asset-Backed Bonds,
Series 1999-2.
4.1 Indenture, dated as of June 28, 1999, between
Impac CMB Trust Series 1999-2, as issuer and
Bankers Trust Company of California, N.A., as
indenture trustee, Collateralized Asset-Backed
Bonds, Series 1999-2.
99.1 Servicing Agreement, dated as of June 1, 1999,
between Impac Funding Corporation, as master
servicer, Impac CMB Trust Series 1999-2, as
issuer and Bankers Trust Company of California,
N.A., as Indenture Trustee, Collateralized
Asset-Backed Bonds, Series 1999- 2.
EXHIBIT 3.1
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IMH ASSETS CORP.
as Depositor
WILMINGTON TRUST COMPANY,
as Owner Trustee
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
as Certificate Registrar and Certificate Paying Agent
-----------------------------------------
AMENDED AND RESTATED
TRUST AGREEMENT
Dated as of June 28, 1999
------------------------------------------
Trust Certificates,
Series 1999-2
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<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Section Page
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ARTICLE I
<S> <C>
DEFINITIONS..............................................................................................1
1.01. DEFINITIONS................................................................................1
1.02. OTHER DEFINITIONAL PROVISIONS..............................................................1
ARTICLE II
ORGANIZATION.............................................................................................3
2.01. NAME.......................................................................................3
2.02. OFFICE.....................................................................................3
2.03. PURPOSES AND POWERS........................................................................3
2.04. APPOINTMENT OF OWNER TRUSTEE...............................................................4
2.05. INITIAL CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE.........................................4
2.06. DECLARATION OF TRUST.......................................................................4
2.07. LIABILITY OF THE HOLDERS OF THE CERTIFICATES...............................................4
2.08. TITLE TO TRUST PROPERTY....................................................................5
2.09. SITUS OF TRUST.............................................................................5
2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR............................................5
2.11. PAYMENT OF TRUST FEES......................................................................6
2.12. INVESTMENT COMPANY.........................................................................6
ARTICLE III
CONVEYANCE OF THE MORTGAGE LOANS;
CERTIFICATES............................................................................................7
3.01. CONVEYANCE OF THE MORTGAGE LOANS...........................................................7
3.02. INITIAL OWNERSHIP..........................................................................7
3.03. THE CERTIFICATES...........................................................................7
3.04. AUTHENTICATION OF CERTIFICATES.............................................................8
3.05. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF CERTIFICATES
..........................................................................................8
3.06. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.........................................10
3.07. PERSONS DEEMED CERTIFICATEHOLDERS.........................................................11
3.08. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.................................11
3.09. MAINTENANCE OF OFFICE OR AGENCY...........................................................11
3.10. CERTIFICATE PAYING AGENT..................................................................11
ARTICLE IV
AUTHORITY AND DUTIES OF OWNER TRUSTEE...................................................................14
4.01. GENERAL AUTHORITY.........................................................................14
<PAGE>
Section Page
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4.02. GENERAL DUTIES............................................................................14
4.03. ACTION UPON INSTRUCTION...................................................................14
4.04. NO DUTIES EXCEPT AS SPECIFIED UNDER SPECIFIED DOCUMENTS OR IN INSTRUCTIONS
.........................................................................................15
4.05. RESTRICTIONS..............................................................................15
4.06. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN MATTERS........................15
4.07. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN MATTERS..............................16
4.08. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY...................................16
4.09. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER.................................................16
4.10. MAJORITY CONTROL..........................................................................17
4.11. OPTIONAL REDEMPTION.......................................................................17
ARTICLE V
APPLICATION OF TRUST FUNDS..............................................................................18
5.01. DISTRIBUTIONS.............................................................................18
5.02. METHOD OF PAYMENT.........................................................................18
5.03. TAX RETURNS...............................................................................18
5.04. STATEMENTS TO CERTIFICATEHOLDERS..........................................................19
ARTICLE VI
CONCERNING THE OWNER TRUSTEE............................................................................20
6.01. ACCEPTANCE OF TRUSTS AND DUTIES...........................................................20
6.02. FURNISHING OF DOCUMENTS...................................................................21
6.03. REPRESENTATIONS AND WARRANTIES............................................................21
6.04. RELIANCE; ADVICE OF COUNSEL...............................................................22
6.05. NOT ACTING IN INDIVIDUAL CAPACITY.........................................................22
6.06. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR RELATED DOCUMENTS............................23
6.07. OWNER TRUSTEE MAY OWN CERTIFICATES AND BONDS..............................................23
6.08. PAYMENTS FROM OWNER TRUST ESTATE..........................................................23
6.09. DOING BUSINESS IN OTHER JURISDICTIONS.....................................................23
6.10. LIABILITY OF CERTIFICATE REGISTRAR AND CERTIFICATE PAYING AGENT...........................24
ARTICLE VII
COMPENSATION OF OWNER TRUSTEE...........................................................................25
7.01. OWNER TRUSTEE'S FEES AND EXPENSES.........................................................25
7.02. INDEMNIFICATION...........................................................................25
ARTICLE VIII
TERMINATION OF TRUST AGREEMENT..........................................................................27
<PAGE>
Section Page
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8.01. TERMINATION OF TRUST AGREEMENT............................................................27
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES..................................................29
9.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE................................................29
9.02. REPLACEMENT OF OWNER TRUSTEE..............................................................29
9.03. SUCCESSOR OWNER TRUSTEE...................................................................29
9.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE..................................................30
9.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.............................................30
ARTICLE X
MISCELLANEOUS...........................................................................................32
10.01. AMENDMENTS................................................................................32
10.02. NO LEGAL TITLE TO OWNER TRUST ESTATE......................................................33
10.03. LIMITATIONS ON RIGHTS OF OTHERS...........................................................34
10.04. NOTICES...................................................................................34
10.05. SEVERABILITY..............................................................................34
10.06. SEPARATE COUNTERPARTS.....................................................................35
10.07. SUCCESSORS AND ASSIGNS....................................................................35
10.08. NO PETITION...............................................................................35
10.09. NO RECOURSE...............................................................................35
10.10. HEADINGS..................................................................................35
10.11. GOVERNING LAW.............................................................................35
10.12. INTEGRATION...............................................................................35
Signatures ......................................................................................................40
EXHIBIT
Exhibit A - Form of Certificate.................................................................................A-1
Exhibit B - Certificate of Trust of Impac CMB Trust ............................................................B-1
Exhibit C - Form of Rule 144A Investment Representation.........................................................C-1
Exhibit D - Form of Certificate of Non-Foreign Status...........................................................D-1
Exhibit E - Form of Investment Letter...........................................................................E-1
Exhibit F - Form of Transferor Certificate......................................................................F-1
Exhibit G - Form of ERISA Letter................................................................................G-1
</TABLE>
<PAGE>
This Amended and Restated Trust Agreement, dated as of June 28, 1999
(as amended from time to time, this "Trust Agreement"), among IMH Assets Corp.,
a California corporation, as depositor (the "Depositor"), Wilmington Trust
Company, a Delaware banking corporation, as owner trustee (the "Owner Trustee"),
and Bankers Trust Company of California, N.A., as certificate registrar (in such
capacity, the "Certificate Registrar") and certificate paying agent (in such
capacity, the "Certificate Paying Agent").
WITNESSETH THAT:
In consideration of the mutual agreements herein contained, the
Depositor and the Owner Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. For all purposes of this Trust Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in Appendix A to the Indenture, dated June 28, 1999,
between Impac CMB Trust Series 1999-2, as Issuer, and Bankers Trust Company of
California, N.A., as Indenture Trustee, which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings
specified herein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Trust Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Trust Agreement or in any such certificate or other document,
and accounting terms partly defined in this Trust 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 Trust
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 Trust Agreement or in any such certificate or
other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Trust Agreement shall refer to this Trust Agreement as
a whole and not to any particular provision of this Trust Agreement; Article,
Section and Exhibit references contained in this Trust Agreement are references
to Articles, Sections and Exhibits in or to this Trust Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
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(d) The definitions contained in this Trust Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(e) 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.
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ARTICLE II
ORGANIZATION
Section 2.01. NAME. The trust created hereby (the "Trust") shall be
known as "Impac CMB Trust Series 1999-2", 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.
Section 2.02. 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
and the Depositor.
Section 2.03. PURPOSES AND POWERS. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Bonds pursuant to the Indenture and the
Certificates pursuant to this Trust Agreement and to sell the Bonds and
the Certificates;
(ii) to pay the organizational, start-up and transactional
expenses of the Trust;
(iii) to assign, grant, transfer, pledge and convey the
Mortgage Loans pursuant to the Indenture and to hold, manage and
distribute to the Certificateholder pursuant to Section 5.01 any
portion of the Mortgage Loans released from the Lien of, and remitted
to the Trust pursuant to the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) if directed by holders of Certificates representing more
than 50% of the beneficial interests in the Trust, sell the Trust
Estate subsequent to the discharge of the Indenture, all for the
benefit of the holders of the Certificates;
(vi) 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
(vii) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Certificateholder and the Bondholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
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 Trust Agreement or the
Basic Documents.
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Section 2.04. 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.
Section 2.05. INITIAL CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Trust,
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 corpus of the Trust and shall
be deposited in the Certificate Distribution Account. The Owner Trustee also
acknowledges on behalf of the Trust the receipt in trust of the Mortgage Loans,
the Bond Insurance Policy pursuant to Section 3.01, and the rights with respect
to the representations and warranties made by the Seller under the Mortgage Loan
Sale and Contribution Agreement which shall constitute the Owner Trust Estate.
Section 2.06. 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 Basic Documents. It is the
intention of the parties hereto that the Trust constitute a "business trust"
under the Business Trust Statute and that this Trust Agreement constitute the
governing instrument of such business trust. It is the intention of the parties
hereto that, for federal and state income and state and local franchise tax
purposes, the Trust (A) shall not be treated as (i) an association subject
separately to taxation as a corporation, (ii) a "publicly traded partnership" as
defined in Treasury Regulation Section 1.7704-1 or (iii) a "taxable mortgage
pool" as defined in Section 7701(i) of the Code, (B) shall, as of the Closing
Date, be disregarded as a separate entity (and if at any other time the Trust
Certificates are held by more than one person for federal income tax purposes,
shall be treated as a partnership) and (C) that the Bonds shall be debt, and the
provisions of this Agreement shall be interpreted to further this intention.
Except as otherwise provided in this Trust Agreement, the rights of the
Certificateholder will be those of equity owners of the Trust. Effective as of
the date hereof, the Owner Trustee shall have all rights, powers and duties set
forth herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Trust.
Section 2.07. LIABILITY OF THE HOLDERS OF THE CERTIFICATES. The Holders
of the Certificates shall be jointly and severally liable directly to and shall
indemnify any injured party for all losses, claims, damages, liabilities and
expenses of the Trust and the Owner Trustee (including Expenses, to the extent
not paid out of the Owner Trust Estate); provided, however, that the Holders of
the Certificates shall not be liable for payments required to be made on the
Bonds or the Certificates, or for any losses incurred by a Certificateholder in
the capacity of an investor in the Certificates or a Bondholder in the capacity
of an investor in the Bonds. The Holders of the Certificates shall be liable for
and shall promptly pay any entity level taxes imposed on the Trust. In addition,
any third party creditors of the Trust, including the Bond Insurer (other than
in connection with the obligations described in the second preceding sentence
for which the Holders of the Certificates shall not be liable) shall be deemed
third party beneficiaries of this paragraph. The obligations of the Holders of
the Certificates under this paragraph shall be evidenced by the Certificates.
<PAGE>
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Section 2.08. TITLE TO TRUST PROPERTY. Except with respect to the
Mortgage Loans, which will be assigned of record to the Indenture Trustee
pursuant to the Indenture, legal title to 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.
Section 2.09. SITUS OF TRUST. The Trust will 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. The
Trust shall not have any employees in any state other than Delaware; provided,
however, that nothing herein shall restrict or prohibit the Owner Trustee from
having employees within or without the State of Delaware or taking actions
outside the State of Delaware in order to comply with Section 2.03. Payments
will be received by the Trust only in Delaware, New York or California, and
payments will be made by the Trust only from Delaware, New York or California.
The only office of the Trust will be at 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 Bond
Insurer that:
(i) The Depositor is duly organized and validly existing
as a corporation in good standing under the laws of the State of
California, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is presently conducted.
(ii) 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 its property or the conduct of its business shall require such
qualifications and in which the failure to so qualify would have a
material adverse effect on the business, properties, assets or
condition (financial or other) of the Depositor.
(iii) The Depositor has the power and authority to execute
and deliver this Trust Agreement and to carry out its terms; the
Depositor has full power and authority to convey and assign the
property to be conveyed and assigned to and deposited with the Trust as
part of the Owner Trust Estate and the Depositor has duly authorized
such conveyance and assignment and deposit to the Trust by all
necessary corporate action; and the execution, delivery and performance
of this Trust Agreement have been duly authorized by the Depositor by
all necessary corporate action.
(iv) The consummation of the transactions contemplated by
this Trust Agreement and the fulfillment of the terms hereof 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 articles of incorporation or bylaws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a
party or by which it is bound;
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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 Basic 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
its properties.
(v) The Trust is not required to register as an investment
company under the Investment Company Act and is not under the control
of a Person required to so register.
(vi) The Depositor has been a "qualified REIT subsidiary" as
defined in Section 856(i) of the Code throughout its existence.
Section 2.11. PAYMENT OF TRUST FEES. The Master Servicer shall remit
the Owner Trustee Fee to the Owner Trustee pursuant to Section 3.07 of the
Servicing Agreement. The Master Servicer shall pay the Trust's expenses
(including expenses of the Owner Trustee and the Indenture Trustee) incurred
with respect to the performance of the Trust's duties under the Indenture
pursuant to a separate side agreement, or, if such amounts are insufficient, the
Owner Trustee shall be paid pursuant to Section 5.01 hereof.
Section 2.12. INVESTMENT COMPANY. Neither the Depositor nor any holder
of a Certificate shall take any action which would cause the Trust to become an
"investment company" which would be required to register under the Investment
Company Act.
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ARTICLE III
CONVEYANCE OF THE MORTGAGE LOANS;
CERTIFICATES
Section 3.01. CONVEYANCE OF THE MORTGAGE LOANS. The Depositor,
concurrently with the execution and delivery hereof, does hereby contribute,
transfer, convey and assign to the Trust, on behalf of the Holders of the Bonds
and the Certificates and the Bond Insurer, without recourse, all its right,
title and interest in and to the Mortgage Loans, including all interest and
principal received on or with respect to the Mortgage Loans after the Cut-off
Date (other than payments of principal and interest due on the Mortgage Loans on
or before the Cut-off Date). In addition, the Depositor hereby assigns to the
Trust all of its right, title, and interest in, to, and under the Mortgage Loan
Sale and Contribution Agreement to the extent of the Mortgage Loans. The
Depositor will also provide the Trust with the Bond Insurance Policy, the CMAC
PMI Policy and the Cap Contract Deposit.
The conveyance of the Mortgage Loans by the Depositor to the Trust
hereunder is intended to facilitate the simultaneous issuance of the Bonds under
the Indenture and issuance of the Certificates hereunder to the Depositor as
Holder, and the Depositor has no present intention of selling any of the
Certificates. Accordingly, at the time of the transaction set forth herein, the
Depositor will retain without interruption, through the ownership of the
Certificates, the economic benefits associated with ownership of the Mortgage
Loans as well as the economic burdens associated with such ownership, subject to
the lien of the Indenture and subject to this Agreement. If the transactions
contemplated by this Trust Agreement are determined to constitute a financing,
the Depositor hereby grants to the Trust a security interest in the Owner Trust
Estate and all distributions thereon and proceeds thereof, and this Trust
Agreement shall constitute a security agreement under applicable law.
Section 3.02. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.05 and until the conveyance
of the Mortgage Loans pursuant to Section 3.01 and the issuance of the
Certificates, and thereafter except as otherwise permitted hereunder, the
Depositor shall be the sole Certificateholder.
Section 3.03. THE CERTIFICATES. The Certificates shall be issued in the
form of one or more Certificates, each representing not less than a 10%
Certificate Percentage Interest. The Certificates shall initially be registered
in the name of IMH Assets Corp. The Certificates shall be executed on behalf of
the Trust by manual or facsimile signature of an authorized officer of the Owner
Trustee and authenticated in the manner provided in Section 3.04. 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 validly issued and entitled to the benefit of this Trust
Agreement, 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. A Person shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
<PAGE>
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Certificateholder hereunder upon such Person's acceptance of a Certificate duly
registered in such Person's name, pursuant to Section 3.05.
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 and upon satisfaction of
the conditions set forth in Section 3.05.
Section 3.04. AUTHENTICATION OF CERTIFICATES. The Owner Trustee shall
cause all Certificates issued hereunder to be executed and authenticated on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Depositor, signed by its chairman of the board, its president or any vice
president, without further corporate action by the Depositor, in authorized
denominations. No Certificate shall entitle its holder to any benefit under this
Trust Agreement or be valid for any purpose unless there shall appear on such
Certificate a certificate of authen tication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee or the Certificate Registrar by
manual 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 3.05. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
OF CERTIFICATES. The Certificate Registrar shall keep or cause to be kept, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Bankers Trust Company of California, N.A. shall be the initial Certificate
Registrar. If the Certificate Registrar resigns or is removed, the Owner Trustee
shall appoint a successor Certificate Registrar.
Subject to satisfaction of the conditions set forth below with respect
to the Certificate, upon surrender for registration of transfer of any
Certificate at the office or agency maintained pursuant to Section 3.09, the
Owner Trustee or the Certificate Registrar shall execute, authenticate and
deliver in the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Owner Trustee or the Certificate Registrar. At the
option of a Holder, Certificates may be exchanged for other Certificates of
authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.09.
Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Certificate Registrar in accordance with its customary
practice.
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
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cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
No Person shall become a Certificateholder until it shall establish its
non-foreign status by submitting to the Certificate Paying Agent an IRS Form W-9
and the Certificate of Non-Foreign Status set forth in Exhibit D hereto.
No transfer, sale, pledge or other disposition of a Certificate shall
be made unless such transfer, sale, pledge or other disposition is exempt from
the registration requirements of the Securities Act and any applicable state
securities laws or is made in accordance with said Act and laws. In the event of
any such transfer, the Certificate Registrar or the Depositor shall prior to
such transfer require the transferee to execute (A) either (i) (a) an investment
letter in substantially the form attached hereto as Exhibit C (or in such form
and substance reasonably satisfactory to the Certificate Registrar and the
Depositor) which investment letter shall not be an expense of the Trust, the
Owner Trustee, the Certificate Registrar, the Master Servicer or the Depositor
and which investment letter states that, among other things, such transferee (1)
is a "qualified institutional buyer" as defined under Rule 144A, acting for its
own account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (2) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act of
1933, as amended, provided by Rule 144A or (ii) (a) a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Certificate
Registrar and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from said
Act and laws or is being made pursuant to said Act and laws, which Opinion of
Counsel shall not be an expense of the Trust, the Owner Trustee, the Certificate
Registrar, the Master Servicer or the Depositor and (b) the transferee executes
a representation letter, substantially in the form of Exhibit F to the
Agreement, and transferor executes a representation letter, substantially in the
form of Exhibit E hereto, each acceptable to and in form and substance
satisfactory to the Certificate Registrar and the Depositor certifying the facts
surrounding such transfer, which representation letters shall not be an expense
of the Trust, the Owner Trustee, the Certificate Registrar, the Master Servicer
or the Depositor and (B) the Certificate of Non-Foreign Status (in substantially
the form attached hereto as Exhibit D) acceptable to and in form and substance
reasonably satisfactory to the Certificate Registrar and the Depositor, which
certificate shall not be an expense of the Trust, the Owner Trustee, the
Certificate Registrar or the Depositor. The Holder of a Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trust, the
Owner Trustee, the Certificate Registrar, the Master Servicer and the Depositor
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of Certificates or any interest therein shall be made to
any employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and bank
collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject to
ERISA, or Section 4975 of the Code (collectively, "Plan"), any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "plan assets"
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of a Plan within the meaning of the Department of Labor regulation promulgated
at 29 C.F.R. ss.2510.3-101 ("Plan Assets") unless the Depositor, the Owner
Trustee, the Certificate Registrar and the Master Servicer are provided with an
Opinion of Counsel which establishes to the satisfaction of the Depositor, the
Owner Trustee, the Certificate Registrar and the Master Servicer that the
purchase of Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Owner Trustee, the
Certificate Registrar or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Owner Trustee, the Certificate
Registrar or the Master Servicer. In lieu of such Opinion of Counsel, a Plan,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with Plan Assets of a Plan may provide a
certification in the form of Exhibit G to this Agreement, which the Depositor,
the Owner Trustee, the Certificate Registrar and the Master Servicer may rely
upon without further inquiry or investigation. Neither an Opinion of Counsel nor
a certification will be required in connection with the initial transfer of any
such Certificate by the Depositor to an affiliate of the Depositor (in which
case, the Depositor or any affiliate thereof shall have deemed to have
represented that such affiliate is not a Plan or a Person investing Plan Assets
of any Plan) and the Owner Trustee and the Certificate Registrar shall be
entitled to conclusively rely upon a representation (which, upon the request of
the Owner Trustee or the Certificate Registrar, shall be a written
representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor.
No offer, sale, transfer, pledge, hypothecation or other disposition
(including any pledge, sale or transfer under a repurchase transaction or
securities loan) of any Certificate shall be made to any transferee unless,
prior to such disposition, the proposed transferor delivers to the Owner
Trustee, the Certificate Registrar and the Bond Insurer an Opinion of Counsel,
rendered by a law firm generally recognized to be qualified to opine concerning
the tax aspects of asset securitization and reasonably satisfactory to the Bond
Insurer, to the effect that such transfer (including any disposition permitted
following any default under any pledge or repurchase transaction) will not cause
the Trust to be (i) treated as an association taxable as a corporation for
federal income tax and relevant state income and franchise tax purposes, (ii)
taxable as a taxable mortgage pool as defined in Section 7701(i) of the Code or
(iii) taxable as a "publicly traded partnership" as defined in Treasury
Regulation section 1.7704-1. Notwithstanding the foregoing, the provisions of
this paragraph shall not apply to the initial transfer of the Certificates to
the Depositor.
No offer, sale, transfer or other disposition (including pledge) of any
Certificate shall be made to any affiliate of the Depositor or the Issuer, other
than the initial transfer of the Certificates to the Depositor.
Section 3.06. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar and the Owner Trustee such security or indemnity as
may be required by them to save each of them harmless, then in the absence of
notice to the
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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 Certificate Registrar, shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like tenor and denomination. In
connection with the issuance of any new Certificate under this Section 3.06, the
Owner Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any expenses of the Owner Trustee or the Certificate
Registrar (including fees and expenses of counsel) and any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section 3.06 shall constitute conclusive
evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 3.07. PERSONS DEEMED CERTIFICATEHOLDERS. Prior to due
presentation of a Certificate for registration of transfer, the Owner Trustee,
the Certificate Registrar or any Certificate Paying Agent may treat the Person
in whose name any Certificate is registered in the Certificate Register as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 5.02 and for all other purposes whatsoever, and none of the Trust, the
Owner Trustee, the Certificate Registrar or any Paying Agent shall be bound by
any notice to the contrary.
Section 3.08. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Certificate Registrar shall furnish or cause to be furnished to
the Depositor, the Certificate Paying Agent or the Owner Trustee, within 15 days
after receipt by the Certificate Registrar of a written request therefor from
the Depositor, the Certificate Paying Agent or the Owner Trustee, a list, in
such form as the Depositor, the Certificate Paying Agent or the Owner Trustee,
as the case may be, may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. Each Holder, by receiving
and holding a Certificate, shall be deemed to have agreed not to hold any of the
Trust, the Depositor, the Certificate Paying Agent, the Certificate Registrar or
the Owner Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
Section 3.09. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee on
behalf of the Trust, shall maintain in Wilmington, Delaware, 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 Basic Documents may be
served. The Owner Trustee initially designates the Corporate Trust Office as its
office for such purposes. The Owner Trustee shall give prompt written notice to
the Depositor, the Certificate Paying Agent, the Certificate Registrar and the
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
Section 3.10. CERTIFICATE PAYING AGENT. (a) The Certificate Paying
Agent shall make distributions to Certificateholders from the Certificate
Distribution Account on behalf of the Trust in accordance with the provisions of
the Certificates and Section 5.01 hereof from payments remitted to the
Certificate Paying Agent by the Indenture Trustee pursuant to Section 3.05 of
the
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Indenture. The Trust hereby appoints Bankers Trust Company of California, N.A.
as Certificate Paying Agent and Bankers Trust Company of California, N.A. hereby
accepts such appointment and further agrees that it will be bound by the
provisions of this Trust Agreement relating to the Certificate Paying Agent and
shall:
(i) hold all sums held by it for the payment of amounts
due with respect to the Certificates in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(ii) give the Owner Trustee notice of any default by the
Trust of which a Responsible Officer of the Certificate Registrar has
actual knowledge in the making of any payment required to be made with
respect to the Certificates;
(iii) at any time during the continuance of any such
default, upon the written request of the Owner Trustee forthwith pay to
the Owner Trustee on behalf of the Trust all sums so held in Trust by
such Certificate Paying Agent;
(iv) not resign from its position as Certificate Paying
Agent so long as it is Indenture Trustee except that it shall
immediately resign as Certificate Paying Agent and forthwith pay to the
Owner Trustee on behalf of the Trust all sums held by it in trust for
the payment of Certificates if at any time it ceases to meet the
standards under this Section 3.10 required to be met by the Certificate
Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on any
Certificates of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection
therewith; and
(vi) not institute Bankruptcy proceedings against the
Issuer in connection with this Trust Agreement.
(b) The Trust may revoke such power and remove the Certificate Paying
Agent if it determines in its sole discretion that the Certificate Paying Agent
shall have failed to perform its obligations under this Trust Agreement in any
material respect. In the event that Bankers Trust Company of California, N.A.
shall no longer be the Certificate Paying Agent under this Trust Agreement and
Paying Agent under the Indenture, the Owner Trustee shall appoint a successor to
act as Certificate Paying Agent (which shall be a bank or trust company) and
which shall also be the successor Paying Agent under the Indenture. The Owner
Trustee shall cause such successor Certificate Paying Agent or any additional
Certificate Paying Agent appointed by the Owner Trustee to execute and deliver
to the Owner Trustee an instrument to the effect set forth in Section 3.10(a) as
it relates to the Certificate Paying Agent. The Certificate Paying Agent shall
return all unclaimed funds to the Trust and upon removal of a Certificate Paying
Agent such Certificate Paying Agent shall also return all funds in its
possession to the Trust. The provisions of Sections 6.01, 6.04, 6.05, 6.06,
6.07, 6.08 and 7.01 shall apply to the Certificate Paying Agent
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to the extent applicable. Any reference in this Agreement to the Certificate
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
(c) The Certificate Paying Agent shall establish and maintain with
itself a trust account (the "Certificate Distribution Account") in which the
Certificate Paying Agent shall deposit, on the same day as it is received from
the Indenture Trustee, each remittance received by the Certificate Paying Agent
with respect to payments made pursuant to the Indenture. The Certificate Paying
Agent shall make all distributions to Certificates, from moneys on deposit in
the Certificate Distribution Account, in accordance with Section 5.01 hereof.
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ARTICLE IV
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 4.01. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Basic 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 Basic Documents to which the Trust is to be a party and any
amendment or other agreement or instrument described herein, as evidenced
conclusively by the Owner Trustee's execution thereof. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, except
as otherwise provided in this Trust Agreement, to take all actions required of
the Trust pursuant to the Basic Documents.
Section 4.02. GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Trust Agreement and the Basic Documents to which the Trust is
a party and to administer the Trust in the interest of the Certificateholders,
subject to the Basic Documents and in accordance with the provisions of this
Trust Agreement.
Section 4.03. ACTION UPON INSTRUCTION. (a) Subject to Article IV and in
accordance with the terms of the Basic Documents, 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 Basic 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 Basic Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is required to decide between
alternative courses of action permitted or required by the terms of this Trust
Agreement or under any Basic Document, or in the event that the Owner Trustee is
unsure as to the application of any provision of this Trust Agreement or any
Basic 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 Trust 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
shall promptly give notice (in such form as shall be appropriate under the
circumstances) to the Certificateholders (with a copy to the Bond Insurer)
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Certificateholders, the Owner Trustee shall not be liable on
account of such action 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
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Trust Agreement or the Basic Documents, as it shall deem to be in the best
interests of the Certificateholders, and the Owner Trustee shall have no
liability to any Person for such action or inaction.
Section 4.04. NO DUTIES EXCEPT AS SPECIFIED UNDER SPECIFIED 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 (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Trust Agreement, (ii) in accordance with the Basic
Documents and (iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 4.03; and no implied duties or obligations
shall be read into this Trust Agreement or any Basic 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 Trust Agreement or any Basic 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 4.05. RESTRICTIONS. (a) The Owner Trustee or the Depositor (or
an Affiliate thereof) shall not take any action (x) that is inconsistent with
the purposes of the Trust set forth in Section 2.03, (y) that, to the actual
knowledge of the Owner Trustee based on an Opinion of Counsel rendered by a law
firm generally recognized to be qualified to opine concerning the tax aspects of
asset securitization, would result in the Trust becoming taxable as a
corporation for federal income tax purposes or (z) would result in the amendment
or modification of the Basic Documents or this Trust Agreement without the prior
written consent of the Bond Insurer. The Certificateholders shall not direct the
Owner Trustee to take action that would violate the provisions of this Section
4.05.
(b) The Owner Trustee shall not convey or transfer any of the Trust's
properties or assets, including those included in the Trust Estate, to any
person unless (a) it shall have received an Opinion of Counsel rendered by a law
firm generally recognized to be qualified to opine concerning the tax aspects of
asset securitization and reasonably acceptable to the Bond Insurer to the effect
that such transaction will not have any material adverse tax consequence to the
Trust, the Bond Insurer or any Certificateholder and (b) such conveyance or
transfer shall not violate the provisions of Section 3.16(b) of the Indenture.
Section 4.06. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO
CERTAIN MATTERS. With respect to the following matters, the Owner Trustee shall
not take action unless at least 30 days before the taking of such action, the
Owner Trustee shall have notified the Certificateholders and the Bond Insurer in
writing of the proposed action and the Certificateholders shall not have
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notified the Owner Trustee in writing prior to the 30th day after such notice is
given that such Certificateholders have withheld consent or provided alternative
direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of cash distributions due
and owing under the Mortgage Loans) and the compromise of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of cash distributions due and
owing under the Mortgage Loans);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Bondholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Bondholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
and
(e) the appointment pursuant to the Indenture of a successor Bond
Registrar, Paying Agent or Indenture Trustee or pursuant to this Trust Agreement
of a successor Certificate Registrar or Certificate Paying Agent or the consent
to the assignment by the Bond Registrar, Paying Agent, Indenture Trustee,
Certificate Registrar or Certificate Paying Agent of its obligations under the
Indenture or this Trust Agreement, as applicable.
Section 4.07. ACTION BY CERTIFICATEHOLDERS 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 Bond Insurer, to (a)
remove the Master Servicer under the Servicing Agreement pursuant to Sections
7.01 and 8.05 thereof or (b) except as expressly provided in the Basic Docu
ments, sell the Mortgage Loans after the termination of the Indenture. The Owner
Trustee shall take the actions referred to in the preceding sentence only upon
written instructions signed by the Certificateholders and with the consent of
the Bond Insurer.
Section 4.08. ACTION BY CERTIFICATEHOLDERS 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 unanimous prior approval of all
Certificateholders and the consent of the Bond Insurer, the Bondholders and the
Owner Trustee 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. This paragraph shall survive
for one year following termination of this Trust Agreement.
Section 4.09. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. The
Certificateholders shall not direct the Owner Trustee to take or to 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 Trust Agreement
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or any of the Basic Documents or would be contrary to Section 2.03, nor shall
the Owner Trustee be obligated to follow any such direction, if given.
Section 4.10. MAJORITY CONTROL. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Trust
Agreement may be taken by the Holders of Certificates evidencing not less than a
majority Percentage Interest of the Certificates. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to this
Trust Agreement shall be effective if signed by Holders of Certificates
evidencing not less than a majority Percentage Interest of the Certificates at
the time of the delivery of such notice.
Section 4.11. OPTIONAL REDEMPTION. Upon receipt of written instructions
provided to the Owner Trustee by the Holder or Holders of 100% of the
Certificates, the Owner Trustee shall cause the Issuer to redeem the Bonds in
accordance with Section 8.07 of the Indenture and shall provide all necessary
notices on behalf of the Issuer to effect the foregoing, provided that such
Holder or Holders shall deposit with the Indenture Trustee an amount equal to
the aggregate redemption price specified under Section 8.07 of the Indenture.
The Owner Trustee shall not have the power to exercise the right of the Issuer
to redeem the Bonds pursuant to Section 8.07 of the Indenture, except as
provided above.
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ARTICLE V
APPLICATION OF TRUST FUNDS
Section 5.01. DISTRIBUTIONS. (a) On each Payment Date, the Certificate
Paying Agent shall distribute to the Certificateholders, on a pro rata basis
based on the Certificate Percentage Interests thereof, all funds on deposit in
the Certificate Distribution Account and available therefor (as provided in
Section 3.05 of the Indenture) for such Payment Date as reduced by any amount
owing to the Owner Trustee hereunder and any Expenses of the Trust remaining
unpaid.
(b) In the event that any withholding tax is imposed on the
distributions (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in accordance
with this Section 5.01. The Certificate Paying Agent is hereby authorized and
directed to retain or cause to be retained 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 Certificateholder
at the time it is withheld by the Certificate Paying Agent 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.
Certificateholder), the Certificate Paying Agent may in its sole discretion
withhold such amounts in accordance with this paragraph (b).
(c) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Bondholders and the Bond Insurer.
Section 5.02. METHOD OF PAYMENT. Subject to Section 8.01(c),
distributions required to be made to Certificateholders on any Payment Date as
provided in Section 5.01 shall be made to each Certificateholder of record on
the preceding Record Date by wire transfer, in immediately available funds, to
the account of such Holder 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 Holder appearing in the Certificate
Register.
Section 5.03. TAX RETURNS. The Indenture Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis using
the accrual method of accounting, (b) deliver (or cause to be delivered) to each
Bondholder and Certificateholder as may be required by the Code and applicable
Treasury Regulations, such information as may be required to enable each
Certificateholder to prepare its federal and state income tax returns, (c)
prepare and file or cause to be prepared and filed such tax returns relating to
the Trust as may be required by the Code and applicable Treasury Regulations
(making such elections as may from time to time be required or appropriate under
any applicable state or federal statutes, rules or regulations) and
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(d) collect or cause to be collected any withholding tax as described in and in
accordance with Section 5.01 of this Trust Agreement with respect to income or
distributions to Certificateholders and prepare or cause to be prepared the
appropriate forms relating thereto. The Owner Trustee shall sign all tax and
information returns prepared or caused to be prepared by the Indenture Trustee
pursuant to this Section 5.03 at the request of the Indenture Trustee, and in
doing so shall rely entirely upon, and shall have no liability for information
or calculations provided by, the Indenture Trustee.
Section 5.04. STATEMENTS TO CERTIFICATEHOLDERS. On each Payment Date,
the Certificate Paying Agent shall send to each Certificateholder the statement
or statements provided to the Owner Trustee and the Certificate Paying Agent by
the Indenture Trustee pursuant to Section 7.05 of the Indenture with respect to
such Payment Date.
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ARTICLE VI
CONCERNING THE OWNER TRUSTEE
Section 6.01. ACCEPTANCE OF TRUSTS AND DUTIES. 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 Trust Agreement. The
Owner Trustee and the Certificate Paying Agent also agree to disburse all moneys
actually received by it constituting part of the Owner Trust Estate upon the
terms of the Basic Documents and this Trust Agreement. The Owner Trustee shall
not be answerable or accountable hereunder or under any Basic Document under any
circumstances, except (i) for its own willful misconduct, gross negligence or
bad faith or grossly negligent failure to act or (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 6.03 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 not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Certificateholders permitted under this Trust Agreement;
(b) No provision of this Trust Agreement or any Basic 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, duties or powers
hereunder or under any Basic 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;
(c) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Bonds;
(d) The Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Trust 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 Basic Documents, the Bonds, the Certificates, other than
the certificate of authentication on the Certificates, if executed by the Owner
Trustee and the Owner Trustee shall in no event assume or incur any liability,
duty, or obligation to any Bondholder or to any Certificateholder, other than as
expressly provided for herein or expressly agreed to in the Basic Documents;
(e) The execution, delivery, authentication and performance by it of
this Trust Agreement will not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action with respect to, any governmental authority or agency;
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(f) The Owner Trustee shall not be liable for the default or misconduct
of the Depositor, Indenture Trustee, Certificate Registrar or the Master
Servicer under any of the Basic Documents or otherwise and the Owner Trustee
shall have no obligation or liability to perform the obligations of the Trust
under this Trust Agreement or the Basic Documents that are required to be
performed by the Indenture Trustee under the Indenture or the Seller under the
Mortgage Loan Sale and Contribution Agreement; and
(g) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it or duties imposed by this Trust Agreement, or
to institute, conduct or defend any litigation under this Trust Agreement or
otherwise or in relation to this Trust Agreement or any Basic Document, at the
request, order or direction of any of the Certificateholders, unless 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 Trust Agreement or in any
Basic Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its gross negligence or willful misconduct in the
performance of any such act.
Section 6.02. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
to the Securityholders promptly upon receipt of a written reasonable request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Trust under the Basic Documents.
Section 6.03. REPRESENTATIONS AND WARRANTIES. The Owner Trustee hereby
represents and warrants to the Depositor, for the benefit of the
Certificateholders and the Bond Insurer, that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Trust Agreement;
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Trust Agreement, and this Trust Agreement
will be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Trust Agreement on its behalf;
(c) Neither the execution nor the delivery by it of this Trust
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound;
(d) This Trust Agreement, assuming due authorization, execution and
delivery by the Owner Trustee and the Depositor, constitutes a valid, legal and
binding obligation of the Owner
<PAGE>
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Trustee, enforceable against it in accordance with the terms hereof subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(e) The Owner Trustee is not in default with respect to any order or
decree of any court or any order, regulation or demand of any Federal, state,
municipal or governmental agency, which default might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of the Owner Trustee or its properties or might have consequences
that would materially adversely affect its performance hereunder; and
(f) No litigation is pending or, to the best of the Owner Trustee's
knowledge, threatened against the Owner Trustee which would prohibit its
entering into this Trust Agreement or performing its obligations under this
Trust Agreement.
Section 6.04. 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. 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 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.
(b) In the exercise or administration of the Trust hereunder and in the
performance of its duties and obligations under this Trust Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) if such persons have been selected by the Owner Trustee with
reasonable care, and (ii) may consult with counsel, accountants and other
skilled persons 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 Trust Agreement or
any Basic Document.
Section 6.05. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VI, 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
<PAGE>
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Trustee by reason of the transactions contemplated by this Trust Agreement or
any Basic Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
Section 6.06. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR RELATED
DOCUMENTS. The recitals contained herein and in the Certificates (other than the
signatures of the Owner Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Trust Agreement, of any Basic Document or of the
Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the Bonds, or of any Related Documents. The Owner Trustee shall
at no time have any responsibility or liability with respect to the sufficiency
of the Owner Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Trust Agreement or the Bondholders
under the Indenture, including compliance by the Depositor or the Seller with
any warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
Section 6.07. OWNER TRUSTEE MAY OWN CERTIFICATES AND BONDS. The Owner
Trustee in its individual or any other capacity may, subject to Section 3.05,
become the owner or pledgee of Certificates or Bonds and may deal with the
Depositor, the Seller, the Certificate Paying Agent, the Certificate Registrar
and the Indenture Trustee in transactions with the same rights as it would have
if it were not Owner Trustee.
Section 6.08. PAYMENTS FROM OWNER TRUST ESTATE. All payments to be made
by the Owner Trustee under this Trust Agreement or any of the Basic Documents to
which the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate or from other amounts required to be provided
by the Certificateholders and only to the extent that the Owner Trust shall have
received income or proceeds from the Owner Trust Estate or the
Certificateholders to make such payments in accordance with the terms hereof.
Wilmington Trust Company, in its individual capacity, shall not be liable for
any amounts payable under this Trust Agreement or any of the Basic Documents to
which the Owner Trustee is a party.
Section 6.09. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained herein to the contrary, neither Wilmington Trust Company nor
the Owner Trustee shall be required to take any action in any jurisdiction other
than in the State of Delaware if the taking of such action will, even after the
appointment of a co-trustee or separate trustee in accordance with Section 9.05
hereof, (i) require the consent or approval or authorization or order of or the
giving of notice to, or the registration with or the taking of any other action
in respect of, any state or other governmental authority or agency of any
jurisdiction other than the State of Delaware; (ii) result in any fee, tax or
other governmental charge under the laws of the State of Delaware becoming
payable by Wilmington Trust Company; or (iii) subject Wilmington Trust Company
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Wilmington Trust Company or the Owner Trustee, as the case may
be, contemplated hereby.
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Section 6.10. LIABILITY OF CERTIFICATE REGISTRAR AND CERTIFICATE PAYING
AGENT. All provisions affording protection to or limiting the liability of the
Owner Trustee shall inure as well to the Certificate Registrar and Certificate
Paying Agent.
<PAGE>
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ARTICLE VII
COMPENSATION OF OWNER TRUSTEE
Section 7.01. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof, and the Owner Trustee shall be
reimbursed by the Depositor or the Master Servicer for its reasonable expenses
hereunder and under the Basic Documents, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may reasonably employ in connection with the exercise and
performance of its rights and its duties hereunder and under the Basic
Documents. The amount of the Owner Trustee Fee shall be paid by the Master
Servicer pursuant to Section 3.07(a)(x) of the Servicing Agreement and Section
2.11 hereof, and all amounts owing to the Owner Trustee hereunder in excess of
such amount shall be paid pursuant to a separate side agreement or as provided
in Section 5.01 hereof.
Section 7.02. INDEMNIFICATION. The Depositor shall indemnify, defend
and hold harmless the Owner Trustee, the Certificate Registrar and the
Certificate Paying Agent, solely in its capacity as Certificate Paying Agent,
and their respective 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 any Indemnified Party in
any way relating to or arising out of this Trust Agreement, the Basic Documents,
the Owner Trust Estate, the administration of the Owner Trust Estate or the
action or inaction of the Owner Trustee, the Certificate Registrar and the
Certificate Paying Agent, solely in its capacity as Certificate Paying Agent,
hereunder, provided, that:
(i) the Depositor shall not be liable for or required
to indemnify an Indemnified Party from and against Expenses arising or
resulting from the Owner Trustee's, the Certificate Registrar's or the
Certificate Paying Agent's willful misconduct, gross negligence or bad
faith or as a result of any inaccuracy of a representation or warranty
of the Owner Trustee contained in Section 6.03 expressly made by the
Owner Trustee;
(ii) with respect to any such claim, the Indemnified
Party shall have given the Depositor written notice thereof promptly
after the Indemnified Party shall have actual knowledge thereof;
(iii) while maintaining control over its own defense, the
Depositor shall consult with the Indemnified Party in preparing such
defense; and
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(iv) notwithstanding anything in this Agreement to the
contrary, the Depositor shall not be liable for settlement of any claim
by an Indemnified Party entered into without the prior consent of the
Depositor which consent shall not be unreasonably withheld.
The indemnities contained in this Section shall survive the resignation
or termination of the Owner Trustee, the Certificate Registrar or the
Certificate Paying Agent or the termination of this Trust Agreement. In the
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section 7.02, the Owner Trustee's, the Certificate Registrar's
or the Certificate Paying Agent's choice of legal counsel, if other than the
legal counsel retained by the Owner Trustee, the Certificate Registrar or the
Certificate Paying Agent in connection with the execution and delivery of this
Trust Agreement, shall be subject to the approval of the Depositor, which
approval shall not be unreasonably withheld. In addition, upon written notice to
the Owner Trustee, the Certificate Registrar or the Certificate Paying Agent and
with the consent of the Owner Trustee, the Certificate Registrar or the
Certificate Paying Agent which consent shall not be unreasonably withheld, the
Depositor has the right to assume the defense of any claim, action or proceeding
against the Owner Trustee, the Certificate Registrar or the Certificate Paying
Agent.
<PAGE>
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ARTICLE VIII
TERMINATION OF TRUST AGREEMENT
Section 8.01. TERMINATION OF TRUST AGREEMENT. (a) This Trust Agreement
(other than Article VII) and the Trust shall terminate and be of no further
force or effect upon the earliest of (i) the final distribution of all moneys or
other property or proceeds of the Owner Trust Estate in accordance with the
terms of the Indenture and this Trust Agreement, (ii) the distribution of all of
the assets of the Owner Trust Estate, in accordance with written instructions
provided to the Owner Trustee by Holders of a 100% Certificate Percentage
Interest in the Certificates, following the optional redemption of the Bonds by
the Issuer pursuant to Section 8.07 of the Indenture; provided in each case that
all amounts owing to the Bondholders and the Bond Insurer to the extent payable
from the Owner Trust Estate or proceeds thereof have been paid in full and that
all obligations under the Indenture have been discharged. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder shall not
(x) operate to terminate this Trust Agreement or the Trust or (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) Except as provided in Section 8.01(a), neither the Depositor nor
any Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which Certificateholders shall surrender their Certificates to the
Certificate Paying Agent for payment of the final distribution and cancellation,
shall be given by the Certificate Paying Agent by letter to Certificateholders
and the Bond Insurer mailed within five Business Days of receipt of notice of
the final payment on the Bonds from the Indenture Trustee, 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 Certificate Paying Agent 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 Certificate Payment Agent
therein specified. The Certificate Paying Agent shall give such notice to the
Owner Trustee and the Certificate Registrar at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Certificates, the
Certificate Paying Agent shall cause to be distributed to Certificateholders
amounts distributable on such Payment Date pursuant to Section 5.01.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Certificate Paying Agent shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. Subject to applicable laws with respect to escheat of funds, if within
one year following the Payment Date on which final payment of the Certificates
was to have been made pursuant to
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Section 3.03 of the Indenture, all the Certificates shall not have been
surrendered for cancellation, the Certificate Paying Agent may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certif icates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Trust Agreement. Any funds remaining in the Certificate
Distribution Account after exhaustion of such remedies shall be distributed by
the Certificate Paying Agent to the Holder of the Certificate.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810(c) of the Business Trust Statute.
<PAGE>
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ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 9.01. 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 trust
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 that has) a rating of at least Baa3 or is otherwise
acceptable to the Bond Insurer, Moody's and Standard & Poor's. 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 9.01, the Owner Trustee shall resign immediately in the manner and
with the effect specified in Section 9.02.
Section 9.02. REPLACEMENT OF OWNER TRUSTEE. The Owner Trustee may at
any time resign and be discharged from the trusts hereby created by giving 30
days prior written notice thereof to the Bond Insurer and the Depositor. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor Owner Trustee with the consent of the Bond Insurer which consent shall
not be unreasonably withheld, by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Owner Trustee and 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 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 9.01 and shall fail to resign after
written request therefor by the Depositor, 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 Depositor may remove the Owner Trustee with the consent of
the Bond Insurer and shall remove the Owner Trustee at the direction of the Bond
Insurer.
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 accep tance of appointment by the successor Owner
Trustee pursuant to Section 9.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Master Servicer shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
Section 9.03. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to the
Indenture Trustee and to
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its predecessor Owner Trustee an instrument accepting such appointment under
this Trust Agreement, and thereupon the resignation or removal of the
predecessor Owner Trustee shall become effective, and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor under
this Trust 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 Trust Agreement; 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 9.03 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 9.03, the Owner Trustee shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Bond Insurer, the Bondholders and
the Rating Agencies.
Section 9.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any Person into
which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding;
provided, that such Person shall be eligible pursuant to Section 9.01 and,
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
Section 9.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Trust Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate may at the time be located, the Owner Trustee
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or trustees, of all or any part of the Owner Trust Estate, 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 Owner Trustee may consider
necessary or desirable. No co-trustee or separate trustee under this Trust
Agreement shall be required to meet the terms of eligibility as a successor
Owner Trustee pursuant to Section 9.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 9.03.
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Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) 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 Owner Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Owner Trustee;
(b) No trustee under this Trust Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Trust Agreement;
and
(c) The Owner Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the 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 Trust
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 Trust Agreement, specifically including
every provision of this Trust 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.
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 do any lawful act under or in respect of this
Trust 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 co-trustee or separate trustee.
<PAGE>
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ARTICLE X
MISCELLANEOUS
Section 10.01. AMENDMENTS. (a) This Trust Agreement may be amended from
time to time by the parties hereto as specified in this Section, provided that
any amendment, except as provided in subparagraph (e) below, be accompanied by
an Opinion of Counsel addressed to the Owner Trustee and obtained by the Master
Servicer to the effect that such amendment (i) complies with the provisions of
this Section and (ii) would not cause the Trust (if IMH Assets Corp. was not the
Holder of 100% of the Certificates) to be subject to an entity level tax for
federal income tax purposes.
(b) If the purpose of the amendment (as detailed therein) is to correct
any mistake, eliminate any inconsistency, cure any ambiguity or deal with any
matter not covered (i.e. to give effect to the intent of the parties and, if
applicable, to the expectations of the Holders), it shall not be necessary to
obtain the consent of any Holders, but the Owner Trustee shall be furnished with
(A) a letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to any Bond or the rating
then assigned to any Bond without taking into account the Bond Insurance Policy
or (B) an Opinion of Counsel obtained by the Master Servicer to the effect that
such action will not adversely affect in any material respect the interests of
any Holders, and the consent of the Bond Insurer shall have been obtained.
(c) If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Security is outstanding, it shall
not be necessary to obtain the consent of any Holder, but the Owner Trustee
shall be furnished with an Opinion of Counsel obtained by the Master Servicer
that such amendment is necessary or helpful to prevent the imposition of such
taxes and is not materially adverse to any Holder, and the consent of the Bond
Insurer shall be obtained.
(d) If the purpose of the amendment is to add or eliminate or change
any provision of the Trust Agreement other than as contemplated in (b) and (c)
above, the amendment shall require (A) an Opinion of Counsel obtained by the
Master Servicer to the effect that such action will not adversely affect in any
material respect the interests of any Holders, (B) the consent of the Bond
Insurer and (C) either (a) a letter from the Rating Agency that the amendment
will not result in the downgrading or withdrawal of the rating then assigned to
any Bond or the rating then assigned to any Bond without taking into account the
Bond Insurance Policy or (b) the consent of Holders of Certificates evidencing a
majority Percentage Interest of the Certificates and the Indenture Trustee;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received that are required to be
distributed on any Certificate without the consent of the related
Certificateholder and the Bond Insurer, or (ii) reduce the aforesaid percentage
of Certificates the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all such Certificates then
outstanding.
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(e) If the purpose of the amendment is to provide for the holding of
any of the Certificates in book-entry form, it shall require the consent of
Holders of all such Certificates then outstanding; provided, that the Opinion of
Counsel specified in subparagraph (a) above shall not be required.
(f) If the purpose of the amendment is to provide for the issuance of
additional certificates representing an interest in the Trust, it shall not be
necessary to obtain the consent of any Holder, but the Owner Trustee shall be
furnished with (A) an Opinion of Counsel obtained by the Master Servicer to the
effect that such action will not adversely affect in any material respect the
interests of any Holders and (B) a letter from the Rating Agencies that the
amendment will not result in the downgrading or withdrawal of the rating then
assigned to any Bonds or the rating then assigned to the Bonds without taking
into account the Bond Insurance Policy and the consent of the Bond Insurer shall
be obtained.
(g) Promptly after the execution of any such amendment or consent, the
Master Servicer shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee, the Bond
Insurer and each of the Rating Agencies. It shall not be necessary for the
consent of Certificateholders or the Indenture Trustee pursuant to this Section
10.01 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 Trust Agreement or in any other Basic 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.
(h) In connection with the execution of any amendment to any agreement
to which the Trust is a party, other than this Trust Agreement, the Owner
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel to the effect that such amendment is authorized or permitted by the
documents subject to such amendment and that all conditions precedent in the
Basic Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.
(i) No amendment or agreement affecting the rights or duties of the
Certificate Registrar or the Certificate Paying Agent may be entered into
without the consent of the affected
party.
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 of the State of Delaware.
Section 10.02. NO LEGAL TITLE TO OWNER TRUST ESTATE. The
Certificateholders shall not have legal title to any part of the Owner Trust
Estate solely by virtue of their status as a Certificateholder. The
Certificateholders shall be entitled to receive distributions with respect to
their undivided beneficial interest therein only in accordance with Articles V
and VIII. No
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transfer, by operation of law or otherwise, of any right, title or interest of
the Certificateholders to and in their ownership interest in the Owner Trust
Estate shall operate to terminate this Trust 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 Owner Trust Estate
Section 10.03. LIMITATIONS ON RIGHTS OF OTHERS. Except for Section
2.07, the provisions of this Trust Agreement are solely for the benefit of the
Owner Trustee, the Depositor, the Certificateholders, the Bond Insurer and, to
the extent expressly provided herein, the Indenture Trustee and the Bondholders,
and nothing in this Trust Agreement (other than Section 2.07), whether express
or implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Owner Trust Estate or under or in
respect of this Trust Agreement or any covenants, conditions or provisions
contained herein.
Section 10.04. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt, to the Owner Trustee at: Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890;
Attention: Corporate Trust Administration; to the Depositor at: IMH Assets
Corp., 20371 Irvine Avenue, Santa Ana Heights, California 92707; Attention:
Richard Johnson; to the Indenture Trustee and the Certificate Paying Agent at:
Bankers Trust Company of California, N.A., 3 Park Plaza, 16th Floor, Irvine,
California 92714, Attention: Impac CMB Trust Series 1999-2; to the Bond Insurer
at: Ambac Assurance Corporation, One State Street Plaza, New York, New York
10004, Attention: Structured Finance--Mortgage Backed Securities; to Moody's at:
99 Church Street, New York, New York 10007; Attention: Residential Mortgage
Monitoring Unit; to Standard & Poor's at 55 Water Street, New York, New York
10041 or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party.
(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 Trust Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder receives such notice.
(c) A copy of any notice delivered to the Owner Trustee or the Trust
shall also be delivered to the Depositor.
Section 10.05. SEVERABILITY. Any provision of this Trust Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
<PAGE>
-35-
Section 10.06. SEPARATE COUNTERPARTS. This Trust 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 but one and the same instrument.
Section 10.07. SUCCESSORS AND ASSIGNS. All representations, warranties,
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, each of the Depositor, the Owner Trustee and its successors and
each Certificateholder and its successors and permitted assigns and the Bond
Insurer, 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 10.08. NO PETITION. The Owner Trustee, by entering into this
Trust Agreement and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against the
Depositor or the Trust, or join in any institution against the Depositor or the
Trust of, any bankruptcy proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations to the
Certificates, the Bonds, this Trust Agreement or any of the Basic Documents.
This Section shall survive for one year following the termination of this Trust
Agreement.
Section 10.09. 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 Seller, the Owner Trustee, the Indenture
Trustee, the Certificate Registrar, the Certificate Paying Agent 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 Trust
Agreement, the Certificates or the Basic Documents.
Section 10.10. 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.
Section 10.11. GOVERNING LAW. THIS TRUST 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 10.12. INTEGRATION. This Trust Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understanding pertaining thereto.
<PAGE>
IN WITNESS WHEREOF, the Depositor and the Owner Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year
first above written.
IMH ASSETS CORP.
as Depositor
By:
----------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY
as Owner Trustee,
By:
----------------------------------------
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
as Certificate Registrar
and Certificate Paying Agent
By:
----------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
Form of Certificate
[Face]
THIS CERTIFICATE IS SUBORDINATE TO THE BONDS AS DESCRIBED IN THE
INDENTURE.
[NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED AN OPINION OF COUNSEL AS DESCRIBED IN THE TRUST
AGREEMENT.]
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED A CERTIFICATE OF NON- FOREIGN STATUS CERTIFYING AS
TO THE TRANSFEREE'S STATUS AS A U.S. PERSON OR CORPORATION UNDER U.S. LAW.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE TRUST AGREEMENT REFERRED
TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE
TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN,
OR (II) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, OR SECTION 4975 OF
THE CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE
OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN
TO EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE
OWNER TRUST ESTATE BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
THE
<PAGE>
A-2
CODE, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF THE CODE, AND
WILL NOT SUBJECT THE OWNER TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION OR
LIABILITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED A CERTIFICATE OF NON- FOREIGN STATUS CERTIFYING AS
TO THE TRANSFEREE'S STATUS AS A U.S. PERSON OR CORPORATION UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE CERTIFICATE REGISTRAR, THE CERTIFICATE PAYING AGENT, THE DEPOSITOR,
THE MASTER SERVICER, THE INDENTURE TRUSTEE, OR THE OWNER TRUSTEE OR ANY OF THEIR
RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE TRUST AGREEMENT OR
THE BASIC DOCUMENTS.
<PAGE>
A-3
Certificate No. ___ Certificate Percentage Interest of
this
Certificate: _________%
Cut-off Date: June 1, 1999
Date of Amended and Restated
Trust Agreement: First Payment Date:
June 28, 1999 July 26, 1999
Master Servicer: Certificate Interest Rate:
Impac Funding Corporation Weighted Average Pass-Through
Rate
IMPAC CMB TRUST SERIES 1999-2
Evidencing a fractional undivided equity interest in the Owner Trust
Estate, the property of which consists primarily of the Mortgage Loans in Impac
CMB Trust Series 1999-2 (the "Trust"), a Delaware business trust formed by IMH
ASSETS CORP., as depositor, pursuant to the Trust Agreement referred to below.
This certifies that ________________________ is the registered owner of
the Percentage Interest represented hereby.
The Trust was created pursuant to a Trust Agreement, dated as of June
18, 1999 as amended and restated by the Amended and Restated Trust Agreement
dated as of June 28, 1999 (as amended and supplemented from time to time, the
"Trust Agreement") between the Depositor and Wilmington Trust Company, as owner
trustee (the "Owner Trustee", which term includes any successor entity under the
Trust Agreement), a summary of certain of the pertinent provisions of which is
set forth hereinafter. This Certificate is issued under and is subject to the
terms, provi sions and conditions of the Trust Agreement, to which Trust
Agreement the Holder of this Certifi cate by virtue of the acceptance hereof
assents and by which such Holder is bound.
This Certificate is one of a duly authorized issue of Trust
Certificates, Series 1999-2 (herein called the "Certificates") issued under the
Trust Agreement to which reference is hereby made for a statement of the
respective rights thereunder of the Depositor, the Owner Trustee and the Holders
of the Certificates and the terms upon which the Certificates are executed and
delivered. All terms used in this Certificate which are defined in the Trust
Agreement shall have the meanings assigned to them in the Trust Agreement. The
Owner Trust Estate consists of the Mortgage Loans in the Impac CMB Trust Series
1999-2 and a Bond Insurance Policy. The rights of the Holders of the
Certificates are subordinated to the rights of the Holders of the Bonds, as set
forth in the Indenture.
<PAGE>
A-4
There will be distributed on the 25th day of each month or, if such
25th day is not a Business Day, the next Business Day (each, a "Payment Date"),
commencing on July 26, 1999, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
preceding the month of such Payment Date (the "Record Date"), such
Certificateholder's Percentage Interest in the amount to be distributed to
Certificateholders on such Payment Date.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Payment Account that
have been released from the Lien of the Indenture for payment hereunder and that
neither the Owner Trustee in its individual capacity nor the Depositor is
personally liable to the Certificateholders for any amount payable under this
Certificate or the Trust Agreement or, except as expressly provided in the Trust
Agreement, subject to any liability under the Trust Agreement.
The Holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate are subordinated to the
rights of the Bondholders as described in the Indenture, dated as of June 28,
1999, between the Trust and Bankers Trust Company of California, N.A., as
Indenture Trustee (the "Indenture").
The Depositor and each Certificateholder, by acceptance of a
Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for federal, state and local income tax purposes
as an equity interest in the Trust.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Depositor, or join in any institution against the Depositor or the Trust 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
Certificates, the Bonds, the Trust Agreement or any of the Basic Documents.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Certificate Paying Agent by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Certificate Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained by the Certificate Registrar for that purpose by the Trust in the
Borough of Manhattan, the City of New York.
<PAGE>
A-5
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency specified
in such notice.
No transfer, sale, pledge or other disposition of a Certificate shall
be made unless such transfer, sale, pledge or other disposition is exempt from
the registration requirements of the Securities Act and any applicable state
securities laws or is made in accordance with said Act and laws. In the event of
any such transfer, the Certificate Registrar or the Depositor shall prior to
such transfer require the transferee to execute (A) either (i) (a) an investment
letter in substantially the form attached to the Agreement as Exhibit C (or in
such form and substance reasonably satisfactory to the Certificate Registrar and
the Depositor) which investment letter shall not be an expense of the Trust, the
Owner Trustee, the Certificate Registrar, the Master Servicer or the Depositor
and which investment letter states that, among other things, such transferee (1)
is a "qualified institutional buyer" as defined under Rule 144A, acting for its
own account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (2) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act of
1933, as amended, provided by Rule 144A or (ii) (a) a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Certificate
Registrar and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from said
Act and laws or is being made pursuant to said Act and laws, which Opinion of
Counsel shall not be an expense of the Trust, the Owner Trustee, the Certificate
Registrar, the Master Servicer or the Depositor and (b) the transferee executes
a representation letter, substantially in the form of Exhibit D to the
Agreement, and the transferor executes a representation letter, substantially in
the form of Exhibit E to the Agreement, each acceptable to and in form and
substance satisfactory to the Certificate Registrar and the Depositor certifying
the facts surrounding such transfer, which representation letters shall not be
an expense of the Trust, the Owner Trustee, the Certificate Registrar, the
Master Servicer or the Depositor and (B) the Certificate of Non-Foreign Status
(in substantially the form attached to the Agreement as Exhibit D) acceptable to
and in form and substance reasonably satisfactory to the Certificate Registrar
and the Depositor, which certificate shall not be an expense of the Trust, the
Owner Trustee, the Certificate Registrar or the Depositor. The Holder of a
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trust, the Owner Trustee, the Indenture Trustee, the Certificate
Paying Agent, the Certificate Registrar, the Master Servicer and the Depositor
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of Certificates or any interest therein shall be made to
any employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and bank
collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject to
ERISA, or Section 4975 of the Code (collectively, "Plan"), any Person acting,
directly or
<PAGE>
A-6
indirectly, on behalf of any such Plan or any Person acquiring such Certificates
with "plan assets" of a Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss.2510.3-101 ("Plan Assets") unless the
Depositor, the Owner Trustee, the Certificate Registrar and the Master Servicer
are provided with an Opinion of Counsel which establishes to the satisfaction of
the Depositor, the Owner Trustee, the Certificate Registrar and the Master
Servicer that the purchase of Certificates is permissible under applicable law,
will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Depositor, the Owner Trustee,
the Certificate Registrar or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Owner Trustee, the Certificate
Registrar or the Master Servicer. In lieu of such Opinion of Counsel, a Plan,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with Plan Assets of a Plan may provide a
certification in the form of Exhibit G to the Agreement, which the Depositor,
the Owner Trustee, the Certificate Registrar and the Master Servicer may rely
upon without further inquiry or investigation. Neither an Opinion of Counsel nor
a certification will be required in connection with the initial transfer of any
such Certificate by the Depositor to an affiliate of the Depositor (in which
case, the Depositor or any affiliate thereof shall have deemed to have
represented that such affiliate is not a Plan or a Person investing Plan Assets
of any Plan) and the Owner Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Owner Trustee, shall be a written
representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor.
No offer, sale, transfer, pledge, hypothecation or other disposition
(including any pledge, sale or transfer under a repurchase transaction or
securities loan) of any Certificate shall be made to any transferee unless,
prior to such disposition, the proposed transferor delivers to the Owner Trustee
and the Bond Insurer an Opinion of Counsel, rendered by a law firm generally
recognized to be qualified to opine concerning the tax aspects of asset
securitization and reasonably satisfactory to the Bond Insurer, to the effect
that such transfer (including any disposition permitted following any default
under any pledge or repurchase transaction) will not cause the Trust to be (i)
treated as an association taxable as a corporation for federal income tax and
relevant state income and franchise tax purposes, (ii) taxable as a taxable
mortgage pool as defined in Section 7701(i) of the Code or (iii) taxable as a
"publicly traded partnership" as defined in Treasury Regulation section
1.7704-1.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
<PAGE>
A-7
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, or an authenticating
agent by manual signature, this Certificate shall not entitle the Holder hereof
to any benefit under the Trust Agreement or be valid for any
purpose.
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.
<PAGE>
A-8
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.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
Dated: June 28, 1999 By:______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By:______________________________
Authorized Signatory
or __________________________________________,
as Authenticating Agent of the Trust
By:______________________________
Authorized Signatory
<PAGE>
A-9
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Seller, the Master Servicer, the Indenture Trustee, the
Certificate Paying Agent, the Certificate Registrar, the Owner Trustee or any
Affiliates of any of them and no recourse may be had against such parties or
their assets, except as expressly set forth or contemplated herein or in the
Trust Agreement or the Basic Documents. In addition, this Certificate is not
guaranteed by any governmental agency or instrumentality and is limited in right
of payment to certain collections and recoveries with respect to the Mortgage
Loans, all as more specifically set forth herein and in the Trust Agreement. A
copy of the Trust Agreement may be examined by any Certificateholder upon
written request during normal business hours at the principal office of the
Depositor and at such other places, if any, designated by the Depositor.
The Trust Agreement permits the amendment thereof as specified below,
provided that any amendment be accompanied by the consent of the Bond Insurer
and an Opinion of Counsel to the Owner Trustee to the effect that such amendment
complies with the provisions of the Trust Agreement and, if IMH Assets Corp. was
not the Holder of 100% of the Certificates, would not cause the Trust to be
subject to an entity level tax. If the purpose of the amendment is to correct
any mistake, eliminate any inconsistency, cure any ambiguity or deal with any
matter not covered, it shall not be necessary to obtain the consent of any
Holder, but the Owner Trustee shall be furnished with a letter from the Rating
Agencies that the amendment will not result in the downgrading or withdrawal of
the rating then assigned to any Bond or the rating then assigned to any Bond
without taking into account the Bond Insurance Policy. If the purpose of the
amendment is to prevent the imposition of any federal or state taxes at any time
that any Security is outstanding, it shall not be necessary to obtain the
consent of the any Holder, but the Owner Trustee shall be furnished with an
Opinion of Counsel that such amendment is necessary or helpful to prevent the
imposition of such taxes and is not materially adverse to any Holder. If the
purpose of the amendment is to add or eliminate or change any provision of the
Trust Agreement, other than as specified in the preceding two sentences, the
amendment shall require either (a) a letter from the Rating Agencies that the
amendment will not result in the downgrading or withdrawal of the rating then
assigned to any Bond or the rating then assigned to any Bond without taking into
account the Bond Insurance Policy or (b) the consent of Holders of the
Certificates evidencing a majority of the Percentage Interests of the
Certificates and the Indenture Trustee; PROVIDED, HOWEVER, that no such
amendment shall (i) reduce in any manner the amount of, or delay the time of,
payments received that are required to be distributed on any Certificate without
the consent of the related Certificateholder, or (ii) reduce the aforesaid
percentage of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.
<PAGE>
A-10
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trust in the Borough of Manhattan, the City of New York, accompanied by a
written instrument of transfer in form satisfactory to the Certificate Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar appointed under the
Trust Agreement is Bankers Trust Company of California, N.A..
Except as provided in the Trust Agreement, the Certificates are
issuable only in a minimum Certificate Percentage Interest of 10%. As provided
in the Trust Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee, the Certificate Paying Agent, or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Owner Trustee,
the Certificate Paying Agent, the Certificate Registrar or any such agent shall
be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate as and when provided in accordance
with the terms of the Trust Agreement.
<PAGE>
A-11
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 Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
to transfer said Certificate 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 Certificate 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.
<PAGE>
A-12
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately available
funds to _____________________________________________________________________
______________________________________________________________________________
for the account of ________________________________________, account number
______________, or, if mailed by check, to ______________.
Applicable statements should be mailed to__________________.
__________________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
<PAGE>
B-1
EXHIBIT B
CERTIFICATE OF TRUST OF
IMPAC CMB TRUST SERIES 1999-2
THIS Certificate of Trust of Impac CMB Trust Series 1999-2
(the "Trust"), dated June __, 1999, 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, ss. 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is
Impac CMB Trust Series 1999-2.
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 North Market Street, Wilmington, Delaware 19890-0001.
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 under a
Trust Agreement dated as of June __, 1999
By:
_______________________________________
Name:
Title:
<PAGE>
C-1
EXHIBIT C
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including
numbers:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with,
the Owner Trustee and the Depositor (as defined in the Trust Agreement (the
"Agreement"), dated as of June 28, 1999, between IMH Assets Corp., as Depositor
and ______________________, as Owner Trustee pursuant to Section 3.05 of the
Agreement and __________________________________ as indenture trustee, as
follows:
a. The Buyer understands that the Rule 144A
Securities have not been registered under the 1933 Act or the
securities laws of any state.
<PAGE>
C-2
b. The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Rule 144A
Securities.
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Seller, the Indenture Trustee, the Owner Trustee or the Master
Servicer.
d. Neither the Buyer nor anyone acting on its behalf
has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of the
1933 Act or require registration pursuant thereto, nor will it act, nor
has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified
institutional buyers, understands that such Rule 144A Securities may be
resold, pledged or transferred only (i) to a person reasonably believed
to be a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the 1933 Act.
[3. The Buyer warrants and represents to, and covenants with,
the Seller, the Indenture Trustee, Owner Trustee, Master Servicer and the
Depositor that either (1) the Buyer is (A) 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 Internal Revenue Code of 1986 ("Code")), which (in either case) is
subject to ERISA or Section 4975 of the Code (both a "Plan"), and (B) is not
directly or indirectly purchasing the Rule 144A Securities on behalf of, as
investment manager of, as named fiduciary of, as trustee of, or with "plan
assets" of a Plan, or (2) the Buyer understands that registration of transfer of
any
<PAGE>
C-3
Rule 144A Securities to any Plan, or to any Person acting on behalf of any Plan,
will not be made unless such Plan delivers an opinion of its counsel, addressed
and satisfactory to the Certificate Registrar and the Depositor, to the effect
that the purchase and holding of the Rule 144A Securities by, on behalf of or
with "plan assets" of any Plan would not constitute or result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, and would
not subject the Depositor, the Certificate Paying Agent, the Certificate
Registrar, the Master Servicer, the Indenture Trustee or the Trust to any
obligation or liability (including liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in the Agreement or any other
liability.]
4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
- --------------------------------- ---------------------------------
Print Name of Seller Print Name of Buyer
By: By:
----------------------------- ------------------------------
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
----------------------------- --------------------------
Date: Date:
----------------------------- --------------------------
<PAGE>
C-4
ANNEX 1 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in
connection with the Rule 144A Investment Representation to which this
Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $______________________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ BANK. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, A COPY OF WHICH IS ATTACHED HERETO.
- --------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
<PAGE>
C-5
___ SAVINGS AND LOAN. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements.
___ BROKER-DEALER. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State or territory or the District
of Columbia.
___ STATE OR LOCAL PLAN. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
___ ERISA PLAN. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ INVESTMENT ADVISER. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed
by the U.S. Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958.
___ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
___ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or
H.R. 10 plans.
<PAGE>
C-6
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit Bonds and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party that at
the time is a "qualified institutional buyer" within the meaning of Rule 144A.
In addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
--------------------------------------------
Print Name of Buyer
<PAGE>
C-7
By:
------------------------------------------
Name:
Title:
Date:
------------------------------------------
<PAGE>
C-8
ANNEX 2 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used.
____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $______________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit Bonds and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements,
<PAGE>
C-9
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales to the
Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
--------------------------------------------
Print Name of Buyer
By:
------------------------------------------
Name:
Title:
IF AN ADVISER:
--------------------------------------------
Print Name of Buyer
Date:
------------------------------------------
<PAGE>
D-1
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is delivered
pursuant to Section 3.03 of the Amended and Restated Trust Agreement, dated as
of June 28, 1999 (the "Trust Agreement"), between IMH Assets Corp., as depositor
and Wilmington Trust Company, as Owner Trustee, in connection with the
acquisition of, transfer to or possession by the undersigned, whether as
beneficial owner for U.S. federal income tax purposes (the "Beneficial Owner"),
or nominee on behalf of the Beneficial Owner of the Certificates, Series 1999-2
(the "Certificate"). Capitalized terms used but not defined in this certificate
have the respective meanings given them in the Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a nominee), and in
all cases sign and otherwise complete Part III. In addition, each holder shall
submit with the Certificate an IRS Form W-9 relating to such holder.
To confirm to the Trust that the provisions of Sections 871, 881 or 1446 of the
Internal Revenue Code (relating to withholding tax on foreign partners) do not
apply in respect of the Certificate held by the undersigned, the undersigned
hereby certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is ) not a non-resident
alien for purposes of U.S. income taxation;
2. My (The Beneficial Owner's) name and home address
are:
------------------------------------
------------------------------------
------------------------------------ ; and
3. My (The Beneficial Owner's) U.S. taxpayer
identification number (Social Security Number) is
-----------.
B. Corporate, Partnership or Other Entity as Beneficial
Owner
<PAGE>
D-2
1. _______________(Name of the Beneficial
Owner) is not a foreign corporation, foreign
partnership, foreign trust or foreign
estate (as those terms are defined in the
Code and Treasury Regulations;
2. The Beneficial Owner's office address and
place of incorporation (if applicable) is
______________________________; and
3. The Beneficial Owner's U.S. employer
identification number is_______________.
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this certificate has been made in reliance upon
information contained in:
_____ an IRS Form W-9
_____ a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least thirty (30) days prior to the date that the
form relied upon becomes obsolete, and (ii) in connection with change in
Beneficial Owners, the undersigned agrees to submit a new Certificate of
Non-Foreign Status to the Trust promptly after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees
to notify the Trust within sixty (60) days of the date that the Beneficial Owner
becomes a foreign person. The undersigned understands that this certificate may
be disclosed to the Internal Revenue Service by the Trust and any false
statement contained therein could be punishable by fines, imprisonment or both.
<PAGE>
D-3
Under penalties of perjury, I declare that I have examined this
certificate and to the best of my knowledge and belief it is true, correct and
complete and will further declare that I will inform the Trust of any change in
the information provided above, and, if applicable, I further declare that I
have the authority* to sign this document.
- --------------------------------
Name
- --------------------------------
Title (if applicable)
- --------------------------------
Signature and Date
*Note: If signed pursuant to a power of attorney, the power of
attorney must accompany this certificate.
<PAGE>
E-1
EXHIBIT E
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Wilmington Trust Company, as Owner Trustee
11 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, California 92714
Re: Impac CMB Trust Series 1999-2 Trust Certificates,
SERIES 1999-2 , (THE "CERTIFICATES")
------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates,
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
<PAGE>
E-2
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Trust Agreement.
Very truly yours,
[TRANSFEREE]
By:
--------------------------------
Authorized Officer
<PAGE>
F-1
EXHIBIT F
TRANSFEROR CERTIFICATE
----------------------
Wilmington Trust Company, as Owner Trustee
11 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, California 92714
Re: Proposed Transfer of Trust Certificates, Impac CMB Trust Series 1999-2
----------------------------------------------------------------------
Gentlemen:
This certification is being made by ______________ (the "Transferor")
in connection with the proposed Transfer to ________ (the "Transferee") of a
trust certificate (the "Trust Certificate") representing ___% fractional
undivided interest in Impac CMB Trust Series 1999-2 (the "Trust") created
pursuant to a Trust Agreement, dated as of June 18, 1999 (such agreement, as
amended by the Amended and Restated Trust Agreement dated June 28, 1999, being
referred to herein as the "Trust Agreement") among IMH Assets Corp. (the
"Company"), Wilmington Trust Company, as Owner Trustee (the "Owner Trustee") and
Bankers Trust Company of California, N.A., as certificate registrar and
certificate paying agent (the "Certificate Registrar"). Initially capitalized
terms used but not defined herein have the meanings assigned to them in the
Deposit Trust Agreement. The Transferor hereby certifies, represents and
warrants to, and covenants with, the Company, the Owner Trustee and the
Certificate Registrar that:
Neither the Transferor nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Trust Certificate, any
interest in any Trust Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Trust Certificate, any interest in any
Trust Certificate or any other similar security from any person in any manner,
(c) has otherwise approached or negotiated with respect to any Trust
Certificate, any interest in any Trust Certificate or any other similar security
with any person in any manner, (d) has made any general solicitation by means of
general advertising or in any other manner, or (e) has taken any other action,
that (as to any of (a) through (e) above) would constitute a distribution of the
Trust Certificates under the Securities Act of 1933 (the "Act"), that would
render the disposition of any Trust Certificate a
<PAGE>
F-2
violation of Section 5 of the Act or any state securities law, or that would
require registration or qualification pursuant thereto. The Transferor will not
act in any manner set forth in the foregoing sentence with respect to any Trust
Certificate. The Transferor has not and will not sell or otherwise transfer any
of the Trust Certificates, except in compliance with the provisions of the Trust
Agreement.
Date:
--------------------------------
--------------------------------
Name of Transferor
--------------------------------
Signature
--------------------------------
Name
--------------------------------
Title
<PAGE>
G-1
EXHIBIT G
[DATE]
Wilmington Trust Company, as Owner Trustee
11 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, California 92714
Re: Proposed Transfer of Trust Certificates, Impac CMB Trust Series 1999-2
(the "Certificates")
--------------------------------
Gentlemen:
This certification is being made by ______________ (the "Transferee")
in connection with the proposed Transfer by ________ (the "Transferor") of a
trust certificate (the "Trust Certificate") representing ___% fractional
undivided interest in Impac CMB Trust Series 1999-2 (the "Trust") created
pursuant to a Trust Agreement, dated as of June 18, 1999 (such agreement, as
amended by the Amended and Restated Trust Agreement dated June 28, 1999, being
referred to herein as the "Trust Agreement") among IMH Assets Corp. (the
"Company"), Wilmington Trust Company, as Owner Trustee (the "Owner Trustee") and
Bankers Trust Company of California, N.A., as certificate registrar and
certificate paying agent (the "Certificate Registrar"). Initially capitalized
terms used but not defined herein have the meanings assigned to them in the
Deposit Trust Agreement. The Transferor hereby certifies, represents and
warrants to, and covenants with, the Company, the Owner Trustee and the
Certificate Registrar that:
(i) either (a) or (b) is satisfied, as marked below:
____ a. The Transferor is not any employee benefit
plan subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the Internal Revenue Code of 1986 (the "Code"), a
Person acting, directly or indirectly, on behalf of any such plan or
any Person acquiring such Certificates with "plan assets" of a Plan
within the meaning of the Department of Labor regulation promulgated at
29 C.F.R. ss.2510.3-101; or
____ b. The Transferor will provide the Depositor,
the Owner Trustee, the Certificate Registrar and the Master Servicer
with an opinion of counsel, satisfactory to the Depositor, the Owner
Trustee, the Certificate Registrar and the Master Servicer, to the
effect that the purchase and holding of a Certificate by or on behalf
of the Transferor is permissible under applicable law, will not
constitute or result in a prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments) and will not subject the Depositor, the Owner
<PAGE>
G-2
Trustee, the Certificate Registrar or the Master Servicer to any
obligation or liability (including liabilities under ERISA or Section
4975 of the Code) in addition to those undertaken in the Trust
Agreement, which opinion of counsel shall not be an expense of the
Depositor, the Owner Trustee, the Certificate Registrar or the Master
Servicer; and
(ii) the Transferor is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406
and 407 of ERISA and Section 4975 of the Code and understands that each
of the parties to which this certification is made is relying and will
continue to rely on the statements made in this paragraph.
Very truly yours,
-----------------------------------
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
EXHIBIT 4.1
<PAGE>
IMPAC CMB TRUST SERIES 1999-2
Issuer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Indenture Trustee
-----------------------------------------
INDENTURE
Dated as of June 28, 1999
------------------------------------------
COLLATERALIZED ASSET-BACKED BONDS
-------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Section Page
- ------- ----
<S> <C> <C> <C>
ARTICLE I
Definitions
1.01. DEFINITIONS................................................................................2
1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT..........................................2
1.03. RULES OF CONSTRUCTION......................................................................2
ARTICLE II
Original Issuance of Bonds
2.01. FORM.......................................................................................4
2.02. EXECUTION, AUTHENTICATION AND DELIVERY.....................................................4
2.03. ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE..........................................4
ARTICLE III
Covenants
3.01. COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS..................................6
3.02. MAINTENANCE OF OFFICE OR AGENCY............................................................6
3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT.......................................6
3.04. EXISTENCE..................................................................................7
3.05. PAYMENT OF PRINCIPAL AND INTEREST..........................................................8
3.06. PROTECTION OF TRUST ESTATE................................................................10
3.07. OPINIONS AS TO TRUST ESTATE...............................................................10
3.08. PERFORMANCE OF OBLIGATIONS................................................................11
3.09. NEGATIVE COVENANTS........................................................................11
3.10. ANNUAL STATEMENT AS TO COMPLIANCE.........................................................12
3.11. [RESERVED]................................................................................12
3.12. REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS..............................12
3.13. AMENDMENTS TO SERVICING AGREEMENT.........................................................13
3.14. MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE..............................13
3.15. INVESTMENT COMPANY ACT....................................................................13
3.16. ISSUER MAY CONSOLIDATE, ETC...............................................................13
3.17. SUCCESSOR OR TRANSFEREE...................................................................15
3.18. NO OTHER BUSINESS.........................................................................16
3.19. NO BORROWING..............................................................................16
3.20. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.........................................16
3.21. CAPITAL EXPENDITURES......................................................................16
3.22. DETERMINATION OF BOND INTEREST RATE.......................................................16
3.23. RESTRICTED PAYMENTS.......................................................................16
<PAGE>
3.24. NOTICE OF EVENTS OF DEFAULT...............................................................17
3.25. FURTHER INSTRUMENTS AND ACTS..............................................................17
3.26. STATEMENTS TO BONDHOLDERS.................................................................17
3.27. PAYMENTS UNDER THE BOND INSURANCE POLICY..................................................17
3.28. REPLACEMENT BOND INSURANCE POLICY.........................................................17
ARTICLE IV
The Bonds; Satisfaction and Discharge of Indenture
4.01. THE BONDS.................................................................................19
4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF BONDS;
APPOINTMENT OF BOND REGISTRAR AND CERTIFICATE REGISTRAR...................................19
4.03. MUTILATED, DESTROYED, LOST OR STOLEN BONDS................................................20
4.04. PERSONS DEEMED OWNERS.....................................................................21
4.05. CANCELLATION..............................................................................21
4.06. BOOK-ENTRY BONDS..........................................................................21
4.07. NOTICES TO DEPOSITORY.....................................................................22
4.08. DEFINITIVE BONDS..........................................................................22
4.09. TAX TREATMENT.............................................................................23
4.10. SATISFACTION AND DISCHARGE OF INDENTURE...................................................23
4.11. APPLICATION OF TRUST MONEY................................................................24
4.12. SUBROGATION AND COOPERATION...............................................................24
4.13. REPAYMENT OF MONIES HELD BY PAYING AGENT..................................................25
4.14. TEMPORARY BONDS...........................................................................25
ARTICLE V
DEFAULT AND REMEDIES
5.01. EVENTS OF DEFAULT.........................................................................27
5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT........................................27
5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE.................28
5.04. REMEDIES; PRIORITIES......................................................................30
5.05. OPTIONAL PRESERVATION OF THE TRUST ESTATE.................................................32
5.06. LIMITATION OF SUITS.......................................................................32
5.07. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND INTEREST.....................33
5.08. RESTORATION OF RIGHTS AND REMEDIES........................................................33
5.09. RIGHTS AND REMEDIES CUMULATIVE............................................................33
5.10. DELAY OR OMISSION NOT A WAIVER............................................................33
5.11. CONTROL BY BOND INSURER...................................................................34
5.12. WAIVER OF PAST DEFAULTS...................................................................34
<PAGE>
5.13. UNDERTAKING FOR COSTS.....................................................................35
5.14. WAIVER OF STAY OR EXTENSION LAWS..........................................................35
5.15. SALE OF TRUST ESTATE......................................................................35
5.16. ACTION ON BONDS...........................................................................37
ARTICLE VI
THE INDENTURE TRUSTEE
6.01. DUTIES OF INDENTURE TRUSTEE...............................................................39
6.02. RIGHTS OF INDENTURE TRUSTEE...............................................................40
6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE....................................................40
6.04. INDENTURE TRUSTEE'S DISCLAIMER............................................................40
6.05. NOTICE OF EVENT OF DEFAULT................................................................41
6.06. REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX ADMINISTRATION............................41
6.07. COMPENSATION AND INDEMNITY................................................................41
6.08. REPLACEMENT OF INDENTURE TRUSTEE..........................................................42
6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER.....................................................43
6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE.........................43
6.11. ELIGIBILITY; DISQUALIFICATION.............................................................44
6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER..........................................44
6.13. REPRESENTATIONS AND WARRANTIES............................................................44
6.14. DIRECTIONS TO INDENTURE TRUSTEE...........................................................45
6.15. THE AGENTS................................................................................45
ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS....................46
7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS................................46
7.03. REPORTS OF ISSUER.........................................................................46
7.04. REPORTS BY INDENTURE TRUSTEE..............................................................47
7.05. STATEMENTS TO BONDHOLDERS.................................................................47
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
8.01. COLLECTION OF MONEY.......................................................................50
8.02. TRUST ACCOUNTS............................................................................50
8.03. OFFICER'S CERTIFICATE.....................................................................50
8.04. TERMINATION UPON DISTRIBUTION TO BONDHOLDERS..............................................51
8.05. RELEASE OF TRUST ESTATE...................................................................51
8.06. SURRENDER OF BONDS UPON FINAL PAYMENT.....................................................51
<PAGE>
8.07. OPTIONAL REDEMPTION OF THE BONDS..........................................................51
ARTICLE IX
SUPPLEMENTAL INDENTURES
9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS....................................53
9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.......................................54
9.03. EXECUTION OF SUPPLEMENTAL INDENTURES......................................................56
9.04. EFFECT OF SUPPLEMENTAL INDENTURE..........................................................56
9.05. CONFORMITY WITH TRUST INDENTURE ACT.......................................................56
9.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.............................................56
ARTICLE X
MISCELLANEOUS
10.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.................................................57
10.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE..........................................58
10.03. ACTS OF BONDHOLDERS.......................................................................59
10.04. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING AGENCIES...........................59
10.05. NOTICES TO BONDHOLDERS; WAIVER............................................................60
10.06. CONFLICT WITH TRUST INDENTURE ACT.........................................................61
10.07. EFFECT OF HEADINGS........................................................................61
10.08. SUCCESSORS AND ASSIGNS....................................................................61
10.09. SEPARABILITY..............................................................................61
10.10. BENEFITS OF INDENTURE.....................................................................61
10.11. LEGAL HOLIDAYS............................................................................62
10.12. GOVERNING LAW.............................................................................62
10.13. COUNTERPARTS..............................................................................62
10.14. RECORDING OF INDENTURE....................................................................62
10.15. ISSUER OBLIGATION.........................................................................62
10.16. NO PETITION...............................................................................62
10.17. INSPECTION................................................................................63
Signatures and Seals ......................................................................................... 59
Acknowledgments .............................................................................................. 60
</TABLE>
<PAGE>
EXHIBITS
Exhibit A - Form of Bonds
Exhibit B - Mortgage Loan Schedule
Exhibit C - Form of Initial Certification
Exhibit D - Form of Final Certification
Appendix A Definitions
<PAGE>
This Indenture, dated as of June 28, 1999, between Impac CMB
Trust Series 1999- 2, a Delaware business trust, as Issuer (the "Issuer"), and
Bankers Trust Company of California, N.A., a national banking association, as
Indenture Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Issuer's
Collateralized Asset-Backed Bonds, Series 1999-2 (the "Bonds") and the Bond
Insurer.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as trustee for the benefit of the Holders of the Bonds and the
Bond Insurer, all of the Issuer's right, title and interest in and to whether
now existing or hereafter created by (a) the Mortgage Loans, Eligible Substitute
Mortgage Loans and the proceeds thereof and all rights under the Related
Documents; (b) all funds on deposit from time to time in the Collection Account
allocable to the Mortgage Loans excluding any investment income from such funds;
(c) all funds on deposit from time to time in the Payment Account and in all
proceeds thereof; (d) all rights under the (i) Mortgage Loan Sale and
Contribution Agreement as assigned to the Issuer, (ii) the Servicing Agreement
and any Sub-Servicing Agreements, (iii) any title, hazard and primary insurance
policies with respect to the Mortgaged Properties (including the CMAC PMI
Policy), (iv) the Cap Contract (including the Cap Contract Pledged Collateral);
and (e) all present and future claims, demands, causes 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 and all payments on or under, and all proceeds of every kind and
nature whatsoever in the conversion thereof, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, checks, deposit accounts, 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 (collectively, the "Trust Estate" or 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
Bonds, 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 trustee on behalf of the Holders of
the Bonds and the Bond Insurer, acknowledges such Grant, accepts the trust under
this Indenture in accordance with the provisions hereof and agrees to perform
its duties as Indenture Trustee as required herein. The Indenture Trustee agrees
that it will hold the Bond Insurance Policy in trust and that it will hold any
proceeds of any claim made upon the Bond Insurance Policy solely for the use and
benefit of the Holders of the Bonds in accordance with the terms hereof and the
terms of the Bond Insurance Policy.
<PAGE>
ARTICLE I
Definitions
Section 1.01. DEFINITIONS. For all purposes of this Indenture, except
as otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act (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 Bonds.
"indenture security holder" means a Bondholder.
"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 by the
TIA, defined by TIA reference to another statute or defined by Commission rules
and have the meanings assigned to them by such definitions.
Section 1.03. 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 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.
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<PAGE>
ARTICLE II
Original Issuance of Bonds
Section 2.01. FORM. The Bonds, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the form set forth in
Exhibit A, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture.
The Bonds shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders).
The terms of the Bonds set forth in Exhibit A are part of the terms of
this Indenture.
Section 2.02. EXECUTION, AUTHENTICATION AND DELIVERY. The Bonds shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Bonds may be manual or
facsimile.
Bonds bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer 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 Bonds or did not hold
such offices at the date of such Bonds.
The Indenture Trustee shall upon Issuer Request authenticate and
deliver the Bonds for original issue in an aggregate initial principal amount of
$115,033,881.
Each of the Bonds shall be dated the date of its authentication. The
Bonds shall be issuable as registered Bonds and the Bonds shall be issuable in
the minimum initial Bond Principal Balances of $25,000 and in integral multiples
of $1 in excess thereof.
No Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Bond 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 Bond shall be conclusive
evidence, and the only evidence, that such Bond has been duly authenticated and
delivered hereunder.
Section 2.03. ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE. (a)
The Indenture Trustee acknowledges receipt of, subject to the exceptions it
notes pursuant to the procedures described below, the documents (or certified
copies thereof) referred to in Section 2.1(b) of the Mortgage Loan Sale and
Contribution Agreement and declares that it holds and will continue to hold
those documents and any amendments, replacements or supplements thereto and all
other assets of the Trust Estate as Indenture Trustee in trust for the use and
benefit of all present and future Holders of the Bonds and the Bond Insurer. No
later than 45 days after the Closing Date (or, with respect to any Eligible
Substitute Mortgage Loan, within 5 days after the receipt by the Indenture
Trustee thereof and, with respect to any documents received beyond 45 days after
the
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Closing Date, promptly thereafter), the Indenture Trustee agrees, for the
benefit of the Bondholders and the Bond Insurer, to review each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Seller and the Master Servicer an Initial Certification in the
form annexed hereto as Exhibit C. In conducting such review, the Indenture
Trustee will ascertain whether all required documents described in Section
2.1(b) of the Mortgage Loan Sale and Contribution Agreement have been executed
and received and whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans it has received, as identified in Exhibit B to this Indenture, as
supplemented (PROVIDED, HOWEVER, that with respect to those documents described
in subclause (b)(vii) of such section, the Indenture Trustee's obligations shall
extend only to documents actually delivered pursuant to such subclause). In
performing any such review, the Indenture Trustee may conclusively rely on the
purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. If the Indenture Trustee finds
any document constituting part of the Mortgage File not to have been executed or
received, or to be unrelated to the Mortgage Loans identified in Exhibit B or to
appear to be defective on its face, the Indenture Trustee shall promptly notify
the Seller of such finding and the Seller's obligation to cure such defect or
repurchase or substitute for the related Mortgage Loan.
(b) No later than 180 days after the Closing Date, the Indenture
Trustee will review, for the benefit of the Bondholders and the Bond Insurer,
the Mortgage Files and will execute and deliver or cause to be executed and
delivered to the Seller, a Final Certification in the form annexed hereto as
Exhibit D. In conducting such review, the Indenture Trustee will ascertain
whether an original of each document described in subclauses (b)(ii)-(iv) of
Section 2.1 of the Mortgage Loan Sale and Contribution Agreement required to be
recorded has been returned from the recording office with evidence of recording
thereon or a certified copy has been obtained from the recording office. If the
Indenture Trustee finds any document constituting part of the Mortgage File has
not been received, or to be unrelated, determined on the basis of the Mortgagor
name, original principal balance and loan number, to the Mortgage Loans
identified in Exhibit B or to appear defective on its face, the Indenture
Trustee shall promptly notify the Seller.
(c) Upon deposit of the Repurchase Price in the Payment Account, the
Indenture Trustee shall release to the Seller the related Mortgage File and
shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by the Seller as are necessary to vest in the Seller
title to and rights under the related Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which certification of the deposit of the
Repurchase Price in the Payment Account was received by the Indenture Trustee.
The Indenture Trustee shall amend the applicable Mortgage Loan Schedule to
reflect such repurchase and shall promptly notify the Master Servicer, the Bond
Insurer and the Rating Agencies of such amendment.
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ARTICLE III
Covenants
Section 3.01. COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE
LOANS. The Indenture Trustee shall establish and maintain an Eligible Account
(the "Payment Account") in which the Indenture Trustee shall, subject to the
terms of this paragraph, deposit, on the same day as it is received from the
Master Servicer, each remittance received by the Indenture Trustee with respect
to the Mortgage Loans. The Indenture Trustee shall make all payments of
principal of and interest on the Bonds, subject to Section 3.03 as provided in
Section 3.05 herein from monies on deposit in the Payment Account.
Section 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in the Borough of Manhattan, The City of New York, an office or agency where,
subject to satisfaction of conditions set forth herein, Bonds may be surrendered
for registration of transfer or exchange, and where notices and demands to or
upon the Issuer in respect of the Bonds and this Indenture may be served. The
Issuer hereby initially appoints the Indenture Trustee to serve as its agent for
the foregoing purposes. 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 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT. (a)
As provided in Section 3.01, all payments of amounts due and payable with
respect to any Bonds that are to be made from amounts withdrawn from the Payment
Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Payment Account for payments of Bonds shall be paid over to the Issuer except as
provided in this Section 3.03.
The Issuer will cause each Paying Agent other than the Indenture
Trustee 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 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts
due with respect to the Bonds in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee and the Bond Insurer
notice of any default by the Issuer of which it has actual knowledge in
the making of any payment required to be made with respect to the
Bonds;
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(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 Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in trust for the
payment of Bonds if at any time it ceases to meet the standards
required to be met by a Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on any Bonds of
any applicable withholding taxes imposed thereon and with respect to
any applicable reporting requirements in connection therewith; and
(vi) not commence a Bankruptcy proceeding against the
Issuer in connection with this Indenture.
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
Request 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, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Bond (other than amounts paid under the Bond
Insurance Policy) and remaining unclaimed for one year after such amount has
become due and payable shall be discharged from such trust and be paid to the
Issuer on Issuer Request; and the Holder of such Bond 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 an Authorized
Newspaper published in the English language, 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, with the
consent of the Bond Insurer, so long as no Bond Insurer Default exists, may 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 Holders whose Bonds have been called but
have not been surrendered for redemption or whose right to or interest in monies
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 Holder).
Section 3.04. EXISTENCE. 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
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<PAGE>
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 Bonds, the
Mortgage Loans and each other instrument or agreement included in the Trust
Estate.
Section 3.05. PAYMENT OF PRINCIPAL AND INTEREST. (a) On each Payment
Date from amounts on deposit in the Payment Account in accordance with Section
8.02 hereof, the Indenture Trustee shall pay to the Persons specified in clause
(b) below, to the extent provided therein, the Available Funds and any Insured
Amount; PROVIDED, HOWEVER, that any amounts representing payments from the Bond
Insurer shall only be used to pay interest and principal to the Bondholders
pursuant to clauses (b)(i) and (ii) and (f) below. Interest will accrue on the
Bonds during the related Accrual Period on the basis of the actual number of
days in such Accrual Period and a year assumed to consist of 360 days.
(b) On each Payment Date, the Available Funds shall be distributed in
the following order of priority, in each case to the extent of amounts
available:
(i) first, to the Bondholders, Accrued Bond Interest
thereon for such Payment Date, subject to Available Interest;
(ii) second, to the Bondholders, the Principal
Payment Amount, in reduction of the Bond Principal Balance of the Bonds
until the Bond Principal Balance of the Bonds has been reduced to zero;
(iii) third, provided that no Bond Insurer Default is
occurring, to the Bond Insurer, the aggregate of all payments, if any,
made by the Bond Insurer under the Bond Insurance Policy and any other
amounts due to the Bond Insurer pursuant to the Insurance Agreement, to
the extent not previously paid or reimbursed;
(iv) fourth, from the amount remaining (the "Net
Monthly Excess Cash Flow"), to the Bondholders, the
Overcollateralization Increase Amount, in reduction of the Bond
Principal Balance of the Bonds until the Bond Principal Balance of the
Bonds has been reduced to zero;
(v) fifth, to pay the Basis Risk Shortfall
Carry-Forward Amount on the Bonds until reduced to zero;
(vi) sixth, to the Bonds, in respect of any Unpaid
Interest Shortfalls previously allocated thereto, until the amount of
such Unpaid Interest Shortfalls has been reduced to zero;
(vii) seventh, any remaining amounts will be
distributed to the Indenture Trustee for amounts owing the Indenture
Trustee hereunder remaining unpaid; and
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(viii) eighth, any remaining amounts will be
distributed to the Issuer or the Certificate Paying Agent, as its
designee, for the benefit of the Holders of the Trust Certificates.
(c) Each distribution with respect to a Book-Entry Bond shall
be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Bond Owners that it represents and to each indirect participating brokerage
firm (a "brokerage firm" or "indirect participating firm") for which it acts as
agent. Each brokerage firm shall be responsible for disbursing funds to the Bond
Owners that it represents. None of the Indenture Trustee, the Bond Registrar,
the Depositor or the Master Servicer shall have any responsibility therefor
except as otherwise provided by this Agreement or applicable law.
(d) On each Payment Date, the Certificate Paying Agent shall
deposit in the Certificate Distribution Account all amounts it received pursuant
to this Section 3.05 for the purpose of distributing such funds to the
Certificateholders.
(e) Any installment of interest or principal, if any, payable
on any Bond that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall, if such Holder shall have so requested at least
five Business Days prior to the related Record Date, be paid to each Holder of
record on the preceding Record Date, by wire transfer to an account specified in
writing by such Holder reasonably satisfactory to the Indenture Trustee as of
the preceding Record Date or in all other cases or if no such instructions have
been delivered to the Indenture Trustee, by check to such Bondholder mailed to
such Holder's address as it appears in the Bond Register in the amount required
to be distributed to such Holder on such Payment Date pursuant to such Holder's
Bonds; PROVIDED, HOWEVER, that the Indenture Trustee shall not pay to such
Holders any amount required to be withheld from a payment to such Holder by the
Code.
(f) The principal of each Bond shall be due and payable in
full on the Final Scheduled Payment Date for such Bond as provided in the forms
of Bond set forth in Exhibit A. All principal payments on the Bonds shall be
made to the Bondholders entitled thereto in accordance with the Percentage
Interests represented by such Bonds. Upon notice to the Indenture Trustee by the
Issuer, the Indenture Trustee shall notify the Person in whose name a Bond is
registered at the close of business on the Record Date preceding the Final
Scheduled Payment Date or other final Payment Date (including any final Payment
Date resulting from any redemption pursuant to Section 8.07 hereof). Such notice
shall to the extent practicable be mailed no later than five Business Days prior
to such Final Scheduled Payment Date or other final Payment Date and shall
specify that payment of the principal amount and any interest due with respect
to such Bond at the Final Scheduled Payment Date or other final Payment Date
will be payable only upon presentation and surrender of such Bond and shall
specify the place where such Bond may be presented and surrendered for such
final payment. No interest shall accrue on the Bonds on or after the Final
Scheduled Payment Date or any such other final Payment Date.
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The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.05 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.
Section 3.06. PROTECTION OF TRUST ESTATE. (a) The Issuer will from time
to time prepare, 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) maintain or preserve the lien and security interest
(and the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity
of any Grant made or to be made by this Indenture;
(iii) cause the Issuer or Master Servicer to enforce any
of the rights to the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and
the rights of the Indenture Trustee, the Bond Insurer and the
Bondholders in such Trust Estate against the claims of all persons and
parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of money
or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.07 hereof (or from the jurisdiction in
which it was held as described in the Opinion of Counsel delivered on the
Closing Date pursuant to Section 3.07(a) hereof, or if no Opinion of Counsel has
yet been delivered pursuant to Section 3.07(b) hereof unless the Indenture
Trustee shall have first received an Opinion of Counsel to the effect that the
lien and security interest created by this Indenture with respect to such
property will continue to be maintained after giving effect to such action or
actions).
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.06 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.
Section 3.07. OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee, the Bond Insurer and the Owner
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing 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 are necessary to perfect and make
effective the lien and first priority security interest in the Collateral and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and first priority
security interest effective.
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(b) On or before April 15 in each calendar year, beginning in 2000, the
Issuer shall furnish to the Indenture Trustee and the Bond Insurer an Opinion of
Counsel at the expense of the Issuer 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 first priority security interest in the Collateral 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 in the Collateral until December 31
in the following calendar year.
Section 3.08. PERFORMANCE OF OBLIGATIONS. (a) The Issuer will
punctually perform and observe all of its obligations and agreements contained
in this Indenture, the Basic Documents and in the instruments and agreements
included in the Trust Estate.
(b) The Issuer, with the consent of the Bond Insurer so long as no Bond
Insurer Default exists, may contract with 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 in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Mortgage
Loans or under any instrument included in the Trust Estate, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the documents relating to
the Mortgage Loans or any such instrument, except such actions as the Master
Servicer is expressly permitted to take in the Servicing Agreement. The
Indenture Trustee, as pledgee of the Mortgage Loans, shall with the consent of,
or direction of, the Bond Insurer, so long as no Bond Insurer Default exists, be
able to exercise the rights of the Issuer to direct the actions of the Master
Servicer pursuant to the Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts
acceptable to the Bond Insurer with other Persons for the performance of the
Issuer's obligations hereunder, and performance of such obligations by such
Persons shall be deemed to be performance of such obligations by the Issuer.
Section 3.09. NEGATIVE COVENANTS. So long as any Bonds are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture,
sell, transfer, exchange or otherwise dispose of the Trust Estate,
unless directed to do so by the Bond Insurer or
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the Indenture Trustee with the consent of the Bond Insurer, so long as
no Bond Insurer Default exists;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Bonds (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Bondholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate;
(iii) (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 Bonds 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 Trust Estate or any part thereof or any interest therein or
the proceeds thereof or (C) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Trust
Estate; or
(iv) waive or impair, or fail to assert rights under,
the Mortgage Loans, or impair or cause to be impaired the Issuer's
interest in the Mortgage Loans, the Mortgage Loan Sale and Contribution
Agreement or in any Basic Document, if any such action would materially
and adversely affect the interests of the Bondholders or the Bond
Insurer.
Section 3.10. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Indenture Trustee and the Bond Insurer, within 120 days after the
end of each fiscal year (which, for the Issuer, is the calendar year) of the
Issuer (commencing with the fiscal year 1999), 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 this 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.
Section 3.11. [RESERVED].
Section 3.12. REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE
LOANS. The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit
of the representations and warranties made by the Seller in the Mortgage Loan
Sale and Contribution Agreement concerning the Seller and the Mortgage Loans and
the right to enforce the remedies against the Seller provided in such Mortgage
Loan Sale and Contribution Agreement to the same extent as though such
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representations and warranties were made directly to the Indenture Trustee. If a
Responsible Officer of the Indenture Trustee has actual knowledge of any breach
of any representation or warranty made by the Seller in the Mortgage Loan Sale
and Contribution Agreement, the Indenture Trustee shall promptly notify the
Seller and the Bond Insurer of such finding and the Seller's obligation to cure
such defect or repurchase or substitute for the related Mortgage Loan. As
pledgee under the CMAC PMI Policy, the Indenture Trustee shall enforce such
policy to the extent the Master Servicer fails to do so.
Section 3.13. AMENDMENTS TO SERVICING AGREEMENT. The Issuer covenants
with the Indenture Trustee and the Bond Insurer that it will not enter into any
amendment or supplement to the Servicing Agreement without the prior written
consent of the Indenture Trustee. The Indenture Trustee, as pledgee of the
Mortgage Loans, may, with the consent of the Bond Insurer so long as no Bond
Insurer Default exists, decline to enter into or consent to any such supplement
or amendment if the Bond Insurer's or Bondholders' rights, duties or immunities
shall be adversely affected.
Section 3.14. MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE
TRUSTEE. Solely for purposes of perfection under Section 9-305 of the Uniform
Commercial Code or other similar applicable law, rule or regulation of the state
in which such property is held by the Master Servicer, the Issuer and the
Indenture Trustee hereby acknowledge that the Master Servicer is acting as
bailee of the Indenture Trustee in holding amounts on deposit in the Collection
Account, as well as its bailee in holding any Related Documents released to the
Master Servicer, and any other items constituting a part of the Trust Estate
which from time to time come into the possession of the Master Servicer. It is
intended that, by the Master Servicer's acceptance of such bailee arrangement,
the Indenture Trustee, as a secured party of the Mortgage Loans, will be deemed
to have possession of such Related Documents, such monies and such other items
for purposes of Section 9-305 of the Uniform Commercial Code of the state in
which such property is held by the Master Servicer.
Section 3.15. INVESTMENT COMPANY ACT. The Issuer shall not become an
"investment company" or be under the "control" of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section 3.15
if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions imposed
in such order.
Section 3.16. ISSUER MAY CONSOLIDATE, ETC. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any state or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture
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Trustee, in form reasonably satisfactory to the Indenture Trustee and
the Bond Insurer, the due and punctual payment of the principal of and
interest on all Bonds, and the payment of the Bond Insurance Premium
and all other amounts payable to the Bond Insurer and the Indenture
Trustee, the payment to the Certificate Paying Agent of all amounts due
to the Certificateholders, and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such
transaction, no Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer
that such transaction shall not cause the rating of the Bonds to be
reduced, suspended or withdrawn or to be considered by either Rating
Agency to be below investment grade without taking into account the
Bond Insurance Policy;
(iv) the Issuer and the Bond Insurer shall have received
an Opinion of Counsel (and shall have delivered a copy thereof to the
Indenture Trustee) to the effect that such transaction will not (A)
result in a "substantial modification" of the Bonds under Treasury
Regulation section 1.1001-3, or adversely affect the status of the
Bonds as indebtedness for federal income tax purposes, or (B) if 100%
of the Certificates are not owned by IMH Assets Corp., cause the Trust
to be subject to an entity level tax for federal income tax purposes;
(v) any action that is necessary to maintain the lien
and security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee and the Bond Insurer an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation or merger and such
supplemental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such transaction
have been complied with (including any filing required by the Exchange
Act); and
(vii) the Bond Insurer, so long as no Bond Insurer
Default exists, shall have given its prior written consent.
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer
the properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any state thereof, (B) expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Bonds and the
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payment of the Bond Insurance Premium and all other amounts payable to
the Bond Insurer and the performance or observance of every agreement
and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agree by
means of such supplemental indenture that all right, title and interest
so conveyed or transferred shall be subject and subordinate to the
rights of the Holders of the Bonds and the Bond Insurer, (D) unless
otherwise provided in such supplemental indenture, expressly agree to
indemnify, defend and hold harmless the Issuer, the Indenture Trustee,
and the Bond Insurer against and from any loss, liability or expense
arising under or related to this Indenture and the Bonds and (E)
expressly agree by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Bonds;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agencies shall have notified the Issuer
that such transaction shall not cause the rating of the Bonds without
taking into account the Bond Insurance Policy to be reduced, suspended
or withdrawn;
(iv) the Issuer and the Bond Insurer shall have received
an Opinion of Counsel (and shall have delivered a copy thereof to the
Indenture Trustee) to the effect that such transaction will not (A)
result in a "substantial modification" of the Bonds under Treasury
Regulation section 1.1001-3, or adversely affect the status of the
Bonds as indebtedness for federal income tax purposes, or (B) if 100%
of the Certificates are not owned by IMH Assets Corp., cause the Trust
to be subject to an entity level tax for federal income tax purposes;
(v) any action that is necessary to maintain the lien
and security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any
filing required by the Exchange Act); and
(vii) the Bond Insurer, so long as no Bond Insurer
Default exists, shall have given its prior written consent.
Section 3.17. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
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(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Bonds immediately upon the delivery of written
notice to the Indenture Trustee and the Bond Insurer of such conveyance or
transfer and approval of such transaction given by the Bond Insurer to the
Indenture Trustee.
Section 3.18. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans and the issuance of the Bonds and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.19. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Bonds and amounts due to the Bond Insurer under this
Indenture and the Insurance Agreement.
Section 3.20. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by this Indenture or the Basic Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
Section 3.21. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long- term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22. DETERMINATION OF BOND INTEREST RATE. On the Interest
Determination Date the Indenture Trustee shall determine One-Month LIBOR and the
Bond Interest Rate for the Bonds for the following Accrual Period and shall
inform the Issuer, the Bond Insurer, the Master Servicer, and the Depositor at
their respective facsimile numbers given to the Indenture Trustee in writing
thereof. The establishment of One-Month LIBOR on each Interest Determination
Date by the Indenture Trustee and the Indenture Trustee's calculation of the
rate of interest applicable to the Bonds for the related Accrual Period shall
(in the absence of manifest error) be final and binding.
Section 3.23. 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, (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, (x) distributions and payments to the
Owner Trustee, the Indenture Trustee and the Certificateholders as contemplated
by, and to the extent funds are available for such purpose under this Indenture
and the Trust
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Agreement and (y) payments to the Master Servicer pursuant to the terms of the
Servicing Agreement. The Issuer will not, directly or indirectly, make payments
to or distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
Section 3.24. NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee, the Bond Insurer and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust Agreement.
Section 3.25. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee or the Bond 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.
Section 3.26. STATEMENTS TO BONDHOLDERS. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall forward by mail to the
Bond Insurer and to each Bondholder and Certificateholder, respectively, the
statement prepared by the Master Servicer pursuant to Section 4.01 of the
Servicing Agreement.
Section 3.27. PAYMENTS UNDER THE BOND INSURANCE POLICY. (a) On the
second Business Day prior to any Payment Date and at such time as it shall
deliver an acceleration notice to the Bondholders pursuant to Section 5.02, the
Indenture Trustee on behalf of the Bondholders shall make a draw on the Bond
Insurance Policy in an amount, if any, equal to the Deficiency Amount.
(b) If the Indenture Trustee determines that a Deficiency Amount will
exist for the following Payment Date, then the Indenture Trustee shall submit a
Notice (as defined in the Bond Insurance Policy) for payment in the amount of
the Deficiency Amount to the Bond Insurer no later than 12:00 Noon, New York
City time, on the second Business Day prior to the applicable Payment Date. Upon
receipt of such Deficiency Amount in accordance with the terms of the Bond
Insurance Policy, the Indenture Trustee shall deposit such Deficiency Amount in
the Payment Account for distribution to Bondholders pursuant to Section 3.05
hereof or with respect to an acceleration pursuant to Section 5.02 hereof.
In addition, a draw may be made under the Bond Insurance Policy in
respect of any Preference Amount (as defined in and pursuant to the terms and
conditions of the such Bond Insurance Policy) and the Indenture Trustee shall
submit a Notice (as defined in such Bond Insurance Policy) for payment with
respect thereto together with the other documents required to be delivered to
the Bond Insurer pursuant to the Bond Insurance Policy in connection with a draw
in respect of any Preference Amount.
Section 3.28. REPLACEMENT BOND INSURANCE POLICY. In the event of a Bond
Insurer Default (a "Replacement Event"), the Issuer, at its expense, in
accordance with and upon satisfaction of the conditions set forth in the Bond
Insurance Policy, including, without limitation, payment in full of all amounts
owed to the Bond Insurer, may, but shall not be required to, substitute a new
surety bond or surety bonds for the existing Bond Insurance Policy or may
arrange for any other form of credit enhancement; PROVIDED, HOWEVER, that in
each case the Bonds shall be rated no
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lower than the rating assigned by each Rating Agency to the Bonds immediately
prior to such Replacement Event and the timing and mechanism for drawing on such
new credit enhancement shall be reasonably acceptable to the Indenture Trustee
and provided further that the premiums under the proposed credit enhancement
shall not exceed such premiums under the existing Bond Insurance Policy. It
shall be a condition to substitution of any new credit enhancement that there be
delivered to the Indenture Trustee (i) an Opinion of Counsel, acceptable in form
to the Indenture Trustee and the Rating Agencies, from counsel to the provider
of such new credit enhancement with respect to the enforceability thereof and
such other matters as the Indenture Trustee and the Rating Agencies may require
and (ii) an Opinion of Counsel to the effect that such substitution would not
(a) result in a "substantial modification" of the Bonds under Treasury
Regulation section 1.1001-3, or adversely affect the status of the Bonds as
indebtedness for federal income tax purposes, or (b) if 100% of the Certificates
are not owned by IMH Assets Corp., cause the Trust to be subject to an entity
level tax for federal income tax purposes. Upon receipt of the items referred to
above and payment of all amounts owing to the Bond Insurer and the taking of
physical possession of the new credit enhancement, the Indenture Trustee shall,
within five Business Days following receipt of such items and such taking of
physical possession, deliver the replaced Bond Insurance Policy to the Bond
Insurer. In the event of any such replacement the Issuer shall give written
notice thereof to the Rating Agencies.
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ARTICLE IV
The Bonds; Satisfaction and Discharge of Indenture
Section 4.01. THE BONDS. The Bonds shall be registered in the name of a
nominee designated by the Depository. Beneficial Owners will hold interests in
the Bonds through the book-entry facilities of the Depository in minimum initial
Bond Principal Balances of $25,000 and integral multiples of $1 in excess
thereof.
The Indenture Trustee may for all purposes (including the making of
payments due on the Bonds) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Bonds for the
purposes of exercising the rights of Holders of the Bonds hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Bonds shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08
hereof, Beneficial Owners shall not be entitled to definitive certificates for
the Bonds as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Bonds shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Bondholders and give notice to the
Depository of such record date. Without the consent of the Issuer and the
Indenture Trustee, no Bond may be transferred by the Depository except to a
successor Depository that agrees to hold such Bond for the account of the
Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Bonds it
beneficially owns in the manner prescribed in Section 4.08.
The Bonds shall, on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Indenture Trustee and delivered by the Indenture
Trustee to or upon the order of the Issuer.
Section 4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
OF BONDS; APPOINTMENT OF BOND REGISTRAR AND CERTIFICATE REGISTRAR. The Issuer
shall cause to be kept at the Corporate Trust Office a Bond Register in which,
subject to such reasonable regulations as it may prescribe, the Bond Registrar
shall provide for the registration of Bonds and of transfers and exchanges of
Bonds as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Bond at the Corporate Trust
Office, the Issuer shall execute and the Bond Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Bonds in authorized initial Bond Principal Balances evidencing the same
aggregate Percentage Interests.
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Subject to the foregoing, at the option of the Bondholders, Bonds may
be exchanged for other Bonds of like tenor and in authorized initial Bond
Principal Balances evidencing the same aggregate Percentage Interests upon
surrender of the Bonds to be exchanged at the Corporate Trust Office of the Bond
Registrar. Whenever any Bonds are so surrendered for exchange, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver the Bonds which
the Bondholder making the exchange is entitled to receive. Each Bond presented
or surrendered for registration of transfer or exchange shall (if so required by
the Bond Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Bond Registrar
duly executed by the Holder thereof or his attorney duly authorized in writing
with such signature guaranteed by a commercial bank or trust company located or
having a correspondent located in the city of New York. Bonds delivered upon any
such transfer or exchange will evidence the same obligations, and will be
entitled to the same rights and privileges, as the Bonds surrendered.
No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Bond Registrar shall 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 Bonds.
The Issuer hereby appoints the Indenture Trustee as (i) Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement and (ii) Bond Registrar under this
Indenture. The Indenture Trustee hereby accepts such appointments.
Section 4.03. MUTILATED, DESTROYED, LOST OR STOLEN BONDS. If (i) any
mutilated Bond is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer, the Bond Insurer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Bond Registrar or the Indenture Trustee that such Bond has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 of the
UCC are met, 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 Bond, a replacement Bond; provided,
however, that if any such destroyed, lost or stolen Bond, but not a mutilated
Bond, shall have become or within seven days shall be due and payable, instead
of issuing a replacement Bond, the Issuer may pay such destroyed, lost or stolen
Bond when so due or payable without surrender thereof. If, after the delivery of
such replacement Bond or payment of a destroyed, lost or stolen Bond pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Bond in lieu of which such replacement Bond was issued presents for payment such
original Bond, the Issuer, the Bond Insurer and the Indenture Trustee shall be
entitled to recover such replacement Bond (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Bond from such
Person to whom such replacement Bond was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity
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provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer, the Bond Insurer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Bond under this Section 4.03, the
Issuer may require the payment by the Holder of such Bond 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 Bond issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Bond shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Bond 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 Bonds duly issued hereunder.
The provisions of this Section 4.03 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 Bonds.
Section 4.04. PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Bond, the Issuer, the Bond Insurer, the
Indenture Trustee and any agent of the Issuer, the Bond Insurer or the Indenture
Trustee may treat the Person in whose name any Bond is registered (as of the day
of determination) as the owner of such Bond for the purpose of receiving
payments of principal of and interest, if any, on such Bond and for all other
purposes whatsoever, whether or not such Bond be overdue, and neither the
Issuer, the Bond Insurer, the Indenture Trustee nor any agent of the Issuer, the
Bond Insurer or the Indenture Trustee shall be affected by notice to the
contrary.
Section 4.05. CANCELLATION. All Bonds 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 cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Bonds previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the
Indenture Trustee. No Bonds shall be authenticated in lieu of or in exchange for
any Bonds cancelled as provided in this Section 4.05, except as expressly
permitted by this Indenture. All cancelled Bonds 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
Request that they be destroyed or returned to it; provided, however, that such
Issuer Request is timely and the Bonds have not been previously disposed of by
the Indenture Trustee.
Section 4.06. BOOK-ENTRY BONDS. The Bonds, upon original issuance, will
be issued in the form of typewritten Bonds representing the Book-Entry Bonds, to
be delivered to The Depository Trust Company, the initial Depository, by, or on
behalf of, the Issuer. The Bonds shall initially be registered on the Bond
Register in the name of Cede & Co., the nominee of the initial Depository, and
no Beneficial Owner will receive a Definitive Bond representing such
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Beneficial Owner's interest in such Bond, except as provided in Section 4.08.
With respect to such Bonds, unless and until definitive, fully registered Bonds
(the "Definitive Bonds") have been issued to Beneficial Owners pursuant to
Section 4.08:
(i) the provisions of this Section 4.06 shall be in
full force and effect;
(ii) the Bond Registrar and the Indenture Trustee shall
be entitled to deal with the Depository for all purposes of this
Indenture (including the payment of principal of and interest on the
Bonds and the giving of instructions or directions hereunder) as the
sole holder of the Bonds, and shall have no obligation to the
Beneficial Owners of the Bonds;
(iii) to the extent that the provisions of this Section
4.06 conflict with any other provisions of this Indenture, the
provisions of this Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised
only through the Depository and shall be limited to those established
by law and agreements between such Owners of Bonds and the Depository
and/or the Depository Participants. Unless and until Definitive Bonds
are issued pursuant to Section 4.08, the initial Depository will make
book-entry transfers among the Depository Participants and receive and
transmit payments of principal of and interest on the Bonds to such
Depository Participants; and
(v) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Holders of Bonds
evidencing a specified percentage of the Bond Principal Balances of the
Bonds, the Depository shall be deemed to represent such percentage with
respect to the Bonds only to the extent that it has received
instructions to such effect from Beneficial Owners and/or Depository
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Bonds and has delivered
such instructions to the Indenture Trustee.
Section 4.07. NOTICES TO DEPOSITORY. Whenever a notice or other
communication to the Bond Holders is required under this Indenture, unless and
until Definitive Bonds shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Bonds to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08. DEFINITIVE BONDS. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Bonds and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Beneficial Owners of Bonds representing beneficial interests
aggregating at least a majority of the Bond Principal Balances of the Bonds
advise the Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Beneficial
Owners, then the Depository shall notify all Beneficial Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Bonds to Beneficial Owners requesting the same. Upon surrender to the
Indenture Trustee of the
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typewritten Bonds representing the Book-Entry Bonds by the Depository,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Bonds in accordance with the
instructions of the Depository. None of the Issuer, the Bond Registrar 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 Bonds, the Indenture Trustee shall
recognize the Holders of the Definitive Bonds as Bondholders.
Section 4.09. TAX TREATMENT. The Issuer has entered into this
Indenture, and the Bonds will be issued, with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Bonds
will qualify as indebtedness. The Issuer, by entering into this Indenture, and
each Bondholder, by its acceptance of its Bond (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Bond), agree to treat the
Bonds for federal, state and local income, single business and franchise tax
purposes as indebtedness.
Section 4.10. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Bonds except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Bonds, (iii) rights of Bondholders (and the Bond
Insurer, as subrogee of the Bondholders) to receive payments of principal
thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09, 3.16, 3.18
and 3.19, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.07 and
the obligations of the Indenture Trustee under Section 4.11) and (vi) the rights
of Bondholders 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 Bonds and shall release and deliver the Collateral to or upon the
order of the Issuer, when
(A) either
(1) all Bonds theretofore authenticated and delivered (other
than (i) Bonds that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 4.03 hereof and (ii) Bonds
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 3.03) have
been delivered to the Indenture Trustee for cancellation; or
(2) all Bonds not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable,
b. will become due and payable at the Final
Scheduled Payment Date within one year, or
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c. have been called for early redemption
pursuant to Section 8.07 hereof,
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 Bonds
then outstanding not theretofore delivered to the Indenture Trustee for
cancellation when due on the Final Scheduled Payment Date or other
final Payment Date and has delivered to the Indenture Trustee and the
Bond Insurer a verification report from a nationally recognized
accounting firm certifying that the amounts deposited with the
Indenture Trustee are sufficient to pay and discharge the entire
indebtedness of such Bonds, or, in the case of c. above, the Issuer
shall have complied with all requirements of Section 8.07 hereof;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder and under the Insurance Agreement by the Issuer as
evidenced by the written consent of the Bond Insurer; and
(C) the Issuer has delivered to the Indenture Trustee and the
Bond Insurer an Officer's Certificate and an Opinion of Counsel, each
meeting the applicable requirements of Section 10.01 hereof, each
stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied
with and, if the Opinion of Counsel relates to a deposit made in
connection with Section 4.10(A)(2)b. above, such opinion shall further
be to the effect that such deposit will constitute an "in-substance
defeasance" within the meaning of Revenue Ruling 85-42, 1985-1 C.B. 36,
and in accordance therewith, the Issuer will be the owner of the assets
deposited in trust for federal income tax purposes.
Section 4.11. APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Bonds and this
Indenture, to the payment, either directly or through any Paying Agent or the
Issuer, Certificate Paying Agent as designee of the Issuer or the Bond Insurer,
as applicable, as the Indenture Trustee may determine, to the Holders of
Securities, of all sums due and to become due thereon for principal and interest
or otherwise; but such monies need not be segregated from other funds except to
the extent required herein or required by law.
Section 4.12. SUBROGATION AND COOPERATION. (a) The Issuer and the
Indenture Trustee acknowledge that (i) to the extent the Bond Insurer makes
payments under the Bond Insurance Policy on account of principal of or interest
on the Bonds, the Bond Insurer will be fully subrogated to the rights of such
Holders to receive such principal and interest from the Issuer, and (ii) the
Bond Insurer shall be paid such principal and interest but only from the sources
and in the manner provided herein and in the Insurance Agreement for the payment
of such principal and interest.
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The Indenture Trustee shall cooperate in all respects with any
reasonable request by the Bond Insurer for action to preserve or enforce the
Bond Insurer's rights or interest under this Indenture or the Insurance
Agreement, consistent with this Indenture and without limiting the rights of the
Bondholders as otherwise set forth in the Indenture, including, without
limitation, upon the occurrence and continuance of a default under the Insurance
Agreement, a request to take any one or more of the following actions:
(i) institute Proceedings for the collection of all
amounts then payable on the Bonds, or under this Indenture in respect
to the Bonds and all amounts payable under the Insurance Agreement,
enforce any judgment obtained and collect from the Issuer monies
adjudged due;
(ii) sell or cause to be sold the Trust Estate or any
portion thereof or rights or interest therein, at one or more public or
private Sales called and conducted in any manner permitted by law;
(iii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture; and
(iv) 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 Bond Insurer hereunder;
provided, however, action shall be taken pursuant to this Section 4.12 by the
Indenture Trustee to preserve the Bond Insurer's rights or interest under this
Agreement or the Insurance Agreement only to the extent such action is available
to the Bondholders or the Bond Insurer under other provisions of this Indenture.
Notwithstanding any provision of this Indenture to the contrary, so
long as no Bond Insurer Default exists, the Bond Insurer shall at all times be
treated as if it were the exclusive owner of all Bonds Outstanding for the
purposes of all approvals, consents, waivers and the institution of any action
and the direction of all remedies, and the Indenture Trustee shall act in
accordance with the directions of the Bond Insurer so long as it is indemnified
therefor to its reasonable satisfaction.
Section 4.13. REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Bonds,
all monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Bonds shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Person shall be released from all further
liability with respect to such monies.
Section 4.14. TEMPORARY BONDS. Pending the preparation of any
Definitive Bonds, the Issuer may execute and upon its written direction, the
Indenture Trustee may authenticate and make available for delivery, temporary
Bonds that are printed, lithographed, typewritten,
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photocopied or otherwise produced, in any denomination, substantially of the
tenor of the Definitive Bonds in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Bonds may determine, as evidenced by their execution of
such Bonds.
If temporary Bonds are issued, the Issuer will cause Definitive Bonds
to be prepared without unreasonable delay. After the preparation of the
Definitive Bonds, the temporary Bonds shall be exchangeable for Definitive Bonds
upon surrender of the temporary Bonds at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Bonds, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Bonds of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Bonds shall in all respects
be entitled to the same benefits under this Indenture as Definitive Bonds.
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ARTICLE V
DEFAULT AND REMEDIES
Section 5.01. EVENTS OF DEFAULT. The Issuer shall deliver to the
Indenture Trustee and the Bond Insurer, within five days after learning of the
occurrence of an Event of Default, 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 clause (iii) of the definition of "Event
of Default", its status and what action the Issuer is taking or proposes to take
with respect thereto.
Section 5.02. 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 written direction of the Bond Insurer (which such
written direction shall include a statement to the effect that such acceleration
is at the sole option of the Bond Insurer), or if a Bond Insurer Default exists
Holders of Bonds representing not less than a majority of the Bond Principal
Balances of all Bonds may declare the Bonds to be immediately due and payable,
by a notice in writing to the Issuer (and to the Indenture Trustee if given by
Bondholders), and upon any such declaration the unpaid Bond Principal Balance of
the Bonds, 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 with
respect to an Event of Default 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 Bond Insurer, unless a Bond Insurer
Default exists, or the Holders of Bonds representing a majority of the Bond
Principal Balances of all Bonds if a Bond Insurer Default exists, by written
notice to the Issuer and the Indenture Trustee, may waive the related Event of
Default and rescind and annul such declaration and its consequences if:
(i) the Issuer or the Bond Insurer has paid or
deposited with the Indenture Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on the
Bonds and all other amounts that would then be due hereunder
or upon the Bonds if the Event of Default giving rise to such
acceleration had not occurred; and
(B) 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
(ii) all Events of Default, other than the nonpayment of
the principal of the Bonds that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
provided, however, the Bond Insurer, so long as no Bond Insurer Default exists,
may waive an Event of Default regardless of Section 5.02(i) above.
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No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03. 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 Bond 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 Bond when the same
becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee,
at the direction of the Bond Insurer, so long as no Bond Insurer Default exists,
pay to the Indenture Trustee, for the benefit of the Holders of Bonds and the
Bond Insurer, the whole amount then due and payable on the Bonds for principal
and interest, with interest at the Bond Interest Rate upon the overdue
principal, 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
its 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, and at the direction of the Bond Insurer, so long as no Bond Insurer
Default exists, subject to the provisions of Section 10.16 hereof may 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 the Bonds and collect in the manner provided by
law out of the property of the Issuer or other obligor the Bonds, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee, at the direction of the Bond Insurer, so long as no Bond Insurer
Default exists, subject to the provisions of Section 10.16 hereof may, as more
particularly provided in Section 5.04 hereof, in its discretion, proceed to
protect and enforce its rights and the rights of the Bondholders and the Bond
Insurer, by such appropriate Proceedings as the Indenture Trustee shall be
directed by the Bond Insurer, so long as no Bond Insurer Default exists, 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 Bonds or any Person having or claiming an ownership interest in
the Trust Estate, 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 Bonds, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, at the direction of the Bond
Insurer, so long as no Bond Insurer Default exists, irrespective of whether the
principal of any Bonds shall then be due and payable as therein expressed or by
declaration or
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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, 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
Bonds and to file such other papers or documents 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 and each predecessor Indenture Trustee, 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 Bond Insurer and of the Bondholders
allowed in such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of Bonds in any election
of a trustee, a standby trustee or Person performing similar functions
in any such Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Bondholders, the Bond
Insurer and of 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 Bond Insurer or the Holders of Bonds
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 Bondholders to make
payments to the Indenture Trustee, with the consent of the Bond Insurer so long
as no Bond Insurer Default exists, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Bondholders, 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 and
all amounts due to the Bond Insurer.
(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 Bondholder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Bondholder 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 Bonds, may be enforced by the Indenture Trustee without the
possession of any of the Bonds or
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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 Holders
of the Bonds, subject to Section 5.05 hereof.
(g) In any Proceedings brought by the Indenture Trustee with the
consent of the Bond Insurer so long as no Bond Insurer Default exists (and also
any Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Bonds, and it shall not be necessary to
make any Bondholder a party to any such Proceedings.
Section 5.04. REMEDIES; PRIORITIES. (a) If an Event of Default shall
have occurred and be continuing and if an acceleration has been declared and not
rescinded pursuant to Section 5.02 hereof, the Indenture Trustee subject to the
provisions of Section 10.16 hereof may with the consent of the Bond Insurer, and
at the direction of the Bond Insurer so long as no Bond Insurer Default exists
shall, do one or more of the following (subject to Section 5.05 hereof):
(i) institute Proceedings in its own name and as
trustee of an express trust for the collection of all amounts then
payable on the Bonds or under this Indenture with respect thereto,
whether by declaration or otherwise, and all amounts payable under the
Insurance Agreement, enforce any judgment obtained, and collect from
the Issuer and any other obligor upon such Bonds monies adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate;
(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 Holders of the Bonds
and the Bond Insurer; and
(iv) sell the Trust Estate or any portion thereof or
rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law;
provided, however, that so long as a Bond Insurer Default exists the Indenture
Trustee may not sell or otherwise liquidate the Trust Estate following an Event
of Default, unless (A) the Indenture Trustee obtains the consent of the Holders
of 100% of the aggregate Bond Principal Balance, (B) the proceeds of such sale
or liquidation distributable to the Holders of the Bonds are sufficient to
discharge in full all amounts then due and unpaid upon the Bonds for principal
and interest and to reimburse the Bond Insurer for any amounts drawn under the
Bond Insurance Policy and any other amounts due to the Bond Insurer under the
Insurance Agreement or (C) the Indenture Trustee determines that the Mortgage
Loans will not continue to provide sufficient funds for the payment of principal
of and interest on the Bonds as they would have become due if the Bonds had not
been declared due and payable, and the Indenture Trustee obtains the consent of
the Holders
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of a majority of the aggregate Bond Principal Balance. In determining such
sufficiency or insufficiency with respect to clause (B) and (C), the Indenture
Trustee may, but need not, obtain and rely upon an opinion (obtained at the
expense of the Trust) 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 Trust Estate for such purpose. Notwithstanding the foregoing,
so long as an Event of Servicer Termination has not occurred, any Sale of the
Trust Estate shall be made subject to the continued servicing of the Mortgage
Loans by the Master Servicer as provided in the Servicing Agreement.
(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;
PROVIDED, HOWEVER, that any amounts representing payments from the Bond Insurer
shall only be used to pay interest and principal to the Bondholders pursuant to
clauses THIRD and FOURTH below:
FIRST: to the Indenture Trustee for amounts due under Section
6.07 hereof;
SECOND: to the Bond Insurer, provided no Bond Insurer Default
exists, with respect to any Premium Amount then due to the
extent unpaid pursuant to the Servicing Agreement;
THIRD: to the Bondholders for amounts due and unpaid on the
Bonds with respect to interest, ratably, without preference or
priority of any kind, according to the amounts due and payable
on the Bonds for interest (including any Unpaid Interest
Shortfalls);
FOURTH: to Bondholders for amounts due and unpaid on the Bonds
with respect to principal (including, but not limited to, any
Principal Payment Amount), and to each Bondholder ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Bonds for principal, until the
Bond Principal Balance is reduced to zero;
FIFTH: to the payment of all amounts due and owing to the Bond
Insurer under the Insurance Agreement (including any Premium
Amount not paid pursuant to clause SECOND above);
SIXTH: to the Bondholders for amounts due and unpaid on the
Bonds with respect to any Unpaid Interest Shortfalls or
Carry-Forward Amounts, ratably, without preference or priority
of any kind, according to the amounts due and payable on the
Bonds with respect thereto, from amounts available in the
Trust Estate for the Bondholders; and
SEVENTH: to the payment of the remainder, if any to the
Certificate Paying Agent on behalf of the Issuer or to any
other person legally entitled thereto.
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The Indenture Trustee may fix a record date and payment date for any
payment to Bondholders pursuant to this Section 5.04. With respect to any
acceleration at the direction of the Bond Insurer, the first payment date after
the acceleration shall be the first Payment Date after the acceleration. At
least 15 days before such record date, the Indenture Trustee shall mail to each
Bondholder a notice that states the record date, the payment date and the amount
to be paid.
Section 5.05. OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Bonds
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, with the consent of the Bond Insurer (which
consent shall not be required if a Bond Insurer default exists), and shall, at
the direction of the Bond Insurer so long as no Bond Insurer Default exists,
elect to take and maintain possession of the Trust Estate. It is the desire of
the parties hereto and the Bondholders that there be at all times sufficient
funds for the payment of principal of and interest on the Bonds and other
obligations of the Issuer including payment to the Bond Insurer, and the
Indenture Trustee, unless directed otherwise by the Bond Insurer, shall take
such desire into account when determining whether or not to take and maintain
possession of the Trust Estate. In determining whether to take and maintain
possession of the Trust Estate, 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 Trust Estate for such purpose.
Section 5.06. LIMITATION OF SUITS. No Holder of any Bond 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, unless and subject to the provisions of Section 10.16 hereof:
(i) such Holder has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Bond
Principal Balances of the Bonds have made a written request to the
Indenture Trustee to institute such Proceeding in respect of such Event
of Default in its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt
of such notice of request and offer of indemnity has failed to
institute such Proceedings;
(v) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day period by
the Holders of a majority of the Bond Principal Balances of the Bonds;
and
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(vi) such Holder or Holders have the written consent of
the Bond Insurer, unless a Bond Insurer Default exists.
It is understood and intended that no one or more Holders of Bonds 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
Holders of Bonds or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
Subject to the last paragraph of Section 5.11 herein, in the event the
Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Bonds, each representing less
than a majority of the Bond Principal Balances of the Bonds, the Indenture
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
Section 5.07. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, the Holder
of any Bond shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Bond on or
after the respective due dates thereof expressed in such Bond or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
Section 5.08. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Bondholder 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 Bond Insurer or to such Bondholder, then and in every such case the
Issuer, the Indenture Trustee, the Bond Insurer and the Bondholders 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, the Bond Insurer and the Bondholders shall
continue as though no such Proceeding had been instituted.
Section 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, to the Bond Insurer or to
the Bondholders 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 Bond Insurer or any Holder of any Bond to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee, the Bond Insurer or to the Bondholders may be
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exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, the Bond Insurer or by the Bondholders, as the case may be.
Section 5.11. CONTROL BY BOND INSURER. The Bond Insurer, unless a Bond
Insurer Default exists, or the Holders of a majority of the Bond Principal
Balances of Bonds, if a Bond Insurer Default exists, shall have the right
(subject to the provisions of Section 5.06) to direct the time, method and place
of conducting any Proceeding for any remedy available to the Indenture Trustee
with respect to the Bonds or exercising any trust or power conferred on the
Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) if a Bond Insurer Default exists, subject to the
express terms of Section 5.04, any direction to the Indenture Trustee
to sell or liquidate the Trust Estate shall be by Holders of Bonds
representing not less than 100% of the Bond Principal Balances of
Bonds;
(iii) if the conditions set forth in Section 5.05 hereof
have been satisfied and the Indenture Trustee, with the consent of the
Bond Insurer (which consent shall not be required if a Bond Insurer
Default exists), elects to retain the Trust Estate pursuant to such
Section, then any direction to the Indenture Trustee by Holders of
Bonds representing less than 100% of the Bond Principal Balances of
Bonds to sell or liquidate the Trust Estate shall be of no force and
effect; and
(iv) if a Bond Insurer Default exists, 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 Bondholders set forth in this Section, subject to
Section 6.01, 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 Bondholders not consenting to such action.
Section 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Bonds as provided in Section 5.02 hereof,
the Bond Insurer, unless a Bond Insurer Default exists, or the Holders of Bonds
of not less than a majority of the Bond Principal Balances of the Bonds, if a
Bond Insurer Default exists, may waive any past Event of Default and its
consequences except an Event of Default (a) with respect to payment of principal
of or interest on any of the Bonds, (b) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the Holder of
each Bond or (c) the waiver of which would materially and adversely affect the
interests of the Bond Insurer or modify its obligation under the Bond Insurance
Policy. In the case of any such waiver, the Issuer, the Indenture Trustee and
the Holders of the Bonds shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereto.
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Upon any such waiver, 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 Event of
Default or impair any right consequent thereto.
Section 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Bond by such Holder'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 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 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Bondholder, or group of
Bondholders, in each case holding in the aggregate more than 10% of the Bond
Principal Balances of the Bonds or (c) any suit instituted by any Bondholder for
the enforcement of the payment of principal of or interest on any Bond on or
after the respective due dates expressed in such Bond and in this Indenture.
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
shall 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. SALE OF TRUST ESTATE. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 hereof is expressly subject to the provisions of Section 5.05
hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Bonds and under this
Indenture and under the Insurance Agreement shall have been paid. The Indenture
Trustee with the consent of the Bond Insurer (which consent shall not be
required if a Bond Insurer Default exists), may from time to time postpone any
public Sale by public announcement made at the time and place of such Sale. The
Indenture Trustee hereby expressly waives its right to any amount fixed by law
as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless
(1) the Bond Insurer, unless a Bond Insurer Default exists, or
the Holders of all Bonds if a Bond Insurer Default exists, consent to or direct
the Indenture Trustee to make, such Sale, or
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(2) the proceeds of such Sale would be not less than the
entire amount which would be payable to the Bondholders under the Bonds and the
Bond Insurer in respect of amounts drawn under the Bond Insurance Policy and any
other amounts due to the Bond Insurer under the Insurance Agreement, in full
payment thereof in accordance with Section 5.02 hereof, on the Payment Date next
succeeding the date of such Sale, or
(3) the Indenture Trustee determines with the consent of the
Bond Insurer, so long as no Bond Insurer Default exists, that the conditions for
retention of the Trust Estate set forth in Section 5.05 hereof cannot be
satisfied (in making any such determination, the Indenture Trustee may rely upon
an opinion of an Independent investment banking firm obtained and delivered as
provided in Section 5.05 hereof), and the Bond Insurer consents to such Sale, or
if a Bond Insurer Default exists, the Holders of Bonds representing at least
66-2/3% of the Bond Principal Balances of the Bonds consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Bond Insurer, or if a Bond Insurer Default exists, the
Holders representing at least 66-2/3% of the Principal Balances of the Bonds
have otherwise consented or directed the Indenture Trustee, at any public Sale
of all or any portion of the Trust Estate at which a minimum bid equal to or
greater than the amount described in paragraph (2) of subsection (b) of this
Section 5.15 has not been established by the Indenture Trustee and no Person
bids an amount equal to or greater than such amount, the Indenture Trustee, as
trustee for the benefit of the Holders of the Bonds, shall bid an amount at
least $1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust
Estate,
(1) any Holder or Holders of Bonds may bid for and purchase
the property offered for sale, and upon compliance with the terms of sale may
hold, retain and possess and dispose of such property, without further
accountability, and may, in paying the purchase money therefor, deliver any
Bonds or claims for interest thereon in lieu of cash up to the amount which
shall, upon distribution of the net proceeds of such sale, be payable thereon,
and such Bonds, in case the amounts so payable thereon shall be less than the
amount due thereon, shall be returned to the Holders thereof after being
appropriately stamped to show such partial payment;
(2) the Indenture Trustee, with the consent of the Bond
Insurer so long as no Bond Insurer Default exists, may bid for and acquire the
property offered for Sale in connection with any Sale thereof, and, subject to
any requirements of, and to the extent permitted by, applicable law in
connection therewith, may purchase all or any portion of the Trust Estate in a
private sale, and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the sum of (A) the
amount which would be distributable to the Holders of the Bonds and Holders of
Certificates and amounts owing to the Bond Insurer as a result of such Sale in
accordance with Section 5.04(b) hereof on the Payment Date next succeeding the
date of such Sale and (B) the expenses of the Sale and of any Proceedings in
connection therewith which are reimbursable to it, without being required to
produce the Bonds
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in order to complete any such Sale or in order for the net Sale price to be
credited against such Bonds, and any property so acquired by the Indenture
Trustee shall be held and dealt with by it in accordance with the provisions of
this Indenture;
(3) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance, prepared by the Issuer and satisfactory to
the Indenture Trustee, transferring its interest in any portion of the Trust
Estate in connection with a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Issuer to transfer and convey its interest in
any portion of the Trust Estate in connection with a Sale thereof, and to take
all action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale 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 monies.
Section 5.16. ACTION ON BONDS. The Indenture Trustee's right to seek
and recover judgment on the Bonds 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 Bondholders 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 Trust Estate
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 5.04(b) hereof.
Section 5.17. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer in
its capacity as holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee or the Bond Insurer may request to cause the Issuer to
compel or secure the performance and observance by the Seller and the Master
Servicer, as applicable, of each of their obligations to the Issuer under or in
connection with the Mortgage Loan Sale and Contribution Agreement and the
Servicing Agreement, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Mortgage Loan Sale and Contribution Agreement and the Servicing Agreement to the
extent and in the manner directed by the Indenture Trustee, with the consent of
the Bond Insurer so long as no Bond Insurer Default exists, as pledgee of the
Mortgage Loans, including the transmission of notices of default on the part of
the Seller or the Master Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Master Servicer of each of their obligations under the Mortgage
Loan Sale and Contribution Agreement and the Servicing Agreement. So long as no
Bond Insurer Default exists, the Bond Insurer shall have the right to approve or
reject any proposed successor to the Master Servicer (other than the Indenture
Trustee) under the Servicing Agreement.
(b) The Indenture Trustee, as pledgee of the Mortgage Loans, subject to
the rights of the Bond Insurer under this Agreement and the Servicing Agreement
may, and at the direction (which direction shall be in writing or by telephone
(confirmed in writing promptly thereafter))
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of the Bond Insurer or if a Bond Insurer Default exists, Holders of 66-2/3% of
the Bond Principal Balances of the Bonds, shall exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Seller or the Master
Servicer under or in connection with the Mortgage Loan Sale and Contribution
Agreement and the Servicing Agreement, including the right or power to take any
action to compel or secure performance or observance by the Seller or the Master
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 Mortgage Loan Sale and Contribution Agreement and
the Servicing Agreement, as the case may be, and any right of the Issuer to take
such action shall not be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default
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 opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements 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 6.01;
(ii) the Indenture Trustee shall not be 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 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.
(d) 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.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other trust funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.
(f) 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
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repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
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.
(h) The Indenture Trustee shall act in accordance with Sections 6.03
and 6.04 of the Servicing Agreement and shall act as successor to the Master
Servicer in accordance with Section 6.02 of the Servicing Agreement.
Section 6.02. 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. 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.
(d) The Indenture Trustee shall not be liable for 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 the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Bonds shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
Section 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Bonds and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Bond 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 hereof.
Section 6.04. 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 Bonds, it shall not be accountable for the
Issuer's use of the proceeds from the Bonds, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Bonds or in the Bonds other than the Indenture
Trustee's certificate of authentication.
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Section 6.05. NOTICE OF EVENT OF DEFAULT. The Indenture Trustee shall
promptly mail to each Bondholder and the Bond Insurer notice of the Event of
Default after it is known to a Responsible Officer of the Indenture Trustee,
unless such Event of Default shall have been waived or cured. Except in the case
of an Event of Default in payment of principal of or interest on any Bond, 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 Bondholders.
Section 6.06. REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX
ADMINISTRATION. The Indenture Trustee shall deliver to each Bondholder such
information as may be required to enable such holder to prepare its federal and
state income tax returns. In addition, upon the Issuer's written request, the
Indenture Trustee shall promptly furnish information reasonably requested by the
Issuer that is reasonably available to the Indenture Trustee to enable the
Issuer to perform its federal and state income tax reporting obligations.
The Indenture Trustee shall prepare and file (or cause to be prepared
and filed), on behalf of the Owner Trustee, all tax returns (if any) and
information reports, tax elections and such annual or other reports of the
Issuer as are necessary for preparation of tax returns and information reports
as provided in Section 5.03 of the Trust Agreement, including without limitation
Form 1099. All tax returns and information reports shall be signed by the Owner
Trustee as provided in Section 5.03 of the Trust Agreement.
Section 6.07. COMPENSATION AND INDEMNITY. The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The amount of the Indenture Trustee Fee shall be paid by the Master Servicer to
the Indenture Trustee on each Payment Date pursuant to Section 3.07(a)(x) of the
Servicing Agreement and all amounts owing to the Indenture Trustee hereunder
(including amounts owing from the Issuer for indemnification and otherwise) in
excess of such amount shall be paid solely as provided in Section 3.05(b)(viii)
and Section 5.04(b) hereof. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to
compensation for its services. Such expenses shall include reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts. The Issuer shall indemnify the
Indenture Trustee against any and all loss, liability or expense (including
attorneys' fees) incurred by it in connection with the administration of this
Trust and the performance of its duties hereunder. The Indenture Trustee shall
notify the Issuer promptly of any claim for which it may seek indemnity. Failure
by the Indenture Trustee to so notify the Issuer shall not relieve the Issuer of
its obligations hereunder. The Issuer shall defend any such claim, and the
Indenture Trustee may have separate counsel and the Issuer shall pay the fees
and expenses of such counsel. The Issuer is not obligated to reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture and the
termination or resignation of the Indenture
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Trustee. When the Indenture Trustee incurs expenses after the occurrence of an
Event of Default 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 6.08. 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 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer and the Bond Insurer. The Bond
Insurer or, if a Bond Insurer Default exists, the Holders of a majority of Bond
Principal Balances of the Bonds may remove the Indenture Trustee by so notifying
the Indenture Trustee and the Bond Insurer and may appoint a successor Indenture
Trustee. The Issuer shall, with the consent of the Bond Insurer so long as no
Bond Insurer Default exists, remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section
6.11 hereof;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of
the Indenture Trustee or its property; or
(iv) 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 the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall, with the consent of the Bond Insurer so long as no Bond Insurer
Default exists, promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, to the Bond 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
Bondholders. 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, the Bond Insurer or the Holders of a majority of
Bond Principal Balances of the Bonds may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
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Section 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of 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 hereof. The Indenture Trustee shall
provide the Rating Agencies and the Bond Insurer with prior written notice of
any such transaction.
If 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 and any of the Bonds 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 Bonds so
authenticated; and if at that time any of the Bonds shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Bonds 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 in the Bonds 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. (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 Trust Estate may at the time be located, the Indenture
Trustee shall have the power 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 Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Bondholders and the Bond Insurer, such title to the Trust Estate, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee or the Bond
Insurer 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 hereof and notice to the Bond Insurer but not to the
Bondholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(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 Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture
Trustee;
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(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 Agreement 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, either jointly with the
Indenture Trustee or separately, as may be provided therein, 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 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 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 Baa3 or better by Moody's and BBB
or better by Standard & Poor's. The Indenture Trustee shall comply with TIA ss.
310(b), including the optional provision permitted by the second sentence of TIA
ss. 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA ss. 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 ss. 310(b)(1) are met.
Section 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13. REPRESENTATIONS AND WARRANTIES. The Indenture Trustee
hereby represents that:
(i) The Indenture Trustee is duly organized and validly
existing as an association in good standing under the laws of the
United States with power and authority to own its
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properties and to conduct its business as such properties are currently
owned and such business is presently conducted;
(ii) The Indenture Trustee has the power and authority to
execute and deliver this Indenture and to carry out its terms; and the
execution, delivery and performance of this Indenture have been duly
authorized by the Indenture Trustee by all necessary corporate action;
(iii) The consummation of the transactions contemplated by
this Indenture and the fulfillment of the terms hereof 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 articles of incorporation or bylaws of the Indenture Trustee or any
agreement or other instrument to which the Indenture Trustee is a party
or by which it is bound; and
(iv) To the Indenture Trustee's knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its
properties: (A) asserting the invalidity of this Indenture (B) seeking
to prevent the consummation of any of the transactions contemplated by
this Indenture or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Indenture
Trustee of its obligations under, or the validity or enforceability of,
this Indenture.
Section 6.14. DIRECTIONS TO INDENTURE TRUSTEE. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of
the Owner Trust Estate in trust for the Bondholders and the Bond Insurer;
(b) to authenticate and deliver the Bonds substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
Section 6.15. THE AGENTS. The provisions of this Indenture relating to
the limitations of the Indenture Trustee's liability and to its indemnity shall
inure also to the Paying Agent and Bond Registrar.
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ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
Section 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES
OF BONDHOLDERS. 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 Holders of Bonds as of such Record Date, (b) at such other
times as the Indenture Trustee and the Bond Insurer 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 Bond Registrar, no such list shall be required to be furnished to the
Indenture Trustee.
Section 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
BONDHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Bonds
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 hereof and the names and addresses of Holders of Bonds received
by the Indenture Trustee in its capacity as Bond Registrar. The Indenture
Trustee may destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.
(b) Bondholders may communicate pursuant to TIA ss. 312(b) with other
Bondholders with respect to their rights under this Indenture or under the
Bonds.
(c) The Issuer, the Indenture Trustee and the Bond Registrar shall have
the protection of TIA ss. 312(c).
Section 7.03. REPORTS OF ISSUER. (a)(i) The Indenture Trustee shall
file with the Commission on behalf of the Issuer, with a copy to the Issuer and
the Bond Insurer within 15 days before the Issuer is required to file the same
with the Commission, the annual reports and the information, documents and other
reports (or 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;
(ii) The Indenture Trustee shall file with the
Commission, on behalf of the Issuer, in accordance with 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
(iii) The Indenture Trustee shall supply (and the
Indenture Trustee shall transmit by mail to all Bondholders described
in TIA ss. 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and
(ii) of
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this Section 7.03(a) and by rules and regulations prescribed from time
to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04. REPORTS BY INDENTURE TRUSTEE. If required by TIA ss.
313(a), within 60 days after each June 28 beginning with June 28, 2000, the
Indenture Trustee shall mail to each Bondholder as required by TIA ss. 313(c)
and the Bond Insurer a brief report dated as of such date that complies with TIA
ss. 313(a). The Indenture Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Bondholders shall
be filed by the Indenture Trustee with the Commission via EDGAR and each stock
exchange, if any, on which the Bonds are listed. The Issuer shall notify the
Indenture Trustee if and when the Bonds are listed on any stock exchange.
Section 7.05. STATEMENTS TO BONDHOLDERS. (a) With respect to each
Payment Date, the Indenture Trustee shall deliver to each Certificateholder,
Bondholder, the Bond Insurer, the Depositor, the Owner Trustee, the Certificate
Paying Agent and each Rating Agency, a statement setting forth the following
information as to the Bonds, to the extent applicable:
(i) the aggregate amount of collections with respect to
the Mortgage Loans;
(ii) the Available Funds and the Net Monthly Excess
Cashflow payable to the Bondholders for such Payment Date, the Basis
Risk Shortfall Carry-Forward Amount on the Bonds for such Payment Date
and the aggregate Unpaid Interest Shortfall on the Bonds for all prior
Payment Dates;
(iii) (a) the amount of such distribution to the Bonds
applied to reduce the Bond Principal Balance thereof, and (b) the
aggregate amount included therein representing Principal Prepayments;
(iv) the Insured Amount, if any, paid by the Bond Insurer
under the Bond Insurance Policy for such Payment Date and the aggregate
Insured Amounts for all prior Payment Dates paid by the Bond Insurer
under the Bond Insurance Policy and not yet reimbursed;
(v) the amount of such distribution to Holders of the
Bonds allocable to interest;
(vi) the amount of such distribution to the Trust
Certificates;
(vii) if the distribution to the Holders of the Bonds is
less than the full amount that would be distributable to such Holders
if there were sufficient funds available therefor, the amount of the
shortfall;
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(viii) the number and the aggregate Principal Balance of the
Mortgage Loans after giving effect to the distribution of principal on
such Payment Date;
(ix) the aggregate Bond Principal Balance of the Bonds,
after giving effect to the amounts distributed on such Payment Date,
separately identifying any reduction thereof due to Realized Losses
other than pursuant to an actual distribution of principal and the
aggregate Bond Principal Balance of all of the Bonds after giving
effect to the distribution of principal on such Payment Date;
(x) the number and aggregate Principal Balances of
Mortgage Loans (a) as to which the Monthly Payment is delinquent for
30-59 days, 60-89 days, 90 or more days, respectively, (b) in
foreclosure and (c) that have become REO Property, in each case as of
the end of the preceding Due Period; PROVIDED, HOWEVER, that such
information will not be provided on the statements relating to the
first Payment Date;
(xi) the Cap Contract Payment Amount;
(xii) the Required Overcollateralization Amount,
Overcollateralization Amount, Net Monthly Excess Cashflow, Excess
Overcollateralization Amount and Overcollateralization Increase Amount,
if any, in each case as the end of the related Payment Date;
(xiii) the amount of any Advances and Compensating
Interest payments;
(xiv) the aggregate Realized Losses with respect to the
related Payment Date and cumulative Realized Losses since the Closing
Date;
(xv) the number and aggregate Principal Balance of
Mortgage Loans repurchased pursuant to the Mortgage Loan Sale and
Contribution Agreement for the related Payment Date and cumulatively
since the Closing Date;
(xvi) the Cumulative Loss Percentage, Delinquency
Percentage and Rolling Delinquency Percentage for such Payment Date;
(xvii) the book value of any REO Property;
(xviii) the amount of any Prepayment Interest Shortfalls or
Relief Act Shortfalls for such Payment Date; and
(xix) the aggregate Principal Balance of Mortgage Loans
purchased pursuant to Section 3.18 of the Servicing Agreement for the
related Payment Date and cumulatively since the Closing Date.
Items (iii), (v) and (vi) above shall be presented on the basis of a
Bond having a $1,000 denomination. In addition, by January 31 of each calendar
year following any year during which
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the Bonds are outstanding, the Indenture Trustee shall furnish a report to each
Bondholder of record if so requested in writing at any time during each calendar
year as to the aggregate of amounts reported pursuant to (iii), (iv), (vi) and
(xii) with respect to the Bonds for such calendar year.
The Indenture Trustee may conclusively rely upon the Determination Date
Report provided by the Master Servicer pursuant to Section 4.01 of the Servicing
Agreement in its preparation of its Statement to Bondholders.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. COLLECTION OF MONEY. 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 Trust Estate, the Indenture Trustee may 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.
Section 8.02. TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Bondholders and the Bond
Insurer, the Payment Account as provided in Section 3.01 hereof.
(b) All monies deposited from time to time in the Payment Account and
all investments made with such monies including all income or other gain from
such investments and all deposits therein pursuant to this Indenture are for the
benefit of the Bondholders and the Bond Insurer.
On each Payment Date, the Indenture Trustee shall distribute all
amounts remaining on deposit in the Payment Account, after payment to the
Indenture Trustee of the Indenture Trustee Fee, to the Bondholders in respect of
the Bonds and to such other persons in the order of priority set forth in
Section 3.05 hereof (except as otherwise provided in Section 5.04(b) hereof).
The Indenture Trustee shall invest any funds in the Payment Account in
Eligible Investments, as directed by the Master Servicer, maturing no later than
the Business Day preceding each Payment Date and such Eligible Investments shall
not be sold or disposed of prior to their maturity. In the absence of such
direction, the Indenture Trustee shall invest the funds in the Payment Account
in money market funds as further described in clause (vii) of the definition of
Eligible Investments. In no event shall the Indenture Trustee have any liability
for such investments and any losses thereon.
Section 8.03. OFFICER'S CERTIFICATE. The Indenture Trustee shall
receive at least seven Business Days' notice when requested by the Issuer to
take any action pursuant to Section 8.05(a) hereof, accompanied by copies of any
instruments to be executed, and the Indenture Trustee shall also require, as a
condition to such action, an Officer's Certificate, 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.
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Section 8.04. TERMINATION UPON DISTRIBUTION TO BONDHOLDERS. This
Indenture and the respective obligations and responsibilities of the Issuer and
the Indenture Trustee created hereby shall terminate upon the distribution to
Bondholders, the Bond Insurer, the Certificate Paying Agent on behalf of the
Certificateholders and the Indenture Trustee of all amounts required to be
distributed pursuant to Article III; provided, however, that in no event shall
the trust created hereby continue beyond the expiration of 21 years from the
death of the survivor of the descendants of Joseph P. Kennedy, the late
ambassador of the United States to the Court of St.
James, living on the date hereof.
Section 8.05. RELEASE OF TRUST ESTATE. (a) Subject to the payment of
its fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture 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
provisions of this Indenture. No party relying upon an instrument executed by
the Indenture Trustee as provided in Article VIII hereunder 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 monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Bonds
Outstanding, (ii) all sums due to the Indenture Trustee pursuant to this
Indenture have been paid and (iii) all sums due to the Bond Insurer have been
paid, release any remaining portion of the Trust Estate that secured the Bonds
from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate and an Opinion of Counsel stating
that all applicable requirements have been satisfied, and a letter from the Bond
Insurer stating that the Bond Insurer has no objection to such request from the
Issuer.
Section 8.06. SURRENDER OF BONDS UPON FINAL PAYMENT. By acceptance of
any Bond, the Holder thereof agrees to surrender such Bond to the Indenture
Trustee promptly, prior to such Bondholder's receipt of the final payment
thereon.
Section 8.07. OPTIONAL REDEMPTION OF THE BONDS. (a) The Issuer shall
have the option to redeem the Bonds in whole, but not in part, on any Payment
Date on or after the earlier of (i) the Payment Date on which the aggregate
Principal Balance of the Mortgage Loans is less than or equal to 25% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date or (ii)
the Payment Date occurring in July 2006. The aggregate redemption price for the
Bonds will be equal to the unpaid Bond Principal Balance of the Bonds as of the
Payment Date on which the proposed redemption will take place in accordance with
the foregoing, together with accrued and unpaid interest thereon at the Bond
Interest Rate through such Payment Date (including any Unpaid Interest
Shortfalls and Carry-Forward Amount), plus an amount sufficient to pay in full
all amounts owing to the Bond Insurer and the Indenture Trustee under this
Indenture and the Insurance Agreement (which amounts shall be specified in
writing upon request of the Issuer by the Indenture Trustee and the Bond
Insurer).
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(b) In order to exercise the foregoing option, the Issuer shall, not
less than 15 days prior to the proposed Payment Date on which such redemption is
to be made, deposit the aggregate redemption price specified in (a) above with
the Indenture Trustee, and shall provide written notice of its exercise of such
option to the Indenture Trustee, the Bond Insurer, the Owner Trustee and the
Master Servicer. Following receipt of the notice and the aggregate redemption
price, calculated as specified in Section 8.07(a) hereof, pursuant to the
foregoing, the Indenture Trustee shall provide notice to the Bondholders of the
final payment on the Bonds and shall apply such funds to make final payments of
principal and interest on the Bonds in accordance with Section 3.05(b) hereof,
and this Indenture shall be discharged subject to the provisions of Section 4.10
hereof. If for any reason the amount deposited by the Issuer is not sufficient
to make such redemption or such redemption cannot be completed for any reason,
the amount so deposited by the Issuer with the Indenture Trustee shall be
immediately returned to the Issuer in full and shall not be used for any other
purpose or be deemed to be part of the Trust Estate.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.
(a) Without the consent of the Holders of any Bonds but with the prior written
consent of the Bond Insurer and prior notice to the Rating Agencies and the Bond
Insurer, the Issuer and the Indenture Trustee, when authorized by an Issuer
Request, 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 TIA
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 Bonds contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Bonds, or 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;
(vi) 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 materially
and adversely affect the interests of the Holders of the Bonds;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Bonds
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 hereof; or
(viii) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA;
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provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that (i)
such indenture supplement is permitted hereunder and (ii) entering into such
indenture supplement will not result in a "substantial modification" of the
Bonds under Treasury Regulation Section 1.1001.3 or adversely affect the status
of the Bonds as indebtedness for federal income tax purposes.
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, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Bonds but
with the prior written consent of the Bond Insurer and prior notice to the
Rating Agencies and the Bond Insurer, 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 Holders of the Bonds under this
Indenture; provided, however, that such action as evidenced by an Opinion of
Counsel, (i) is permitted by this Indenture, and shall not (ii) adversely affect
in any material respect the interests of any Bondholder or (iii) if 100% of the
Certificates are not owned by IMH Assets Corp., cause the Issuer to be subject
to an entity level tax for federal income tax purposes.
Section 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and, with the prior written
consent of the Bond Insurer and with the consent of the Holders of not less than
a majority of the Bond Principal Balances of the Bonds affected thereby, by Act
(as defined in Section 10.03 hereof) of such Holders 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 Holders of the Bonds under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Bond affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Bond, or reduce the principal amount
thereof or the interest rate thereon, change the provisions of this
Indenture relating to the application of collections on, or the
proceeds of the sale of, the Trust Estate to payment of principal of or
interest on the Bonds, or change any place of payment where, or the
coin or currency in which, any Bond 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 Bonds on or after the respective due dates
thereof;
(ii) reduce the percentage of the Bond Principal
Balances of the Bonds, the consent of the Holders of which is required
for any such supplemental indenture, or the consent of the Holders of
which is required for any waiver of compliance with certain
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provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to
the definition of the term "Outstanding" or modify or alter the
exception in the definition of the term "Holder";
(iv) reduce the percentage of the Bond Principal
Balances of the Bonds required to direct the Indenture Trustee to
direct the Issuer to sell or liquidate the Trust Estate pursuant to
Section 5.04 hereof;
(v) modify any provision of this Section 9.02 except to
increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the Basic Documents cannot
be modified or waived without the consent of the Holder of each Bond
affected thereby;
(vi) 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 Bond on any Payment Date (including
the calculation of any of the individual components of such
calculation); or
(vii) 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 Trust Estate 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 Holder of any Bond of the security
provided by the lien of this Indenture; and provided, further, that
such action shall not, as evidenced by an Opinion of Counsel, cause the
Issuer (if 100% of the Certificates are not owned by IMH Assets Corp.)
to be subject to an entity level tax.
The Indenture Trustee may, with the consent of the Bond Insurer, so
long as no Bond Insurer Default exists, in its discretion determine whether or
not any Bonds would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Bonds, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Bondholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Bonds to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
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Section 9.03. 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 6.01 and 6.02 hereof, 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.
Section 9.04. 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 Bonds 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 Holders of the Bonds
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 9.05. 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 9.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES. Bonds
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 Bonds 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 Outstanding Bonds.
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ARTICLE X
MISCELLANEOUS
Section 10.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) 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 and to the Bond Insurer (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) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this 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 signatory of 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;
(3) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation as
is necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
(4) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied with; and
(5) if the signatory of such certificate or opinion
is required to be Independent, the statement required by the definition
of the term "Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee and the Bond
Insurer an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days prior to
such deposit) to the Issuer of the Collateral or other property or securities to
be so deposited and a report from a nationally recognized accounting firm
verifying such value.
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(ii) Whenever the Issuer is required to furnish to
the Indenture Trustee and the Bond Insurer an Officer's Certificate certifying
or stating the opinion of any signer thereof as to the matters described in
clause (i) above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate from a nationally recognized accounting firm as to the
same matters, if the fair value of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause (ii), is 10%
or more of the Bond Principal Balances of the Bonds, but such a certificate need
not be furnished with respect to any securities so deposited, if the fair value
thereof as set forth in the related Officer's Certificate is less than $25,000
or less than one percent of the Bond Principal Balances of the Bonds.
(iii) Whenever any property or securities are to be
released from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee and the Bond Insurer an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the fair value
(within 90 days prior to such release) of the property or securities proposed to
be released and stating that in the opinion of such person the proposed release
will not impair the security under this Indenture in contravention of the
provisions hereof.
(iv) Whenever the Issuer is required to furnish to
the Indenture Trustee and the Bond Insurer an Officer's Certificate certifying
or stating the opinion of any signer thereof as to the matters described in
clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the property
or securities and of all other property or securities released from the lien of
this Indenture since the commencement of the then-current calendar year, as set
forth in the certificates required by clause (iii) above and this clause (iv),
equals 10% or more of the Bond Principal Balances of the Bonds, but such
certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then Bond
Principal Balances of the Bonds.
Section 10.02. 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 his 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 Seller or the Issuer, stating that the information with respect to
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such factual matters is in the possession of the Seller or the Issuer, 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 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 10.03. ACTS OF BONDHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Bondholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Bondholders 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 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 Bondholders 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 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section 10.03
hereof.
(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 Bonds shall be proved by the Bond Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Bonds shall bind the Holder of every
Bond 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 Bond.
Section 10.04. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other
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documents provided or permitted by this Indenture shall be in writing and if
such request, demand, authorization, direction, notice, consent, waiver or act
of Bondholders is to be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Bondholder 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 the Corporate Trust Office. The Indenture Trustee shall promptly
transmit any notice received by it from the Bondholders to the Issuer,
or
(ii) the Issuer by the Indenture Trustee or by any
Bondholder shall be sufficient for every purpose hereunder if in
writing and mailed first-class, postage prepaid to the Issuer addressed
to: Impac CMB Trust Series 1999-2, in care of Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration, or at any other
address previously furnished in writing to the Indenture Trustee by the
Issuer. The Issuer shall promptly transmit any notice received by it
from the Bondholders to the Indenture Trustee, or
(iii) the Bond Insurer by the Issuer, the Indenture
Trustee or by any Bondholders shall be sufficient for every purpose
hereunder if in writing and mailed, first-class postage pre-paid, or
personally delivered or telecopied to: Ambac Assurance Corporation, One
State Street Plaza, New York, New York 10004, Attention: Structured
Finance-Mortgage Backed Securities, Telephone (212) 208-3387,
Telecopier: (212) 363- 1459. The Bond Insurer shall promptly transmit
any notice received by it from the Issuer, the Indenture Trustee or the
Bondholders to the Issuer or Indenture Trustee, as the case may be.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, mailed first-class
postage pre-paid, to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., Residential Mortgage Monitoring Department, 99
Church Street, New York, New York 10007 and (ii) in the case of Standard &
Poor's, at the following address: Standard & Poor's, 55 Water Street - 41st
Floor, New York, New York 10041, Attention of Asset Backed Surveillance
Department; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
Section 10.05. NOTICES TO BONDHOLDERS; WAIVER. Where this Indenture
provides for notice to Bondholders 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 Bondholder affected by such
event, at such Person's address as it appears on the Bond 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 Bondholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Bondholder shall affect the sufficiency of such notice with
respect to other Bondholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
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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 Bondholders 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 Bondholders 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 an Event of
Default.
Section 10.06. 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 ss.ss. 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 10.07. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 10.08. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Bonds 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 10.09. SEPARABILITY. In case any provision in this Indenture or
in the Bonds 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 10.10. BENEFITS OF INDENTURE. The Bond Insurer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Indenture. To the extent that this Indenture confers upon or gives or
grants to the Bond Insurer any right, remedy or claim under or by reason of this
Indenture, the Bond Insurer may enforce any such right, remedy or claim
conferred, given or granted hereunder. Nothing in this Indenture or in the
Bonds, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Bondholders and the Bond Insurer,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
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Section 10.11. 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 Bonds 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 10.12. 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 10.13. 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 10.14. 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
at its expense (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 Bondholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
Section 10.15. ISSUER 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 Bonds 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 holder 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 10.16. NO PETITION. The Indenture Trustee, by entering into
this Indenture, and each Bondholder, by accepting a Bond, hereby covenant and
agree that they will not at any time prior to one year from the date of
termination hereof, institute against the Depositor or the Issuer, or join in
any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization,
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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 Bonds, this Indenture or any of the Basic
Documents.
Section 10.17. INSPECTION. The Issuer agrees that, at its expense, on
reasonable prior notice, it shall permit any representative of the Indenture
Trustee and the Bond 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 and the Bond Insurer
shall cause their 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 or the Bond Insurer may reasonably determine that
such disclosure is consistent with its obligations hereunder.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
IMPAC CMB TRUST SERIES 1999-2,
as Issuer
Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By:_________________________________
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Indenture Trustee
By:________________________________
Name:
Title:
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On this 28th day of June 1999, before me personally appeared
____________ to me known, who being by me duly sworn, did depose and say, that
he/she is the ________________ of the Indenture Trustee, one of the corporations
described in and which executed the above instrument; and that she signed her
name thereto by like order.
Notary Public
------------------------
NOTARY PUBLIC
[NOTARIAL SEAL]
<PAGE>
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this 28th day of June, 1999, before me personally appeared Patricia
A. Evans to me known, who being by me duly sworn, did depose and say, that she
resides at Newark, DE and is the Financial Services Officer of the Owner
Trustee, one of the corporations described in and which executed the above
instrument; and that she signed her name thereto by like order.
Notary Public
------------------------
NOTARY PUBLIC
[NOTARIAL SEAL]
<PAGE>
EXHIBIT A
FORM OF BONDS
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE BOND INSURANCE POLICY
AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE
PERSONALLY LIABLE FOR PAYMENTS ON THIS BOND.
PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
IMPAC CMB TRUST SERIES 1999-2
COLLATERALIZED ASSET-BACKED BONDS
AGGREGATE BOND PRINCIPAL BOND INTEREST
BALANCE: $________________ RATE:____%
INITIAL BOND PRINCIPAL BOND NO. ___
BALANCE OF THIS BOND: $_______________
PERCENTAGE INTEREST: ______% CUSIP NO. ___________
<PAGE>
Impac CMB Trust Series 1999-2 (the "Issuer"), a Delaware business
trust, for value received, hereby promises to pay to CEDE & CO. or registered
assigns, the principal sum of __________________________________________________
($_________________) in monthly installments on the twenty-fifth day of each
month or, if such day is not a Business Day, the next succeeding Business Day
(each a "Payment Date"), commencing in July 1999 and ending on or before the
Payment Date occurring in (the "Stated Maturity") and to pay interest on the
Bond Principal Balance of this Bond (this "Bond") outstanding from time to time
as provided below.
This Bond is one of a duly authorized issue of the Issuer's
Collateralized Asset-Backed Bonds, Series 1999-2 (the "Bonds"), issued under an
Indenture dated as of June 28, 1999 (the "Indenture"), between the Issuer and
Bankers Trust Company of California, N.A., as indenture trustee (the "Indenture
Trustee", which term includes any successor Indenture Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights thereunder of the
Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon
which the Bonds are to be authenticated and delivered. All terms used in this
Bond which are defined in the Indenture shall have the meanings assigned to them
in the Indenture.
Ambac Assurance Corporation (the "Bond Insurer"), in consideration of
the payment of the premium and subject to the terms of the bond insurance policy
(the "Bond Insurance Policy") issued thereby, has unconditionally and
irrevocably guaranteed the payment of the Insured Amount with respect to the
Bonds with respect to each Payment Date. Such Bond Insurance Policy will not
cover any Prepayment Interest Shortfalls, Relief Act Shortfalls or Basis Risk
Shortfall Carry-Forward Amount.
Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. On each
Payment Date, Bondholders will be entitled to receive interest payments in an
aggregate amount equal to the aggregate Accrued Bond Interest for such Payment
Date, together with principal payments in an aggregate amount equal to the
Principal Payment Amount, if any, for such Payment Date. The "Bond Principal
Balance" of a Bond as of any date of determination is equal to the initial Bond
Principal Balance thereof, reduced by the aggregate of all amounts previously
paid with respect to such Bond on account of principal and the aggregate amount
of cumulative Realized Losses allocated to such Bond on all prior Payment Dates.
The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Bonds as
described above, and shall be applied as between interest and principal as
provided in the Indenture.
All principal and interest accrued on the Bonds, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.
<PAGE>
The Bonds are subject to redemption in whole, but not in part, by the
Issuer on any Payment Date on or after the earlier of (i) the Payment Date on
which the aggregate Principal Balance of the Mortgage Loans is less than or
equal to 25% of the aggregate Principal Balance of the Mortgage Loans as of the
Cut-off Date and (ii) the Payment Date in July 2006.
The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate and payments under the Bond Insurance Policy will be the sole
source of payments on the Bonds, and each Holder hereof, by its acceptance of
this Bond, agrees that (i) such Bond will be limited in right of payment to
amounts available from the Trust Estate and the Bond Insurance Policy as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc. (formerly known as Imperial Credit Mortgage Holdings,
Inc.), the Master Servicer or any of their respective affiliates, or to the
assets of any of the foregoing entities, except the assets of the Issuer pledged
to secure the Bonds pursuant to the Indenture and the rights conveyed to the
Issuer under the Indenture and the Bond Insurance Policy.
Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more Predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.
Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.
If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the Holder of this
Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds,
together with accrued and unpaid interest thereon as described in the Indenture.
The
<PAGE>
Indenture provides that, notwithstanding the acceleration of the maturity of the
Bonds, under certain circumstances specified therein, all amounts collected as
proceeds of the Trust Estate securing the Bonds or otherwise shall continue to
be applied to payments of principal of and interest on the Bonds as if they had
not been declared due and payable.
The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.
Pursuant to the Indenture, unless a Bond Insurer Default (as defined in
the Indenture) exists (i) the Bond Insurer shall be deemed to be the holder of
the Bonds for certain purposes specified in the Indenture (other than with
respect to payment on the Bonds), and will be entitled to exercise all rights of
the Bondholders thereunder, including the rights of Bondholders relating to the
occurrence of, and the remedies with respect to, an Event of Default, without
the consent of such Bondholders, and (ii) the Trustee may take actions which
would otherwise be at its option or within its discretion, including actions
relating to the occurrence of, and the remedies with respect to, an Event of
Default, only at the direction of the Bond Insurer.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.
Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer with the consent of the Bond Insurer and the Holders of a
majority of all Bonds at the time outstanding. The Indenture also contains
provisions permitting (i) the Bond Insurer or (ii) if a Bond Insurer Default
exists, the Holders of Bonds representing specified percentages of the aggregate
Bond Principal Balance of the Bonds on behalf of the Holders of all the Bonds,
to waive any past Default under the Indenture and its consequences. Any such
waiver by the Holder, at the time of the giving thereof, of this Bond (or any
one or more Predecessor Bonds) shall bind the Holder of every Bond issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon such Bond.
<PAGE>
The Indenture also permits the Issuer and the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of the Holders of the Bonds issued thereunder.
Initially, the Bonds will be registered in the name of CEDE & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.
Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND 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.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: June 28, 1999
IMPAC CMB TRUST SERIES 1999-1
BY: WILMINGTON TRUST COMPANY, not
in its individual capacity but solely in its
capacity as Owner Trustee
By:_______________________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A., as Indenture Trustee
By:______________________________________
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of the Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -- __________________ Custodian _________________________
(Cust) (Minor)
under Uniform Gifts to Minor Act _______________________
(State)
Additional abbreviations may also be used though not in
the above list.
<PAGE>
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 typewrite name and address, including zip code, of assignee)
________________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________ attorney to transfer said Bond on the books kept
for registration thereof, with full power of substitution in the premises.
Dated:_________________________ ___________________________________
Signature Guaranteed by _____________________________________________
NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.
<PAGE>
EXHIBIT B
MORTGAGE LOAN SCHEDULE
(provided upon request)
<PAGE>
EXHIBIT C
FORM OF INITIAL CERTIFICATION
___________________, 199_
[Issuer]
[Bond Insurer]
[Master Servicer]
Attention: Impac CMB Trust Series 1999-2
Re: Indenture dated as of June 28, 1999, between Impac CMB Trust Series
1999-2 and Bankers Trust Company of California, N.A.
Ladies and Gentlemen:
In accordance with Section 2.03(a) of the above-captioned
Indenture, and Section 2.1(b)(i)-(v) of the Mortgage Loan Sale and Contribution
Agreement, dated as of June 28, 1999 between Impac Mortgage Holdings, Inc.
(formerly known as Imperial Credit Mortgage Holdings, Inc.) and Impac Funding
Corporation (formerly known as ICI Funding Corporation) (the "MLSCA"; and
together with the Indenture, the "Agreements"), the undersigned, as Indenture
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
exception report attached hereto) it has reviewed the Mortgage File and the
Mortgage Loan Schedule and has determined that: (i) all documents required to be
included in the Mortgage File are in its possession; (ii) such documents have
been reviewed by it and appear regular on their face and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in items (iii) and (v) of the definition or description of
"Mortgage Loan Schedule" is correct.
The Indenture Trustee has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Agreements. The Indenture Trustee makes no
representation that any documents specified in clause (v) of Section 2.1(b) of
the MLSCA should be included in any Mortgage File. The Indenture Trustee makes
no representations as to and shall not be responsible to verify: (i) the
validity, legality, sufficiency, enforceability, due authorization,
recordability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, (ii)
the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan, or (iii) the existence of any assumption, modification, written
assurance or substitution agreement with respect to any Mortgage File if no such
documents appear in the Mortgage File delivered to the Indenture Trustee.
<PAGE>
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Indenture.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Indenture Trustee
By:__________________________________
Name:________________________________
Title:_______________________________
<PAGE>
EXHIBIT D
FORM OF FINAL CERTIFICATION
___________________, 199_
[Issuer]
[Bond Insurer]
[Master Servicer]
Attention: Impac CMB Trust Series 1999-2
Re: Indenture, dated as of June 28, 1999, between Impac CMB Trust Series
1999-2 and Bankers Trust Company of California, N.A.
Ladies and Gentlemen:
In accordance with Section 2.03(b) of the above-captioned
Indenture, and Section 2.1(b) of the Mortgage Loan Sale and Contribution
Agreement, dated as of June 28, 1999, between Impac Mortgage Holdings, Inc.
(formerly known as Imperial Credit Mortgage Holdings, Inc.) and Impac Funding
Corporation (formerly known as ICI Funding Corporation) (the "MLSCA"; and
together with the Indenture, the "Agreements"), the undersigned, as Indenture
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
exception report attached hereto) it has received the documents set forth in
Section 2.1(b) of the MLSCA.
The Indenture Trustee has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the Agreements. The Indenture Trustee makes no representation that
any documents specified in clause (v) of Section 2.1(b) should be included in
any Mortgage File. The Indenture Trustee makes no representations as to and
shall not be responsible to verify: (i) the validity, legality, sufficiency,
enforceability, due authorization, recordability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) the existence of
any assumption, modification, written assurance or substitution agreement with
respect to any Mortgage File if no such documents appear in the Mortgage File
delivered to the Indenture Trustee.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Indenture.
<PAGE>
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Indenture Trustee
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE>
APPENDIX A
DEFINITIONS
ACCRUAL PERIOD: With respect to the Bonds and any Payment
Date, the period commencing on the preceding Payment Date (or, in the case of
the first Payment Date, on the Closing Date) through the day preceding such
Payment Date.
ACCRUED BOND INTEREST: With respect to each Payment Date and
the Bonds, interest accrued during the related Accrual Period at the related
Bond Interest Rate on the Bond Principal Balance thereof immediately prior to
such Payment Date. Accrued Bond Interest for the Bonds shall be calculated on
the basis of the actual number of days in the Accrual Period and a 360-day year.
ADJUSTMENT DATE: As to each ARM Loan, each date set forth in
the related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.
ADVANCE: As to any Mortgage Loan, any advance made by the
Master Servicer (or the Indenture Trustee as successor Master Servicer),
pursuant to Section 4.04 of the Servicing Agreement. Anything in the Basic
Documents referring to an "Advance" by the Master Servicer shall be deemed to
mean the Indenture Trustee as Master Servicer, if the Master Servicer has been
terminated pursuant to Section 6.01 of the Servicing Agreement and the Indenture
Trustee has made such Advance.
AFFILIATE: With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
APPRAISED VALUE: The appraised value of a Mortgaged Property
based upon the lesser of (i) the appraisal made at the time of the origination
of the related Mortgage Loan, or (ii) the sales price of such Mortgaged Property
at such time of origination. With respect to a Mortgage Loan the proceeds of
which were used to refinance an existing mortgage loan, the appraised value of
the Mortgaged Property based upon the appraisal obtained at the time of
refinancing.
ARM LOANS: At any time, collectively, all the mortgage loans
that have been sold to the Depositor under the Mortgage Loan Sale and
Contribution Agreement which have adjustable rates and will be secured by first
liens on the related Mortgage Property.
ASSIGNMENT OF MORTGAGE: An assignment of Mortgage, notice of
transfer or equivalent instrument, in recordable form, which is sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to reflect of record the sale of the Mortgage, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county, if permitted by law.
<PAGE>
AUTHORIZED NEWSPAPER: A newspaper of general circulation in
the Borough of Manhattan, The City of New York, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
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).
AVAILABLE INTEREST: On any Payment Date, an amount equal to
interest accrued on the Mortgage Loans at the Available Funds Rate for such
Payment Date
AVAILABLE FUNDS: With respect to any Payment Date, the sum of
the following, in each case with respect to the Mortgage Loans:
(i) each previously undistributed Monthly Payment due after
the Cut-Off Date received on or prior to the related Determination Date
or advanced prior to such Payment Date (other than Monthly Payments due
after the related Due Period, which shall be treated as if received
during the Due Period they were due and other than Monthly Payments
with respect to which the Master Servicer has made an unreimbursed
Advance) on each Outstanding Mortgage Loan (less the related Servicing
Fees, any subservicing fees under any Subservicing Agreement and any
fees or penalties retained by the Servicer or any subservicer, the fees
of the Owner Trustee and the Indenture Trustee and the premium with
respect to the Bond Insurance Policy);
(ii) all proceeds of any Mortgage Loan repurchased during the
related Collection Period (or deemed to have been so repurchased in
accordance with the Servicing Agreement) pursuant to the Servicing
Agreement and the amount of any shortfall deposited in the Collection
Account in connection with the substitution of a Deleted Mortgage Loan
pursuant to the Servicing Agreement during the related Collection
Period; and
(iii) all other unscheduled collections (including, without
limitation, Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) received during the related Due Period (or
deemed to have been so received) to the extent applied by the Master
Servicer as recoveries of principal of the related Mortgage Loan
pursuant to the Servicing Agreement;
(iv) interest on amounts in the Collection Account or Payment
Account in respect of deposits from the Mortgage Loans;
(v) any fees or penalties on the Mortgage Loans, including
prepayment penalties and assumption fees, not retained by any
Subservicer pursuant to the terms of the related Subservicing
Agreement;
2
<PAGE>
(vi) any amounts received with respect to a High LTV Loan that
was 180 or more days delinquent in payment of interest (including
amounts with respect to principal); and
(vii) the Cap Contract Payment Amount;
MINUS
(viii) expenses incurred by and reimbursable to Master
Servicer or the Depositor pursuant to the Servicing Agreement or
otherwise, or in connection with enforcing any repurchase, substitution
or indemnification obligation of the Seller (other than an Affiliate of
the Depositor) in respect of a Mortgage Loan;
(ix) amounts expended by the Master Servicer (a) pursuant to
the Servicing Agreement in good faith in connection with the
restoration of property related to a Mortgage Loan damaged by an
Uninsured Cause, and (b) in connection with the liquidation of a
Mortgage Loan or disposition of an REO Property related to a Mortgage
Loan to the extent not otherwise reimbursed to the Master Servicer
pursuant to the Servicing Agreement; and
(x) if the Bonds have been declared due and payable
following an Event of Default on such Payment Date, any
amounts owed to the Indenture Trustee by the Issuer pursuant
to Section 6.07 of the Indenture.
AVAILABLE FUNDS RATE: On any Payment Date, a rate equal to the
sum of (A)(i)(a) the weighted average of the Mortgage Rates on the Mortgage
Loans minus the sum of the related Servicing Fee Rate, Indenture Trustee Fee
Rate, Owner Trustee Fee Rate, Minimum Spread Rate, and, if applicable, the
related CMAC PMI Policy Rate, weighted on the basis of the Principal Balances
thereof as of the end of the prior Due Period, times a fraction equal to (1) the
aggregate Principal Balance of the Mortgage Loans as of the end of the prior Due
Period over (2) the Bond Principal Balance of the Bonds immediately prior to
such Payment Date, minus (b) the Policy Premium Rate, times (ii) a fraction
equal to (x) 30 divided by (y) the number of days in the related Accrual Period
plus (B)(i) a fraction, converted to a per annum percentage, (x) the numerator
of which is equal to the sum of (a) the Cap Contract Payment Amount for such
Payment Date (whether or not received) and (b) amounts in respect of interest
received with respect to the Mortgage Loans for such Payment Date with respect
to clauses (iv) and (v) of the definition of Available Funds, and (y) the
denominator of which is the aggregate Principal Balance of the Mortgage Loans as
of the end of the prior Due Period, times (ii) a fraction equal to (x) 30
divided by (y) the number of days in the related Accrual Period.
BALLOON LOAN: Each of the Mortgage Loans identified in the
Mortgage Loan Schedule as having an original term to maturity that is shorter
than the related amortization term.
BALLOON PAYMENT: With respect to any Balloon Loan, the related
Monthly Payment payable on the stated maturity date of such Balloon Loan.
BANKRUPTCY CODE: The Bankruptcy Code of 1978, as amended.
3
<PAGE>
BASIC DOCUMENTS: The Trust Agreement, the Certificate of
Trust, the Indenture, the Servicing Agreement, the Insurance Agreement, the
Mortgage Loan Sale and Contribution Agreement, the Cap Contract and the other
documents and certificates delivered in connection with any of the above.
BASIS RISK SHORTFALL: On each Payment Date, the excess, if
any, of (x) Accrued Bond Interest on the Bonds calculated pursuant to clause (i)
of the definition of Bond Interest Rate thereof over (y) interest accrued on the
Mortgage Loans at the Available Funds Rate.
BASIS RISK SHORTFALL CARRY-FORWARD AMOUNT: With respect to any
Payment Date, an amount equal to the aggregate amount of Basis Risk Shortfall
for the Bonds on such Payment Date, plus any unpaid Basis Risk Shortfall from
prior Payment Dates, plus interest thereon at the related Bond Interest Rate for
such Payment Date, to the extent previously unreimbursed by the Net Monthly
Excess Cash Flow.
BENEFICIAL OWNER: With respect to any Bond, the Person who is
the beneficial owner of such Bond as reflected on the books of the Depository or
on the books of a Person maintaining an account with such Depository (directly
as a Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
BOND INSURANCE POLICY: With respect to the Bonds, the
certificate guaranty insurance policy number #AB0269BE, issued by the Bond
Insurer to the Indenture Trustee for the benefit of the Bondholders.
BOND INSURANCE PREMIUM: The premium payable to the Bond
Insurer with respect to the Bond Insurance Policy, as specified in the Insurance
Agreement.
BOND INSURER: Ambac Assurance Corporation, a
Wisconsin-domiciled stock insurance corporation, any successor thereto or any
replacement bond insurer substituted pursuant to Section 3.29 of the Indenture.
BOND INSURER DEFAULT: The existence and continuance of any of
the following: (a) a failure by the Bond Insurer to make a payment required
under the Bond Insurance Policy in accordance with its terms; or (b)(i) the Bond
Insurer (A) files any petition or commences any case or proceeding under any
provision or chapter of the Bankruptcy Code or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (B) makes a general assignment for the benefit of its creditors,
or (C) has an order for relief entered against it under the Bankruptcy Code or
any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and nonappealable;
or (ii) a court of competent jurisdiction, the New York or Wisconsin Department
of Insurance or other competent regulatory authority enters a final and
nonappealable order, judgment or decree (A) appointing a custodian, trustee,
agent or receiver for the Bond Insurer or for all or any material portion of its
property or (B) authorizing the taking of possession by a custodian, trustee,
agent or receiver of the Bond Insurer (or the taking of possession of all or any
material portion of the property of the Bond Insurer).
4
<PAGE>
BOND INTEREST RATE: With respect to each Payment Date and the
Bonds, a floating rate equal to the lesser of (i) One-Month LIBOR plus the
related Bond Margin and (ii) the Maximum Bond Rate with respect to such Payment
Date.
BOND MARGIN: On any Payment Date prior to the Step-Up Date,
0.37%, and on any Payment Date thereafter, 0.74%.
BOND OWNER: The Beneficial Owner of a Bond.
BOND PRINCIPAL BALANCE: With respect to any Bond and any date
of determination, the initial Bond Principal Balance as stated on the face
thereof, minus all amounts distributed in respect of principal with respect to
such Bond and the aggregate amount of Realized Losses allocated to such Bond on
all prior Payment Dates. Reimbursement of the principal portion of Realized
Losses from the Interest Remittance Amount shall not reduce the Bond Principal
Balance of any Bond.
BOND REGISTER: The register maintained by the Bond Registrar
in which the Bond Registrar shall provide for the registration of Bonds and of
transfers and exchanges of Bonds.
BOND REGISTRAR: The Indenture Trustee, in its capacity as Bond
Registrar, or any successor to the Indenture Trustee in such capacity.
BONDHOLDER OR HOLDER: The Person in whose name a Bond is
registered in the Bond Register, except that, any Bond registered in the name of
the Depositor, the Issuer or the Indenture Trustee or any Affiliate of any of
them shall be deemed not to be a holder or holder, nor shall any so owned be
considered outstanding, for purposes of giving any request, demand,
authorization, direction, notice, consent or waiver under the Indenture or the
Trust Agreement; provided that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Bonds that the Indenture Trustee or
the Owner Trustee knows to be so owned shall be so disregarded. Owners of Bonds
that have been pledged in good faith may be regarded as Holders if the pledgee
establishes to the satisfaction of the Indenture Trustee or the Owner Trustee
the pledgee's right so to act with respect to such Bonds and that the pledgee is
not the Issuer, any other obligor upon the Bonds or any Affiliate of any of the
foregoing Persons. Any bonds on which payments are made under the Bond Insurance
Policy shall be deemed Outstanding until the Bond Insurer has been reimbursed
with respect thereto and the Bond Insurer shall be deemed the Bondholder thereof
to the extent of such unreimbursed payment.
BONDS: The Bonds issued and outstanding at any time pursuant
to the Indenture.
BOOK-ENTRY BONDS: Beneficial interests in the Bonds, ownership
and transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.
5
<PAGE>
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the City of New York, Delaware or
California or in the city in which the corporate trust offices of the Indenture
Trustee or the principal office of the Bond Insurer are located,
are required or authorized by law to be closed.
BUSINESS TRUST STATUTE: Chapter 38 of Title 12 of the Delaware
Code, 12 DEL. Code [section symbol] [section symbol] ET SEQ., as the same may be
amended from time to time.
CAP CONTRACT: The ISDA Master Agreement, including the Credit
Support Annex and the Confirmations thereto, dated June 28, 1999, between the
Cap Counterparty and the Issuer.
CAP CONTRACT DEPOSIT: The amount equal to $350,000.00
deposited by the Depositor into the Trust to allow the Owner Trustee on behalf
of the Issuer to acquire the Cap Contract.
CAP CONTRACT PAYMENT AMOUNT: With respect to any Payment Date,
the amount payable by the Cap Counterparty under the Cap Contract based upon the
Confirmation thereto attached as Exhibit I.
CAP CONTRACT PLEDGED COLLATERAL: The collateral pledged by the
Cap Counterparty to the Issuer pursuant to the Cap Contract.
CAP COUNTERPARTY: DLJ Financial Products Limited, and its
successors and assigns.
CASH LIQUIDATION: As to any defaulted Mortgage Loan other than
a Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer evidenced in a certificate of a Servicing Officer that it has
received all Insurance Proceeds, Liquidation Proceeds and other payments or cash
recoveries which the Master Servicer reasonably and in good faith expects to be
finally recoverable with respect to such Mortgage Loan.
CERTIFICATE DISTRIBUTION ACCOUNT: The account or accounts
created and maintained pursuant to Section 3.10(c) of the Trust Agreement. The
Certificate Distribution Account shall be an Eligible Account.
CERTIFICATE PAYING AGENT: The meaning specified in Section
3.10 of the Trust Agreement.
CERTIFICATE PERCENTAGE INTEREST: With respect to each
Certificate, the Certificate Percentage Interest stated on the face thereof.
CERTIFICATE REGISTER: The register maintained by the
Certificate Registrar in which the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates.
CERTIFICATE REGISTRAR: Initially, the Indenture Trustee, in
its capacity as Certificate Registrar, or any successor to the Indenture Trustee
in such capacity.
6
<PAGE>
CERTIFICATE OF TRUST: The Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Business Trust Statute.
CERTIFICATES OR TRUST CERTIFICATES: The IMH Assets Corp.,
Trust Certificates, Series 1999-2, evidencing the beneficial ownership interest
in the Issuer and executed by the Owner Trustee in substantially the form set
forth in Exhibit A to the Trust Agreement.
CERTIFICATEHOLDER OR HOLDER: The Person in whose name a
Certificate is registered in the Certificate Register. Owners of Certificates
that have been pledged in good faith may be regarded as Holders if the pledgee
establishes to the satisfaction of the Indenture Trustee or the Owner Trustee,
as the case may be, the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Issuer, any other obligor upon the
Certificates or any Affiliate of any of the foregoing Persons.
CUT-OFF DATE BALANCE: $117,561,452.
CLOSING DATE: June 28, 1999.
CMAC: Commonwealth Mortgage Assurance Corporation, or its
successor in interest.
CMAC PMI POLICY: The modified primary insurance policy issued
with respect to certain of the ARM Loans by CMAC.
CMAC PMI POLICY FEE: With respect to each Mortgage Loan
covered by the CMAC PMI Policy and any Payment Date, the product of (i) the CMAC
PMI Policy Rate divided by 12 and (ii) the Principal Balance of such Mortgage
Loan as of the first day of the related Due
Period.
CMAC PMI POLICY RATE: With respect to any ARM Loan covered by
the CMAC PMI Policy, the rate per annum at which the premium with respect to
such policy accrues.
CODE: The Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
COLLATERAL: The meaning specified in the Granting Clause of
the Indenture.
COLLATERAL ACCOUNT CONTROL AGREEMENT: The Collateral Account
Control Agreement between the Issuer and the Securities Intermediary, whereby
which the Cap Contract Pledged Collateral under the Cap Contract is held by the
Securities Intermediary.
COLLECTION ACCOUNT: The account or accounts created and
maintained pursuant to Section 3.06(d) of the Servicing Agreement. The
Collection Account shall be an Eligible Account.
7
<PAGE>
COLLECTION PERIOD: With respect to each Payment Date, the
calendar month immediately preceding the month in which such Payment Date
occurs.
COMBINED LOAN-TO-VALUE RATIO: With respect to any Mortgage
Loan and any date, the percentage equivalent of a fraction, the numerator of
which is the Cut-Off Date Principal Balance of such Mortgage Loan and of any
mortgage loan or mortgage loans that are secured by liens on the Mortgaged
Property that are subordinate to the Mortgage and the denominator of which is
the Appraised Value of the related Mortgaged Property.
COMPENSATING INTEREST: With respect to any Determination Date,
an amount equal to the lesser of (i) the aggregate amount of Prepayment Interest
Shortfall for the related Collection Period and (ii) the Servicing Fee for such
Determination Date.
CONDOSELECT LOAN: The Mortgage Loans that are
cross-collateralized and cross- defaulted and indicated on the Mortgage Loan
Schedule as "CondoSelect Loans."
CONVERTED MORTGAGE LOAN: Any Convertible Mortgage Loan with
respect to which the interest rate borne by such Mortgage Loan has been
converted from an adjustable interest rate to a fixed interest rate.
CONVERTIBLE MORTGAGE LOAN: Any Mortgage Loan which by its
terms grants to the related Mortgagor the option to convert the interest rate
borne by such Mortgage Loan from an adjustable interest rate to a fixed interest
rate.
CONVERTING MORTGAGE LOAN: Any Convertible Mortgage Loan with
respect to which the related Mortgagor has given notice of his intent to convert
from an adjustable interest rate to a fixed interest rate and prior to the
conversion of such Mortgage Loan.
CORPORATE TRUST OFFICE: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Bond Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at 3 Park
Plaza, 16th Floor, Irvine, CA 92614 Attention: Impac CMB Trust Series 1999-2.
With respect to the Owner Trustee, the principal corporate trust office of the
Owner Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of the execution of this Trust
Agreement is located at Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19801, Attention: Impac CMB Trust
Series 1999-2.
CUMULATIVE LOSS PERCENTAGE: As to any Payment Date and the
Mortgage Loans, the percentage equivalent of the fraction obtained by dividing
(i) the aggregate of Realized Losses on the Mortgage Loans from the Cut-Off Date
through such Payment Date by (ii) the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.
CUT-OFF DATE: With respect to the ARM Loans, June 1, 1999.
With respect to the High LTV Loans, the close of business on May 31, 1999.
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CUT-OFF DATE PRINCIPAL BALANCE: With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-Off Date after applying
the principal portion of Monthly Payments due on or before such date, whether or
not received, and without regard to any payments
due after such date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
DEFAULT: Any occurrence which is or with notice or the lapse
of time or both would become an Event of Default.
DEFICIENCY AMOUNT: The meaning provided in the Bond Insurance
Policy.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
scheduled Monthly Payment that constitutes a permanent forgiveness of principal,
which valuation or reduction results from a proceeding under the Bankruptcy
Code.
DEFINITIVE BONDS: The meaning specified in Section 4.06 of the
Indenture.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced with an Eligible Substitute Mortgage Loan.
DELINQUENCY PERCENTAGE: As of the last day of any Due Period
and with respect to the Mortgage Loans, the percentage equivalent of a fraction,
the numerator of which equals the aggregate Principal Balance of the Mortgage
Loans that are 60 or more days delinquent, in foreclosure or converted to REO
Properties as of such last day of such Due Period, and the denominator of which
is the aggregate Principal Balance of the Mortgage Loans as of the last day of
such Due Period.
DEPOSITOR: IMH Assets Corp., a California corporation, or its
successor in interest.
DEPOSITORY OR DEPOSITORY AGENCY: The Depository Trust Company
or a successor appointed by the Indenture Trustee. Any successor to the
Depository shall be an organization registered as a "clearing agency" pursuant
to Section 17A of the Exchange Act and the regulations of the Securities and
Exchange Commission thereunder.
DEPOSITORY PARTICIPANT: A Person for whom, from time to time,
the Depository effects book-entry transfers and pledges of securities deposited
with the Depository.
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DETERMINATION DATE: With respect to any Payment Date, the 15th
of the related month, or if the 15th day of such month is not a Business Day,
the immediately preceding Business Day.
DETERMINATION DATE REPORT: The report prepared by the Master
Servicer pursuant to Section 4.01 of the Servicing Agreement.
DUE DATE: The date on which the Monthly Payment on the related
Mortgage Loan is due in accordance with the terms of the related Mortgage Note.
DUE PERIOD: With respect to any Payment Date and the ARM
Loans, the period commencing on the second day of the month preceding the month
of such Payment Date (or, with respect to the first Due Period, the day
following the Cut-Off Date) and ending on the first day of the month of such
Payment Date. With respect to any Payment Date and the High LTV Loans, the
period is the calendar month preceding the month of such Payment Date.
ELIGIBLE ACCOUNT: An account that is any of the following: (i)
maintained with a depository institution the short term deposits of which have
been rated by each Rating Agency in its highest rating available, or (ii) an
account or accounts in a depository institution in which such accounts are fully
insured to the limits established by the FDIC, PROVIDED that any deposits not so
insured shall, to the extent acceptable to the Bond Insurer and each Rating
Agency, as evidenced in writing, be maintained such that (as evidenced by an
Opinion of Counsel delivered to the Indenture Trustee, the Bond Insurer and each
Rating Agency) the Indenture Trustee has a claim with respect to the funds in
such account or a perfected first security interest against any collateral
(which shall be limited to Eligible Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, or (iii) in the case of the
Collection Account, either (A) a trust account or accounts maintained at the
Corporate Trust Department of the Indenture Trustee or (B) an account or
accounts maintained at the Corporate Trust Department of the Indenture Trustee,
as long as its short term debt obligations are rated P-1 by Moody's and A-1 by
Standard & Poor's or better and its long term debt obligations are rated A2 by
Moody's and A by Standard & Poor's or better, or (iv) in the case of the
Collection Account and the Payment Account, a trust account or accounts
maintained in the corporate trust division of the Indenture Trustee, or (v) an
account or accounts of a depository institution acceptable to each Rating Agency
as evidenced in writing by each Rating Agency that use of any such account as
the Collection Account or the Payment Account will not reduce the rating
assigned to any of the Securities by such Rating Agency below investment grade
without taking into account the Bond Insurance Policy and acceptable to the Bond
Insurer as evidenced in writing.
ELIGIBLE INVESTMENTS: One or more of the following:
(i) direct obligations of, and obligations fully
guaranteed by, the United States of America, the Federal Home Mortgage
Corporation, the Federal National Mortgage Association, the Federal
Home Loan Banks or any agency or instrumentality of the United States
of America the obligations of which are backed by the full faith and
credit of the United States of America;
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(ii) (A) demand and time deposits in, certificates of
deposit of, banker's acceptances issued by or federal funds sold by any
depository institution or trust company (including the Indenture
Trustee or its agent acting in their respective commercial capacities)
incorporated under the laws of the United States of America or any
State thereof and subject to supervision and examination by federal
and/or state authorities, so long as at the time of such investment or
contractual commitment providing for such investment, such depository
institution or trust company has a short term unsecured debt rating in
the highest available rating category of each of the Rating Agencies
and provided that each such investment has an original maturity of no
more than 365 days, and (B) any other demand or time deposit or deposit
which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30
days with respect to any security described in clause (i) above and
entered into with a depository institution or trust company (acting as
a principal) rated "A" or higher by Standard & Poor's and A2 or higher
by Moody's; provided, however, that collateral transferred pursuant to
such repurchase obligation must (A) be valued weekly at current market
price plus accrued interest, (B) pursuant to such valuation, equal, at
all times, 105% of the cash transferred by the Indenture Trustee in
exchange for such collateral and (C) be delivered to the Indenture
Trustee or, if the Indenture Trustee is supplying the collateral, an
agent for the Indenture Trustee, in such a manner as to accomplish
perfection of a security interest in the collateral by possession of
certificated securities.
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States of America or any State thereof which has a long term unsecured
debt rating in the highest available rating category of each
of the Rating Agencies at the time of such investment;
(v) commercial paper having an original maturity of
less than 365 days and issued by an institution having a short term
unsecured debt rating in the highest available rating category of each
of the Rating Agencies at the time of such investment;
(vi) a guaranteed investment contract approved by each
of the Rating Agencies and the Bond Insurer and issued by an insurance
company or other corporation having a long term unsecured debt rating
in the highest available rating category of each of
the Rating Agencies at the time of such investment;
(vii) money market funds having ratings in the highest
available long-term rating category of each of the Rating Agencies at
the time of such investment; any such money market funds which provide
for demand withdrawals being conclusively deemed to satisfy any
maturity requirement for Eligible Investments set forth in the
Indenture; and
(viii) any investment approved in writing by each of the
Rating Agencies and the Bond Insurer.
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The Indenture Trustee may purchase from or sell to itself or an affiliate, as
principal or agent, the Eligible Investments listed above.
PROVIDED, HOWEVER, that each such instrument shall be acquired in an arm's
length transaction and no such instrument shall be an Eligible Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations; PROVIDED FURTHER, HOWEVER, that each such instrument acquired shall
not be acquired at a price in excess of par.
ELIGIBLE SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan substituted
by the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officer's Certificate delivered to the
Indenture Trustee, (i) have an outstanding principal balance, after deduction of
the principal portion of the monthly payment due in the month of substitution
(or in the case of a substitution of more than one Mortgage Loan for a Deleted
Mortgage Loan, an aggregate outstanding principal balance, after such
deduction), not in excess of the outstanding principal balance of the Deleted
Mortgage Loan (the amount of any shortfall to be deposited by the Seller in the
Collection Account in the month of substitution); (ii)(A) if such Mortgage Loan
is an ARM Loan, comply with each representation and warranty set forth in
clauses (i) through (lxiii) of Section 3.1(b) of the Mortgage Loan Sale and
Contribution Agreement other than clauses (ii) through (xiii) and clause (lvii)
thereof or (B) if such Mortgage Loan is a High LTV Loan, comply with each
representation and warranty set forth in clauses (i) through (lix) of Section
3.1(c) of the Mortgage Loan Sale and Contribution Agreement other than clauses
(ii) through and (xiii) and clause (lvi) thereof, in each case as of the date of
substitution; (iii) have a Mortgage Rate no lower than and not more than 1% per
annum higher than the Mortgage Rate of the Deleted Mortgage Loan as of the date
of substitution; (iv) have a Loan-to-Value Ratio and a Combined Loan-to-Value
Ratio at the time of substitution no higher than that of the Deleted Mortgage
Loan at the time of substitution; (v) have a remaining term to stated maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan, (vi) not be 30 days or more delinquent and (vii) not be a
CondoSelect Loan or Convertible Mortgage Loan.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
EVENT OF DEFAULT: With respect to the Indenture, any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) a default in (a) the payment of Accrued Bond
Interest on the Bonds or the Bond Principal Distribution Amount with
respect to a Payment Date on such Payment Date or (b) the Unpaid
Interest Shortfall with respect to the Bonds, but only, with respect to
clause (b), to the extent funds are available to make such payment as
provided in the Indenture; or
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(ii) the failure by the Issuer on the Final Scheduled
Payment Date to reduce the Bond Principal Balance to zero; or
(iii) there occurs a default in the observance or
performance of any covenant or agreement of the Issuer made in the
Indenture, or any representation or warranty of the Issuer made in the
Indenture 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 representation 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 Bond Insurer, or if a Bond Insurer
Default exists the Holders of at least 25% of the aggregate Bond
Principal Balance of the Outstanding Bonds, 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
(iv) there occurs 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 Trust Estate 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 Trust Estate,
or ordering the winding-up or liquidation of the Issuer's affairs, and
such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or
(v) there occurs 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 assets of the Trust Estate,
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.
EVENT OF SERVICER TERMINATION: With respect to the Servicing
Agreement, a Servicing Default as defined in Section 6.01 of the Servicing
Agreement.
EXCESS OVERCOLLATERALIZATION AMOUNT: With respect to any
Payment Date, the excess, if any, of (a) the Overcollateralization Amount that
would apply on such Payment Date after taking into account all distributions to
be made on such Payment Date over (b) the Required Overcollateralization Amount
for such Payment Date.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
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EXPENSE FEE RATE: With respect to each Mortgage Loan, the sum
of the Servicing Fee Rate, the Indenture Trustee Fee Rate, the Owner Trustee Fee
Rate and, if applicable, the CMAC PMI Policy Rate.
EXPENSES: The meaning specified in Section 7.02 of the Trust
Agreement.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
FINAL CERTIFICATION: The final certification delivered by the
Indenture Trustee pursuant to Section 2.03(c) of this Indenture in the form
attached hereto as Exhibit D.
FINAL DISPOSITION: With respect to a defaulted Mortgage Loan,
upon a determination by the Master Servicer that it has received all Insurance
Proceeds, Liquidation Proceeds and other payments or cash recoveries which the
Master Servicer reasonably and in good faith expects to be finally recoverable
with respect to such Mortgage Loan.
FINAL SCHEDULED PAYMENT DATE: With respect to the Bonds, the
Payment Date in July 2029.
FNMA: The Federal National Mortgage Association, or any
successor thereto.
FORECLOSURE PROFIT: With respect to a Liquidated Mortgage
Loan, the amount, if any, by which (i) the aggregate of its Net Liquidation
Proceeds exceeds (ii) the related Principal Balance (plus accrued and unpaid
interest thereon at the applicable Mortgage Rate from the date interest was last
paid through the date of receipt of the final Liquidation Proceeds) of such
Liquidated Mortgage Loan immediately prior to the final recovery of its
Liquidation Proceeds.
GRANT: 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 the 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 such collateral or other agreement or
instrument 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.
GROSS MARGIN: With respect to any Mortgage Loan, the
percentage set forth as the "Gross Margin" for such Mortgage Loan on the
Mortgage Loan Schedule, as adjusted from time to time in accordance with the
terms of the Servicing Agreement.
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HIGH LTV LOANS: At any time, collectively, all the mortgage
loans that have been sold to the Depositor under the Mortgage Loan Sale and
Contribution Agreement which have fixed rates and will be secured by second or
third liens on the related Mortgage Property.
IMPAC HOLDINGS: Impac Mortgage Holdings, Inc. (formerly known
as Imperial Credit Mortgage Holdings, Inc.), a Maryland corporation, and its
successors and assigns.
INDEMNIFIED PARTY: The meaning specified in Section 7.02 of
the Trust Agreement.
INDENTURE: The indenture dated as of June 28, 1999, between
the Issuer, as debtor, and the Indenture Trustee, as Indenture Trustee, relating
to the Impac CMB Trust Series 1999-2 Bonds.
INDENTURE TRUSTEE: Bankers Trust Company of California, N.A.,
and its successors and assigns or any successor indenture trustee appointed
pursuant to the terms of the Indenture.
INDENTURE TRUSTEE FEE: With respect to each Mortgage Loan and
any Payment Date the product of (i) the Indenture Trustee Fee Rate divided by 12
and (ii) the Principal Balance of such Mortgage Loans as of the first day of the
related Due Period (with respect to an ARM Loan) or
Collection Period (with respect to a High LTV Loan).
INDENTURE TRUSTEE FEE RATE: 0.0125% per annum.
INDEPENDENT: When used with respect to any specified Person,
the Person (i) is in fact independent of the Issuer, any other obligor on the
Bonds, the Seller, the Issuer, the Depositor and any Affiliate of any of the
foregoing Persons, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller, the Issuer, the Depositor or any Affiliate of any of the foregoing
Persons and (iii) is not connected with the Issuer, any such other obligor, the
Seller, the Issuer, the Depositor 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 10.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Request 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.
INDEX: With respect to any ARM Loan, the index for the
adjustment of the Mortgage Rate set forth as such on the related Mortgage Note.
INITIAL BOND PRINCIPAL BALANCE: With respect to the Bonds,
$115,033,881.
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INITIAL CERTIFICATION: The initial certification delivered by
the Indenture Trustee pursuant to Section 2.03(b) of this Indenture in the form
attached hereto as Exhibit C.
INITIAL SUBSERVICER: With respect to the Mortgage Loans,
Wendover.
INSOLVENCY EVENT: With respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture Trustee shall have notice)
of its inability to pay its debts generally, or the adoption by the Board of
Directors or managing member of such Person of a resolution which authorizes
action by such Person in furtherance of any of the foregoing.
INSURANCE AGREEMENT: The Insurance and Indemnity Agreement
dated as of June 28, 1999, among the Master Servicer, the Seller, the Depositor,
the Issuer, Impac Holdings, the Indenture Trustee and the Bond Insurer,
including any amendments and supplements thereto.
INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to
any insurance policy covering a Mortgage Loan which are required to be remitted
to the Master Servicer, net of any component thereof (i) covering any expenses
incurred by or on behalf of the Master Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property or (iii) released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures.
INSURED AMOUNT: Shall have the meaning assigned to the term
"Insured Amount" in the Bond Insurance Policy.
INTEREST DETERMINATION DATE: With respect to any Accrual
Period, the second LIBOR Business Day preceding the commencement of such Accrual
Period.
INTEREST RATE ADJUSTMENT DATE: With respect to each ARM Loan,
the date or dates on which the Mortgage Rate is adjusted in accordance with the
related Mortgage Note.
INVESTMENT COMPANY ACT: The Investment Company Act of 1940, as
amended, and any amendments thereto.
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ISSUER: Impac CMB Trust Series 1999-2, a Delaware business
trust, or its successor in interest.
ISSUER REQUEST: A written order or request signed in the name
of the Issuer by any one of its Authorized Officers and approved in writing by
the Bond Insurer, so long as no Bond Insurer Default exists, and delivered to
the Indenture Trustee.
LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State of New York or
in the city of London, England are required or authorized by law to be closed.
LIEN: Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the UCC
(other than any such financing statement filed for informational purposes only)
or comparable law of any jurisdiction to evidence any of the foregoing;
PROVIDED, HOWEVER, that any assignment pursuant to Section 6.02 of the Servicing
Agreement shall not be deemed to constitute a Lien.
LIFETIME RATE CAP: With respect to each ARM Loan with respect
to which the related Mortgage Note provides for a lifetime rate cap, the maximum
Mortgage Rate permitted over the life of such Mortgage Loan under the terms of
such Mortgage Note, as set forth on the Mortgage Loan Schedule and initially as
set forth on Exhibit A to the Servicing Agreement.
LIQUIDATED MORTGAGE LOAN: With respect to any Payment Date,
any Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified in the Servicing Agreement,
as of the end of the related Due Period that substantially all Liquidation
Proceeds which it reasonably expects to recover with respect to the disposition
of the related Mortgaged Property or REO Property have been recovered. In
addition, the Master Servicer will treat any High LTV Loan that is 180 days or
more delinquent as having been finally liquidated.
LIQUIDATION EXPENSES: Out-of-pocket expenses (exclusive of
overhead) which are incurred by or on behalf of the Master Servicer in
connection with the liquidation of any Mortgage Loan and not recovered under any
insurance policy, such expenses including, without limitation, legal fees and
expenses, any unreimbursed amount expended (including, without limitation,
amounts advanced to correct defaults on any mortgage loan which is senior to
such Mortgage Loan and amounts advanced to keep current or pay off a mortgage
loan that is senior to such Mortgage Loan) respecting the related Mortgage Loan
and any related and unreimbursed expenditures for real estate property taxes or
for property restoration, preservation or insurance against casualty loss or
damage.
LIQUIDATION PROCEEDS: Proceeds (including Insurance Proceeds)
received in connection with the liquidation of any Mortgage Loan or related REO
Property, whether through trustee's sale, foreclosure sale or otherwise.
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LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan, as of
any date of determination, a fraction expressed as a percentage, the numerator
of which is the then current principal amount of the Mortgage Loan, and the
denominator of which is the Appraised Value of the related Mortgaged Property.
LOAN YEAR: With respect to any ARM Loan, the one year period
commencing on the day succeeding the origination of such Mortgage Loan and
ending on the anniversary date of such Mortgage Loan, and each annual period
thereafter.
LONDON BUSINESS DAY: Any day on which banks in the City of
London, England are open and conducting transactions in United States dollars.
LOST NOTE AFFIDAVIT: With respect to any Mortgage Loan as to
which the original Mortgage Note has been lost or destroyed and has not been
replaced, an affidavit from the Seller certifying that the original Mortgage
Note has been lost, misplaced or destroyed (together with a copy of the related
Mortgage Note).
MASTER SERVICER: Impac Funding Corporation, a California
corporation, and its successors and assigns.
MASTER SERVICING FEE: With respect to each Mortgage Loan and
any Payment Date the product of (i) the Servicing Fee Rate divided by 12 and
(ii) the Principal Balance of such Mortgage Loans as of the first day of the
related Due Period (with respect to an ARM Loan) or
Collection Period (with respect to a High LTV Loan).
MASTER SERVICING FEE RATE: With respect to any Mortgage Loan,
0.030% per annum.
MAXIMUM BOND RATE: 12.25% per annum.
MAXIMUM MORTGAGE RATE: With respect to each ARM Loan, the
maximum Mortgage Rate.
MINIMUM MORTGAGE RATE: With respect to each ARM Loan, the
minimum Mortgage Rate.
MINIMUM SPREAD RATE: For the first twelve Payment Dates, 0.50%
per annum, for the thirteenth through twenty-fourth Payment Dates, 0.75% per
annum, and for each Payment Date thereafter, 0.50% per annum.
MONTHLY PAYMENT: With respect to any Mortgage Loan (including
any REO Property) and any Due Date, the payment of principal and interest due
thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment, if any, for partial Prepayments and for Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than a Deficient
Valuation, or similar proceeding or any moratorium or similar waiver or grace
period).
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MOODY'S: Moody's Investors Service, Inc. or its successor in
interest.
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 Loan.
MORTGAGE FILE: The file containing the Related Documents
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to the Mortgage Loan Sale and
Contribution Agreement or the Servicing Agreement.
MORTGAGE LOAN SALE AND CONTRIBUTION AGREEMENT: The Mortgage
Loan Sale and Contribution Agreement, dated as of the Cut-Off Date, between the
Seller, as seller, and the Purchaser, as purchaser, relating to the sale,
transfer and assignment of the Mortgage Loans.
MORTGAGE LOAN SCHEDULE: With respect to any date, the schedule
of Mortgage Loans held by the Issuer on such date. The initial schedule of
Mortgage Loans as of the Cut-Off Date is the schedule set forth in Exhibit A of
the Servicing Agreement, which schedule sets forth as to each
Mortgage Loan:
(i) the loan number and name of the Mortgagor;
(ii) the street address, city, state and zip code of the
Mortgaged Property;
(iii) the original Mortgage Rate;
(iv) the maturity date;
(v) the original principal balance;
(vi) the first payment date;
(vii) the type of Mortgaged Property;
(viii) the Monthly Payment in effect as of the Cut-Off Date;
(ix) the Cut-off Date Principal Balance;
(x) the Index and the Gross Margin, if applicable;
(xi) the Adjustment Date frequency and Payment Date
frequency, if applicable;
(xii) the occupancy status;
(xiii) the purpose of the Mortgage Loan;
(xiv) the Appraised Value of the Mortgaged Property;
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(xv) (A) the original term to maturity and (B) if such
Mortgage Loan is a Balloon
Loan, the amortization term thereof;
(xvi) the paid-through date of the Mortgage Loan;
(xvii) whether the Mortgage Loan is a Balloon Mortgage Loan
or a Mortgage Loan the terms of which do not provide
for a Balloon Payment;
(xviii) the Loan-to-Value Ratio or Combined Loan-to-Value
Ratio (as applicable);
(xix) whether such Mortgage Loan is a CondoSelect Loan,
High LTV Loan, or Convertible Mortgage Loan; and
(xx) whether or not the Mortgage Loan was underwritten
pursuant to a limited documentation program.
The Mortgage Loan Schedule shall also set forth the total of
the amounts described under (ix) above for all of the Mortgage Loans.
MORTGAGE LOANS: At any time, collectively, all the mortgage
loans that have been sold to the Depositor under the Mortgage Loan Sale and
Contribution Agreement or substituted for pursuant to Section 2.1 and 3.1 of the
Mortgage Loan Sale and Contribution Agreement and transferred and conveyed to
the Issuer and contributed to the Trust, in each case together with the
Related Documents, and that remain subject to the terms thereof.
MORTGAGE NOTE: The note or other evidence of the indebtedness
of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: With respect to any Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan.
MORTGAGED PROPERTY: The underlying property, including real
property and improvements thereon, securing a Mortgage Loan.
MORTGAGOR: The obligor or obligors under a Mortgage Note.
NET DELINQUENCY AMOUNT: With respect to any Payment Date, the
excess, if any, of (x) the product of 1.20 and the Six-Month Rolling Delinquency
Average over (y) the aggregate of the Net Monthly Excess Interest Amount for the
three preceding Payments Dates.
NET LIQUIDATION PROCEEDS: With respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.
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NET MONTHLY EXCESS CASH FLOW: For any Payment Date, the amount
as defined in Section 3.05(b)(iv) of the Indenture.
NET MORTGAGE RATE: With respect to any Mortgage Loan and any
day, the related Mortgage Rate less the Expense Fee Rate.
NONRECOVERABLE ADVANCE: Any advance (i) which was previously
made or is proposed to be made by the Master Servicer; and (ii) which, in the
good faith judgment of the Master Servicer, will not or, in the case of a
proposed advance, would not, be ultimately recoverable by the Master Servicer
from Liquidation Proceeds, Insurance Proceeds or future payments on any Mortgage
Loan. The Indenture Trustee may conclusively rely on any determination of
nonrecoverability made by the Master Servicer.
OFFICER'S CERTIFICATE: With respect to the Master Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
ONE-MONTH LIBOR: With respect to the first Accrual Period,
5.14% per annum and with respect to any Accrual Period other than the first
Accrual Period, the rate determined by the Indenture Trustee on the related
Interest Determination Date on the basis of the London interbank offered rate
for one-month United States dollar deposits, as such rates appear on the
Telerate Screen Page 3750, as of 11:00 a.m. (London time) on such Interest
Determination Date.
In the event that on any Interest Determination Date, Telerate Screen
3750 fails to indicate the London interbank offered rate for one-month United
States dollar deposits, then One-Month LIBOR for the related Interest Accrual
Period will be established by the Indenture Trustee as
follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall
be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole
multiple of 1/16%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall
be the higher of (i) One-Month LIBOR as determined on
the previous Interest Determination Date and (ii) the
Reserve Interest Rate.
The establishment of One-Month LIBOR on each Interest Determination
Date by the Indenture Trustee and the Indenture Trustee's calculation of the
rate of interest applicable for the related Accrual Period shall (in the absence
of manifest error) be final and binding.
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OPINION OF COUNSEL: A written opinion of counsel acceptable to
the Bond Insurer in its reasonable discretion who may be in-house counsel for
the Master Servicer if acceptable to the Indenture Trustee, the Bond Insurer and
the Rating Agencies or counsel for the Depositor, as the case may be.
ORIGINAL VALUE: Except in the case of a refinanced Mortgage
Loan, the lesser of the Appraised Value or sales price of Mortgaged Property at
the time a Mortgage Loan is closed, and for a refinanced Mortgage Loan, the
Original Value is the value of such property set forth in an
appraisal acceptable to the Master Servicer.
OUTSTANDING: With respect to the Bonds, as of the date of
determination, all Bonds theretofore executed, authenticated and delivered under
this Indenture except:
(i) Bonds theretofore canceled by the Bond Registrar or
delivered to the Indenture Trustee for cancellation; and
(ii) Bonds in exchange for or in lieu of which other
Bonds have been executed, authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Bonds are held by a holder in due course;
all Bonds that have been paid with funds provided under the Bond Insurance
Policy shall be deemed to be Outstanding until the Bond Insurer has been
reimbursed with respect thereto.
OUTSTANDING MORTGAGE LOAN: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not (i) the subject of a Principal
Prepayment in Full, Cash Liquidation or REO Disposition and which was not
purchased, deleted or substituted for prior to such Due Date pursuant to the
Servicing Agreement or (ii) with respect to a High LTV Loan, 180 days or more
delinquent during any preceding Collection Period as of such Payment Date.
OVERCOLLATERALIZATION AMOUNT: As of any Payment Date, the
excess, if any, of (a) the aggregate Principal Balances of the Mortgage Loans
immediately following such Payment Date over (b) the Bond Principal Balance of
the Bonds as of such Payment Date (after taking into account the payments to the
Bonds of the Principal Payment Amount).
OVERCOLLATERALIZATION DEFICIT: As of any Payment Date, the
excess, if any, of (a) the Bond Principal Balance of the Bonds as of such
Payment Date (after taking into account the payments to the Bonds of the
Principal Payment Amount) over (b) the aggregate Principal Balances
of the Mortgage Loans immediately following such Payment Date.
OVERCOLLATERALIZATION FLOOR: 0.75% of the Cut-off Date
Balance; provided that if the aggregate Principal Balance of the High LTV Loans
is less than 1.00% of the aggregate Principal Balance of all of the Mortgage
Loans, the Overcollateralization Floor shall be 0.50% of the Cut-off Date
Balance.
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OVERCOLLATERALIZATION INCREASE AMOUNT: On any Payment Date, an
amount equal to the lesser of (i) the Available Funds and any Insured Amount in
respect of the Bonds after distributions pursuant to Section 3.05(b)(i) through
(iii) of the Indenture and (ii) the excess of (a) the Required
Overcollateralization Amount for such Payment Date over (b) the
Overcollateralization Amount that would apply on such Payment Date after taking
into account all distributions to be made on such Payment Date.
OVERCOLLATERALIZATION REDUCTION AMOUNT: As of any Payment
Date, the lesser of (a) any Excess Overcollateralization Amount as of such
Payment Date and (b) the Principal Payment Amount for such Payment Date (other
than with respect to clause (v) thereof).
OWNER TRUST ESTATE: The corpus of the Issuer created by the
Trust Agreement which consists of items referred to in Section 3.01 of the Trust
Agreement.
OWNER TRUSTEE: Wilmington Trust Company and its successors and
assigns or any successor owner trustee appointed pursuant to the terms of the
Trust Agreement.
OWNER TRUSTEE FEE: With respect to any Payment Date the
product of (i) the Owner Trustee Fee Rate divided by 12 and (ii) the Principal
Balance of such Mortgage Loans as of the first day of the related Due Period
(with respect to an ARM Loan) or Collection Period (with respect to a High LTV
Loan).
OWNER TRUSTEE FEE RATE: 0.0017% per annum.
PAYING AGENT: Any paying agent or co-paying agent appointed
pursuant to Section 3.03 of the Indenture, which initially shall be the
Indenture Trustee.
PAYMENT ACCOUNT: The account established by the Indenture
Trustee pursuant to Section 3.01 of the Indenture. The Payment Account shall be
an Eligible Account.
PAYMENT DATE: The 25th day of each month, or if such day is
not a Business Day, then the next Business Day.
PERCENTAGE INTEREST: With respect to any Bond, the percentage
obtained by dividing the Bond Principal Balance of such Bond by the aggregate of
the Bond Principal Balances of all Bonds. With respect to any Certificate, the
percentage on the face thereof.
PERIODIC RATE CAP: With respect to any ARM Loan, the maximum
rate, if any, by which the Mortgage Rate on such Mortgage Loan can adjust on any
Adjustment Date, as stated in the related Mortgage Bond or Mortgage.
PERSON: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
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POLICY PREMIUM RATE: With respect to any Payment Date, the
rate per annum at which the Premium Amount for the Bond Insurance Policy
accrues, as specified in the Insurance Agreement.
POOL BALANCE: With respect to any date of determination, the
aggregate of the Principal Balances of all Mortgage Loans as of such date.
PREFERENCE AMOUNT: Any amount previously distributed to an
Owner on the Bonds that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
PREMIUM AMOUNT: The amount of premium due to the Bond Insurer
in accordance with the terms of the Insurance Agreement.
PREPAYMENT INTEREST SHORTFALL: As to any Payment Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Collection
Period, an amount equal to the excess of interest accrued during the related
Collection Period at the Mortgage Rate (less the Servicing Fee Rate) on the
Principal Balance of such Mortgage Loan over the sum of the amount of interest
(less interest at the related Expense Fee Rate) paid by the Mortgagor for such
Collection Period to the date of such Principal Prepayment in Full and any
Advances made by the Master Servicer pursuant to Section 4.04 of the Servicing
Agreement or (b) a partial Principal Prepayment during the related Collection
Period, an amount equal to the interest at the Mortgage Rate (less the Servicing
Fee Rate) during the related Collection Period on the amount of such partial
Principal Prepayment.
PREPAYMENT PERIOD: With respect to each Mortgage Loan and any
Payment Date, the prior calendar month.
PRIMARY INSURANCE POLICY: Each primary policy of mortgage
guaranty insurance issued by a Qualified Insurer or any replacement policy
therefor, including the CMAC PMI Policy.
PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related REO Property, at any given time, (i) the Cut-off Date Principal Balance
of the Mortgage Loan, minus (ii) the sum of (a) the principal portion of the
Monthly Payments due with respect to such Mortgage Loan or REO Property during
each Due Period ending prior to the most recent Payment Date which were received
or with respect to which an Advance was made, and (b) all Principal Prepayments
with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds, to the extent applied by the Master
Servicer as recoveries of principal in accordance with the Servicing Agreement
with respect to such Mortgage Loan or REO Property, and (c) if such Mortgage
Loan or related REO Property is an ARM Loan, any Realized Loss with respect
thereto, in each case to the extent paid, distributed or applied on any previous
Payment Date; provided, that any High LTV Loan that becomes 180 or more days
delinquent shall be treated as if it had a Principal Balance of zero.
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PRINCIPAL PAYMENT AMOUNT: With respect to any Payment Date,
the sum of the following:
(i) the principal portion of each previously undistributed
Monthly Payment due after the Cut-Off Date received on or prior to the
related Determination Date or advanced prior to such Payment Date
(other than Monthly Payments due after the related Due Period, which
shall be treated as if received during the Due Period they were due) on
each Outstanding Mortgage Loan;
(ii) the principal portion of all proceeds of any Mortgage
Loan repurchased during the related Prepayment Period (or deemed to
have been so repurchased in accordance with the Servicing Agreement)
pursuant to the Servicing Agreement and the amount of any shortfall
deposited in the Collection Account in connection with the substitution
of a Deleted Mortgage Loan pursuant to the Servicing Agreement during
the related Collection Period;
(iii) the principal portion of all other unscheduled
collections (including, without limitation, Principal Prepayments,
Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received
during the related Prepayment Period (or deemed to have been so
received) to the extent applied by the Master Servicer as recoveries of
principal of the related Mortgage Loan pursuant to the Servicing
Agreement; and
(iv) the portion of any Insured Amount for such Payment Date
in respect of any Overcollateralization Deficit;
MINUS
(v) the amount of any Overcollateralization Reduction Amount
for such Payment Date.
PRINCIPAL PREPAYMENT: Any payment of principal or other
recovery on a Mortgage Loan, including a recovery that takes the form of
Liquidation Proceeds or Insurance Proceeds, which is received in advance of its
scheduled Due Date and is not accompanied by an amount as to interest
representing scheduled interest on such payment due on any date or dates in any
month or months subsequent to the month of prepayment.
PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment made by
a Mortgagor of the entire principal balance of a Mortgage Loan.
PROCEEDING: Any suit in equity, action at law or other
judicial or administrative proceeding.
PROSPECTUS: The Prospectus Supplement, dated June 24, 1999,
together with the attached Prospectus, dated February 23, 1999.
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PURCHASE PRICE: The meaning specified in Section 2.2(a) of the
Mortgage Loan Sale and Contribution Agreement.
PURCHASER: IMH Assets Corp., a California corporation, and its
successors and assigns.
QUALIFIED INSURER: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as
an insurer by the Master Servicer and as a FNMA-approved mortgage insurer.
RATING AGENCY: Any nationally recognized statistical rating
organization, or its successor, that rated the Bonds at the request of the
Depositor at the time of the initial issuance of the Bonds. Initially, Standard
& Poor's or Moody's. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, designated by the Bond Insurer
so long as no Bond Insurer Default exists, notice of which designation shall be
given to the Indenture Trustee. References herein to the highest short term
unsecured rating category of a Rating Agency shall mean A-1 or better in the
case of Standard & Poor's and P-1 or better in the case of Moody's and in the
case of any other Rating Agency shall mean such equivalent ratings. References
herein to the highest long-term rating category of a Rating Agency shall mean
"AAA" in the case of Standard & Poor's and "Aaa" in the case of Moody's and in
the case of any other Rating Agency, such equivalent rating.
REALIZED LOSS: With respect to each Mortgage Loan (or REO
Property) as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Principal Balance of the Mortgage
Loan (or REO Property) as of the date of Cash Liquidation or REO Disposition,
plus (ii) interest (and REO Imputed Interest, if any) at the Net Mortgage Rate
from the Due Date as to which interest was last paid or advanced to Bondholders
up to the last day of the month in which the Cash Liquidation (or REO
Disposition) occurred on the Principal Balance of such Mortgage Loan (or REO
Property) outstanding during each Due Period that such interest was not paid or
advanced, minus (iii) the proceeds, if any, received during the month in which
such Cash Liquidation (or REO Disposition) occurred, to the extent applied as
recoveries of interest at the Net Mortgage Rate and to principal of the Mortgage
Loan, net of the portion thereof reimbursable to the Master Servicer or any
Subservicer with respect to related Advances or expenses as to which the Master
Servicer or Subservicer is entitled to reimbursement thereunder but which have
not been previously reimbursed. With respect to each Mortgage Loan which has
become the subject of a Deficient Valuation, the difference between the
principal balance of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation. With respect to each Mortgage Loan which has become the
object of a Debt Service Reduction, the amount of such Debt Service Reduction.
With respect to each High LTV Loan (or related REO Property) which became 180 or
more days delinquent, an amount equal to the Principal Balance of such High LTV
Loan (or related REO Property) as of such date.
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RECORD DATE: With respect to the Bonds and any Payment Date,
the last day of the calendar month preceding such Payment Date.
REFERENCE BANKS: Any leading banks selected by the Indenture
Trustee after consultation with the Master Servicer and engaged in transactions
in Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) which have been designated as such
by the Indenture Trustee after consultation with the Master Servicer, and (iii)
which are not Affiliates of the Depositor.
REGISTERED HOLDER: The Person in whose name a Bond is
registered in the Bond Register on the applicable Record Date.
RELATED DOCUMENTS: With respect to each Mortgage Loan, the
documents specified in Section 2.1(b) of the Mortgage Loan Sale and Contribution
Agreement and any documents required to be added to such documents pursuant to
the Mortgage Loan Sale and Contribution Agreement, the Trust Agreement,
Indenture or the Servicing Agreement.
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
RELIEF ACT SHORTFALL: As to any Payment Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property), any shortfalls
relating to the Relief Act or similar legislation or regulations.
REO ACQUISITION: The acquisition by the Master Servicer on
behalf of the Indenture Trustee for the benefit of the Bondholders of any REO
Property pursuant to Section 3.13 of the Servicing Agreement.
REO DISPOSITION: As to any REO Property, a determination by
the Master Servicer that it has received substantially all Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.
REO IMPUTED INTEREST: As to any REO Property, for any period,
an amount equivalent to interest (at the Net Mortgage Rate that would have been
applicable to the related Mortgage Loan had it been Outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of acquisition thereof for
such period as such balance is reduced pursuant to Section 3.13 of the Servicing
Agreement by any income from the REO Property treated as a recovery of
principal.
REO PROCEEDS: Proceeds, net of expenses, received in respect
of any REO Property (including, without limitation, proceeds from the rental of
the related Mortgaged Property) which proceeds are required to be deposited into
the Collection Account only upon the related REO
Disposition.
REO PROPERTY: A Mortgaged Property that is acquired by the
Issuer by foreclosure or by deed in lieu of foreclosure.
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REPURCHASE EVENT: With respect to any Mortgage Loan, either
(i) a discovery that, as of the Closing Date, in the case of the ARM Loans, the
related Mortgage was not a valid first lien on the related Mortgaged Property,
or in the case of the High LTV Loans, the related Mortgage was not a valid
second lien on the related Mortgaged Property, subject to no other liens except
(A) the lien of real property taxes and assessments not yet due and payable, (B)
covenants, conditions, and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage and such
other permissible title exceptions as are permitted and (C) other matters to
which like properties are commonly subject which do not materially adversely
affect the value, use, enjoyment or marketability of the related Mortgaged
Property or (ii) with respect to any Mortgage Loan as to which the Seller
delivers an affidavit certifying that the original Mortgage Note has been lost
or destroyed, a subsequent default on such Mortgage Loan if the enforcement
thereof or of the related Mortgage is materially and adversely affected by the
absence of such original Mortgage Note.
REPURCHASE PRICE: With respect to any Mortgage Loan required
to be repurchased on any date pursuant to the Mortgage Loan Sale and
Contribution Agreement or purchased by the Master Servicer pursuant to the
Servicing Agreement, an amount equal to the sum, without duplication, of (i)
100% of the Principal Balance thereof (without reduction for any amounts charged
off) and (ii) unpaid accrued interest at the Mortgage Rate on the outstanding
principal balance thereof from the Due Date to which interest was last paid by
the Mortgagor to the first day of the month following the month of purchase plus
(iii) the amount of unreimbursed Advances or unreimbursed Servicing Advances
made with respect to such Mortgage Loan plus (iv) any other amounts owed to the
Master Servicer or the Subservicer pursuant to Section 3.07 of the Servicing
Agreement and not included in clause (iii) of this definition.
REQUIRED OVERCOLLATERALIZATION AMOUNT: With respect to any
Payment Date (i) prior to the Step-Down Date, 3.60% of the Cut-off Date Balance
and (ii) on or after the Step-Down Date, the greatest of (a) 7.20% of the then
current aggregate Principal Balance of the Mortgage Loans as of the end of the
related Due Period, (b) the aggregate Principal Balance as of the end of the
related Due Period of the three largest Mortgage Loans, (c) two times the excess
of (1) 50% of the aggregate Principal Balance of the Mortgage Loans 90 or more
days delinquent, in foreclosure or converted to REO Properties, as of the end of
the related Due Period, over (2) three times the Net Monthly Excess Cash Flow
for such Payment Date and (d) the Overcollateralization Floor.
RESERVE INTEREST RATE: With respect to any Interest
Determination Date, the rate per annum that the Indenture Trustee determines to
be either (i) the arithmetic mean (rounded upwards if necessary to the nearest
whole multiple of 1/16%) of the one-month United States dollar lending rates
which New York City banks selected by the Indenture Trustee are quoting on the
relevant Interest Determination Date to the principal London offices of leading
banks in the London interbank market or (ii) in the event that the Indenture
Trustee can determine no such arithmetic mean, the lowest one-month United
States dollar lending rate which New York City banks selected by the Indenture
Trustee are quoting on such Interest Determination Date to leading European
banks.
RESPONSIBLE OFFICER: With respect to the Indenture Trustee,
any officer of the Indenture Trustee with direct responsibility for the
administration of the Indenture and also, with
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respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
ROLLING DELINQUENCY PERCENTAGE: For any Payment Date, the
average of the Delinquency Percentages for the Mortgage Loans as of the last day
of each of the six (or 1, 2, 3, 4, and 5 in the case of the first five Payment
Dates, as applicable) most recently ended Due Periods.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
SECURITIES INTERMEDIARY: Bankers Trust Company, or its
successors and assigns.
SECURITY: Any of the Certificates or Bonds.
SECURITYHOLDER or HOLDER: Any Bondholder or a
Certificateholder.
SECURITY INSTRUMENT: A written instrument creating a valid
first lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
SELLER: Impac Mortgage Holdings, Inc. (formerly known as
Imperial Credit Mortgage Holdings, Inc.), a Maryland corporation, and its
successors and assigns.
SERVICING ACCOUNT: The separate trust account created and
maintained by the Master Servicer or each Subservicer with respect to the
Mortgage Loans or REO Property, which shall be an Eligible Account, for
collection of taxes, assessments, insurance premiums and comparable items as
described in Section 3.08 of the Servicing Agreement.
SERVICING ADVANCES: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in connection with a default,
delinquency or other unanticipated event in the performance by the Master
Servicer of its servicing obligations, including, without duplication, but not
limited to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property and (iv)
compliance with the obligations under Sections 3.10, 3.11, 3.13 of the Servicing
Agreement.
SERVICING AGREEMENT: The Servicing Agreement dated as of June
1, 1999, among the Master Servicer, the Issuer and the Indenture Trustee.
SERVICING CERTIFICATE: A certificate completed and executed by
a Servicing Officer on behalf of the Master Servicer in accordance with Section
4.01 of the Servicing Agreement.
SERVICING DEFAULT: The meaning assigned in Section 6.01 of the
Servicing Agreement.
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SERVICING FEE: The sum of the Master Servicing Fee and the
Subservicing Fee.
SERVICING FEE RATE: The sum of the Master Servicing Fee Rate
and the related Subservicing Fee Rate.
SERVICING OFFICER: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and specimen signature appear on a list of servicing officers
furnished to the Indenture Trustee by the Master Servicer, as such list may be
amended from time to time.
SINGLE BOND: A Bond in the amount of $1,000.
SIX-MONTH ROLLING DELINQUENCY AVERAGE: With respect to each
Payment Date, the average of the Sixty-Day Delinquency Amounts for each of the
six immediately preceding Due Periods.
SIXTY-DAY DELINQUENCY AMOUNT: With respect to any Due Period,
an amount equal to the aggregate Principal Balance of the Mortgage Loans that
are sixty or more days delinquent in payment of principal and interest as of the
immediately preceding Determination Date (including Mortgage Loans that are in
foreclosure and Mortgage Loans which are REO Properties).
STANDARD & POOR'S: Standard & Poor's Ratings Service, or its
successor in interest.
STEP-DOWN DATE: The later of (i) the first Payment Date
occurring after July 2002 and (ii) the first Payment Date on which the Principal
Balance of the Mortgage Loans is equal to or less than 50% of the Cut-off Date
Balance.
STEP-UP DATE: The first Payment Date on which the Issuer can
cause the redemption of the Bonds pursuant to Section 8.07 of the Indenture.
SUBSERVICER: Any Person with whom the Master Servicer has
entered into a Subservicing Agreement as a Subservicer by the Master Servicer
and acceptable to the Bond Insurer, including the Initial Subservicer.
SUBSERVICING ACCOUNT: An Eligible Account established or
maintained by a Subservicer as provided for in Section 3.06(e) of the Servicing
Agreement.
SUBSERVICING AGREEMENT: The written contract between the
Master Servicer and any Subservicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02 of the Servicing Agreement.
SUBSERVICING FEE: With respect to each Mortgage Loan and any
Payment Date the product of (i) the Subservicing Fee Rate divided by 12 and (ii)
the Principal Balance of such Mortgage Loans as of the first day of the related
Due Period (with respect to an ARM Loan) or Collection Period (with respect to a
High LTV Loan).
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SUBSERVICING FEE RATE: With respect to any ARM Loan, 0.375%
per annum. With respect to any High LTV Loan, 0.750% per annum.
SUBSTITUTION ADJUSTMENT AMOUNT: With respect to any Eligible
Substitute Mortgage Loan, the amount as defined in Section 2.03 of the Servicing
Agreement.
TELERATE SCREEN PAGE 3750: The display designated as page 3750
on the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks).
TREASURY REGULATIONS: 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: The Impac CMB Trust Series 1999-2 to be created
pursuant to the Trust Agreement.
TRUST AGREEMENT: The Amended and Restated Trust Agreement
dated as of June 28, 1999, among the Owner Trustee, the Depositor and Bankers
Trust Company of California, N.A., as certificate registrar and certificate
paying agent, relating to the Trust.
TRUST ESTATE: The meaning specified in the Granting Clause of
the Indenture.
TRUST INDENTURE ACT OR TIA: The Trust Indenture Act of 1939,
as amended from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
UNINSURED CAUSE: Any cause of damage to property subject to a
Mortgage that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies.
UNPAID INTEREST SHORTFALL: With respect to the Bonds and each
Payment Date, any Accrued Bond Interest remaining unpaid as to the Bonds as a
result of the insufficiency of the Available Funds, plus any such shortfall for
all prior Payment Dates, and plus interest thereon at the related Bond Interest
Rate for such Payment Date. Unpaid Interest Shortfall with respect to the Bonds
shall not include any shortfalls that result in any Basis Risk Shortfall
Carry-Forward Amount.
WENDOVER: Wendover Funding, Inc., or its successor in
interest.
31
EXHIBIT 99.1
<PAGE>
IMPAC FUNDING CORPORATION,
as Master Servicer,
IMPAC CMB TRUST SERIES 1999-2,
as Issuer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
as Indenture Trustee,
----------------------
SERVICING AGREEMENT
Dated as of June 1, 1999
----------------------
Mortgage Loans
Impac CMB Trust Series 1999-2
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
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<S> <C> <C>
ARTICLE I
Definitions
Section 1.01. DEFINITIONS..........................................................................1
Section 1.02. OTHER DEFINITIONAL PROVISIONS........................................................2
Section 1.03. INTEREST CALCULATIONS................................................................2
ARTICLE II
Representations and Warranties
Section 2.01. REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER SERVICER.........................3
Section 2.02. EXISTENCE............................................................................4
Section 2.03. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES........................................4
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. MASTER SERVICER TO ASSURE SERVICING..................................................6
Section 3.02. SUBSERVICING AGREEMENTS BETWEEN MASTER SERVICER AND SUBSERVICERS.....................8
Section 3.03. SUCCESSOR SUBSERVICERS...............................................................9
Section 3.04. LIABILITY OF THE MASTER SERVICER.....................................................9
Section 3.05. ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY INDENTURE
TRUSTEE.............................................................................10
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS................................................11
Section 3.07. WITHDRAWALS FROM THE COLLECTION ACCOUNT.............................................13
Section 3.09. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE MORTGAGE
LOANS...............................................................................16
Section 3.10. MAINTENANCE OF PRIMARY INSURANCE POLICIES AND THE CMAC POLICY;
COLLECTION THEREUNDER...............................................................16
Section 3.11. MAINTENANCE OF HAZARD INSURANCE AND FIDELITY COVERAGE...............................17
Section 3.12. DUEONSALE CLAUSES; ASSUMPTION AGREEMENTS..........................................18
Section 3.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS...........................................19
Section 3.14. INDENTURE TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES...........................21
Section 3.15. MASTER SERVICING COMPENSATION.......................................................22
Section 3.16. ANNUAL STATEMENTS OF COMPLIANCE.....................................................23
Section 3.17. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.............................23
Section 3.18. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS AND MANDATORY REPURCHASE
OF CONVERTED MORTGAGE LOANS.........................................................24
i
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Page
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Section 3.19. INFORMATION REQUIRED BY THE INTERNAL REVENUE SERVICE GENERALLY AND
REPORTS OF FORECLOSURES AND ABANDONMENTS OF MORTGAGED PROPERTY......................24
ARTICLE IV
Servicing Certificate
Section 4.01. DETERMINATION DATE REPORTS..........................................................25
Section 4.02. RESERVED............................................................................25
Section 4.03. PAYMENT ACCOUNT.....................................................................25
Section 4.04. ADVANCES............................................................................26
Section 4.05. COMPENSATING INTEREST PAYMENTS......................................................26
ARTICLE V
The Master Servicer
Section 5.01. LIABILITY OF THE MASTER SERVICER....................................................27
Section 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE
MASTER SERVICER.....................................................................27
Section 5.03. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS...........................27
Section 5.04. MASTER SERVICER NOT TO RESIGN.......................................................28
Section 5.05. DELEGATION OF DUTIES................................................................29
Section 5.06. MASTER SERVICER TO PAY INDENTURE TRUSTEE'S AND OWNER TRUSTEE'S FEES AND
EXPENSES; INDEMNIFICATION...........................................................29
ARTICLE VI
Default
Section 6.01. SERVICING DEFAULT...................................................................31
Section 6.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..................................33
Section 6.03. NOTIFICATION TO BONDHOLDERS.........................................................35
Section 6.04. WAIVER OF DEFAULTS..................................................................35
ARTICLE VII
Miscellaneous Provisions
Section 7.01. AMENDMENT...........................................................................36
Section 7.02. GOVERNING LAW.......................................................................36
Section 7.03. NOTICES.............................................................................36
Section 7.04. SEVERABILITY OF PROVISIONS..........................................................37
Section 7.05. THIRDPARTY BENEFICIARIES...........................................................37
ii
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Page
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Section 7.06. COUNTERPARTS........................................................................38
Section 7.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS............................................38
Section 7.08. TERMINATION.........................................................................38
Section 7.09. NO PETITION.........................................................................38
Section 7.10. NO RECOURSE.........................................................................38
ARTICLE VIII
DUTIES OF THE MASTER SERVICER
Section 8.01. ADMINISTRATIVE DUTIES...............................................................38
Section 8.02. RECORDS.............................................................................40
Section 8.03. ADDITIONAL INFORMATION TO BE FURNISHED..............................................40
EXHIBIT A - MORTGAGE LOAN SCHEDULE............................................................................A1
EXHIBIT B - FORM OF REQUEST FOR RELEASE.......................................................................B1
</TABLE>
iii
<PAGE>
This Servicing Agreement, dated as of June 1, 1999, among
Impac Funding Corporation, as Master Servicer (the "Master Servicer"), Impac CMB
Trust Series 1999-2, as Issuer (the "Issuer") and Bankers Trust Company of
California, N.A., as Indenture Trustee (the "Indenture Trustee").
W I T N E S S E T H T H A T:
-----------------------------
WHEREAS, pursuant to the terms of the Mortgage Loan Sale and
Contribution Agreement, IMH Assets Corp. (the "Company" or the "Depositor") will
acquire the Mortgage Loans;
WHEREAS, the Company will create Impac CMB Trust Series
1999-2, a Delaware business trust, and will transfer the Mortgage Loans and all
of its rights under the Mortgage Loan Sale and Contribution Agreement to the
Issuer;
WHEREAS, pursuant to the terms of an Amended and Restated
Trust Agreement dated as of June 28, 1999 (the "Trust Agreement") among the
Company, as depositor, Wilmington Trust Company, as owner trustee (the "Owner
Trustee") and Bankers Trust Company of California, N.A., as certificate
registrar and certificate paying agent, the Company will convey the Mortgage
Loans to the Issuer in exchange for the Certificates (as defined below);
WHEREAS, pursuant to the terms of the Trust Agreement, the
Issuer will issue and transfer to or at the direction of the Depositor, the
Trust Certificates, Series 1999-2 (the "Certificates");
WHEREAS, pursuant to the terms of an Indenture dated as of
June 28, 1999 (the "Indenture") between the Issuer and Bankers Trust Company of
California, N.A. (the "Indenture Trustee"), the Issuer will pledge the Mortgage
Loans and issue and transfer to or at the direction of the Purchaser the
Collateralized Asset-Backed Bonds, Series 1999-2 (the "Bonds"); and
WHEREAS, pursuant to the terms of this Servicing Agreement,
the Master Servicer will service the Mortgage Loans set forth on the Mortgage
Loan Schedule attached hereto as Exhibit A directly or through one or more
Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. DEFINITIONS. For all purposes of this Servicing
Agreement, except as otherwise expressly provided herein or unless the context
otherwise requires, capitalized terms not otherwise defined herein shall have
the meanings assigned to such terms in the Definitions
<PAGE>
contained in Appendix A to the Indenture which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings
specified herein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS. (a) All terms defined in
this Servicing Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing 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
Servicing 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 Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Servicing Agreement shall refer to this Servicing
Agreement as a whole and not to any particular provision of this Servicing
Agreement; Section and Exhibit references contained in this Servicing Agreement
are references to Sections and Exhibits in or to this Servicing Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(d) The definitions contained in this Servicing 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.
(e) 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.
Section 1.03. INTEREST CALCULATIONS. All calculations of interest
hereunder that are made in respect of the Principal Balance of a Mortgage Loan
shall be made on the basis of a 360-day year consisting of twelve 30-day months,
notwithstanding the terms of the related Mortgage Note and Mortgage. The
calculation of the Servicing Fee shall be made on the basis of a 360-day year
consisting of twelve 30-day months.
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<PAGE>
ARTICLE II
Representations and Warranties
Section 2.01. REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER
SERVICER. The Master Servicer represents and warrants to the Issuer and for the
benefit of the Indenture Trustee, as pledgee of the Mortgage Loans, the Bond
Insurer and the Bondholders, as of the Cut-Off Date and the Closing Date, that:
(i) The Master Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of California and has the corporate power to own its assets and
to transact the business in which it is currently engaged. The Master
Servicer is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires
such qualification and in which the failure to so qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Master Servicer or the validity
or enforceability of the Mortgage Loans;
(ii) The Master Servicer has the power and authority to
make, execute, deliver and perform this Servicing Agreement and all of
the transactions contemplated under this Servicing Agreement, and has
taken all necessary corporate action to authorize the execution,
delivery and performance of this Servicing Agreement. When executed and
delivered, this Servicing Agreement will constitute the legal, valid
and binding obligation of the Master Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(iii) The Master Servicer is not required to obtain the
consent of any other Person or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Servicing Agreement, except for such consent, license, approval or
authorization, or registration or declaration, as shall have been
obtained or filed, as the case may be;
(iv) The execution and delivery of this Servicing
Agreement and the performance of the transactions contemplated hereby
by the Master Servicer will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to the
Master Servicer or any provision of the certificate of incorporation or
bylaws of the Master Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Master
Servicer is a party or by which the Master Servicer may be bound; and
(v) No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Master
-3-
<PAGE>
Servicer threatened, against the Master Servicer or any of its
properties or with respect to this Servicing Agreement or the Bonds or
the Certificates which, to the knowledge of the Master Servicer, has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Servicing Agreement.
The foregoing representations and warranties shall survive any
termination of the Master Servicer hereunder.
Section 2.02. EXISTENCE. 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 Servicing Agreement.
Section 2.03. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES. The Master
Servicer, on behalf of and subject to the direction of the Indenture Trustee, as
pledgee of the Mortgage Loans, or the Bond Insurer shall enforce the
representations and warranties and related obligations for breaches thereof of
the Seller pursuant to the Mortgage Loan Sale and Contribution Agreement. Upon
the discovery by the Seller, the Master Servicer, the Indenture Trustee, the
Bond Insurer or the Company of a breach of any of the representations and
warranties made in the Mortgage Loan Sale and Contribution Agreement, in respect
of any Mortgage Loan which materially and adversely affects the interests of the
Bondholders or the Certificateholders or the Bond Insurer, the party discovering
such breach shall give prompt written notice to the other parties. The Master
Servicer shall promptly notify the Seller of such breach and request that,
pursuant to the terms of the Mortgage Loan Sale and Contribution Agreement, the
Seller either (i) cure such breach in all material respects or (ii) purchase
such Mortgage Loan, in each instance in accordance with the Mortgage Loan Sale
and Contribution Agreement; PROVIDED that the Seller shall, subject to the
conditions set forth in the Mortgage Loan Sale and Contribution Agreement, have
the option to substitute an Eligible Substitute Mortgage Loan or Eligible
Substitute Mortgage Loans for such Mortgage Loan. Monthly Payments due with
respect to Eligible Substitute Mortgage Loans in the month of substitution shall
not be part of the Trust Estate and will be retained by the Master Servicer and
remitted by the Master Servicer to the Seller on the next succeeding Payment
Date. For the month of substitution, distributions to the Payment Account
pursuant to the Servicing Agreement will include the Monthly Payment due on a
Deleted Mortgage Loan for such month and thereafter the Seller shall be entitled
to retain all amounts received in respect of such Deleted Mortgage Loan. The
Master Servicer shall amend or cause to be amended the Mortgage Loan Schedule to
reflect the removal of such Mortgage Loan and the substitution of the Eligible
Substitute Mortgage Loans and the Master Servicer shall promptly deliver the
amended Mortgage Loan Schedule to the related Subservicer, the Bond Insurer,
Owner Trustee and Indenture Trustee.
In connection with the substitution of one or more Eligible Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (such amount, a "Substitution Adjustment Amount"), if any,
by which the aggregate principal balance
-4-
<PAGE>
of all such Eligible Substitute Mortgage Loans as of the date of substitution is
less than the aggregate principal balance of all such Deleted Mortgage Loans
(after application of the principal portion of the Monthly Payments due in the
month of substitution that are to be distributed to the Payment Account in the
month of substitution). The Seller shall pay the Substitution Adjustment Amount
to the Master Servicer and the Master Servicer shall deposit such Substitution
Adjustment Amount into the Collection Account upon receipt.
-5-
<PAGE>
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. MASTER SERVICER TO ASSURE SERVICING. (a) The Master
Servicer shall supervise, or take such actions as are necessary to ensure, the
servicing and administration of the Mortgage Loans and any REO Property in
accordance with this Servicing Agreement and its normal servicing practices,
which generally shall conform to the standards of an institution prudently
servicing mortgage loans for its own account and shall have full authority to do
anything it reasonably deems appropriate or desirable in connection with such
servicing and administration. The Master Servicer may perform its
responsibilities relating to servicing through other agents or independent
contractors, but shall not thereby be released from any of its responsibilities
as hereinafter set forth. The authority of the Master Servicer, in its capacity
as master servicer, and any Subservicer acting on its behalf, shall include,
without limitation, the power to (i) consult with and advise any Subservicer
regarding administration of a related Mortgage Loan, (ii) approve any
recommendation by a Subservicer to foreclose on a related Mortgage Loan, (iii)
supervise the filing and collection of insurance claims and take or cause to be
taken such actions on behalf of the insured Person thereunder as shall be
reasonably necessary to prevent the denial of coverage thereunder, and (iv)
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing a related Mortgage Loan, including the employment of
attorneys, the institution of legal proceedings, the collection of deficiency
judgments, the acceptance of compromise proposals, the filing of claims under
any Primary Insurance Policy and the CMAC PMI Policy with respect to any ARM
Loan and any other matter pertaining to a delinquent Mortgage Loan. The
authority of the Master Servicer shall include, in addition, the power on behalf
of the Bondholders, the Indenture Trustee, the Bond Insurer or any of them to
(i) execute and deliver customary consents or waivers and other instruments and
documents, (ii) consent to transfer of any related Mortgaged Property and
assumptions of the related Mortgage Notes and Security Instruments (in the
manner provided in this Servicing Agreement) and (iii) collect any Insurance
Proceeds and Liquidation Proceeds. Without limiting the generality of the
foregoing, the Master Servicer and any Subservicer acting on its behalf may, and
is hereby authorized, and empowered by the Indenture Trustee to, execute and
deliver, on behalf of itself, the Bondholders, the Indenture Trustee, the Bond
Insurer or any of them, any instruments of satisfaction, cancellation, partial
or full release, discharge and all other comparable instruments, with respect to
the related Mortgage Loans, the Insurance Policies and the accounts related
thereto, and the Mortgaged Properties. The Master Servicer may exercise this
power in its own name or in the name of a Subservicer.
(b) If the Mortgage relating to a Mortgage Loan did not have a lien
senior to the Mortgage Loan on the related Mortgaged Property as of the Cut-off
Date or Subsequent Cut-off Date, as applicable, then the Master Servicer, in
such capacity, may not consent to the placing of a lien senior to that of the
Mortgage on the related Mortgaged Property. If the Mortgage relating to a High
LTV Loan had a lien senior to the High LTV Loan on the related Mortgaged
Property as of the Cut-off Date, then the Master Servicer, in such capacity, may
consent to the refinancing of the prior senior lien, provided that the following
requirements are met:
-6-
<PAGE>
(i) the resulting Combined Loan-to-Value Ratio of such High LTV Loan is
no higher than the Combined Loan-to-Value Ratio prior to such refinancing;
PROVIDED, HOWEVER, if such refinanced mortgage loan is a "rate and term"
mortgage loan (meaning, the borrower does not receive any cash from the
refinancing), the Combined Loan-to-Value Ratio may increase to the extent of
either (a) the reasonable closing costs of such refinancing or (b) any decrease
in the value of the related Mortgaged Property, if the borrower is in good
standing;
(ii) the interest rate for the loan evidencing the refinanced senior
lien is no higher than the interest rate on the loan evidencing the existing
senior lien immediately prior to the date of such refinancing; PROVIDED, HOWEVER
if the loan evidencing the existing senior lien prior to the date of refinancing
has an adjustable rate and the loan evidencing the refinanced senior lien has a
fixed rate, then the loan evidencing the refinanced senior lien may be up to
2.0% higher than the then-current mortgage rate of the loan evidencing the
existing senior lien; and
(iii) the loan evidencing the refinanced senior lien is not subject to
negative amortization.
(b) The Master Servicer or the related Subservicer, as the case may be,
shall be entitled to (A) execute assumption agreements, substitution agreements,
and instruments of satisfaction or cancellation or of full release or discharge,
or any other document contemplated by this Servicing Agreement and other
comparable instruments with respect to the Mortgage Loans and with respect to
the Mortgaged Properties subject to the Mortgages (and the Issuer and the
Indenture Trustee each shall promptly execute any such documents on request of
the Master Servicer) and (B) approve the granting of an easement thereon in
favor of another Person, any alteration or demolition of the related Mortgaged
Property or other similar matters, if it has determined, exercising its good
faith business judgment in the same manner as it would if it were the owner of
the related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected thereby.
An assumption pursuant to this Section 3.01 is permitted solely if the
creditworthiness of the prospective purchaser of a Mortgaged Property meets the
same or better underwriting guidelines as those which were applied to the
original borrower and the security for such Mortgage Loan is not impaired by the
assumption. Any fee collected by the Master Servicer or the related Subservicer
for processing such request will be retained by the Master Servicer or such
Subservicer as additional servicing compensation.
(c) Certain of the Mortgage Notes related to the High LTV Loans contain
a rider allowing the related Mortgagor to transfer the lien on the related
Mortgaged Property to another, new Mortgaged Property. In the event that a
Mortgagor requests such a transfer, such Mortgage Loan shall remain in the Trust
Fund only if the following requirements are met:
(i) the Combined Loan-to-Value Ratio of the High LTV Loan after such
transfer must be less than or equal to the original Combined
Loan-to-Value Ratio;
(ii) the Loan-to-Value Ratio of the first lien on the new Mortgaged
Property must be less than or equal to the Loan-to-Value Ratio of the
first lien on the prior Mortgaged Property at the time the related High
LTV Loan was originated;
-7-
<PAGE>
(iii) both the original and the new Mortgaged Property must be a
single-family owner occupied property;
(iv) following such transfer, the aggregate Principal Balance of High
LTV Loans included in the Trust Fund which have been similarly
transferred is equal to 5% or less of the aggregate Principal Balance
of the Mortgage Loans at such time; and
(v) following such transfer, not more than 40% of the aggregate
Principal Balance of the Mortgage Loans will be: (a) obligations
secured by real estate the fair market value of which equaled at least
eighty percent (80%) of the adjusted issue price of such obligation at
the time of origination; or (b) obligations substantially all of the
proceeds of which were used to acquire, improve or protect an interest
in real property that, at the origination date, was the only security
for such obligation.
If such requirements cannot be met, the High LTV Loan must be purchased from the
Trust Fund at the Repurchase Price in accordance with Section 3.18 hereof.
For purposes of applying the criteria of clause (v) of the preceding
paragraph, "substantially all of the proceeds" shall mean at least sixty-six and
two-thirds percent (66 2/3%) of such proceeds, and the fair market value of real
estate shall first be reduced by the amount of any lien senior to the lien
securing a High LTV Loan (or reduced proportionately by the amount of any lien
in parity with such lien).
(d) Notwithstanding the provisions of Subsection 3.01(a), the Master
Servicer shall not take any action inconsistent with the interests of the
Indenture Trustee, the Bond Insurer or the Bondholders or with the rights and
interests of the Indenture Trustee, the Bond Insurer or the Bondholders under
this Servicing Agreement.
(e) The Indenture Trustee shall furnish the Master Servicer with any
limited powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the Master Servicer to service and administer
the related Mortgage Loans and REO Property.
Section 3.02. SUBSERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
SUBSERVICERS. (a) The Master Servicer may enter into Subservicing Agreements
with Subservicers for the servicing and administration of the Mortgage Loans and
for the performance of any and all other activities of the Master Servicer
hereunder. Each Subservicer shall be either (i) an institution the accounts of
which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans comparable to the Mortgage
Loans, and in either case shall be authorized to transact business in the state
or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, and in either case shall be a FHLMC or FNMA approved mortgage
servicer. Any Subservicing Agreement entered into by the Master Servicer shall
include the provision that such Agreement may be immediately terminated (x) with
cause and without any termination fee by any Master Servicer hereunder or (y)
without cause in which case the Master Servicer shall be responsible for any
termination fee
-8-
<PAGE>
or penalty resulting therefrom. In addition, each Subservicing Agreement shall
provide for servicing of the Mortgage Loans consistent with the terms of this
Servicing Agreement. With the consent of the Indenture Trustee and the Bond
Insurer, the Master Servicer and the Subservicers may enter into Subservicing
Agreements and make amendments to the Subservicing Agreements or enter into
different forms of Subservicing Agreements providing for, among other things,
the delegation by the Master Servicer to a Subservicer of additional duties
regarding the administration of the Mortgage Loans; provided, however, that any
such amendments or different forms shall be consistent with and not violate the
provisions of this Servicing Agreement, and that no such amendment or different
form shall be made or entered into which could be reasonably expected to be
materially adverse to the interests of the Bond Insurer or the Bondholders,
without the consent of the Bond Insurer or, if a Bond Insurer Default exists,
the holders of at least 51% of the aggregate Bond Principal Balance of the
Outstanding Bonds.
The Master Servicer has entered into Subservicing Agreements with the
Initial Subservicer for the servicing and administration of the Mortgage Loans
and may enter into additional Subservicing Agreements with Subservicers
acceptable to the Indenture Trustee and the Bond Insurer for the servicing and
administration of certain of the Mortgage Loans.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Indenture Trustee, the Bond Insurer and the Bondholders,
shall enforce the obligations of each Subservicer under the related Subservicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements and the pursuit of
other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense, but
shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement only to the extent, if any, that such recovery exceeds all
amounts due in respect of the related Mortgage Loan or (ii) from a specific
recovery of costs, expenses or attorneys' fees against the party against whom
such enforcement is directed.
Section 3.03. SUCCESSOR SUBSERVICERS. The Master Servicer shall be
entitled to terminate any Subservicing Agreement that may exist in accordance
with the terms and conditions of such Subservicing Agreement and without any
limitation by virtue of this Servicing Agreement; PROVIDED, HOWEVER, that upon
termination, the Master Servicer shall either act as servicer of the related
Mortgage Loan or enter into an appropriate contract with a successor Subservicer
acceptable to the Indenture Trustee and the Bond Insurer pursuant to which such
successor Subservicer will be bound by all relevant terms of the related
Subservicing Agreement pertaining to the servicing of such Mortgage Loan.
Section 3.04. LIABILITY OF THE MASTER SERVICER. (a) Notwithstanding any
Subservicing Agreement, any of the provisions of this Servicing Agreement
relating to agreements or arrangements between the Master Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Master Servicer shall under all circumstances remain obligated and primarily
liable to the Indenture Trustee, the Bondholders and the Bond Insurer for the
servicing and administering of the Mortgage Loans and any REO Property in
accordance with this Servicing
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Agreement. The obligations and liability of the Master Servicer shall not be
diminished by virtue of Subservicing Agreements or by virtue of indemnification
of the Master Servicer by any Subservicer, or any other Person. The obligations
and liability of the Master Servicer shall remain of the same nature and under
the same terms and conditions as if the Master Servicer alone were servicing and
administering the related Mortgage Loans. The Master Servicer shall, however, be
entitled to enter into indemnification agreements with any Subservicer or other
Person and nothing in this Servicing Agreement shall be deemed to limit or
modify such indemnification. For the purposes of this Servicing Agreement, the
Master Servicer shall be deemed to have received any payment on a Mortgage Loan
on the date the Subservicer received such payment; PROVIDED, HOWEVER, that this
sentence shall not apply to the Indenture Trustee acting as the Master Servicer;
PROVIDED, FURTHER, however, that the foregoing provision shall not affect the
obligation of the Master Servicer if it is also the Indenture Trustee to advance
amounts which are not Nonrecoverable Advances.
(b) Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Master Servicer alone, and the Indenture Trustee, the
Bond Insurer and the Bondholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with respect to the
Subservicer except as set forth in Section 3.05.
Section 3.05. ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY
INDENTURE TRUSTEE. (a) If the Indenture Trustee or a successor Master Servicer
shall assume the master servicing obligations of the Master Servicer in
accordance with Section 6.02 below, the Indenture Trustee, to the extent
necessary to permit the Indenture Trustee to carry out the provisions of Section
6.02 with respect to the Mortgage Loans, shall succeed to all of the rights and
obligations of the Master Servicer under each of the Subservicing Agreements. In
such event, the Indenture Trustee or its designee as the successor master
servicer shall be deemed to have assumed all of the Master Servicer's rights and
obligations therein and to have replaced the Master Servicer as a party to such
Subservicing Agreements to the same extent as if such Subservicing Agreements
had been assigned to the Indenture Trustee or its designee as a successor master
servicer, except that the Indenture Trustee or its designee as a successor
master servicer shall not be deemed to have assumed any obligations or
liabilities of the Master Servicer arising prior to such assumption (other than
the obligation to make any Advances) and the Master Servicer shall not thereby
be relieved of any liability or obligations under such Subservicing Agreements
arising prior to such assumption. Nothing in the foregoing shall be deemed to
entitle the Indenture Trustee or its designee as a successor master servicer at
any time to receive any portion of the servicing compensation provided under
Section 3.17 except for such portion as the Master Servicer would be entitled to
receive.
(b) In the event that the Indenture Trustee or a successor Master
Servicer assumes the servicing obligations of the Master Servicer under Section
6.02, upon the reasonable request of the Indenture Trustee or such successor
Master Servicer, the Master Servicer shall at its own expense deliver to the
Indenture Trustee, or to such successor Master Servicer, photocopies of all
documents, files and records, electronic or otherwise, relating to the
Subservicing Agreements and
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the related Mortgage Loans or REO Property then being serviced and an accounting
of amounts collected and held by it, if any, and will otherwise cooperate and
use its reasonable efforts to effect the orderly and efficient transfer of the
Subservicing Agreements, or responsibilities hereunder to the Indenture Trustee,
or to such successor Master Servicer.
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS. (a) The Master
Servicer will coordinate and monitor remittances by Subservicers to it with
respect to the Mortgage Loans in accordance with this Servicing Agreement.
(b) The Master Servicer shall make its best reasonable efforts to
collect or cause to be collected all payments required under the terms and
provisions of the Mortgage Loans and shall follow, and use its best reasonable
efforts to cause Subservicers to follow, collection procedures comparable to the
collection procedures of prudent mortgage lenders servicing mortgage loans for
their own account to the extent such procedures shall be consistent with this
Servicing Agreement. Consistent with the foregoing, the Master Servicer or the
related Subservicer may in its discretion (i) waive or permit to be waived any
late payment charge, prepayment charge, assumption fee, or any penalty interest
in connection with the prepayment of a Mortgage Loan and (ii) suspend or reduce
or permit to be suspended or reduced regular monthly payments for a period of up
to six months, or arrange or permit an arrangement with a Mortgagor for a
scheduled liquidation of delinquencies; provided, however, that the Master
Servicer or the related Subservicer may permit the foregoing only if it
believes, in good faith, that recoveries of Monthly Payments will be maximized;
provided further, however, that Monthly Payments may not be suspended during the
twelve months prior to the final maturity of the Bonds. In the event the Master
Servicer or related Subservicer shall consent to the deferment of the due dates
for payments due on a Mortgage Note, the Master Servicer shall nonetheless make
an Advance or shall cause the related Subservicer to make an advance to the same
extent as if such installment were due, owing and delinquent and had not been
deferred through liquidation of the Mortgaged Property; PROVIDED, HOWEVER, that
the obligation of the Master Servicer or the related Subservicer to make an
Advance shall apply only to the extent that the Master Servicer believes, in
good faith, that such advances are not Nonrecoverable Advances.
(c) Within five Business Days after the Master Servicer has determined
that all amounts which it expects to recover from or on account of a Mortgage
Loan have been recovered and that no further Liquidation Proceeds will be
received in connection therewith, the Master Servicer shall provide to the
Indenture Trustee a certificate of a Servicing Officer that such Mortgage Loan
became a Liquidated Mortgage Loan as of the date of such determination.
(d) The Master Servicer shall establish a segregated account in the
name of the Indenture Trustee (the "Collection Account"), which shall be an
Eligible Account, in which the Master Servicer shall deposit or cause to be
deposited any amounts representing payments on and any collections in respect of
the Mortgage Loans due subsequent to the Cut-Off Date (other than in respect of
the payments referred to in the following paragraph) within one Business Day
following receipt thereof (or otherwise on or prior to the Closing Date),
including the following payments and collections received or made by it (without
duplication):
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(i) all payments of principal of or interest on the
Mortgage Loans received by the Master Servicer directly from Mortgagors
or from the respective Subservicer, net of any portion of the interest
thereof retained by the Subservicer as subservicing fees;
(ii) the aggregate Repurchase Price of the Mortgage
Loans purchased by the Master Servicer pursuant to Section 3.18;
(iii) Net Liquidation Proceeds;
(iv) all proceeds of any Mortgage Loans repurchased by
the Seller pursuant to the Mortgage Loan Sale and Contribution
Agreement, and all Substitution Adjustment Amounts required to be
deposited in connection with the substitution of an Eligible Substitute
Mortgage Loan pursuant to the Mortgage Loan Sale and Contribution
Agreement;
(v) Insurance Proceeds, other than Net Liquidation
Proceeds, resulting from any insurance policy maintained on a Mortgaged
Property;
(vi) any Advance and any Compensating Interest payments;
and
(vii) any other amounts received by the Master Servicer,
including any fees or penalties not retained by a Subservicer, required
to be deposited in the Collection Account pursuant to this Servicing
Agreement.
PROVIDED, HOWEVER, that with respect to each Due Period, the Master Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans, the Servicing Fee for such Due Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Master Servicer need not deposit in the Collection Account fees (including
annual fees or assumption fees) or late charge and prepayment penalties, payable
by Mortgagors, each as further described in Section 3.15, or amounts received by
the Subservicer for the accounts of Mortgagors for application towards the
payment of taxes, insurance premiums, assessments and similar items. In the
event any amount not required to be deposited in the Collection Account is so
deposited, the Master Servicer may at any time (prior to being terminated under
this Agreement) withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding. The Master Servicer shall keep records
that accurately reflect the funds on deposit in the Collection Account that have
been identified by it as being attributable to the Mortgage Loans and shall hold
all collections in the Collection Account for the benefit of the Owner Trustee,
the Indenture Trustee, the Bondholders and the Bond Insurer, as their interests
may appear. The Master Servicer shall remit all Foreclosure Profits to the
Collection Account.
Funds in the Collection Account may not be invested and shall not be
commingled with the Master Servicer's own funds or general assets or with funds
respecting payments on mortgage loans or with any other funds not related to the
Bonds. Funds in the Collection Account shall be
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invested solely in Eligible Investments, designated in the name of the Indenture
Trustee, which shall mature not later than the Business Day next preceding the
third Business Day prior to each Payment Date next following the date of such
investment and shall not be sold or disposed of prior to maturity. All income
and gain realized from any such investment shall be for the benefit of the
Master Servicer or the related Subservicer. The amount of any losses incurred
with respect to any such investments shall be deposited in the Collection
Account by the Master Servicer.
In the event the Indenture Trustee assumes the responsibilities of the
Master Servicer under this Servicing Agreement upon a Servicing Event of Default
under Section 6.01, the Indenture Trustee shall be entitled to reimburse itself
for Advances pursuant to Sections 3.07(a)(v), (viii) and (ix) prior to
reimbursement of the terminated Master Servicer or any successor Master
Servicer.
(e) The Master Servicer will require each Subservicer to hold all funds
constituting collections on the Mortgage Loans, pending remittance thereof to
the Master Servicer, in one or more accounts meeting the requirements of an
Eligible Account, and invested in Eligible Investments, and in the name of the
Indenture Trustee. The Subservicer shall segregate and hold all funds collected
and received pursuant to each Mortgage Loan separate and apart from any of its
own funds and general assets and any other funds. Each Subservicer shall make
remittances to the Master Servicer no later than the eighteenth (18th) day of
each month, commencing on the eighteenth (18th) day of the month next following
the Cut-off Date, or if such eighteenth (18th) day is not a Business Day, the
first Business Day immediately preceding such eighteenth (18th) day.
Section 3.07. WITHDRAWALS FROM THE COLLECTION ACCOUNT. (a) The Master
Servicer shall, from time to time as provided herein, make withdrawals from the
Collection Account of amounts on deposit therein pursuant to Section 3.06 that
are attributable to the Mortgage Loans for the following purposes (without
duplication):
(i) to deposit in the Payment Account, by the third
Business Day prior to each Payment Date, the Available Funds required
to be distributed as provided in the Indenture on a Payment Date;
(ii) to the extent deposited to the Collection Account,
to reimburse itself or the related Subservicer for previously
unreimbursed expenses incurred in maintaining individual insurance
policies pursuant to Sections 3.10 or 3.11, or Liquidation Expenses,
paid pursuant to Section 3.13 or otherwise reimbursable pursuant to the
terms of this Servicing Agreement, such withdrawal right being limited
to amounts received on particular Mortgage Loans (other than any
Repurchase Price in respect thereof) which represent late recoveries of
the payments for which such advances were made, or from related
Liquidation Proceeds;
(iii) to pay to itself out of each payment received on
account of interest on a Mortgage Loan as contemplated by Section 3.15,
an amount equal to the related Servicing Fee (to the extent not
retained pursuant to Section 3.06) and to pay to any Subservicer any
subservicing fees not previously withheld by the Subservicer;
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(iv) to pay to itself or the Seller, with respect to any
Mortgage Loan or property acquired in respect thereof that has been
purchased or otherwise transferred to the Seller, the Master Servicer
or other entity, all amounts received thereon and not required to be
distributed to Bondholders as of the date on which the related Purchase
Price or Repurchase Price is determined;
(v) to reimburse the Master Servicer or any Subservicer
for any Advance of its own funds or any advance of such Subservicer's
own funds, the right of the Master Servicer or a Subservicer to
reimbursement pursuant to this subclause (v) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose,
the Repurchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late payments or recoveries of the principal
of or interest on such Mortgage Loan respecting which such Advance or
advance was made;
(vi) to reimburse the Master Servicer or any Subservicer
from Insurance Proceeds or Liquidation Proceeds relating to a
particular Mortgage Loan for amounts expended by the Master Servicer or
such Subservicer pursuant to Section 3.13 in good faith in connection
with the restoration of the related Mortgage Property which was damaged
by the uninsured cause or in connection with the liquidation of such
Mortgage Loan;
(vii) to pay the Master Servicer or any Subservicer
(payment to any Subservicer to be subject to prior payment to the
Master Servicer of an amount equal to the Servicing Fee), as
appropriate, from Liquidation Proceeds or Insurance Proceeds received
in connection with the liquidation of any Mortgage Loan, the amount
which it or such Subservicer would have been entitled to receive under
subclause (x) of this Subsection 3.07(a) as servicing compensation on
account of each defaulted scheduled payment on such Mortgage Loan if
paid in a timely manner by the related Mortgagor, but only to the
extent that the aggregate of Liquidation Proceeds and Insurance
Proceeds with respect to such Mortgage Loan, after any reimbursement to
the Master Servicer or any Subservicer, pursuant to other subclauses of
this Subsection 3.07(a), exceeds the outstanding Principal Balance of
such Mortgage Loan plus accrued and unpaid interest thereon at the
related Mortgage Rate less the Servicing Fee to but not including the
date of payment (in any event, the amount of servicing compensation
received by a Subservicer and the Master Servicer with respect to any
defaulted scheduled payment shall not exceed the applicable Servicing
Fee);
(viii) to reimburse the Master Servicer or any Subservicer
for advances of funds pursuant to Article III, the right to
reimbursement pursuant to this subclause being limited to amounts
received on the related Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds)
which represent late recoveries of the payments for which such advances
were made;
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(ix) to reimburse the Master Servicer or any Subservicer
for any Nonrecoverable Advance previously made, and not reimbursed
pursuant to this Subsection 3.07(a);
(x) to deposit in the Payment Account, by the third
Business Day prior to each Payment Date, the Indenture Trustee Fee;
(xi) to withdraw any other amount deposited in the
Collection Account that was not required to be deposited therein
pursuant to Section 3.06;
(xii) to pay CMAC the premium with respect to the CMAC
PMI Policy;
(xiii) to pay the Owner Trustee the Owner Trustee Fee
and the Bond Insurer the Premium Amount;
(xiv) to reimburse the Master Servicer for costs
associated with the environmental report specified in Section 3.13(c);
and
(xv) clear and terminate the Collection Account
following a termination of the Trust pursuant to Section 8.01 of the
Trust Agreement.
In connection with withdrawals pursuant to clauses (ii), (iii), (iv), (v), (vi),
(vii) and (viii), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, and the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Collection Account pursuant to such clauses. Notwithstanding any other provision
of this Servicing Agreement, the Master Servicer shall be entitled to reimburse
itself for any previously unreimbursed expenses incurred pursuant to Section
3.13 or otherwise reimbursable expenses incurred pursuant to the terms of this
Servicing Agreement, but only to the extent of collections or other recoveries
on the related Mortgage Loan.
(b) Notwithstanding the provisions of this Section 3.07, the Master
Servicer may, but is not required to, allow the Subservicers to deduct from
amounts received by them or from the related account maintained by a
Subservicer, prior to deposit in the Collection Account, any portion to which
such Subservicers are entitled as servicing compensation (including income on
Eligible Investments) or reimbursement of any reimbursable Advances made by such
Subservicers.
Section 3.08. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS.
(a) The Master Servicer shall establish and maintain or cause the
related Subservicer to establish and maintain, one or more Servicing Accounts.
The Master Servicer or a Subservicer will deposit and retain therein all
collections from the Mortgagors for the payment of taxes, assessments, insurance
premiums, or comparable items as agent of the Mortgagors.
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(b) The deposits in the Servicing Accounts shall be held in trust by
the Master Servicer or a Subservicer (and its successors and assigns) in the
name of the Indenture Trustee. Such Servicing Accounts shall be Eligible
Accounts and if permitted by applicable law, invested in Eligible Investments
held in trust by the Master Servicer or a Subservicer as described above and
maturing, or be subject to redemption or withdrawal, no later than the date on
which such funds are required to be withdrawn, and in no event later than 45
days after the date of investment; withdrawals of amounts from the Servicing
Accounts may be made only to effect timely payment of taxes, assessments,
insurance premiums, or comparable items, to reimburse the Master Servicer or a
Subservicer for any advances made with respect to such items, to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required, to Mortgagors on balances in the Servicing Accounts or to clear and
terminate the Servicing Accounts at or any time after the termination of this
Servicing Agreement.
Section 3.09. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE MORTGAGE LOANS. The Master Servicer shall provide, and shall cause any
Subservicer to provide, to the Indenture Trustee, the Owner Trustee and the Bond
Insurer access to the documentation regarding the related Mortgage Loans and REO
Property and to the Bondholders, the FDIC, and the supervisory agents and
examiners of the FDIC (to which the Indenture Trustee shall also provide) access
to the documentation regarding the related Mortgage Loans required by applicable
regulations, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Master Servicer
or the Subservicers that are designated by these entities; PROVIDED, HOWEVER,
that, unless otherwise required by law, the Indenture Trustee, the Master
Servicer or the Subservicer shall not be required to provide access to such
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor; PROVIDED, FURTHER, HOWEVER, that the Indenture Trustee, the
Bond Insurer and the Owner Trustee shall coordinate their requests for such
access so as not to impose an unreasonable burden on, or cause an unreasonable
interruption of, the business of the Master Servicer or any Subservicer. The
Master Servicer, the Subservicers and the Indenture Trustee shall allow
representatives of the above entities to photocopy any of the documentation and
shall provide equipment for that purpose at a charge that covers their own
actual out-of-pocket costs.
Section 3.10. MAINTENANCE OF PRIMARY INSURANCE POLICIES AND THE CMAC
POLICY; COLLECTION THEREUNDER. The Master Servicer shall, or shall cause the
related Subservicer to, exercise its best reasonable efforts to maintain and
keep in full force and effect each Primary Insurance Policy by a Qualified
Insurer, or other insurer satisfactory to the Bond Insurer and the Rating
Agencies, with respect to each first lien ARM Loan as to which as of the Cut-Off
Date such a Primary Insurance Policy was in effect (or, in the case of a
Substitute Mortgage Loan, the date of substitution) and the original principal
amount of the related Mortgage Note exceeded 80% of the Original Value in an
amount at least equal to the excess of such original principal amount over 75%
of such Original Value until the principal amount of any such first lien
Mortgage Loan is reduced below 80% of the Original Value or, based upon a new
appraisal, the principal amount of such first lien Mortgage Loan represents less
than 80% of the new appraised value. The Master Servicer shall, or shall cause
the related Subservicer to, effect the timely payment of the premium on each
Primary Insurance Policy and the CMAC PMI Policy. The Master Servicer and the
related Subservicer shall have the power to substitute for any Primary Insurance
Policy another
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substantially equivalent policy issued by another Qualified Insurer, PROVIDED,
THAT, such substitution shall be subject to the condition that (i) it will not
cause the ratings on the Bonds to be downgraded or withdrawn without taking into
account the Bond Insurance Policy, as evidenced by a writing from each Rating
Agency, and (ii) the Bond Insurer shall have consented thereto, which consent
shall not be unreasonably withheld.
The Master Servicer shall pay or cause any Subservicer to pay directly
to CMAC the premium with respect to the CMAC PMI Policy from interest payments
on the Mortgage Loans, in accordance with the CMAC PMI Policy. Such obligation
will be assigned to any successor Master Servicer.
Section 3.11. MAINTENANCE OF HAZARD INSURANCE AND FIDELITY COVERAGE.
(a) The Master Servicer shall maintain and keep, or cause each Subservicer to
maintain and keep, with respect to each ARM Loan and each REO Property, in full
force and effect hazard insurance (fire insurance with extended coverage) equal
to at least the lesser of the Principal Balance of the ARM Loan or the current
replacement cost of the Mortgaged Property, and containing a standard mortgagee
clause, PROVIDED, HOWEVER, that the amount of hazard insurance may not be less
than the amount necessary to prevent loss due to the application of any
co-insurance provision of the related policy. Unless applicable state law
requires a higher deductible, the deductible on such hazard insurance policy may
be no more than $1,000 or 1% of the applicable amount of coverage, whichever is
less. In the case of a condominium unit or a unit in a planned unit development,
the required hazard insurance shall take the form of a multi-peril policy
covering the entire condominium project or planned unit development, in an
amount equal to at least 100% of the insurable value based on replacement cost.
(b) Any amounts collected by the Master Servicer or a Subservicer under
any such hazard insurance policy (other than amounts to be applied to the
restoration or repair of the Mortgaged Property or amounts released to the
Mortgagor in accordance with the Master Servicer's or a Subservicer's normal
servicing procedures, the Mortgage Note, the Security Instrument or applicable
law) shall be deposited initially in a Collection Account, for transmittal to
the Payment Account, subject to withdrawal pursuant to Section 3.07.
(c) Any cost incurred by a Master Servicer or a Subservicer in
maintaining any such hazard insurance policy shall not be added to the amount
owing under the ARM Loan for the purpose of calculating monthly distributions to
Bondholders, notwithstanding that the terms of the ARM Loan so permit. Such
costs shall be recoverable by the Master Servicer or a Subservicer out of
related late payments by the Mortgagor or out of Insurance Proceeds or
Liquidation Proceeds or by the Master Servicer from the Repurchase Price, to the
extent permitted by Section 3.07.
(d) No earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired with respect to a Security
Instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. When, at
the time of origination of the ARM Loan or at any subsequent time, the Mortgaged
Property is located in a federally designated special flood hazard area, the
Master Servicer shall use its best reasonable efforts to cause with respect to
the ARM Loans and each
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REO Property flood insurance (to the extent available and in accordance with
mortgage servicing industry practice) to be maintained. Such flood insurance
shall cover the Mortgaged Property, including all items taken into account in
arriving at the Appraised Value on which the ARM Loan was based, and shall be in
an amount equal to the lesser of (i) the Principal Balance of the related
Mortgage Loan and (ii) the minimum amount required under the terms of coverage
to compensate for any damage or loss on a replacement cost basis, but not more
than the maximum amount of such insurance available for the related Mortgaged
Property under either the regular or emergency programs of the National Flood
Insurance Program (assuming that the area in which such Mortgaged Property is
located is participating in such program). Unless applicable state law requires
a higher deductible, the deductible on such flood insurance may not exceed
$1,000 or 1% of the applicable amount of coverage, whichever is less.
(e) If insurance has not been maintained complying with Subsections
3.11 (a) and (d) and there shall have been a loss which would have been covered
by such insurance had it been maintained, the Master Servicer shall pay, or
cause the related Subservicer to pay, for any necessary repairs.
(f) The Master Servicer shall present, or cause the related Subservicer
to present, claims under any applicable Primary Insurance Policy or the related
hazard insurance or flood insurance policy.
(g) The Master Servicer shall obtain and maintain at its own expense
and for the duration of this Servicing Agreement a blanket fidelity bond and
shall cause each Subservicer to obtain and maintain an errors and omissions
insurance policy covering such Subservicer's officers, employees and other
persons acting on its behalf in connection with its activities under this
Servicing Agreement. The amount of coverage shall be at least equal to the
coverage maintained by the Master Servicer acceptable to FNMA or FHLMC to
service loans for it or otherwise in an amount as is commercially available at a
cost that is generally not regarded as excessive by industry standards. The
Master Servicer shall promptly notify the Indenture Trustee of any material
change in the terms of such bond or policy. The Master Servicer shall provide
annually to the Indenture Trustee a certificate of insurance that such bond and
policy are in effect. If any such bond or policy ceases to be in effect, the
Master Servicer shall, to the extent possible, give the Indenture Trustee ten
days' notice prior to any such cessation and shall use its reasonable best
efforts to obtain a comparable replacement bond or policy, as the case may be.
Any amounts relating to the Mortgage Loans collected under such bond or policy
shall be deposited initially in a Collection Account for transmittal to the
Payment Account, subject to withdrawal pursuant to Section 3.07.
Section 3.12. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. (a) In any
case in which the Master Servicer is notified by any Mortgagor or Subservicer
that a Mortgaged Property relating to a Mortgage Loan has been or is about to be
conveyed by the Mortgagor, the Master Servicer shall enforce, or shall instruct
such Subservicer to enforce, any due-on-sale clause contained in the related
Security Instrument to the extent permitted under the terms of the related
Mortgage Note and by applicable law. The Master Servicer or the related
Subservicer may repurchase a Mortgage Loan at the Repurchase Price when the
Master Servicer requires
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acceleration of the Mortgage Loan, but only if the Master Servicer is satisfied,
as evidenced by an Officer's Certificate delivered to the Indenture Trustee,
that either (i) such Mortgage Loan is in default or default is reasonably
foreseeable or (ii) if such Mortgage Loan is not in default or default is not
reasonably foreseeable, such repurchase will have no adverse tax consequences
for the Trust Estate or any Securityholder. If the Master Servicer reasonably
believes that such due-on-sale clause cannot be enforced under applicable law or
if the Mortgage Loan does not contain a due-on-sale clause, the Master Servicer
is authorized, and may authorize any Subservicer, to consent to a conveyance
subject to the lien of the Mortgage, and to take or enter into an assumption
agreement from or with the Person to whom such property has been or is about to
be conveyed, pursuant to which such Person becomes liable under the related
Mortgage Note and unless prohibited by applicable state law, such Mortgagor
remains liable thereon, on condition, however, that the related Mortgage Loan
shall continue to be covered by a hazard policy and (if so covered before the
Master Servicer or the related Subservicer enters into such agreement) by any
Primary Insurance Policy. In connection with any such assumption, no material
term of the related Mortgage Note may be changed. The Master Servicer shall
notify the Indenture Trustee, whenever possible, before the completion of such
assumption agreement, and shall forward to the Indenture Trustee the original
copy of such assumption agreement, which copy shall be added by the Indenture
Trustee to the related Mortgage File and which shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. A portion, equal to up to
2% of the Principal Balance of the related Mortgage Loan, of any fee or
additional interest collected by the related Subservicer for consenting in any
such conveyance or entering into any such assumption agreement may be retained
by the related Subservicer as additional servicing compensation.
(b) Notwithstanding the foregoing paragraph or any other provision of
this Servicing Agreement, the Master Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason of
any assumption of a Mortgage Loan by operation of law or any conveyance by the
Mortgagor of the related Mortgaged Property or assumption of a Mortgage Loan
which the Master Servicer reasonably believes it may be restricted by law from
preventing, for any reason whatsoever or if the exercise of such right would
impair or threaten to impair any recovery under any applicable insurance policy.
Section 3.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a) The Master
Servicer shall, or shall direct the related Subservicer to, foreclose upon or
otherwise comparably convert the ownership of properties securing any ARM Loans
that come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.06, except that the Master Servicer shall not, and shall not direct
the related Subservicer to, foreclose upon or otherwise comparably convert a
Mortgaged Property if there is evidence of toxic waste or other environmental
hazards thereon unless the Master Servicer follows the procedures in Subsection
(e) below.
(b) With respect to such of the High LTV Loans as come into
and continue in default, the Master Servicer shall, or shall direct the related
Subservicer to decide whether to (i) foreclose upon the Mortgaged Properties
securing such High LTV Loans, (ii) write off the unpaid principal balance of the
High LTV Loans as bad debt, (iii) take a deed in lieu of foreclosure, (iv)
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accept a short sale, (v) arrange for a repayment plan, (vi) agree to a
modification in accordance with this Servicing Agreement, or (vii) take an
unsecured note, in the case of (i) subject to the rights of any related first
lien holder, except that the Master Servicer shall not, and shall not direct the
related Subservicer to, foreclose upon or otherwise comparably convert a
Mortgaged Property if the Master Servicer has actual knowledge that any
Mortgaged Property is affected by hazardous or toxic wastes or other substances
and the acquisition or such property would not be commercially reasonable, which
determination shall be made in accordance with the procedures in Subsection (e)
below; and provided, that the Master Servicer may not modify more than 10% (by
current Principal Balance) of the High LTV Loans without the consent of the Bond
Insurer; and provided further, that the Master Servicer may not take an
unsecured note pursuant to clause (vii) above for more than 10% (by current
Principal Balance) of the High LTV Loans without the consent of the Bond
Insurer. In connection with such decision, the Master Servicer shall follow such
practices (including, in the case of any default on a related senior mortgage
loan, the advancing of funds to correct such default if deemed to be appropriate
by the Master Servicer) and procedures as it shall deem necessary or advisable
and as shall be normal and usual in its general mortgage servicing activities
(including any analysis and decisions regarding whether to realize a gain or
loss pursuant to Section 1001 of the Code); PROVIDED that the Master Servicer
shall not be liable in any respect hereunder if the Master Servicer is acting in
connection with any such foreclosure or attempted foreclosure which is not
completed or other conversion in a manner that is consistent with the provisions
of this Servicing Agreement.
(c) In connection with such foreclosure or other conversion,
the Master Servicer in conjunction with the related Subservicer, if any, shall
use its best reasonable efforts to preserve REO Property and to realize upon
defaulted Mortgage Loans in such manner as to maximize the receipt of principal
and interest by the Bondholders, taking into account, among other things, the
timing of foreclosure and the considerations set forth in Subsection 3.13(d).
The foregoing is subject to the proviso that the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of any property unless it determines in good faith (i) that such
restoration or foreclosure will increase the proceeds of liquidation of the
Mortgage Loan to Bondholders after reimbursement to itself for such expenses and
(ii) that such expenses will be recoverable to it either through Liquidation
Proceeds (respecting which it shall have priority for purposes of reimbursements
from the Collection Account pursuant to Section 3.07) or through Insurance
Proceeds (respecting which it shall have similar priority). The Master Servicer
shall be responsible for all other costs and expenses incurred by it in any such
proceedings; PROVIDED, HOWEVER, that it shall be entitled to reimbursement
thereof (as well as its normal servicing compensation), and in respect of any
Subservicer only, to receive Foreclosure Profits as additional servicing
compensation to the extent that transfers or withdrawals from the Collection
Account with respect thereto are permitted under Section 3.07. Any income from
or other funds (net of any income taxes) generated by REO Property shall be
deemed for purposes of this Servicing Agreement to be Insurance Proceeds.
(d) The Trust Estate shall not acquire any real property (or any
personal property incident to such real property) except in connection with a
default or reasonably foreseeable default of a Mortgage Loan. In the event that
the Trust Estate acquires any real property (or personal property incident to
such real property) in connection with a default or imminent default
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of a Mortgage Loan, such property shall be disposed of by the Indenture Trustee
(or its agent) on behalf of the Trust Estate within two years after its
acquisition by the Trust Estate.
(e) With respect to any Mortgage Loan as to which the Master Servicer
or a Subservicer has received notice of, or has actual knowledge of, the
presence of any toxic or hazardous substance on the Mortgaged Property, the
Master Servicer shall promptly notify the Indenture Trustee, the Owner Trustee
and the Bond Insurer and shall act in accordance with any such directions and
instructions provided by the Bond Insurer, or if a Bond Insurer Default exists,
by the Indenture Trustee, as pledgee of the Issuer. Notwithstanding the
preceding sentence of this Section 3.13(e), with respect to any Mortgage Loan
described in such sentence, the Master Servicer shall, if requested by the Bond
Insurer, obtain and deliver to the Issuer, the Indenture Trustee and the Bond
Insurer an environmental audit report prepared by a Person who regularly
conducts environmental audits using customary industry standards, a copy of
which shall be delivered to the Issuer and the Indenture Trustee. The Master
Servicer shall be entitled to reimbursement for such report pursuant to Section
3.07. If the Bond Insurer or Indenture Trustee, as applicable, has not provided
directions and instructions to the Master Servicer in connection with any such
Mortgage Loan within 30 days of a request by the Master Servicer for such
directions and instructions, then the Master Servicer shall take such action as
it deems to be in the best economic interest of the Trust Estate (other than
proceeding against the Mortgaged Property) and is hereby authorized at such time
as it deems appropriate to release such Mortgaged Property from the lien of the
related Mortgage. The parties hereto acknowledge that the Master Servicer shall
not obtain on behalf of the Issuer a deed as a result or in lieu of foreclosure,
and shall not otherwise acquire possession of or title to, or commence any
proceedings to acquire possession of or title to, or take any other action with
respect to, any Mortgage Property, if the Owner Trustee could reasonably be
considered to be a responsible party for any liability arising from the presence
of any toxic or hazardous substance on the Mortgaged Property, unless the Owner
Trustee has been indemnified to its reasonable satisfaction against such
liability.
Section 3.14. INDENTURE TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE
FILES. (a) Upon payment in full of any Mortgage Loan or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Indenture Trustee by a certification signed by a Servicing Officer in the
form of the request for release (the "Request for Release") attached hereto as
Exhibit B (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Payment Account have been or will be so
deposited) and shall request delivery to the Master Servicer or Subservicer, as
the case may be, of the Mortgage File. Upon receipt of such certification and
request, the Indenture Trustee shall promptly release the related Mortgage File
to the Master Servicer or Subservicer and execute and deliver to the Master
Servicer, without recourse, the request for reconveyance, deed of reconveyance
or release or satisfaction of mortgage or such instrument releasing the lien of
the Security Instrument (furnished by the Master Servicer), together with the
Mortgage Note with written evidence of cancellation thereon.
(b) From time to time as is appropriate, for the servicing or
foreclosure of any Mortgage Loan or collection under an insurance policy, the
Master Servicer may deliver to the
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Indenture Trustee a Request for Release signed by a Servicing Officer on behalf
of the Master Servicer in substantially the form attached as Exhibit B hereto.
Upon receipt of the Request for Release, the Indenture Trustee shall deliver the
Mortgage File or any document therein to the Master Servicer or Subservicer, as
the case may be, as bailee for the Indenture Trustee.
(c) The Master Servicer shall cause each Mortgage File or any document
therein released pursuant to Subsection 3.14(b) to be returned to the Indenture
Trustee when the need therefor no longer exists, and in any event within 21 days
of the Master Servicer's receipt thereof, unless the Mortgage Loan has become a
Liquidated Mortgage Loan and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Collection Account or such Mortgage File is
being used to pursue foreclosure or other legal proceedings. Prior to return of
a Mortgage File or any document to the Indenture Trustee, the Master Servicer,
the related insurer or Subservicer to whom such file or document was delivered
shall retain such file or document in its respective control as bailee for the
Indenture Trustee unless the Mortgage File or such document has been delivered
to an attorney, or to a public trustee or other public official as required by
law, to initiate or pursue legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Indenture Trustee and the Indenture Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. If a Mortgage Loan becomes a Liquidated
Mortgage Loan, the Indenture Trustee shall deliver the Request for Release with
respect thereto to the Master Servicer and upon deposit of the related
Liquidation Proceeds in the Collection Account.
(d) The Indenture Trustee shall execute and deliver to the Master
Servicer any court pleadings, requests for trustee's sale or other documents
necessary to (i) the foreclosure or trustee's sale with respect to a Mortgaged
Property; (ii) any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment
against the Mortgagor; or (iv) enforce any other rights or remedies provided by
the Mortgage Note or Security Instrument or otherwise available at law or
equity. Together with such documents or pleadings the Master Servicer shall
deliver to the Indenture Trustee a certificate of a Servicing Officer in which
it requests the Indenture Trustee to execute the pleadings or documents. The
certificate shall certify and explain the reasons for which the pleadings or
documents are required. It shall further certify that the Indenture Trustee's
execution and delivery of the pleadings or documents will not invalidate any
insurance coverage under the insurance policies or invalidate or otherwise
affect the lien of the Security Instrument, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
Section 3.15. MASTER SERVICING COMPENSATION. (a) As compensation for
its activities hereunder, the Master Servicer shall be entitled to receive the
Servicing Fee from full payments of accrued interest on each Mortgage Loan. The
Master Servicer shall be solely responsible for paying any and all fees with
respect to a Subservicer and the Trust Estate shall not bear any fees, expenses
or other costs directly associated with any Subservicer.
(b) The related Subservicer may retain additional servicing
compensation in the form of conversion fees, if any, with respect to a Converted
Mortgage Loan, prepayment charges, if
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any, a portion of the assumption fees up to 2% of the Principal Balance of the
related Mortgage Loan, tax service fees, fees for statement of account or
payoff, late payment charges, or otherwise, to the extent such fees are
collected from the related Mortgagors or, with respect to a Liquidated Mortgage
Loan, to the extent such fees have accrued. The Master Servicer shall not be
entitled to servicing compensation other than its Servicing Fee. The Master
Servicer shall be required to pay all expenses it incurs in connection with
servicing activities under this Servicing Agreement and shall not be entitled in
connection with servicing activities under this Servicing Agreement to
reimbursement except as provided in this Servicing Agreement. Expenses to be
paid by the Master Servicer under this Subsection 3.15(b) shall include payment
of the expenses of the accountants retained pursuant to Section 3.17.
Section 3.16. ANNUAL STATEMENTS OF COMPLIANCE. Within 120 days after
December 31 of each year, commencing December 1999, the Master Servicer at its
own expense shall deliver to the Indenture Trustee, with a copy to the Bond
Insurer and the Rating Agencies, an Officer's Certificate stating, as to the
signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of performance under this Servicing
Agreement has been made under such officer's supervision, (ii) to the best of
such officer's knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Servicing Agreement for such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof including the steps being taken by the Master Servicer to remedy such
default; (iii) a review of the activities of each Subservicer during the
Subservicer's most recently ended calendar year on or prior to such December 31
and its performance under its Subservicing Agreement has been made under such
officer's supervision; and (iv) to the best of the Servicing Officer's
knowledge, based on his review and the certification of an officer of the
Subservicer (unless the Servicing Officer has reason to believe that reliance on
such certification is not justified), either each Subservicer has performed and
fulfilled its duties, responsibilities and obligations under this Servicing
Agreement and its Subservicing Agreement in all material respects throughout the
year, or, if there has been a default in performance or fulfillment of any such
duties, responsibilities or obligations, specifying the nature and status of
each such default known to the Servicing Officer. Copies of such statements
shall be provided by the Master Servicer to the Bondholders upon request or by
the Indenture Trustee at the expense of the Master Servicer should the Master
Servicer fail to provide such copies.
Section 3.17. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
(a) Within 120 days after December 31 of each year, commencing December 1999,
the Master Servicer, at its expense, shall cause a firm of Independent public
accountants who are members of the American Institute of Certified Public
Accountants and who are KPMG LLP (or a successor thereof) or are otherwise
acceptable to the Bond Insurer to furnish a statement to the Master Servicer,
which will be provided to the Indenture Trustee, the Bond Insurer and the Rating
Agencies, to the effect that, in connection with the firm's examination of the
Master Servicer's financial statements as of the end of such calendar year,
nothing came to their attention that indicated that the Master Servicer was not
in compliance with Sections 3.06, 3.07 and 3.08 except for (i) such exceptions
as such firm believes to be immaterial and (ii) such other exceptions as are set
forth in such statement.
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(b) Within 120 days after December 31 of each year, commencing
December 1999, the Master Servicer, at its expense, shall or shall cause each
Subservicer to cause a nationally recognized firm of independent certified
public accountants to furnish to the Master Servicer or such Subservicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer or such Subservicer
which includes an assertion that the Master Servicer or such Subservicer has
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to residential mortgage loans) identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America with respect to the servicing of first and second lien
conventional single family mortgage loans during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. Immediately upon receipt of such report, the Master Servicer shall
or shall cause each Subservicer to furnish a copy of such report to the
Indenture Trustee, the Rating Agencies and the Bond Insurer.
Section 3.18. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS AND
MANDATORY REPURCHASE OF CONVERTED MORTGAGE LOANS. The Master Servicer may, but
is not obligated to, repurchase any Mortgage Loan delinquent in payment for a
period of 90 days or longer for a price equal to the Repurchase Price. In
addition, the Master Servicer shall be obligated to repurchase any Converted
Mortgage Loan at a price equal to the Repurchase Price therefor. In addition,
the Master Servicer must repurchase any Mortgage Loan which does not satisfy the
requirements of 3.01(c) at a price equal to the Repurchase Price. Any such
purchase shall be accomplished as provided in Subsection 2.03 hereof.
Notwithstanding the foregoing, the Indenture Trustee, whether acting as
Indenture Trustee or in the capacity of successor Master Servicer, shall have no
obligation to repurchase any Mortgage Loan including, without limitation, a
Converted Mortgage Loan.
Section 3.19. INFORMATION REQUIRED BY THE INTERNAL REVENUE SERVICE
GENERALLY AND REPORTS OF FORECLOSURES AND ABANDONMENTS OF MORTGAGED PROPERTY.
The Master Servicer shall prepare and deliver all federal and state information
reports when and as required by all applicable state and federal income tax
laws. In particular, with respect to the requirement under Section 6050J of the
Code to the effect that the Master Servicer or Subservicer shall make reports of
foreclosures and abandonments of any mortgaged property for each year beginning
in 1999, the Master Servicer or Subservicer shall file reports relating to each
instance occurring during the previous calendar year in which the Master
Servicer (i) acquires an interest in any Mortgaged Property through foreclosure
or other comparable conversion in full or partial satisfaction of a Mortgage
Loan, or (ii) knows or has reason to know that any Mortgaged Property has been
abandoned. The reports from the Master Servicer or Subservicer shall be in form
and substance sufficient to meet the reporting requirements imposed by Section
6050J, Section 6050H (reports relating to mortgage interest received) and
Section 6050P of the Code (reports relating to cancellation of indebtedness).
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ARTICLE IV
Servicing Certificate
Section 4.01. DETERMINATION DATE REPORTS. On the second Business Day
following each Determination Date, the Master Servicer shall deliver to the
Indenture Trustee a report, prepared as of the close of business on the
Determination Date (the "Determination Date Report"), in the form of a magnetic
tape or disk or such other method as to which the Master Servicer and Indenture
Trustee shall agree. The Determination Date Report and any written information
supplemental thereto shall include such information with respect to the Mortgage
Loans that is reasonably available to the Master Servicer and that is required
by the Indenture Trustee for purposes of making the calculations and providing
the reports referred to in the Indenture, as set forth in written specifications
or guidelines issued by the Indenture Trustee from time to time. Such
information shall include the aggregate amounts required to be withdrawn from
the Collection Account and deposited into the Payment Account pursuant to 3.07.
In addition, prior to each Payment Date, the Master Servicer shall
determine the total amount of Realized Losses, if any, that resulted from any
Cash Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition
that occurred during the related Collection Period and the total amount of
Realized Losses incurred due to a High LTV Loan being 180 days or more
delinquent. The amount of each Realized Loss shall be evidenced by an Officer's
Certificate delivered to the Indenture Trustee and the Bond Insurer with the
related Determination Date Report in the month following the month during which
the High LTV Loan becomes 180 days delinquent.
The determination by the Master Servicer of such amounts shall, in the
absence of obvious error, be presumptively deemed to be correct for all purposes
hereunder and the Owner Trustee and Indenture Trustee shall be protected in
relying upon the same without any independent check or verification.
Section 4.02. RESERVED.
Section 4.03. PAYMENT ACCOUNT. The Indenture Trustee shall establish
and maintain a separate account (the "Payment Account") in accordance with the
Indenture. The Payment Account shall be an Eligible Account. On each Payment
Date, amounts on deposit in the Payment Account will be distributed by the
Indenture Trustee in accordance with Section 3.05 of the Indenture. The
Indenture Trustee shall, upon written request from the Master Servicer, invest
or cause the institution maintaining the Payment Account to invest the funds in
the Payment Account in Eligible Investments designated in the name of the
Indenture Trustee, which shall mature not later than the Business Day next
preceding the Payment Date next following the date of such investment and shall
not be sold or disposed of prior to maturity. All income and gain realized from
any such investment shall be for the benefit of the Bond Insurer and the
Securityholders. The amount of any losses incurred with respect to any such
investments shall be deposited in the Payment Account by the Master Servicer.
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Section 4.04. ADVANCES. If any Monthly Payment on a Mortgage Loan
(other than Balloon Payments) that was due on the immediately preceding Due Date
(with respect to an ARM Loan) or due during the related Collection Period (with
respect to a High LTV Loan) and delinquent on the Determination Date is
delinquent other than as a result of application of the Relief Act, the Master
Servicer will deposit in the Collection Account not later than the third
Business Day immediately preceding the related Payment Date an amount equal to
such Monthly Payment (with respect to an ARM Loan) or the interest portion of
such Monthly Payment (with respect to a High LTV Loan) net of the related
Servicing Fee and CMAC PMI Policy Fee for such Mortgage Loan, except to the
extent the Master Servicer or the related Subservicer determines any such
advance to be nonrecoverable from Liquidation Proceeds, Insurance Proceeds or
future payments on any Mortgage Loan. Subject to the foregoing and in the
absence of such a determination, the Master Servicer shall continue to make such
advances through the date that the related Mortgaged Property has, in the
judgment of the Master Servicer, been completely liquidated. No later than the
fourth Business Day preceding each Payment Date, the Master Servicer shall
present an Officer's Certificate to the Indenture Trustee and the Bond Insurer
with respect to the ARM Loans, (i) stating that the Master Servicer elects not
to make an Advance in a stated amount and (ii) detailing the reason it deems the
advance to be a Nonrecoverable Advance. Such an Officer's Certificate is not
required with respect to to the Master Servicer's determination not to make an
Advance in connection with a High LTV Loan. The Master Servicer will include in
the Determination Date Report a list of each ARM Loan or High LTV Loan for which
it does not make an Advance in accordance with this Section.
Such Advances may be made in whole or in part from funds in the
Collection Account being held for future distribution or withdrawal on or in
connection with Payment Dates in subsequent months. Any funds being held for
future distribution to Securityholders and so used shall be replaced by the
Master Servicer from its own funds by deposit in the Collection Account on or
before the fourth Business Day preceding any Payment Date to the extent that
funds in the Collection Account with respect to such Payment Date shall be less
than payments to Securityholders required to be made on such date.
Section 4.05. COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Collection Account not later than the third Business Day
preceding the Payment Date an amount equal to the Compensating Interest related
to the related Determination Date. The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest payment.
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ARTICLE V
The Master Servicer
Section 5.01. LIABILITY OF THE MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer herein.
Section 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE MASTER SERVICER. Any corporation into which the Master
Servicer 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
Master Servicer shall be a party, or any corporation succeeding to the business
of the Master Servicer, shall be the successor of the Master Servicer,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
The Master Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; PROVIDED, that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of FNMA or FHLMC, is reasonably satisfactory to the
Indenture Trustee (as pledgee of the Mortgage Loans) and the Company (in its
sole discretion) and the Bond Insurer, is willing to service the Mortgage Loans
and executes and delivers to the Indenture Trustee and the Company an agreement,
in form and substance reasonably satisfactory to the Bond Insurer, the Indenture
Trustee and the Company, which contains an assumption by such Person of the due
and punctual performance and observance of each covenant and condition to be
performed or observed by the Master Servicer under this Servicing Agreement;
PROVIDED, FURTHER, that each Rating Agency's rating of the Bonds in effect
immediately prior to such assignment and delegation will not be qualified,
reduced, or withdrawn as a result of such assignment and delegation (as
evidenced by a letter to such effect from each Rating Agency) or considered to
be below investment grade without taking into account the Bond Insurance Policy.
Section 5.03. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND
OTHERS. Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Company, the Issuer, the Owner Trustee, the Indenture Trustee or the Bondholders
for any action taken or for refraining from the taking of any action in good
faith pursuant to this Servicing Agreement, PROVIDED, HOWEVER, that this
provision shall not protect the Master Servicer or any such Person against any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder or by
reason of its reckless disregard of its obligations and duties hereunder. The
Master Servicer and any director or officer or employee or agent of the Master
Servicer may rely in good faith on any document of any kind PRIMA FACIE properly
executed and submitted by any Person respecting any matters arising hereunder.
The Master Servicer and any director or officer or employee or agent of the
Master Servicer shall be indemnified by the Company and held harmless against
any loss, liability or expense incurred in connection with any legal action
relating to this Servicing Agreement or the Bonds, including any amount paid to
the Owner Trustee or the
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Indenture Trustee pursuant to Section 5.06(b), other than any loss, liability or
expense related to any specific Mortgage Loan or Mortgage Loans (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Servicing Agreement) and any loss, liability or expense incurred by reason of
its willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder or by reason of its reckless disregard of its obligations and
duties hereunder. The Master Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
duties to service the Mortgage Loans in accordance with this Servicing
Agreement, and which in its opinion may involve it in any expense or liability;
PROVIDED, HOWEVER, that the Master Servicer may in its sole discretion undertake
any such action which it may deem necessary or desirable in respect of this
Servicing Agreement, and the rights and duties of the parties hereto and the
interests of the Bondholders hereunder. In such event, the reasonable legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Company, and the Master Servicer shall be
entitled to be reimbursed therefor. The Master Servicer's right to indemnity or
reimbursement pursuant to this Section 5.03 shall survive any resignation or
termination of the Master Servicer pursuant to Section 5.04 or 6.01 with respect
to any losses, expenses, costs or liabilities arising prior to such resignation
or termination (or arising from events that occurred prior to such resignation
or termination).
Section 5.04. MASTER SERVICER NOT TO RESIGN. Subject to the provisions
of Section 5.02, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that the performance
of its obligations or duties hereunder are no longer permissible under
applicable law or (ii) upon satisfaction of the following conditions: (a) the
Master Servicer has proposed a successor servicer to the Company, the Bond
Insurer and the Indenture Trustee in writing and such proposed successor
servicer is reasonably acceptable to the Company and the Indenture Trustee; (b)
each Rating Agency shall have delivered a letter to the Company, the Bond
Insurer and the Indenture Trustee prior to the appointment of the successor
servicer stating that the proposed appointment of such successor servicer as
Master Servicer hereunder will not result in the reduction or withdrawal of the
then current rating of the Bonds or the then current rating of the Bonds without
taking into account the Bond Insurance Policy; and (c) such proposed successor
servicer is acceptable to the Bond Insurer, as evidenced by a letter to the
Company and the Indenture Trustee; PROVIDED, HOWEVER, that no such resignation
by the Master Servicer shall become effective until such successor servicer or,
in the case of (i) above, the Indenture Trustee, as pledgee of the Mortgage
Loans, shall have assumed the Master Servicer's responsibilities and obligations
hereunder or another successor Master Servicer has been approved in accordance
with Section 6.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 6.01 and 6.02 as
obligations that survive the resignation or termination of the Master Servicer.
The Master Servicer shall have no claim (whether by subrogation or otherwise) or
other action against any Bondholder or the Bond Insurer for any amounts paid by
the Master Servicer pursuant to any provision of this Servicing Agreement. Any
such determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Indenture
Trustee and the Bond Insurer.
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Section 5.05. DELEGATION OF DUTIES. In the ordinary course of business,
the Master Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those with which the Master Servicer
complies pursuant to Section 3.01. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and
shall not constitute a resignation within the meaning of Section 5.04.
Section 5.06. MASTER SERVICER TO PAY INDENTURE TRUSTEE'S AND OWNER
TRUSTEE'S FEES AND EXPENSES; INDEMNIFICATION. (a) The Master Servicer covenants
and agrees to pay to the Owner Trustee, the Indenture Trustee and any co-trustee
of the Indenture Trustee from time to time, and the Owner Trustee, the Indenture
Trustee and any such co-trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by each
of them in the execution of the trusts created under the Trust Agreement and the
Indenture and in the exercise and performance of any of the powers and duties
under the Trust Agreement or the Indenture, as the case may be, of the Owner
Trustee, the Indenture Trustee and any co-trustee of the Indenture Trustee, and
the Master Servicer will pay or reimburse (i) the Indenture Trustee and any
co-trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Indenture Trustee or any co-trustee of the Indenture
Trustee in accordance with any of the provisions of this Servicing Agreement
except any such expense, disbursement or advance as may arise from its
negligence or bad faith and (ii) the Owner Trustee upon request for all
reasonable expenses, disbursements and advances incurred or made by the Owner
Trustee in accordance with any of the provisions of this Servicing Agreement
except any such expense, disbursement or advance as may arise from its willful
misconduct, gross negligence or bad faith or grossly negligent failure to act.
(b) The Master Servicer agrees to indemnify the Indenture Trustee and
the Owner Trustee for, and to hold the Indenture Trustee and the Owner Trustee,
as the case may be, harmless against, any claim, tax, penalty, loss, liability
or expense of any kind whatsoever, incurred without negligence (gross negligence
in the case of the Owner Trustee) or willful misconduct on its part, arising out
of, or in connection with, the failure by the Master Servicer to perform its
duties in compliance with this Servicing Agreement, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against any claim in connection with the exercise or performance of any of its
powers or duties under any Basic Document, provided that:
(i) with respect to any such claim, the Indenture
Trustee or Owner Trustee, as the case may be, shall have given the
Master Servicer written notice thereof promptly after the Indenture
Trustee or Owner Trustee, as the case may be, shall have actual
knowledge thereof; it being understood that failure to give such notice
shall not relieve the Master Servicer of its indemnification
obligations hereunder;
(ii) while maintaining control over its own defense, the
Company, the Indenture Trustee or Owner Trustee, as the case may be,
shall cooperate and consult fully with the Master Servicer in preparing
such defense; and
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(iii) notwithstanding anything in this Servicing
Agreement to the contrary, the Master Servicer shall not be liable for
settlement of any claim by the Indenture Trustee or the Owner Trustee,
as the case may be, entered into without the prior consent of the
Master Servicer, which consent shall not be unreasonably withheld.
(c) The Master Servicer agrees to indemnify the Owner Trustee for, and
to hold the Owner Trustee, harmless against, any claim, tax, penalty, loss,
liability or expense of any kind whatsoever, in connection with the Owner
Trustee's duties under any of the Basic Documents, except to the extent that
such claim, tax, penalty, loss liability or expense is (i) caused by the Owner
Trustee's own willful misconduct, gross negligence or bad faith or grossly
negligent failure to act or (ii) incurred as a result of the inaccuracy of any
representation or warranty contained in Section 6.03 of the Trust Agreement
expressly made by the Owner Trustee.
(d) No termination of this Servicing Agreement or the resignation or
removal of the Owner Trustee or the Indenture Trustee shall affect the
obligations created by this Section 5.06 of the Master Servicer to indemnify the
Indenture Trustee and the Owner Trustee under the conditions and to the extent
set forth herein. This section shall survive the termination of this Servicing
Agreement and the resignation or removal of the Master Servicer. Any amounts to
be paid by the Master Servicer pursuant to this Subsection may not be paid from
the Trust Estate.
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ARTICLE VI
Default
Section 6.01. SERVICING DEFAULT. If any one of the following events
("Servicing Default") shall occur and be continuing:
(i) Any failure by the Master Servicer to deposit in
the Collection Account or Payment Account any deposit required to be
made under the terms of this Servicing Agreement, including any
Advances and Compensating Interest (other than Servicing Advances),
which continues unremedied for a period of one (1) Business Day after
the date upon which written notice of such failure shall have been
given to the Master Servicer by the Company, the Issuer or the
Indenture Trustee or to the Master Servicer, the Company, the Issuer
and the Indenture Trustee by the Bond Insurer; or
(ii) Failure on the part of the Master Servicer duly to
observe or perform in any material respect any other covenants or
agreements of the Master Servicer (including Servicing Advances) set
forth in the Bonds or in this Servicing Agreement, which failure, in
each case, materially and adversely affects the interests of
Bondholders or the Bond Insurer and which continues unremedied for a
period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, and stating that such
notice is a "Notice of Default" hereunder, shall have been given to the
Master Servicer by the Company, the Issuer or the Indenture Trustee or
to the Master Servicer, the Company, the Issuer and the Indenture
Trustee by the Bond Insurer; or
(iii) The entry against the Master Servicer of a decree
or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a trustee,
conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(iv) The Master Servicer shall voluntarily go into
liquidation, consent to the appointment of a conservator, receiver,
liquidator or similar person in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or
substantially all of its property, or a decree or order of a court,
agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, liquidator or similar
person in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an
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assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(v) Any failure by the Seller (so long as the Seller is
the Master Servicer) or the Master Servicer, as the case may be, to pay
when due any amount payable by it under the terms of the Insurance
Agreement which continues unremedied for a period of three (3) Business
Days after the date upon which written notice of such failure shall
have been given to the Seller (so long as the Seller is the Master
Servicer) or the Master Servicer, as the case may be; or
(vi) Failure on the part of the Seller or the Master
Servicer to duly perform in any material respect any covenant or
agreement set forth in the Insurance Agreement, which failure continues
unremedied for a period of 30 days (5 days in the event of a failure to
enforce the CMAC PMI Policy) after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given
to the Seller or the Master Servicer (with a copy to the Indenture
Trustee), as the case may be, by the Bond Insurer; or
(vii) The occurrence of either of the following
additional events: (1) with respect to any Payment Date, the aggregate
Cumulative Loss Percentage with respect to the Mortgage Loans over the
prior twelve months is more than 1.25% of the aggregate Principal
Balance of the Mortgage Loans as of the first day of the first month of
such twelve month period, or (2) the Rolling Delinquency Percentage
with respect to the Mortgage Loans for any Payment Date is more than
5.75%;
then, (a) and in every such case, other than that set forth in (v), (vi) or
(vii) hereof, so long as a Servicing Default shall not have been remedied by the
Master Servicer, either the Issuer, subject to the direction of the Indenture
Trustee as pledgee of the Mortgage Loans, with the consent of the Bond Insurer,
or the Bond Insurer, or if a Bond Insurer Default exists, the holders of at
least 51% of the aggregate Bond Principal Balance of the Bonds, by notice then
given in writing to the Master Servicer (and to the Indenture Trustee and the
Issuer if given by the Bond Insurer) or (b) in the case of the events set forth
in (v), (vi) or (vii) hereof, the Bond Insurer or, if a Bond Insurer Default
exists, the holders of at least 51% of the aggregate Bond Principal Balance of
the Bonds may, by notice to the Master Servicer, terminate all of the rights and
obligations of the Master Servicer as servicer under this Servicing Agreement
other than its right to receive servicing compensation and expenses for
servicing the Mortgage Loans hereunder during any period prior to the date of
such termination and the Issuer, subject to the direction of the Indenture
Trustee as pledgee of the Mortgage Loans, with the consent of the Bond Insurer,
or the Bond Insurer may exercise any and all other remedies available at law or
equity. Any such notice to the Master Servicer shall also be given to each
Rating Agency, the Bond Insurer, the Company and the Issuer. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Servicing Agreement, whether with respect to
the Bonds or the Mortgage Loans or otherwise, shall pass to and be vested in the
Indenture Trustee, pursuant to and under this Section 6.01; and, without
limitation, the Indenture Trustee is hereby authorized and
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empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of each Mortgage Loan and related documents, or otherwise. The
Master Servicer agrees to cooperate with the Indenture Trustee in effecting the
termination of the responsibilities and rights of the Master Servicer hereunder,
including, without limitation, the transfer to the Indenture Trustee for the
administration by it of all cash amounts relating to the Mortgage Loans that
shall at the time be held by the Master Servicer and to be deposited by it in
the Collection Account, or that have been deposited by the Master Servicer in
the Collection Account or thereafter received by the Master Servicer with
respect to the Mortgage Loans. All reasonable costs and expenses (including, but
not limited to, attorneys' fees) incurred in connection with the succession as
Master Servicer, including amending this Servicing Agreement to reflect such
succession as Master Servicer pursuant to this Section 6.01 shall be paid by the
predecessor Master Servicer (or if the predecessor Master Servicer is the
Indenture Trustee, the initial Master Servicer) upon presentation of reasonable
documentation of such costs and expenses, and if not so paid by the predecessor
Master Servicer, shall be reimbursed by the Trust.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of any
late collection of a payment on a Mortgage Loan which was due prior to the
notice terminating the Master Servicer's rights and obligations hereunder and
received after such notice, that portion to which the Master Servicer would have
been entitled pursuant to Sections 3.07 and 3.15 as well as its Servicing Fee in
respect thereof, and any other amounts payable to the Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 6.01(i) or under Section 6.01(ii) after the applicable grace
periods specified in such Sections, shall not constitute a Servicing Default if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Master Servicer and such delay or failure was caused by an act
of God or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes, floods or similar causes. The preceding sentence shall not relieve
the Master Servicer from using reasonable efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Servicing
Agreement and the Master Servicer shall provide the Indenture Trustee, the Bond
Insurer and the Bondholders with notice of such failure or delay by it, together
with a description of its efforts to so perform its obligations. The Master
Servicer shall immediately notify the Indenture Trustee, the Bond Insurer and
the Owner Trustee in writing of any Servicing Default.
Section 6.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a)
On and after the time the Master Servicer receives a notice of termination
pursuant to Section 6.01 or sends a notice pursuant to Section 5.04, the
Indenture Trustee on behalf of the Bondholders and the Bond Insurer shall be the
successor in all respects to the Master Servicer in its capacity as servicer
under this Servicing Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof, including but not limited to the provisions of Article VIII. Nothing
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in this Servicing Agreement shall be construed to permit or require the
Indenture Trustee to (i) succeed to the responsibilities, duties and liabilities
of the initial Master Servicer in its capacity as the Seller under the Mortgage
Loan Sale and Contribution Agreement, (ii) be responsible or accountable for any
act or omission of the Master Servicer prior to the effectiveness of the Master
Servicer's termination hereunder, (iii) require or obligate the Indenture
Trustee, in its capacity as successor Master Servicer, to purchase, repurchase
or substitute any Mortgage Loan, (iv) fund any losses on any Eligible Investment
directed by any other Master Servicer, or (v) be responsible for the
representations and warranties of the Master Servicer; PROVIDED, HOWEVER, that
the Indenture Trustee, as successor Master Servicer, shall be required to make
any Advances to the extent that the Master Servicer failed to make such
Advances, to the extent such Advance is not determined by the Indenture Trustee
to be nonrecoverable. As compensation therefor, the Indenture Trustee shall be
entitled to such compensation as the Master Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Indenture Trustee is unwilling to act as successor Master
Servicer, or (ii) if the Indenture Trustee is legally unable so to act, the
Indenture Trustee on behalf of the Bondholders and the Bond Insurer may (in the
situation described in clause (i)) or shall (in the situation described in
clause (ii)) appoint or petition a court of competent jurisdiction to appoint
any established housing and home finance institution, bank or other mortgage
loan servicer having a net worth of not less than $10,000,000 as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder;
PROVIDED, that any such successor Master Servicer shall be acceptable to the
Bond Insurer, as evidenced by the Bond Insurer's prior written consent and
provided further that the appointment of any such successor Master Servicer will
not result in the qualification, reduction or withdrawal of the ratings assigned
to the Bonds by the Rating Agencies without taking the Bond Insurance Policy
into account. Pending appointment of a successor to the Master Servicer
hereunder, unless the Indenture Trustee is prohibited by law from so acting, the
Indenture Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the successor shall be entitled
to receive compensation out of payments on Mortgage Loans in an amount equal to
the compensation which the Master Servicer would otherwise have received
pursuant to Section 3.15 (or such lesser compensation as the Indenture Trustee
and such successor shall agree). The appointment of a successor Master Servicer
shall not affect any liability of the predecessor Master Servicer which may have
arisen under this Servicing Agreement prior to its termination as Master
Servicer (including, without limitation, the obligation to purchase Mortgage
Loans pursuant to Section 3.01, to pay any deductible under an insurance policy
pursuant to Section 3.11 or to indemnify the Indenture Trustee pursuant to
Section 5.06), nor shall any successor Master Servicer be liable for any acts or
omissions of the predecessor Master Servicer or for any breach by such Master
Servicer of any of its representations or warranties contained herein or in any
related document or agreement. The Indenture Trustee and such successor shall
take such action, consistent with this Servicing Agreement, as shall be
necessary to effectuate any such succession.
(b) Any successor, including the Indenture Trustee on behalf of the
Bondholders, to the Master Servicer as servicer shall during the term of its
service as servicer (i) continue to service and administer the Mortgage Loans
for the benefit of the Bondholders and the Bond Insurer, (ii) maintain in force
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Master Servicer hereunder and a fidelity bond
in respect of
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its officers, employees and agents to the same extent as the Master Servicer is
so required pursuant to Section 3.11(g).
(c) Any successor Master Servicer, including the Indenture Trustee on
behalf of the Bondholders, shall not be deemed to be in default or to have
breached its duties hereunder if the predecessor Master Servicer shall fail to
deliver any required deposit to the Collection Account or otherwise cooperate
with any required servicing transfer or succession hereunder.
Section 6.03. NOTIFICATION TO BONDHOLDERS. Upon any termination or
appointment of a successor to the Master Servicer pursuant to this Article VI or
Section 5.04, the Indenture Trustee shall give prompt written notice thereof to
the Bondholders, the Bond Insurer, the Owner Trustee, the Company, the Issuer
and each Rating Agency.
Section 6.04. WAIVER OF DEFAULTS. The Indenture Trustee shall transmit
by mail to all Bondholders and the Bond Insurer, within 10 days after the
occurrence of any Servicing Default known to the Indenture Trustee, unless such
Servicing Default shall have been cured, notice of each such Servicing Default
hereunder known to a Responsible Officer of the Indenture Trustee. The Bond
Insurer or if a Bond Insurer Default exists, the holders of at least 51% of the
aggregate Bond Principal Balance of the Bonds may waive any default by the
Master Servicer in the performance of its obligations hereunder and the
consequences thereof, except a default in the making of or the causing to be
made any required distribution on the Bonds. Upon any such waiver of a past
default, such default shall be deemed to cease to exist, and any Servicing
Default arising therefrom shall be deemed to have been timely remedied for every
purpose of this Servicing Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived. The Master Servicer shall give notice of any such
waiver to the Rating Agencies.
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ARTICLE VII
Miscellaneous Provisions
Section 7.01. AMENDMENT. This Servicing Agreement may be amended from
time to time by the parties hereto, provided that any amendment be accompanied
by a letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to the Bonds or the rating
then assigned to the Bonds without taking into account the Bond Insurance
Policy, and the consent of the Bond Insurer and the Indenture Trustee.
Section 7.02. GOVERNING LAW. THIS SERVICING AGREEMENT 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 7.03. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
when delivered to:
(a) in the case of the Master Servicer: Impac Funding Corporation
20371 Irvine Avenue
Santa Ana Heights, CA 92707
Attention: Mary Glass-Schannault
(b) in the case of the Bond Insurer: Ambac Assurance Corporation
One State Street Plaza
New York, NY 10004
Attention: Structured Finance --
Mortgage Backed Securities
(c) in the case of Rating Agencies: Moody's Investors Service, Inc.
4th Floor
99 Church Street
New York, NY 10007
Attention: Residential Mortgage
Monitoring Unit
Standard & Poor's - a division of
The McGraw-Hill Companies, Inc.
55 Water Street - 41st Floor,
New York, New York 10041
Attention: Asset Backed
Surveillance Group
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(d) in the case of the Owner Trustee,
the Corporate Trust Office: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust
Administration
(e) in the case of the Issuer,
to Impac CMB Trust Series 1999-2: c/o IMH Assets Corp.
1401 Dove Street
Newport Beach, California 92660
Attention: Richard Johnson
(f) in the case of the Indenture Trustee: 3 Park Plaza, 16th Floor
Irvine, California 92614
Attention: Impac CMB Trust
Series 1999-2
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party. Any notice required or permitted to be
mailed to a Bondholder shall be given by first class mail, postage prepaid, at
the address of such Bondholder as shown in the Bond Register. Any notice so
mailed within the time prescribed in this Servicing Agreement shall be
conclusively presumed to have been duly given, whether or not the Bondholder
receives such notice. Any notice or other document required to be delivered or
mailed by the Indenture Trustee to any Rating Agency shall be given on a
reasonable efforts basis and only as a matter of courtesy and accommodation and
the Indenture Trustee shall have no liability for failure to deliver such notice
or document to any Rating Agency.
Section 7.04. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Servicing 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 Servicing Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Servicing
Agreement or of the Bonds or the rights of the Bondholders thereof.
Section 7.05. THIRD-PARTY BENEFICIARIES. This Servicing Agreement will
inure to the benefit of and be binding upon the parties hereto, the Bondholders,
the Bond Insurer, the Owner Trustee, the Indenture Trustee and their respective
successors and permitted assigns. Except as otherwise provided in this Servicing
Agreement, no other Person will have any right or obligation hereunder. The
Indenture Trustee shall have the right to exercise all rights of the Issuer
under this Agreement.
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Section 7.06. 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 7.07. 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 7.08. TERMINATION. The respective obligations and
responsibilities of the Master Servicer and the Issuer created hereby shall
terminate upon the satisfaction and discharge of the Indenture pursuant to
Section 4.10 thereof.
Section 7.09. NO PETITION. The Master Servicer, by entering into this
Servicing Agreement, hereby covenants and agrees that it will not at any time
institute against the Issuer, or join in any institution against the Issuer, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations of the Issuer. This section shall
survive the termination of this Servicing Agreement by one year.
Section 7.10. NO RECOURSE. The Master Servicer acknowledges that no
recourse may be had against the Issuer, except as may be expressly set forth in
this Servicing Agreement.
ARTICLE VIII
DUTIES OF THE MASTER SERVICER
Section 8.01. ADMINISTRATIVE DUTIES. (a) DUTIES WITH RESPECT
TO THE INDENTURE. The Master Servicer shall perform all its duties and the
duties of the Issuer under the Indenture. In addition, the Master Servicer shall
consult with the Owner Trustee as the Master Servicer deems appropriate
regarding the duties of the Issuer under the Indenture. The Master Servicer
shall monitor the performance of the Issuer and shall advise the Owner Trustee
when action is necessary to comply with the Issuer's duties under the Indenture.
The Master Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture. In furtherance of
the foregoing, the Master Servicer shall take all necessary action that is the
duty of the Issuer to take pursuant to the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Master Servicer
set forth in this Servicing Agreement or any of the Basic Documents, the Master
Servicer shall perform such calculations and shall prepare for execution by the
Issuer or the Owner Trustee or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer or the Owner Trustee to prepare,
file
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or deliver pursuant to this Servicing Agreement or any of the Basic Documents or
under state and federal tax and securities laws, and at the request of the Owner
Trustee or the Bond Insurer shall take all appropriate action that it is the
duty of the Issuer to take pursuant to this Servicing Agreement or any of the
Basic Documents. In accordance with the directions of the Issuer, the Bond
Insurer or the Owner Trustee, the Master Servicer shall administer, perform or
supervise the performance of such other activities in connection with the Bonds
(including the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Issuer, the Bond Insurer, the
Indenture Trustee or the Owner Trustee and are reasonably within the capability
of the Master Servicer.
(ii) Notwithstanding anything in this Servicing
Agreement or any of the Basic Documents to the contrary, the Master Servicer
shall be responsible for promptly notifying the Owner Trustee and the Bond
Insurer in the event that any withholding tax is imposed on the Issuer's
payments (or allocations of income) to an Owner (as defined in the Trust
Agreement) as contemplated in Section 5.03 of the Trust Agreement. Any such
notice shall be in writing and specify the amount of any withholding tax
required to be withheld by the Owner Trustee pursuant to such provision.
(iii) In carrying out the foregoing duties or any of
its other obligations under this Servicing Agreement, the Master Servicer may
enter into transactions with or otherwise deal with any of its Affiliates;
PROVIDED, HOWEVER, that the terms of any such transactions or dealings shall be
in accordance with any directions received from the Issuer and shall be, in the
Master Servicer's opinion, no less favorable to the Issuer in any material
respect than with terms made available to unrelated third-parties.
(c) TAX MATTERS. The Indenture Trustee shall prepare and file
(or cause to be prepared and filed), on behalf of the Owner Trustee, all tax
returns and information reports, tax elections, financial statements and such
annual or other reports of the Issuer as are necessary for preparation of tax
returns and information reports as provided in Section 5.03 of the Trust
Agreement, including without limitation Form 1099.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in
the reasonable judgment of the Master Servicer are non-ministerial, the Master
Servicer shall not take any action pursuant to this Article VIII unless within a
reasonable time before the taking of such action, the Master Servicer shall have
notified the Owner Trustee, the Bond Insurer and the Indenture Trustee of the
proposed action and the Owner Trustee, the Bond Insurer and, with respect to
items (A), (B), (C) and (D) below, the Indenture Trustee shall not have withheld
consent or provided an alternative direction. For the purpose of the preceding
sentence, "non-ministerial matters" shall include:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer (other than in connection
with the collection of the Mortgage Loans);
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(C) the amendment, change or modification of this
Agreement or any of the Basic Documents;
(D) the appointment of successor Certificate Paying
Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Servicers or the
consent to the assignment by the Certificate Registrar, Paying
Agent or Indenture Trustee of its obligations under the
Indenture; and
(E) the removal of the Indenture Trustee.
Section 8.02. RECORDS. The Master Servicer shall maintain
appropriate books of account and records relating to services performed under
this Servicing Agreement, which books of account and records shall be accessible
for inspection by the Issuer and the Bond Insurer at any time during normal
business hours.
Section 8.03. ADDITIONAL INFORMATION TO BE FURNISHED. The
Master Servicer shall furnish to the Issuer, the Indenture Trustee and the Bond
Insurer from time to time such additional information regarding the Bonds as the
Issuer, the Indenture Trustee or the Bond Insurer shall reasonably request.
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IN WITNESS WHEREOF, the Master Servicer, the Issuer and the Indenture
Trustee have caused this Servicing Agreement to be duly executed by their
respective officers or representatives all as of the day and year first above
written.
IMPAC FUNDING CORPORATION,
as Master Servicer
By:
-----------------------------------
Name: Mary Glass-Schannault
Title: Executive Vice President
IMPAC CMB TRUST SERIES 1999-2,
as Issuer
Wilmington Trust Company, not in its
capacity but solely as Owner Trustee
By:
-----------------------------------
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.
as Indenture Trustee
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
(provided upon request)
<PAGE>
EXHIBIT B
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Mortgage Loans, we request the
release of the Mortgage File described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Other
Mortgage Loan Repurchased
Please deliver the Mortgage File to:__________________________________________
______________________________________________________________________________
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Servicing Agreement."
- -------------------------------------
[Name of Master Servicer]
Authorized Signature
******************************************************************
TO CUSTODIAN/Indenture Trustee: Please acknowledge this request, and check off
documents being enclosed with a copy of this form. You should retain this form
for your files in accordance with the terms of the Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or
Deed of Trust
[ ] Title Insurance Policy
[ ] Other: ___________________________
- ---------------------
Name
- ---------------------
Title
- ---------------------
Date
B-1
