IMPAC CMB TRUST SERIES 1998-2
Issuer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Indenture Trustee
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INDENTURE
Dated as of March 27, 1998
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COLLATERALIZED ASSET-BACKED BONDS
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TABLE OF CONTENTS
SECTION PAGE
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.........................................................12
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.........................................................................15
3.19. NO BORROWING..............................................................................15
3.20. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.........................................15
3.21. CAPITAL EXPENDITURES......................................................................15
3.22. [Reserved]................................................................................16
3.23. RESTRICTED PAYMENTS.......................................................................16
3.24. NOTICE OF EVENTS OF DEFAULT...............................................................16
3.25. FURTHER INSTRUMENTS AND ACTS..............................................................16
3.26. [RESERVED]................................................................................16
3.27. ALLOCATION OF REALIZED LOSSES.............................................................16
ARTICLE IV
The Bonds; Satisfaction and Discharge of Indenture
4.01. THE BONDS.................................................................................17
4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF BONDS;
APPOINTMENT OF BOND REGISTRAR AND CERTIFICATE REGISTRAR...................................17
4.03. MUTILATED, DESTROYED, LOST OR STOLEN BONDS................................................18
4.04. PERSONS DEEMED OWNERS.....................................................................19
4.05. CANCELLATION..............................................................................19
4.06. BOOK-ENTRY BONDS..........................................................................20
4.07. NOTICES TO DEPOSITORY.....................................................................20
4.08. DEFINITIVE BONDS..........................................................................21
4.09. TAX TREATMENT.............................................................................21
4.10. SATISFACTION AND DISCHARGE OF INDENTURE...................................................21
4.11. APPLICATION OF TRUST MONEY................................................................22
4.12. REPAYMENT OF MONIES HELD BY PAYING AGENT..................................................23
4.13. TEMPORARY BONDS...........................................................................23
ARTICLE V
DEFAULT AND REMEDIES
5.01. EVENTS OF DEFAULT.........................................................................24
5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT........................................24
5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE
.........................................................................................24
5.04. REMEDIES; PRIORITIES......................................................................27
5.05. OPTIONAL PRESERVATION OF THE TRUST ESTATE.................................................28
5.06. LIMITATION OF SUITS.......................................................................29
5.07. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND INTEREST
.........................................................................................29
5.08. RESTORATION OF RIGHTS AND REMEDIES........................................................29
5.09. RIGHTS AND REMEDIES CUMULATIVE............................................................30
5.10. DELAY OR OMISSION NOT A WAIVER............................................................30
5.11. CONTROL BY BONDHOLDERS....................................................................30
5.12. WAIVER OF PAST DEFAULTS...................................................................31
5.13. UNDERTAKING FOR COSTS.....................................................................31
5.14. WAIVER OF STAY OR EXTENSION LAWS..........................................................31
5.15. SALE OF TRUST ESTATE......................................................................31
5.16. ACTION ON BONDS...........................................................................33
ARTICLE VI
THE INDENTURE TRUSTEE
6.01. DUTIES OF INDENTURE TRUSTEE...............................................................35
6.02. RIGHTS OF INDENTURE TRUSTEE...............................................................36
6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE....................................................36
6.04. INDENTURE TRUSTEE'S DISCLAIMER............................................................36
6.05. NOTICE OF EVENT OF DEFAULT................................................................37
6.06. REPORTS BY INDENTURE TRUSTEE TO HOLDERS...................................................37
6.07. COMPENSATION AND INDEMNITY................................................................37
6.08. REPLACEMENT OF INDENTURE TRUSTEE..........................................................37
6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER.....................................................38
6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE.........................39
6.11. ELIGIBILITY; DISQUALIFICATION.............................................................40
6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER..........................................40
6.13. REPRESENTATIONS AND WARRANTIES............................................................40
6.14. DIRECTIONS TO INDENTURE TRUSTEE...........................................................41
6.15. THE AGENTS................................................................................41
ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS
.........................................................................................42
7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS................................42
7.03. REPORTS OF ISSUER.........................................................................42
7.04. REPORTS BY INDENTURE TRUSTEE..............................................................43
7.05. STATEMENTS TO BONDHOLDERS.................................................................43
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
8.01. COLLECTION OF MONEY.......................................................................46
8.02. TRUST ACCOUNTS............................................................................46
8.03. OFFICER'S CERTIFICATE.....................................................................46
8.04. TERMINATION UPON DISTRIBUTION TO BONDHOLDERS..............................................47
8.05. RELEASE OF TRUST ESTATE...................................................................47
8.06. SURRENDER OF BONDS UPON FINAL PAYMENT.....................................................47
8.07. OPTIONAL REDEMPTION OF THE BONDS..........................................................47
ARTICLE IX
SUPPLEMENTAL INDENTURES
9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS....................................49
9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.......................................50
9.03. EXECUTION OF SUPPLEMENTAL INDENTURES......................................................51
9.04. EFFECT OF SUPPLEMENTAL INDENTURE..........................................................52
9.05. CONFORMITY WITH TRUST INDENTURE ACT.......................................................52
9.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.............................................52
ARTICLE X
MISCELLANEOUS
10.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.................................................53
10.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE..........................................54
10.03. ACTS OF BONDHOLDERS.......................................................................55
10.04. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING AGENCIES...........................55
10.05. NOTICES TO BONDHOLDERS; WAIVER............................................................56
10.06. CONFLICT WITH TRUST INDENTURE ACT.........................................................57
10.07. EFFECT OF HEADINGS........................................................................57
10.08. SUCCESSORS AND ASSIGNS....................................................................57
10.09. SEPARABILITY..............................................................................57
10.10. BENEFITS OF INDENTURE.....................................................................57
10.11. LEGAL HOLIDAYS............................................................................57
10.12. GOVERNING LAW.............................................................................57
10.13. COUNTERPARTS..............................................................................58
10.14. RECORDING OF INDENTURE....................................................................58
10.15. ISSUER OBLIGATION.........................................................................58
10.16. NO PETITION...............................................................................58
10.17. INSPECTION................................................................................58
Signatures and Seals ......................................................................................... 59
Acknowledgments .............................................................................................. 60
EXHIBITS
Exhibit A-1 - Form of Class A Bonds
Exhibit A-2 - Form of Class M Bonds
Exhibit A-3 - Form of Class B Bonds
Exhibit B - Trustee's Initial Certification
Exhibit C - Trustee's Final Certification
Exhibit D - Mortgage Loan Schedule
Exhibit E - Certificate of Non-Foreign Status
Appendix A Definitions
This Indenture, dated as of March 27, 1998, between Impac CMB
Trust Series 1998-2, 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 1998-2 (the "Bonds").
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, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created by (a) the Mortgage Loans, 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); 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, Bonds, 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, 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.
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, instru ment 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
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
Exhibits A-1 through A-3, 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 Exhibits A-1 through A-3 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 Class A, Class M-1, Class M-2, Class M-3 and Class B Bonds for
original issue in an aggregate initial principal amount of $220,158,539.00.
Each Class of 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. No later than 45 days
after the Closing Date (or, with respect to any
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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 Closing Date, promptly thereafter), the Indenture Trustee agrees,
for the benefit of the Bondholders, 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 B. 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 D 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 D 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, 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 C. 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 D 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 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 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 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 Inden ture 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 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 successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the
7
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 Bondholders and to other
Persons the Interest Remittance Amount and Principal Remittance Amount. Interest
on the Bonds will be calculated on the basis of a 30-day month and a 360-day
year.
(b) On each Payment Date, the Interest Remittance Amount shall
be distributed in the following order of priority, in each case to the extent of
the then remaining Interest Remittance Amount:
(i) first, to the Bondholders, on a pro rata basis,
Accrued Bond Interest thereon for such Payment Date, plus any Unpaid
Interest Shortfalls thereon remaining unpaid from any previous Payment
Date; provided, that any if the Interest Remittance Amount is
insufficient to pay the Bondholders in full any Accrued Bond Interest
thereon, the amount of such shortfall shall be allocated first, to the
Class B Bonds, second, to the Class M-3 Bonds, third to the Class M-2
Bonds, fourth, to the Class M-1 Bonds and fifth, to the Class A Bonds;
(ii) second, to the Bondholders in the following
order: first, to the Class A Bonds, second, to the Class M-1 Bonds,
third, to the Class M-2 Bonds, fourth, to the Class M-3 Bonds, and
fifth, to the Class B Bonds, in each case in respect of the principal
portion of any Realized Losses to be allocated thereto on such Payment
Date, or previously allocated thereto on any prior Payment Date, until
the amount of such losses has been fully reimbursed;
(iii) third, to the Certificate Paying Agent on
behalf of the Certificateholders.
(c) On each Payment Date the Principal Remittance Amount shall
be distributed in the following order of priority, in each case to the extent of
the then remaining Principal Remittance Amount, as follows:
(i) first, to the Bondholders on a pro rata basis,
based on the then-current Bond Principal Balances thereof, an amount
equal to the Bond Principal Distribution Amount, in reduction of the
Bond Principal Balances thereof, until reduced to zero; and
(ii) second, to the Certificate Paying Agent on
behalf of the Certificateholders.
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(d) 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.
(e) 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.
(f) 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 and such Holder holds Bonds
of an aggregate initial Bond Principal Balance of at least $5,000,000, 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.
(g) 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 Exhibits A-1 through A-3. 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.
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.
9
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 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 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.
(b) On or before April 15 in each calendar year, beginning in 1999, the
Issuer shall furnish to the Indenture Trustee 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, rerecording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite
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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 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 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
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 Indenture Trustee;
(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
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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 other wise
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.
Section 3.10. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Indenture Trustee, 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 1998), an Officer's Certificate stating, as to
the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during
such year and of its performance under this Indenture has been made
under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions and
covenants under 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
representations and warranties were made directly to the Indenture Trustee. If
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 of such
finding and the Seller's obligation to cure such defect or repurchase or
substitute for the related Mortgage Loan.
Section 3.13. AMENDMENTS TO SERVICING AGREEMENT. The Issuer covenants
with the Inden ture Trustee 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
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the Mortgage Loans, may decline to enter into or consent to any such supplement
or amendment if the 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 agent
and bailee of the Indenture Trustee in holding amounts on deposit in the
Collection Account, as well as its agent and 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 agency, 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 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 Trustee,
in form reasonably satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Bonds and to
the Certificate Paying Agent, on behalf of 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;
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(iv the Issuer 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;
and
(vi) the Issuer shall have delivered to the Indenture
Trustee 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).
(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
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 trans
ferred shall be subject and subordinate to the rights of the Holders of
the Bonds, (D) unless otherwise provided in such supplemental
indenture, expressly agree to indemnify, defend and hold harmless the
Issuer 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 to be
reduced, suspended or withdrawn or to be considered by any Rating
Agency to be below investment grade;
(iv) the Issuer 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
14
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;
and
(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).
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.
(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 of such conveyance or transfer.
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.
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).
15
Section 3.22. [Reserved]
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 to the Owner Trustee
and the Certificateholders as contemplated by, and to the extent funds are
available for such purpose under this Indenture and the Trust 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 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, 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. [RESERVED].
Section 3.27. ALLOCATION OF REALIZED LOSSES. On each Payment Date, the
principal portion of Realized Losses will be allocated as follows: first, to the
Class C-3 Certificates; second, to the Class C-2 Certificates; third to the
Class C-1 Certificates; fourth to the Class B Bonds; fifth, to the Class M-3
Bonds; sixth to the Class M-2 Bonds; seventh, to the Class M-1 Bonds; and
eighth, to the Class A Bonds, in each case in reduction of the Certificate
Principal Balance or Bond Principal Balance thereof, until such Certificate
Principal Balance or Bond Principal Balance has been reduced to zero. Except as
provided in the following sentence, any allocation of the principal portion of
Realized Losses (other than Debt Service Reductions) to a Class of Certificates
or Bonds shall be made by reducing the Certificate Principal Balance or Bond
Principal Balance thereof, as applicable, by the amount so allocated, which
allocation shall be deemed to have occurred on such Payment Date. Any allocation
of the principal portion of Realized Losses (other than Debt Service Reductions)
to the class of Class C Certificates then outstanding with the highest numerical
designation shall be made by operation of the definition of "Certificate
Principal Balance" and by operation of the provisions of Section 3.05.
Allocations of the principal portion of Debt Service Reductions shall be made by
operation of the provisions of Section 3.05. All Realized Losses and all other
losses allocated to a class of Certificates or class of Bonds hereunder will be
allocated among the Certificates or Bonds of such class in proportion to the
Certificate Percentage Interests or Percentage Interests, as applicable,
evidenced thereby.
16
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 desig nated 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 inte gral 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.
17
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 Bond holder 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.
No Person shall become a Class B Bondholder until it shall establish
its non-foreign status by submitting to the Bond Registrar an IRS Form W-9 and
the Certificate of Non-Foreign Status in the form set forth in Exhibit E hereto,
acceptable to and in form and substance reasonably satisfactory to the Bond
Registrar and the Company, which certificate shall not be an expense of the
Trust, the Owner Trustee, the Bond Registrar, the Master Servicer or the
Company. If the Bondholder is unable to provide a Certificate of Non-Foreign
Status, the Bondholder must provide an Opinion of Counsel as to the non-foreign
status of such Person which Opinion of Counsel shall not be an expense of the
Trust, the Owner Trustee, the Indenture Trustee, the Bond Registrar, the Master
Servicer or the Company. The Class B Bondholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trust, the Owner Trustee, the
Bond Registrar, the Servicer and the Company 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. So long as the Class B Bonds are Book-Entry Bonds, any
purchaser of a Class B Bond will be deemed to have represented by such purchase
that such purchaser is a U.S. Person under the Code and otherwise complied with
this paragraph.
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 and the Indenture Trustee
18
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 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
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer 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 Indenture Trustee and any
agent of the Issuer 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 Indenture Trustee nor any agent of the
Issuer 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
19
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 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
20
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 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 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
21
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
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 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
(C) the Issuer has delivered to the Indenture Trustee 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, as applicable, as
the Indenture Trustee may determine, to the Holders of Securities, of all sums
due and to become
22
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. 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 Paying Agent shall be released from all further
liability with respect to such monies.
Section 4.13. 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, 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, 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 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, the Holders of Bonds representing a majority of
the Bond Principal Balances of all Bonds, 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 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.
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.
24
(a) The Issuer covenants that if (i) default is made in the payment of
any interest (including the Interest Remittance Amount) 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 (including the
Principal Remittance Amount) 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, pay to the Indenture Trustee, for the benefit of the Holders
of Bonds, 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, disburse ments 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, 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, 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, by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the 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, irrespective of whether the
principal of any Bonds shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, 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
25
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) 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 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 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, 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.
(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 Bond
holder 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 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 (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall
26
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 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 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
(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 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 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 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 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:
FIRST: to the Indenture Trustee for amounts due under Section
6.07 hereof;
27
SECOND: 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 Interest Remittance
Amount but not any Unpaid Interest Shortfalls) from amounts
available in the Trust Estate for the Bondholders;
THIRD: to Bondholders for amounts due and unpaid on the Bonds
with respect to principal (including, but not limited to,
any Bond Principal Distribution Amount), from amounts
available in the Trust Estate for such Bondholders, 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;
FOURTH: to the Bondholders for amounts due and unpaid on the
Bonds with respect to any Unpaid Interest Shortfalls, 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
FIFTH: 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.
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, 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 shall 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, and the Indenture
Trustee 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.
28
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; and
(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.
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
29
adversely to the Indenture Trustee or to such Bondholder, then and in every such
case the Issuer, the Indenture Trustee 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 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 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 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 or to the Bondholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Bondholders, as
the case may be.
Section 5.11. CONTROL BY BONDHOLDERS. The Holders of a majority of the
Bond Principal Balances of Bonds 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) 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 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) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent with
such direction.
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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 Holders of Bonds of not less than a majority of the Bond Principal Balances
of the Bonds 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 or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Bond. 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.
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
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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 shall have been paid. The Indenture Trustee 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 Holders of all Bonds, consent to or direct the
Indenture Trustee to make, such Sale, or
(2) the proceeds of such Sale would not be less than the
entire amount which would be payable to the Bondholders under the Bonds on the
Payment Date next succeeding the date of such Sale; or
(3) the Indenture Trustee determines, 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 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 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 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 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
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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 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 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 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 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 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.
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(b) The Indenture Trustee, as pledgee of the Mortgage Loans, may, and
at the direction (which direction shall be in writing or by telephone (confirmed
in writing promptly thereafter)) of 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
35
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
mail to each Bondholder notice of the Event of Default within 10 days 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. 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.
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 in
excess of such amount shall be paid solely as provided in a separate agreement
between the Indenture Trustee and the Master Servicer. 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, negli
gence 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. 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. The Holders of a
37
majority of Bond Principal Balances of the Bonds may remove the Indenture
Trustee by so notifying the Indenture Trustee and may appoint a successor
Indenture Trustee. The Issuer shall 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 promptly appoint a successor Indenture
Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee 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 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.
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 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;
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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 meet ing 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, 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 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 no notice to
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;
(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
39
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 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 organization 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
40
(iv) To the Indenture Trustee's best 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;
(b) to authenticate and deliver the Bonds substantially in the form
prescribed by Exhibits A-1 through A-3 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 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.
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
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 this Section 7.03(a) and by rules and regulations prescribed
from time to time by the Commission.
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(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 March 27 beginning with March 27, 1999, the
Indenture Trustee shall mail to each Bondholder as required by TIA ss. 313(c) 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 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 Depositor, the Owner Trustee, the Certificate Paying Agent and
each Rating Agency, a statement setting forth the following information as to
each Class of Bonds and Certificates, to the extent applicable:
(i) the aggregate amount of collections with respect to
the Mortgage Loans;
(ii) the Interest Remittance Amount, Principal Remittance
Amount and Bond Principal Distribution Amount payable to the
Bondholders and Certificates for such Payment Date, and the aggregate
Unpaid Interest Shortfalls for all prior Payment Dates;
(iii) (a) the amount of such distribution to the Holders of
each Class of Bonds applied to reduce the Bond Principal Balance
thereof, and (b) the aggregate amount included therein representing
Principal Prepayments;
(iv) (a) the amount of such distribution to the Holders of
each Class of Class C Certificates applied to reduce the Certificate
Principal Balance thereof, and (b) the aggregate amount included
therein representing Principal Prepayments;
(v) the amount of such distribution to Holders of such
Class of Bonds allocable to interest;
(vi) the amount of such distribution to Holders of such
Class of Certificates allocable to interest;
(vii) if the distribution to the Holders of any Class of
Bonds or Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds available
therefor, the amount of the shortfall;
(viii) the number and the aggregate Stated Principal Balance
of the Mortgage Loans after giving effect to the distribution of
principal on such Payment Date;
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(ix) the aggregate Bond Principal Balance of each Class 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 aggregate Certificate Principal Balance of each
Class of Class C Certificates, 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 Certificate Principal
Balance of all of the Certificates after giving effect to the
distribution of principal on such Payment Date;
(xi) the Certificate Interest Rate on each Class of
Certificates,
(xii) the Notional Amount of the Class X Certificates,
after giving effect to the amounts distributed on such Payment Date,
(xiii) 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 preceding Due Period; PROVIDED, HOWEVER, that such information will
not be provided on the statements relating to the first Payment Date;
(xiv) the amount of any Advances and Compensating Interest
payments;
(xv) the aggregate Realized Losses with respect to the
related Payment Date and cumulative Realized Losses since the Closing
Date;
(xvi) 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;
(xvii) the book value of any REO Property; and
(xviii) 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), (iv), (v), (vi), (vii), (ix), (x) and (xii) above shall be
presented on the basis of a Bond or Certificate, as applicable, having a $1,000
denomination. In addition, by January
31
of each calendar year following any year during which 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), (v) and (vii) with respect to the Bonds
for such calendar year.
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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, 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 pursuant to the Servicing Agreement and all deposits therein
pursuant to this Indenture are for the benefit of the Bondholders. The amount of
any losses incurred with respect to any such investments shall be deposited in
the Payment Account by the Master Servicer.
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 and payment to the Owner Trustee
of the Owner 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.
Section 8.03. OFFICER'S CERTIFICATE. The Indenture Trustee shall
receive at least seven 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
46
to complete the same, and concluding that all conditions precedent to the taking
of such action have been complied with.
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 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 and (ii) all sums due to the Indenture Trustee pursuant to this
Indenture 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.
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 20% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date or (ii)
the Payment Date occurring in March 2008. 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), plus an amount sufficient to pay in full all amounts owing to the
Indenture Trustee under this Indenture (which amounts shall be specified in
writing upon request of the Issuer by the Indenture Trustee).
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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 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) and 3.05(c) 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 prior notice to the
Rating Agencies, 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;
(vi) 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
(vii) 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;
49
provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
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 prior notice to the Rating Agencies, 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 shall not, as evidenced by an
Opinion of Counsel, (i) adversely affect in any material respect the interests
of any Bondholder or (ii) 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 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 provisions
of this Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;
50
(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, 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.
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,
51
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 require ments 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 Inden ture
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 (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 an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of 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.
(ii) Whenever the Issuer is required to furnish to
the Indenture Trustee an Officer's Certificate certifying or stating the opinion
of any signer thereof as to the matters
53
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 to the Issuer 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 to the Issuer 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 an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days of
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 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 such
factual matters is in the possession of the Seller or the Issuer, unless such
counsel knows, or
54
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
55
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 1998-2, 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.
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, (ii) in the case of DCR, at the
following address: Duff & Phelps Credit Rating Co., 55 East Monroe Street, 38th
Floor, Chicago, Illinois 60603, Attention of Asset Backed Surveillance
Department and (iii) in the case of Fitch, at the following address: Fitch IBCA,
One State Street Plaza, 33rd Floor, New York, New York 10004, 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.
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.
56
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. 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, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
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,
57
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
(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 institute against the Depositor or the
Issuer, or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Bonds, this
Indenture or any of the Basic Documents. This Section 10.16 will survive for one
year following the termination of this Indenture.
Section 10.17. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, 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
58
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and Independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Indenture Trustee shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
59
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 1998-2, as Issuer
Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee
By: /s/Patricia A. Evans
---------------------------------------------
Name: Patricia A. Evans
Title: Financial Services Officer
Bankers Trust Company of California, N.A.,
as Indenture Trustee
By: /s/Melanie Anbarci
---------------------------------------------
Name: Melanie Anbarci
Title: Assistant Secretary
Bankers Trust Company of California, N.A.
hereby accepts the appointment as Certificate
Paying Agent pursuant to Section 3.10 of
the Trust Agreement and as Certificate
Registrar pursuant to Section 4.02 hereof.
By: /s/Melanie Anbarci
-----------------------------------------
Name: Melanie Anbarci
Title: Assistant Secretary
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this 27th day of March, 1998, 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
/s/Kathleen A. Pedelini
-----------------------------------
NOTARY PUBLIC
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 27th day of March, 1998, before me personally appeared Melanie
Anbarci to me known, who being by me duly sworn, did depose and say, that she is
the Assistant Secretary 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
/s/Azusa Tice
--------------------------------------------
NOTARY PUBLIC
[NOTARIAL SEAL]
EXHIBIT A-1
FORM OF CLASS A 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 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 1998-2
COLLATERALIZED ASSET-BACKED BONDS
CLASS A
AGGREGATE BOND PRINCIPAL BOND INTEREST RATE:____%
BALANCE:$
INITIAL BOND PRINCIPAL
BALANCE OF THIS BOND: BOND NO.
$
PERCENTAGE INTEREST: ____% CUSIP NO.
Impac CMB Trust Series 1998-2 (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 April 1998 and ending on or before the
Payment Date occurring in
(the "Stated Maturity") and to pay interest on the Bond Principal
Balance of this Class A 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 1998-2 (the "Bonds"), issued under an
Indenture dated as of March 27, 1998 (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.
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 Bond
Principal Distribution 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.
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 20% of the aggregate Principal Balance of the Mortgage Loans as of the
Cut-off Date and (ii) the Payment Date in March 2008.
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 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 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.
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 (holding an aggregate
Initial Bond Principal Balance of at least $5,000,000) 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 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.
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 Holders of a majority of all Bonds at
the time outstanding. The Indenture also contains provisions permitting 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. 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.
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: March 27, 1998
IMPAC CMB TRUST SERIES 1998-2
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 Class A Bonds referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A., as Indenture Trustee
By:
-----------------------------------------------
Authorized Signatory
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.
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.
EXHIBIT A-2
FORM OF CLASS [M-1][M-2][M-3] 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 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.
THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR BONDS AS DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
IMPAC CMB TRUST SERIES 1998-2
COLLATERALIZED ASSET-BACKED BONDS
CLASS [M-1][M-2][M-3]
AGGREGATE BOND PRINCIPAL BOND INTEREST
BALANCE: $________________ RATE:____%
INITIAL BOND PRINCIPAL
BALANCE OF THIS BOND: $_______________ BOND NO. ___
PERCENTAGE INTEREST: ______% CUSIP NO.___________
Impac CMB Trust Series 1998-2 (the "Issuer"), a Delaware business
trust, for value received, hereby promises to pay to CEDE & CO. or registered
assigns, the principal sum of
- --------------------------------------------------------------------------------
($_________________) 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 April 1998 and ending on or before the
Payment Date occurring in ----------------------------------------------
(the "Stated Maturity") and to pay interest on the Bond Principal Balance of
this Class [M-1][M-2][M-3] 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 1998-2 (the "Bonds"), issued under an
Indenture dated as of March 27, 1998 (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.
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 Bond
Principal Distribution 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.
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 20% of the aggregate Principal Balance of the Mortgage Loans as of the
Cut-off Date and (ii) the Payment Date in March 2008.
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 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 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.
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 (holding an aggregate
Initial Bond Principal Balance of at least $5,000,000) 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 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.
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 Holders of a majority of all Bonds at
the time outstanding. The Indenture also contains provisions permitting 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. 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.
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.
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: March 27, 1998
IMPAC CMB TRUST SERIES 1998-2
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 Class [M-1][M-2][M-3] Bonds referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A., as Indenture Trustee
By:_____________________________________
Authorized Signatory
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.
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.
EXHIBIT A-3
FORM OF CLASS B 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 AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.
NO TRANSFER OF THIS BOND SHALL BE MADE UNLESS THE BOND 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. SO LONG AS THE CLASS B
BONDS ARE BOOK-ENTRY BONDS, ANY PURCHASER OF THIS CLASS B BOND WILL BE DEEMED TO
HAVE REPRESENTED AS FOLLOWS: THE PURCHASER OF THIS BOND IS DEEMED TO HAVE
REPRESENTED BY SUCH PURCHASE THAT SUCH PURCHASER IS A UNITED STATES PERSON FOR
THE PURPOSES OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
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.
THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR BONDS AS DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
IMPAC CMB TRUST SERIES 1998-2
COLLATERALIZED ASSET-BACKED BONDS
CLASS B
AGGREGATE BOND PRINCIPAL BOND INTEREST
BALANCE: $________________ RATE: ____%
INITIAL BOND PRINCIPAL
BALANCE OF THIS BOND: $_________________ BOND NO. ___
PERCENTAGE INTEREST: _____% CUSIP NO._____________
Impac CMB Trust Series 1998-2 (the "Issuer"), a Delaware business
trust, for value received, hereby promises to pay to CEDE & CO. or registered
assigns, the principal sum of
- --------------------------------------------------------------------------------
($___________________) 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 April 1998 and ending on or before the
Payment Date occurring in ----------------------------------- (the "Stated
Maturity") and to pay interest on the Bond Principal Balance of this Class B
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 1998-2 (the "Bonds"), issued under an
Indenture dated as of March 27, 1998 (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.
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 Bond
Principal Distribution 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.
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 20% of the aggregate Principal Balance of the Mortgage Loans as of the
Cut-off Date and (ii) the Payment Date in March 2008.
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 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 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.
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 (holding an aggregate
Initial Bond Principal Balance of at least $5,000,000) 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 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.
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 Holders of a majority of all Bonds at
the time outstanding. The Indenture also contains provisions permitting 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. 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.
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.
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: March 27, 1998
IMPAC CMB TRUST SERIES 1998-2
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 Class B Bonds referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A., as Indenture Trustee
By:_____________________________________
Authorized Signatory
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.
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.
EXHIBIT B
FORM OF TRUSTEE INITIAL CERTIFICATION
[Closing Date]
[Master Servicer]
[Depositor]
- --------------------------
- --------------------------
Re: Indenture, dated as of March 27, 1998,
between Impac CMB Trust Series 1998-2
and Bankers Trust Company of California,
N.A., IMH Assets Corp. Collateralized
Asset-Backed Bonds, Series 1998-2
Gentlemen:
In accordance with Section 2.03 of the above-captioned
Indenture, and Section 2.1(b) of the Mortgage Loan Sale and Contribution
Agreement, dated as of March 1, 1998 between Impac Mortgage Holdings, Inc.
(formerly known as Imperial Credit Mortgage Holdings, Inc.) and Impac Funding
Corporation (formerly known as ICI Funding Corporation) (the "Mortgage Loan Sale
and Contribution Agreement"; 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 attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that: (i) all documents required
to be included in the Mortgage File are in its possession; (ii) such documents
have been reviewed by it and appear regular on their face and relate to such
Mortgage Loan; and (iii) based on examination by it, and only as to such
documents, the information set forth in items (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 Mortgage Loan Sale and Contribution Agreement 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.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Indenture Trustee
By:
Name:
Title:
EXHIBIT C
FORM OF TRUSTEE FINAL CERTIFICATION
[date]
[Master Servicer]
[Depositor]
- ------------------------
- ------------------------
Re: Indenture, dated as of March 27, 1998, between Impac CMB
Trust Series 1998-2 and Bankers Trust Company of
California, N.A., IMH Assets Corp. Collateralized
Asset-Backed Bonds, Series 1998-2
Gentlemen:
In accordance with Section 2.03 of the above-captioned
Indenture, and Section 2.1(b) of the Mortgage Loan Sale and Contribution
Agreement, dated as of March 1, 1998 between Impac Mortgage Holdings, Inc.
(formerly known as Imperial Credit Mortgage Holdings, Inc.) and Impac Funding
Corporation (formerly known as ICI Funding Corporation) (the "Mortgage Loan Sale
and Contribution Agreement"; 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 attachment hereto) it has received the documents set forth
in Section 2.1(b) of the Mortgage Loan Sale and Contribution Agreement.
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.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Indenture Trustee
By:-------------------------------------
Name:
Title:
EXHIBIT D
MORTGAGE LOAN SCHEDULE
(provided upon request)
EXHIBIT E
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("Certificate") is delivered
pursuant to Section 4.02 of the Indenture (the "Indenture"), dated as of March
27, 1998, between Impac CMB Trust Series 1998-2 and Bankers Trust Company of
California, N.A., in connection with the acquisition of, transfer to or
possession by the undersigned, whether as beneficial owner (the "Beneficial
Owner"), or nominee on behalf of the Beneficial Owner of the IMH Assets Corp.
Collateralized Asset-Backed Bonds, Series 1998-2 Class B Bond (the "Bond").
Capitalized terms used but not defined in this certificate have the respective
meanings given them in the Indenture.
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 Indenture Trustee 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 Bond 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
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 Indenture Trustee at least (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 Indenture Trustee promptly after such change.
PART III - DECLARATION
- -----------------------------
The undersigned, as the Beneficial Owner or a nominee thereof, agrees
to notify the Indenture Trustee 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 Indenture
Trustee and any false statement contained therein could be punishable by fines,
imprisonment or both.
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 Indenture Trustee 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.
APPENDIX A
DEFINITIONS
ACCRUED BOND INTEREST: With respect to each Payment Date, as
to each Class of Bonds, one month's interest accrued 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 for the
preceding calendar month on the basis of a 30-day month and 360-day year.
ACCRUED CERTIFICATE INTEREST: With respect to each Payment
Date, as to each Class of Class C Certificates, the sum of (a) one month's
interest accrued at the related Certificate Interest Rate on the Certificate
Principal Balance thereof immediately prior to such Payment Date and (b) an
amount equal to the principal portion of any Realized Losses previously
allocated to such Certificate. With respect to each Payment Date, as to the
Class X Certificates, the sum of (a) one month's interest accrued at the related
Certificate Interest Rate on the Notional Amount thereof immediately prior to
such Payment Date and (b) any amounts in the Certificate Distribution Account
with respect to clauses (iii) and (iv) of the definition of the Interest
Remittance Amount. Clause (a) of Accrued Certificate Interest for the
Certificates shall be calculated for the preceding calendar month on the basis
of a 30-day month and 360-day year.
ADVANCE: As to any Mortgage Loan, any advance made by the
Master Servicer, pursuant to Section 4.04 of the Servicing Agreement.
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.
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.
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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 identi fied 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).
BANKRUPTCY CODE: The Bankruptcy Code of 1978, as amended.
BASIC DOCUMENTS: The Trust Agreement, the Certificate of
Trust, the Indenture, the Servicing Agreement, the Mortgage Loan Sale and
Contribution Agreement and the other documents and certificates delivered in
connection with any of the above.
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).
BONDS: The Bonds issued and outstanding at any time pursuant
to the Indenture.
BOND ACCELERATED DISTRIBUTION PERCENTAGE: With respect to any
Payment Date, the percentage indicated below:
Bond Accelerated
Payment Date Distribution Percentage
------------ -----------------------
April 1998 through
March 2003..................... 100%
April 2003 through
March 2004..................... Bond Percentage, plus 70% of the Certificate
Percentage
April 2004 through
March 2005..................... Bond Percentage, plus 60% of the Certificate
Percentage
April 2005 through
March 2006..................... Bond Percentage, plus 40% of the Certificate
Percentage
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April 2006 through
March 2007...................... Bond Percentage, plus 20% of the Certificate
Percentage
April 2007 and
thereafter...................... Bond Percentage
PROVIDED, HOWEVER, (i) that any scheduled reduction to the Bond Accelerated
Distribution Percentage described above shall not occur as of any Payment Date
unless either:
(a)(1)(X) the outstanding principal balance of the Mortgage
Loans delinquent 60 days or more averaged over the last six months, as
a percentage of the aggregate outstanding Certificate Principal Balance
of the Certificates, is less than 50% or (Y) the outstanding principal
balance of Mortgage Loans delinquent 60 days or more averaged over the
last six months, as a percentage of the aggregate outstanding principal
balance of all Mortgage Loans averaged over the last six months, does
not exceed 2% and (2) Realized Losses on the Mortgage Loans to date for
such Payment Date if occurring during the sixth, seventh, eighth, ninth
or tenth year (or any year thereafter) after the Closing Date are less
than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial
Certificate Principal Balances of the Certificates;
or
(b)(1) the outstanding principal balance of Mortgage Loans
delinquent 60 days or more averaged over the last six months, as a
percentage of the aggregate outstanding principal balance of all
Mortgage Loans averaged over the last six months, does not exceed 4%
and (2) Realized Losses on the Mortgage Loans to date for any Payment
Date are less than 10% of the sum of the Initial Certificate Principal
Balances of the Certificates and (ii) that for any Payment Date on
which the Bond Percentage is greater than the Original Bond Percentage,
the Bond Accelerated Distribution Percentage for such Payment Date
shall be 100%. Notwithstanding the foregoing, upon the reduction of the
aggregate Bond Principal Balance of the Bonds to zero, the Bond
Accelerated Distribution Percentage shall thereafter be 0%.
BOND INTEREST RATE: With respect to the Class A Bonds, Class
M-1 Bonds, Class M- 2 Bonds, Class M-3 Bonds and Class B Bonds, 6.70%, 6.95%,
7.25%, 7.25% and 7.25%, respectively; provided, however, that on the Payment
Date immediately following the earlier of (i) the Payment Date on which the
aggregate Principal Balance (as defined herein) of the Mortgage Loans is less
than or equal to [20%] of the aggregate Principal Balance of the Mortgage Loans
as of the Cut-off Date or (ii) the Payment Date occurring in March 2008, the
Bond Interest Rate on each class of Bonds will be increased by [0.50%] per
annum.
BOND OWNER: The Beneficial Owner of a Bond.
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BOND PERCENTAGE: With respect to each Payment Date, the
percentage equal to the aggregate Bond Principal Balance of the Bonds
immediately prior to such Payment Date divided by the aggregate Principal
Balance of all of the Mortgage Loans immediately prior to such Payment Date.
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 PRINCIPAL DISTRIBUTION AMOUNT: With respect to each
Payment Date, the lesser of (a) the Principal Remittance Amount and (b) and
amount equal to the sum of the following:
(i) the product of (A) the then-applicable Bond Percentage and (B) the
aggregate of the following amounts:
(1) the principal portion of all scheduled monthly payments on
the Mortgage Loans received or for which an Advance was made on the
Mortgage Loans with respect to the related Due Date;
(2) the principal portion of all proceeds of the repurchase of
a Mortgage Loan (or, in the case of a substitution, certain amounts
representing a principal adjustment) as required by the Servicing
Agreement during the preceding calendar month; and
(3) the principal portion of all other unscheduled collections
received during the preceding calendar month (other than full and
partial Mortgagor prepayments made by the respective Mortgagors and any
amounts received in connection with a Final Disposition (as defined
below) of a Mortgage Loan described in clause (ii) below), to the
extent applied as recoveries of principal;
(ii) in connection with the Final Disposition of a Mortgage Loan that
occurred in the preceding calendar month, an amount equal to the lesser of (A)
the then-applicable Bond Percentage of the Principal Balance of such Mortgage
Loan and (B) the then-applicable Bond Accelerated Distribution Percentage of the
related unscheduled collections, including Insurance Proceeds and Liquidation
Proceeds, to the extent applied as recoveries of principal;
(iii) the then-applicable Bond Accelerated Distribution Percentage of
the aggregate of all full and partial Mortgagor prepayments made by the
respective Mortgagors of the Mortgage Loans during the preceding calendar month;
and
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(iv) any amounts allocable to principal for any previous Payment Date
(calculated pursuant to clauses (i) through (iii) above) that remain
undistributed to the extent that any such amounts are not attributable to
Realized Losses which were allocated to the Certificates.
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
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 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.
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.
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 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 ss.ss.3801 ET SEQ., as the same may be amended from
time to time.
CASH LIQUIDATION: As to any defaulted Mortgage Loan other than
a Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with
respect to such Mortgage Loan.
CERTIFICATE 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.
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CERTIFICATE INTEREST RATE: With respect to each Payment Date
and the Class C Certificates, the weighted average as of the Due Date in the
month preceding the month in which such Payment Date occurs (weighted on the
basis of the Principal Balances of the Mortgage Loans as of the close of
business on the immediately preceding Payment Date) of the Net Mortgage Rates on
the Mortgage Loans. With respect to each Payment Date and the Class X
Certificates the excess of the weighted average as of the Due Date in the month
preceding the month in which such Payment Date occurs (weighted on the basis of
the Principal Balances of the Mortgage Loans as of the close of business on the
immediately preceding Payment Date) of the Net Mortgage Rates on the Mortgage
Loans over the weighted average of the Bond Interest Rates on the Bonds based on
the Bond Principal Balances thereof immediately prior to such Payment Date.
CERTIFICATE PAYING AGENT: The meaning specified in Section
3.10 of the Trust Agreement.
CERTIFICATE PERCENTAGE: As of any date of determination, 100%
minus the Bond Percentage.
CERTIFICATE PERCENTAGE INTEREST: With respect to each
Certificate, the Certificate Percentage Interest 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.
CERTIFICATE OF TRUST: The Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Business Trust Statute.
CERTIFICATE PRINCIPAL BALANCE: With respect to any
Certificate, the Initial Certificate Principal Balance thereof, minus all
amounts distributed in respect of principal with respect thereto and all
Realized Losses allocated thereto on all prior Payment Date; provided, that the
Certificate Principal Balance as of any date of determination with respect to
the most subordinate class of Class C Certificates then outstanding will equal
the excess, if any, of (i) the aggregate Principal Balance of the Mortgage Loans
over (ii) the sum of the aggregate Bond Principal Balance of the Bonds and the
aggregate Certificate Principal Balance of the Class C Certificates, if any,
senior thereto. Reimbursement of the principal portion of Realized Losses from
the Interest Remittance Amount shall not reduce the Certificate Principal
Balance of any Class C Certificate.
CERTIFICATES OR TRUST CERTIFICATES: The IMH Assets Corp.,
Trust Certificates, Series 1998-2, Class C-1, Class C-2, Class C-3 and Class X,
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.
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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.
CLASS: Collectively, all of the Bonds bearing the same
designation.
CLASS A BONDS: The Class A Bonds.
CLASS M BONDS: The Class M-1 Bonds, Class M-2 Bonds and the\
Class M-3 Bonds.
CLASS B BONDS: The Class B Bonds.
CLASS C CERTIFICATES: The Class C-1, Class C-2 and Class C-3
Certificates.
CLASS X CERTIFICATES: The Class X Certificates.
CLOSING DATE: March 27, 1998.
CMAC: Commonwealth Mortgage Assurance Company, or its
successors or assigns.
CMAC PMI POLICY: The modified primary insurance pool policy
issued with respect to certain of the Mortgage Loans by CMAC.
CMAC PMI POLICY RATE: With respect to any Insured Loan, the
rate per annum at which the related premium on the CMAC PMI Policy accrues.
CMAC PMI POLICY FEE: With respect to each Insured Loan and any
Payment Date the product of (i) the CMAC PMI Policy Rate divided by 12 and (ii)
the Principal Balance of such
Insured Loans as of such date.
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.
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.
COLLECTION PERIOD: With respect to each Payment Date, the
calendar month immediately preceding the month in which such Payment Date
occurs.
7
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.
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, California 92614, Attention: Impac CMB Trust Series
1998-2, except that for purposes of Section 4.02 of the Indenture and Section
3.09 of the Trust Agreement, such term shall include the Indenture Trustee's
office or agency at 4 Albany Street, New York, New York 10006, Attention:
Certificate Transfers. 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 1998-2.
CUT-OFF DATE: With respect to the Mortgage Loans,
March 1, 1998.
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.
DCR: Duff & Phelps Credit Rating Co., or its successor in
interest.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
DEFAULT: Any occurrence which is or with notice or the lapse
of time or both would become an Event of Default.
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
8
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.
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.
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.
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 Mortgage Loan and Due Date,
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 related Due 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 each Rating Agency, as evidenced in
writing, be maintained such that (as evidenced by an Opinion of Counsel
delivered to the Indenture Trustee and each Rating Agency) the Indenture Trustee
have 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
9
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.
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;
(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 S&P 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;
10
(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 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.
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) comply with each
representa tion and warranty set forth in clauses (ii) through (lxi) of Section
3.1(b) of the Mortgage Loan Sale and Contribution Agreement other than clauses
(ii)-(viii), (ix) (other than with respect to the percentages of the Mortgage
Loans that are first liens) (xi)-(xii), (xlii), (xliv) and (lvii); (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 and (vi) not
be 30 days or more delinquent.
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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 any class of 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 any class of Bonds, but
only, with respect to clause (b), to the extent funds are available to
make such payment as provided in the Indenture; or
(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, to the Issuer by
the Indenture Trustee or to the Issuer and the Indenture Trustee by the
Holders of at least 25% of the aggregate Outstanding amount of the
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
12
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.
EXCHANGE ACT: The Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
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, with respect to the Insured Loans, 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 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: The Payment Date occurring in
March 2028.
FITCH: Fitch IBCA, Inc., or its successor in interest.
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
13
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.
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 March 27, 1998, between
the Issuer, as debtor, and the Indenture Trustee, as Indenture Trustee, relating
to the Impac CMB Trust Series 1998-2 Bonds.
INDENTURE TRUSTEE: Bankers Trust Company of California, N.A.,
a national banking association, 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 such date.
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.
INITIAL BOND PRINCIPAL BALANCE: With respect to the Class A
Bonds, $177,820,358.00, with respect to the Class M-1 Bonds, $11,854,691.00,
with respect to the Class
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M-2 Bonds, $16,370,763.00, with respect to the Class M-3 Bonds, $7,903,127.00
and with respect to the Class B Bonds, $6,209,600.00.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to the
Class C-1 Certificates, $2,258,036.00, with respect to the Class C-2
Certificates, $1,354,822.00 and with respect to the Class C-3 Certificates
$2,032,233.40.
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 PROCEEDS: Proceeds paid by any insurer pursuant to
any insurance policy (including the CMAC PMI 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 LOANS: Any Mortgage Loan included in the Mortgage
Pool which is covered by the CMAC PMI Policy.
INTEREST REMITTANCE AMOUNT: With respect to any Payment Date,
the sum of the following:
(i) the interest portion of each previously undistributed
Monthly Payment due after the Cut-Off Date and received on or before
the 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
15
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, any premiums paid in connection with the CMAC PMI Policy
and the fees of the Owner Trustee and the Indenture Trustee); and
(ii) the interest portion of all other unscheduled collections
(including, without limitation, Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) received during the related Collection
Period (or deemed to have been so received) to the extent applied by
the Master Servicer as recoveries of interest on the related Mortgage
Loan at the Net Mortgage Rate pursuant to Section 3.13 of the Servicing
Agreement;
(iii) interest on amounts in the Collection Account;
(iv) any fees or penalties, including prepayment penalties,
not retained by any Subservicer pursuant to the terms of the related
Subservicing Agreement;
minus
(v) 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.
INVESTMENT COMPANY ACT: The Investment Company Act of 1940,
as amended, and any amendments thereto.
ISSUER: Impac CMB Trust Series 1998-2, 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 delivered to the
Indenture Trustee.
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
agree ment, 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.
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
16
procedures specified in the Servicing Agreement, as of the end of the related
Prepayment 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.
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.
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.
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.
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).
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.
17
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, among the
Seller, as seller, the Purchaser, as purchaser and the Master Servicer 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 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;
(ix) the Cut-Off Date Principal Balance;
(x) the occupancy status;
(xi) whether the Mortgage Loan is covered by the CMAC PMI Policy
and the related CMAC PMI Policy Rate;
(xii) the purpose of the Mortgage Loan;
(xiii) the Appraised Value of the Mortgaged Property;
(xiv) the original term to maturity;
(xv) the paid-through date of the Mortgage Loan;
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(xvi) the Loan-to-Value Ratio; and
(xvii) 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 LIQUIDATION PROCEEDS: With respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.
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.
NOTIONAL AMOUNT: With respect to any date of determination,
the aggregate Bond Principal Balance of all classes of Bonds.
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,
19
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.
OPINION OF COUNSEL: A written opinion of counsel who may be
in-house counsel for the Master Servicer if acceptable to the Indenture Trustee
and the Rating Agencies or counsel for the Depositor, as the case may be.
ORIGINAL BOND PERCENTAGE: 97.25%.
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 cancelled 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.
OUTSTANDING MORTGAGE LOAN: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not purchased,
deleted or substituted for prior to such Due Date pursuant to the Servicing
Agreement.
OWNER TRUST ESTATE: The corpus of the Issuer created by the
Trust Agreement which consists of items referred to in Section 2.01 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 such date.
OWNER TRUSTEE FEE RATE: 0.0017% per annum.
20
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 and Section 4.03 of the
Servicing Agreement. 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.
PERSON: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
POOL BALANCE: With respect to any date of determination, the
aggregate of the Principal Balances of all Mortgage Loans as of such date.
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.
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
21
Property, and (c) any Realized Loss with respect thereto, in each case to the
extent paid, distributed or applied on any previous 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.
PRINCIPAL REMITTANCE 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 and
other than Monthly Payments with respect to which the Master Servicer
has made an unreimbursed Advance) on each Outstanding Mortgage Loan;
(ii) the principal portion of 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) the principal portion of all other unscheduled
collections (including, without limitation, Principal Prepayments,
Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received
during the related Collection 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;
MINUS
(iv) 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); and
(v) amounts expended by the Master Servicer (a) pursuant to
the Servicing Agreement in good faith in connection with the
restoration of property damaged by an
22
Uninsured Cause, and (b) in connection with the liquidation of a
Mortgage Loan or disposition of an REO Property to the extent not
otherwise reimbursed to the Master Servicer pursuant to the Servicing
Agreement; and
(vi) 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 that have not been paid from
the Interest Remittance Amount.
PROCEEDING: Any suit in equity, action at law or other
judicial or administrative proceeding.
PROSPECTUS: The Prospectus Supplement, dated March 24, 1998,
together with the attached Prospectus, dated March 24, 1998.
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, Moody's,
Fitch or DCR. 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, 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
23
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.
RECORD DATE: With respect to the Bonds and any Payment Date,
the last day of the calendar month preceding such Payment Date.
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.
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.
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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.
REPURCHASE EVENT: With respect to any Mortgage Loan, either
(i) a discovery that, as of the Closing Date the related Mortgage was not a
valid lien on the related Mortgaged Property subject only to (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 Advances and any unreimbursed Servicing Advances or
unreimbursed 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.
RESPONSIBLE OFFICER: With respect to the Indenture Trustee,
any officer of the Indenture Trustee with direct responsibility for the
administration of the Trust Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
SECURITY: Any of the Certificates or Bonds.
SECURITYHOLDER or HOLDER: Any Bondholder or a
Certificateholder.
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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
March 1, 1998, between the Master Servicer and the Issuer.
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.
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 such date.
SERVICING FEE RATE: With respect to any Mortgage Loan, 0.25%
per annum.
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.
STANDARD & POOR'S: Standard & Poor's Ratings Service, or its
successor in interest.
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SUBORDINATE BONDS: Any one of the Class M Bonds or Class B
Bonds.
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 Indenture Trustee, including the Initial Subservicer.
SUBSERVICING ACCOUNT: An Eligible Account established or
maintained by a Sub servicer 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.
SUBSTITUTION ADJUSTMENT AMOUNT: With respect to any Eligible
Substitute Mortgage Loan, the amount as defined in Section 2.03 of the Servicing
Agreement.
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 1998-2 to be created
pursuant to the Trust Agreement.
TRUST AGREEMENT: The Amended and Restated Trust Agreement
dated as of March 27, 1998 between the Owner Trustee and the Depositor 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 each class of the
Bonds and each Payment Date, any Accrued Bond Interest remaining unpaid as to
such class of Bonds as a result of the insufficiency of the Interest Remittance
Amount, plus any such shortfall for all prior Payment Dates, and plus interest
thereon at the related Bond Interest Rate immediately prior to such
Payment Date.
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VOTING RIGHTS: With respect to the Certificates, 40% of the
Voting Rights will be allocated among the Holders of the Class C Certificates in
proportion to their then outstanding Certificate Principal Balances and 60% of
all Voting Rights will be allocated among the Holders of the Class X
Certificates in proportion to the Certificate Percentage Interests thereof.
WENDOVER: Wendover Funding, Inc., or its successor in
interest.
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