--------------------------------------------------------------------------------
TRUST AGREEMENT
BETWEEN
IMC SECURITIES, INC.
as DEPOSITOR
AND
---------------
as OWNER TRUSTEE
DATED AS OF __________, 199__
IMC HOME EQUITY LOAN TRUST 199_-_
--------------------------------------------------------------------------------
TRUST AGREEMENT, dated as of _______________, 199__, between IMC
SECURITIES, INC., a Delaware corporation (the "Depositor"), and ______________,
a ___________________, not in its individual capacity but solely as Owner
Trustee (the "Owner Trustee").
The Depositor and the Owner Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. Certain capitalized terms used in this
Agreement shall have the respective meanings assigned them in Article I to the
Indenture of even date herewith, among the Depositor, the Servicer, the
Indenture Trustee and the Issuer, which is the trust formed under this Agreement
and which is referred to herein as the "Trust". Certificates representing a
beneficial interest in the Trust substantially in the form attached hereto as
Exhibit A are referred to herein as the "Certificates". "Certificate Registrar"
and "Trust Paying Agent" shall have the meaning and duties as designated
pursuant to Sections 3.4 and 3.9 herein. All references herein to "the
Agreement" or "this Agreement" are to the Trust Agreement, and all references
herein to Articles, Sections and subsections are to Articles, Sections and
subsections of this Agreement unless otherwise specified.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The Trust created hereby shall be known as "IMC Home
Equity Loan Trust 199__-__", in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and xxx and be sued on behalf of the Trust.
SECTION 2.2 Office. The office of the Trust shall be in care of the
Owner Trustee at its Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Certificateholders,
the Note Insurer and the Depositor.
SECTION 2.3 Purpose and Powers. (a) The purpose of the Trust is to
engage in the following activities:
(i) to accept the transfer of, manage and hold or, pursuant
to the Indenture, cause the Servicer to manage, the Home Equity Loans;
(ii) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement, and to sell pursuant to the
Underwriting Agreement dated __________________, 199__ among the
Trust, the Depositor, ______________ and ___________ (hereinafter the
"Underwriting Agreement"), the Notes;
(iii) to acquire certain property and assets from the
Depositor pursuant to the Indenture;
(iv) to assign, grant, transfer, pledge, mortgage and convey
the Trust Estate pursuant to the terms of the Indenture and to hold,
manage and distribute to the Certificateholders pursuant to the terms
of this Agreement and the Trust Estate any portion of the assets of
the Trust released from the lien of, and remitted to the Trust
pursuant to, the Indenture;
(v) to enter into and perform its obligations under the
Operative Documents to which it is to be a party and the Underwriting
Agreement;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Operative Documents, to
engage in such other activities as may be required in connection with
conservation of the assets of the Trust and the making of distributions
to the Certificateholders and the Owners of the Notes.
The Trust is hereby authorized to engage in the foregoing activities
and shall not engage in any activity other than in connection with the foregoing
or other than as required or authorized by the terms of this Agreement or the
Operative Documents.
SECTION 2.4 Appointment of Owner Trustee. The Depositor hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein. The Owner Trustee
hereby accepts its appointment subject to the terms and conditions hereof.
SECTION 2.5 Initial Capital Contribution of Assets of the Trust. The
Depositor hereby transfers to the Owner Trustee, as of the date hereof, the sum
of $1. The Owner Trustee hereby acknowledges receipt in trust from the
Depositor, as of the date hereof, of the foregoing contributions which shall
constitute the initial assets of the Trust and shall be deposited in the
Certificate Distribution Account (as defined in Section 5.1 below). The
Depositor shall pay organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares
that it shall hold the assets of the Trust in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Trust under the Operative Documents. The Trust
shall constitute a business trust under the Business Trust Statute and this
Agreement shall constitute the governing instrument of such business trust. It
is the intention of the parties hereto that, solely for income and franchise tax
purposes, after the issuance of the Certificates, the Trust shall be treated as
a partnership, with the assets of the
2
partnership being the Home Equity Loans and other assets of the Trust, the
partners of the partnership being the holders of the Certificates and the Notes
being non-recourse debt of the partnership. The parties agree that, unless
otherwise required by the appropriate tax authorities, the Owner Trustee will
file or cause to be filed annual or other necessary returns, reports or other
forms consistent with the characterization of the Trust as a partnership for
such tax purposes. Effective as of the date hereof, the Owner Trustee shall have
the rights, powers and duties set forth herein and in Chapter 38 of Title 12 of
the Delaware Code (the "Business Trust Statute") with respect to accomplishing
the purposes of the Trust. The Owner Trustee shall file the Certificate of Trust
pursuant to the Business Trust Statute with the Secretary of State.
SECTION 2.7 Liability of the Depositor and the Certificateholders.
(a) The Depositor shall be liable directly to and shall
indemnify any injured party for all losses, claims, damages, liabilities and
expenses of the Trust (including Expenses (as defined in Section 6.9(b)), to the
extent not paid out of the assets of the Trust) to the extent that the Depositor
would be liable if the Trust were a partnership under the Delaware Revised
Uniform Limited Partnership Act in which the Depositor was a general partner;
provided, however, that the Depositor shall not be liable for (i) any losses
incurred by a Certificateholder in its capacity as an investor in the
Certificates or by an Owner in its capacity as an investor in the Notes. In
addition, any third party creditors of the Trust (other than in connection with
the obligations described in the preceding sentence for which the Depositor
shall not be liable) shall be deemed third party beneficiaries of this
subsection 2.7(a). The obligations of the Depositor under this subsection 2.7(a)
shall be evidenced by the Certificate issued in the name of the Depositor.
(b) No Certificateholder, other than to the extent set forth
in subsection 2.7(a), shall have any personal liability for any liability or
obligation of the Trust.
SECTION 2.8. Title to Trust Property. Subject to the Indenture, legal
title to all of the assets of the Trust shall be vested at all times in the
Trust as a separate legal entity except where applicable law in any jurisdiction
requires title to any part of the assets of the Trust to be vested in a trustee
or trustees, in which case title shall be deemed to be vested in the Owner
Trustee, a co-trustee and/or a separate trustee, as the case may be.
SECTION 2.9 Situs of Trust. The Trust shall be located and administered
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
New York. The Trust shall not have any employees in any state other than
Delaware; provided, however, that nothing herein shall restrict or prohibit the
Owner Trustee from having employees within or without the State of Delaware.
Payments shall be received by the Trust only in Delaware or New York, and
payments will be made by the Trust only from Delaware or New York. The only
office of the Trust shall be the Corporate Trust Office in Delaware.
SECTION 2.10 Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee that:
3
(a) The Depositor has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority to own its properties and to
conduct its business as such properties are presently owned and such
business is presently conducted and had at all relevant times, and now
has, power, authority and legal right to acquire and own the Home
Equity Loans.
(b) The Depositor is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such
qualifications.
(c) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms, the Depositor has
full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust as part of the Trust Estate,
and the Depositor has duly authorized such sale and assignment to the
Trust by all necessary corporate action; and the execution, delivery
and performance of this Agreement have been duly authorized by the
Depositor by all necessary corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the other Operative Documents to which it is a party and
the fulfillment of the terms of this Agreement do not conflict with,
result in any breach of any of the terms and provisions of or
constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or by-laws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a
party or by which it is bound, or result in the creation or imposition
of any lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to
the Operative Documents) or violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to the
Depositor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or any of its properties.
(e) There are no proceedings or investigations pending or
notice of which has been received in writing before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement, (ii)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) seeking any determination or
ruling that might materially and adversely affect the performance by
the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
4
ARTICLE III
THE CERTIFICATES
SECTION 3.1 Initial Certificate Ownership. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.5 and until the
issuance of the Certificates, the Depositor shall be the sole beneficiary of the
Trust.
SECTION 3.2 Form of the Certificates.
(a) The Certificates shall be substantially in the form set
forth in Exhibit A and shall be issued without a principal amount and shall
evidence beneficial ownership interests in the Trust. The Certificates shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized signatory of the Owner Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust shall be
valid, notwithstanding that such individuals or any of them shall have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of authentication and delivery of such
Certificates.
(b) The Certificates shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
or without steel engraved borders) all as determined by the authorized signatory
of the Owner Trustee or the Owner Trustee's authenticating agent executing such
Certificates, as evidenced by their execution of such Certificates.
SECTION 3.3 Execution, Authentication and Delivery. Concurrently with
the transfer of the Home Equity Loans to the Trust pursuant to the Indenture,
the Owner Trustee shall execute, or cause its authenticating agent to execute
the Certificates representing 100% of the Percentage Interests of the Trust to
be executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor, signed by an Authorized Officer of the
Depositor, without further corporate action by the Depositor. No Certificate
shall entitle its holder to any benefit under this Agreement, or shall be valid
for any purpose, unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A, executed by the
Owner Trustee or the Owner Trustee's authenticating agent, by manual signature.
Such authentication shall constitute conclusive evidence that such Certificate
shall have been duly authenticated and delivered hereunder. All Certificates
shall be dated the date of their authentication.
SECTION 3.4 Registration; Registration of Transfer and Exchange of
Certificates.
(a) The Certificate Registrar shall cause to be kept at its
office or agency in New York, New York, or at its designated agent, a
Certificate Register in which, subject to such reasonable regulations
as it may prescribe, it shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein
provided. Upon any resignation of a Certificate Registrar, the Owner
Trustee shall promptly appoint a
5
successor or, if it elects not to make such an appointment, assume the
duties of the Certificate Registrar. The Owner Trustee shall be the
initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at the
office or agency of the Owner Trustee maintained pursuant to Section 3.8, the
Owner Trustee shall execute, and the Owner Trustee or its authenticating agent
shall authenticate and deliver in the name of the designated transferee or
transferees, a new Certificate of the same Percentage Interest and dated the
date of authentication by the Owner Trustee or such authenticating agent.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of a like aggregate Percentage Interest, upon surrender
of the Certificates to be exchanged at such office. Whenever any Certificates
are so surrendered for exchange, the Owner Trustee or its authenticating agent
shall execute, authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be marked "canceled" by the Owner Trustee.
SECTION 3.5 Mutilated; Destroyed; Lost or Stolen Certificates.
(a) If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence
to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Certificate Registrar,
the Owner Trustee and the Trust such security or indemnity as may be
required by them to hold each of them harmless, then, in the absence of
notice to the Certificate Registrar or the Owner Trustee that such
Certificate has been acquired by a bona fide purchaser, the Owner
Trustee shall execute on behalf of the Trust and the Owner Trustee or
the Owner Trustee's Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Certificate, a replacement Certificate of a like
Percentage Interest; provided, however, that if any such destroyed,
lost or stolen Certificate, but not a mutilated Certificate, shall have
become or within seven days shall be due and payable, then instead of
issuing a replacement Certificate the Owner Trustee may pay such
destroyed, lost or stolen Certificate when so due or payable.
(b) In connection with the issuance of any replacement
Certificate under this Section 3.5, the Owner Trustee or the
Certificate Registrar may require the payment by the holder of such
Certificate of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable
expenses (including the fees and expenses of the Owner Trustee and the
Certificate Registrar) connected therewith.
6
(c) Any duplicate Certificate issued pursuant to this Section
3.5 in replacement of any mutilated, destroyed, lost or stolen
Certificate shall constitute an original additional contractual
obligation of the Trust, whether or not the mutilated, destroyed, lost
or stolen Certificate shall be found at any time or be enforced by
anyone, and shall be entitled to all the benefits of this Agreement
equally and proportionately with any and all other Certificates duly
issued hereunder.
(d) The provisions of this Section 3.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Certificates.
SECTION 3.6 Persons Deemed Certificateholders. Prior to due
presentation of a Certificate for registration of transfer, the Owner Trustee,
the Certificate Registrar or any Paying Agent may treat the Person in whose name
any Certificate shall be registered in the Certificate Registrar as the
Certificateholder of such Certificate for the purpose of receiving distributions
pursuant to Article V and for all other purposes whatsoever, and neither the
Owner Trustee nor the Certificate Registrar shall be affected by any notice to
the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and Addresses.
The Certificate Registrar shall furnish or cause to be furnished to the Servicer
and the Depositor, within 15 days after receipt by the Certificate Registrar of
a request therefor from the Servicer or the Depositor in writing, a list, in
such form as the Servicer or the Depositor may reasonably require, of the names
and addresses of the Certificateholders as of the most recent Record Date. Each
holder, by receiving and holding a Certificate, shall be deemed to have agreed
not to hold any of the Servicer, the Depositor, the Certificate Registrar or the
Owner Trustee accountable by reason of the disclosure of its name and address,
regardless of the source from which information was derived.
SECTION 3.8 Maintenance of Office For Surrenders. The Owner Trustee
shall maintain an office or offices or agency or agencies where Certificates may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Owner Trustee in respect of the Certificates and the
Operative Documents may be served. The Owner Trustee initially designates the
offices of ___________, as its principal office for such purposes. The Owner
Trustee shall give prompt written notice to the Depositor and to the
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
SECTION 3.9 Appointment of Trust Paying Agent. The Owner Trustee hereby
appoints __________ as the Trust Paying Agent under this Agreement. The Trust
Paying Agent shall make distributions to Certificateholders from the Certificate
Distribution Account pursuant to Section 5.2 and shall report the amounts of
such distributions to the Owner Trustee and the Servicer. The Paying Agent shall
have the revocable power to withdraw funds from the Certificate Distribution
Account for the purpose of making the distributions referred to above. The Owner
Trustee may revoke such power and remove the Trust Paying Agent if the Owner
Trustee determines in its sole discretion that the Trust Paying Agent shall have
failed to perform its obligations under this Agreement in any material respect.
If ____________ shall no longer
7
be the Trust Paying Agent, the Owner Trustee shall appoint a successor to act as
Trust Paying Agent (which shall be a bank or trust company acceptable to the
Note Insurer and the Rating Agencies). The Owner Trustee shall cause such
successor Trust Paying Agent or any additional Trust Paying Agent appointed by
the Owner Trustee to execute and deliver to the Owner Trustee an instrument in
which such successor Trust Paying Agent or additional Trust Paying Agent shall
agree with the Owner Trustee that as Trust Paying Agent, such successor Trust
Paying Agent or additional Trust Paying Agent shall hold all sums, if any, held
by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Trust Paying Agent shall return all unclaimed funds to
the Owner Trustee and upon removal of a Trust Paying Agent such Trust Paying
Agent shall also return all funds in its possession to the Owner Trustee. The
provisions of Article VI shall apply to the Owner Trustee also in its role as
Trust Paying Agent, for so long as the Owner Trustee shall act as Trust Paying
Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Trust Paying Agent shall
include any co-paying agent unless the context requires otherwise.
SECTION 3.10 Restriction on Transfers of Certificates.
(a) Each prospective purchaser and any subsequent transferee
of a Certificate (each, a "Prospective Holder"), other than the Depositor or the
Seller, shall represent and warrant, in writing, to the Owner Trustee and the
Certificate Registrar and any of their respective successors that:
(i) Such Person is (A) a "qualified institutional
buyer" as defined in Rule 144A under the Securities Act of
1933, as amended (the "Securities Act"), and is aware that the
seller of the Certificate may be relying on the exemption from
the registration requirements of the Securities Act provided
by Rule 144A and is acquiring such Certificate for its own
account or for the account of one or more qualified
institutional buyers for whom it is authorized to act, or (B)
a Person involved in the organization or operation of the
Trust or an affiliate of such Person within the meaning of
Rule 3a-7 of the Investment Company Act of 1940, as amended
(including, but not limited to, the Depositor).
(ii) Such Person understands that the Certificates
have not been and will not be registered under the Securities
Act and may be offered, sold, pledged or otherwise transferred
only to a person whom the seller reasonably believes is (A) a
qualified institutional buyer or (B) a Person involved in the
organization or operation of the Trust or an affiliate of such
Person, in a transaction meeting the requirements of Rule 144A
under the Securities Act and in accordance with any applicable
securities laws of any state of the United States.
(iii) Such Person understands that the Certificates
bear a legend to the following effect:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS
8
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THIS
CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR
OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER
HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE ACT, IN A TRANSACTION THAT IS
REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT PURSUANT TO RULE 144A OR (II) A PERSON INVOLVED IN
THE ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE
OF SUCH A PERSON WITHIN THE MEANING OF RULE 3a-7 OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED IN A TRANSACTION
THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. NO PERSON IS
OBLIGATED TO REGISTER THIS CERTIFICATE UNDER THE ACT OR ANY
STATE SECURITIES LAWS."
(b) By its acceptance of a Certificate, each Prospective
Holder agrees and acknowledges that no legal or beneficial interest in all or
any portion of any Certificate may be transferred directly or indirectly to (i)
an entity that holds residual securities as nominee to facilitate the clearance
and settlement of such securities through electronic book-entry changes in
accounts of participating organizations (a "Book-Entry Nominee"), or (ii) an
individual, corporation, partnership or other person unless such transferee is
not a Non-U.S. Person (any such person being referred to herein as a
"Non-permitted Foreign Holder"), and any such purported transfer shall be void
and have no effect.
(c) The Owner Trustee shall not execute, and shall not
countersign and deliver, a Certificate in connection with any transfer thereof
unless the transferor shall have provided to the Owner Trustee a certificate,
signed by the transferee, a Book-Entry Nominee or a Non-permitted Foreign
Holder, which certificate shall contain the consent of the transferee to any
amendments of this Agreement as may be required to effectuate further the
foregoing restrictions on transfer of the Certificates to Book-Entry Nominees or
Non-permitted Foreign Holders, and an agreement by the transferee that it will
not transfer a Certificate without providing to the Owner Trustee a certificate
in the form provided above.
(d) The Certificates shall bear an additional legend referring
to the restrictions contained in paragraph (b) above.
SECTION 3.11 Appointment of Authenticating Agent. At any time when any
of the Certificates remain outstanding the Owner Trustee may appoint an
authenticating agent or agents with respect to the Certificates which shall be
authorized to act on behalf of the Owner Trustee to authenticate Certificates
issued upon original issuance, exchange or registration of
9
transfer. The Owner Trustee may revoke such power and remove any authenticating
agent at any time. ______________ shall initially be an authenticating agent
hereunder.
If any authenticating agent is appointed hereunder, the Certificates
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
___________, not in
its individual capacity but
solely as Owner Trustee
By:_____________________________
As Authenticating Agent
By:_____________________________
Authorized Signatory
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not take action with respect to the following
matters, unless (i) the Owner Trustee shall have notified the Certificateholders
and the Note Insurer in writing of the proposed action at least 30 days before
the taking of such action, and (ii) neither the Certificateholders nor the Note
Insurer shall not have notified the Owner Trustee in writing prior to the 30th
day after such notice is given that such Certificateholders or the Note Insurer
have withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except
claims and law suits brought in connection with the collection of the
Home Equity Loans) or the compromise of any action, claim or lawsuit
brought by or against the Trust (except claims and law suits brought
in connection with the collection of the Home Equity Loans);
(b) the election by the Trust to file an amendment to the
Certificate of Trust, (except to the extent such amendment is required
under the Business Trust Statute);
(c) the amendment or other change to this Agreement or any
Operative Documents in circumstances where the consent of any Owner of
a Note or the Note Insurer is required;
10
(d) the amendment or other change to this Agreement or any
Operative Documents in circumstances where the consent of any Owner of
a Note or the Note Insurer is not required and such amendment
materially adversely affects the interest of the Certificateholders;
(e) the appointment pursuant to the Indenture of a successor
Registrar, Paying Agent or Indenture Trustee or pursuant to this
Agreement of a successor Certificate Registrar or Trust Paying Agent,
or the consent to the assignment by the Registrar, Paying Agent or
Indenture Trustee or Certificate Registrar or Trust Paying Agent of
its obligations under the Indenture or this Agreement, as applicable;
(f) the consent to the calling or waiver of any default of any
Operative Document;
(g) the consent to the assignment of the Indenture Trustee or
Servicer of their respective obligations under the Operative Document;
(h) except as provided in Article IV hereof, dissolve, terminate
or liquidate the Trust in whole or in part;
(i) merge or consolidate the Trust with or into any other entity,
or convey or transfer all or substantially all of the Trust's assets
to any other entity;
(j) cause the Trust in incur, assume or guaranty any indebtedness
other than as set forth in this Agreement;
(k) do any act that conflicts with any other Operative Document;
(l) do any act which would make it impossible to carry on the
ordinary business of the Trust as described in Section 2.3 hereof;
(m) confess a judgment against the Trust;
(n) possess Trust assets, or assign the Trust's right to
property, for other than a Trust purpose.
(o) cause the Trust to lend any funds to any entity; or
(p) change the Trust's purpose and powers from those set forth in
this Agreement.
In addition the Trust shall not commingle its assets with those of any
other entity. The Trust shall maintain its financial and accounting books and
records separate from those of any other entity. Except as expressly set forth
herein, the Trust shall pay its indebtedness, operating expenses from its own
funds, and the Trust shall not pay the indebtedness, operating expenses and
liabilities of any other entity. The Trust shall maintain appropriate minutes or
other records
11
of all appropriate actions and shall maintain its office separate from the
offices of the Depositor, the Seller and the Servicer.
The Owner Trustee shall not have the power, except upon the direction
of the Certificateholders with the consent of the Note Insurer, and to the
extent otherwise consistent with the Operative Documents, to (i) remove or
replace the Servicer or the Indenture Trustee, (ii) institute proceedings to
have the Trust declared or adjudicated a bankruptcy or insolvent, (iii) consent
to the institution of bankruptcy or insolvency proceedings against the Trust,
(iv) file a petition or consent to a petition seeking reorganization or relief
on behalf of the Trust under any applicable federal or state law relating to
bankruptcy, (v) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or any similar official) of the Trust or a substantial
portion of the property of the Trust, (vi) make any assignment for the benefit
of the Trust's creditors, (vii) cause the Trust to admit in writing its
inability to pay its debts generally as they become due, (viii) take any action,
or cause the Trust to take any action, in furtherance of any of the foregoing
(any of the above, a "Bankruptcy Action"). So long as the Indenture remains in
effect and no Note Insurer Default exists, no Certificateholder shall have the
power to take, and shall not take, any Bankruptcy Action with respect to the
Trust or the Depositor or direct the Owner Trustee to take any Bankruptcy Action
with respect to the Trust or the Depositor.
SECTION 4.2 Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the consent and approval of the Note
Insurer, the unanimous prior approval of all Certificateholders and the delivery
to the Owner Trustee by each such Certificateholder of a certificate certifying
that such Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.3 Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Operative
Documents or would be contrary to Section 2.3, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
SECTION 4.4 Majority Control. Except as expressly provided herein any
action that may be taken or consent that may be given or withheld by the
Certificateholders under this Agreement may be taken by Certificateholders
evidencing more than a majority of the Percentage Interest in the Trust. Except
as expressly provided herein, any written notice of the Certificateholders
delivered pursuant to this Agreement shall be effective if signed by a
Certificateholders evidencing more than a majority Percentage Interest of the
Trust.
12
ARTICLE V
APPLICATION OF ASSETS OF THE TRUST; CERTAIN DUTIES
SECTION 5.1 Establishment of Certificate Distribution Account.
(a) The Owner Trustee, for the benefit of the
Certificateholders, shall establish and maintain in the name of the
Owner Trustee an Eligible Account known as the "IMC Home Equity Loan
Trust 199__-__ Certificate Distribution Account" (the "Certificate
Distribution Account"), bearing an additional designation clearly
indicating that the funds deposited therein are held for the benefit of
the Certificateholders.
(b) The Owner Trustee on behalf of the Trust shall possess all
right, title and interest in and to all funds on deposit from time to
time in the Certificate Distribution Account and in all proceeds
thereof. Except as otherwise provided herein or in the Indenture, the
Certificate Distribution Account shall be under the sole dominion and
control of the Owner Trustee for the benefit of the Certificateholders.
SECTION 5.2 Application of Funds. [ON EACH PAYMENT DATE,] the Owner
Trustee shall direct the Trust Paying Agent to distribute to the
Certificateholders on the basis of their respective Percentage Interest, all
amounts then on deposit in the Certificate Distribution Account.
SECTION 5.3 Method of Payment. Subject to subsection 7.1(c),
distributions required to be made to Certificateholders [ON ANY PAYMENT DATE]
shall be made to each Certificateholder of record on the immediately preceding
Record Date by wire transfer, in immediately available funds, to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor.
SECTION 5.4 Segregation of Moneys; No Interest. Subject to Sections 5.1
and 5.2, moneys received by the Trust Paying Agent hereunder and deposited into
the Certificate Distribution Account will be segregated except to the extent
required otherwise by law and shall be invested in Eligible Investments maturing
no later than one Business Day prior to the related Payment Date a the direction
of the Depositor. The Trust Paying Agent shall not be liable for payment of any
interest or losses in respect of such moneys. Investment gains shall be for the
account of and paid to the Certificateholders.
SECTION 5.5 Accounting and Reports to the Certificateholders, the
Internal Revenue Service and Others. The Owner Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis on the
accrual method of accounting, and such books shall be maintained separately from
those of any other entity and reflect the separate interest of the Trust, (b)
deliver to each Certificateholder, as may be required by the Code and applicable
Treasury Regulations, such information as may be required (including Schedule
K-1) to enable such Certificateholder to prepare its federal and state income
tax returns, (c) file such tax returns relating to the Trust (including a
partnership information return, IRS Form 1065), and make such elections as may
from time to time be required or appropriate under any
13
applicable state or federal statute or rule or regulation thereunder so as to
maintain the Trust's characterization as a partnership for federal income tax
purposes, (d) cause such tax returns to be signed in the manner required by law
and (e) collect or cause to be collected any withholding tax with respect to
income or distributions to Certificateholders. The Owner Trustee shall elect
under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Home Equity Loans. The Owner Trustee
shall not make the election provided under Section 754 of the Code.
ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.1 Duties of Owner Trustee.
(c) The Owner Trustee undertakes to perform such duties, and
only such duties, as are specifically set forth in this Agreement and
the other Operative Documents, including the administration of the
Trust in the interest of the Certificateholders, subject to the
Operative Documents and in accordance with the provisions of this
Agreement. No implied covenants or obligations shall be read into this
Agreement against the Owner Trustee.
(d) In the absence of bad faith on its part, the Owner Trustee
may conclusively rely upon certificates or opinions furnished to the
Owner Trustee and conforming to the requirements of this Agreement in
determining the truth of the statements and the correctness of the
opinions contained therein; provided, however, that the Owner Trustee
shall have examined such certificates or opinions so as to determine
compliance of the same with the requirements of this Agreement.
(e) The Owner Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own
bad faith or wilful misconduct, except that:
(i) this subsection 6.1(c) shall not limit the effect
of subsection 6.1(a);
(ii) the Owner Trustee shall not be liable for any
error of judgment made in good faith by an Authorized
Officer unless it is proved that the Owner Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Owner 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 4.1 or 6.4.
(f) Subject to Sections 5.1 and 5.2, monies received by the
Owner Trustee hereunder need not be segregated in any manner except to
the extent required by law or the Indenture and may be deposited under
such general conditions as may be prescribed by law, and the Owner
Trustee shall not be liable for any interest thereon.
14
(g) The Owner Trustee shall not take any action that (i) is
inconsistent with the purposes of the Trust set forth in Section 2.3 or
(ii) would, to the actual knowledge of an Authorized Officer of the
Owner Trustee, result in the Trust's becoming taxable as a corporation
for federal, state or local income tax purposes. The Certificateholders
shall not direct the Owner Trustee to take action that would violate
the provisions of this Section 6.1.
SECTION 6.2 Additional Duties of Owner Trustee. The Owner Trustee is
authorized and directed to execute and deliver the Operative Documents to which
it or the Trust is a party, each certificate or other document attached as an
exhibit to or contemplated by the Operative Documents to which it or the Trust
is to be a party and the Underwriting Agreement, in each case in such form as
the Depositor shall approve as evidenced conclusively by the Owner Trustee's or
the Depositor's execution thereof. In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust pursuant to the Operative Documents.
SECTION 6.3 Acceptance of Trusts and Duties. Except as otherwise
provided in this Article VI, in accepting the trusts hereby created ___________
acts solely as Owner Trustee hereunder and not in its individual capacity and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any Operative Document shall look
only to the assets of the Trust for payment or satisfaction thereof. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the assets of the Trust upon the terms of the Operative
Documents and this Agreement. The Owner Trustee shall not be liable or
accountable hereunder or under any Operative Document under any circumstances,
except (i) for its own negligent action, its own negligent failure to act or its
own willful misconduct or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.6 and expressly made by the
Owner Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and
enforceability of any Home Equity Loan, or the perfection and priority
of any security interest created by any Home Equity Loan in any
Mortgaged Property or the maintenance of any such perfection and
priority, or for or with respect to the sufficiency of the assets of
the Trust or their ability to generate the payments to be distributed
to Certificateholders under this Agreement or the Owners of the Notes
under the Indenture, including, without limitation: the existence,
condition and ownership of any Mortgaged Property; the existence and
enforceability of any insurance thereon; the existence and contents of
any Home Equity Loan on any computer or other record thereof; the
validity of the assignment of any Home Equity Loan to the Trust or of
any intervening assignment; the completeness of any Home Equity Loan;
the performance or enforcement of any Home Equity Loan; the compliance
by the Depositor or the Servicer with any warranty or representation
made under any Operative Document or in any related document or the
accuracy of any such warranty or representation or any
15
action of the Indenture Trustee, the Custodian or the Servicer or any
subservicer taken in the name of the Owner Trustee.
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of the Note Insurer or any Certificateholder;
(c) no provision of this Agreement or any Operative Document
shall require the Owner Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its rights
or powers hereunder or under any Operative Document, if the Owner
Trustee shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Operative
Documents, including the Note Principal Balance and the interest on
the Notes;
(e) the Owner Trustee shall not be responsible for or in respect
of any makes no representation as to the validity or sufficiency of
any provision of this Agreement or for the due execution hereof by the
Depositor or for the form, character, genuineness, sufficiency, value
or validity of any of the assets of the Trust or for or in respect of
the validity or sufficiency of the Operative Documents, the
Underwriting Agreement, the Notes, the Certificates (other than the
certificate of authentication on the Certificates) or of any Home
Equity Loans or any related documents, and the Owner Trustee shall in
no event assume or incur any liability, duty or obligation to any
Owner of a Note or to any Certificateholder, other than as expressly
provided for herein and in the Operative Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Indenture Trustee, the Custodian, the Depositor or
the Servicer under any of the Operative Documents or otherwise and the
Owner Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the Operative
Documents that are required to be performed by the Indenture Trustee
under the Indenture, the Custodian under the Custodial Agreement or
the Servicer under the Indenture;
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this agreement, the Underwriting Agreement
or any Operative Document, at the request, order or direction of any
of the Note Insurer or any of the Certificateholders, unless the Note
Insurer or such Certificateholders have offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any Operative Document shall
not
16
be construed as a duty, and the Owner Trustee shall not be answerable
for other than its negligence or willful misconduct in the performance
of any such act;
(h) The Owner Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security
interest or lien granted to it hereunder or the prepare, execute or
file any Securities and Exchange Commission filing or tax return for
the Trust or to record this Agreement or any Operative Document.
SECTION 6.4 Action upon Instruction by Certificateholders.
(a) Subject to Section 4.3, the Certificateholders may by
written instruction direct the Owner Trustee in the management of the
Trust. Such direction may be exercised at any time by written
instruction of the Certificateholders pursuant to Section 4.4.
(b) Notwithstanding the foregoing, the Owner Trustee shall not
be required to take any action hereunder or under any Operative
Document if the Owner Trustee shall have reasonably determined, or
shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to
the terms hereof or of any Operative Document or is otherwise contrary
to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of
this Agreement or any Operative Document, or is unsure as to the
application, intent, interpretation or meaning of any provision of this
agreement or the Operative Documents, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the
circumstances) to the Note Insurer and the Certificateholders
requesting instruction as to the course of action to be adopted, and,
to the extent the Owner Trustee acts in good faith in accordance with
any such instruction received, the Owner Trustee shall not be liable on
account of such action to any Person. If the Owner Trustee shall not
have received appropriate instructions within ten days of such notice
(or within such shorter period of time as reasonably may be specified
in such notice or may be necessary under the circumstances) it may, but
shall be under no duty to, take or refrain from taking such action
which is consistent, in its view, with this Agreement or the Operative
Documents, and as it shall deem to be the best interests of the
Certificateholders, and the Owner Trustee shall have no liability to
any Person for any such action or inaction.
SECTION 6.5 Furnishing of Documents. The Owner Trustee shall furnish
(a) to the Certificateholders, promptly upon receipt of a written request
therefor, duplicate or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Operative Documents, and (b) to the Note Insurer, copies
of any reports, notices, requests, demands, certificates, financial statements,
and any other instruments relating to the Trust, the Certificates or the Notes
in the possession of the Owner Trustee, that the Note Insurer shall request in
writing.
17
SECTION 6.6 Representations and Warranties of Owner Trustee. The Owner
Trustee hereby represents and warrants to the Depositor, for the benefit of the
Certificateholders and the Note Insurer, that:
(a) It is a banking corporation duly organized, validly
existing and in good standing under the laws of the state of its
incorporation.
(b) It has full power, authority and legal right to execute,
deliver and perform its obligations under this Agreement, and has taken
all necessary action to authorize the execution, delivery and
performance by it of this Agreement.
(c) The execution, delivery and performance by it of this
Agreement (i) shall not violate any provision of any law or regulation
governing the banking and trust powers of the Owner Trustee or any
order, writ, judgment or decree of any court, arbitrator or
governmental authority applicable to the Owner Trustee or any of its
assets, (ii) shall not violate any provision of the corporate charter
or by-laws of the Owner Trustee, or (iii) shall not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on
any properties included in the Trust pursuant to the provisions of any
mortgage, indenture, contract, agreement or other undertaking to which
it is a party, which violation, default or lien could reasonably be
expected to have a materially adverse effect on the Owner Trustee's
performance or ability to perform its duties as owner Trustee under
this Agreement or on the transactions contemplated in this Agreement.
(d) This Agreement has been duly executed and delivered by the
Owner Trustee and constitutes the legal, valid and binding agreement of
the Owner Trustee, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar law affecting the enforcement of
creditors' rights in general and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
SECTION 6.7 Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, note or other document or
paper believed by it to be genuine and believed by it to be signed by
the proper party or parties and need not investigate any fact or matter
in any such document. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been
duly adopted by such body and that the same is in full force and
effect. As to any fact or matter the method of the determination of
which is not specifically prescribed herein, the Owner Trustee may for
all purposes hereof rely on a certificate, signed by the president or
any vice president or by the treasurer or other authorized officers of
the relevant party, as to such fact or matter, and such certificate
shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
18
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this
Agreement or the Operative Documents, the Owner Trustee: (i) may act
directly or through its agents, attorneys, custodians or nominees, and
the Owner Trustee shall not be liable for the conduct or misconduct of
such agents, attorneys, custodians or nominees if such agents,
attorneys, custodians or nominees shall have been selected by the Owner
Trustee with reasonable care and (ii) may consult with counsel,
accountants and other skilled professionals to be selected with
reasonable care and employed by it. The Owner Trustee shall not be
liable for anything done, suffered or omitted in good faith by it in
accordance with the opinion or advice of any such counsel, accountants
or other such Persons.
SECTION 6.8. Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with either Depositor, the Indenture
Trustee and the Servicer in transactions in the same manner and with the same
rights as it would have if it were not the Owner Trustee.
SECTION 6.9 Compensation and Indemnity. (a) The Owner Trustee shall
receive from the Depositor as compensation for its services hereunder such fees
as have been separately agreed upon before the date hereof between the Depositor
and the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed
by the Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents, custodians,
nominees, representatives, experts and counsel as the Owner Trustee may employ
in connection with the exercise and performance of its rights and its duties
hereunder.
(b) The Depositor shall be liable as primary obligors for, and
shall indemnity the Owner Trustee and its successors, assigns, agents
and servants (collectively, the "Indemnified Parties") from and
against, any and all liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses
and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever (collectively, "Expenses") which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee
or any Indemnified Party in any way relating to or arising out of this
Agreement, the Operative Documents, the assets of the Trust, the
administration of the Trust or the action or inaction of the Owner
Trustee hereunder, except only that the Depositor shall not be liable
for or required to indemnify the Owner Trustee from and against
Expenses arising or resulting from the negligence or willful misconduct
of the Owner Trustee. The indemnities contained in this Section 6.9
shall survive the resignation of the Owner Trustee, termination of the
Trust or the termination of this Agreement. Any amounts paid to the
Owner Trustee pursuant to this Article VI shall be deemed not to be a
part of the assets of the Trust immediately after such payment.
SECTION 6.10 Replacement of Owner Trustee.
(a) The Owner Trustee may resign at any time and be discharged
from the trusts hereby created by giving 30 days' prior written notice
thereof to the Note Insurer
19
and the Indenture Trustee. The Servicer shall appoint a successor Owner
Trustee with the consent of the Note Insurer by delivering written
instrument, in duplicate, to the resigning Owner Trustee and the
successor Owner Trustee. If no successor Owner Trustee shall have been
appointed and have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Owner Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Owner Trustee. The Note Insurer, or the Indenture Trustee, with the
consent of the Note Issuer, may shall remove the Owner Trustee if:
(i) the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 6.13 and shall fail to
resign after written request therefor by the Indenture Trustee;
(ii) the Owner Trustee shall be adjudged bankrupt or
insolvent;
(iii) a receiver or other public officer shall be appointed
or take charge or control of the Owner Trustee or of its property
or affairs for the purposes of rehabilitation, conservation or
liquidation; or
(iv) the Owner Trustee shall otherwise be legally incapable
of acting.
(b) If the Owner Trustee resigns or is removed or if a vacancy
exists in the office of Owner Trustee for any reason the Servicer shall
promptly appoint a successor Owner Trustee with the consent of the Note
Insurer by written instrument, in duplicate (one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed
and one copy to the successor Owner Trustee) and shall pay all fees and
other amounts owed to the outgoing Owner Trustee.
(c) Any resignation or removal of the Owner Trustee and
appointment of successor Owner Trustee pursuant to any of the
provisions of this Section 6.10 shall not become effective until a
written acceptance of appointment is delivered by the successor Owner
Trustee to the outgoing Owner Trustee and the Depositor and all fees
and expenses due to the outgoing Owner Trustee are paid. Any successor
Owner Trustee appointed pursuant to this Section 6.10 shall be eligible
to act in such capacity in accordance with Section 6.13 and, following
compliance with the preceding sentence, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as originally named as Owner Trustee.
The Depositor shall provide notice of such resignation or removal of
the Owner Trustee to the Note Insurer and each of the Rating Agencies.
(d) The predecessor Owner Trustee shall upon payment of its
fees and expenses deliver to the successor Owner Trustee all documents
and statements and monies held by it under this Agreement. The
Depositor, the Indenture Trustee and the predecessor Owner Trustee
shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting the
confirming in the successor Owner Trustee all such rights, powers,
duties and obligations.
20
(e) Upon acceptance of appointment by a successor Owner
Trustee pursuant to this Section 6.10, the Depositor (or if the
Depositor fails to so notify, the successor Owner Trustee, at the
expense of the Depositor) shall mail notice of the successor of such
Owner Trustee to all Certificateholders, the Indenture Trustee, the
Owners of the Notes, the Note Insurer and each of the Rating Agencies.
SECTION 6.11 Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 6.13, and without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto; provided, however, that the Owner Trustee shall mail notice
of such merger or consolidation to the Note Insurer and each of the Rating
Agencies.
SECTION 6.12 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at
any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the assets of the Trust or any
Mortgaged Property may at the time be located, the Administrator and
the Owner Trustee (with the consent of the Note Insurer) shall have the
power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Owner Trustee and the Note Insurer to act
as co-trustee, jointly with the Owner Trustee, or as separate trustee
or trustees, of all or any part of the assets of the Trust, and to vest
in such Person, in such capacity, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section 6.12,
such powers, duties, obligations, rights and trusts as the Note Insurer
and the Owner Trustee may consider necessary or desirable. No
co-trustee or separate trustee under this Agreement shall be required
to meet the terms of eligibility as a successor trustee pursuant to
Section 6.13 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 6.10.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee, and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except
to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Owner Trustee
shall be incompetent or unqualified to perform such act or acts,
in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion
thereof in any such
21
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of
the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee
under this Agreement; and
(iii) the Owner Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article. Each
separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such instrument shall
be filed with the Owner Trustee and a copy thereof given to the Note
Insurer.
(d) Any separate trustee or co-trustee may at any time appoint
the Owner Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act
under or in respect of this Agreement on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Owner
Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.
SECTION 6.13 Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times: (a) be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (b) be authorized to exercise
corporate trust powers; (c) have a combined capital and surplus of at least
$50,000,000 and be subject to supervision or examination by federal or state
authorities; and (d) have (or have a parent which has) a [BBB] by Standard &
Poor's and at least [BAA2] by Xxxxx'x Investors Service, Inc. and be acceptable
to the Note Insurer. If such corporation shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 6.13,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.13, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.14 Underwriting Agreement. For purposes of this Article VI,
the term "Operative Document" shall be deemed to include the Underwriting
Agreement.
22
SECTION 6.15 Not Acting in Individual Capacity. Except as provided in
this Article VI, in accepting the trustee hereby created __________ acts solely
as Owner Trustee hereunder and not in its individual capacity and all Persons
having any claim against the Owner Trustee by reason of the transactions
contemplated by this Agreement or any Operative Document shall look only to the
Trust for payment or satisfaction thereof.
ARTICLE VII
TERMINATION OF TRUST AGREEMENT
SECTION 7.1 Termination of Trust Agreement.
(a) This Agreement (other than Article VI) and the Trust shall
terminate and be of no further force or effect on the earlier of: (i)
the final distribution by the Indenture Trustee of all moneys or other
property or proceeds of the assets of the Trust in accordance with the
terms of the Indenture, (ii) at the time provided in Section 7.2 and
(iii) the expiration of 21 years from the death of the last survivor of
the descendants of Xxxxxx X. Xxxxxxx (the late ambassador of the United
States to the Court of St. James's). The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder, other than
the Depositor as described in Section 7.2, shall not (x) operate to
terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or the assets
of the Trust or (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in Section 7.1(a), none of the
Depositor, the Servicer, the Note Insurer or any Certificateholder
shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Payment Date upon which the Certificateholders shall surrender their
Certificates to the Owner Trustee for payment of the final distribution
and cancellation, shall be given by the Owner Trustee by letter to the
Note Insurer, the Rating Agencies, the Trust Paying Agent and the
Certificateholders mailed within five Business Days of receipt of
notice of such termination, stating: (i) the Payment Date upon or with
respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the
Owner Trustee therein designated; (ii) the amount of any such final
payment; and (iii) that the Record Date otherwise applicable to such
Payment Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the
Owner Trustee therein specified. The Owner Trustee shall give such
notice to the Certificate Registrar (if other than the Owner Trustee)
and the Trust Paying Agent at the time such notice is given to
Certificateholders. The Owner Trustee will give notice to the Trust
Paying Agent of each presentation and surrender of the Certificates and
the Trust Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Payment Date pursuant
to Section 5.2.
23
(d) Each Certificateholder is required, and hereby agrees, to
return to the Owner Trustee, any Certificate with respect to which the
Owner Trustee has made the final distribution due thereon. Any such
Certificate as to which the Owner Trustee has made the final
distribution thereon shall be deemed canceled and shall no longer be
outstanding for any purpose of this Agreement, whether or not such
Certificate is ever returned to the Owner Trustee.
(e) Upon the winding up of the Trust and its termination, the
Owner Trustee shall cause the Certificate or Trust to be canceled by
filing a certificate of cancellation with the Secretary of State in
accordance with the provisions of Section 3820 of the Business Trust
Statute.
SECTION 7.2 Dissolution upon Bankruptcy of the Depositor. This
Agreement shall be terminated in accordance with Section 7.1 90 days after the
occurrence of an Insolvency Event with respect to the Depositor, unless, before
the end of such 90 day period, the Owner Trustee shall have received written
instructions from (a) each of the Certificateholders (other than the Depositor)
and (b) each of the Certificateholders (other than the Depositor) representing
more than a majority Percentage Interests of the Trust to the effect that each
such party disapproves of the liquidation of the Home Equity Loans and
termination of the Trust. Promptly after the occurrence of any Insolvency Event
with respect to the Depositor: (i) the Depositor shall give the Note Insurer,
the Indenture Trustee, the Rating Agencies and the Owner Trustee written notice
of such Insolvency Event; (ii) the Owner Trustee shall, upon the receipt of such
written notice from the Depositor, give prompt written notice to the
Certificateholders and the Indenture Trustee of the occurrence of such event and
(iii) the Indenture Trustee shall, upon receipt of written notice of such
Insolvency Event from the Owner Trustee or the Depositor, give prompt written
notice to the Owners of the Notes of the occurrence of such event; provided,
however, that any failure to give a notice required by this sentence shall not
prevent or delay in any manner a termination of the Trust pursuant to the first
sentence of this Section 7.2. Upon a termination pursuant to this Section 7.2,
the Owner Trustee shall direct the Indenture Trustee promptly to sell the assets
of the Trust (other than the Accounts and the Certificate Distribution Account)
in a commercially reasonable manner and on commercially reasonable terms and to
apply the proceeds of any such sale, disposition or liquidation of the assets of
the Trust as required under the Indenture.
ARTICLE VIII
AMENDMENTS
SECTION 8.1 Amendments Without Consent of Certificateholders or Owners
of the Notes. This Agreement may be amended by the Depositor and the Owner
Trustee without the consent of any of the Owners of the Notes or the
Certificateholders (but with the prior written consent of the Note Insurer and
prior notice to each of the Rating Agencies), to (i) cure any ambiguity, (ii)
correct or supplement any provision in this Agreement that may be defective or
inconsistent with any other provision in this Agreement, (iii) add or supplement
any credit enhancement for the benefit of the Owners of the Notes or the
Certificateholders, (iv) add to the covenants, restrictions or obligations of
the Depositor or the Owner Trustee and (v) add, change
24
or eliminate any other provision of this Agreement in any manner that shall not,
as evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of the Owners of the Notes or the Certificateholders.
SECTION 8.2 Amendments With Consent of Certificateholders and Owners of
the Notes. This Agreement may be amended from time to by the Depositor and the
Owner Trustee with the consent of the Note Insurer and more than a majority in
Percentage Interests of the Trust and more than a majority in Percentage
Interests of the Notes then Outstanding for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement, or of modifying in any manner the rights of the Owners of the Notes
or the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Home Equity Loans or distributions that
shall be made for the benefit of the Owners of the Notes or the
Certificateholders or (b) reduce the aforesaid percentage required to consent to
any such amendment, without the consent of the holders of all Outstanding Notes
and all of the Certificates then outstanding.
SECTION 8.3 Form of Amendments.
(a) Promptly after the execution of any amendment, supplement
or consent pursuant to Section 8.1 or 8.2, The Owner Trustee shall
furnish written notification of the substance of such amendment or
consent to each Certificateholder, the Indenture Trustee, the Note
Insurer and each Rating Agency.
(b) It shall not be necessary for the consent of
Certificateholders, the Owners of the Notes or the Indenture Trustee
pursuant to Section 8.2 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents
(and any other consents of Certificateholders provided for in this
Agreement or in any other Operative Document) and of evidencing the
authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may
prescribe.
(c) Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing os such
amendment with the Secretary of State.
(d) Prior to the execution of any amendment to this Agreement
or the Certificate of Trust, the Owner Trustee shall be entitled to
receive and rely upon an Opinion of Counsel stating that the execution
of such amendment is authorized or permitted by this Agreement and that
all conditions precedent to the execution and delivery of such
amendment have been satisfied. The Owner Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner
Trustee's own rights, duties or immunities under this Agreement or
otherwise.
25
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 No Legal Title to Trust Assets. The Certificateholders
shall not have legal title to any part of the assets of the Trust. The
Certificateholders shall be entitled to receive distributions with respect to
their undivided ownership interest therein only in accordance with Articles V
and VII. No transfer, by operation of law or otherwise, of any right, title, and
interest of the Certificateholders to and in their ownership interest in the
assets of the Trust shall operate to terminate This Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the assets of the Trust.
SECTION 9.2 Limitations on Rights of Others. Except for Section 2.7,
the provisions of this Agreement are solely for the benefit of the Note Insurer,
the Owner Trustee, the Depositor, the Certificateholders and, to the extent
expressly provided herein, the Indenture Trustee and the Owners of the Notes,
and nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
assets of the Trust or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 9.3 Notices.
(a) All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if personally
delivered at or mailed by overnight mail, certified mail or registered
mail, postage prepaid, to (i) in the case of the Servicer,
_____________________________________________, Attention: _________
_______________, or such other addresses as may hereafter be furnished
to the Certificateholders and the Owners of the Notes in writing by the
Servicer, (ii) in the case of the Depositor, c/o IMC Securities, Inc.
___________________ ______________________________, Attention:
_______________ _______________, or such other addresses as may
hereafter be furnished to the Certificateholders and the Owners of the
Notes in writing by the Depositor, (iii) Owner Trustee,
_______________, Attention: IMC Home Equity Loan Trust 199__-__, (iv)
in the case of the Certificateholders, as set forth in the Certificate
Register, (vi) in the case of the Indenture Trustee, _____________,
Attention: IMC Home Equity Loan Trust 199__-__, (v) in the case of the
Owners of the Notes as set forth in the Register, (vi) in the case of
Moody's, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Home
Equity Monitoring Group, (vii) in the case of S&P, 00 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention:
__________, and (viii) in the case of the Note Insurer,________________
_____________________________________________________, _______________,
_______________, _______________ _______________ , Attention: IMC Home
Equity Loan Trust 199__-__. Any such notices shall be deemed to be
effective with respect to any party hereto upon the receipt of such
notice by such party, except that notices to the Certificateholders or
Owners of the Notes shall be effective upon mailing or personal
delivery.
26
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid,
at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 9.4 Severability. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
SECTION 9.5 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
SECTION 9.6 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor, the Owner Trustee, the Note Insurer and each Certificateholder and
their respective successors and permitted assigns, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 9.7 No Petition Covenant. Notwithstanding any prior termination
of this Agreement, the Trust (or the Owner Trustee on behalf of the Trust), each
Certificateholder or Certificate Owner, the Indenture Trustee and each Owner of
the Notes shall not acquiesce, petition or otherwise invoke or cause any
Depositor or the Trust to invoke the process of any court or governmental
authority for the purpose of commencing or sustaining a case against the
Depositor or the Trust under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Depositor or the Trust or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Depositor or the Trust.
SECTION 9.8 No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Depositor, the Servicer, the Owner Trustee, the Indenture
Trustee or any affiliate thereof and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated in this
Agreement, the Certificates or the Operative Documents.
SECTION 9.9 Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 9.10 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
27
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 9.11 The Note Insurer. Any right conferred to the Issuer
hereunder shall be suspended during any period in which the Note Insurer is in
default in its payment obligations under the Note Insurance Policy. The Servicer
shall give the Owner Trustee notice of such event. The Note Insurer is an
intended third party beneficiary of this Agreement.
28
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
----------------------------------------,
as Owner Trustee
By:
--------------------------------------
Name:
Title:
IMC SECURITIES, INC.,
as Depositor
By:
--------------------------------------
Name:
Title:
Acknowledged and Accepted:
-----------------------------------------
as Servicer
By:
--------------------------------------
Name:
Title:
-----------------------------------------
as Indenture Trustee
By:
--------------------------------------
Name:
Title:
EXHIBIT A
CERTIFICATE OF TRUST OF
IMC Home Equity Loan Trust 199__-__
THIS Certificate of Trust of IMC Home Equity Loan Trust 199__-__ (the "Trust")
dated as of ___________________ 1, 199__, is being duly executed and filed by
_______________, a ______________, as trustee, to form a business trust under
the Delaware Business Trust Act (12 Del. Code, Section 3801 et seq.).
0.Xxxx. The name of the business trust formed hereby is IMC Home Equity Loan
Trust 199__- __.
2.Delaware Trustee. The name and business address of the trustee of the Trust in
the State of Delaware is _________________________________, Attention:
__________________.
3.This Certificate of Trust shall be effective as of its filing. IN WITNESS
WHEREOF, the undersigned, being the sole trustee of the Trust, has executed this
Certificate of Trust as of the date first above written.
-----------------------------,
not in its individual capacity
but solely as Owner Trustee
By:
-------------------------
Name:
Title:
