Common use of Replacement Cap Contracts Clause in Contracts

Replacement Cap Contracts. In the event of a default by a Cap Contract Counterparty with respect to the related Cap Contracts (a "Cap Contract Default"), the Issuer, at its expense, may, but shall not be required to, substitute a new cap contract for the existing Cap Contracts any other form of similar coverage for basis risk shortfalls; PROVIDED, HOWEVER, that the timing and mechanism for receiving payments under such new cap contracts shall be reasonably acceptable to the Indenture Trustee. It shall be a condition to substitution of any new cap contracts that there be delivered to the Indenture Trustee an Opinion of Counsel to the effect that such substitution would not (a) result in a "substantial modification" of the Bonds under Treasury Regulation section 1.1001-3, or adversely affect the status of the Bonds as indebtedness for federal income tax purposes, or (b) if 100% of the Certificates are not owned by IMH Assets Corp., cause the Trust to be subject to an entity level tax for federal income tax purposes.