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IMPAC SECURED ASSETS CORP.,
Company,
IMPAC FUNDING CORPORATION
Master Servicer,
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2002
------------------------
Mortgage Pass-Through Certificates
Series 2002-1
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS.......................................................................................................5
Section 1.01. Defined Terms...................................................................................5
Accrual Period...........................................................................................5
Addition Notice..........................................................................................5
Advance..................................................................................................5
Aggregate Stated Principal Balance.......................................................................5
Agreement................................................................................................5
Allocated Realized Loss Amount...........................................................................5
Assignment...............................................................................................6
Available Distribution Amount............................................................................6
Balloon Loan.............................................................................................6
Balloon Payment..........................................................................................6
Bankruptcy Code..........................................................................................6
Basic Principal Distribution Amount......................................................................6
Book-Entry Certificate...................................................................................6
Business Day.............................................................................................6
Cash Liquidation.........................................................................................7
Certificate..............................................................................................7
Certificate Account......................................................................................7
Certificate Account Deposit Date.........................................................................7
Certificateholder........................................................................................7
Certificate Owner........................................................................................7
Certificate Principal Balance............................................................................7
Certificate Register.....................................................................................8
Class....................................................................................................8
Class A Certificate......................................................................................8
Class A-I-1 Certificate..................................................................................8
Class A-I-2 Certificate..................................................................................8
Class A-I-3 Certificate..................................................................................8
Class A-I-4 Certificate..................................................................................8
Class A-I-5 Certificate..................................................................................8
Class A-I-6 Certificate..................................................................................8
Class A-II Certificate...................................................................................9
Class A-IO Certificate...................................................................................9
Class A Principal Distribution Amount....................................................................9
Class B Certificate.....................................................................................10
Class B Principal Distribution Amount...................................................................10
Class C Certificate.....................................................................................10
Class M-1 Certificate...................................................................................11
Class M-1 Principal Distribution Amount.................................................................11
Class M-2 Certificate...................................................................................11
Class M-2 Principal Distribution Amount.................................................................11
Class P Certificate.....................................................................................12
Class R Certificate.....................................................................................12
Class R-1 Interest......................................................................................12
Class R-2 Interest......................................................................................12
Class R-3 Interest......................................................................................12
Closing Date............................................................................................12
Code....................................................................................................12
Collateral Value........................................................................................12
Commission..............................................................................................12
Company.................................................................................................12
Compensating Interest...................................................................................12
Corporate Trust Office..................................................................................12
Corresponding Certificate...............................................................................13
Current Specified Overcollateralization Percentage......................................................13
Curtailment.............................................................................................13
Custodial Account.......................................................................................13
Cut-off Date............................................................................................14
Defaulted Mortgage Loan.................................................................................14
Deficient Valuation.....................................................................................14
Definitive Certificate..................................................................................14
Deleted Mortgage Loan...................................................................................14
Depository..............................................................................................14
Depository Participant..................................................................................14
Determination Date......................................................................................14
Disqualified Organization...............................................................................14
Distribution Date.......................................................................................15
Due Date................................................................................................15
Due Period..............................................................................................15
Eligible Account........................................................................................15
Event of Default........................................................................................15
Excess Overcollateralized Amount........................................................................15
Excess Proceeds.........................................................................................16
Extra Principal Distribution Amount.....................................................................16
Fannie Mae..............................................................................................16
FDIC....................................................................................................16
Fitch...................................................................................................16
Freddie Mac.............................................................................................16
Funding Date............................................................................................16
Funding Period..........................................................................................16
GMAC....................................................................................................16
Group I Loan............................................................................................16
Group II Loan...........................................................................................16
Group I Marker Rate.....................................................................................16
Group II Marker Rate....................................................................................17
Group II Net WAC Rate...................................................................................18
Group I Principal Fraction..............................................................................18
Group II Principal Fraction.............................................................................18
Initial Certificate Principal Balance...................................................................18
Initial Mortgage Loans..................................................................................18
Initial Notional Amount.................................................................................19
Insurance Policy........................................................................................19
Insurance Proceeds......................................................................................19
Interest Coverage Account...............................................................................19
Interest Coverage Amount................................................................................19
Interest Remittance Amount..............................................................................19
Late Collections........................................................................................19
LIBOR...................................................................................................19
LIBOR Business Day......................................................................................19
LIBOR Rate Adjustment Date..............................................................................19
Liquidated Mortgage Loan................................................................................20
Liquidation Proceeds....................................................................................20
Loan-to-Value Ratio.....................................................................................20
Lost Note Affidavit.....................................................................................20
Majority Class C Certificateholder......................................................................20
Master Servicer.........................................................................................20
Master Servicer Prepayment Charge Payment Amount........................................................20
Master Servicing Fees...................................................................................20
Master Servicing Fee Rate...............................................................................20
Maximum Uncertificated Accrued Interest Deferral Amount.................................................21
MERS....................................................................................................22
MERS(R)System............................................................................................22
Mezzanine Certificate...................................................................................22
Mezzanine Net WAC Rate..................................................................................22
MIN.....................................................................................................22
MOM Loan................................................................................................23
Monthly Interest Distributable Amount...................................................................23
Monthly Payment.........................................................................................23
Moody's.................................................................................................23
Mortgage................................................................................................23
Mortgage File...........................................................................................23
Mortgage Loan...........................................................................................23
Mortgage Loan Purchase Agreement........................................................................23
Mortgage Loan Schedule..................................................................................24
Mortgage Note...........................................................................................25
Mortgage Rate...........................................................................................25
Mortgaged Property......................................................................................25
Mortgagor...............................................................................................25
Net Liquidation Proceeds................................................................................25
Net Mortgage Rate.......................................................................................25
Net Monthly Excess Cashflow.............................................................................25
Net Prepayment Interest Shortfall.......................................................................26
Net WAC Rate............................................................................................26
Net WAC Shortfall Amount................................................................................26
Net WAC Shortfall Reserve Fund..........................................................................27
Nonrecoverable Advance..................................................................................27
Non-United States Person................................................................................27
Notional Amount.........................................................................................27
Officers' Certificate...................................................................................27
Opinion of Counsel......................................................................................27
Optional Termination Date...............................................................................28
Original Pre-Funded Amount..............................................................................28
OTS.....................................................................................................28
Outstanding Mortgage Loan...............................................................................28
Overcollateralization Deficiency Amount.................................................................28
Overcollateralization Release Amount....................................................................28
Overcollateralization Target Amount.....................................................................28
Overcollateralized Amount...............................................................................28
Ownership Interest......................................................................................28
Pass-Through Rate.......................................................................................28
Percentage Interest.....................................................................................31
Permitted Investment....................................................................................32
Permitted Transferee....................................................................................33
Person..................................................................................................33
Pre-Funded Amount.......................................................................................33
Pre-Funding Account.....................................................................................33
Prepayment Assumption...................................................................................33
Prepayment Charge.......................................................................................33
Prepayment Interest Shortfall...........................................................................33
Prepayment Period.......................................................................................33
Primary Hazard Insurance Policy.........................................................................33
Primary Insurance Policy................................................................................34
Principal Distribution Amount...........................................................................34
Principal Prepayment....................................................................................34
Principal Prepayment in Full............................................................................34
Principal Remittance Amount.............................................................................34
Prospectus Supplement...................................................................................34
Purchase Price..........................................................................................34
Qualified Insurer.......................................................................................35
Qualified Substitute Mortgage Loan......................................................................35
Radian..................................................................................................35
Radian Insured Loans....................................................................................35
Radian Lender-Paid PMI Policy...........................................................................35
Radian PMI Policy Rate..................................................................................35
Rating Agency...........................................................................................35
Realized Loss...........................................................................................36
Record Date.............................................................................................36
Regular Certificate.....................................................................................36
Relief Act..............................................................................................36
Relief Act Interest Shortfall...........................................................................36
REMIC...................................................................................................36
REMIC 1.................................................................................................36
REMIC 1 Regular Interest LT1A...........................................................................37
REMIC 1 Regular Interest LT1B...........................................................................37
REMIC 1 Regular Interest LT1C...........................................................................37
REMIC 1 Regular Interest LT1D...........................................................................37
REMIC 1 Regular Interest LT1E...........................................................................37
REMIC 1 Regular Interest LT1F...........................................................................38
REMIC 1 Regular Interest LT1P...........................................................................38
REMIC 1 Regular Interests...............................................................................38
REMIC 2.................................................................................................38
REMIC 2 Group 1 Interest Loss Allocation Amount.........................................................38
REMIC 2 Group 2 Interest Loss Allocation Amount.........................................................38
REMIC 2 Group 1 Overcollateralized Amount...............................................................38
REMIC 2 Group 2 Overcollateralized Amount...............................................................39
REMIC 2 Group 1 Principal Loss Allocation Amount........................................................39
REMIC 2 Group 2 Principal Loss Allocation Amount........................................................39
REMIC 2 Overcollateralization Target Amount.............................................................39
REMIC 2 Regular Interest LT2A-IO........................................................................40
REMIC 2 Regular Interest LT2-1AA........................................................................40
REMIC 2 Regular Interest LT2-AI1........................................................................40
REMIC 2 Regular Interest LT2-AI2........................................................................40
REMIC 2 Regular Interest LT2-AI3........................................................................40
REMIC 2 Regular Interest LT2-AI4........................................................................40
REMIC 2 Regular Interest LT2-AI5........................................................................40
REMIC 2 Regular Interest LT2-AI6........................................................................41
REMIC 2 Regular Interest LT2-1M1........................................................................41
REMIC 2 Regular Interest LT2-1B.........................................................................41
REMIC 2 Regular Interest LT2-1ZZ........................................................................41
REMIC 2 Regular Interest LT2-2AA........................................................................41
REMIC 2 Regular Interest LT2-AII........................................................................41
REMIC 2 Regular Interest LT2-2M1........................................................................42
REMIC 2 Regular Interest LT2-2M2........................................................................42
REMIC 2 Regular Interest LT2-2B.........................................................................42
REMIC 2 Regular Interest LT2-2ZZ........................................................................42
REMIC 2 Regular Interest LT2P...........................................................................42
REMIC 2 Regular Interests...............................................................................42
REMIC 3.................................................................................................43
REMIC Provisions........................................................................................43
REMIC Regular Interest..................................................................................43
Remittance Report.......................................................................................43
REO Acquisition.........................................................................................43
REO Disposition.........................................................................................43
REO Imputed Interest....................................................................................43
REO Proceeds............................................................................................43
REO Property............................................................................................43
Request for Release.....................................................................................43
Residual Interest.......................................................................................44
Responsible Officer.....................................................................................44
Seller..................................................................................................44
Servicing Account.......................................................................................44
Servicing Advances......................................................................................44
Servicing Guide.........................................................................................44
Servicing Officer.......................................................................................44
Single Certificate......................................................................................44
Standard & Poor's.......................................................................................45
Startup Day.............................................................................................45
Stated Principal Balance................................................................................45
Stepdown Date...........................................................................................45
Subsequent Cut-off Date.................................................................................45
Subsequent Mortgage Loan................................................................................45
Subsequent Mortgage Loan Purchase Agreement.............................................................45
Subsequent Transfer Date................................................................................45
Subsequent Transfer Instrument..........................................................................46
Sub-Servicer............................................................................................46
Sub-Servicer Remittance Date............................................................................46
Sub-Servicing Account...................................................................................46
Sub-Servicing Agreement.................................................................................46
Sub-Servicing Fees......................................................................................46
Sub-Servicing Fee Rate..................................................................................46
Substitution Adjustment.................................................................................46
Tax Returns.............................................................................................46
Transfer................................................................................................46
Transferor..............................................................................................47
Trigger Event...........................................................................................47
Trust Fund..............................................................................................47
Trustee.................................................................................................47
Trustee's Fee...........................................................................................47
Trustee Fee Rate........................................................................................47
Uncertificated Accrued Interest.........................................................................47
Uncertificated Notional Amount..........................................................................48
Uncertificated Principal Balance........................................................................48
Uncertificated Pass-Through Rate........................................................................48
Uncertificated REMIC 1 Pass-Through Rate................................................................48
Uncertificated REMIC 2 Pass-Through Rate................................................................49
Uninsured Cause.........................................................................................49
United States Person....................................................................................49
Unpaid Interest Shortfall Amount........................................................................50
Voting Rights...........................................................................................50
Weighted Average Net Mortgage Rate......................................................................50
Wendover................................................................................................50
Section 1.02 Determination of LIBOR.........................................................................50
Section 1.03 Allocation of Certain Interest Shortfalls......................................................51
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES................................................................................54
Section 2.01. Conveyance of Mortgage Loans...................................................................54
Section 2.02. Acceptance of the Trust Fund by the Trustee....................................................58
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the
Company........................................................................................59
Section 2.04. Representations and Warranties of the Seller...................................................61
Section 2.05. Issuance of Certificates; Conveyance of REMIC Regular Interests and
Acceptance of REMIC 2 and REMIC 3 by the Trustee...............................................63
Section 2.06. Conveyance of the Subsequent Mortgage Loans....................................................64
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND................................................................................................68
Section 3.01. Master Servicer to Act as Master Servicer......................................................68
Section 3.02. Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.............................70
Section 3.03. Successor Sub-Servicers........................................................................71
Section 3.04. Liability of the Master Servicer...............................................................71
Section 3.05. No Contractual Relationship Between Sub-Servicers and Trustee or
Certificateholders.............................................................................72
Section 3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee...............................72
Section 3.07. Collection of Certain Mortgage Loan Payments...................................................72
Section 3.08. Sub-Servicing Accounts.........................................................................73
Section 3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts.........................74
Section 3.10. Custodial Account..............................................................................74
Section 3.11. Permitted Withdrawals From the Custodial Account...............................................75
Section 3.12. Permitted Investments..........................................................................77
Section 3.13. Maintenance of Primary Hazard Insurance........................................................77
Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption Agreements......................................79
Section 3.15. Realization Upon Defaulted Mortgage Loans......................................................81
Section 3.16. Trustee to Cooperate; Release of Mortgage Files................................................82
Section 3.17. Servicing Compensation.........................................................................83
Section 3.18. Maintenance of Certain Servicing Policies......................................................84
Section 3.19. Annual Statement as to Compliance..............................................................84
Section 3.20. Annual Independent Public Accountants' Servicing Statement.....................................85
Section 3.21. Access to Certain Documentation................................................................85
Section 3.22. Title, Conservation and Disposition of REO Property............................................86
Section 3.23. Additional Obligations of the Master Servicer..................................................88
Section 3.24. Additional Obligations of the Company..........................................................88
Section 3.25. Periodic Filings with the Securities and Exchange Commission; Additional
Information....................................................................................89
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS...................................................................................90
Section 4.01. Distributions..................................................................................90
Section 4.02. Statements to Certificateholders...............................................................95
Section 4.03. Remittance Reports; Advances by the Master Servicer............................................98
Section 4.04. Pre-Funding Account............................................................................99
Section 4.05. Interest Coverage Account.....................................................................101
Section 4.06. Distributions on the REMIC Regular Interests..................................................102
Section 4.07. Allocation of Realized Losses.................................................................105
Section 4.08. Information Reports to Be Filed by the Master Servicer........................................107
Section 4.09. Compliance with Withholding Requirements......................................................107
Section 4.10. Distribution of Net WAC Shortfall REMIC Amount; Net WAC Shortfall Reserve
Fund............................................................................................................107
ARTICLE V
THE CERTIFICATES................................................................................................109
Section 5.01. The Certificates..............................................................................109
Section 5.02. Registration of Transfer and Exchange of Certificates.........................................111
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................115
Section 5.04. Persons Deemed Owners.........................................................................116
Section 5.05. Rule 144A Information.........................................................................116
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER.............................................................................117
Section 6.01. Liability of the Company and the Master Servicer..............................................117
Section 6.02. Merger, Consolidation or Conversion of the Company or the Master Servicer
.............................................................................................117
Section 6.03. Limitation on Liability of the Company, the Master Servicer and Others........................117
Section 6.04. Limitation on Resignation of the Master Servicer..............................................118
Section 6.05. Sale and Assignment of Master Servicing.......................................................119
ARTICLE VII
DEFAULT.........................................................................................................120
Section 7.01. Events of Default.............................................................................120
Section 7.02. Trustee to Act; Appointment of Successor......................................................122
Section 7.03. Notification to Certificateholders............................................................123
Section 7.04. Waiver of Events of Default...................................................................123
Section 7.05. List of Certificateholders....................................................................124
ARTICLE VIII
CONCERNING THE TRUSTEE..........................................................................................125
Section 8.01. Duties of Trustee.............................................................................125
Section 8.02. Certain Matters Affecting the Trustee.........................................................126
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.........................................127
Section 8.04. Trustee May Own Certificates..................................................................128
Section 8.05. Trustee's Fees................................................................................128
Section 8.06. Eligibility Requirements for Trustee..........................................................129
Section 8.07. Resignation and Removal of the Trustee........................................................129
Section 8.08. Successor Trustee.............................................................................130
Section 8.09. Merger or Consolidation of Trustee............................................................130
Section 8.10. Appointment of Co-Trustee or Separate Trustee.................................................131
ARTICLE IX
TERMINATION.....................................................................................................133
Section 9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans or upon
Purchase of Certificates......................................................................133
Section 9.02. Termination of REMIC 2 and REMIC 3............................................................135
Section 9.03. Additional Termination Requirements...........................................................135
ARTICLE X
REMIC PROVISIONS................................................................................................137
Section 10.01. REMIC Administration..........................................................................137
Section 10.02. Prohibited Transactions and Activities........................................................140
Section 10.03. Master Servicer and Trustee Indemnification...................................................140
ARTICLE XI
MISCELLANEOUS PROVISIONS........................................................................................141
Section 11.01. Amendment.....................................................................................141
Section 11.02. Recordation of Agreement; Counterparts........................................................142
Section 11.03. Limitation on Rights of Certificateholders....................................................142
Section 11.04. Governing Law.................................................................................143
Section 11.05. Notices.......................................................................................143
Section 11.06. Severability of Provisions....................................................................144
Section 11.07. Successors and Assigns........................................................................144
Section 11.08. Article and Section Headings..................................................................144
Section 11.09. Notice to Rating Agencies.....................................................................144
Signatures
Acknowledgments
Exhibit A Form of Class A Certificate
Exhibit B-1 Form of Class [M][B] Certificate
Exhibit B-2 Form of Class C Certificate
Exhibit B-3 Form of Class P Certificate
Exhibit B-4 Form of Class R Certificate
Exhibit C Form of Trustee Initial Certification
Exhibit D Form of Trustee Final Certification
Exhibit E Form of Remittance Report
Exhibit F-1 Request for Release
Exhibit F-2 Request for Release for Mortgage Loans Paid in Full
Exhibit G-1 Form of Investor Representation Letter
Exhibit G-2 Form of Transferor Representation Letter
Exhibit G-3 Form of Rule 144A Investment Representation
Exhibit G-4 Transferor Certificate for Transfers of Residual Certificates
Exhibit G-5 Transfer Affidavit and Agreement for Transfers of Residual Certificates
Exhibit H Mortgage Loan Schedule
Exhibit I Seller Representations and Warranties
Exhibit J Form of Notice Under Section 3.24
Exhibit K Impac Funding Corporation Servicing Guide
Exhibit L Addition Notice
Exhibit M Subsequent Transfer Instrument
This Pooling and Servicing Agreement, dated and effective as of January
1, 2002, is entered into among Impac Secured Assets Corp., as company (the
"Company"), Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Bankers Trust Company of California, N.A., as trustee (the
"Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of fourteen classes of
certificates, designated as (i) the Class A-I-1, (ii) Class A-I-2, (iii) Class
A-I-3, (iv) Class A-I-4, (v) Class A-I-5, (vi) Class A-I-6, (vii) Class A-II,
(viii) Class A-IO Certificates, (ix) the Class M-1 Certificates, (x) the Class
M-2 Certificates, (xi) the Class B Certificates, (xii) the Class P Certificates,
(xiii) the Class C Certificates and (xiv) the Class R Certificates.
REMIC 1
-------
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (exclusive of the Pre-Funding Account,
the Interest Coverage Account and the Net WAC Shortfall Reserve Fund) as a real
estate mortgage investment conduit (a "REMIC") for federal income tax purposes,
and such segregated pool of assets will be designated as "REMIC 1." The Class
R-1 Interest will represent the sole class of "residual interests" in REMIC 1
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the designation, the
Uncertificated REMIC 1 Pass-Through Rate, the initial Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 1
Regular Interests. None of the REMIC 1 Regular Interests will be certificated.
Uncertificated REMIC 1 Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date (1)
----------- ----------------- ----------------- -----------------
LT1A Variable(2) $ 173,248,268.86 April 2032
LT1B Variable(2) $ 1,194.11 April 2032
LT1C Variable(2) $ 538.39 April 2032
LT1D Variable(2) $ 20,000,000.00 April 2032
LT1E Variable(2) $ 5,000,000.00 April 2032
LT1F Variable(2) $ 1,750,000.00 April 2032
LT1P Variable(2) $ 100.00 April 2032
1
- -------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest possible maturity date has
been designated as the "latest possible maturity date" for each REMIC 1
Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2". The Class R-2 Interest will represent the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions.
The following table irrevocably sets forth the designation, the
Uncertificated REMIC 2 Pass-Through Rate, the initial Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 2
Regular Interests. None of the REMIC 2 Regular Interests will be certificated.
Uncertificated REMIC 2 Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date (1)
----------- ----------------- ----------------- -----------------
LT2-1AA Variable(2) $ 135,091,674.97 April 2032
LT2-AI1 Variable(2) $ 308,000.00 April 2032
LT2-AI2 Variable(2) $ 179,000.00 April 2032
LT2-AI3 Variable(2) $ 191,000.00 April 2032
LT2-AI4 Variable(2) $ 255,000.00 April 2032
LT2-AI5 Variable(2) $ 100,000.00 April 2032
LT2-AI6 Variable(2) $ 252,440.00 April 2032
LT2-1M1 Variable(2) $ 53,502.96 April 2032
LT2-1M2 Variable(2) $ 35,668.64 April 2032
LT2-1B Variable(2) $ 31,210.06 April 2032
LT2-1ZZ Variable(2) $ 1,378,486.49 April 2032
LT2-2AA Variable(2) $ 60,908,326.36 April 2032
LT2-AII Variable(2) $ 579,560.00 April 2032
LT2-2M1 Variable(2) $ 6,497.04 April 2032
LT2-2M2 Variable(2) $ 4,331.36 April 2032
LT2-2B Variable(2) $ 3,789.94 April 2032
LT2-2ZZ Variable(2) $ 621,513.54 April 2032
LT2A-IO Variable(2) N/A(3) April 2032
2
LT2P Variable(2) $ 100.00 April 2032
- -------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest possible maturity date has
been designated as the "latest possible maturity date" for each REMIC 2
Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 2
Pass-Through Rate" herein.
(3) REMIC 2 Regular Interest LT2A-IO will not have an Uncertificated
Principal Balance, but will accrue interest on its respective
Uncertificated Notional Amounts outstanding from time to time which
shall equal the Uncertificated Principal Balance of (a) REMIC 1 Regular
Interest LT1D, REMIC 1 Regular Interest LT1E and REMIC 1 Regular
Interest LT1F up to and including the Distribution Date in July 2002,
(b) REMIC 1 Regular Interest LT1D and REMIC 1 Regular Interest LT1E up
to and including the Distribution Date in January 2003, and (c) REMIC 1
Regular Interest LT1D for each Distribution Date thereafter.
REMIC 3
-------
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 3". The Class R-3 Interest will represent the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions.
The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in REMIC 3
created hereunder:
Initial Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity Date(1)
----------------- ----------------- ----------------- ----------------
Class A-I-1 $ 30,800,000.00 Variable(2) April 2032
Class A-I-2 $ 17,900,000.00 Variable(2) April 2032
Class A-I-3 $ 19,100,000.00 Variable(2) April 2032
Class A-I-4 $ 25,500,000.00 Variable(2) April 2032
Class A-I-5 $ 10,000,000.00 Variable(2) April 2032
Class A-I-6 $ 25,244,000.00 Variable(2) April 2032
Class A-II $ 57,956,000.00 Variable(2) April 2032
Class A-IO N/A (4) Variable(2) April 2032
Class M-1 $ 6,000,000.00 Variable(2) April 2032
Class M-2 $ 4,000,000.00 Variable(2) April 2032
Class B $ 3,500,000.00 Variable(2) April 2032
Class C $ 0.00 (3) Variable(2) April 2032
3
Class P $ 100.00 N/A(5) April 2032
- -------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest possible maturity date has
been designated as the "latest possible maturity date" for each Class
of Certificates that represents one or more of the "regular interests"
in REMIC 3.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class C Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class C Certificates
outstanding from time to time which shall equal the aggregate of the
Uncertificated Principal Balances of the REMIC 2 Regular Interests. The
Class C Certificates will not accrue interest on their Certificate
Principal Balance.
(4) The Class A-IO Certificates do not have a Certificate Principal Balance
and are not entitled to distributions of principal. The Class A-IO
Certificates accrue interest on a Notional Amount calculated in
accordance with the definition of "Notional Amount" herein.
(5) The Class P Certificates do not accrue interest.
Using the Structuring Assumptions (as defined in the Prospectus
Supplement) and assuming a 0.00% Prepayment Assumption, no losses or
delinquencies on the Mortgage Loans, and an Overcollateralization Target Amount
of $0, the final scheduled Distribution Date on each Class of Certificates would
be as follows: (i) for the Class A-I-1 Certificates, the Distribution Date in
June 2016; (ii) for the Class A-I-2 Certificates, the Distribution Date in
August 2019; (iii) for the Class A-I-3 Certificates, the Distribution Date in
March 2023; (iv) for the Class A-I-4 Certificates, the Distribution Date in
November 2027; (v) for the Class A-IO Certificates, the Distribution Date in
July 2004; and (v) for the Class A-I-5, Class A-I-6, Class A-II, Class M, Class
B and Class C Certificates, the Distribution Date in April 2032.
Due to Realized Losses, principal prepayments (including Principal
Prepayments, liquidations of defaulted Mortgage Loans, repurchases of Mortgage
Loans) and other differences between the Structuring Assumptions and the actual
behavior that the Mortgage Loans will exhibit during the period that they are
held in the Trust Fund, the final scheduled Distribution Date on each Class of
Certificates may be substantially earlier or later than the dates indicated in
the preceding paragraph. The failure of any Class of Certificates to be retired
on or before the applicable date indicated in the preceding paragraph shall not
constitute an Event of Default or a breach by any party hereto, nor shall any
Certificateholder (or the Trustee on behalf of any Certificateholder) be
entitled to any remedy for such failure. The termination of the Trust Fund and
the final distribution on any Class of the Certificates shall only occur in
accordance with the provisions of Article IX of this Agreement.
4
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Article. Unless otherwise specified, all calculations in respect of interest on
the Class A Certificates (other than the Class A-I-1 Certificates), the
Mezzanine Certificates, the Class C Certificates, the REMIC 1 Regular Interests
and the REMIC 2 Regular Interests shall be made on the basis of a 360-day year
consisting of twelve 30-day months. Accrued Certificate Interest on the Class
A-I-1 Certificates shall accrue on the basis of a 360-day year and the actual
number of days in the related Accrual Period. The Class P Certificates and the
Class R Certificates do not accrue interest.
"Accrual Period": With respect to each Class of Regular Certificates
(other than the Class A-I-1 and Class P Certificates) and each Distribution
Date, the calendar month prior to the month of such Distribution Date. With
respect to the Class A-I-1 Certificates (i) with respect to the Distribution
Date in February 2002, the period commencing the Closing Date and ending on the
day preceding the Distribution Date in February 2002, and (ii) with respect to
any Distribution Date after the Distribution Date in February 2002, the period
commencing on the Distribution Date in the month immediately preceding the month
in which such Distribution Date occurs and ending on the day preceding such
Distribution Date.
"Addition Notice": With respect to the transfer of Subsequent Mortgage
Loans to the Trust Fund pursuant to Section 2.06, a notice of the Company's
designation of the Subsequent Mortgage Loans to be sold to the Trust Fund and
the aggregate Stated Principal Balance of such Subsequent Mortgage Loans as of
the Subsequent Cut-off Date. The Addition Notice shall be given not later than
three Business Days prior to the related Subsequent Transfer Date and shall be
substantially in the form attached hereto as Exhibit L.
"Advance": As to any Mortgage Loan, any advance made by the Master
Servicer on any Distribution Date pursuant to Section 4.03.
"Aggregate Stated Principal Balance": As of any date of determination,
the aggregate Stated Principal Balance of the Mortgage Loans.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof.
"Allocated Realized Loss Amount": With respect to any Distribution Date
and any Class of Mezzanine Certificates, the sum of (i) any Realized Losses
allocated to such Class of Certificates on any Distribution Date and (ii) the
amount of any Allocated Realized Loss Amount for such Class of Certificates
remaining unpaid from previous Distribution Date.
5
"Assignment": 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.
"Available Distribution Amount": With respect to any Distribution Date,
an amount equal to (a) the sum of (i) the balance on deposit in the Custodial
Account as of the close of business on the related Determination Date, (ii) the
aggregate amount of any Advances made and all amounts required to be paid by the
Master Servicer pursuant to Sections 3.13 and 3.23 by deposits into the
Certificate Account on the immediately preceding Certificate Account Deposit
Date, (iii) the aggregate amount of Mortgage Loan purchases made pursuant to
Section 9.01, (iv) any amounts deposited into the Certificate Account from the
Pre-Funding Account and the Interest Coverage Account pursuant to Sections 4.04
and 4.05 of this Agreement and (v) the aggregate amount required to be deposited
by the Master Servicer pursuant to Section 4.01(h), reduced by (b) the sum, as
of the close of business on the related Determination Date, of (i) Monthly
Payments collected but due during a Due Period subsequent to the Due Period
ending on the first day of the month of the related Distribution Date, (ii) all
interest or other income earned on deposits in the Custodial Account or the
Certificate Account, (iii) any other amounts reimbursable or payable to the
Trustee, Master Servicer or any Sub-Servicer pursuant to Section 3.11, (iv) the
Master Servicing Fees, the Sub-Servicing Fees and the fees of the Trustee
payable on such Distribution Date, (v) any amounts in respect of the premium
payable to Radian under the Radian Lender-Paid PMI Policy, (vi) Insurance
Proceeds, Liquidation Proceeds, Principal Prepayments, REO Proceeds and the
proceeds of Mortgage Loan purchases made pursuant to Sections 2.02, 2.04 or
3.14, in each case received or made in the month of such Distribution Date and
(vii) amounts on deposit in the Custodial Account representing any Prepayment
Charges or Master Servicer Prepayment Charge Payment Amounts.
"Balloon Loan": Each of the Mortgage Loans identified in the Mortgage
Loan Schedule as having an original term to maturity that is shorter than the
related amortization term.
"Balloon Payment": With respect to any Balloon Loan, the related
Monthly Payment payable on the stated maturity date of such Balloon Loan.
"Bankruptcy Code": The Bankruptcy Code of 1978, as amended.
"Basic Principal Distribution Amount": With respect to any Distribution
Date, the excess of (i) the Principal Remittance Amount for such Distribution
Date over (ii) the Overcollateralization Release Amount, if any, for such
Distribution Date.
"Book-Entry Certificate": Any Certificate registered in the name of the
Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in California or New York (and such other state or
states in which the Custodial Account or the Certificate Account are at the time
located) or in the city in which the Corporate
6
Trust Office of the Trustee is located are authorized or obligated by law or
executive order to close.
"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": Any Regular Certificate or Class R Certificate.
"Certificate Account": The trust account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled Bankers Trust
Company of California, N.A., in trust for registered holders of Impac Secured
Assets Corp., Mortgage Pass-Through Certificates, Series 2002-1, and which
account or accounts must each be an Eligible Account.
"Certificate Account Deposit Date": With respect to any Distribution
Date, the third Business Day immediately preceding such Distribution Date.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that only a Permitted
Transferee shall be a holder of a Residual Certificate for any purposes hereof
and, solely for the purposes of giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Company or the Master Servicer or
any affiliate thereof shall be deemed not to be outstanding and the Voting
Rights to which such Certificate is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent has been obtained, except as otherwise provided in
Section 11.01. The Trustee shall be entitled to rely upon a certification of the
Company or the Master Servicer in determining if any Certificates are registered
in the name of the respective affiliate. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Depository and participating members
thereof, except as otherwise specified herein; provided, however, that the
Trustee shall be required to recognize as a "Holder" or "Certificateholder" only
the Person in whose name a Certificate is registered in the Certificate
Register.
"Certificate Owner": With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.
"Certificate Principal Balance": With respect to any Class of Regular
Certificates (other than the Class A-IO Certificates and Class C Certificates)
immediately prior to any Distribution Date, the Initial Certificate Principal
Balance thereof reduced by the sum of all amounts actually distributed in
respect of principal of such Class and, in the case of a Mezzanine Certificate,
Realized Losses allocated thereto on all prior Distribution Dates. With respect
to the Class C
7
Certificates as of any date of determination, an amount equal to the excess, if
any, of (A) the then aggregate Uncertificated Principal Balances of the REMIC 2
Regular Interests over (B) the then aggregate Certificate Principal Balances of
the Class A Certificates, the Mezzanine Certificates and the Class P
Certificates then outstanding. The Class A-IO Certificates will not have a
Certificate Principal Balance.
"Certificate Register": The register maintained pursuant to Section
5.02.
"Class": Collectively, all of the Certificates bearing the same
designation.
"Class A Certificate": Any one of the Class A-I-1, Class A-I-2, Class
A-I-3, Class A-I-4, Class A-I-5, Class A-I-6, Class A-II or Class A-IO
Certificates.
"Class A-I-1 Certificate": Any one of the Class A-I-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.
"Class A-I-2 Certificate": Any one of the Class A-I-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing (i) a REMIC Regular Interest in REMIC 3 and (ii) the right to
receive the Net WAC Shortfall Amount from the Reserve Fund.
"Class A-I-3 Certificate": Any one of the Class A-I-3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing (i) a REMIC Regular Interest in REMIC 3 and (ii) the right to
receive the Net WAC Shortfall Amount from the Reserve Fund.
"Class A-I-4 Certificate": Any one of the Class A-I-4 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing (i) a REMIC Regular Interest in REMIC 3 and (ii) the right to
receive the Net WAC Shortfall Amount from the Reserve Fund.
"Class A-I-5 Certificate": Any one of the Class A-I-5 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing (i) a REMIC Regular Interest in REMIC 3 and (ii) the right to
receive the Net WAC Shortfall Amount from the Reserve Fund.
"Class A-I-6 Certificate": Any one of the Class A-I-6 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and
8
authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 3 and (ii) the right to receive the Net WAC Shortfall Amount
from the Reserve Fund..
"Class A-II Certificate": Any one of the Class A-II Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing (i) the right to distributions as set forth herein and
therein and evidencing a REMIC Regular Interest in REMIC 3 and (ii) the right to
receive the Net WAC Shortfall Amount from the Reserve Fund.
"Class A-IO Certificate": Any one of the Class A-IO Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-3, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.
"Class A-IO Rate": With respect to the Class A-IO Certificates,
(A) in the case of the Distribution Dates beginning in
February 2002 through January 2003, a per annum rate equal to the excess of (i)
the Weighted Average Net Mortgage Rate over (ii) the excess (but not less than
zero) of (x) the Weighted Average Net Mortgage Rate over (y) 7.75% per annum;
(B) in the case of the Distribution Dates beginning in
February 2003 through July 2003, a per annum rate equal to the excess of (i) the
Weighted Average Net Mortgage Rate over (ii) the excess (but not less than zero)
of (x) the Weighted Average Net Mortgage Rate over (y) 7.00% per annum;
(C) in the case of the Distribution Dates beginning in August
2003 through January 2004, a per annum rate equal to the excess of (i) the
Weighted Average Net Mortgage Rate over (ii) the excess (but not less than zero)
of (x) the Weighted Average Net Mortgage Rate over (y) 5.00% per annum;
(D) in the case of the Distribution Dates beginning in
February 2004 through July 2004, a per annum rate equal to the excess of (i) the
Weighted Average Net Mortgage Rate over (ii) the excess (but not less than zero)
of (x) the Weighted Average Net Mortgage Rate over (y) 4.00% per annum; and
(E) in the case of each Distribution Date thereafter, 0.00%
per annum.
"Class A Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date over (y) the difference between (a) the sum of the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related
9
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Prepayment Period) and the amount on
deposit in the Pre-Funding Account (less any investment income transferred to
the Interest Coverage Account) and (b) the sum of the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Prepayment Period) and the amount on
deposit in the Pre-Funding Account multiplied by the sum of (A) approximately
13.50% and (B) the Current Specified Overcollateralization Percentage.
"Class B Certificate": Any one of the Class B Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing (i) a REMIC Regular Interest in REMIC 3 and (ii) the right to
receive the Net WAC Shortfall Amount from the Reserve Fund.
"Class B Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class B Certificates immediately prior to such
Distribution Date over (y) the difference between (a) the sum of the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) and the amount on deposit in the Pre-Funding Account and (b) the sum of
(1) the Certificate Principal Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), and (4)
the sum of aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) and the amount on deposit in the Pre-Funding Account
multiplied by the Current Specified Overcollateralization Percentage.
"Class C Certificate": Any one of the Class C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-2, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.
10
"Class M-1 Certificate": Any one of the Class M-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing (i) a REMIC Regular Interest in REMIC 3 and (ii) the right to
receive the Net WAC Shortfall Amount from the Reserve Fund.
"Class M-1 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date over (y) the difference between (a) the sum of the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) and the amount on deposit in the Pre-Funding Account, and (b) the sum of
(1) the Certificate Principal Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date) and (2) the sum of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period, and after reduction for Realized
Losses incurred during the related Prepayment Period) and the amount on deposit
in the Pre-Funding Account multiplied by the sum of (A) approximately 7.50% and
(B) the Current Specified Overcollateralization Percentage.
"Class M-2 Certificate": Any one of the Class M-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing (i) a REMIC Regular Interest in REMIC 3 and (ii) the right to
receive the Net WAC Shortfall Amount from the Reserve Fund.
"Class M-2 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the difference between (a) the sum of the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) and the amount on deposit in the Pre-Funding Account, and (b) the sum of
(1) the Certificate Principal Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), and (3) the sum of the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due
11
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Prepayment Period) and the amount on
deposit in the Pre-Funding Account multiplied by the sum of (A) approximately
3.50% and (B) the Current Specified Overcollateralization Percentage.
"Class P Certificate": Any one of the Class P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-3, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.
"Class R Certificate": Any one of the Class R Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-4, executed by the Trustee and authenticated and delivered by the
Trustee, evidencing the ownership of the Class R-1 Interest, Class R-2 Interest
and Class R-3 Interest.
"Class R-1 Interest": The uncertificated Residual Interest in REMIC 1.
"Class R-2 Interest": The uncertificated Residual Interest in REMIC 2.
"Class R-3 Interest": The uncertificated Residual Interest in REMIC 3.
"Closing Date": January 31, 2002.
"Code": The Internal Revenue Code of 1986.
"Collateral Value": The appraised value of a Mortgaged Property based
upon the lesser of (i) the appraisal (as reviewed and approved by the Seller)
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 (as reviewed and approved by the Seller) obtained at the time of
refinancing.
"Commission": The Securities and Exchange Commission.
"Company": Impac Secured Assets Corp., or its successor in interest.
"Compensating Interest": With respect to any Distribution Date, an
amount equal to Prepayment Interest Shortfalls resulting from Principal
Prepayments during the related Prepayment Period, but not more than the sum of
the Master Servicing Fees and the Subservicing Fees for the immediately
preceding Due Period.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business related to
this Agreement shall be administered,
12
which office at the date of the execution of this Agreement is located at 1761
East St. Andrew Place, Santa Ana, California 92705, Attention: Corporate Trust,
Impac Secured Assets Corp. Series 2002-1 (IM02S1).
"Corresponding Certificate": With respect to:
(i) REMIC 2 Regular Interest LT2-AI1, the Class A-I-1
Certificates,
(ii) REMIC 2 Regular Interest LT2-AI2, the Class A-I-2
Certificates,
(iii) REMIC 2 Regular Interest LT2-AI3, the Class A-I-3
Certificates,
(iv) REMIC 2 Regular Interest LT2-AI4, the Class A-I-4
Certificates,
(v) REMIC 2 Regular Interest LT2-AI5, the Class A-I-5
Certificates,
(vi) REMIC 2 Regular Interest LT2-AI6, the Class A-I-6
Certificates,
(vii) REMIC 2 Regular Interest LT2-AII, the Class A-II
Certificates,
(viii) REMIC 2 Regular Interest LT2-1M1 and REMIC 2 Regular
Interest LT2- 2M1, the Class M-1 Certificates,
(ix) REMIC 2 Regular Interest LT2-1M2 and REMIC 2 Regular
Interest LT2- 2M2, the Class M-2 Certificates,
(x) REMIC 2 Regular Interest LT2-1B and REMIC 2 Regular
Interest LT2- 2B, the Class B Certificates, and
(xi) REMIC 2 Regular Interest LT2P, the Class P
Certificates.
"Current Specified Overcollateralization Percentage": For any
Distribution Date, a percentage equal to (a) the Overcollateralization Target
Amount divided by (b) the sum of (i) the aggregate Stated Principal Balance of
the Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) and (ii) the amount on deposit in the Pre-Funded Amount, in
each case as of the last day of the related Due Period.
"Curtailment": Any Principal Prepayment made by a Mortgagor which is
not a Principal Prepayment in Full.
"Custodial Account": The custodial account or accounts created and
maintained pursuant to Section 3.10 in the name of a depository institution, as
custodian for the holders of the
13
Certificates. Any such account or accounts shall be an Eligible Account.
"Cut-off Date": January 1, 2002.
"Defaulted Mortgage Loan" means any Mortgage Loan as to which the
Mortgagor has failed to make unexcused three or more consecutive scheduled
Monthly Payments.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under the Mortgage Loan, or any reduction
in the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
"Definitive Certificate": Any definitive, fully registered Certificate.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced
with a Qualified Substitute Mortgage Loan.
"Depository" The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(5) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
"Depository Participant": A broker, dealer, bank or other financial
institutions or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the month
of the related Distribution Date.
"Disqualified Organization": Any organization defined as a
"disqualified organization" under Section 860E(e)(5) of the Code, which includes
any of the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the Freddie Mac, a
majority of its board of directors is not selected by such governmental unit),
(ii) a foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code and (v) any other Person so designated by the
14
Trustee based upon an Opinion of Counsel that the holding of an Ownership
Interest in a Class R Certificate by such Person may cause either REMIC 1, REMIC
2 or REMIC 3 or any Person having an Ownership Interest in any Class of
Certificates (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Class R Certificate to such Person. The terms
"United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
"Distribution Date": The 25th day of any month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing in February 2002.
"Due Date": The first day of the month of the related Distribution
Date.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month of such
Distribution Date (or, with respect to the first Due Period, the day following
the Cut-off Date) and ending on the first day of the month of the related
Distribution Date.
"Eligible Account": Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1+ or better by Standard & Poor's and P-1 by Moody's (and
F-1 by Fitch if rated by Fitch) at the time of any deposit therein or (B)
insured by the FDIC (to the limits established by such Corporation), the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel (obtained by the Person requesting that the
account be held pursuant to this clause (ii)) delivered to the Trustee prior to
the establishment of such account, the Certificateholders will have a claim with
respect to the funds in such account and a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Investment is an obligation of the institution that maintains the Certificate
Account or Custodial Account) securing such funds that is superior to claims of
any other depositors or general creditors of the depository institution with
which such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Custodial Account or the Certificate Account will not have an
adverse effect on the then-current ratings assigned to the Classes of the
Certificates then rated by the Rating Agencies). Eligible Accounts may bear
interest.
"Event of Default": One or more of the events described in Section
7.01.
"Excess Overcollateralized Amount": With respect to the Class A
Certificates (other than the Class A-IO Certificates) and the Mezzanine
Certificates and any Distribution Date, the excess, if any, of (i) the
Overcollateralized Amount for such Distribution Date, assuming that
15
100% of the Principal Remittance Amount is applied as a principal payment on
such Distribution Date over (ii) the Overcollateralization Target Amount for
such Distribution Date.
"Excess Proceeds": As defined in Section 3.22.
"Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (x) the Net Monthly Excess Cashflow for such Distribution
Date and (y) the Overcollateralization Deficiency Amount for such Distribution
Date.
"Fannie Mae": Federal National Mortgage Association or any successor.
"FDIC": Federal Deposit Insurance Corporation or any successor.
"Fitch": Fitch, Inc., or its successor in interest.
"Freddie Mac": Federal Home Loan Mortgage Corporation or any successor.
"Funding Date": With respect to each Mortgage Loan, the date on which
funds were advanced by or on behalf of the Seller and interest began to accrue
thereunder.
"Funding Period": The period from the Closing Date until the earliest
of (i) the date on which the amount on deposit in the Pre-Funding Account
(exclusive of investment income) is reduced to zero or (ii) March 31, 2002.
"GMAC": GMAC Mortgage Corporation.
"Group I Loan": Any Mortgage Loan identified as a Group I Loan on the
Mortgage Loan Schedule.
"Group II Loan": Any Mortgage Loan identified as a Group II Loan on the
Mortgage Loan Schedule.
"Group I Marker Rate": With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 2 Pass-Through Rates for REMIC 2 Regular Interest
LT2-AI1, REMIC 2 Regular Interest LT2- AI2, REMIC 2 Regular Interest LT2-AI3,
REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular Interest LT2-AI5, REMIC 2
Regular Interest LT2-AI6, REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular
Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B, and REMIC 2 Regular Interest
LT2-1ZZ, with the rate on REMIC 2 Regular Interest LT2-AI1 subject to a cap
equal to the lesser of (x) LIBOR plus 0.23% per annum and (y) the Group I Net
WAC Rate for the purpose of this calculation; with the rate on REMIC 2 Regular
Interest LT2-AI2 subject to a cap equal to the lesser of (x) 4.59% per annum and
(y) the Group I Net WAC Rate for the purpose of this calculation; with the rate
on REMIC 2 Regular Interest LT2-AI3 subject to a cap equal to the lesser of (x)
5.57% per annum and (y) the Group I Net WAC Rate for the purpose of this
16
calculation; with the rate on REMIC 2 Regular Interest LT2-AI4 subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 6.29% per annum and (y) the Group I
Net WAC Rate and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) 6.79% per annum and (y) the Group I Net WAC
Rate for the purpose of this calculation; with the rate on REMIC 2 Regular
Interest LT2-AI5 subject to a cap equal to (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 6.75%
per annum and (y) the Group I Net WAC Rate and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x) 7.25%
per annum and (y) the Group I Net WAC Rate for the purpose of this calculation;
with the rate on REMIC 2 Regular Interest LT2-AI6 subject to a cap equal to (A)
in the case of any Distribution Date up to and including the Optional
Termination Date, the lesser of (x) 7.03% per annum and (y) the Group I Net WAC
Rate and (B) in the case of any Distribution Date after the Optional Termination
Date, the lesser of (x) 7.53% per annum and (y) the Group I Net WAC Rate for the
purpose of this calculation; with the rate on REMIC 2 Regular Interest LT2-1M1
subject to a cap equal to (A) in the case of any Distribution Date up to and
including the Optional Termination Date, the lesser of (x) 7.00% per annum and
(y) the Mezzanine Net WAC Rate and (B) in the case of any Distribution Date
after the Optional Termination Date, the lesser of (x) 7.50% per annum and (y)
the Mezzanine Net WAC Rate for the purpose of this calculation; with the rate on
REMIC 2 Regular Interest LT2-1M2 subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 7.00% per annum and (y) the Mezzanine Net WAC Rate and (B) in the
case of any Distribution Date after the Optional Termination Date, the lesser of
(x) 7.50% per annum and (y) the Mezzanine Net WAC Rate for the purpose of this
calculation; with the rate on REMIC 2 Regular Interest LT2- 1B subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.00% per annum and (y) the
Mezzanine Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 7.50% per annum and (y) the
Mezzanine Net WAC Rate for the purpose of this calculation; and with the rate on
REMIC 2 Regular Interest LT2-1ZZ subject to a cap of zero for the purpose of
this calculation; provided, however, that for this purpose, calculations of the
Uncertificated REMIC 2 Pass-Through Rate and the related caps with respect to
REMIC 2 Regular Interest LT2-AI1 shall be multiplied by a fraction, the
numerator of which is the actual number of days in the Accrual Period and the
denominator of which is 30.
"Group II Marker Rate": With respect to the Class C Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC 2 Pass-Through Rates for REMIC 2 Regular
Interest LT2-AII, REMIC 2 Regular Interest LT2- 2M1, REMIC 2 Regular Interest
LT2-2M2, REMIC 2 Regular Interest LT2-2B and REMIC 2 Regular Interest LT2-2ZZ;
with the rate on REMIC 2 Regular Interest LT2-AII subject to a cap equal to (A)
in the case of any Distribution Date up to and including the Optional
Termination Date, the lesser of (x) 6.50% per annum and (y) the Group II Net WAC
Rate and (B) in the case of any Distribution Date after the Optional Termination
Date, the lesser of (x) 7.00% per annum and (y) the Group II Net WAC Rate for
the purpose of this calculation; with the rate on REMIC 2 Regular Interest
LT2-1M1 subject to a cap equal to (A) in the case of any Distribution Date up to
and including the Optional Termination Date, the lesser of (x) 7.00% per annum
and (y) the
17
Mezzanine Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 7.50% per annum and (y) the
Mezzanine Net WAC Rate for the purpose of this calculation; with the rate on
REMIC 2 Regular Interest LT2-1M2 subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 7.00% per annum and (y) the Mezzanine Net WAC Rate and (B) in the
case of any Distribution Date after the Optional Termination Date, the lesser of
(x) 7.50% per annum and (y) the Mezzanine Net WAC Rate for the purpose of this
calculation; with the rate on REMIC 2 Regular Interest LT2-1B subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.00% per annum and (y) the
Mezzanine Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 7.50% per annum and (y) the
Mezzanine Net WAC Rate for the purpose of this calculation; and with the rate on
REMIC 2 Regular Interest LT2-2ZZ subject to a cap of zero for the purpose of
this calculation.
"Group I Net WAC Rate": With respect to each Distribution Date through
and including the Distribution Date in July 2004, the Net WAC Rate and for each
Distribution Date thereafter, the weighted average of the Net Mortgage Rates of
the Group I Loans, weighted on the basis of the Stated Principal Balances
thereof as of the close of business on the first day of the calendar month
preceding the month in which such Distribution Date occurs.
"Group II Net WAC Rate": With respect to each Distribution Date through
and including the Distribution Date in July 2004, the Net WAC Rate and for each
Distribution Date thereafter, the weighted average of the Net Mortgage Rates of
the Group II Loans, weighted on the basis of the Stated Principal Balances
thereof as of the close of business on the first day of the calendar month
preceding the month in which such Distribution Date occurs.
"Group I Principal Fraction": With respect to any Distribution Date, a
fraction equal to (x) the Principal Remittance Amount received from the Group I
Loans included in the Trust for such Distribution Date over (y) the Principal
Remittance Amount received from all of the Mortgage Loans included in the Trust
for such Distribution Date.
"Group II Principal Fraction": With respect to any Distribution Date, a
fraction equal to (x) the Principal Remittance Amount received from the Group II
Loans included in the Trust for such Distribution Date over (y) the Principal
Remittance Amount received from all of the Mortgage Loans included in the Trust
for such Distribution Date.
"Initial Certificate Principal Balance": With respect to each Class of
Regular Certificates (other than the Class A-IO Certificates), the Initial
Certificate Principal Balance of such Class of Certificates as set forth in the
Preliminary Statement hereto, or with respect to any single Certificate, the
Initial Certificate Principal Balance as stated on the face thereof.
"Initial Mortgage Loans": Any of the Mortgage Loans included in the
Trust Fund as of the Closing Date. The aggregate principal balance of the
Initial Mortgage Loans as of the Cut-off Date is equal to $155,898,142.36.
18
"Initial Notional Amount": With respect to the Class A-IO Certificates,
$26,750,000 or with respect to any single Certificate, the Initial Notional
Amount as stated on the face thereof. With respect to the Class C Certificate,
the aggregate of the initial Uncertificated Principal Balance of the REMIC 2
Regular Interests, or with respect to any single Certificate, the Initial
Notional Amount as stated on the face thereof.
"Insurance Policy": With respect to any Mortgage Loan, any insurance
policy (including a Radian Lender-Paid PMI Policy) which is required to be
maintained from time to time under this Agreement in respect of such Mortgage
Loan.
"Insurance Proceeds": Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Hazard Insurance Policy, any title insurance policy or
any other insurance policy covering a Mortgage Loan, to the extent such proceeds
are not applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with the procedures that the Master Servicer
would follow in servicing mortgage loans held for its own account.
"Interest Coverage Account": The account established and maintained
pursuant to Section 4.05.
"Interest Coverage Amount": The amount to be paid by the Company to the
Trustee for deposit in the Interest Coverage Account on the Closing Date
pursuant to Section 4.05, which amount is $1,023,927.
"Interest Remittance Amount": With respect to any Distribution Date,
that portion of the Available Distribution Amount for such Distribution Date
allocable to interest received or advanced on the Mortgage Loans.
"Late Collections": With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
"LIBOR": With respect to any Distribution Date and the Pass-Through
Rates on the Class A-I-1 Certificates, the arithmatic mean of the Loan interbank
offered rate quotations of reference banks (which will be selected by the
Trustee after consultation with the Master Servicer) for one- month U.S. dollar
deposits, expressed on a per annum basis, determined in accordance with Section
1.02.
"LIBOR Business Day": Any day other than (i) Saturday or a Sunday or
(ii) a day on which banking institutions in the city of London, England and New
York City are required or authorized by law to be closed.
"LIBOR Rate Adjustment Date": With respect to each Distribution Date,
the second LIBOR Business Day immediately preceding the commencement of the
related Accrual Period.
19
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been recovered.
"Liquidation Proceeds": Amounts (other than Insurance Proceeds)
received by the Master Servicer in connection with the taking of an entire
Mortgaged Property by exercise of the power of eminent domain or condemnation or
in connection with the liquidation of a defaulted Mortgage Loan through
trustee's sale, foreclosure sale or otherwise, other than amounts received in
respect of any REO Property.
"Loan-to-Value Ratio": As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Collateral Value of the related Mortgaged Property.
"Lost Note Affidavit": With respect to any Mortgage Note, an original
lost note affidavit from the Seller stating that the original Mortgage Note was
lost, misplaced or destroyed, together with a copy of the related Mortgage Note.
"Majority Class C Certificateholder": As defined in Section 9.01.
"Master Servicer": Impac Funding Corporation, or any successor master
servicer appointed as herein provided.
"Master Servicer Prepayment Charge Payment Amount": The amounts payable
by the Master Servicer in respect of any waived Prepayment Charges pursuant to
Section 2.03, and any amount paid to the Trust Fund by any Person to remedy any
breach of any representation, warranty of covenant made with respect to the
Prepayment Charges to the extent the Trust Fund, as assignee, is the beneficiary
of such representation, warranty or covenant.
"Master Servicing Fees": As to each Mortgage Loan, an amount, payable
out of any payment of interest on the Mortgage Loan, equal to interest at the
Master Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan
as of the Due Date in the calendar month preceding the month in which the
payment of the Master Servicing Fee is due (alternatively, in the event such
payment of interest accompanies a Principal Prepayment in full made by the
Mortgagor, interest for the number of days covered by such payment of interest).
The Master Servicing Fee consists of servicing compensation payable to the
Master Servicer in respect of its master servicing responsibilities.
"Master Servicing Fee Rate": With respect to each Mortgage Loan, the
per annum rate of 0.03%.
20
"Maximum Uncertificated Accrued Interest Deferral Amount": With respect
to any Distribution Date, the excess of (a) the sum of (I) accrued interest at
the Uncertificated REMIC 2 Pass-Through Rate applicable to REMIC 2 Regular
Interest LT2-1ZZ for such Distribution Date on a balance equal to the excess of
(i) the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2-1ZZ and
(ii) the REMIC 2 Group 1 Overcollateralized Amount for such Distribution Date
and (II) accrued interest at the Uncertificated REMIC 2 Pass-Through Rate
applicable to REMIC 2 Regular Interest LT2-2ZZ for such Distribution Date on a
balance equal to the excess of (i) the Uncertificated Principal Balance of REMIC
2 Regular Interest LT2-2ZZ and (ii) the REMIC 2 Group 2 Overcollateralized
Amount for such Distribution Date, over (b) the sum of (I) Uncertificated
Accrued Interest on REMIC 2 Regular Interest LT2-AI1, with the rate on REMIC 2
Regular Interest LT2-AI1 subject to a cap equal to the lesser of (x) LIBOR plus
0.23% per annum and (y) the Group I Net WAC Rate, (II) Uncertificated Accrued
Interest on REMIC 2 Regular Interest LT2-AI2, with the rate on REMIC 2 Regular
Interest LT2-AI2 subject to a cap equal to the lesser of (x) 4.59% per annum and
(y) the Group I Net WAC Rate, (III) Uncertificated Accrued Interest on REMIC 2
Regular Interest LT2-AI3, with the rate on REMIC 2 Regular Interest LT2-AI3
subject to a cap equal to the lesser of (x) 5.57% per annum and (y) the Group I
Net WAC Rate, (IV) Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2-AI4, with the rate on REMIC 2 Regular Interest LT2-AI4 subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 6.29% per annum and (y) the Group 1
Net WAC Rate and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) 6.79% per annum and (y) the Group I Net WAC
Rate, (V) Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2-AI5,
with the rate on REMIC 2 Regular Interest LT2-AI5 subject to a cap equal to (A)
in the case of any Distribution Date up to and including the Optional
Termination Date, the lesser of (x) 6.75% per annum and (y) the Group 1 Net WAC
Rate and (B) in the case of any Distribution Date after the Optional Termination
Date, the lesser of (x) 7.25% per annum and (y) the Group I Net WAC Rate, (VI)
Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2-AI6, with the
rate on REMIC 2 Regular Interest LT2-AI6 subject to a cap equal to (A) in the
case of any Distribution Date up to and including the Optional Termination Date,
the lesser of (x) 7.03% per annum and (y) the Group 1 Net WAC Rate and (B) in
the case of any Distribution Date after the Optional Termination Date, the
lesser of (x) 7.53% per annum and (y) the Group I Net WAC Rate, (VII)
Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2-1M1 with the
rate on REMIC 2 Regular Interest LT2-1M1 subject to a cap equal to (A) in the
case of any Distribution Date up to and including the Optional Termination Date,
the lesser of (x) 7.00% per annum and (y) the Mezzanine Net WAC Rate and (B) in
the case of any Distribution Date after the Optional Termination Date, the
lesser of (x) 7.50% per annum and (y) the Mezzanine Net WAC Rate for the purpose
of this calculation, (VIII) Uncertificated Accrued Interest on REMIC 2 Regular
Interest LT2-1M2, with the rate on REMIC 2 Regular Interest LT2-1M2 subject to a
cap equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.00% per annum and (y) the
Mezzanine Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 7.50% per annum and (y) the
Mezzanine Net WAC Rate for the purpose of calculation, (IX) Uncertificated
Accrued Interest on REMIC 2 Regular Interest LT2-1B, with the rate on REMIC 2
Regular Interest LT2-1B subject to a cap equal to (A) in the case of any
Distribution Date up to
21
and including the Optional Termination Date, the lesser of (x) 7.00% per annum
and (y) the Mezzanine Net WAC Rate and (B) in the case of any Distribution Date
after the Optional Termination Date, the lesser of (x) 7.50% per annum and (y)
the Mezzanine Net WAC Rate for the purpose of this calculation, (X)
Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2-AII, with the
rate on REMIC 2 Regular Interest LT2-AII subject to a cap equal to (A) in the
case of any Distribution Date up to and including the Optional Termination Date,
the lesser of (x) 6.50% per annum and (y) the Group II Net WAC Rate and (B) in
the case of any Distribution Date after the Optional Termination Date, the
lesser of (x) 7.00% per annum and (y) the Group II Net WAC Rate for the purpose
of this calculation, (XI) Uncertificated Accrued Interest on REMIC 2 Regular
Interest LT2-2M1 with the rate on REMIC 2 Regular Interest LT2-2M1 subject to a
cap equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.00% per annum and (y) the
Mezzanine Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 7.50% per annum and (y) the
Mezzanine Net WAC Rate for the purpose of this calculation, (XII) Uncertificated
Accrued Interest on REMIC 2 Regular Interest LT2-2M2, with the rate on REMIC 2
Regular Interest LT2-2M2 subject to a cap equal to (A) in the case of any
Distribution Date up to and including the Optional Termination Date, the lesser
of (x) 7.00% per annum and (y) the Mezzanine Net WAC Rate and (B) in the case of
any Distribution Date after the Optional Termination Date, the lesser of (x)
7.50% per annum and (y) the Mezzanine Net WAC Rate for the purpose of this
calculation, and (XIII) Uncertificated Accrued Interest on REMIC 2 Regular
Interest LT2-2B, with the rate on REMIC 2 Regular Interest LT2-2B subject to a
cap equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.00% per annum and (y) the
Mezzanine Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 7.50% per annum and (y) the
Mezzanine Net WAC Rate for the purpose of this calculation.
"MERS": Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
"MERS(R) System": The system of recording transfers of Mortgages
electronically maintained by MERS.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate or Class B Certificate.
"Mezzanine Net WAC Rate": (A) For the February 2002 Distribution Date
through the July 2004 Distribution Date, a per annum rate equal to the Net WAC
Rate and (B) for each Distribution Date thereafter, the lesser of (1) the
weighted average of the Net Mortgage Rates of the Group I Loans as of the first
day of the month preceding the month in which such Distribution Date occurs and
(2) the weighted average of the Net Mortgage Rates of the Group II Loans as of
the first day of the month preceding the month in which such Distribution Date
occurs.
"MIN": The Mortgage Identification Number for Mortgage Loans registered
with MERS
22
on the MERS(R)System.
"MOM Loan": With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
"Monthly Interest Distributable Amount": With respect to the Class A
Certificates, Mezzanine Certificates and Class C Certificates and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class A-IO Certificates and Class C
Certificates) of such Class immediately prior to such Distribution Date, in each
case, reduced by any Net Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls (allocated to such Certificate as set forth in Section 1.03). The
Monthly Interest Distributable Amount on the Regular Certificates, other than
the Class A-I-1 Certificates, will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. The amount of accrued interest for the Class
A-I-1 Certificates will be calculated on the basis of the actual number of days
in the related Accrual Period and a 360-day year.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by a Mortgagor from time to time under the related Mortgage Note as originally
executed (after adjustment, if any, for Deficient Valuations occurring prior to
such Due Date, and after any adjustment by reason of any bankruptcy 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 any other instrument
securing the Mortgage Loan.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement; provided, that
whenever the term "Mortgage File" is used to refer to documents actually
received by the Trustee, such term shall not be deemed to include such
additional documents required to be added unless they are actually so added.
"Mortgage Loan": Each of the mortgage loans, transferred and assigned
to the Trustee pursuant to Section 2.01, 2.04 or 2.06 and from time to time held
in the Trust Fund (including any Subsequent Mortgage Loans and Qualified
Substitute Mortgage Loans), the Mortgage Loans so transferred, assigned and held
being identified in the Mortgage Loan Schedule. As used herein, the term
"Mortgage Loan" includes the related Mortgage Note and Mortgage.
"Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
Agreement dated as of January 1, 2002, among Impac Funding Corporation, as
seller, Impac Mortgage Holdings, Inc., as guarantor, and the Company as
purchaser, and all amendments thereof and supplements
23
thereto.
"Mortgage Loan Schedule": As of any date of determination, the schedule
of Mortgage Loans included in the Trust Fund. The initial schedule of Mortgage
Loans with accompanying information transferred on the Closing Date to the
Trustee as part of the Trust Fund for the Certificates, attached hereto as
Exhibit H (as amended from time to time to reflect the addition of Subsequent
Mortgage Loans and Qualified Substitute Mortgage Loans) (and, for purposes of
the Trustee pursuant to Section 2.02, in computer-readable form as delivered to
the Trustee), which list shall set forth the following information with respect
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) (A) the original term to maturity and (B) if such Mortgage Loan
is a Balloon Loan, the amortization term thereof;
(iv) the original principal balance and the original Mortgage Rate;
(v) the first payment date;
(vi) whether the Mortgage Loan is a Balloon Mortgage Loan or a Mortgage
Loan the terms of which do not provide for a Balloon Payment;
(vii) the type of Mortgaged Property;
(viii) the Monthly Payment in effect as of the Cut-off Date (or
Subsequent Cut-off Date, with respect to a Subsequent Mortgage Loan);
(ix) the principal balance as of the Cut-off Date (or Subsequent
Cut-off Date, with respect to a Subsequent Mortgage Loan);
(x) the Mortgage Rate as of the Cut-off Date (or Subsequent Cut-off
Date, with respect to a Subsequent Mortgage Loan);
(xi) the occupancy status;
(xii) the purpose of the Mortgage Loan;
(xiii) the Collateral Value of the Mortgaged Property;
(xiv) the original term to maturity;
(xv) the paid-through date of the Mortgage Loan;
24
(xvi) the Master Servicing Fee Rate;
(xvii) the Sub-Servicing Fee Rate;
(xviii) the Net Mortgage Rate for such Mortgage Loan;
(xix) whether such Mortgage Loan is a Radian Insured Loan and, if so,
the related Radian PMI Policy Rate;
(xx) whether the Mortgage Loan is covered by a private mortgage
insurance policy or an original certificate of private mortgage insurance;
(xxi) the documentation type;
(xxii) the type and term of the related Prepayment Charge, if any; and
(xxiii) whether the Mortgage Loan is a Group I Loan or a Group II Loan.
The Mortgage Loan Schedule may be in the form of more than one
schedule, collectively setting forth all of the information required.
"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, as adjusted from time to time in
accordance with the provisions of the Mortgage Note.
"Mortgaged Property": The underlying property securing a Mortgage Loan.
"Mortgagor": The obligor or obligors on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, Servicing Advances,
Servicing Fees and any other accrued and unpaid servicing fees received and
retained in connection with the liquidation of such Mortgage Loan or Mortgaged
Property.
"Net Mortgage Rate": With respect to each Mortgage Loan Due Date, a per
annum rate of interest equal to the then-applicable Mortgage Rate on such
Mortgage Loan less the sum of the Servicing Fee Rate, the Trustee Fee Rate and
the Advisor's Fee Rate, and with respect to the Radian Insured Loans, the Radian
PMI Policy Rate.
"Net Monthly Excess Cashflow": With respect to each Distribution Date,
the sum of (a)
25
any Overcollateralization Release Amount for such Distribution Date and (b) the
excess of (x) Available Distribution Amount for such Distribution Date over (y)
the sum for such Distribution Date of (A) the Monthly Interest Distributable
Amounts for the Class A Certificates and the Mezzanine Certificates, (B) the
Unpaid Interest Shortfall Amounts for the Class A Certificates and (C) the
Principal Remittance Amount.
"Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.
"Net WAC Rate": With respect to each class of the Class A Certificates
(other than the Class A-IO Certificates) and each Class of the Mezzanine
Certificates and each REMIC 2 Regular Interest (other than REMIC 2 Regular
Interest LT2A-IO) and any Distribution Date, a per annum rate (but not less than
zero) equal to the weighted average of (w) the Uncertificated REMIC 1
Pass-Through Rate with respect to REMIC 1 Regular Interest LT1A, REMIC 1 Regular
Interest LT1B, REMIC 1 Regular Interest LT1C and REMIC 1 Regular Interest LT1P
for such Distribution Date and (x) the excess, if any, of (i) the Uncertificated
REMIC 1 Pass- Through Rate with respect to REMIC 1 Regular Interest LT1D for
such Distribution Date over (ii) (A) in the case of the Distribution Dates
beginning in February 2002 and ending in July 2004, the applicable Class A-IO
Rate, and (B) in the case of any Distribution Date thereafter, 0.00% per annum,
(y) the excess, if any, of (i) the Uncertificated REMIC 1 Pass-Through Rate with
respect to REMIC 1 Regular Interest LT1E for such Distribution Date over (ii)
(A) in the case of the Distribution Dates beginning in February 2002 and ending
in January 2003, the applicable Class A-IO Rate, and (B) in the case of any
Distribution Date thereafter, 0.00% per annum, (z) the excess, if any, of (i)
the Uncertificated REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular
Interest LT1F for such Distribution Date over (ii) (A) in the case of the
Distribution Dates beginning in February 2002 and ending in July 2002, the
applicable Class A-IO Rate, and (B) in the case of any Distribution Date
thereafter, 0.00% per annum weighted, in the case of clause (w), on the basis of
the aggregate Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A,
REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C and REMIC 1 Regular
Interest LT1P, and in the case of clause (x), on the basis of the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1D, and in the case of clause
(y), on the basis of the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1E, and in the case of clause (z), on the basis of the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1F respectively.
"Net WAC Shortfall Amount": With respect to the Class A Certificates
(other than the Class A-IO Certificates and Class A-I-1 Certificates), Class M
Certificates and Class B Certificates and any Distribution Date on which the
related Net WAC Rate is used to determine the Pass-Through Rate of these classes
of Certificates, an amount equal to the excess of (x) the Monthly Interest
Distributable Amount calculated at the fixed Pass-Through Rate for such
Certificates (i.e. assuming that the related Net WAC Rate is not in effect on
such Distribution Date) over (y) the Monthly Interest Distributable Amount
calculated using the related Net WAC Rate.
26
"Net WAC Shortfall Reserve Fund": A reserve fund established by the
Trustee for the benefit of the Holders of the Class A Certificates (other than
the Class A-IO Certificates and Class A-I-1 Certificates), Class M Certificates
and Class B Certificates, and funded on the Closing Date by or on behalf of the
Company with $210,000. The Net WAC Shortfall Reserve Fund is an "outside reserve
fund" within the meaning of Treasury regulation Section 1.860G-2(h), which is
not an asset of any REMIC, ownership of which is evidenced by the Class A
Certificates, other than the Class A-IO Certificates and Class A-I-1
Certificates, Class M Certificates and Class B Certificates, and which is
established and maintained pursuant to Section 4.10.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan which, in the good
faith judgment of the Master Servicer, will not or, in the case of a proposed
Advance or Servicing Advance, would not be ultimately recoverable from related
Late Collections, Insurance Proceeds, Liquidation Proceeds or REO Proceeds. The
determination by the Master Servicer that it has made a Nonrecoverable Advance
or that any proposed Advance or Servicing Advance would constitute a
Nonrecoverable Advance, shall be evidenced by a certificate of a Servicing
Officer delivered to the Company and the Trustee.
"Non-United States Person": Any Person other than a United States
Person.
"Notional Amount": With respect to the Class A-IO Certificates,
immediately prior to any Distribution Date in July 2002, an amount equal to the
sum of the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1D,
REMIC 1 Regular Interest LT1E and REMIC 1 Regular Interest LT1F, with respect to
any Distribution Date beginning in August 2002 through and including January
2003, an amount equal to the sum of the Uncertificated Principal Balances of
REMIC 1 Regular Interest LT1D and REMIC 1 Regular Interest LT1E, and with
respect to any Distribution Date immediately prior to any Distribution Date in
July 2004, an amount equal to the Uncertified Principal Balance of REMIC 1
Regular Interest LT1D. With respect to the Class C Certificates, immediately
prior to any Distribution Date, the aggregate of the Uncertificated Principal
Balances of the REMIC 2 Regular Interests.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president and by
the Treasurer, the Secretary, or one of the assistant treasurers or assistant
secretaries of the Company, the Seller, the Master Servicer or of any
Sub-Servicer and delivered to the Company and Trustee.
"Opinion of Counsel": A written opinion of counsel, who may be counsel
for the Company, the Seller, or the Master Servicer, reasonably acceptable to
the Trustee; except that any opinion of counsel relating to (a) the
qualification of any account required to be maintained pursuant to this
Agreement as an Eligible Account, (b) the qualification of REMIC 1, REMIC 2, or
REMIC 3 as REMICs, (c) compliance with the REMIC Provisions or (d) resignation
of the Master Servicer pursuant to Section 6.04 must be an opinion of counsel
who (i) is in fact independent of the Company and the Master Servicer, (ii) does
not have any direct financial
27
interest or any material indirect financial interest in the Company or the
Master Servicer or in an affiliate of either and (iii) is not connected with the
Company or the Master Servicer as an officer, employee, director or person
performing similar functions.
"Optional Termination Date": The first Distribution Date on which the
Majority Class C Certificateholders may opt to terminate the Trust Fund pursuant
to Section 9.01.
"Original Pre-Funded Amount": The amount deposited by the Trustee in
the Pre-Funding Account on the Closing Date, which amount is $44,101,959.
"OTS": Office of Thrift Supervision or any successor.
"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 prior
to such Due Date pursuant to Sections 2.02, 2.04 or 3.14.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Basic Principal Distribution
Amount on such Distribution Date).
"Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount and (y) the
Excess Overcollateralized Amount.
"Overcollateralization Target Amount": With respect to any Distribution
Date, $1,000,000.
"Overcollateralized Amount": With respect to any Distribution Date, the
amount, if any, by which (i) the sum of the aggregate Stated Principal Balance
of the Mortgage Loans (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and the Pre-Funded Amount exceeds (ii) the aggregate Certificate
Principal Balance of the Class A Certificates (other than the Class A-IO
Certificates), the Mezzanine Certificates and the Class P Certificates as of
such Distribution Date after giving effect to distributions to be made on such
Distribution Date.
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to any Distribution Date and
(i) the Class A-I-1 Certificates, the lesser of (x) LIBOR plus 0.23%
per annum and
28
(y) the Group I Net WAC Rate;
(ii) the Class A-I-2 Certificates, the lesser of (x) 4.59% per annum
and (y) the Group I Net WAC Rate;
(iii) the Class A-I-3 Certificates, the lesser of (x) 5.57% per annum
and (y) the Group I Net WAC Rate;
(iv) the Class A-I-4 Certificates, (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 6.29%
per annum and (y) the Group I Net WAC Rate and (B) in the case of any
Distribution Date after the Optional termination Date, the lesser of (x) 6.79%
per annum and (y) the Group I Net WAC Rate;
(v) the Class A-I-5 Certificates, (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 6.75%
per annum and (y) the Group I Net WAC Rate and (B) in the case of any
Distribution Date after the Optional termination Date, the lesser of (x) 7.25%
per annum and (y) the Group I Net WAC Rate;
(vi) the Class A-I-6 Certificates, (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 7.03%
per annum and (y) the Group I Net WAC Rate and (B) in the case of any
Distribution Date after the Optional termination Date, the lesser of (x) 7.53%
per annum and (y) the Group I Net WAC Rate;
(vii) the Class A-II Certificates, (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 6.50%
per annum and (y) the Group II Net WAC Rate and (B) in the case of any
Distribution Date after the Optional termination Date, the lesser of (x) 7.00%
per annum and (y) the Group II Net WAC Rate ;
(viii) the Class A-IO Certificates, 100% of the interest on REMIC 2
Regular Interest LT2A-IO;
(ix) the Class M-1 Certificates, (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 7.00%
per annum and (y) the Mezzanine Net WAC Rate and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x) 7.50%
per annum and (y) the Mezzanine Net WAC Rate;
(x) the Class M-2 Certificates, (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 7.00%
per annum and (y) the Mezzanine Net WAC Rate and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x) 7.50%
per annum and (y) the Mezzanine Net WAC Rate;
(xi) the Class B Certificates, (A) in the case of any Distribution Date
up to and including the Optional Termination Date, the lesser of (x) 7.00% per
annum and (y) the Mezzanine Net WAC Rate and (B) in the case of any Distribution
Date after the Optional
29
Termination Date, the lesser of (x) 7.50% per annum and (y) the Mezzanine Net
WAC Rate; and
(xii) the Class C Certificates, a per annum rate equal to the
percentage equivalent of a fraction, the numerator of which is (x) the sum of
the amounts calculated pursuant to clauses (A) through (R) below, and the
denominator of which is (y) the aggregate of the Uncertificated Principal
Balances of the REMIC 2 Regular Interests. For purposes of calculating the Pass-
Through Rate for the Class C Certificates, the numerator is equal to the sum of
the following components:
(A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-1AA minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1AA;
(B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI1 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI1;
(C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI2 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI2;
(D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI3 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI3;
(E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI4 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI4;
(F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI5 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI5;
(G) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI6 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI6;
(H) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-1M1 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1M1;
(I) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-1M2 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1M2;
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(J) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-1B minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1B;
(K) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-1ZZ minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1ZZ;
(L) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2AA minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2AA;
(M) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AII minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AII;
(N) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2M1 minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2M1;
(O) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2M2 minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2M2;
(P) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2B minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2B;
(Q) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2ZZ minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2ZZ; and
(R) 100% of the interest on REMIC 2 Regular Interest LT2P.
The Class P Certificates will not accrue interest and therefore will
not have a Pass- Through Rate.
"Percentage Interest": With respect to any Regular Certificate, the
undivided percentage ownership interest in the related Class evidenced by such
Certificate, which percentage ownership interest shall be equal to the Initial
Certificate Principal Balance thereof or Initial Notional Amount, as applicable,
thereof divided by the aggregate Initial Certificate Principal Balance or
Initial Notional Amount, as applicable, of all of the Certificates of the same
Class. With respect to any Class R Certificate, the interest in distributions to
be made with respect to such Class evidenced thereby, expressed as a percentage,
as stated on the face of each such
31
Certificate.
"Permitted Investment": One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof, provided
that the unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in its highest
short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original maturity of
not more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining maturity of
more than 30 days) denominated in United States dollars of any U.S. depository
institution or trust company incorporated under the laws of the United States or
any state thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard &
Poor's, in the case of the principal depository institution in a depository
institution holding company, debt obligations of the depository institution
holding company) at the date of acquisition thereof have been rated by each
Rating Agency in its highest short-term rating available; and provided further
that, if the only Rating Agency is Standard & Poor's and if the depository or
trust company is a principal subsidiary of a bank holding company and the debt
obligations of such subsidiary are not separately rated, the applicable rating
shall be that of the bank holding company; and, provided further that, if the
original maturity of such short-term obligations of a domestic branch of a
foreign depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of Standard &
Poor's if Standard & Poor's is the Rating Agency;
(iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the United States or any
state thereof which on the date of acquisition has been rated by Moody's and
Standard & Poor's (and by Fitch if rated by Fitch) in their highest short-term
ratings available; provided that such commercial paper shall have a remaining
maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by Moody's
and Fitch in their respective highest long-term ratings available and rated AAAm
or AAAm-G by Standard & Poor's, including any such funds for which Bankers Trust
Company of California, N.A. or any affiliate thereof serves as an investment
advisor, manager, administrator, shareholder, servicing agent, and/or custodian
or sub-custodian; and
(vi) other obligations or securities that are acceptable to each Rating
Agency as a
32
Permitted Investment hereunder and will not reduce the rating assigned to any
Class of Certificates by such Rating Agency below the lower of the then-current
rating or the rating assigned to such Certificates as of the Closing Date by
such Rating Agency, as evidenced in writing;
provided, however, that no instrument shall be a Permitted 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.
"Permitted Transferee": Any transferee of a Residual Certificate other
than a Disqualified Organization, a Non-United States Person or an "electing
large partnership" (as defined in Section 775 of the Code).
"Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Pre-Funded Amount": The amount on deposit in the Pre-Funding Account
on any date of determination.
"Pre-Funding Account": The account established and maintained pursuant
to Section 4.04.
"Prepayment Assumption": As defined in the Prospectus Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Master
Servicer Prepayment Charge Payment Amount).
"Prepayment Interest Shortfall": As to any Distribution 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 Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the Net Mortgage Rate on the amount of such Curtailment.
"Prepayment Period": As to any Distribution Date, the calendar month
preceding the month in which such Distribution Date occurs.
"Primary Hazard Insurance Policy": Each primary hazard insurance policy
required to be
33
maintained pursuant to Section 3.13.
"Primary Insurance Policy": Any primary policy of mortgage guaranty
insurance including the Radian Lender-Paid PMI Policy, or any replacement policy
therefor.
"Principal Distribution Amount": With respect to any Distribution Date,
an amount equal to the sum of the Basic Principal Distribution Amount plus the
Extra Principal Distribution Amount and any amount on deposit in the Pre-Funding
Account at the end of the Funding Period.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest representing scheduled
interest 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 unpaid principal balance of the Mortgage Loan.
"Principal Remittance Amount": With respect to any Distribution Date,
the sum of (i) each scheduled payment of principal collected or advanced on the
Mortgage Loans by the Master Servicer that were due during the related Due
Period, (ii) the principal portion of all partial and full Principal Prepayments
of the Mortgage Loans applied by the Master Servicer during the related
Prepayment Period, (iii) the principal portion of all Net Liquidation Proceeds,
REO Proceeds and Insurance Proceeds received during the related Prepayment
Period, (iv) the principal portion of proceeds of Mortgage Loan purchases made
pursuant to Section 2.02, 2.04 or 3.14, in each case received or made during the
related Prepayment Period, (v) the principal portion of any related Substitution
Adjustments deposited in the Custodial Account during the related Prepayment
Period and (vi) on the Distribution Date on which the Trust Fund is to be
terminated pursuant to Section 9.01, the principal portion of the termination
price received from the Majority Class C Certificateholders in connection with a
termination of the Trust Fund to occur on such Distribution Date.
"Prospectus Supplement": That certain Prospectus Supplement dated
January 29, 2002 relating to the public offering of the Class A Certificates and
the Mezzanine Certificates.
"Purchase Price": With respect to any Mortgage Loan (or REO Property)
required to be purchased pursuant to Section 2.02, 2.04 or 3.14, an amount equal
to the sum of (i) 100% of the Stated Principal Balance thereof, (ii) unpaid
accrued interest (or REO Imputed Interest) at the applicable Net Mortgage Rate
on the Stated Principal Balance thereof outstanding during each Due Period that
such interest was not paid or advanced, from the date through which interest was
last paid by the Mortgagor or advanced and distributed to Certificateholders
together with unpaid Master Servicing Fees, Sub-Servicing Fees, Trustee's Fees
and, if such Mortgage Loan is a Radian Insured Loan, fees due Radian at the
Radian PMI Policy Rate, from the date through which interest was last paid by
the Mortgagor, in each case to the first day of the month in which such Purchase
Price is to be distributed, plus (iii) the aggregate of all Advances and
Servicing
34
Advances made in respect thereof that were not previously reimbursed.
"Qualified Insurer": Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
"Qualified Substitute Mortgage Loan": A Mortgage Loan substituted by
the Company for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officers' Certificate of the Seller delivered
to the 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 Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any shortfall to be paid to the Master Servicer for
deposit in the Custodial Account in the month of substitution); (ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more than 1% per
annum higher than the Mortgage Rate and Net Mortgage Rate, respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iii) have a Loan-to-Value
Ratio at the time of substitution no higher than that of the Deleted Mortgage
Loan at the time of substitution; (iv) have a remaining term to stated maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (v) comply with each representation and warranty set forth in
Section 2.04 hereof; and, (vi) comply with each representation and warranty set
forth in the Mortgage Loan Purchase Agreement.
"Radian": Radian Guaranty, Inc. (f/k/a Commonwealth Mortgage Assurance
Company), or its successors or assigns.
"Radian Insured Loans": The Mortgage Loans included in the Trust Fund
covered by a Radian Lender-Paid PMI Policy, as indicated on the Mortgage Loan
Schedule.
"Radian Lender-Paid PMI Policy": A Primary Insurance Policy issued by
Radian in accordance with a May 1, 2000 letter between the Seller and Radian.
"Radian PMI Policy Rate": With respect to any Radian Insured Loan, the
rate per annum at which the related premium on the Radian Lender-Paid PMI Policy
accrues.
"Rating Agency": Standard & Poor's, Fitch or Moody's and each of their
successors. If such agencies and their successors are no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating agency,
or other comparable Person, designated by the Company, notice of which
designation shall be given to the Trustee and Master Servicer. References herein
to the two highest long term debt rating of a Rating Agency shall mean "AA" or
better in the case of Standard & Poor's, "AA" or better in the case of Fitch and
"Aa2" or better
35
in the case of Moody's and references herein to the highest short-term debt
rating of a Rating Agency shall mean "A-1+" in the case of Standard & Poor's,
F-1 in the case of Fitch and "P-1" in the case of Moody's, and in the case of
any other Rating Agency such references shall mean such rating categories
without regard to any plus or minus.
"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 Stated Principal Balance of the Mortgage Loan 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 Certificateholders up to the date of the
Cash Liquidation or REO Disposition on the Stated Principal Balance of such
Mortgage Loan 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 Sub- Servicer with respect to related Advances or Servicing Advances not
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.
"Record Date": With respect to each Class of Certificates (other than
the Class A-I-1 Certificates) and each Distribution Date, the last Business Day
of the month immediately preceding the month of the related Distribution Date.
For each Distribution Date and the Class A-I-1 Certificates, the Business Day
prior to such Distribution Date. If the Class A-I-1 Certificate is no longer a
Book-Entry Certificate, the Record Date shall be the last Business Day of the
month immediately preceding the month of the related Distribution Date.
"Regular Certificate": Any of the Certificates other than a Residual
Certificate.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period as
a result of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Principal Balance of such Mortgage Loan at the Loan Rate
for such Mortgage Loan before giving effect to the application of the Relief
Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto (exclusive of
the Pre-Funding Account, the Interest Coverage Account and the Net WAC Shortfall
Reserve Fund, each of
36
which is not an asset of any REMIC), with respect to which a REMIC election is
to be made, conveyed in trust to the Trustee, for the benefit of the Holders of
the REMIC 1 Regular Interests and the Holders of the Class R Certificates (as
holders of the Class R-1 Interest), consisting of: (i) each Mortgage Loan
(exclusive of payments of principal and interest due on or before the Cut- off
Date, if any, received by the Master Servicer which shall not constitute an
asset of the Trust Fund) as from time to time are subject to this Agreement and
all payments under and proceeds of such Mortgage Loans (exclusive of any
prepayment fees and late payment charges received on the Mortgage Loans),
together with all documents included in the related Mortgage File, subject to
Section 2.01; (ii) such funds or assets as from time to time are deposited in
the Custodial Account or the Certificate Account and belonging to the Trust
Fund; (iii) any REO Property; (iv) the Primary Hazard Insurance Policies, if
any, the Primary Insurance Policies, if any, and all other Insurance Policies
with respect to the Mortgage Loans; (v) [reserved]; and (vi) the Company's
interest in respect of the representations and warranties made by the Seller in
the Mortgage Loan Purchase Agreement as assigned to the Trustee pursuant to
Section 2.04 hereof.
"REMIC 1 Regular Interest LT1A": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1B": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1C": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1C shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1D": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1D shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1E": One of the separate non-certificated
beneficial
37
ownership interests in REMIC 1 issued hereunder and designated as a Regular
Interest in REMIC 1. REMIC 1 Regular Interest LT1E shall accrue interest at the
related Uncertificated REMIC 1 Pass-Through Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Principal Balance as set forth in the Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1F": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1E shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1P shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to any Prepayment Charges relating to the Mortgage
Loans collected by the Master Servicer and to a distribution of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F and REMIC 1
Regular Interest LT1P.
"REMIC 2": The segregated pool of assets consisting of all of the REMIC
1 Regular Interests conveyed in trust to the Trustee, for the benefit of REMIC
3, as holder of the REMIC 2 Regular Interests, and the Class R
Certificateholders, as holders of the Class R-2 Interest, pursuant to Article II
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.
"REMIC 2 Group 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Group 1 Loans and related REO Properties then
outstanding and the Pre-Funded Amount and (ii) the Uncertificated REMIC 2
Pass-Through Rate for REMIC 2 Regular Interest LT2-1AA minus the Group I Marker
Rate, divided by (b) 12.
"REMIC 2 Group 2 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Group II Loans and related REO Properties then
outstanding and the Pre-Funded Amount and (ii) the Uncertificated REMIC 2
Pass-Through Rate for REMIC 2 Regular Interest LT2-2AA minus the Group II Marker
Rate, divided by (b) 12.
"REMIC 2 Group 1 Overcollateralized Amount": With respect to any date
of
38
determination, (i) 1% of the aggregate Uncertificated Principal Balances of
REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular Interest LT2-AI1, REMIC 2
Regular Interest LT2-AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2 Regular
Interest LT2-AI4, REMIC 2 Regular Interest LT2-AI5, REMIC 2 Regular Interest
LT2-AI6, REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2,
REMIC 2 Regular Interest LT2-1B and REMIC 2 Regular Interest LT2-1ZZ, minus (ii)
the aggregate of the Uncertificated Principal Balances of REMIC 2 Regular
Interest LT2-AI1, REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular Interest
LT2- AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular Interest LT2-AI5,
REMIC 2 Regular Interest LT2-AI6, REMIC 2 Regular Interest LT2-1M1, REMIC 2
Regular Interest LT2-1M2 and REMIC 2 Regular Interest LT2-1B, in each case as of
such date of determination.
"REMIC 2 Group 2 Overcollateralized Amount": With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
REMIC 2 Regular Interest LT2-2AA, REMIC 2 Regular Interest LT2-AII, REMIC 2
Regular Interest LT2-2M1, REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular
Interest LT2-2B and REMIC 2 Regular Interest LT2-2ZZ, minus (ii) the aggregate
of the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-AII,
REMIC 2 Regular Interest LT2-2M1, REMIC 2 Regular Interest LT2- 2M2 and REMIC 2
Regular Interest LT2-2B, in each case as of such date of determination.
"REMIC 2 Group 1 Principal Loss Allocation Amount": With respect to any
Distribution Date and the Group I Loans, an amount equal to (a) the product of
(i) the aggregate Principal Balance of the Group I Loans and related REO
Properties then outstanding and the Pre-Funded Amount and (ii) 1 minus a
fraction, the numerator of which is two times the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-AI1, REMIC 2
Interest LT2- AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2 Regular Interest
LT2-AI4, REMIC 2 Regular Interest LT2-AI5, REMIC 2 Regular Interest LT2-AI6,
REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2 and REMIC 2
Regular Interest LT2-1B, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-AI1, REMIC 2
Regular Interest LT2-AI2, REMIC 2 Regular Interest LT2- AI3, REMIC 2 Regular
Interest LT2-AI4, REMIC 2 Regular Interest LT2-AI5, REMIC 2 Regular Interest
LT2-AI6, REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2,
REMIC 2 Regular Interest LT2-1B and REMIC 2 Regular Interest LT2-1ZZ.
"REMIC 2 Group 2 Principal Loss Allocation Amount": With respect to any
Distribution Date and the Group II Loans, an amount equal to (a) the product of
(i) the aggregate Principal Balance of the Group II Loans and related REO
Properties then outstanding and the Pre-Funded Amount and (ii) 1 minus a
fraction, the numerator of which is two times the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-AII, REMIC 2
Regular Interest LT2-2M1, REMIC 2 Regular Interest LT2-2M2 and REMIC 2 Regular
Interest LT2-2B, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-AII, REMIC 2
Regular Interest LT2-2M1, REMIC 2 Regular Interest LT2-2M2 and REMIC 2 Regular
Interest LT2-2B.
"REMIC 2 Overcollateralization Target Amount": 1% of the
Overcollateralization Target
39
Amount.
"REMIC 2 Regular Interest LT2A-IO": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a regular interest in REMIC 2. REMIC 2 Regular Interest LT2A-IO
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interest LT2-1AA": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-1AA
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-AI1": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a regular interest in REMIC 2. REMIC 2 Regular Interest LT2-AI1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-AI2": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-AI2
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-AI3": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-AI3
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-AI4": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-AI4
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-AI5": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in
40
REMIC 2. REMIC 2 Regular Interest LT2-AI5 shall accrue interest at the related
Uncertificated REMIC 2 Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.
"REMIC 2 Regular Interest LT2-AI6": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-AI6
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-1M1": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-1M1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-1B": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-1B shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2-1ZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-1ZZ
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-2AA": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-2AA
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-AII": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-AII
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
41
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 2 Regular Interest LT2-2M1": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-2M1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-2M2": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-2M2
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2-2B": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-2B shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2 Regular Interest LT2-2ZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2-2ZZ
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2P": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2P shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1
Regular Interest LT1P (including Prepayment Charges).
"REMIC 2 Regular Interests": REMIC 2 Regular Interest LT2-1AA, REMIC 2
Regular Interest LT2A-IO, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular
Interest LT2-AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2 Regular Interest
LT2-AI4, REMIC 2 Regular Interest LT2-AI5, REMIC 2 Regular Interest LT2-AI6,
REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2, REMIC 2
Regular Interest LT2-1B, REMIC 2 Regular Interest LT2-1ZZ, REMIC 2 Regular
Interest LT2-2AA, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular Interest
LT2-2M1, REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular
42
Interest LT2-2B, REMIC 2 Regular Interest LT2-2ZZ and REMIC 2 Regular Interest
LT2P.
"REMIC 3": The segregated pool of assets consisting of all of the REMIC
2 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Holders of the Class R Certificates
(as holders of the Class R-3 Interest), pursuant to Article II hereunder, and
all amounts deposited therein, with respect to which a separate REMIC election
is to be made.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
"REMIC Regular Interest": A REMIC 1 Regular Interest, REMIC 2 Regular
Interest or Regular Interest Certificate.
"Remittance Report": A report prepared by the Master Servicer providing
the information set forth in Exhibit E attached hereto.
"REO Acquisition": The acquisition by the Master Servicer on behalf of
the Trustee for the benefit of the Certificateholders of any REO Property
pursuant to Section 3.15.
"REO Disposition": The receipt by the Master Servicer of Insurance
Proceeds, Liquidation 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 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 (as
such balance is reduced pursuant to Section 3.15 by any income from the REO
Property treated as a recovery of principal).
"REO Proceeds": Proceeds, net of directly related expenses, received in
respect of any REO Property (including, without limitation, proceeds from the
rental of the related Mortgaged Property and of any REO Disposition), which
proceeds are required to be deposited into the Custodial Account as and when
received.
"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Mortgage Loan.
"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibits
43
F-1 or F-2 attached hereto.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters, any
vice president, any assistant vice president, the Secretary, any assistant
secretary, the Treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Seller": Impac Funding Corporation, or its successor in interest.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"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 or any
Sub-Servicer of its servicing obligations, including, 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,
including any expenses incurred in relation to any such proceedings that result
from the Mortgage Loan being registered on the MERS System, (iii) the management
and liquidation of any REO Property, including reasonable fees paid to any
independent contractor in connection therewith, and (iv) compliance with the
obligations under the second paragraph of Section 3.01, Section 3.09 and Section
3.13 (other than any deductible described in the last paragraph thereof).
"Servicing Guide": The Impac Funding Corporation Servicing Guide
attached hereto as Exhibit K.
"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 Trustee by the Master Servicer, as such list may from time to time be
amended.
"Single Certificate": A Regular Certificate of any Class (other than a
Class P Certificate) evidencing an Initial Certificate Principal Balance or
Initial Notional Amount, as applicable, of $1,000, or, in the case of a Class P
Certificate, a Certificate of such Class evidencing an Initial Certificate
Principal Balance of $100.
44
"Standard & Poor's": Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc., or its successor in interest.
"Startup Day": The day designated as such pursuant to Article X hereof.
"Stated Principal Balance": With respect to any Mortgage Loan or
related REO Property at any given time, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut-off Date (or Subsequent Cut-off Date, as
applicable), after application of principal payments due on or before such date,
whether or not received, 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 Distribution 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 Section
3.15 with respect to such Mortgage Loan or REO Property, which were distributed
pursuant to Section 4.01 on any previous Distribution Date, and (c) any Realized
Loss with respect thereto allocated pursuant to Section 4.07 for any previous
Distribution Date.
"Stepdown Date": The earlier to occur of (i) the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (ii) the later to occur of (x) the Distribution
Date occurring in February 2005 and (y) the first Distribution Date for which
the aggregate Certificate Principal Balance of the Mezzanine Certificates
divided by the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period, and after reduction for Realized Losses incurred
during the related Prepayment Period) and the amount on deposit in the
Pre-Funding Account is greater than or equal to 13.50%.
"Subsequent Cut-off Date": With respect to those Subsequent Mortgage
Loans sold to the Trust Fund pursuant to a Subsequent Transfer Instrument, the
later of (i) first day of the month in which the related Subsequent Transfer
Date occurs or (ii) the date of origination of such Mortgage Loan.
"Subsequent Mortgage Loan": A Mortgage Loan sold by the Company to the
Trust Fund pursuant to Section 2.06, such Mortgage Loan being identified on the
Mortgage Loan Schedule attached to a Subsequent Transfer Instrument.
"Subsequent Mortgage Loan Purchase Agreement": The agreement among
Impac Funding Corporation, as seller, Impac Mortgage Holdings, Inc., as
guarantor, and the Company, as purchaser, and all amendments thereof and
supplements thereto, regarding the transfer of the Subsequent Mortgage Loans by
the Seller to the Company.
"Subsequent Transfer Date": With respect to each Subsequent Transfer
Instrument, the
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date on which the related Subsequent Mortgage Loans are sold to the Trust Fund.
"Subsequent Transfer Instrument": Each Subsequent Transfer Instrument,
dated as of a Subsequent Transfer Date, executed by the Trustee at the written
direction of the Company and the Company substantially in the form attached
hereto as Exhibit M, by which Subsequent Mortgage Loans are transferred to the
Trust Fund.
"Sub-Servicer": Any Person with which the Master Servicer has entered
into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicer Remittance Date": The 18th day of each month, or if such
day is not a Business Day, the immediately preceding Business Day.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub-Servicer and any successor Sub-Servicer relating to servicing
and administration of certain Mortgage Loans as provided in Section 3.02.
"Sub-Servicing Fees": As to each Mortgage Loan, an amount, payable out
of any payment of interest on the Mortgage Loan, equal to interest at the
Sub-Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan as
of the Due Date in the calendar month preceding the month in which the payment
of the Servicing Fee is due (alternatively, in the event such payment of
interest accompanies a Principal Prepayment in Full made by the Mortgagor,
interest for the number of days covered by such payment of interest).
"Sub-Servicing Fee Rate": With respect to each Mortgage Loan, the per
annum rate of 0.25%.
"Substitution Adjustment": As defined in Section 2.04 hereof.
"Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of REMIC 1, REMIC 2 and REMIC 3 due to their
classification as REMICs under the REMIC Provisions, together with any and all
other information, reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
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"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trigger Event": A Trigger Event is in effect
(i) with respect to any Distribution Date, if the aggregate Stated
Principal Balance of Mortgage Loans that are 60 or more days delinquent
(including for this purpose any such Mortgage Loans in foreclosure and Mortgage
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust) as of the close of business on the last day of the preceding calendar
month exceeds 2.25% (in the case of the 36th Distribution Date through the 60th
Distribution Date) or 3.25% (in the case of any Distribution Date thereafter) of
the aggregate Stated Principal Balance of the Mortgage Loans as of such
Distribution Date (prior to giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and the amount on deposit in the Pre-Funding Account; or
(ii) in the case of any Distribution Date after the 36th Distribution
Date, the cumulative amount of Realized Losses incurred on the Mortgage Loans
from the Cut-off Date through the end of the calendar month immediately
preceding such Distribution Date exceeds 10.00% of the sum of (x) the aggregate
Certificate Principal Balance of the Mezzanine Certificates (or, if the
Certificate Principal Balances of the Class A Certificates have been reduced to
zero, the aggregate Certificate Principal Balance of the Mezzanine Certificates
other than the Class of Mezzanine Certificates with the highest payment
priority) after giving effect to distributions that would be made on such
Distribution Date if no Trigger Event were in effect and (y) the
Overcollateralized Amount.
For purposes of the foregoing calculation, a mortgage loan is
considered "60 days" delinquent if a payment due on the first day of a month has
not been received by the second day of the second following month.
"Trust Fund": REMIC 1, REMIC 2, REMIC 3, the Pre-Funded Amount, the
Interest Coverage Amount and the Net WAC Shortfall Reserve Fund.
"Trustee": Bankers Trust Company of California, N.A., or its successor
in interest, or any successor trustee appointed as herein provided.
"Trustee's Fee": As to each Mortgage Loan and Distribution Date, an
amount equal to interest at the Trustee Fee Rate on the Stated Principal Balance
of such Mortgage Loan as of the Due Date in the month immediately preceding the
month in which such Distribution Date occurs.
"Trustee Fee Rate": On each Mortgage Loan plus any amounts in the
Pre-Funding Account, a rate equal to 0.01% per annum.
"Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each
47
Distribution Date, an amount equal to one month's interest at the related
Uncertificated Pass- Through Rate on the Uncertificated Principal Balance or
Uncertificated Notional Amount, as applicable, of such REMIC Regular Interest.
In each case, Uncertificated Accrued Interest will be reduced by any Net
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls (allocated to
such REMIC Regular Interests as set forth in Section 1.03).
"Uncertificated Notional Amount": With respect to each of REMIC 2
Regular Interest LT2A-IO and (i) any Distribution Date prior to and including
the Distribution Date in July 2002, the Uncertificated Principal Balance of
REMIC 1 Regular Interest LT1D, the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1E and the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1F, or (ii) for the August 2002 Distribution Date through and
including the January 2003 Distribution Date, the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT1E and the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT1F, or (iii) any Distribution Date
thereafter, the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1D for such Distribution Date.
"Uncertificated Principal Balance": With respect to each REMIC 1
Regular Interest and REMIC 2 Regular Interest (other than REMIC 2 Regular
Interest LT2A-IO), the principal amount of such REMIC Regular Interest
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Principal Balance of each REMIC Regular Interest (other than
REMIC 2 Regular Interest LT2A-IO) shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.06 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.07. The
Uncertificated Principal Balance of each of REMIC 2 Regular Interest LT2-1ZZ and
REMIC 2 Regular Interest LT2-2ZZ shall each be increased by interest deferrals
as provided in Section 4.06. The Uncertificated Principal Balance of each REMIC
Regular Interest shall never be less than zero. REMIC 2 Regular Interest LT2A-IO
will not have an Uncertificated Principal Balance.
"Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate or Uncertificated REMIC 2 Pass-Through Rate.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC 1
Regular Interest LT1A, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest
LT1E, REMIC 1 Regular Interest LT1F and REMIC 1 Regular Interest LT1P and any
Distribution Date, a per annum rate equal to the average of the Net Mortgage
Rates of the Mortgage Loans, weighted on the basis of the Stated Principal
Balances thereof as of the close of business on the last day of the calendar
month preceding the month in which such Distribution Date occurs. With respect
to REMIC 1 Regular Interest LT1B and any Distribution Date, a per annum rate
equal to the average of the Net Mortgage Rates of the Group I Loans, weighted on
the basis of the Stated Principal Balances thereof as of the close of business
on the last day of the calendar month
48
preceding the month in which such Distribution Date occurs. With respect to
REMIC 1 Regular Interest LT1C and any Distribution Date, a per annum rate equal
to the average of the Net Mortgage Rates of the Group II Loans, weighted on the
basis of the Stated Principal Balances thereof as of the close of business on
the last day of the calendar month preceding the month in which such
Distribution Date occurs.
"Uncertificated REMIC 2 Pass-Through Rate":
(a) With respect to REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular
Interest LT2-AI1, REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular Interest
LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular Interest LT2-1ZZ,
REMIC 2 Regular Interest LT2- 2AA, REMIC 2 Regular Interest LT2-1M1, REMIC 2
Regular Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B, REMIC 2 Regular
Interest LT2-1ZZ, REMIC 2 Regular Interest LT2- AII, REMIC 2 Regular Interest
LT2-2M1, REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular Interest LT2-2B,
REMIC 2 Regular Interest LT2-2ZZ and REMIC 2 Regular Interest LT2P and any
Distribution Date prior to and including the Distribution Date in July 2004, a
per annum rate equal to the Net WAC Rate. With respect to REMIC 2 Regular
Interest LT2-1AA, REMIC 2 Regular Interest LT2-AI1, REMIC 2 Regular Interest
LT2-AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2 Regular Interest LT2-AI4,
REMIC 2 Regular Interest LT2-AI5, REMIC 2 Regular Interest LT2-AI6, REMIC 2
Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2, REMIC 2 Regular
Interest LT2-1B, REMIC 2 Regular Interest LT2-1ZZ and REMIC 2 Regular Interest
LT2P and any Distribution Date after the Distribution Date in July 2004, a per
annum rate equal to the Uncertificated REMIC 1 Pass-Through Rate of the
Uncertificated REMIC 1 Regular Interest LT1B. With respect to REMIC 2 Regular
Interest LT2- 2AA, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular Interest
LT2-2M1, REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular Interest LT2-2B and
REMIC 2 Regular Interest LT2-2ZZ and any Distribution Date after the
Distribution Date in July 2004, a per annum rate equal to the Uncertificated
REMIC 1 Pass-Through Rate of the Uncertificated REMIC 1 Regular Interest LT1C.
(b) With respect to REMIC 2 Regular Interest LT2A-IO and the first 30
Distribution Dates, the Class A-IO Rate, and 0.00% per annum thereafter.
"Uninsured Cause": Any cause of damage to property subject to a
Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 3.13.
"United States Person": A citizen or resident of the United States, a
corporation or a partnership (including an entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States or any State thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations) provided that, for purposes solely of the restrictions on the
transfer of Class R Certificates, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States Person unless all persons that own an
49
interest in such partnership either directly or through any entity that is not a
corporation for United States federal income tax purposes are required by the
applicable operative agreement to be United States Persons or an estate whose
income is subject to United States federal income tax regardless of its source,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more such United
States Persons have the authority to control all substantial decisions of the
trust. To the extent prescribed in regulations by the Secretary of the Treasury,
which have not yet been issued, a trust which was in existence on August 20,
1996 (other than a trust treated as owned by the grantor under subpart E of part
I of subchapter J of chapter 1 of the Code), and which was treated as a United
States person on August 20, 1996 may elect to continue to be treated as a United
States person notwithstanding the previous sentence.
"Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates and Mezzanine Certificates and (i) the first Distribution Date,
zero, and (ii) any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class for the immediately preceding Distribution Date and (2)
the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed on
such Class in respect of interest pursuant to clause (a) of this definition on
such preceding Distribution Date, plus interest on the amount of interest due
but not paid on the Certificates of such Class on such preceding Distribution
Date, to the extent permitted by law, at the Pass-Through Rate for such Class
for the related Accrual Period.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times during the term
of this Agreement, (i) 97% of all Voting Rights will be allocated among the
Holders of the Class A Certificates (other than the Class A-IO Certificates),
the Mezzanine Certificates and the Class C Certificates in proportion to the
then outstanding Certificate Principal Balances of their respective
Certificates, (ii) 1% of all Voting Rights will be allocated to the Holders of
the Class A-IO Certificates, (iii) 1% of all Voting Rights will be allocated to
the Holders of the Class P Certificates and (iv) 1% of all Voting Rights will be
allocated to the Holders of the Class R Certificates. The Voting Rights
allocated to any Class of Certificates shall be allocated among all Holders of
the Certificates of such Class in proportion to the outstanding Percentage
Interests in such Class represented thereby.
"Weighted Average Net Mortgage Rate": The weighted average of the Net
Mortgage Rates of the Mortgage Loans, weighted on the basis of the Stated
Principal Balances thereof as of the close of business on the first day of the
calendar month preceding the month in which such Distribution Date occurs.
"Wendover": Wendover Funding, Inc.
Section 1.02 Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on the
Class A-I-1
50
Certificates for any Accrual Period will be determined on each LIBOR Rate
Adjustment Date.
On each LIBOR Rate Adjustment Date, LIBOR shall be established by the
Trustee and, as to any Accrual Period, will equal the rate for one month United
States dollar deposits that appears on the Telerate Screen Page 3750 as of 11:00
a.m., London time, on such LIBOR Rate Adjustment Date. "Telerate Screen Page
3750" means the display designated as page 3750 on the Telerate Service (or such
other page as may replace page 3750 on that service for the purpose of
displaying London interbank offered rates of major banks). If such rate does not
appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, LIBOR shall be so established
by use of such other service for displaying LIBOR or comparable rates as may be
selected by the Trustee after consultation with the Master Servicer), the rate
will be the Reference Bank Rate. The "Reference Bank Rate" will be determined on
the basis of the rates at which deposits in U.S. Dollars are offered by the
reference banks (which shall be any three major banks that are engaged in
transactions in the London interbank market, selected by the Trustee after
consultation with the Master Servicer) as of 11:00 a.m., London time, on the
LIBOR Rate Adjustment Date to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the Class A-I-1 Certificates then outstanding. The Trustee
will request the principal London office of each of the reference banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate will be the arithmetic mean of the quotations rounded up to the next
multiple of 1/16%. If on such date fewer than two quotations are provided as
requested, the rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Trustee after consultation
with the Master Servicer, as of 11:00 a.m., New York City time, on such date for
loans in U.S. Dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
the Class A-I-1 Certificates then outstanding. If no such quotations can be
obtained, the rate will be LIBOR for the prior Distribution Date; provided
however, if, under the priorities described above, LIBOR for a Distribution Date
would be based on LIBOR for the previous Distribution Date for the third
consecutive Distribution Date, the Trustee shall select an alternative
comparable index (over which the Trustee has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party.
The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment
Date and the Trustee's subsequent calculation of the Pass-Through Rate
applicable to the Class A-I-1 Certificates for the relevant Accrual Period, in
the absence of manifest error, will be final and binding.
Promptly following each LIBOR Rate Adjustment Date the Trustee shall
supply the Master Servicer with the results of its determination of LIBOR on
such date. Furthermore, the Trustee will supply to any Certificateholder so
requesting by telephone the Pass-Through Rate on the Class A-I-1 Certificates
for the current and the immediately preceding Accrual Period.
Section 1.03 Allocation of Certain Interest Shortfalls.
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For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A Certificates, the Mezzanine Certificates
and the Class C Certificates for any Distribution Date, (1) the aggregate amount
of any Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, among the Class C Certificates on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable Pass-Through
Rate on the Notional Amount of each such Certificate and, thereafter, among the
Class A Certificates and the Mezzanine Certificates on a PRO RATA basis based
on, and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance of each such
Certificate and (2) the aggregate amount of any Realized Losses incurred for any
Distribution Date shall be allocated among the Class C Certificates on a PRO
RATA basis based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Notional Amount of each such Certificate.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated REMIC 1 Regular Interests for any Distribution
Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first with respect to any Group I Loan, to
REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1B, its respective
proportion (based on its Uncertificated Principal Balance in relation to such
Loan Group) of such shortfall, and with respect to any Group II Loan, to REMIC 1
Regular Interest LT1A and REMIC 1 Regular Interest LT1C, its respective
proportion (based on its Uncertificated Principal Balance in relation to such
Loan Group) of such shortfall, second to REMIC 1 Regular Interest LT1F, third to
REMIC 1 Regular Interest LT1E, and fourth, to REMIC 1 Regular Interest LT1D, in
each case to the extent of one month's interest at the then applicable
respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC 1 Regular
Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated REMIC 2 Regular Interests for any Distribution
Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated (i) with respect to the Group I Loans,
first, to Uncertificated Accrued Interest payable to REMIC 2 Regular Interest
LT2-1AA and REMIC 2 Regular Interest LT2-1ZZ up to an aggregate amount equal to
the REMIC 2 Group 1 Interest Loss Allocation Amount, 98% and 2% respectively,
and thereafter among REMIC 2 Regular Interest LT2A-IO, REMIC 2 Regular Interest
LT2-1AA, REMIC 2 Regular Interest LT2- AI1, REMIC 2 Regular Interest LT2-AI2,
REMIC 2 Regular Interest LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2
Regular Interest LT2-AI5, REMIC 2 Regular Interest LT2-AI6, REMIC 2 Regular
Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2, REMIC 2 Regular Interest,
LT2-1B and REMIC 2 Regular Interest LT2-1ZZ, PRO RATA based on, and to the
extent of, one month's interest at the then applicable respective Uncertificated
REMIC 2 Pass-Through Rate on the respective Uncertificated Principal Balance of
each such Uncertificated REMIC 2 Regular Interest, and (ii) with respect to the
Group II Loans, first, to Uncertificated Accrued Interest payable to REMIC 2
Regular Interest LT2-2AA and REMIC 2 Regular Interest LT2-2ZZ
52
up to an aggregate amount equal to the REMIC 2 Group 2 Interest Loss Allocation
Amount, 98% and 2%, respectively, and thereafter among REMIC 2 Regular Interest
LT2A-IO, REMIC 2 Regular Interest LT2-2AA, REMIC 2 Regular Interest LT2-AII,
REMIC 2 Regular LT2-2M1, REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular
Interest LT2-2B and REMIC 2 Regular Interest LT2-2ZZ, PRO RATA based on, and to
the extent of, one month's interest at the then applicable respective
Uncertificated REMIC 2 Pass-Through Rate on the respective Uncertificated
Principal Balance of each such Uncertificated REMIC 2 Regular Interest.
53
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
The Company, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign, transfer, sell, set over and
otherwise convey to the Trustee without recourse all the right, title and
interest of the Company in and to the Mortgage Loans identified on the Mortgage
Loan Schedule (exclusive of any prepayment fees and late payment charges
received thereon) and all other assets included or to be included in the Trust
Fund for the benefit of the Certificateholders, including the amount to be
deposited by or on behalf of the Company into the Net WAC Shortfall Reserve
Fund. Such assignment includes all principal and interest received by the Master
Servicer on or with respect to the Mortgage Loans (other than payment of
principal and interest due on or before the Cut-off Date or Subsequent Cut-off
Date, as applicable).
The Master Servicer hereby acknowledges the receipt by it of cash in an
amount equal to $265,625.70 (the "Special Deposit"), representing interest at
the Mortgage Rate, for the calendar month of January 2002, for those Mortgage
Loans which do not have Monthly Payments due on February 1, 2002. The Master
Servicer shall hold such amount in the Custodial Account and shall include such
amount in the Available Distribution Amount for the Distribution Date in
February 2002.
The Trustee hereby acknowledges the receipt by it of the Pre-Funded
Amount and the Interest Coverage Amount.
In connection with such transfer and assignment, the Company has caused
the Seller to deliver to, and deposit with the Trustee, as described in the
Mortgage Loan Purchase Agreement, with respect to each Initial Mortgage Loan,
and as described in the Subsequent Mortgage Loan Purchase Agreement, with
respect to each Subsequent Mortgage Loan, the following documents or
instruments:
(i) the original Mortgage Note endorsed without recourse, "Bankers
Trust Company of California, N.A., as trustee under the Pooling and Servicing
Agreement relating to Impac Secured Assets Corp., Mortgage Pass-Through
Certificates, Series 2002-1" with all intervening endorsements showing an
unbroken chain of endorsements from the originator to the Person endorsing it to
the Trustee or, with respect to any Mortgage Loan as to which the original
Mortgage Note has been permanently lost or destroyed and has not been replaced,
a Lost Note Affidavit;
(ii) the original recorded Mortgage, noting the presence of the MIN of
the Mortgage
54
Loan and language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon or, if
the original Mortgage has not been returned from the public recording office, a
copy of the Mortgage certified by the Seller or the public recording office in
which such Mortgage has been recorded to be a true and complete copy of the
original Mortgage submitted for recording;
(iii) unless the Mortgage Loan is registered on the MERS(R)System, a
duly executed original Assignment of the Mortgage, without recourse, in
recordable form to "Bankers Trust Company of California, N.A., as trustee," or
to "Bankers Trust Company of California, N.A., as trustee for holders of Impac
Secured Assets Corp., Mortgage Pass-Through Certificates, Series 2002-1";
(iv) the original recorded Assignment or Assignments of the Mortgage
showing an unbroken chain of assignment from the originator thereof to the
Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS(R) System and noting the presence of a MIN) or, if any
such Assignment has not been returned from the applicable public recording
office, a copy of such Assignment certified by the Seller to be a true and
complete copy of the original Assignment submitted to the title insurance
company for recording;
(v) the original title insurance policy, or, if such policy has not
been issued, any one of an original or a copy of the preliminary title report,
title binder or title commitment on the Mortgaged Property with the original
policy of the insurance to be delivered promptly following the receipt thereof;
(vi) a copy of the related hazard insurance policy; and
(vii) a true and correct copy of any assumption, modification,
consolidation or substitution agreement.
The Seller is obligated as described in the Mortgage Loan Purchase
Agreement, with respect to the Initial Mortgage Loans, and will be obligated as
described in the Subsequent Mortgage Loan Purchase Agreement, with respect to
the Subsequent Mortgage Loans, to deliver to the Trustee: (a) either the
original recorded Mortgage, or in the event such original cannot be delivered by
the Seller, a copy of such Mortgage certified as true and complete by the
appropriate recording office, in those instances where a copy thereof certified
by the Seller was delivered to the Trustee pursuant to clause (ii) above; and
(b) either the original Assignment or Assignments of the Mortgage, with evidence
of recording thereon, showing an unbroken chain of assignment from the
originator to the Seller, or in the event such original cannot be delivered by
the Seller, a copy of such Assignment or Assignments certified as true and
complete by the appropriate recording office, in those instances where copies
thereof certified by the Seller were delivered to the Trustee pursuant to clause
(iv) above. However, pursuant to the Mortgage Loan Purchase Agreement (or the
Subsequent Mortgage Loan Purchase Agreement, with respect to the Subsequent
Mortgage Loans), the Seller need not cause to be recorded any assignment in any
jurisdiction under the laws of which, as evidenced by an Opinion of Counsel
delivered by the
55
Seller to the Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of
Counsel, each assignment shall be submitted for recording by the Seller in the
manner described above, at no expense to the Trust or the Trustee, upon the
earliest to occur of: (i) direction by the Holders of Certificates evidencing at
least 25% of the Voting Rights, (ii) the occurrence of a Event of Default, (iii)
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02
hereof and (v) if the Seller is not the Master Servicer and with respect to any
one assignment, the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Mortgagor under the related Mortgage.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains the original
Mortgage after it has been recorded, the Seller shall be deemed to have
satisfied its obligations hereunder upon delivery to the Trustee of a copy of
such Mortgage certified by the public recording office to be a true and complete
copy of the recorded original thereof.
If any Assignment is lost or returned unrecorded to the Trustee because
of any defect therein, the Seller is required, as described in the Mortgage Loan
Purchase Agreement (or the Subsequent Mortgage Loan Purchase Agreement, as
applicable), to prepare a substitute Assignment or cure such defect, as the case
may be, and the Seller shall cause such Assignment to be recorded in accordance
with this section.
The Seller is required as described in the Mortgage Loan Purchase
Agreement, with respect to the Initial Mortgage Loans, and will be required as
described in the Subsequent Mortgage Loan Purchase Agreement, with respect to
the Subsequent Mortgage Loans, to exercise its best reasonable efforts to
deliver or cause to be delivered to the Trustee within 120 days of the Closing
Date, with respect to the Initial Mortgage Loans, or the Subsequent Transfer
Date, with respect to the Subsequent Mortgage Loans, the original or a photocopy
of the title insurance policy with respect to each such Mortgage Loan assigned
to the Trustee pursuant to this Section 2.01.
In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Seller further agrees that it will cause, at the
Seller's own expense, as of the Closing Date, the MERS(R) System to indicate
that such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code in the field
which identifies the specific Trustee and (b) the code in the field "Pool Field"
which identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Company further agrees that it will not, and will not permit
the Master Servicer to, and the Master Servicer agrees that it will not, alter
the codes referenced in this paragraph with respect to any Mortgage Loan during
the term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.
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All original documents relating to the Mortgage Loans which are not
delivered to the Trustee are and shall be held by the Master Servicer in trust
for the benefit of the Trustee on behalf of the Certificateholders.
Except as may otherwise expressly be provided herein, none of the
Company, the Master Servicer or the Trustee shall (and the Master Servicer shall
ensure that no Sub-Servicer shall) assign, sell, dispose of or transfer any
interest in the Trust Fund or any portion thereof, or cause the Trust Fund or
any portion thereof to be subject to any lien, claim, mortgage, security
interest, pledge or other encumbrance.
It is intended that the conveyance of the Mortgage Loans by the Company
to the Trustee as provided in this Section be, and be construed as, a sale of
the Mortgage Loans and the REMIC 1 Regular Interests as provided for in this
Section 2.01 by the Company to the Trustee for the benefit of the
Certificateholders. It is, further, not intended that such conveyance be deemed
a pledge of the Mortgage Loans and the REMIC 1 Regular Interests by the Company
to the Trustee to secure a debt or other obligation of the Company. However, in
the event that the Mortgage Loans and the REMIC 1 Regular Interests are held to
be property of the Company, or if for any reason this Agreement is held or
deemed to create a security interest in the Mortgage Loans and the REMIC 1
Regular Interests, then it is intended that, (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction; (b) the conveyance provided for in this Section shall
be deemed to be (1) a grant by the Company to the Trustee of a security interest
in all of the Company's right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to (A) the
Mortgage Loans, including the Mortgage Notes, the Mortgages, any related
Insurance Policies and all other documents in the related Mortgage Files, (B)
all amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof, (C) the REMIC 1 Regular Interests and (D) all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including without limitation all amounts from time
to time held or invested in the Certificate Account or the Custodial Account,
whether in the form of cash, instruments, securities or other property and (2)
an assignment by the Company to the Trustee of any security interest in any and
all of the Seller's right (including the power to convey title thereto), title
and interest, whether now owned or hereafter acquired, in and to the property
described in the foregoing clauses (1)(A) through (D); (c) the possession by the
Trustee or any other agent of the Trustee of Mortgage Notes and such other items
of property as constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" or possession by a
purchaser or a person designated by such secured party, for purposes of
perfecting the security interest pursuant to the New York Uniform Commercial
Code and the Uniform Commercial Code of any other applicable jurisdiction
(including, without limitation, Sections 9-115, 9-305, 8-102, 8-301, 8-501 and
8-503 thereof); and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law. The
Company and the
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Trustee shall, to the extent consistent with this Agreement, take such actions
as may be necessary to ensure that, if this Agreement were deemed to create a
security interest in the Mortgage Loans and the REMIC 1 Regular Interests, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement.
Section 2.02. Acceptance of the Trust Fund by the Trustee.
The Trustee acknowledges receipt (subject to any exceptions noted in
the Initial Certification described below), of the documents referred to in
Section 2.01 above and all other assets included in the definition of "Trust
Fund" and declares that it holds and will hold such documents and the other
documents delivered to it constituting the Mortgage Files, and that it holds or
will hold such other assets included in the definition of "Trust Fund" (to the
extent delivered or assigned to the Trustee), in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to
review or cause to be reviewed on its behalf, each Mortgage File on or before
the Closing Date to ascertain that all documents required to be delivered to it
are in its possession, and the Trustee agrees to execute and deliver, or cause
to be executed and delivered, to the Company and the Master Servicer on the
Closing Date, with respect to each Initial Mortgage Loan, or the Subsequent
Transfer Date, with respect to each Subsequent Mortgage Loan, an Initial
Certification in the form annexed hereto as Exhibit C to the effect that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), (i) all documents required
to be delivered to it pursuant to this Agreement with respect to such Mortgage
Loan 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
its examination and only as to the foregoing documents, the information set
forth in items (i), (ii), (iii)(A) and (iv) of the definition of the "Mortgage
Loan Schedule" accurately reflects information set forth in the Mortgage File.
Neither the Trustee nor the Master Servicer shall be under any duty to determine
whether any Mortgage File should include any of the documents specified in
clause (vi) or (vii) of Section 2.01. Neither the Trustee nor the Master
Servicer shall be under any duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable or appropriate for the represented purpose or that
they have actually been recorded, or they are in recordable form or that they
are other than what they purport to be on their face.
Within 90 days of the Closing Date, with respect to the Initial
Mortgage Loans, (or Subsequent Transfer Date, with respect to the Subsequent
Mortgage Loans) the Trustee shall deliver to the Company and the Master Servicer
a Final Certification in the form annexed hereto as Exhibit D evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.
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If in the process of reviewing the Mortgage Files and preparing the
certifications referred to above the Trustee finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, the Trustee shall promptly notify the Seller, the Master
Servicer and the Company. The Trustee shall promptly notify the Seller of such
defect and request that the Seller cure any such defect within 60 days from the
date on which the Seller was notified of such defect, and if the Seller does not
cure such defect in all material respects during such period, request on behalf
of the Certificateholders that the Seller purchase such Mortgage Loan from the
Trust Fund at the Purchase Price within 90 days after the date on which the
Seller was notified of such defect; provided that if such defect would cause the
Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. It is understood and agreed that the
obligation of the Seller to cure a material defect in, or purchase any Mortgage
Loan as to which a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders. The Purchase
Price for the purchased Mortgage Loan shall be deposited or caused to be
deposited upon receipt by the Master Servicer in the Custodial Account and, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall release or cause to be released to the
Seller the related Mortgage File and shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as the Seller shall
require as necessary to vest in the Seller ownership of any Mortgage Loan
released pursuant hereto and at such time the Trustee shall have no further
responsibility with respect to the related Mortgage File. In furtherance of the
foregoing, if the Seller is not a member of MERS and the Mortgage is registered
on the MERS(R) System, the Master Servicer, at its own expense and without any
right of reimbursement, shall cause MERS to execute and deliver an assignment of
the Mortgage in recordable form to transfer the Mortgage from MERS to the Seller
and shall cause such Mortgage to be removed from registration on the MERS(R)
System in accordance with MERS' rules and regulations.
Section 2.03. Representations, Warranties and Covenants of the
Master Servicer and the Company.
(a) The Master Servicer hereby represents and warrants to and covenants
with the Company and the Trustee for the benefit of Certificateholders that:
(i) The Master Servicer is, and throughout the term hereof
shall remain, a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation (except as otherwise
permitted pursuant to Section 6.02), the Master Servicer is, and shall remain,
in compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to perform its obligations under this Agreement,
and the Master Servicer is, and shall remain, approved to sell mortgage loans to
and service mortgage loans for Fannie Mae and Freddie Mac;
(ii) The execution and delivery of this Agreement by the
Master Servicer, and the performance and compliance with the terms of this
Agreement by the Master Servicer, will
59
not violate the Master Servicer's articles of incorporation or bylaws or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any material
agreement or other instrument to which it is a party or which is applicable to
it or any of its assets;
(iii) The Master Servicer has the full power and authority to
enter into and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization, execution and
delivery by the Company and the Trustee, constitutes a valid, legal and binding
obligation of the Master Servicer, enforceable against the Master Servicer in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the enforcement
of creditors' rights generally, and (B) general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at law;
(v) The Master Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and compliance with
the terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand of
any federal, state or local governmental or regulatory authority, which
violation is likely to affect materially and adversely either the ability of the
Master Servicer to perform its obligations under this Agreement or the financial
condition of the Master Servicer;
(vi) No litigation is pending (other than litigation with
respect to which pleadings or documents have been filed with a court, but not
served on the Master Servicer) or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit its
entering into this Agreement or performing its obligations under this Agreement
or is likely to affect materially and adversely either the ability of the Master
Servicer to perform its obligations under this Agreement or the financial
condition of the Master Servicer;
(vii) The Master Servicer will comply in all material respects
in the performance of this Agreement with all reasonable rules and requirements
of each insurer under each Insurance Policy;
(viii) The execution of this Agreement and the performance of
the Master Servicer's obligations hereunder do not require any license, consent
or approval of any state or federal court, agency, regulatory authority or other
governmental body having jurisdiction over the Master Servicer, other than such
as have been obtained;
(ix) No information, certificate of an officer, statement
furnished in writing or report delivered to the Company, any affiliate of the
Company or the Trustee by the Master Servicer in its capacity as Master
Servicer, and not in its capacity as a Seller hereunder, will, to the knowledge
of the Master Servicer, contain any untrue statement of a material fact;
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(x) The Master Servicer will not waive any Prepayment Charge
unless it is waived in accordance with the standard set forth in Section 3.01;
and
(xi) The Master Servicer is a member of MERS in good standing,
and will comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered with
MERS.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.03(a) shall survive the execution and
delivery of this Agreement, and shall inure to the benefit of the Company, the
Trustee and the Certificateholders. Upon discovery by the Company, the Trustee
or the Master Servicer of a breach of any of the foregoing representations,
warranties and covenants that materially and adversely affects the interests of
the Company or the Trustee, the party discovering such breach shall give prompt
written notice to the other parties. Notwithstanding the foregoing, within 90
days of the earlier of discovery by the Master Servicer or receipt of notice by
the Master Servicer of the breach of the covenant of the Master Servicer set
forth in Section 2.03(x) above which materially and adversely affects the
interests of the Holders of the Class P Certificates in any Prepayment Charge,
the Master Servicer shall remedy such breach as follows: the Master Servicer
shall pay the amount of such waived Prepayment Charge, for the benefit of the
holders of the Class P Certificates, by depositing such amount into the
Custodial Account (net of any amount actually collected by the Master Servicer
in respect of such Prepayment Charge and remitted by the Master Servicer, for
the benefit of the Holders of the Class P Certificates, in respect of such
Prepayment Charge, into the Custodial Account). The foregoing shall not,
however, limit any remedies available to the Certificateholders, the Company or
the Trustee on behalf of the Certificateholders, pursuant to the Mortgage Loan
Purchase Agreement or the Subsequent Mortgage Loan Purchase Agreement respecting
a breach of any of the representations, warranties and covenants contained in
the Mortgage Loan Purchase Agreement or the Subsequent Mortgage Loan Purchase
Agreement.
(b) The Company hereby represents and warrants to the Master Servicer
and the Trustee for the benefit of Certificateholders that as of the Closing
Date, the representations and warranties of the Seller with respect to the
Mortgage Loans and the remedies therefor that are contained in the Mortgage Loan
Purchase Agreement or the Subsequent Mortgage Loan Purchase Agreement are as set
forth in Exhibit I hereto.
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the respective Mortgage
Files to the Trustee.
Upon discovery by either the Company, the Master Servicer or the
Trustee of a breach of any representation or warranty set forth in this Section
2.03 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties.
Section 2.04. Representations and Warranties of the Seller.
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The Company hereby assigns to the Trustee for the benefit of
Certificateholders all of its rights (but none of its obligations) in, to and
under the Mortgage Loan Purchase Agreement and the Subsequent Mortgage Loan
Purchase Agreement. Insofar as the Mortgage Loan Purchase Agreement (and the
Subsequent Mortgage Loan Purchase Agreement, with respect to the Subsequent
Mortgage Loans) relates to such representations and warranties and any remedies
provided thereunder for any breach of such representations and warranties, such
right, title and interest may be enforced by the Trustee on behalf of the
Certificateholders. Upon the discovery by the Company, the Master Servicer or
the Trustee of a breach of any of the representations and warranties made in the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan (and the
Subsequent Mortgage Loan Purchase Agreement, with respect to any Subsequent
Mortgage Loan) which materially and adversely affects the interests of the
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties. The Trustee shall
promptly notify the Seller of such breach and request that the Seller shall,
within 90 days from the date that the Seller was notified or otherwise obtained
knowledge of such breach, either (i) cure such breach in all material respects
or (ii) purchase such Mortgage Loan from the Trust Fund at the Purchase Price
and in the manner set forth in Section 2.02; provided that if such breach would
cause the Mortgage Loan to be other than a "qualified mortgage" as defined in
Section 860G(a)(3) of the Code, any such cure or repurchase must occur within 90
days from the date such breach was discovered. However, in the case of a breach
under the Mortgage Loan Purchase Agreement, subject to the approval of the
Company the Seller shall have the option to substitute a Qualified Substitute
Mortgage Loan or Loans for such Mortgage Loan if such substitution occurs within
two years following the Closing Date, except that if the breach would cause the
Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such substitution must occur within 90 days from the
date the breach was discovered if such 90 day period expires before two years
following the Closing Date. In the event that the Seller elects to substitute a
Qualified Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant
to this Section 2.04, the Trustee shall enforce the obligation of the Seller
under the Mortgage Loan Purchase Agreement to deliver to the Trustee and the
Master Servicer, as appropriate, with respect to such Qualified Substitute
Mortgage Loan or Loans, the original Mortgage Note, the Mortgage, an Assignment
of the Mortgage in recordable form, and such other documents and agreements as
are required by Section 2.01, with the Mortgage Note endorsed as required by
Section 2.01. No substitution will be made in any calendar month after the
Determination Date for such month. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution, to the extent
received by the Master Servicer or any Sub-Servicer, shall not be part of the
Trust Fund and will be retained by the Master Servicer and remitted by the
Master Servicer to the Seller on the next succeeding Distribution Date. For the
month of substitution, distributions to Certificateholders will include the
Monthly Payment due on a Deleted Mortgage Loan for such month and thereafter the
Seller shall be entitled to retain all amounts received in respect of such
Deleted Mortgage Loan. The Company shall amend or cause to be amended the
Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the
removal of such Deleted Mortgage Loan and the substitution of the Qualified
Substitute Mortgage Loan or Loans and the Company shall deliver the amended
Mortgage Loan Schedule to the Trustee. Upon such substitution, the Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in
62
all respects, the Seller shall be deemed to have made the representations and
warranties with respect to the Qualified Substitute Mortgage Loan contained in
the Mortgage Loan Purchase Agreement as of the date of substitution, and the
Company shall be deemed to have made with respect to any Qualified Substitute
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties set forth in Exhibit I hereof (other than representations (xiv),
(xvi), (xxix) and (xxxiii) through (xli)).
In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (the "Substitution Adjustment"), if any, by which the
aggregate principal balance of all such Qualified Substitute Mortgage Loans as
of the date of substitution is less than the aggregate Stated Principal Balance
of all such Deleted Mortgage Loans (in each case after application of the
principal portion of the Monthly Payments due in the month of substitution that
are to be distributed to Certificateholders in the month of substitution). The
Trustee shall enforce the obligation of the Seller under the Mortgage Loan
Purchase Agreement to provide the Master Servicer on the day of substitution for
immediate deposit into the Custodial Account the amount of such shortfall,
without any reimbursement therefor. In accordance with the Mortgage Loan
Purchase Agreement, the Seller shall give notice in writing to the Trustee of
such event, which notice shall be accompanied by an Officers' Certificate as to
the calculation of such shortfall and by an Opinion of Counsel to the effect
that such substitution will not cause (a) any federal tax to be imposed on REMIC
1, REMIC 2 or REMIC 3, including without limitation, any federal tax imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code or
(b) any portion of REMIC 1, REMIC 2 or REMIC 3 to fail to qualify as a REMIC at
any time that any Certificate is outstanding. The costs of any substitution as
described above, including any related assignments, opinions or other
documentation in connection therewith shall be borne by the Seller.
Except as expressly set forth herein neither the Trustee nor the Master
Servicer is under any obligation to discover any breach of the above-mentioned
representations and warranties. It is understood and agreed that the obligation
of the Seller to cure such breach, purchase or to substitute for such Mortgage
Loan as to which such a breach has occurred and is continuing shall constitute
the sole remedy respecting such breach available to Certificateholders or the
Trustee on behalf of Certificateholders.
Section 2.05. Issuance of Certificates; Conveyance of REMIC
Regular Interests and Acceptance of REMIC 2 and REMIC
3 by the Trustee.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, together with the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Company executed by an officer
of the Company, has executed, authenticated and delivered to or upon the order
of the Company, the Certificates in authorized denominations. The interests
evidenced by the Certificates, constitute the entire
63
beneficial ownership interest in the Trust Fund.
(b) The Company, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Company in and
to the REMIC 1 Regular Interests for the benefit of the Holders of the REMIC 2
Regular Interests and Holders of the Class R Certificates (as holders of the
Class R-1 Interest). The Trustee acknowledges receipt of the REMIC 1 Regular
Interests (which are uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the Holders of the REMIC
2 Regular Interests and Holders of the Class R Certificates (as holders of the
Class R-1 Interest). The interests evidenced by the Class R-2 Interest, together
with the Regular Certificates, constitute the entire beneficial ownership
interest in REMIC 2.
(c) The Company, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Company in and
to the REMIC 2 Regular Interests for the benefit of the holders of the REMIC 3
Regular Interests and Holders of the Class R Certificates (as Holders of the
Class R-3 Interest). The Trustee acknowledges receipt of the REMIC 2 Regular
Interests (which are uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders of the REMIC
3 Regular Interests and Holders of the Class R Certificates (as Holders of the
Class R-3 Interest). The interests evidenced by the Class R-3 Interest, together
with the REMIC 3 Regular Interests, constitute the entire beneficial ownership
interest in REMIC 3.
(d) In exchange for the REMIC 2 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Company executed by an officer of the Company, the Trustee has executed,
authenticated and delivered to or upon the order of the Company, the Regular
Certificates in authorized denominations evidencing (together with the Class R-3
Interest) the entire beneficial ownership interest in REMIC 3.
(e) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof, (ii) the assignment and
delivery to the Trustee of REMIC 2 (including the Residual Interest therein
represented by the Class R-2 Interest), and (iii) the assignment and delivery to
the Trustee of REMIC 3 (including the Residual Interest therein represented by
the Class R-3 Interest), and the acceptance by the Trustee thereof, the Trustee,
pursuant to the written request of the Company executed by an officer of the
Company, has executed, authenticated and delivered to or upon the order of the
Company, the Class R Certificates in authorized denominations evidencing the
Class R-1 Interest and the Class R-2 Interest and the Class R-3 Interest.
Section 2.06. Conveyance of the Subsequent Mortgage Loans.
(a) Subject to the conditions set forth in paragraph (b) below in
consideration of the
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Trustee's delivery on the Subsequent Transfer Dates to or upon the written order
of the Company of all or a portion of the balance of funds in the Pre-Funding
Account, the Company shall on any Subsequent Transfer Date sell, transfer,
assign, set over and convey without recourse to the Trust Fund but subject to
the other terms and provisions of this Agreement all of the right, title and
interest of the Company in and to (i) the Subsequent Mortgage Loans identified
on the Mortgage Loan Schedule attached to the related Subsequent Transfer
Instrument delivered by the Company on such Subsequent Transfer Date, (ii) all
interest accruing thereon on and after the Subsequent Cut-off Date and all
collections in respect of interest and principal due after the Subsequent Cut-
off Date and (iii) all items with respect to such Subsequent Mortgage Loans to
be delivered pursuant to Section 2.01 and the other items in the related
Mortgage Files; provided, however, that the Company reserves and retains all
right, title and interest in and to principal received and interest accruing on
the Subsequent Mortgage Loans prior to the related Subsequent Cut-off Date. The
transfer to the Trustee for deposit in the mortgage pool by the Company of the
Subsequent Mortgage Loans identified on the Mortgage Loan Schedule shall be
absolute and is intended by the Company, the Master Servicer, the Trustee and
the Certificateholders to constitute and to be treated as a sale of the
Subsequent Mortgage Loans by the Company to the Trust Fund. The related Mortgage
File for each Subsequent Mortgage Loan shall be delivered to the Trustee at
least three (3) Business Days prior to the related Subsequent Transfer Date.
The purchase price paid by the Trustee from amounts released from the
Pre-Funding Account shall be one-hundred percent (100%) of the aggregate Stated
Principal Balance of the Subsequent Mortgage Loans so transferred (as identified
on the Mortgage Loan Schedule provided by the Company). This Agreement shall
constitute a fixed-price purchase contract in accordance with Section
860G(a)(3)(A)(ii) of the Code.
(b) The Company shall transfer to the Trustee for deposit in the
mortgage pool the Subsequent Mortgage Loans and the other property and rights
related thereto as described in paragraph (a) above, and the Trustee shall
release funds from the Pre-Funding Account, only upon the satisfaction of each
of the following conditions on or prior to the related Subsequent Transfer Date:
(i) the Company shall have provided the Trustee and the Rating
Agencies with a timely Addition Notice and shall have provided any
information reasonably requested by the Trustee with respect to the
Subsequent Mortgage Loans;
(ii) the Company shall have delivered to the Trustee a duly
executed Subsequent Transfer Instrument, which shall include a Mortgage
Loan Schedule listing the Subsequent Mortgage Loans, and the Master
Servicer, in its capacity as Originator, shall have delivered a
computer file containing such Mortgage Loan Schedule to the Trustee at
least three (3) Business Days prior to the related Subsequent Transfer
Date;
(iii) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, substantially in the
form of Exhibit M, the Company shall not be insolvent nor shall it have
been rendered insolvent by such transfer nor shall
65
it be aware of any pending insolvency;
(iv) such sale and transfer shall not result in a material
adverse tax consequence to the Trust Fund or the Certificateholders;
(v) the Funding Period shall not have terminated;
(vi) the Company shall not have selected the Subsequent
Mortgage Loans in a manner that it believed to be adverse to the
interests of the Certificateholders;
(vii) the Company shall have delivered to the Trustee a
Subsequent Transfer Instrument confirming the satisfaction of the
conditions precedent specified in this Section 2.06 and, pursuant to
the Subsequent Transfer Instrument, assigned to the Trustee without
recourse for the benefit of the Certificateholders all the right, title
and interest of the Company, in, to and under the Subsequent Mortgage
Loan Purchase Agreement, to the extent of the Subsequent Mortgage
Loans;
(viii) with respect to the last Subsequent Transfer Date, the
Company shall have delivered to the Trustee a letter from an
Independent accountant (with copies provided to each Rating Agency)
stating that the characteristics of the Subsequent Mortgage Loans
conform to the statistical characteristics set forth in paragraphs
(c)(iii), (vi) and (ix) and (d) below; and
(ix) the Company shall have delivered to the Trustee an
Opinion of Counsel addressed to the Trustee and the Rating Agencies
with respect to the transfer of the Subsequent Mortgage Loans
substantially in the form of the Opinion of Counsel delivered to the
Trustee on the Closing Date regarding the true sale of the Subsequent
Mortgage Loans.
(c) The obligation of the Trust Fund to purchase a Subsequent Mortgage
Loan on any Subsequent Transfer Date is subject to the satisfaction of the
conditions set forth in the immediately following paragraph and the accuracy of
the following representations and warranties with respect to each such
Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) the Subsequent Mortgage Loan will each be a fixed-rate Mortgage Loan
with a first lien on the related Mortgaged Property; (ii) no Subsequent Mortgage
Loan will have a maturity date later than April 2032; (iii) no more than
approximately 5.0% of the Subsequent Mortgage Loans will have a credit score
less than 600 and no Subsequent Mortgage Loan will have a credit score less than
544; (iv) the transfer of such Subsequent Mortgage Loans into the mortgage pool
during the Funding Period will not result in the certificates receiving lower
credit ratings from the Ratings Agencies upon termination of the Funding Period
than the ratings that were obtained at the time of the initial offering of the
Certificates; (v) such Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the last day of the month preceding the Subsequent Cut-off
Date; (vi) the original term to stated maturity of such Subsequent Mortgage Loan
will not be less than 167 months and will not exceed 360 months;
66
(vii) if the Subsequent Mortgage Loan has a loan-to-value ratio greater than
80.00%, it is covered by a Primary Insurance Policy or the Radian Lender-Paid
PMI Policy; (viii) no Subsequent Mortgage Loan will be a buydown mortgage loan;
(ix) no Subsequent Mortgage Loan will have a first Due Date prior to September
1, 2001 or after May 1, 2002; and (x) such Subsequent Mortgage Loan shall have
been underwritten in accordance with the criteria set forth under "The Mortgage
Pool--Underwriting Standards" in the Prospectus Supplement.
(d) In addition, the Subsequent Mortgage Loans will as of the
Subsequent Cut-off Date: (i) not have more than 4.12% of the Subsequent Mortgage
Loans be balloon loans; (ii) have been serviced by the Master Servicer since
origination or the date of purchase; (iii) have a weighted average mortgage rate
of approximately 8.5%; (iv) have no more than approximately 1.63% of the
Subsequent Mortgage Loans (by aggregate Stated Principal Balance as of the
Subsequent Cut-off Date) be secured by Mortgaged Properties located in any one
zip code; (v) have a weighted average credit score of approximately 685; (vi)
not have more than approximately 41.9% and 13.0% of such Subsequent Mortgage
Loans concentrated in the states of California and Florida, respectively; (vii)
have no less than 90.8% of the Mortgaged Properties be owner occupied; (viii)
have no less than 84.9% of the Mortgaged Properties be single family residences
and de minimis planned unit developments; and (ix) have no more than 33.3% of
the Mortgage Loans be cashout refinance.
(e) Notwithstanding the foregoing, any Subsequent Mortgage Loan may be
rejected by any Rating Agency if the inclusion of any such Subsequent Mortgage
Loan would adversely affect the ratings of any Class of Certificates. At least
one (1) Business Day prior to the Subsequent Transfer Date, each Rating Agency
shall notify the Trustee as to which Subsequent Mortgage Loans, if any, shall
not be included in the transfer on the Subsequent Transfer Date; provided,
however, that the Master Servicer, in its capacity as Originator, shall have
delivered to each Rating Agency at least three (3) Business Days prior to such
Subsequent Transfer Date a computer file acceptable to each Rating Agency
describing the characteristics specified in paragraphs (c) and (d) above.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01. Master Servicer to Act as Master Servicer.
The Master Servicer shall supervise, or take such actions as are
necessary to ensure, the servicing and administration of the Mortgage Loans and
any REO Property in accordance with this Agreement and its normal servicing
practices, which generally shall conform to the standards (i) of the Servicing
Guide, if Impac Funding Corporation is Master Servicer, or (ii) if Impac Funding
Corporation is not the Master Servicer, of an institution prudently servicing
mortgage loans for its own account and shall have full authority to do anything
it reasonably deems appropriate or desirable in connection with such servicing
and administration. To the extent consistent with the foregoing, the Master
Servicer shall waive (or permit a Sub-Servicer to waive) a Prepayment Charge
only under the following circumstances: (i) such waiver is standard and
customary in servicing similar Mortgage Loans and (ii) such waiver would, in the
reasonable judgement of the Master Servicer, maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and the related Mortgage
Loan and, if such waiver is made in connection with a refinancing of the related
Mortgage Loan, such refinancing is related to a default or a reasonably
foreseeable default.
The Master Servicer may perform its responsibilities relating to
servicing through other agents or independent contractors, but shall not thereby
be released from any of its responsibilities as hereinafter set forth. The
authority of the Master Servicer, in its capacity as master servicer, and any
Sub-Servicer acting on its behalf, shall include, without limitation, the power
to (i) consult with and advise any Sub-Servicer regarding administration of a
related Mortgage Loan, (ii) approve any recommendation by a Sub-Servicer to
foreclose on a related Mortgage Loan, (iii) supervise the filing and collection
of insurance claims and take or cause to be taken such actions on behalf of the
insured Person thereunder as shall be reasonably necessary to prevent the denial
of coverage thereunder, and (iv) effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing a related Mortgage Loan,
including the employment of attorneys, the institution of legal proceedings, the
collection of deficiency judgments, the acceptance of compromise proposals, the
filing of claims under any Insurance Policy and any other matter pertaining to a
delinquent Mortgage Loan. The authority of the Master Servicer shall include, in
addition, the power on behalf of the Certificateholders, the Trustee or any of
them to (i) execute and deliver customary consents or waivers and other
instruments and documents, (ii) consent to transfer of any related Mortgaged
Property and assumptions of the related Mortgage Notes and Security Instruments
(in the manner provided in this Agreement) and (iii) collect any Insurance
Proceeds and Liquidation Proceeds. Without limiting the generality of the
foregoing, the Master Servicer and any Sub-Servicer acting on its behalf may,
and is hereby authorized, and empowered by the Trustee to, execute and deliver,
on behalf of itself, the Certificateholders or the Trustee or any of them, any
instruments of satisfaction, cancellation, partial or full release, discharge
and all other comparable instruments,
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with respect to the related Mortgage Loans, the Insurance Policies and the
accounts related thereto, and the Mortgaged Properties. The Master Servicer may
exercise this power in its own name or in the name of a Sub-Servicer.
Subject to Section 3.16, the Trustee shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer and any
Sub-Servicer such documents as are necessary or appropriate to enable the Master
Servicer or any Sub-Servicer to carry out their servicing and administrative
duties hereunder, and the Trustee hereby grants to the Master Servicer a power
of attorney to carry out such duties. The Trustee shall not be liable for the
actions of the Master Servicer or any Sub-Servicers under such powers of
attorney.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11; provided that the Master Servicer shall not be
obligated to make such advance if, in its good faith judgment, the Master
Servicer determines that such advance to be a Nonrecoverable Advance.
The Master Servicer is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name or in the name
of any Subservicer, when the Master Servicer or such Subservicer, as the case
may be, believes it is appropriate in its best judgment to register any Mortgage
Loan on the MERS(R) System, or cause the removal from the registration of any
Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of the
Trustee and the Certificateholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns. Any expenses incurred in connection with
the actions described in the preceding sentence shall be borne by the Master
Servicer in accordance with Section 3.17, with no right of reimbursement;
provided, that if, as a result of MERS discontinuing or becoming unable to
continue operations in connection with the MERS System, it becomes necessary to
remove any Mortgage Loan from registration on the MERS System and to arrange for
the assignment of the related Mortgages to the Trustee, then any related
expenses shall be reimbursable to the Master Servicer from the Trust Fund.
Notwithstanding anything in this Agreement to the contrary, the Master
Servicer shall not (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Master Servicer,
reasonably foreseeable) make or permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (i) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury
regulations promulgated thereunder) and (ii) cause any of REMIC 1, REMIC 2 or
REMIC 3 to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions" after the startup date under
the REMIC Provisions.
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The relationship of the Master Servicer (and of any successor to the
Master Servicer under this Agreement) to the Trustee under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or agent.
Section 3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements with
Sub- Servicers for the servicing and administration of the Mortgage Loans and
for the performance of any and all other activities of the Master Servicer
hereunder; provided, however, that such agreements would not result in a
withdrawal or a downgrading by Standard & Poor's of its rating on any Class of
Certificates. Each Sub-Servicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans comparable to the Mortgage
Loans, and in either case shall be authorized to transact business in the state
or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the Sub-
Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, and in either case shall be a Freddie Mac or Fannie Mae approved
mortgage servicer. Any Sub- Servicing Agreement entered into by the Master
Servicer shall include the provision that such Agreement may be immediately
terminated (x) with cause and without any termination fee by any Master Servicer
hereunder or (y) without cause in which case the Master Servicer shall be
responsible for any termination fee or penalty resulting therefrom. In addition,
each Sub- Servicing Agreement shall provide for servicing of the Mortgage Loans
consistent with the terms of this Agreement. With the consent of the Trustee,
the Master Servicer and the Sub-Servicers may enter into Sub-Servicing
Agreements and make amendments to the Sub-Servicing Agreements or enter into
different forms of Sub-Servicing Agreements providing for, among other things,
the delegation by the Master Servicer to a Sub-Servicer of additional duties
regarding the administration of the Mortgage Loans; provided, however, that any
such amendments or different forms shall be consistent with and not violate the
provisions of this Agreement, and that no such amendment or different form shall
be made or entered into which could be reasonably expected to be materially
adverse to the interests of the Certificateholders, without the consent of the
Holders of Certificates entitled to at least 51% of the Voting Rights. The
parties hereto acknowledge that the initial Sub-Servicer shall be Wendover.
The Master Servicer has entered into a Sub-Servicing Agreement with
Wendover for the servicing and administration of the Mortgage Loans and may
enter into additional Sub-Servicing Agreements with Sub-Servicers acceptable to
the Trustee for the servicing and administration of certain of the Mortgage
Loans.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the
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related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, but shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement only to the extent, if any,
that such recovery exceeds all amounts due in respect of the related Mortgage
Loan or (ii) from a specific recovery of costs, expenses or attorneys' fees
against the party against whom such enforcement is directed.
(c) The Master Servicer represents that it has entered into a contract
regarding the sale of sub-servicing rights with respect to the Mortgage Loans
with GMAC and shall transfer the subservicing of the Initial Mortgage Loans from
Wendover to GMAC on or about April 1, 2002 and with respect to the Subsequent
Mortgage Loans, no later than three months after they are transferred to the
trust. The Trustee hereby consents to such transfer.
(d) The Master Servicer represents that it will cause any Sub-Servicer
to accurately and fully report its borrower credit files to all three credit
repositories in a timely manner.
Section 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Master Servicer without any act or deed on the part of such Sub-Servicer or
the Master Servicer, and the Master Servicer either shall service directly the
related Mortgage Loans or shall enter into a Sub-Servicing Agreement with a
successor Sub-Servicer which qualifies under Section 3.02.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall under all circumstances remain obligated
and primarily liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans and any REO Property in accordance with the
provisions of Article III without diminution of such obligation or liability by
virtue of such Sub-Servicing Agreements or arrangements or by virtue of
indemnification from the Sub- Servicer and to the same extent and under the same
terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. For purposes of this Agreement, the Master
Servicer shall be deemed to have received payments on Mortgage Loans when the
Sub-Servicer has received such payments. The Master Servicer shall be entitled
to enter into any agreement with a Sub-Servicer for indemnification of the
Master Servicer by such Sub-Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
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Section 3.05. No Contractual Relationship Between Sub-Servicers and
Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.06. The Master Servicer (or Sub-Servicer) shall
be liable for the payment of any franchise taxes which may be assessed by the
California Franchise Tax Board in connection with the activities of the Trust
under this Agreement.
Section 3.06. Assumption or Termination of Sub-Servicing Agreements
by Trustee.
(a) If the Trustee or its designee shall assume the master servicing
obligations of the Master Servicer in accordance with Section 7.02 below, the
Trustee, to the extent necessary to permit the Trustee to carry out the
provisions of Section 7.02 with respect to the Mortgage Loans, shall succeed to
all of the rights and obligations of the Master Servicer under each of the Sub-
Servicing Agreements. In such event, the Trustee or its designee as the
successor master servicer shall be deemed to have assumed all of the Master
Servicer's rights and obligations therein and to have replaced the Master
Servicer as a party to such Sub-Servicing Agreements to the same extent as if
such Sub-Servicing Agreements had been assigned to the Trustee or its designee
as a successor master servicer, except that the Trustee or its designee as a
successor master servicer shall not be deemed to have assumed any obligations or
liabilities of the Master Servicer arising prior to such assumption (other than
the obligation to make any Advances hereunder) and the Master Servicer shall not
thereby be relieved of any liability or obligations under such Sub- Servicing
Agreements arising prior to such assumption. Nothing in the foregoing shall be
deemed to entitle the Trustee or its designee as a successor master servicer at
any time to receive any portion of the servicing compensation provided under
Section 3.17 except for such portion as the Master Servicer would be entitled to
receive.
(b) In the event that the Trustee or its designee as successor master
servicer for the Trustee assumes the servicing obligations of the Master
Servicer under Section 7.02, upon the reasonable request of the Trustee or such
designee as successor master servicer the Master Servicer shall at its own
expense deliver to the Trustee, or at its written request to such designee,
photocopies of all documents, files and records, electronic or otherwise,
relating to the Sub- Servicing Agreements and the related Mortgage Loans or REO
Property then being serviced and an accounting of amounts collected and held by
it, if any, and will otherwise cooperate and use its reasonable efforts to
effect the orderly and efficient transfer of the Sub-Servicing Agreements, or
responsibilities hereunder to the Trustee, or at its written request to such
designee as successor master servicer.
Section 3.07. Collection of Certain Mortgage Loan Payments.
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(a) The Master Servicer will coordinate and monitor remittances by
Sub-Servicers to the Master Servicer with respect to the Mortgage Loans in
accordance with this Agreement.
(b) The Master Servicer shall make its reasonable efforts to collect or
cause to be collected all payments required under the terms and provisions of
the Mortgage Loans and shall follow, and use its reasonable efforts to cause
Sub-Servicers to follow, collection procedures comparable to the collection
procedures of prudent mortgage lenders servicing mortgage loans for their own
account to the extent such procedures shall be consistent with this Agreement.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive or permit to be waived any late payment charge, prepayment charge,
assumption fee, or any penalty interest in connection with the prepayment of a
Mortgage Loan and (ii) suspend or reduce or permit to be suspended or reduced
regular monthly payments for a period of up to six months, or arrange or permit
an arrangement with a Mortgagor for a scheduled liquidation of delinquencies. In
the event the Master Servicer shall consent to the deferment of the due dates
for payments due on a Mortgage Note, the Master Servicer shall nonetheless make
an Advance or shall cause the related Sub-Servicer to make an advance to the
same extent as if such installment were due, owing and delinquent and had not
been deferred through liquidation of the Mortgaged Property; provided, however,
that the obligation of the Master Servicer or related Sub-Servicer to make an
Advance shall apply only to the extent that the Master Servicer believes, in
good faith, that such advances are not Nonrecoverable Advances.
(c) On each Determination Date, with respect to each Mortgage Loan for
which during the related Prepayment Period the Master Servicer has determined
that all amounts which it expects to recover from or on account of each such
Mortgage Loan have been recovered and that no further Liquidation Proceeds will
be received in connection therewith, the Master Servicer shall provide to the
Trustee a certificate of a Servicing Officer that such Mortgage Loan became a
Liquidated Mortgage Loan in a Cash Liquidation or REO Disposition.
The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Insurance Policy, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. The Master Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note, Primary Hazard Insurance
Policy or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that it is prohibited by
applicable law from enforcing the provision of the Mortgage or other instrument
pursuant to which such payment is required. The Master Servicer shall be
responsible for preparing and distributing all information statements relating
to payments on the Mortgage Loans, in accordance with all applicable federal and
state tax laws and regulations.
Section 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub-
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Servicing Agreement, the Sub-Servicer will be required to establish and maintain
one or more accounts (collectively, the "Sub-Servicing Account"). The
Sub-Servicing Account shall be an Eligible Account and shall otherwise be
acceptable to the Master Servicer. All amounts held in a Sub-Servicing Account
shall be held in trust for the Trustee for the benefit of the
Certificateholders. Any investment of funds held in such an account shall be in
Permitted Investments maturing not later than the Business Day immediately
preceding the next Sub- Servicer Remittance Date. The Sub-Servicer will be
required to deposit into the Sub-Servicing Account no later than one Business
Day after receipt all proceeds of Mortgage Loans received by the Sub-Servicer,
less its servicing compensation and any unreimbursed expenses and advances, to
the extent permitted by the Sub-Servicing Agreement. On each Sub-Servicer
Remittance Date the Sub-Servicer will be required to remit to the Master
Servicer for deposit in the Custodial Account all funds held in the
Sub-Servicing Account with respect to any Mortgage Loan as of the Sub-Servicer
Remittance Date, after deducting from such remittance an amount equal to the
servicing compensation (including interest on Permitted Investments) and
unreimbursed expenses and advances to which it is then entitled pursuant to the
related Sub-Servicing Agreement, to the extent not previously paid to or
retained by it. In addition, on each Sub- Servicer Remittance Date the
Sub-Servicer will be required to remit to the Master Servicer any amounts
required to be advanced pursuant to the related Sub-Servicing Agreement. The
Sub- Servicer will also be required to remit to the Master Servicer, within five
Business Days of receipt, the proceeds of any Principal Prepayment made by the
Mortgagor, and, on each Sub- Servicer Remittance Date, the amount of any
Insurance Proceeds or Liquidation Proceeds received during the related
Prepayment Period.
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
The Master Servicer and the Sub-Servicers shall establish and maintain
one or more accounts (the "Servicing Accounts"), and shall deposit and retain
therein all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, Primary Hazard Insurance
Policy premiums, and comparable items for the account of the Mortgagors, to the
extent that the Master Servicer customarily escrows for such amounts.
Withdrawals of amounts so collected from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, Primary Hazard Insurance Policy
premiums and comparable items; (ii) reimburse the Master Servicer (or a
Sub-Servicer to the extent provided in the related Sub-Servicing Agreement) out
of related collections for any payments made pursuant to Sections 3.01 (with
respect to taxes and assessments), and 3.13 (with respect to Primary Hazard
Insurance Policies); (iii) refund to Mortgagors any sums as may be determined to
be overages; or (iv) clear and terminate the Servicing Account at the
termination of this Agreement pursuant to Section 9.01. As part of its servicing
duties, the Master Servicer or Sub-Servicers shall, if and to the extent
required by law, pay to the Mortgagors interest on funds in Servicing Accounts
from its or their own funds, without any reimbursement therefor.
Section 3.10. Custodial Account.
(a) The Master Servicer shall establish and maintain one or more
accounts
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(collectively, the "Custodial Account") in which the Master Servicer shall
deposit or cause to be deposited on a daily basis, or as and when received from
the Sub-Servicers, the following payments and collections received or made by or
on behalf of it subsequent to the Cut-off Date (or Subsequent Transfer Date,
with respect to the Subsequent Mortgage Loans), or received by it prior to the
Cut-off Date (or Subsequent Transfer Date) but allocable to a period subsequent
thereto (other than in respect of principal and interest on the Mortgage Loans
due on or before the Cut-off Date or Subsequent Transfer Date):
(i) all payments (including advances by a Sub-Servicer) on
account of principal, including Principal Prepayments, on the Mortgage Loans and
all Prepayment Charges collected on the Mortgage Loans (and any Master Servicer
Prepayment Charge Payment Amounts paid by, or collected on behalf of the Trust
Fund by, the Master Servicer or any Sub- Servicer);
(ii) all payments (including advances by a Sub-Servicer) on
account of interest on the Mortgage Loans, net of any portion thereof retained
by the Master Servicer or any Sub- Servicer as Servicing Fees;
(iii) all Insurance Proceeds, other than proceeds that
represent reimbursement of costs and expenses incurred by the Master Servicer or
any Sub-Servicer in connection with presenting claims under the related
Insurance Policies, Liquidation Proceeds and REO Proceeds;
(iv) all proceeds of any Mortgage Loan or REO Property
repurchased or purchased in accordance with Sections 2.02, 2.04 , 3.14 or 9.01;
and all amounts required to be deposited in connection with the substitution of
a Qualified Substitute Mortgage Loan pursuant to Section 2.04; and
(v) any amounts required to be deposited pursuant to Section
3.12, 3.13, 3.15 or 3.22.
The foregoing requirements for deposit in the Custodial Account shall
be exclusive. In the event the Master Servicer shall deposit in the Custodial
Account any amount not required to be deposited therein, it may withdraw such
amount from the Custodial Account, any provision herein to the contrary
notwithstanding. The Custodial Account shall be maintained as a segregated
account, separate and apart from trust funds created for mortgage pass-through
certificates of other series, and the other accounts of the Master Servicer.
(b) Funds in the Custodial Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Master Servicer shall give notice to the Trustee and the Company of the location
of the Custodial Account after any change thereof.
Section 3.11. Permitted Withdrawals From the Custodial Account.
The Master Servicer may, from time to time as provided herein, make
withdrawals from
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the Custodial Account of amounts on deposit therein pursuant to Section 3.10
that are attributable to the Mortgage Loans for the following purposes:
(i) to make deposits into the Certificate Account in the amounts and in
the manner provided for in Section 4.01;
(ii) to pay to itself, the Company, the Seller or any other appropriate
person, as the case may be, with respect to each Mortgage Loan that has
previously been purchased or repurchased pursuant to Sections 2.02, 2.04, 3.14
or 9.01 all amounts received thereon and not yet distributed as of the date of
purchase or repurchase;
(iii) to reimburse itself or any Sub-Servicer for Advances not
previously reimbursed, the Master Servicer's or any Sub-Servicer's right to
reimbursement pursuant to this clause (iii) being limited to amounts received
which represent Late Collections (net of the related Servicing Fees) of Monthly
Payments on Mortgage Loans with respect to which such Advances were made and as
further provided in Section 3.15;
(iv) to reimburse or pay itself, the Trustee or the Company for
expenses incurred by or reimbursable to the Master Servicer, the Trustee or the
Company pursuant to Sections 3.22, 6.03, 8.05 or 10.01(g), except as otherwise
provided in such Sections hereof;
(v) to reimburse itself or any Sub-Servicer for costs and expenses
incurred by or reimbursable to it relating to the prosecution of any claims
pursuant to Section 3.13 that are in excess of the amounts so recovered;
(vi) to reimburse itself or any Sub-Servicer for unpaid Master
Servicing Fees, Sub- Servicing Fees and unreimbursed Servicing Advances, the
Master Servicer's or any Sub- Servicer's right to reimbursement pursuant to this
clause (vi) with respect to any Mortgage Loan being limited to late recoveries
of the payments for which such advances were made pursuant to Section 3.01 or
Section 3.09 and any other related Late Collections;
(vii) to pay itself as servicing compensation (in addition to the
Master Servicing Fee and Sub-Servicing Fee), on or after each Distribution Date,
any interest or investment income earned on funds deposited in the Custodial
Account for the period ending on such Distribution Date;
(viii) to reimburse itself or any Sub-Servicer for any Advance or
Servicing Advance previously made, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Advance or Servicing Advance was not
reimbursed pursuant to clauses (iii) and (vi);
(ix) to pay Radian the premium under the Radian Lender-Paid PMI
Policies; and
(x) to clear and terminate the Custodial Account at the termination of
this Agreement pursuant to Section 9.01.
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The Master Servicer shall keep and maintain separate accounting records
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii) through
(x).
Section 3.12. Permitted Investments.
Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account in Permitted
Investments, each of which shall mature not later than (i) the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon and shall not be sold or disposed of prior to its
maturity. All income and gain realized from any such investment as well as any
interest earned on deposits in the Custodial Account shall be for the benefit of
the Master Servicer. The Master Servicer shall deposit in the Custodial Account
an amount equal to the amount of any loss incurred in respect of any such
investment immediately upon realization of such loss without right of
reimbursement.
Section 3.13. Maintenance of Primary Hazard Insurance.
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan primary hazard insurance by a Qualified Insurer or other insurer
satisfactory to the Rating Agencies with extended coverage on the related
Mortgaged Property in an amount equal to the lesser of (i) 100% of the
replacement value of the improvements, as determined by the insurance company,
on such Mortgaged Property or (ii) the unpaid principal balance of the Mortgage
Loan. The Master Servicer shall also cause to be maintained on property acquired
upon foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount equal to the replacement value of
the improvements thereon. Any costs incurred in maintaining any insurance
described in this Section 3.13 (other than any deductible described in the last
paragraph hereof) shall be recoverable as a Servicing Advance. The Master
Servicer shall not be obligated to advance any amounts pursuant to this Section
3.13 if, in its good faith judgment, the Master Servicer determines that such
advance would be a Nonrecoverable Advance. Pursuant to Section 3.10, any amounts
collected by the Master Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the related Mortgaged Property or
property thus acquired or amounts released to the Mortgagor in accordance with
the Master Servicer's normal servicing procedures) shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating monthly distributions to Certificateholders, be added
to the amount owing under the Mortgage Loan, notwithstanding that the terms of
the Mortgage Loan so permit. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
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The Master Servicer shall, or shall cause the related Sub-Servicer to,
exercise its best reasonable efforts to maintain and keep in full force and
effect each Primary Insurance Policy by a Qualified Insurer, or other insurer
satisfactory to the Rating Agencies, with respect to each first lien Mortgage
Loan as to which as of the Cut-Off Date (or Subsequent Transfer Date, with
respect to the Subsequent Mortgage Loans) such a Primary Insurance Policy was in
effect (or, in the case of a Qualified Substitute Mortgage Loan, the date of
substitution) and the original principal amount of the related Mortgage Note
exceeded 80% of the Collateral Value in an amount at least equal to the excess
of such original principal amount over 75% of such Collateral Value until the
principal amount of any such first lien Mortgage Loan is reduced below 80% of
the Collateral Value or, based upon a new appraisal, the principal amount of
such first lien Mortgage Loan represents less than 80% of the new appraised
value. The Master Servicer shall, or shall cause the related Sub-Servicer to,
effect the timely payment of the premium on each Primary Insurance Policy. The
Master Servicer and the related Sub-Servicer shall have the power to substitute
for any Primary Insurance Policy another substantially equivalent policy issued
by another Qualified Insurer, provided, that, such substitution shall be subject
to the condition that it will not cause the ratings on the Certificates to be
downgraded or withdrawn, as evidenced in writing from each Rating Agency.
The Master Servicer shall cooperate with Radian and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Master Servicer or to which the Master Servicer has access
with respect to any Radian Insured Loan.
The Master Servicer shall cooperate with Radian and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Master Servicer or to which the Master Servicer has access
with respect to any Radian Insured Loan.
In the event of a default by Radian under the Radian Lender-Paid PMI
Policy (a "Replacement Event"), the Master Servicer shall use its best efforts
to obtain a substitute lender- paid primary mortgage insurance policy (a
"Substitute PMI Policy"); provided, however, that the Master Servicer shall not
be obligated, and shall have no liability for failing, to obtain a Substitute
PMI Policy unless such Substitute PMI Policy can be obtained on the following
terms and conditions: (i) the Certificates shall be rated no lower than the
rating assigned by each Rating Agency to the Certificates immediately prior to
such Replacement Event, as evidenced by a letter from each Rating Agency
addressed to the Company, the Master Servicer and the Trustee, (ii) the timing
and mechanism for drawing on such new Substitute PMI Policy shall be reasonably
acceptable to the Master Servicer and the Trustee and (iii) the premiums under
the proposed Substitute PMI Policy shall not exceed such premiums under the
existing Radian Lender-Paid PMI Policy.
With respect to the Radian PMI Insured Loans covered by a Radian
Lender-Paid PMI Policy, the Master Servicer will confirm with Radian, and Radian
will certify to the Trustee, on or before February 15, 2002, that the Mortgage
Loans indicated on the Mortgage Loan Schedule as being covered by Radian
Lender-Paid PMI Policy are so covered.
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No earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired with respect to a security
instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. When, at
the time of origination of the Mortgage Loan or at any subsequent time, the
Mortgaged Property is located in a federally designated special flood hazard
area, the Master Servicer shall cause with respect to the Mortgage Loans and
each REO Property flood insurance (to the extent available and in accordance
with mortgage servicing industry practice) to be maintained. Such flood
insurance shall cover the Mortgaged Property, including all items taken into
account in arriving at the Collateral Value on which the Mortgage Loan was
based, and shall be in an amount equal to the lesser of (i) the Stated Principal
Balance of the related Mortgage Loan and (ii) the minimum amount required under
the terms of coverage to compensate for any damage or loss on a replacement cost
basis, but not more than the maximum amount of such insurance available for the
related Mortgaged Property under either the regular or emergency programs of the
National Flood Insurance Program (assuming that the area in which such Mortgaged
Property is located is participating in such program). Unless applicable state
law requires a higher deductible, the deductible on such flood insurance may not
exceed $1,000 or 1% of the applicable amount of coverage, whichever is less.
In the event that the Master Servicer shall obtain and maintain a
blanket fire insurance policy with extended coverage insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first two sentences of this Section 3.13 and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account from its own funds the amount not otherwise payable under
the blanket policy because of such deductible clause. Any such deposit by the
Master Servicer shall be made on the Certificate Account Deposit Date next
preceding the Distribution Date which occurs in the month following the month in
which payments under any such policy would have been deposited in the Custodial
Account. Any such deposit shall not be deemed Servicing Advances and the Master
Servicer shall not be entitled to reimbursement therefor. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Master
Servicer agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.
Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged Property
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note or the
Mortgage), exercise or cause to be exercised its rights to accelerate the
maturity of such Mortgage Loan under any "due-on-sale" clause applicable
thereto; provided, however, that the Master Servicer shall not exercise any such
rights if it reasonably believes that it is prohibited by law from doing so. The
Master Servicer or the related Sub-Servicer may
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repurchase a Mortgage Loan at the Purchase Price when the Master Servicer
requires acceleration of the Mortgage Loan, but only if the Master Servicer is
satisfied, as evidenced by an Officer's Certificate delivered to the Trustee,
that either (i) such Mortgage Loan is in default or default is reasonably
foreseeable or (ii) if such Mortgage Loan is not in default or default is not
reasonably foreseeable, such repurchase will have no adverse tax consequences
for the Trust Fund or any Certificateholder. If the Master Servicer is unable to
enforce such "due-on-sale" clause (as provided in the second preceding sentence)
or if no "due-on-sale" clause is applicable, the Master Servicer or the
Sub-Servicer is authorized to enter into an assumption and modification
agreement with the Person to whom such property has been conveyed or is proposed
to be conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon; provided, however, that the Master Servicer shall not enter into
any assumption and modification agreement if the coverage provided under the
Primary Insurance Policy, if any, would be impaired by doing so. The Master
Servicer shall notify the Trustee, whenever possible, before the completion of
such assumption agreement, and shall forward to the Trustee the original copy of
such assumption agreement, which copy shall be added by the Trustee to the
related Mortgage File and which shall, for all purposes, be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. In connection with any such assumption agreement,
the interest rate on the related Mortgage Loan shall not be changed and no other
material alterations in the Mortgage Loan shall be made unless such material
alteration would not cause any of REMIC 1, REMIC 2 or REMIC 3 to fail to qualify
as a REMIC for federal income tax purposes, as evidenced by an Opinion of
Counsel. The Master Servicer is also authorized to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as the Mortgagor and
becomes liable under the Mortgage Note. Any fee collected by or on behalf of the
Master Servicer for entering into an assumption or substitution of liability
agreement will be retained by or on behalf of the Master Servicer as additional
servicing compensation. In connection with any such assumption, no material term
of the Mortgage Note (including but not limited to the Mortgage Rate, the amount
of the Monthly Payment and any other term affecting the amount or timing of
payment on the Mortgage Loan) may be changed. The Master Servicer shall not
enter into any substitution or assumption if such substitution or assumption
shall (i) both constitute a "significant modification" effecting an exchange or
reissuance of such Mortgage Loan under the Code (or Treasury regulations
promulgated thereunder) and cause any of REMIC 1, REMIC 2 or REMIC 3 to fail to
qualify as a REMIC under the REMIC Provisions or (ii) cause the imposition of
any tax on "prohibited transactions" or "contributions" after the Startup Day
under the REMIC Provisions. The Master Servicer shall notify the Trustee that
any such substitution or assumption agreement has been completed by forwarding
to the Trustee the original copy of such substitution or assumption agreement,
which copy shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. A portion equal to
up to 2% of the Collateral Value of the related Mortgage Loan, of any fee or
additional interest collected by the related Sub-Servicer for consenting in any
such conveyance or entering into any such assumption agreement may be retained
by the related Sub-Servicer as additional servicing compensation.
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Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption that the Master Servicer
may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Section 3.14, the term "assumption" is deemed to also include a
sale of a Mortgaged Property that is not accompanied by an assumption or
substitution of liability agreement.
Section 3.15. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall exercise reasonable efforts, consistent with
the procedures that the Master Servicer would use in servicing loans for its own
account, to foreclose upon or otherwise comparably convert (which may include an
REO Acquisition) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from the Trust Fund pursuant to any
other provision hereof. The Master Servicer shall use reasonable efforts to
realize proceeds from such defaulted Mortgage Loans in such manner (including
short sales) as will maximize the receipt of principal and interest by
Certificateholders, taking into account, among other things, the timing of
foreclosure proceedings. The foregoing is subject to the provisions that, in any
case in which Mortgaged Property shall have suffered damage from an Uninsured
Cause, the Master Servicer shall not be required to expend its own funds toward
the restoration of such property unless it shall determine in its sole
discretion (i) that such restoration will increase the net proceeds of
liquidation of the related Mortgage Loan to Certificateholders after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Master Servicer through Insurance Proceeds or Liquidation
Proceeds from the related Mortgaged Property, as contemplated in Section 3.11.
The Master Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the related property, as contemplated in
Section 3.11.
The proceeds of any Cash Liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds or any income from an REO Property, will be deposited into
the Custodial Account and applied in the following order of priority: first, to
reimburse the Master Servicer or any Sub-Servicer for any related unreimbursed
Servicing Advances, pursuant to Section 3.11(vi) or 3.22; second, to accrued and
unpaid interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage
Rate, to the date of the Cash Liquidation or REO Disposition, or to the Due Date
prior to the Distribution Date on which such amounts are to be distributed if
not in connection with a Cash Liquidation or REO Disposition; and third, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, to interest
at the Net Mortgage Rate. The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 3.11(vi). The portions of the recovery so allocated to
interest at the Net Mortgage Rate and to principal of the Mortgage Loan shall be
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applied as follows: first, to reimburse the Master Servicer or any Sub-Servicer
for any related unreimbursed Advances in accordance with Section 3.11(iii) or
3.22, second, payment to Radian in accordance with Sections 3.11(ix) and third,
for payment to the Trustee and distribution to the Certificateholders in
accordance with the provisions of Section 4.01, subject to Section 3.22 with
respect to certain recoveries from an REO Disposition constituting Excess
Proceeds.
Section 3.16. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by a certification (which certification shall include a statement to
the effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Mortgage File in the form of the Request for
Release attached hereto as Exhibit F-2. Upon receipt of such certification and
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. Subject to the receipt by the Master Servicer of the proceeds
of such payment in full and the payment of all related fees and expenses, the
Master Servicer shall arrange for the release to the Mortgagor of the original
canceled Mortgage Note. In connection with the satisfaction of any MOM Loan, the
Master Servicer is authorized to cause the removal from the registration on the
MERS(R) System of such Mortgage. All other documents in the Mortgage File shall
be retained by the Master Servicer to the extent required by applicable law. The
Master Servicer shall provide for preparation of the appropriate instrument of
satisfaction covering any Mortgage Loan which pays in full and the Trustee shall
cooperate in the execution and return of such instrument to provide for its
delivery or recording as may be required. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Custodial Account or the Certificate Account.
From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any
insurance policy relating to the Mortgage Loan, the Trustee shall, upon request
of the Master Servicer and delivery to the Trustee of a Request for Release in
the form attached hereto as Exhibit F-1, release the related Mortgage File to
the Master Servicer and the Trustee shall execute such documents as the Master
Servicer shall prepare and request as being necessary to the prosecution of any
such proceedings. Such Request for Release shall obligate the Master Servicer to
return each document previously requested from the Mortgage File to the Trustee
when the need therefor by the Master Servicer no longer exists; and in any event
within 21 days of the Master Servicer's receipt thereof, unless the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Trustee a
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certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a Request for Release
stating that such Mortgage Loan was liquidated and that all amounts received or
to be received in connection with such liquidation which are required to be
deposited into the Custodial Account have been or will be so deposited, or that
such Mortgage Loan has become an REO Property, a copy of the Request for Release
shall be released by the Trustee to the Master Servicer.
Upon written request of a Servicing Officer, the Trustee shall execute
and deliver to the Master Servicer any court pleadings, requests for trustee's
sale or other documents prepared by the Master Servicer that are necessary to
the foreclosure or trustee's sale in respect of a Mortgaged Property or to any
legal action brought to obtain judgment against any Mortgagor on the Mortgage
Note or Mortgage or to obtain a deficiency judgment, or to enforce any other
remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Each such request that such pleadings or
documents be executed by the Trustee shall include a certification signed by a
Servicing Officer as to the reason such documents or pleadings are required and
that the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
Section 3.17. Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer shall
be entitled to withhold and retain, from deposits to the Custodial Account of
amounts representing payments or recoveries of interest, the Servicing Fees with
respect to each Mortgage Loan (less any portion of such amounts retained by any
Sub-Servicer). In addition, the Master Servicer shall be entitled to recover
unpaid Servicing Fees out of related Late Collections to the extent permitted in
Section 3.11.
Each Sub-Servicing Agreement shall permit the related Sub-Servicer to
retain the Sub- Servicer Fees from collections on the related Mortgage Loans, or
shall provide that the Sub- Servicer be paid directly by the Master Servicer
from collections on the related Mortgage Loans. To the extent the Master
Servicer directly services a Mortgage Loan, the Master Servicer shall be
entitled to retain the Sub-Servicing Fees for that Mortgage Loan.
The Master Servicer also shall be entitled pursuant to Section 3.11 to
receive from the Custodial Account as additional servicing compensation interest
or other income earned on deposits therein, subject to Section 3.23, as well as
any assumption fees, late payment charges and reconveyance fees. The Master
Servicer shall not be entitled to retain any Prepayment Charges. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of the premiums for any
blanket policy insuring against hazard losses pursuant to Section 3.13 and
servicing compensation of the Sub- Servicer to the extent not retained by it),
and shall not be entitled to reimbursement therefor except as specifically
provided in Section 3.11. The Master Servicing Fee may not be
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transformed in whole or in part except in connection with the transfer of all of
the Master Servicer's responsibilities and obligations under this Agreement.
The Master Servicer also shall be entitled pursuant to Section 3.11 to
receive from the Custodial Account as additional servicing compensation interest
or other income earned on deposits therein, subject to Section 3.23, as well as
any assumption fees, late payment charges and reconveyance fees. The Master
Servicer shall not be entitled to retain any Prepayment Charges. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of the premiums for any
blanket policy insuring against hazard losses pursuant to Section 3.13 and
servicing compensation of the Sub- Servicer to the extent not retained by it),
and shall not be entitled to reimbursement therefor except as specifically
provided in Section 3.11. The Servicing Fee may not be transferred in whole or
in part except in connection with the transfer of all of the Master Servicer's
responsibilities and obligations under this Agreement.
Section 3.18. Maintenance of Certain Servicing Policies.
The Master Servicer shall obtain and maintain at its own expense and
shall cause each Sub-Servicer to obtain and maintain for the duration of this
Agreement a blanket fidelity bond and an errors and omissions insurance policy
covering the Master Servicer's and such Sub- Servicer's officers, employees and
other persons acting on its behalf in connection with its activities under this
Agreement. The amount of coverage shall be at least equal to the coverage
maintained by the Master Servicer or Sub-Servicer in order to be acceptable to
Fannie Mae or Freddie Mac to service loans for it or otherwise in an amount as
is commercially available at a cost that is generally not regarded as excessive
by industry standards. The Master Servicer shall promptly notify the Trustee in
writing of any material change in the terms of such bond or policy. The Master
Servicer shall provide annually to the Trustee a certificate of insurance that
such bond and policy are in effect. If any such bond or policy ceases to be in
effect, the Master Servicer shall, to the extent possible, give the Trustee ten
days' notice prior to any such cessation and shall use its reasonable best
efforts to obtain a comparable replacement bond or policy, as the case may be.
Section 3.19. Annual Statement as to Compliance.
Within 120 days after December 31 of each year, commencing on the first
December 31 following the first anniversary of the Closing Date, the Master
Servicer at its own expense shall deliver to the Trustee, with a copy to the
Rating Agencies, a certificate signed by a Servicing Officer stating, as to the
signers thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of performance under this Agreement has
been made under such officers' supervision, (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer has fulfilled all its
obligations under this Agreement for such year, or, if there has been a default
in the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof including the steps being taken
by the Master Servicer to remedy such default; (iii) a review of the activities
of each Sub-Servicer
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during the Sub-Servicer's most recently ended fiscal year on or prior to such
December 31 and its performance under its Sub-Servicing Agreement has been made
under such officer's supervision; and (iv) to the best of the Servicing
Officer's knowledge, based on his review and the certification of an officer of
the Sub-Servicer (unless the Servicing Officer has reason to believe that
reliance on such certification is not justified), either each Sub-Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement and its Sub-Servicing Agreement in all material respects throughout
the year, or, if there has been a default in performance or fulfillment of any
such duties, responsibilities or obligations, specifying the nature and status
of each such default known to the Servicing Officer. Copies of such statements
shall be provided by the Master Servicer to the Certificateholders upon request
or by the Trustee at the expense of the Master Servicer should the Master
Servicer fail to provide such copies.
Section 3.20. Annual Independent Public Accountants' Servicing
Statement.
(a) Within 120 days after December 31 of each year, commencing on the
first December 31 following the first anniversary of the Closing Date, the
Master Servicer, at its expense, shall cause a firm of independent public
accountants who are members of the American Institute of Certified Public
Accountants to furnish a statement to the Master Servicer, which will be
provided to the Trustee and the Rating Agencies, to the effect that, in
connection with the firm's examination of the Master Servicer's financial
statements as of the end of such calendar year, nothing came to their attention
that indicated that the Master Servicer was not in compliance with the
provisions of this Agreement except for (i) such exceptions as such firm
believes to be immaterial and (ii) such other exceptions as are set forth in
such statement.
(b) Within 120 days after December 31 of each year, commencing December
2002, the Master Servicer, at its expense, shall or shall cause each
Sub-Servicer to cause a nationally recognized firm of independent certified
public accountants to furnish to the Master Servicer or such Sub-Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer or such Sub-Servicer
which includes an assertion that the Master Servicer or such Sub-Servicer has
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to commercial and multifamily mortgage loans) identified in the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America with respect to the servicing of first
and second lien conventional single family mortgage loans during the most
recently completed calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. Immediately upon receipt of such report, the Master
Servicer shall or shall cause each Sub-Servicer to furnish a copy of such report
to the Trustee and the Rating Agencies.
Section 3.21. Access to Certain Documentation.
The Master Servicer shall provide, and shall cause any Sub-Servicer to
provide, to the
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Trustee, access to the documentation in their possession regarding the related
Mortgage Loans and REO Properties and to the Certificateholders, the FDIC, and
the supervisory agents and examiners of the FDIC (to which the Trustee shall
also provide) access to the documentation regarding the related Mortgage Loans
required by applicable regulations, such access being afforded without charge
but only upon reasonable request and during normal business hours at the offices
of the Master Servicer or the Sub-Servicers that are designated by these
entities; provided, however, that, unless otherwise required by law, the
Trustee, the Master Servicer or the Sub-Servicer shall not be required to
provide access to such documentation if the provision thereof would violate the
legal right to privacy of any Mortgagor; provided, further, however, that the
Trustee shall coordinate its requests for such access so as not to impose an
unreasonable burden on, or cause an unreasonable interruption of, the business
of the Master Servicer or any Sub-Servicer. The Master Servicer, the
Sub-Servicers and the Trustee shall allow representatives of the above entities
to photocopy any of the documentation and shall provide equipment for that
purpose at a charge that covers their own actual out-of-pocket costs.
Section 3.22. Title, Conservation and Disposition of REO Property.
This Section shall apply only to REO Properties acquired for the
account of REMIC 1 and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from REMIC 1 pursuant to
Sections 2.02, 2.04 or 3.14. In the event that title to any such REO Property is
acquired, the deed or certificate of sale shall be issued to the Trustee, or to
its nominee, on behalf of the Certificateholders. The Master Servicer, on behalf
of REMIC 1, shall either sell any REO Property before the close of the third
taxable year following the taxable year in which REMIC 1 acquires ownership of
such REO Property for purposes of Section 860G(a)(8) of the Code or, at the
expense of REMIC 1, request, more than 60 days before the day on which the
three-year grace period would otherwise expire an extension of the three-year
grace period, unless the Master Servicer has delivered to the Trustee an Opinion
of Counsel (which shall not be at the expense of the Trustee), addressed to the
Trustee and the Master Servicer, to the effect that the holding by REMIC 1 of
such REO Property subsequent to the close of the third taxable year following
the taxable year in which REMIC 1 acquires ownership of such REO Property will
not result in the imposition on REMIC 1 of taxes on "prohibited transactions"
thereof, as defined in Section 860F of the Code, or cause any of REMIC 1, REMIC
2 or REMIC 3 to fail to qualify as a REMIC under the REMIC Provisions or
comparable provisions of the laws of the State of California at any time that
any Certificates are outstanding. The Master Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) or result in the receipt by any of REMIC 1, REMIC 2 or REMIC
3 of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under the REMIC Provisions. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the
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Certificateholders, rent the same, or any part thereof, as the Master Servicer
deems to be in the best interest of the Certificateholders for the period prior
to the sale of such REO Property.
Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).
The Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets. The Master Servicer shall deposit, or
cause to be deposited, on a daily basis in the Custodial Account all revenues
received with respect to the REO Properties, net of any directly related
expenses incurred or withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property.
If as of the date of acquisition of title to any REO Property there
remain outstanding unreimbursed Servicing Advances with respect to such REO
Property or any outstanding Advances allocated thereto the Master Servicer, upon
an REO Disposition, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances and any unreimbursed related Advances as well as
any unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.15. The Master Servicer shall not
be obligated to advance any amounts with respect to an REO Property if, in its
good faith judgment, the Master Servicer determines that such advance would
constitute a Nonrecoverable Advance.
The REO Disposition shall be carried out by the Master Servicer at such
price and upon such terms and conditions as the Master Servicer shall determine.
The Master Servicer shall deposit the proceeds from the REO
Disposition, net of any payment to the Master Servicer as provided above, in the
Custodial Account upon receipt thereof for distribution in accordance with
Section 4.01; provided, that any such net proceeds received by the Master
Servicer which are in excess of the applicable Stated Principal Balance plus all
unpaid REO Imputed Interest thereon through the last day of the month in which
the REO Disposition occurred ("Excess Proceeds") shall be retained by the Master
Servicer as additional servicing compensation.
With respect to any Mortgage Loan as to which the Master Servicer has
received notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the Mortgaged Property, the Master Servicer shall not, on
behalf of the Trustee, either (i) obtain title to the related Mortgaged Property
as a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire
possession of, the related Mortgaged Property, unless the Master Servicer has,
at least 30 days prior to taking such action, obtained and delivered to the
Trustee an environmental audit report prepared by a Person who regularly
conducts environmental audits using customary industry standards. The Master
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund (other than proceeding against the Mortgaged Property) and is
hereby authorized at such time as it deems appropriate to release such Mortgaged
Property from the lien of the related Mortgage.
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The cost of the environmental audit report contemplated by this Section
3.22 shall be advanced by the Master Servicer as an expense of the Trust Fund,
and the Master Servicer shall be reimbursed therefor from the Custodial Account
as provided in Section 3.11, any such right of reimbursement being prior to the
rights of the Certificateholders to receive any amount in the Custodial Account.
If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property in compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Master Servicer as
an expense of the Trust Fund, and the Master Servicer shall be entitled to be
reimbursed therefor from the Custodial Account as provided in Section 3.11, any
such right of reimbursement being prior to the rights of the Certificateholders
to receive any amount in the Custodial Account.
Section 3.23. Additional Obligations of the Master Servicer.
On each Certificate Account Deposit Date, the Master Servicer shall
deliver to the Trustee for deposit in the Certificate Account from its own funds
and without any right of reimbursement therefor, a total amount equal to the
amount of Compensating Interest for the related Distribution Date.
Section 3.24. Additional Obligations of the Company.
The Company agrees that on or prior to the tenth day after the Closing
Date, the Company shall provide the Trustee with a written notification,
substantially in the form of Exhibit J attached hereto, relating to each Class
of Certificates, setting forth (i) in the case of each Class of such
Certificates, (a) if less than 10% of the aggregate Certificate Principal
Balance or Notional Amount of such Class of Certificates has been sold as of
such date, the value calculated pursuant to clause (b)(iii) of Exhibit J hereto,
or, (b) if 10% or more of such Class of Certificates has been sold as of such
date but no single price is paid for at least 10% of the aggregate Certificate
Principal Balance or Notional Amount of such Class of Certificates, then the
weighted average price at which the Certificates of such Class were sold and the
aggregate percentage of Certificates of such Class sold, (c) the first single
price at which at least 10% of the aggregate Certificate Principal Balance or
Notional Amount of such Class of Certificates was sold, or (d) if any
Certificates of each Class of Certificates are retained by the Company or an
affiliate corporation, or are delivered to the Seller, the fair market value of
such Certificates as of the Closing Date, (ii) the Prepayment Assumption used in
pricing the Certificates, and (iii) such other information as to matters of fact
as the Trustee may reasonably request to enable it to comply with its reporting
requirements with respect to each Class of such Certificates to the extent such
information can in the good faith judgment of the Company be determined by it.
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Section 3.25. Periodic Filings with the Securities and Exchange
Commission; Additional Information.
The Trustee shall prepare or cause to be prepared for filing with the
Commission any and all reports, statements and information respecting the Trust
Fund and/or the Certificates required to be filed with the Commission pursuant
to the Securities Exchange Act of 1934, as amended, and shall solicit any and
all proxies of the Certificateholders whenever such proxies are required to be
solicited, pursuant to the Securities Exchange Act of 1934, as amended. The
Company shall promptly file, and exercise its reasonable best efforts to obtain
a favorable response to, no- action requests with, or other appropriate
exemptive relief from, the Commission seeking the usual and customary exemption
from such reporting requirements granted to issuers of securities similar to the
Certificates. Fees and expenses incurred by the Trustee in connection with this
Section shall not be reimbursable from the Trust Fund.
The Master Servicer and the Company each agree to promptly furnish to
the Trustee, from time to time upon request, such further information, reports
and financial statements within their respective control related to this
Agreement and the Mortgage Loans as the Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Distributions.
(a) The Trustee shall establish and maintain a Certificate Account, in
which the Master Servicer shall cause to be deposited on behalf of the Trustee
on or before 5:00 P.M. New York time on each Certificate Account Deposit Date by
wire transfer of immediately available funds an amount equal to the sum of (i)
any Advance for the immediately succeeding Distribution Date, (ii) any amount
required to be deposited in the Certificate Account pursuant to Sections 3.11,
3.13 or 3.23, (iii) any amounts deposited into the Certificate Account from the
Pre-Funding Account and the Interest Coverage Account pursuant to Sections 4.04
and 4.05 of this Agreement, (iv) all other amounts constituting the Available
Distribution Amount for the immediately succeeding Distribution Date and (v) any
amounts on deposit in the Custodial Account representing Prepayment Charges
collected by the Master Servicer (and any Master Servicer Prepayment Charge
Payment Amounts paid by, or collected on behalf of the Trust Fund by, the Master
Servicer or any Sub-Servicer), other than any such Prepayment Charges or Master
Servicer Prepayment Charge Payment Amounts relating to Principal Prepayments
that occurred after the end of the related Prepayment Period.
On each Distribution Date, prior to making any other distributions
referred to in Section 4.01, the Trustee shall withdraw from the Certificate
Account and pay itself the Trustee's Fee for such Distribution Date.
On each Distribution Date the Trustee shall distribute to each
Certificateholder of record as of the next preceding Record Date (other than as
provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least 5
Business Days prior to the related Record Date, or otherwise by check mailed to
such Certificateholder at the address of such Holder appearing in the
Certificate Register, such Certificateholder's share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the amounts required to be distributed to such Holder
pursuant to this Section 4.01.
On each Distribution Date, the Trustee shall withdraw from the
Certificate Account that portion of Available Distribution Amount for such
Distribution Date consisting of the Interest Remittance Amount for such
Distribution Date, and make the following disbursements and transfers in the
order of priority described below, in each case to the extent of the Interest
Remittance Amount remaining for such Distribution Date:
(i) to the Holders of the Class A-IO Certificates, the related
Monthly Interest Distributable Amount for each such Class for such Distribution
Date;
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(ii) to the Holders of the Class A-IO Certificates, the
related Unpaid Interest Shortfall Amount, if any, for each such Class for such
Distribution Date;
(iii) (a) from the remaining Interest Remittance Amount in
respect of the Group I Loans, to the Holders of the Class A-I-1, Class A-I-2,
Class A-I-3, Class A-I-4, Class A- I-5 and Class A-I-6 Certificates, pro rata,
the related Monthly Interest Distributable Amount for such Class for such
Distribution Date, and (b) from the remaining Interest Remittance Amount in
respect of the Group II Loans, to the Holders of the Class A-II Certificates,
the related Monthly Interest Distributable Amount for such Class for such
Distribution Date;
(iv) (a) from the remaining Interest Remittance Amount in
respect of the Group I Loans, to the Holders of the Class A-I-1, Class A-I-2,
Class A-I-3, Class A-I-4, Class A- I-5 and Class A-I-6 pro rata, the related
Unpaid Interest Shortfall for such Class for such Distribution Date, and (b)
from the remaining Interest Remittance Amount in respect of the Group II Loans,
to the Holders of the Class A-II Certificates, the related Unpaid Interest
Shortfall for such Class for such Distribution Date;
(v) (a) from the remaining Interest Remittance Amount in
respect of the Group I Loans, to the Holders of the Class A-II Certificates, any
remaining Unpaid Interest Shortfall for such Class for such Distribution Date,
and (b) from the remaining Interest Remittance Amount in respect of the Group II
Loans, to the Holders of the Class A-I-1, Class A- I-2, Class A-I-3, Class
A-I-4, Class A-I-5 and Class A-I-6 Certificates, pro rata, any remaining Unpaid
Interest Shortfall for such Class for such Distribution Date;
(vi) to the Holders of the Class M-1 Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution Date;
(vii) to the Holders of the Class M-2 Certificates, the
Monthly Interest Distributable Amount for such Class for such Distribution Date;
and
(viii) to the Holders of the Class B Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution Date.
(b) On each Distribution Date (x) prior to the Stepdown Date or (y) on
which a Trigger Event is in effect, the Trustee shall withdraw from the
Certificate Account an amount equal to the Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority, in each case to the extent of the Principal Distribution
Amount remaining for such Distribution Date:
(i) first, (a) to the Class A-I-1 Certificates, the Class
A-I-2 Certificates and the Class A-I-3 Certificates, sequentially, in that
order, the Group I Principal Fraction of the Principal Distribution Amount for
such Distribution Date and (b) to the holders of the Class A-II Certificates,
the Group II Principal Fraction of the Principal Distribution Amount for such
Distribution Date from the Group II Loans, in each case until the Certificate
Principal Balances
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thereof are reduced to zero; provided that if on any Distribution Date, the
Class A-I Certificates or Class A-II Certificates are no longer outstanding, the
Principal Distribution Amount will be allocated to the Class A-II Certificates
and Class A-I Certificates, respectively, in the order described above, in each
case until the Certificate Principal Balances thereof are reduced to zero;
(ii) second, (a) to the Class A-I-4, Class A-I-5 and Class
A-I-6 Certificates, pro rata, the Group I Principal Fraction of the Principal
Distribution Amount until the Certificate Principal Balances thereof are reduced
to zero; provided, that with respect to the amount due to the Class A-I-6
Certificates, such distributions shall be made first, to the Class A-I-4
Certificates until the Certificate Principal Balance thereof has been reduced to
zero, and then to the Class A- I-6 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; provided further, that if on any
distribution date, the Class A-I Certificates or Class A-II Certificates are no
longer outstanding, the Principal Distribution Amount will be allocated to the
Class A-II Certificates or Class A-I Certificates, respectively, in the order
described above with respect to the Class A-I Certificates, in each case until
the Certificate Principal Balances thereof are reduced to zero;
(iii) third, to the holders of the Class M-1 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
(iv) fourth, to the holders of the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; and
(v) fifth, to the holders of the Class B Certificates, until
the Certificate Principal Balance thereof has been reduced to zero.
(c) On each Distribution Date (x) on or after the Stepdown Date and (y)
on which a Trigger Event is not in effect, the Trustee shall withdraw from the
Certificate Account an amount equal to the Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority, in each case to the extent of the Principal Distribution
Amount remaining for such Distribution Date:
(i) first, the Class A Principal Distribution Amount shall be
distributed as follows:
(A) to the Class A-I-1 Certificates, the Class A-I-2
Certificates and the Class A-I-3 Certificates, sequentially, in that
order, the Group I Principal Fraction of the Class A Principal
Distribution Amount, in each case until the Certificate Principal
Balances thereof are reduced to zero,
(B) to the Class A-I-4, Class A-I-5 and Class A-I-6
Certificates, pro rata, the Group I Principal Fraction of the Class A
Principal Distribution Amount, in each case until the Certificate
Principal Balances thereof are reduced to zero; provided, that with
respect to the amount due to the Class A-I-6 Certificates, such
distributions shall be
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made first, to the Class A-I-4 Certificates until the Certificate
Principal Balance thereof has been reduced to zero, and then to the
Class A-I-6 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and
(C) to the holders of the Class A-II Certificates,
the Group II Principal Fraction of the Class A Principal Distribution
Amount, until the Certificate Principal Balance thereof is reduced to
zero;
provided, that if on any Distribution Date, the Class A-I Certificates or Class
A-II Certificates are no longer outstanding, the Class A Principal Distribution
Amount will be allocated to the Class A-II Certificates or Class A-I
Certificates, respectively, in the order described above with respect to the
Class A-I Certificates, in each case until the Certificate Principal Balances
thereof are reduced to zero;
(ii) second, to the holders of the Class M-1 Certificates, the
Class M-1 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
(iii) third, to the holders of the Class M-2 Certificates, the
Class M-2 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero; and
(iv) fourth, to the holders of the Class B Certificates, the
Class B Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero.
(d) On each Distribution Date, the Net Monthly Excess Cashflow shall be
distributed in the following order of priority, in each case to the extent of
the Net Monthly Excess Cashflow remaining for such Distribution Date:
(i) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of principal, in an amount
equal to any Extra Principal Distribution Amount, payable to such Holders as
part of the Principal Distribution Amount as described under Section 4.01(b) or
Section 4.01(c) above, as applicable;
(ii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(iii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(iv) to the Holders of the Class M-2 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(v) to the Holders of the Class M-2 Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such Certificates;
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(vi) to the Holders of the Class B Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such Certificates;
(vii) to the Holders of the Class B Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such Certificates;
(viii) to the Holders of the Class C Certificates, interest
equal to the Monthly Interest Distributable Amount for such Class and principal
equal to any remaining Overcollateralization Release Amount for such
Distribution Date;
(ix) if such Distribution Date follows the Prepayment Period
during which occurs the latest date on which a Prepayment Charge may be required
to be paid in respect of any Mortgage Loans, to the Holders of the Class P
Certificates, in reduction of the Certificate Principal Balance thereof, until
the Certificate Principal Balance thereof is reduced to zero; and
(x) any remaining amounts to the Holders of the Class R
Certificates (in respect of the appropriate Residual Interest).
(e) On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period and any Master Servicer Prepayment Charge Amounts paid by the Master
Servicer during the related Prepayment Period will be withdrawn from the
Certificate Account and distributed by the Trustee to the Holders of the Class P
Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.
(f) Each distribution with respect to a Book-Entry Certificate 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 Certificate 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 Certificate Owners that it represents. None of the Trustee, the Company
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.
(g) The Trustee, upon written direction of the Master Servicer, shall
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders, which shall
mature not later than the Business Day next preceding the Distribution Date next
following the date of such investment and shall not be sold or disposed of prior
to maturity. All income and gain realized from any such investment shall be for
the benefit of the Master Servicer and shall be subject to its withdrawal or
order from time to time. The amount of any losses incurred in respect of any
such investments shall be deposited in the
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Certificate Account by the Master Servicer out of its own funds immediately as
realized without any right of reimbursement.
(h) Except as otherwise provided in Section 9.01, if the Master
Servicer anticipates that a final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Master Servicer
shall, no later than the Determination Date in the month of such final
distribution, notify the Trustee and the Trustee shall, no later than two (2)
Business Days after such Determination Date, mail on such date to each Holder of
such Class of Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of
Certificates will be made on such Distribution Date but only upon presentation
and surrender of such Certificates at the office of the Trustee or as otherwise
specified therein, and (ii) no interest shall accrue on such Certificates from
and after the end of the prior calendar month.
Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 4.01(h) shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non- tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within six months after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee shall
take reasonable steps as directed by the Company, or appoint an agent to take
reasonable steps, to contact the remaining non-tendering Certificateholders
concerning surrender of their Certificates. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in the Trust Fund. If within nine months
after the second notice any such Certificates shall not have been surrendered
for cancellation, the Class R Certificateholders shall be entitled to all
unclaimed funds and other assets which remain subject hereto. No interest shall
accrue or be payable to any Certificateholder on any amount held in trust as a
result of such Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 4.01(h).
Section 4.02. Statements to Certificateholders.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Trustee shall prepare and make
available on the Trustee's website, http://www-apps.gis.deutsche-bank.com/invr
(or deliver at the recipient's option), to each Holder of the Regular
Certificates, the Master Servicer and the Rating Agencies, a statement as to the
distributions made on such Distribution Date:
(i) (A) the amount of the distribution made on such
Distribution Date to the Holders of each Class of Regular Certificates (other
than the Class A-IO Certificates), separately identified, allocable to principal
and (B) the amount of the distribution made on such Distribution
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Date to the Holders of the Class P Certificates allocable to Prepayment Charges
and Master Servicer Prepayment Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates (other than the Class
P Certificates) allocable to interest, separately identified;
(iii) the Pass-Through Rate on each Class of Regular
Certificates (other than the Class P Certificates) for such Distribution Date;
(iv) the aggregate amount of Advances for such Distribution
Date;
(v) the number and aggregate Stated Principal Balance of the
Mortgage Loans as of the end of the related Due Period;
(vi) the Overcollateralized Amount, the Excess
Overcollateralized Amount, the Overcollateralization Release Amount, the
Overcollateralization Deficiency Amount and the Overcollateralization Target
Amount for such Distribution Date;
(vii) the aggregate Certificate Principal Balance or Notional
Amount, as applicable, of each Class of Regular Certificates after giving effect
to the amounts distributed on such Distribution Date (in the case of each Class
of the Mezzanine Certificates, separately identifying any reduction thereof due
to the allocation of Realized Losses thereto);
(viii) the number and aggregate Stated Principal Balance of
Mortgage Loans (a) delinquent 31 to 60 days, (b) delinquent 61 to 90 days, (c)
delinquent 91 days or more, in each case as of the end of the calendar month
prior to such Distribution Date;
(ix) the number, aggregate principal balance and book value of
any REO Properties as of the close of business on the last day of the calendar
month preceding the month in which such Distribution Date occurs;
(x) the weighted average remaining term to maturity, weighted
average Mortgage Rate and weighted average Net Mortgage Rate of the Mortgage
Loans as of the close of business on the first day of the calendar month in
which such Distribution Date occurs and the number and aggregate Stated
Principal Balance of the Subsequent Mortgage Loans added during the preceding
Prepayment Period;
(xi) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xii) the aggregate amount of Realized Losses incurred during
the related Prepayment Period and the cumulative amount of Realized Losses;
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(xiii) the aggregate amount of extraordinary Trust Fund
expenses withdrawn from the Custodial Account or the Certificate Account for
such Distribution Date;
(xiv) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by payments by
the Master Servicer pursuant to Section 3.23, and the aggregate amount of Relief
Act Interest Shortfalls for such Distribution Date;
(xv) the Monthly Interest Distributable Amount in respect of
each Class of the Class A Certificates and Mezzanine Certificates for such
Distribution Date and the Unpaid Interest Shortfall Amount, if any, with respect
to each Class of the Class A Certificates and Mezzanine Certificates for such
Distribution Date;
(xvi) (A) the Overcollateralization Target Amount, (B) the
Overcollateralized Amount and (C) the amount, if any, by which the
Overcollateralization Target Amount exceeds the Overcollateralized Amount, in
each case after giving effect to the distribution made on the Regular
Certificates on such Distribution Date;
(xvii) when the Stepdown Date or a Trigger Event has occurred;
(xviii) the aggregate amount of servicing compensation
received by the Master Servicer with respect to the related Due Period and such
other customary information as the Trustee deems necessary or desirable, or
which a Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;
(xix) the amount withdrawn from the Pre-Funding Account and
the Interest Coverage Account and used to make payments to Certificateholders on
that Distribution Date, the amount remaining on deposit following such
Distribution Date, and the amount withdrawn from the Pre-Funding Account used to
buy Subsequent Mortgage Loans prior to such Distribution Date;
(xx) the aggregate of any deposits to and withdrawals from the
Net WAC Shortfall Reserve Fund for such Distribution Date and the remaining
amount on deposit in the Net WAC Shortfall Reserve Fund after such deposits and
withdrawals;
(xxi) the Available Distribution Amount for such Distribution
Date.
In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall also be expressed as a dollar amount per Single
Certificate.
On each Distribution Date the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP level factors for each Class of Certificates
as of such Distribution Date, using a format and media mutually acceptable to
the Trustee and Bloomberg.
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Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and forward, to each Person who at any time during the
calendar year was a Holder of a Certificate, a statement containing the
information set forth in subclauses (i) and (ii) above, aggregated for such
calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code and regulations
thereunder as from time to time are in force.
On each Distribution Date the Trustee shall prepare and make available
on the Trustee's website, http://www-apps.gis.deutsche-bank.com/invr (or deliver
at the recipient's option), to each Holder of a Class R Certificate a copy of
the reports forwarded to the other Certificateholders on such Distribution Date.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and forward, to each Person who at any time during the
calendar year was a Holder of a Class R Certificate a statement containing the
information provided pursuant to the previous paragraph aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in force.
Section 4.03. Remittance Reports; Advances by the Master Servicer.
(a) On the Business Day following each Determination Date, the Master
Servicer shall deliver to the Trustee a report, prepared as of the close of
business on the Determination Date (the "Remittance Report"), in the form of an
electromagnetic tape or disk. The Remittance Report and any written information
supplemental thereto shall include such information with respect to the Mortgage
Loans that is required by the Trustee for purposes of making the calculations
and preparing the statement described in Sections 4.01 and 4.02, as set forth in
written specifications or guidelines issued by the Trustee from time to time.
The Trustee shall have no obligation to recompute, recalculate or verify any
information provided to it by the Master Servicer.
(b) The Master Servicer shall determine the aggregate amount of
Advances required to be made for the related Distribution Date, which shall be
in an aggregate amount equal to the sum of (1) the aggregate amount of Monthly
Payments (with each interest portion thereof adjusted to the Mortgage Rate less
the sum of the Master Servicing Fee Rate, the Sub-Servicing Fee Rate and any
applicable Radian PMI Policy Rate, other than Balloon Payments, less the amount
of any related Debt Service Reductions or reductions in the amount of interest
collectable from the Mortgagor pursuant to the Relief Act, on the Outstanding
Mortgage Loans as of the related Due Date, which Monthly Payments were
delinquent as of the close of business as of the related Determination Date)
plus (2) with respect to each Balloon Loan delinquent in respect of its Balloon
Payment as of the close of business on the related Determination Date, an amount
equal to the assumed Monthly Payment (net of the related Servicing Fees) that
would have been
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due on the related Due Date based on the original principal amortization
scheduled for such Balloon Loan until such Balloon Loan is finally liquidated;
provided that no Advance shall be made if it would be a Nonrecoverable Advance.
On or before 4:00 P.M. New York time on each Certificate Account Deposit Date,
the Master Servicer shall either (i) deposit in the Certificate Account from its
own funds, or funds received therefor from the Sub-Servicers, an amount equal to
the Advances to be made by the Master Servicer in respect of the related
Distribution Date, (ii) withdraw from amounts on deposit in the Custodial
Account and deposit in the Certificate Account all or a portion of the amounts
held for future distribution in discharge of any such Advance, or (iii) make
advances in the form of any combination of (i) and (ii) aggregating the amount
of such Advance. Any portion of the amounts held for future distribution so used
shall be replaced by the Master Servicer by deposit in the Certificate Account
on or before 1:00 P.M. New York time on any future Certificate Account Deposit
Date to the extent that funds attributable to the Mortgage Loans that are
available in the Custodial Account for deposit in the Certificate Account on
such Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date. The
amount of any reimbursement pursuant to Section 3.11 in respect of outstanding
Advances on any Distribution Date shall be allocated to specific Monthly
Payments due but delinquent for previous Due Periods, which allocation shall be
made, to the extent practicable, to Monthly Payments which have been delinquent
for the longest period of time. Such allocations shall be conclusive for
purposes of reimbursement to the Master Servicer from recoveries on related
Mortgage Loans pursuant to Section 3.11. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance,
if made, would constitute a Nonrecoverable Advance, shall be evidenced by a
certificate of a Servicing Officer delivered to the Seller and the Trustee with
the Remittance Report. The Trustee shall deposit all funds it receives pursuant
to this Section 4.03 into the Certificate Account.
(c) In the event that the Master Servicer determines as of any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date in the amount determined by the Master
Servicer pursuant to paragraph (b) above, it shall give notice to the Trustee of
its inability to Advance (such notice may be given by telecopy), not later than
4:00 P.M., New York time, on such date, specifying the portion of such amount
that it will be unable to deposit. Not later than 4:00 P.M., New York time, on
the earlier of (x) two Business Days following such Certificate Account Deposit
Date or (y) the Business Day preceding the related Distribution Date, unless by
such time the Master Servicer shall have directly or indirectly deposited in the
Certificate Account the entire amount of the Advances required to be made for
the related Distribution Date, pursuant to Section 7.01, the Trustee shall (a)
terminate all of the rights and obligations of the Master Servicer under this
Agreement in accordance with Section 7.01 and (b) assume the rights and
obligations of the Master Servicer hereunder, including the obligation to
deposit in the Certificate Account an amount equal to the Advance for the
immediately succeeding Distribution Date.
Section 4.04. Pre-Funding Account.
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(a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account that is an Eligible Account, which shall be
titled "Pre-Funding Account, Bankers Trust Company of California, National
Association, as trustee for the registered holders of Impac Secured Assets
Corp., Mortgage Pass-Through Certificates, Series 2002-1" (the "Pre- Funding
Account"). The Trustee shall, promptly upon receipt, deposit in the Pre-Funding
Account and retain therein the Original Pre-Funded Amount remitted on the
Closing Date to the Trustee by the Company. Funds deposited in the Pre-Funding
Account shall be held in trust by the Trustee for the Certificateholders for the
uses and purposes set forth herein.
(b) The Trustee will invest funds deposited in the Pre-Funding Account
as directed by the Master Servicer in writing in Permitted Investments with a
maturity date (i) no later than the Business Day immediately preceding the date
on which such funds are required to be withdrawn from such account pursuant to
this Agreement, if a Person other than the Trustee or an Affiliate manages or
advises such investment, (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee or an Affiliate manages or advises such investment or (iii) within one
(1) Business Day of the Trustee's receipt thereof. For federal income tax
purposes, the Master Servicer shall be the owner of the Pre- Funding Account and
shall report all items of income, deduction, gain or loss arising therefrom. All
income and gain realized from investment of funds deposited in the Pre-Funding
Account shall be transferred to the Interest Coverage Account at the following
times: (i) on the Business Day immediately preceding each Distribution Date, if
a Person other than the Trustee or an Affiliate of the Trustee manages or
advises such investment, or on each Distribution Date, if the Trustee or an
Affiliate of the Trustee manages or advises such investment, (ii) on the
Business Day immediately preceding each Subsequent Transfer Date, if a Person
other than the Trustee or an Affiliate of the Trustee manages or advises such
investment, or on each Subsequent Transfer Date, if the Trustee or an Affiliate
of the Trustee manages or advises such investment or (iii) within one (1)
Business Day of the Trustee's receipt thereof. Such transferred funds shall not
constitute income and gain for purposes of Section 4.05(b) hereof. The Master
Servicer shall deposit in the Pre-Funding Account the amount of any net loss
incurred in respect of any such Permitted Investment immediately upon
realization of such loss without any right of reimbursement therefor. At no time
will the Pre-Funding Account be an asset of any REMIC created hereunder.
(c) Amounts on deposit in the Pre-Funding Account shall be withdrawn by
the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall
withdraw from the Pre-Funding Account an amount equal to 100% of the Stated
Principal Balances of the Subsequent Mortgage Loans transferred and assigned to
the Trustee for deposit in the mortgage pool on such Subsequent Transfer Date
and pay such amount to or upon the order of the Company upon satisfaction of the
conditions set forth in Section 2.06 with respect to such transfer and
assignment;
(ii) If the amount on deposit in the Pre-Funding Account
(exclusive of
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investment income) has not been reduced to zero during the Funding Period, on
the day immediately following the termination of the Funding Period, the Trustee
shall deposit into the Certificate Account any amounts remaining in the
Pre-Funding Account (exclusive of investment income) for distribution in
accordance with the terms hereof;
(iii) To withdraw any amount not required to be deposited in
the Pre-Funding Account or deposited therein in error; and
(iv) To clear and terminate the Pre-Funding Account upon the
earlier to occur of (A) the Distribution Date immediately following the end of
the Funding Period and (B) the termination of this Agreement, with any amounts
remaining on deposit therein being paid to the Holders of the Certificates then
entitled to distributions in respect of principal.
Withdrawals pursuant to clauses (i), (ii) and (iii) shall be treated as
contributions of cash to REMIC 1 on the date of withdrawal.
Section 4.05. Interest Coverage Account.
(a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account that is an Eligible Account, which shall be
titled "Interest Coverage Account, Bankers Trust Company of California, National
Association, as trustee for the registered holders of Impac Secured Assets
Corp., Mortgage Pass-Through Certificates, Series 2002-1" (the "Interest
Coverage Account"). The Trustee shall, promptly upon receipt, deposit in the
Interest Coverage Account and retain therein the Interest Coverage Amount
remitted on the Closing Date to the Trustee by the Company. Funds deposited in
the Interest Coverage Account shall be held in trust by the Trustee for the
Certificateholders for the uses and purposes set forth herein.
(b) For federal income tax purposes, the Master Servicer shall be the
owner of the Interest Coverage Account and shall report all items of income,
deduction, gain or loss arising therefrom. At no time will the Interest Coverage
Account be an asset of any REMIC created hereunder. All income and gain realized
from investment of funds deposited in the Interest Coverage Account shall be for
the sole and exclusive benefit of the Master Servicer and shall be remitted by
the Trustee to the Master Servicer no later than the first Business Day
following receipt of such income and gain by the Trustee. The Master Servicer
shall deposit in the Interest Coverage Account the amount of any net loss
incurred in respect of any such Permitted Investment immediately upon
realization of such loss.
(c) On each Distribution Date during the Funding Period and on the
Distribution Date immediately following the end of the Funding Period, the
Trustee shall withdraw from the Interest Coverage Account and deposit in the
Certificate Account an amount equal to 30 days' interest on the excess, if any,
of the Original Pre-Funded Amount over the aggregate Principal Balance of
Subsequent Mortgage Loans that both (i) had a Due Date during the Due Period
relating to such Distribution Date and (ii) had a Subsequent Cut-off Date prior
to the first day of
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the month in which such Distribution Date occurs, at a per annum rate equal to
the weighted average of the Net Mortgage Rates of the Mortgage Loans, plus the
Trustee's Fee Rate. Such withdrawal and deposit shall be treated as a
contribution of cash by the Master Servicer to REMIC 1 on the date thereof.
Immediately following any such withdrawal and deposit, and immediately following
the conveyance of any Subsequent Mortgage Loans to the Trust on any Subsequent
Transfer Date, the Trustee shall withdraw from the Interest Coverage Account and
remit to the Master Servicer or its designee an amount equal to the excess, if
any, of the amount remaining in such Interest Coverage Account over the amount
that would be required to be withdrawn therefrom (assuming sufficient funds
therein) pursuant to the preceding sentence on each subsequent Distribution
Date, if any, that will occur during the Funding Period or that will be the
Distribution Date immediately following the end of the Funding Period, if no
Subsequent Mortgage Loans were acquired by the Trust Fund after the end of the
Prepayment Period relating to the current Distribution Date.
(d) Upon the earliest of (i) the Distribution Date immediately
following the end of the Funding Period, (ii) the reduction of the Certificate
Principal Balances of the Certificates to zero or (iii) the termination of this
Agreement in accordance with Section 9.01, any amount remaining on deposit in
the Interest Coverage Account after distributions pursuant to paragraph (c)
above shall be withdrawn by the Trustee and paid to the Master Servicer or its
designee.
Section 4.06. Distributions on the REMIC Regular Interests.
On each Distribution Date, the Trustee shall cause the Available
Distribution Amount, in the following order of priority, to be distributed by
REMIC 1 to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from
the Certificate Account and distributed to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest), as the case may be:
(1) first, to the Holders of REMIC 1 Regular Interest LT1F, and then to
REMIC 1 Regular Interest LT1E,and then to REMIC 1 Regular Interest LT1D, in an
amount equal to (A) the Uncertificated Accrued Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates and second, to Holders of REMIC 1 Regular Interest LT1A,
REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C and REMIC 1 Regular
Interest LT1P in an amount equal to (A) the Uncertificated Accrued Interest for
such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid
from previous Distribution Dates; and
(2) second, to the Holders of REMIC 1 Regular Interests, in an amount
equal to the remainder of the Available Distribution Amount for such
Distribution Date after the distributions made pursuant to clause (1) above,
allocated in the following order of priority:
(A) to the Holders of REMIC 1 Regular Interest LT1P, on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter until $100 has been distributed pursuant to this clause (A);
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(B) with respect to the Group I Loans, to the Holders of REMIC
1 Regular Interest LT1A and REMIC 1 Regular Interest LT1B, its respective
proportion (based on its Uncertificated Principal Balance in relation to such
Loan Group) of such amount, until the Uncertificated Principal Balance of those
REMIC 1 Regular Interests are reduced to zero;
(C) with respect to the Group II Loans, to the Holders of
REMIC Regular Interest LT1A and REMIC 1 Regular Interest LTIC, its respective
proportion (based on its Uncertificated Principal Balance in relation to such
Loan Group) of such amount, until the Uncertificated Principal Balance of those
REMIC 1 Regular Interests are reduced to zero;
(D) to the Holders of REMIC 1 Regular Interest LT1F until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1F is reduced to
zero;
(E) to the Holders of REMIC 1 Regular Interest LT1E until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1E is reduced to
zero;
(F) to the Holders of REMIC 1 Regular Interest LT1D, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1D is reduced to
zero; and
(G) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest).
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
and any Master Servicer Prepayment Charge Payment Amounts paid by the Master
Servicer during the related Prepayment Period will be distributed by REMIC 1 to
the Holders of REMIC 1 Regular Interest LT1P. The payment of the foregoing
amounts to the Holders of REMIC 1 Regular Interest LT1P shall not reduce the
Uncertificated Principal Balance thereof.
On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed by REMIC 2 to REMIC 3
on account of the REMIC 2 Regular Interests or withdrawn from the Certificate
Account and distributed to the holders of the Class R Certificates (in respect
of the Class R-2 Interest), as the case may be:
(i) first, to the extent of Available Funds, to the Holders of REMIC 2
Regular Interest A-IO, in an amount equal to (A) the Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates and then, in respect of the
Group 1 Loans, to Holders of REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular
Interest LT2-AI1, REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular Interest
LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular Interest LT2-AI5,
REMIC 2 Regular Interest LT2-AI6,REMIC 2 Regular Interest LT2-1M1, REMIC 2
Regular Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B, REMIC 2 Regular
Interest LT2-1ZZ, and in respect of the Group 2 Loans, to REMIC 2 Regular
Interest LT2-2AA, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular Interest
LT2-2M1, REMIC 2 Regular Interest LT2-2-2M2,
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REMIC 2 Regular Interest LT2-2B, REMIC 2 Regular Interest LT2-2ZZ and REMIC 2
Regular Interest LT2P, PRO RATA, in an amount equal to (A) the Uncertificated
Accrued Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from the previous Distribution Dates. Amounts payable
as Uncertificated Accrued Interest in respect of REMIC 2 Regular Interest
LT2-1ZZ and REMIC 2 Regular Interest LT2-2ZZ shall each be reduced when the sum
of the REMIC 2 Group 1 Overcollateralized Amount and REMIC 2 Group 2
Overcollateralized Amount is less than the REMIC 2 Overcollateralization Target
Amount, by the lesser or (x) the amount of such difference and (y) the Maximum
Uncertificated Accrued Interest Deferral Amount, and such amount will be payable
to the Holders of REMIC 2 Regular Interest LT2-AI1, REMIC 2 Regular Interest
LT-2-AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2 Regular Interest LT2-AI4,
REMIC 2 Regular Interest LT2-AI5, REMIC 2 Regular Interest LT2-AI6, REMIC 2
Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2, REMIC 2 Regular
Interest LT2-1B, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular Interest
LT2-2MI, REMIC 2 Regular Interest LT2-2M2 and REMIC 2 Regular Interest LT2-2B in
the same proportion as the Overcollateralization Deficiency Amount is allocated
to the Corresponding Certificates;
(ii) second, to the Holders of REMIC 2 Regular Interests, in an amount
equal to the remainder of the Available Funds for such Distribution Date after
the distributions made pursuant to clause (i) above, allocated as follows:
(a) with respect to the Group I Loans, to the Holders of REMIC
2 Regular Interest LT2-1AA, 98.00% of such remainder (other than amounts payable
pursuant to clause (d) below), until the Uncertificated Principal Balance of
such Uncertificated REMIC 2 Regular Interest is reduced to zero, and with
respect to the Group II Loans, to the Holders of REMIC 2 Regular Interest
LT2-2AA, 98.00% of such remainder, until the Uncertificated Principal Balance of
such Uncertificated REMIC 2 Regular Interest is reduced to zero;
(b) with respect to the Group I Loans, to the Holders of REMIC
2 Regular Interest LT2-AI1, REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular
Interest LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular Interest
LT2-1M1, REMIC 2 Regular Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B,
1.00% of such remainder (other than amounts payable pursuant to clause (d)
below), in the same proportion as principal payments are allocated to the
Corresponding Certificates, until the Uncertificated Principal Balances of such
REMIC 2 Regular Interests are reduced to zero; and with respect to the Group II
Loans, to the Holders of REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular
Interest LT2-2M1, REMIC 2 Regular Interest LT2-2M2 and REMIC 2 Regular Interest
LT2-2B, 1.00% of such remainder, in the same proportion as principal payments
are allocated to the Corresponding Certificates, until the Uncertificated
Principal Balances of such REMIC 2 Regular Interests are reduced to zero;
(c) with respect to the Group 1 Loans, to the Holders of REMIC
2 Regular Interest LT2-1ZZ, 1.00% of such remainder (other than amounts payable
pursuant to clause (d) below), until the Uncertificated Principal Balance of
such REMIC 2 Regular Interest is reduced to zero, and with respect to the Group
II Loans, to the Holders of REMIC 2 Regular Interest LT2-
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2ZZ, 1.00% of such remainder, until the Uncertificated Principal Balance of such
REMIC 2 Regular Interest is reduced to zero;
(d) to the Holders of REMIC 2 Regular Interest LT2P, on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter until $100 has been distributed pursuant to this clause; then
(e) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-2 Interest); and
(iii) third, to REMIC 2 Regular Interest LT2P, 100% of the amount paid
in respect of Prepayment Charges and Master Servicer Prepayment Charge Payment
Amounts on REMIC 1 Regular Interest LT1P;
provided, however, that with respect to the Group I Loans, 98.00% and 2.00% of
any principal payments that are attributable to an Overcollateralization Release
Amount shall be allocated to Holders of REMIC 2 Regular Interest LT2-1AA and
REMIC 2 Regular Interest LT2-1ZZ, respectively, to the extent the principal
balance of the Group I Loans exceeds the sum of the Uncertificated Principal
Balances of REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular Interest LT2-AI1,
REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2
Regular Interest LT2-AI4, REMIC 2 Regular Interest LT2-AI5, REMIC 2 Regular
Interest LT2-AI6, REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular Interest
LT2-1M2, REMIC 2 Regular Interest LT2-1B and REMIC 2 Regular Interest LT2-1ZZ
immediately following payments pursuant to (c) above but prior to any payments
pursuant to this proviso, and with respect to the Group II Loans, 98.00% and
2.00% of any principal payments that are attributable to an
Overcollateralization Release Amount shall be allocated to Holders of REMIC 2
Regular Interest LT2-2AA and REMIC 2 Regular Interest LT2-2ZZ, respectively, to
the extent the principal balance of the Group II Loans exceeds the sum of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-2AA, REMIC 2
Regular Interest LT2-AII, REMIC 2 Regular Interest LT2-2MI, REMIC 2 Regular
Interest LT2-2M2, REMIC 2 Regular Interest LT2- 2B and REMIC 2 Regular Interest
LT2-2ZZ immediately following payments pursuant to (c) above but prior to any
payments pursuant to this proviso.
Section 4.07. Allocation of Realized Losses.
(a) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow; second, to the Class C Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class B Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and fifth, to the Class M-1 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero. All
Realized Losses to be allocated to the Certificate Principal Balances of all
Classes on any Distribution Date shall be so allocated after the actual
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distributions to be made on such date as provided above. All references above to
the Certificate Principal Balance of any Class of Certificates shall be to the
Certificate Principal Balance of such Class immediately prior to the relevant
Distribution Date, before reduction thereof by any Realized Losses, in each case
to be allocated to such Class of Certificates, on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated. Any allocation of Realized Losses to a Class
C Certificate shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.01(d)(viii). No allocations of any Realized Losses
shall be made to the Certificate Principal Balances of the Class A Certificates
or the Class P Certificates.
(b) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date as follows: with respect to Realized Losses on
the Group 1 Loans, first to REMIC 1 Regular Interest LT1A and REMIC 1 Regular
Interest LT1B, its respective proportion (based on its Uncertificated Principal
Balance in relation to such Loan Group) of such Realized Loss, and with respect
to Realized Losses on the Group II Loans, to REMIC 1 Regular Interest LT1A and
REMIC 1 Regular Interest LT1C, its respective proportion (based on its
Uncertificated Principal Balance in relation to such Loan Group) of such
Realized Loss, until the Uncertificated Principal Balance has been reduced to
zero, second to REMIC 1 Regular Interest LT1F, third to REMIC 1 Regular Interest
LT1E, and fourth to REMIC 1 Regular Interest LT1D until the Uncertificated
Principal Balance has been reduced to zero.
(c) All Realized Losses on the REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
LT1D, REMIC 1 Regular Interest LT1E and REMIC 1 Regular Interest LT1F shall be
deemed to have been allocated in the specified percentages, as follows: with
respect to Realized Losses on the Group I Loans, first to Uncertificated Accrued
Interest payable to the REMIC 2 Regular Interest LT2- 1AA and REMIC 2 Regular
Interest LT2-1ZZ up to an aggregate amount equal to the REMIC 2 Group 1 Interest
Loss Allocation Amount, 98% and 2% respectively; second, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2-1AA and REMIC 2 Regular
Interest LT2-1ZZ up to an aggregate amount equal to the REMIC 2 Group 1
Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-1AA, REMIC 2
Regular Interest LT2-1B and REMIC 2 Regular Interest LT2-1ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2-1B has been reduced to zero; fourth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular Interest
LT2-1M2 and REMIC 2 Regular Interest LT2-1ZZ, 98%, 1% and 1%, respectively,
until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2-1M2
has been reduced to zero; and fifth, to the Uncertificated Principal Balances of
REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular Interest LT2-1M1 and REMIC 2
Regular Interest LT2-1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2-1M1 has been reduced to zero,
and with respect to Realized Losses on the Group II Loans, first, to
Uncertificated Accrued
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Interest payable to the REMIC 2 Regular Interest LT2-2AA and REMIC 2 Regular
Interest LT2- 2ZZ up to an aggregate amount equal to the REMIC 2 Group 2
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-2AA and REMIC
2 Regular Interest LT2-2ZZ up to an aggregate amount equal to the REMIC 2 Group
2 Principal Loss Allocation Amount, 98% and 2% respectively; third, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-2AA, REMIC 2
Regular Interest LT2-2B and REMIC 2 Regular Interest LT2-2ZZ, 98%, 1% and 1%
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2-2B has been reduced to zero; fourth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2-2AA, REMIC 2 Regular Interest
LT2-2M2 and REMIC 2 Regular Interest LT2-2ZZ, 98%, 1% and 1%, respectively,
until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2-2M2
has been reduced to zero; and fifth, to the Uncertificated Principal Balances of
REMIC 2 Regular Interest LT2-2AA, REMIC 2 Regular Interest LT2-2M1 and REMIC 2
Regular Interest LT2- 2ZZ, 98%, 1% and 1% respectively, until the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2-2M1 has been reduced to zero.
Section 4.08. Information Reports to Be Filed by the Master
Servicer.
The Master Servicer or the Sub-Servicers shall file information reports
with respect to the receipt of mortgage interest received in a trade or
business, foreclosures and abandonments of any Mortgaged Property and the
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of the
Code, respectively, and deliver to the Trustee an Officers' Certificate stating
that such reports have been filed. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.
Section 4.09. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together with its monthly report to
such Certificateholders pursuant to Section 4.02 hereof, indicate such amount
withheld.
Section 4.10. Distribution of Net WAC Shortfall REMIC Amount; Net
WAC Shortfall Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of Class A Certificates (other than the Class
A-I-1 Certificates and Class A-IO Certificates), the Class M Certificates and
Class B Certificates, the Net WAC Shortfall Reserve Fund. In addition, on the
Closing Date, the Trustee shall deposit into the Net WAC Shortfall
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Reserve Fund an amount equal to $210,000.
(b) On each Distribution Date, to the extent required, the Trustee
shall make withdrawals from the Net WAC Shortfall Reserve Fund and use the
amounts in the Net WAC Shortfall Reserve Fund to make distributions to the Class
A Certificates (other than the Class A- I-1 Certificates and Class A-IO
Certificates), the Class M Certificates and Class B Certificates, in an amount
equal to the amount of any Net WAC Shortfall Amount on such Certificates. Any
such amounts shall be distributed first, to such Class A Certificates on a pro
rata basis, based on the related Net WAC Shortfall Amount thereon, and then to
the Class M-1, Class M-2 and Class B Certificates, in that order, in each case
until the related Net WAC Shortfall Amount has been reduced to zero. On the 30th
Distribution Date, after the distributions described in the preceding sentence,
the Trustee shall withdraw from the Net WAC Shortfall Reserve Fund (to the
extent of funds available on deposit therein) any remaining amounts and
distribute them to the Holders of the Class C Certificates.
(c) The Net WAC Shortfall Reserve Fund shall be an Eligible Account.
Amounts held in the Net WAC Shortfall Reserve Fund from time to time shall
continue to constitute assets of the Trust Fund, but not of the REMICs, until
released from the Net WAC Shortfall Reserve Fund pursuant to this Section 4.10.
The Net WAC Shortfall Reserve Fund constitutes an "outside reserve fund" within
the meaning of Treasury Regulation ss.ss. 1.860G-2(h) and is not an asset of the
REMICs. The Holders of the Class C Certificates shall be the owner of the Net
WAC Shortfall Reserve Fund. The Trustee shall keep records that accurately
reflect the funds on deposit in the Net WAC Shortfall Reserve Fund. The Trustee
shall, at the direction of the Majority Class C Certificateholder, invest
amounts on deposit in the Net WAC Shortfall Reserve Fund in Permitted
Investments. In the absence of written direction to the Trustee from the
Majority Class C Certificateholder, all funds in the Net WAC Shortfall Reserve
Fund shall remain uninvested. On each Distribution Date, the Trustee shall
distribute any interest earned on the Net WAC Shortfall Reserve Fund to the
Holders of the Class C Certificates.
(d) For federal income tax purposes, the Trustee intends to take the
position that the right to receive the Net WAC Shortfall Amount has a value of
0.54% of the initial Certificate Principal Balance of each of the Class A-I-6
Certificates, the Class M-1 Certificates, the Class M-2 Certificates and Class B
Certificates, and a DE MINIMUS value with respect to the other Certificates
entitled to receive the Net WAC Shortfall Amount.
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ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Certificates will be substantially in the respective forms
annexed hereto as Exhibits A and B-1 through B-4. The Certificates will be
issuable in registered form only. The Certificates (other than the Class P
Certificates, the Class C Certificates and the Class R Certificates) will be
issued in minimum denominations of $25,000 Initial Certificate Principal Balance
or Initial Notional Amount, as applicable, and integral multiples of $1 in
excess thereof. The Class C Certificates will be issued in minimum denominations
of $1.00 Initial Notional Amount and integral multiples of $1.00 in excess
thereof. The Class P Certificates and the Class R Certificates will each be
issuable in minimum denominations of any Percentage Interest representing 20.00%
and multiples of 0.01% in excess thereof.
Upon original issue, the Certificates shall, upon the written request
of the Company executed by an officer of the Company, be executed and delivered
by the Trustee, authenticated by the Trustee and delivered to or upon the order
of the Company upon receipt by the Trustee of the documents specified in Section
2.01. The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee in its capacity as trustee hereunder by a Responsible
Officer. Certificates bearing the manual or facsimile signatures of individuals
who were at the time they signed the proper officers of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates issued on the Closing
Date shall be dated the Closing Date and any Certificates delivered thereafter
shall be dated the date of their authentication.
(b) The Class A Certificates and the Mezzanine Certificates shall
initially be issued as one or more Certificates registered in the name of the
Depository or its nominee and, except as provided below, registration of such
Certificates may not be transferred by the Trustee except to another Depository
that agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to each of such Book-Entry Certificates through the
book-entry facilities of the Depository and, except as provided below, shall not
be entitled to Definitive Certificates in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the
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procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall transfer
the Ownership Interests only in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Trustee shall not be
required to monitor, determine or inquire as to compliance with the transfer
restrictions with respect to the Book-Entry Certificates, and the Trustee shall
have no liability for transfers of Ownership Interests in the Book Entry
Certificates made through the book-entry facilities of the Depositary or between
or among Depositary Participants or Certificate Owners, made in violation of the
applicable restrictions.
The Trustee, the Master Servicer and the Company may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
If (i)(A) the Company advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Company is unable to locate a
qualified successor or (ii) the Company at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall, at the expense of the Company, issue the Definitive
Certificates. Neither the Company, the Master Servicer nor the Trustee shall be
liable for any actions taken by the Depository or its nominee, including,
without limitation, 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 Certificates the Trustee and the Master Servicer
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(c) Each Certificate is intended to be a "security" governed by Article
8 of the Uniform Commercial Code as in effect in the State of New York and any
other applicable jurisdiction, to the extent that any of such laws may be
applicable.
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Section 5.02. Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall maintain a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Trustee shall provide
for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided.
(b) Except as provided in Section 5.02(c), no transfer, sale, pledge or
other disposition of a Class P Certificate, Class C Certificate or a Class R
Certificate shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Act"), and any applicable state securities laws or is
made in accordance with said Act and laws. In the event that a transfer of a
Class P Certificate, Class C Certificate or Class R Certificate is to be made
under this Section 5.02(b), (i) the Trustee shall require an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee that such
transfer shall be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer, provided that such Opinion
of Counsel will not be required in connection with the initial transfer of any
such Certificate by the Company or any affiliate thereof, to a non-affiliate of
the Company and (ii) the Trustee shall require the transferee to execute a
representation letter, substantially in the form of Exhibit G-1 hereto, and the
Trustee shall require the transferor to execute a representation letter,
substantially in the form of Exhibit G-2 hereto, each acceptable to and in form
and substance satisfactory to the Trustee certifying to the Company and the
Trustee the facts surrounding such transfer, which representation letters shall
not be an expense of the Trustee, the Company or the Master Servicer; provided,
however, that such representation letters will not be required in connection
with any transfer of any such Certificate by the Company to an affiliate of the
Company and the Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Trustee, shall be a written
representation) from the Company of the status of such transferee as an
affiliate of the Company. Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Company and
the Master Servicer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such applicable federal and state
laws.
(c) Notwithstanding the requirements of Section 5.02(b), transfers of
Class P Certificates, Class C Certificates and Class R Certificates may be made
in accordance with this Section 5.02(c) if the prospective transferee of a
Certificate provides the Trustee and the Company with an investment letter
substantially in the form of Exhibit G-3 attached hereto, which investment
letter shall not be an expense of the Trustee, the Company or the Master
Servicer, and which investment letter states that, among other things, such
transferee is a "qualified institutional buyer" as defined under Rule 144A. Such
transfers shall be deemed to have complied with the requirements of Section
5.02(b) hereof; provided, however, that no
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Transfer of any of the Class P Certificates, Class C Certificates or Class R
Certificates may be made pursuant to this Section 5.02(c) by the Company. Any
such Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Company and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such applicable federal and state laws.
The Trustee shall require an Opinion of Counsel from a prospective
transferee prior to the transfer of any Class P Certificate, Class C Certificate
or Class R Certificate to any employee benefit plan or other retirement
arrangement, including individual retirement accounts and Keogh plans, that is
subject to Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") or Section 4975 of the Code (any of the foregoing, a
"Plan"), to a trustee or other Person acting on behalf of any Plan, or to any
other person who is using "plan assets" of any Plan to effect such acquisition
(including any insurance company using funds in its general or separate accounts
that may constitute "plan assets"). Such Opinion of Counsel must establish to
the satisfaction of the Trustee that such transfer is permissible under
applicable law, will not violate the prohibited transaction provisions of
Section 406 of ERISA and Section 4975 of the Code, will not cause the assets of
the Trust Fund to constitute "plan assets" within the meaning of 29 C.F.R. ss.
2510.3-101, and will not subject the Trustee, the Master Servicer or the Company
to any obligation in addition to those undertaken in this Agreement. Neither the
Company, the Master Servicer nor the Trustee will be required to obtain such
Opinion of Counsel on behalf of any prospective transferee.
(d) [Reserved]
(e) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery to it, and
shall not register the Transfer of any Class R Certificate until its receipt of
(I) an affidavit and agreement (a "Transfer Affidavit and Agreement" in the form
attached hereto as Exhibit G-5) from the proposed Transferee, in form and
substance satisfactory to the Trustee representing and warranting, among other
things,
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that it is a Permitted Transferee, that it is not acquiring its Ownership
Interest in the Class R Certificate that is the subject of the proposed Transfer
as a nominee, trustee or agent for any Person who is not a Permitted Transferee,
that for so long as it retains its Ownership Interest in a Class R Certificate,
it will endeavor to remain a Permitted Transferee, and that it has reviewed the
provisions of this Section 5.02 and agrees to be bound by them, and (II) a
certificate, in the form attached hereto as Exhibit G-4, from the Holder wishing
to transfer the Class R Certificate, in form and substance satisfactory to the
Trustee representing and warranting, among other things, that no purpose of the
proposed Transfer is to impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a Responsible
Officer of the Trustee assigned to this transaction has actual knowledge that
the proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer its
Ownership Interest in a Class R Certificate and (y) not to transfer its
Ownership Interest unless it provides a certificate to the Trustee in the form
attached hereto as Exhibit G-4.
(E) Each Person holding or acquiring an Ownership Interest in
a Class R Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Class
R Certificate, if it is "a pass-through interest holder", or is holding an
Ownership Interest in a Class R Certificate on behalf of a "pass-through
interest holder."
(ii) The Trustee will register the Transfer of any Class R Certificate
only if it shall have received the Transfer Affidavit and Agreement in the form
attached hereto as Exhibit G-5, a certificate of the Holder requesting such
transfer in the form attached hereto as Exhibit G-4 and all of such other
documents as shall have been reasonably required by the Trustee as a condition
to such registration. Transfers of the Class R Certificates other than to
Permitted Transferees are prohibited.
(iii) (A) If any Person other than a Permitted Transferee shall become
a Holder of a Class R Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a Holder of
a Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a transfer of a Class R
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Certificate is disregarded pursuant to the provisions of Treasury Regulations
Section 1.860E-1 or Section 1.860G-3, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of such
transfer of such Class R Certificate. The prior Holder shall be entitled to
recover from any purported Holder of a Class R Certificate that was in fact not
a Permitted Transferee under this Section 5.05(b) at the time it became a Holder
all payments made on such Class R Certificate. Each Holder of a Class R
Certificate, by acceptance thereof, shall be deemed for all purposes to have
consented to the provisions of this clause (b) and to any amendment of this
Agreement deemed necessary (whether as a result of new legislation or otherwise)
by counsel of the Company to ensure that the Class R Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Class R Certificates will not cause the imposition of a tax
upon the Trust or cause any such REMIC to fail to qualify as a REMIC. The
Trustee shall be under no liability to any Person for any registration of
Transfer of a Class R Certificate that is in fact not permitted by this Section
5.02 or for making any payments due on such Certificate to the holder thereof or
for taking any other action with respect to such holder under the provisions of
this Agreement.
(B) If any purported Transferee shall become a Holder of a
Class R Certificate in violation of the restrictions in this Section 5.02 and to
the extent that the retroactive restoration of the rights of the Holder of such
Class R Certificate as described in clause (iii)(A) above shall be invalid,
illegal or unenforceable, then the Trustee shall have the right, without notice
to the holder or any prior holder of such Class R Certificate, to sell such
Class R Certificate to a purchaser selected by the Trustee on such terms as the
Trustee may choose. Such purported Transferee shall promptly endorse and deliver
each Class R Certificate in accordance with the instructions of the Trustee.
Such purchaser may be the Trustee itself. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Trustee), expenses and
taxes due, if any, will be remitted by the Trustee to such purported Transferee.
The terms and conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Trustee, and the Trustee shall not be
liable to any Person having an Ownership Interest in a Class R Certificate as a
result of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions, all information necessary
to compute any tax imposed (A) as a result of the transfer of an ownership
interest in a Class R Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of such
Class R Certificates required to be provided to the Internal Revenue Service and
certain Persons as described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E- 2(a)(5), and (B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust, estate or
organization described in Section 1381 of the Code that holds an Ownership
Interest in a Class R Certificate having as among its record holders at any time
any Person who is a Disqualified Organization. The Trustee may charge and shall
be entitled to reasonable compensation for providing such information as may be
required
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from those Persons which may have had a tax imposed upon them as specified in
clauses (A) and (B) of this paragraph for providing such information.
(F) Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate at the office of the Trustee
maintained for such purpose, the Trustee shall execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest. Every Certificate surrendered for transfer shall be
accompanied by notification of the account of the designated transferee or
transferees for the purpose of receiving distributions pursuant to Section 4.01
by wire transfer, if any such transferee desires and is eligible for
distribution by wire transfer.
(G) At the option of the Certificateholders, Certificates may
be exchanged for other Certificates of authorized denominations of the same
Class of a like aggregate Percentage Interest, upon surrender of the
Certificates to be exchanged at the office of the Trustee. Whenever any
Certificates are so surrendered for exchange the Trustee shall execute,
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing. In addition, with respect to each Class R Certificate,
the Holder thereof may exchange, in the manner described above, such Class R
Certificate for three separate Certificates, each representing such Holder's
respective Percentage Interest in the Class R-1 Interest, the Class R-2 Interest
and the Class R-3 Interest, respectively, in each case that was evidenced by the
Class R Certificate being exchanged.
(H) No service charge shall be made to the Certificateholders
for any transfer or exchange of Certificates, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
(I) All Certificates surrendered for transfer and exchange
shall be canceled and retained by the Trustee in accordance with the Trustee's
standard procedures.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as may be required by it to save it harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and
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Percentage Interest. Upon the issuance of any new Certificate under this
Section, the Trustee may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith. Any replacement Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust Fund, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04. Persons Deemed Owners.
The Company, the Master Servicer, the Trustee and any agent of any of
them may treat the person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and for all other purposes whatsoever, and neither the Company, the
Master Servicer, the Trustee nor any agent of any of them shall be affected by
notice to the contrary.
Section 5.05. Rule 144A Information.
For so long as any Class P Certificates, Class C Certificates and Class
R Certificates are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) of the Securities Act, (1) the Company will provide or
cause to be provided to any holder of such Certificates and any prospective
purchaser thereof designated by such a holder, upon the request of such holder
or prospective purchaser, the information required to be provided to such holder
or prospective purchaser by Rule 144A(d)(4) under the Securities Act; and (2)
the Company shall update such information from time to time in order to prevent
such information from becoming false and misleading and will take such other
actions as are necessary to ensure that the safe harbor exemption from the
registration requirements of the Securities Act under Rule 144A is and will be
available for resales of such Certificates conducted in accordance with Rule
144A. The Master Servicer shall cooperate with the Company and furnish the
Company such information in the Master Servicer's possession as the Company may
reasonably request.
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ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01. Liability of the Company and the Master Servicer.
The Company and the Master Servicer each shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Company and the Master Servicer herein. Only the Master
Servicer, any successor Master Servicer or the Trustee acting as Master Servicer
shall be liable with respect to the servicing of the Mortgage Loans and the REO
Property for actions taken by any such Person in contravention of the Master
Servicer's duties hereunder.
Section 6.02. Merger, Consolidation or Conversion of the Company or
the Master Servicer.
The Company and the Master Servicer each will keep in full effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and each will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
Any Person into which the Company or the Master Servicer may be merged,
consolidated or converted, or any corporation resulting from any merger or
consolidation to which the Company or the Master Servicer shall be a party, or
any Person succeeding to the business of the Company or the Master Servicer,
shall be the successor of the Company or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to sell mortgage loans to and service
mortgage loans for Fannie Mae or Freddie Mac.
Section 6.03. Limitation on Liability of the Company, the Master
Servicer and Others.
Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Company or the Master Servicer (but this
provision shall protect the above described persons) against any breach of
warranties or representations made herein, or against any specific liability
imposed on the Master Servicer pursuant to Section 3.01 or any other Section
hereof; and provided further that this provision shall not protect the Company,
the
117
Master Servicer or any such person, against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Company, the Master Servicer and any director, officer,
employee or agent of the Company or the Master Servicer may rely in good faith
on any document of any kind PRIMA FACIE properly executed and submitted by any
Person respecting any matters arising hereunder. The Company, the Master
Servicer and any director, officer, employee or agent of the Company or the
Master Servicer shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates (including reasonable legal fees
and disbursements of counsel), other than (a) any loss, liability or expense
related to Master Servicer's servicing obligations with respect to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) or related to the
Master Servicer's obligations under Section 3.01, or (b) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Company nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its respective duties under this Agreement and which
in its opinion may involve it in any expense or liability; provided, however,
that the Company or the Master Servicer may in its sole discretion undertake any
such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom (except any action or
liability related to the Master Servicer's obligations under Section 3.01) shall
be expenses, costs and liabilities of the Trust Fund, and the Company and the
Master Servicer shall be entitled to be reimbursed therefor from the Certificate
Account as provided in Section 3.11, any such right of reimbursement being prior
to the rights of Certificateholders to receive any amount in the Certificate
Account.
Section 6.04. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment of a successor servicer
reasonably acceptable to the Trustee upon receipt by the Trustee of a letter
from each Rating Agency (obtained by the Master Servicer and at its expense)
that such a resignation and appointment will not, in and of itself, result in a
downgrading of the Certificates or (b) upon determination that its duties
hereunder are no longer permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel (at the expense of the resigning Master Servicer) to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer shall have assumed the Master
Servicer's responsibilities, duties, liabilities and obligations hereunder.
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Section 6.05. Sale and Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its
duties and obligations in their entirety as Master Servicer under this
Agreement; provided, however, that: (i) the purchaser or transferee accepting
such assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Fannie Mae or Freddie Mac; (b) shall, in the case of
successor master servicers only, have a net worth of not less than $10,000,000
(unless otherwise approved by each Rating Agency pursuant to clause (ii) below);
(c) shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee) as having a comparable servicing ability to that of the
Master Servicer on the Closing Date; (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement and any custodial
agreement, from and after the effective date of such agreement; (ii) each Rating
Agency shall be given prior written notice of the identity of the proposed
successor to the Master Servicer and each Rating Agency's rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect obtained by the Master
Servicer at its expense and delivered to the Trustee; and (iii) the Master
Servicer assigning and selling the master servicing shall deliver to the Trustee
an Officer's Certificate and an Opinion of Counsel (at the expense of the Master
Servicer), each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.
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ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit into the Certificate
Account on each Certificate Account Deposit Date the amounts required to be
deposited therein (other than an Advance) under the terms of this Agreement
which continues unremedied for two (2) Business Days after such amount was
required to be remitted; or
(ii) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in the Certificates or in this Agreement
(including any breach of the Master Servicer's representations and warranties
pursuant to Section 2.03(a) which materially and adversely affects the interests
of the Certificateholders) which continues unremedied for a period of 60 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee, or to the
Master Servicer and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or of or relating to all or substantially all of its
property; or
(v) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations; or
(vi) the Master Servicer shall fail to deposit in the Certificate
Account on any
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Certificate Account Deposit Date an amount equal to any required Advance which
continues unremedied for the earlier of (a) a period of two (2) Business Days or
(b) the Business Day immediately preceding the Distribution Date.
If an Event of Default described in clauses (i) - (v) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Trustee or the Holders of Certificates
entitled to at least 51% of the Voting Rights, by notice in writing to the
Master Servicer (and to the Trustee if given by such Holders of Certificates),
with a copy to the Rating Agencies, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; provided, however, that the successor to the Master
Servicer appointed pursuant to Section 7.02 shall have accepted the duties of
Master Servicer effective upon the resignation or termination of the Master
Servicer. If an Event of Default described in clause (vi) hereof shall occur,
the Trustee shall, by notice to the Master Servicer, and the Company, terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Trust Fund, other than its rights as a Certificateholder
hereunder; provided, however, that if the Trustee determines (in its sole
discretion) that the failure by the Master Servicer to make any required Advance
was due to circumstances beyond its control, and the required Advance was
otherwise made, the Trustee shall not terminate the Master Servicer. On or after
the receipt by the Master Servicer of such notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a holder thereof) or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise at the
expense of the Master Servicer. The Master Servicer agrees to cooperate with
(and pay any related costs and expenses of) the Trustee in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee or the successor
Master Servicer for administration by it of (i) the property and amounts which
are then or should be part of the Trust Fund or which thereafter become part of
the Trust Fund; (ii) originals or copies of all documents of the Master Servicer
reasonably requested by the Trustee to enable it to assume the Master Servicer's
duties thereunder; (iii) the rights and obligations of the Master Servicer under
the Sub-Servicing Agreements with respect to the Mortgage Loans; and (iv) all
cash amounts which shall at the time be deposited by the Master Servicer or
should have been deposited to the Custodial or the Certificate Account or
thereafter be received with respect to the Mortgage Loans. The Trustee shall not
be deemed to have breached any obligation hereunder as a result of a failure to
make or delay in making any distribution as and when required hereunder caused
by the failure of the Master Servicer to remit any amounts received by it or to
deliver any documents held by it with respect to the Mortgage Loans. For
purposes of this Section 7.01, the Trustee shall not be
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deemed to have knowledge of an Event of Default unless a Responsible Officer of
the Trustee has actual knowledge thereof or unless notice of any event which is
in fact such an Event of Default is received by the Trustee as provided in
Section 11.05 and such notice references the Certificates, the Trust Fund or
this Agreement.
Section 7.02. Trustee to Act; Appointment of Successor.
Within 90 days of the time the Master Servicer receives a notice of
termination pursuant to Section 7.01(i) - (v), the Trustee or its appointed
agent shall be the successor in all respects to the Master Servicer in its
capacity as Master Servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject thereafter to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer including the obligation to make Advances which have been or will be
required to be made (except for the responsibilities, duties and liabilities
contained in Section 2.03 and its obligations to deposit amounts in respect of
losses pursuant to Section 3.12 and 4.01(h)) by the terms and provisions hereof;
and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide information
required by Section 4.03 shall not be considered a default by the Trustee
hereunder. As compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans which the Master Servicer would have been
entitled to charge to the Custodial Account and the Certificate Account if the
Master Servicer had continued to act hereunder. If the Trustee has become the
successor to the Master Servicer in accordance with Section 6.04 or Section
7.02, then notwithstanding the above, if the Trustee shall be unwilling to so
act, or shall be unable to so act, the Trustee may appoint, or petition a court
of competent jurisdiction or appoint, any established housing and home finance
institution, which is also a Fannie Mae- or Freddie Mac-approved mortgage
servicing institution, having a net worth of not less than $10,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as herein above provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Master Servicer hereunder. Each of the Seller, the
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. In no event
shall the successor Master Servicer be liable for the acts or omissions of the
predecessor Master Servicer.
In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in
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causing MERS to revise its records to reflect the transfer of servicing to the
successor Master Servicer as necessary under MERS' rules and regulations, or
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Trustee and to execute
and deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor Master Servicer.
The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master Servicer
shall bear any and all fees of MERS, costs of preparing any assignments of
Mortgage, and fees and costs of filing any assignments of Mortgage that may be
required under this Section 7.02. The successor Master Servicer shall cause such
assignment to be delivered to the Trustee promptly upon receipt of the original
with evidence of recording thereon or a copy certified by the public recording
office in which such assignment was recorded.
Any successor, including the Trustee, to the Master Servicer shall
maintain in force during its term as master servicer hereunder policies and
fidelity bonds to the same extent as the Master Servicer is so required pursuant
to Section 3.18.
Notwithstanding anything else herein to the contrary, in no event shall
the Trustee be liable for any Servicing Fee or for any differential in the
amount of the Servicing Fee paid hereunder and the amount necessary to induce
any successor Master Servicer or Servicer, as applicable, to act as successor
Master Servicer or Servicer, as applicable, under this Agreement and the
transactions set forth or provided for herein.
Section 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the
Master Servicer, the Trustee shall give prompt notice thereof to
Certificateholders and to the Rating Agencies.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
Section 7.04. Waiver of Events of Default.
The Holders representing at least 51% of the Voting Rights of
Certificates affected by a default or Event of Default hereunder, may waive such
default or Event of Default (other than an Event of Default set forth in Section
7.01(vi)); provided, however, that (a) a default or Event of Default under
clause (i) of Section 7.01 may be waived only by all of the Holders of
Certificates affected by such default or Event of Default and (b) no waiver
pursuant to this Section 7.04 shall affect the Holders of Certificates in the
manner set forth in the second paragraph of Section 11.01 or materially
adversely affect any non-consenting Certificateholder. Upon any such waiver of a
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default or Event of Default by the Holders representing the requisite percentage
of Voting Rights of Certificates affected by such default or Event of Default,
such default or Event of Default shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon except to the extent expressly so waived. The Master Servicer
shall give notice of any such waiver to the Rating Agencies.
Section 7.05. List of Certificateholders.
Upon written request of three or more Certificateholders of record, for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Trustee will afford such Certificateholders
access during business hours to the most recent list of Certificateholders held
by the Trustee.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Default occurs, is continuing and has
not been waived, the Trustee shall exercise such of the rights and powers vested
in it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them in accordance with the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, the Trustee shall
take such action as it deems appropriate to have the instrument corrected, and
if the instrument is not corrected to the Trustee's satisfaction, the Trustee
will provide notice thereof to the Certificateholders. Notwithstanding the
foregoing, the Trustee shall not be responsible for the accuracy or content of
any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Master Servicer hereunder or any Opinion of
Counsel required hereunder.
The Trustee shall prepare and file or cause to be filed on behalf of
the Trust Fund any tax return that is required with respect to REMIC 1, REMIC 2
and REMIC 3 pursuant to applicable federal, state or local tax laws.
The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of REMIC 1, REMIC 2 and REMIC
3 under the REMIC Provisions and to prevent the imposition of any federal, state
or local income, prohibited transaction, contribution or other tax on any of
REMIC 1, REMIC 2 or REMIC 3 to the extent that maintaining such status and
avoiding such taxes are within the control of the Trustee and are reasonably
within the scope of its duties under this Agreement.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all
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such Events of Default which may have occurred, the duties and obligations of
the Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) The Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Certificates entitled to at least 25% of the Voting
Rights relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement.
Section 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(a) The Trustee may conclusively rely upon and shall be fully protected
in acting or refraining from acting in reliance upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
therewith;
(c) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement, other than its obligation to
give notice pursuant to this Agreement, or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction of
any of the Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Trustee's corporate trust
department has actual knowledge (which has not been waived or cured), to
exercise such of the
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rights and powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(e) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiver of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing to do so by the Holders of Certificates entitled to
at least 25% of the Voting Rights; provided, however, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement reasonable expense of every such examination shall be
paid by the Certificateholders requesting the investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys appointed with due care, and shall not be responsible
for any willful misconduct or negligence on the part of any agent, attorney,
custodian or nominee so appointed;
(g) The Trustee shall not be required to give any bond or surety with
respect to the execution of the trust created hereby or the powers granted
hereunder; and
(h) Whenever in the administration of the provisions of this Agreement
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action to be taken hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of gross negligence or bad faith on the part of
the Trustee, be deemed to be conclusively proved and established by a
certificate signed and delivered to the Trustee and such certificate, in the
absence of gross negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Agreement upon the faith thereof.
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other than the
signature of the Trustee, the authentication of the Trustee on the Certificates,
the acknowledgments of the Trustee contained in Article II) shall be taken as
the statements of the Company and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to
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the validity or sufficiency of this Agreement or of the Certificates (other than
the signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document, or of MERS or the MERS(R) System. The Trustee
shall not be accountable for the use or application by the Company of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Company or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Custodial Account by
the Master Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity (other than as
Trustee hereunder) may become the owner or pledgee of Certificates with the same
rights it would have if it were not Trustee and may otherwise deal with the
parties hereto.
Section 8.05. Trustee's Fees.
On each Distribution Date, the Trustee shall be entitled to withdraw
from the Certificate Account as compensation hereunder the Trustee Fees. Such
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) shall be paid for all
services rendered by it (except as otherwise reimbursed by the Seller pursuant
to a separate fee letter between the Seller and the Trustee) in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder or of the Trustee. Except as otherwise provided in
this Agreement, the Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified and held harmless by the Trust Fund against any
claim, loss, liability, fee or expense incurred in connection with any Event of
Default, any breach of this Agreement or any claim or legal action (including
any pending or threatened claim or legal action) relating to the acceptance or
administration of its trusts hereunder or the Trustee's performance under the
Certificates, other than any claim, loss, liability or expense (i) sustained in
connection with this Agreement related to the willful misfeasance, bad faith or
negligence of the Master Servicer in the performance of its duties hereunder or
(ii) incurred in connection with a breach constituting willful misfeasance, bad
faith or negligence of the Trustee in the performance of its duties hereunder or
by reason of reckless disregard of its obligations and duties hereunder.
The Master Servicer shall indemnify the Trustee and any director,
officer, employee or agent of the Trustee against any such claim or legal action
(including any pending or threatened claim or legal action), loss, liability,
fee or expense that may be sustained in connection with this Agreement related
to the willful misfeasance, bad faith, or negligence in the performance of the
Master Servicer's duties hereunder.
The provisions of this Section 8.05 shall survive the resignation or
removal of the Trustee or the termination of this Agreement.
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Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a national
banking association organized and doing business under the laws of any state or
the United States of America or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. In addition, the Trustee shall at all times be acceptable to
the Rating Agency rating the Certificates. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
The corporation or national banking association serving as Trustee may have
normal banking and trust relationships with the Seller and their affiliates or
the Master Servicer and its affiliates; provided, however, that such corporation
cannot be an affiliate of the Master Servicer other than the Trustee in its role
as successor to the Master Servicer.
Section 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Master Servicer; with a
copy to the Rating Agencies; provided, that such resignation shall not be
effective until a successor trustee is appointed and accepts appointment in
accordance with the following provisions; provided, however, that the resigning
Trustee shall not resign and be discharged from the trusts hereby created until
such time as the Rating Agency rating the Certificates approves the successor
trustee. Upon receiving such notice of resignation, the Master Servicer shall
promptly appoint a successor trustee who meets the eligibility requirements of
Section 8.06 by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee and to the successor
trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Master Servicer, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of
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rehabilitation, conservation or liquidation, the Master Servicer may remove the
Trustee and appoint a successor trustee who meets the eligibility requirements
of Section 8.06 by written instrument, in triplicate, which instrument shall be
delivered to the Trustee so removed and to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights, may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders and the Company by the
Master Servicer.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
Section 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Master Servicer and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall after payment of its outstanding fees and
expenses, promptly deliver to the successor trustee all assets and records of
the Trust Fund held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver all such instruments and do such other things
as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Master Servicer shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register. If the Master Servicer fails to mail such notice
within ten days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Master Servicer.
Section 8.09. Merger or Consolidation of Trustee.
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Any state bank or trust company or corporation or national banking
association into which the Trustee may be merged or converted or with which it
may be consolidated or any state bank or trust company or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any state bank or trust company or corporation or
national banking association succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such state bank or trust company or corporation or national
banking association shall be eligible under the provisions of Section 8.06
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment
without the Master Servicer. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred or such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the 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 Fund or any portion thereof in any
such jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the 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
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Agreement and the conditions of this Article VIII. 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 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 Trustee. Every such instrument shall be filed with
the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
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
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Repurchase or Liquidation of All
Mortgage Loans or upon Purchase of Certificates.
(a) Subject to Section 9.03, the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders of all amounts held by or on
behalf of the Trustee and required to be paid to them hereunder following the
earlier to occur of (i) the repurchase by the Holder of a 50.01% or greater
Percentage Interest in the Class C Certificates (the "Majority Class C
Certificateholders") or its designee of all Mortgage Loans and each REO Property
in respect thereof remaining in the Trust Fund at a price equal to (a) 100% of
the unpaid principal balance of each Mortgage Loan (other than one as to which a
REO Property was acquired) on the day of repurchase together with accrued
interest on such unpaid principal balance at the Net Mortgage Rate to the first
day of the month in which the proceeds of such repurchase are to be distributed,
plus (b) the appraised value of any REO Property (but not more than the unpaid
principal balance of the related Mortgage Loan, together with accrued interest
on that balance at the Net Mortgage Rate to the first day of the month such
repurchase price is distributed), less the good faith estimate of the Majority
Class C Certificateholders of liquidation expenses to be incurred in connection
with its disposal thereof, such appraisal to be conducted by an appraiser
mutually agreed upon by the Majority Class C Certificateholders and the Trustee
at the expense of the Master Servicer, and (ii) the final payment or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund (or the disposition of all REO Property in respect
thereof); provided, however, that in no event shall the trust created hereby
continue beyond the earlier of (i) the Distribution Date occurring in April 2032
and (ii) the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof, and provided further, that
the purchase price set forth above shall be increased as is necessary, as
determined by the Majority Class C Certificateholders, to avoid disqualification
of any of REMIC 1, REMIC 2 or REMIC 3 as a REMIC. In the case of any repurchase
by the Majority Class C Certificateholders pursuant to clause (i), the Master
Servicer shall exercise reasonable efforts to cooperate fully with the Trustee
in effecting such repurchase and the transfer of the Mortgage Loans and related
Mortgage Files and related records to the Majority Class C Certificateholders.
The right of the Majority Class C Certificateholders or its designee to
repurchase all Mortgage Loans pursuant to (i) above shall be conditioned upon
the aggregate Stated Principal Balance of such Mortgage Loans at the time of any
such repurchase aggregating an amount equal
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to or less than 10% of the sum of the aggregate Stated Principal Balance of the
Initial Mortgage Loans at the Cut-off Date and the Original Pre-Funded Amount.
If such right is exercised, the Majority Class C Certificateholders upon such
repurchase shall provide to the Trustee, notice of such exercise prior to the
Determination Date in the month preceding the month of purchase and the
certification required by Section 3.16.
Written notice of any termination, specifying the Distribution Date
upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
promptly by the Trustee by letter to the Certificateholders mailed (a) in the
event such notice is given in connection with the Majority Class C
Certificateholder's election to repurchase, not earlier than the 15th day and
not later than the 25th day of the month next preceding the month of such final
distribution or (b) otherwise during the month of such final distribution on or
before the Determination Date in such month, in each case specifying (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Trustee therein specified. In the event such notice is given in
connection with the Majority Class C Certificateholder or its designee's
election to repurchase, the Majority Class C Certificateholder or its designee
shall deliver to the Trustee for deposit in the Certificate Account on the
Business Day immediately preceding the Distribution Date specified in such
notice an amount equal to the above-described repurchase price payable out of
its own funds. Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall first, pay itself the Trustee's Fees for
such Distribution Date and any other amounts owing to the Trustee under this
Agreement, and second, distribute to the Certificateholders (i) the amount
otherwise distributable on such Distribution Date, if not in connection with the
Majority Class C Certificateholder's election to repurchase, or (ii) if the
Majority Class C Certificateholder elected to so repurchase, an amount
determined as follows: with respect to each Regular Certificate (other than the
Class A-IO Certificates), the outstanding Certificate Principal Balance thereof,
plus with respect to each Regular Certificate (other than the Class P
Certificates), one month's interest thereon at the applicable Pass-Through Rate
and any Unpaid Interest Shortfall Amount, plus with respect to each Mezzanine
Certificate, any unpaid Allocated Realized Loss Amount; and with respect to the
Class R Certificates, the Percentage Interest evidenced thereby multiplied by
the difference, if any, between the above described repurchase price and the
aggregate amount to be distributed to the Holders of the Regular Certificates,
subject to the priorities set forth in Section 4.01. Notwithstanding the
foregoing, by acceptance of the Class R Certificates, the Holders of the Class R
Certificates agree, in connection with any termination hereunder, to assign and
transfer any amounts received in respect of such termination to the Holders of
the Class C Certificates and to pay any such amounts to the Holders of the Class
C Certificates. Upon certification to the Trustee by a Servicing Officer,
following such final deposit, the Trustee shall promptly release the Mortgage
Files as directed by the Majority Class C Certificateholder for the remaining
Mortgage Loans,
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and the Trustee shall execute all assignments, endorsements and other
instruments required by the Majority Class C Certificateholder as being
necessary to effectuate such transfer.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned notice, the Trustee shall give a second notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within six months
after the second notice all of the Certificates shall not have been surrendered
for cancellation, the Trustee shall take reasonable steps as directed by the
Company in writing, or appoint an agent to take reasonable steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets which remain
subject hereto. If within nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto.
Section 9.02. Termination of REMIC 2 and REMIC 3.
REMIC 2 shall be terminated on the earlier of the Final Distribution
Date and the date on which it is deemed to receive the last deemed distributions
on the REMIC 1 Regular Interests and the last distribution due on the REMIC 2
Regular Interests and the Class R Certificates (in respect of the Class R-2
Interest) is made. REMIC 3 shall be terminated on the earlier of the Final
Distribution Date and the date on which it is deemed to receive the last deemed
distributions on the REMIC 2 Regular Interests and the last distribution due on
the Regular Certificates and the Class R Certificates (in respect of the Class
R-3 Interest) is made.
Section 9.03. Additional Termination Requirements.
(a) In the event the Majority Class C Certificateholder repurchases the
Mortgage Loans as provided in Section 9.01, the Trust Fund shall be terminated
in accordance with the following additional requirements, unless the Majority
Class C Certificateholder, at its own expense, obtains for the Trustee an
Opinion of Counsel to the effect that the failure of the Trust Fund to comply
with the requirements of this Section 9.03 will not (i) result in the imposition
on the Trust of taxes on "prohibited transactions," as described in Section 860F
of the Code, or (ii) cause either REMIC 1, REMIC 2 or REMIC 3 to fail to qualify
as a REMIC at any time that any Certificate is outstanding:
(i) The Trustee shall establish a 90-day liquidation period
for REMIC 1, REMIC 2 and REMIC 3, as the case may be, and specify the first day
of such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury regulations Section 1.860F-1. The Trustee also shall
satisfy all of the requirements of a qualified liquidation for REMIC 1, REMIC 2
and REMIC 3, as the case may be, under Section 860F of the Code and regulations
thereunder; and
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(ii) The Majority Class C Certificateholder shall notify the
Trustee at the commencement of such 90-day liquidation period and, at or prior
to the time of making of the final payment on the Certificates, the Trustee
shall sell or otherwise dispose of all of the remaining assets of the Trust Fund
in accordance with the terms hereof.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Master Servicer as its attorney-in-fact to adopt a
plan of complete liquidation for REMIC 1, REMIC 2 and REMIC 3 at the expense of
the Trust Fund in accordance with the terms and conditions of this Agreement.
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ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The Trustee shall make an election to treat the Trust Fund as three
REMICs under the Code and, if necessary, under applicable state law. Each such
election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC elections in respect of
the Trust Fund, (i) the Class R-1 Interest will constitute the sole class of
"residual interest" in REMIC 1, (ii) the Class R-2 Interest will constitute the
sole class of "residual interest" in REMIC 2, and (iii) the Class R-3 Interest
will constitute the sole class of "residual interest" in REMIC 3, and the
Regular Certificates shall be designated as the "regular interests" in REMIC 3.
The Master Servicer and the Trustee shall not permit the creation of any
"interests" (within the meaning of Section 860G of the Code) in REMIC 1, REMIC 2
or REMIC 3 other than the REMIC 1 Regular Interests and the Class R-1 Interest
(in the case of REMIC 1), the REMIC 2 Regular Interests and the Class R-2
Interest (in the case of REMIC 2), and the Regular Certificates and the Class
R-3 Interest (in the case of REMIC 3). The Trustee will apply for an Employee
Identification Number from the IRS via form SS-4 or any other acceptable method
for each of REMIC 1, REMIC 2 and REMIC 3.
(b) The Closing Date is hereby designated as the "startup day" of the
Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the REMICs
(including, but not limited to, any professional fees or any administrative or
judicial proceedings with respect to the REMICs that involve the Internal
Revenue Service or state tax authorities), other than the expense of obtaining
any tax-related Opinion of Counsel except as specified herein. The Trustee, as
agent for the REMICs' tax matters person, shall (i) act on behalf of the REMICs
in relation to any tax matter or controversy involving the Trust Fund and (ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. By their acceptance thereof, the holder of the largest Percentage
Interest of the Class R Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the REMICs.
(d) The Trustee shall prepare, sign and file all of the Tax Returns
(including Form 8811, which must be filed within 30 days of the Closing Date) in
respect of the REMICs created hereunder. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely basis
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to the Trustee or its designee such information with respect to the assets of
the REMICs as is in its possession and reasonably required by the Trustee to
enable it to perform its obligations under this Article X.
(e) The Trustee shall perform on behalf of the REMICs all reporting and
other tax compliance duties that are the responsibility of the REMICs under the
Code, the REMIC Provisions or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
as required by the Code, the REMIC Provisions or other such compliance guidance,
the Trustee shall provide (i) to any Transferor of a Class R Certificate such
information as is necessary for the application of any tax relating to the
transfer of a Class R Certificate to any Person who is not a Permitted
Transferee, (ii) to the Certificateholders such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of the REMICs. The Master Servicer shall provide on a timely
basis to the Trustee such information with respect to the assets of the REMICs,
including, without limitation, the Mortgage Loans, as is in its possession and
reasonably required by the Trustee to enable it to perform its obligations under
this subsection. In addition, the Company shall provide or cause to be provided
to the Trustee, within ten (10) days after the Closing Date, all information or
data that the Trustee reasonably determines to be relevant for tax purposes as
to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.
(f) The Trustee shall take such action and shall cause the REMICs
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as REMICs under the REMIC Provisions (and the Master
Servicer shall assist it, to the extent reasonably requested by it). The Trustee
shall not take any action, cause the Trust Fund to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (i) endanger the status of the
REMIC 1, REMIC 2 or REMIC 3 as REMICs or (ii) result in the imposition of a tax
upon the REMICs (including but not limited to the tax on prohibited transactions
as defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) (either such event, an "Adverse
REMIC Event") unless the Trustee has received an Opinion of Counsel, addressed
to the Trustee (at the expense of the party seeking to take such action but in
no event at the expense of the Trustee) to the effect that the contemplated
action will not, with respect to the REMICs created hereunder, endanger such
status or result in the imposition of such a tax, nor shall the Master Servicer
take or fail to take any action (whether or not authorized hereunder) as to
which the Trustee has advised it in writing that it has received an Opinion of
Counsel to the effect that an Adverse REMIC Event could occur with respect to
such action. In addition, prior to taking any action with respect to the REMICs
or the assets of the REMICs, or causing the REMICs to take any action, which is
not contemplated under the terms of this Agreement, the Master
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Servicer will consult with the Trustee or its designee, in writing, with respect
to whether such action could cause an Adverse REMIC Event to occur with respect
to the Trust Fund, and the Master Servicer shall not take any such action or
cause the Trust Fund to take any such action as to which the Trustee has advised
it in writing that an Adverse REMIC Event could occur. The Trustee may consult
with counsel to make such written advice, and the cost of same shall be borne by
the party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee. At all times as may be
required by the Code, the Trustee will ensure that substantially all of the
assets of the REMICs created hereunder will consist of "qualified mortgages" as
defined in Section 860G(a)(3) of the Code and "permitted investments" as defined
in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions"
of the REMICs created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the REMICs as defined in Section
860G(c) of the Code, on any contributions to the REMICs after the Startup Day
therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Trustee pursuant to Section 10.03 hereof, if such tax
arises out of or results from a breach by the Trustee of any of its obligations
under this Article X, (ii) to the Master Servicer pursuant to Section 10.03
hereof, if such tax arises out of or results from a breach by the Master
Servicer of any of its obligations under Article III or this Article X, or
otherwise, (iii) to the Master Servicer as provided in Section 3.05 and (iv)
against amounts on deposit in the Certificate Account and shall be paid by
withdrawal therefrom to the extent not required to be paid by the Master
Servicer or the Trustee pursuant to another provision of this Agreement.
(h) On or before April 15 of each calendar year, commencing April 15,
2003, the Trustee shall deliver to the Master Servicer and the Rating Agency a
Certificate from a Responsible Officer of the Trustee stating the Trustee's
compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes, maintain books
and records with respect to the REMICs on a calendar year and on an accrual
basis.
(j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to the REMICs other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the REMICs will not cause the REMIC 1, REMIC 2 or
REMIC 3 to fail to qualify as REMICs at any time that any Certificates are
outstanding or subject either REMIC 1, REMIC 2 or REMIC 3 to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which the REMICs will receive a fee or other compensation for
services nor permit the REMICs
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to receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
Section 10.02. Prohibited Transactions and Activities.
None of the Company, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of
REMIC 1, REMIC 2 or REMIC 3 pursuant to Article IX of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any
assets for the Trust Fund (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain, nor accept any
contributions to the REMICs after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.04), unless it
has received an Opinion of Counsel, addressed to the Trustee (at the expense of
the party seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of REMIC 1, REMIC 2 or REMIC 3 as REMICs or (b) cause the
Trust Fund to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.
Section 10.03. Master Servicer and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Company, and
the Master Servicer for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Company
or the Master Servicer, as a result of a breach of the Trustee's covenants set
forth in this Article X.
(b) The Master Servicer agrees to indemnify the Trust Fund, the Company
and the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Company
or the Trustee, as a result of a breach of the Master Servicer's covenants set
forth in Article III or this Article X, in each case with respect to compliance
with the REMIC Provisions.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
This Agreement may be amended from time to time by the Company, the
Master Servicer and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or to correct any error, (iii) to amend this Agreement in any
respect subject to the provisions in clauses (A) and (B) below, or (iv) if such
amendment, as evidenced by an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, is reasonably necessary to
comply with any requirements imposed by the Code or any successor or amendatory
statute or any temporary or final regulation, revenue ruling, revenue procedure
or other written official announcement or interpretation relating to federal
income tax laws or any proposed such action which, if made effective, would
apply retroactively to the Trust Fund at least from the effective date of such
amendment; provided that such action (except any amendment described in (iv)
above) shall not adversely affect in any material respect the interests of any
Certificateholder (other than Certificateholders who shall consent to such
amendment), as evidenced by (A) an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, and (B) a letter from each
Rating Agency, confirming that such amendment shall not cause it to lower its
rating on any of the Certificates.
This Agreement may also be amended from time to time by the Company,
the Master Servicer and the Trustee and Holders of Certificates entitled to at
least 66-2/3% of the Voting Rights 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 Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing at least 66-2/3% of the Voting Rights of such Class, or (iii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Seller or the
Master Servicer or any affiliate thereof shall be entitled to Voting Rights with
respect to matters described in (i), (ii) and (iii) of this paragraph.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel
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(provided by the Person requesting such amendment) to the effect that such
amendment will not result in the imposition of any tax on either REMIC 1, REMIC
2 or REMIC 3 pursuant to the REMIC Provisions or cause either REMIC 1, REMIC 2
or REMIC 3 to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment or a written statement describing the amendment
to each Certificateholder, with a copy to the Rating Agencies.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Prior to executing any amendment pursuant to this Section, the Trustee
shall be entitled to receive an Opinion of Counsel (provided by the Person
requesting such amendment) to the effect that such amendment is authorized or
permitted by this Agreement. The cost of any Opinion of Counsel delivered
pursuant to this Section 11.01 shall be an expense of the party requesting such
amendment, but in any case shall not be an expense of the Trustee.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
Section 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Certificateholders, but only upon
direction of the Company accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this
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Agreement or the Trust Fund, nor 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 the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a notice of an Event of Default, or of a default
by the Seller or the Trustee in the performance of any obligation hereunder, and
of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 51% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Section 11.04. Governing Law.
This Agreement and the Certificates shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.
Section 11.05. Notices.
All demands, notices and direction hereunder shall be in writing and
shall be deemed
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effective upon receipt when delivered to (a) in the case of the Company, Impac
Funding, 1401 Dove Street, Newport Beach, California 92660, Attention: General
Counsel, or such other address as may hereafter be furnished to the other
parties hereto in writing; (b) in the case of Impac Funding, 1401 Dove Avenue,
Newport Beach, California 92660, Attention: General Counsel, or such other
address as may hereafter be furnished to the other parties hereto in writing;
(c) in the case of the Trustee, to its Corporate Trust Office, or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(d) in the case of the Rating Agencies, Standard & Poor's, 55 Water Street, 41st
Floor, New York, NY 10041 Attention: Residential Mortgage Surveillance Group;
Fitch, Fitch, Inc., One State Street, 30th Floor, New York, New York 10004,
Attention: Mortgage Backed Securities Department, Impac 2002-1; and Moody's,
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
Section 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Trustee and the
Certificateholders.
Section 11.08. Article and Section Headings.
The article and Section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
Section 11.09. Notice to Rating Agencies.
The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency referred to below with respect to each of the following of
which it has actual knowledge:
1. Any material change or amendment to this Agreement;
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2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.04;
5. The final payment to Certificateholders; and
6. Any change in the location of the Custodial Account or the
Certificate Account.
In addition, the Trustee shall promptly furnish to the Rating Agency
copies of each report to Certificateholders described in Section 4.02; and the
Master Servicer shall promptly furnish to the Rating Agency copies of each
annual independent public accountants' servicing report received as described in
Section 3.20.
Any such notice pursuant to this Section 11.09 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to (i) in the
case of Standard & Poor's, 55 Water Street, 41st Floor, New York, New York
10041; (ii) in the case of Fitch, One State Street, 30th Floor, New York, New
York 10004, Attention: Mortgage Backed Securities Department, Impac 2002-1; and
(iii) in the case of Moody's, ABS Monitoring Department, 99 Church Street, New
York, New York 10007, or, in each case, such other address as either such Rating
Agency may designate in writing to the parties thereto.
145
IN WITNESS WHEREOF, the Company, the Master Servicer and the 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 SECURED ASSETS CORP.,
Company
By: /s/ Richard J. Johnson
-----------------------------
Name: Richard J. Johnson
Title: Chief Financial Officer
IMPAC FUNDING CORPORATION,
Master Servicer
By: /s/ Lisa Duehring
-----------------------------
Name: Lisa Duehring
Title: Senior Vice President
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
Trustee
By: /s/ James F. Noriega
-----------------------------
Name: James F. Noriega
Title: Associate
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 31st day of January, 2002 before me, a notary public in and for
said State, personally appeared Richard J. Johnson, known to me to be the Chief
Financial Officer of Impac Secured Assets Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 31st day of January, 2002, before me, a notary public in and for
said State, personally appeared Lisa Duehring, known to me to be a Senior Vice
President of Impac Funding Corporation, one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 31st day of January, 2002, before me, a notary public in and for
said State, personally appeared James F. Noriega, known to me to be an Associate
of Bankers Trust Company of California, N.A., the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES
REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED
BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE
EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE
RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE
OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH
BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND,
EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN
RESPECT OF SUCH OWNERSHIP INTERESTS. ALL TRANSFERS BY CERTIFICATE OWNERS OF
THEIR RESPECTIVE OWNERSHIP IN THE BOOK-ENTRY CERTIFICATES SHALL BE MADE IN
ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY THE DEPOSITORY PARTICIPANT OR
BROKERAGE FIRM REPRESENTING SUCH CERTIFICATE OWNER. EACH DEPOSITORY PARTICIPANT
SHALL TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE BOOK-ENTRY CERTIFICATES OF
CERTIFICATE OWNERS IT REPRESENTS OR OF BROKERAGE FIRMS FOR WHICH IT ACTS AS
AGENT IN ACCORDANCE WITH THE DEPOSITORY'S NORMAL PROCEDURES. THE TRUSTEE SHALL
NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE
TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE
TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE
BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY
OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN
VIOLATION OF THE APPLICABLE RESTRICTIONS.
A-1
Certificate No.__ _____% Pass-Through Rate
Class A-____
Date of Pooling and Servicing Percentage Interest:____%
Agreement and Cut-off Date:
January 1, 2002
First Distribution Date: Aggregate Initial [Certificate Principal Balance]
February 25, 2002 [Notional Amount] of the Class A-__ Certificates:
$______________
Master Servicer: Initial [Certificate Principal
Impac Funding Corporation Balance] [Notional Amount] of this Certificate:
$______________
Assumed Final CUSIP:__________
Distribution Date:
__________ 25, 20__
[July 25, 2004] [__________ 25, 20__]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-1
evidencing a percentage interest in the distributions allocable to the
Class A- ___ Certificates with respect to a Trust Fund consisting
primarily of a pool of conforming one- to four-family fixed-rate first
lien mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial [Certificate Principal Balance] [Notional Amount] of this Certificate by
the aggregate Initial [Certificate Principal Balance] [Notional Amount] of all
Class A-____ Certificates, both as specified above) in certain distributions
with respect to the Trust Fund consisting primarily of an interest in a pool of
conventional one- to four-family fixed-rate first lien mortgage loans (the
"Mortgage Loans"), formed and sold by Impac Secured Assets Corp. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement
A-2
referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the
Company, the Master Servicer and Bankers Trust Company of California, N.A., as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of [interest
and] [principal], if any, required to be distributed to Holders of Class
A-____Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. The [Certificate Principal Balance] [Notional Amount] hereof will
be reduced to the extent of [distributions allocable to principal and] any
Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
A-3
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
A-4
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised if the
aggregate Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than
ten percent of the aggregate Stated Principal Balance of the Mortgage Loans at
the Cut-off Date.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January __, 2002 BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
----------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-____ Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
---------------------
Authorized Signatory
A-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
________________________________
Signature Guaranteed
A-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________, as its agent.
A-8
EXHIBIT B-1
FORM OF CLASS [M][B] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, [THE CLASS M-1 CERTIFICATES] [AND THE CLASS M-2 CERTIFICATES] AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES
REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED
BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE
EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE
RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE
OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH
BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND,
EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN
RESPECT OF SUCH OWNERSHIP INTERESTS. ALL TRANSFERS BY CERTIFICATE OWNERS OF
THEIR RESPECTIVE OWNERSHIP IN THE BOOK-ENTRY CERTIFICATES SHALL BE MADE IN
ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY THE DEPOSITORY PARTICIPANT OR
BROKERAGE FIRM REPRESENTING SUCH CERTIFICATE OWNER. EACH DEPOSITORY PARTICIPANT
SHALL TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE BOOK-ENTRY CERTIFICATES OF
CERTIFICATE OWNERS IT REPRESENTS OR OF BROKERAGE FIRMS FOR WHICH IT ACTS AS
AGENT IN ACCORDANCE WITH THE DEPOSITORY'S NORMAL PROCEDURES. THE TRUSTEE SHALL
NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE
TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE
TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE
BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY
OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN
VIOLATION OF THE APPLICABLE RESTRICTIONS.
B-1-1
Certificate No.______ _______% Pass-Through Rate
Class [M-_][B] Subordinate Aggregate Initial Certificate Principal
Balance of the Class
[M-__] [B] Certificates:
$____________
Date of Pooling and Servicing Initial Certificate Principal Balance of this
Agreement and Cut-off Date: Certificate:
January 1, 2002 $__________________
First Distribution Date: CUSIP:______________
February 25, 2002
Master Servicer:
Impac Funding Corporation
Assumed Final Distribution Date:
April 25, 2032
MORTGAGE PASS-THROUGH CERTIFICATE
Series 2002-1
evidencing a percentage interest in any distributions allocable to the
Class [M-__] [B] Certificates with respect to the Trust Fund consisting
primarily of a pool of conforming one- to four-family fixed-rate first
lien mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class [M-_][B] Certificates, both
as specified above) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of conforming one- to four-family fixed-rate
first lien mortgage loans (the "Mortgage Loans"), formed and sold by Impac
Secured Assets Corp. (hereinafter called the "Company," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among
B-1-2
the Company, the Master Servicer and Bankers Trust Company of California, N.A.,
as trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
[and principal], if any) required to be distributed to Holders of Class
[M-__][B] Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of [the
distributions allocable to principal and] any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including
B-1-3
without limitation reimbursement to the Trustee, the Company and the Master
Servicer of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
B-1-4
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised if the
aggregate Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than
ten percent of the aggregate Stated Principal Balance of the Mortgage Loans at
the Cut-off Date.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
B-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January __, 2002 BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
----------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [M-_][B] Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
---------------------
Authorized Signatory
B-1-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
________________________________
Signature Guaranteed
B-1-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________, as its agent.
B-1-8
EXHIBIT B-2
FORM OF CLASS C CERTIFICATES
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A,
CLASS M-1, CLASS M-2 AND CLASS B CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS
DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
B-2-1
Certificate No. 1
Class C Aggregate Initial Notional Amount of the
Class C Certificates:
$_________________
Date of Pooling and Servicing Initial Notional Amount
Agreement and Cut-off Date: of this Certificate ("Denomination"):
January 1, 2002 $______________
First Distribution Date: Initial Certificate Principal Balance of
February 25, 2002 this Certificate ("Denomination"):
$______________
Master Servicer: CUSIP:
Impac Funding Corporation
Assumed Final Distribution Date: Percentage Interest of this Certificate:
April 25, 2032 100.00%
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-1
evidencing percentage interest in the distributions allocable to the
Class C Certificates with respect to a Trust Fund consisting primarily
of a pool of conforming one- to four- family fixed-rate first lien
mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other or obligation
secured by or payable from payments on the Certificates.
This certifies that __________ is the registered owner of the
Percentage Interest evidenced by this Class C Certificate (obtained by dividing
the Original Class C Certificate by the Original Class Certificate Principal
Balance) in certain distributions with respect to a Trust consisting primarily
of the Mortgage Loans deposited by Impac Secured Assets Corp. (the "Company").
The Trust was created pursuant to a Pooling and Servicing Agreement dated as of
January 1, 2002 (the "Agreement") among the Company, Impac Funding Corporation,
as master servicer (the "Master Servicer"), and Bankers Trust Company of
California, N.A., as Trustee (the "Trustee"). To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the
B-2-2
Agreement. This Class C Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Class C Certificate by virtue of the acceptance hereof assents and by which
such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class C
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is
B-2-3
exempt from the registration requirements under said Act and such laws. In the
event that a transfer is to be made in reliance upon an exemption from the Act
and such laws, in order to assure compliance with the act and such laws, the
Certificateholder desiring to effect such transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee and the Company in
writing the facts surrounding the transfer. In the event that such a transfer is
not to be made pursuant to Rule 144A of the act, there shall be delivered to the
Trustee and the Company of an Opinion of Counsel that such transfer may be made
pursuant to an exemption from the Act, which Opinion of Counsel shall not be
obtained at the expense of the Trustee, the Master Servicer or the Company; or
there shall be delivered to the Trustee and the Company a transferor certificate
by the transferor and an investment letter shall be executed by the transferee.
The Holder hereof desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee 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.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized
B-2-4
denominations evidencing the same Class and aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect, thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised if the
aggregate Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than
ten percent of the aggregate Stated Principal Balance of the Mortgage Loans at
the Cut-off Date.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
B-2-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January __, 2002 BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
----------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class C Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
---------------------
Authorized Signatory
B-2-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
________________________________
Signature Guaranteed
B-2-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________, as its agent.
B-2-8
EXHIBIT B-3
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
B-3-1
Certificate No. 1
Class P Aggregate Initial Certificate Principal
Balance of the Class P Certificates:
$100.00
Date of Pooling and Servicing Initial Certificate Principal Balance
Agreement and Cut-off Date: of this Certificate ("Denomination"):
January 1, 2002 $100.00
First Distribution Date: Percentage Interest of this Certificate:
February 25, 2002 100.00%
Master Servicer: CUSIP:
Impac Funding Corporation
Assumed Final Distribution Date:
April 25, 2032
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-1
evidencing a percentage interest in any distributions allocable to the
Class P Certificates with respect to the Trust Fund consisting
primarily of a pool of one- to four-family fixed-rate first lien
mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that ____________ is the registered owner of the
Percentage Interest evidenced by this Class P Certificate (obtained by dividing
the Denomination of this Class P Certificate by the Original Class Certificate
Principal Balance) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of one- to four-family fixed-rate first lien
mortgage loans (the "Mortgage Loans"), formed and sold by Impac Secured Assets
Corp. (hereinafter called the "Company," which term includes any successor
entity under the Agreement referred to below). The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Company, the Master Servicer and Bankers Trust Company of
California,
B-3-2
N.A., as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement; to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of Prepayment
Charges and principal, if any) required to be distributed to Holders of Class P
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of the
distributions allocable to principal allocable hereto.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including
B-3-3
without limitation reimbursement to the Trustee, the Company and the Master
Servicer of advances made, or certain expenses incurred, by either of them.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Company in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the Act, there shall be delivered to the Trustee and the Company of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Master Servicer or the Company; or there shall be delivered to the
Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee 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.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certifrcateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
B-3-4
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respects hereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans an
all REO Property; provided, that any such option may only be exercised if the
aggregate Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than
ten percent of the aggregate Stated Principal Balance of the Mortgage Loans at
the Cut-off Date.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
B-3-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January __, 2002 BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
----------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class P Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
---------------------
Authorized Signatory
B-3-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
________________________________
Signature Guaranteed
B-3-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________, as its agent.
B-3-8
EXHIBIT B-4
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(E) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE
COMPANY AND THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT (THE
"AGREEMENT").
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR
INTEREST AND WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO
B-4-1
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE, EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
B-4-2
Certificate No. 1
Class R Senior
Date of Pooling and, Servicing
Agreement and Cut-off Date:
January 1, 2002 Percentage Interest: 100.00%
First Distribution Date:
February 25, 2002 CUSIP:
Master Servicer:
Impac Funding Corporation
Assumed Final Distribution Date:
April 25, 2032
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-1
evidencing a percentage interest in any distributions allocable to the
Class R Certificates with respect to a Trust Fund consisting primarily
of a pool of one- to four-family fixed-rate first lien mortgage loans
formed and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate stated above in certain
distributions with respect to a Trust Fund, consisting primarily of a pool of
one- to four-family fixed-rate first lien mortgage loans (the
B-4-3
"Mortgage Loans"), formed and sold by Impac Secured Assets Corp. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to a Pooling
and Servicing Agreement dated as specified above (the "Agreement") among the
Company, the Master Servicer and Bankers Trust Company of California, N.A., as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the Patent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in California.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Company in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the Act, there shall be delivered to the Trustee and the Company of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Master Servicer or the Company; or there shall be delivered to the
Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee 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.
B-4-4
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest, in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, the Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an, assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
B-4-5
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01 % Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property, in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised if the
aggregate Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than
ten percent of the aggregate Stated Principal Balance of the Mortgage Loans at
the Cut-off Date.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
B-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January __, 2002 BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
----------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:
---------------------
Authorized Signatory
B-4-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
________________________________
Signature Guaranteed
B-4-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________, as its agent.
B-4-9
EXHIBIT C
FORM OF TRUSTEE'S INITIAL CERTIFICATION
January__, 2002
Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660
Re: Pooling and Servicing Agreement, dated as of January 1, 2002
among Impac Secured Assets Corp., Impac Funding Corporation,
and Bankers Trust Company of California, N.A., Mortgage
Pass-Through Certificates Series 2002-1
------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as 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 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 (i), (ii), (iii) (iv) of
the definition or description of "Mortgage Loan Schedule" is correct.
The trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The 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 Trustee.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
By:
------------------------
Name:
Title:
C-2
EXHIBIT D
FORM OF TRUSTEE FINAL CERTIFICATION
January __, 2002
Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660
Re: Pooling and Servicing Agreement, dated as of January 1, 2002
among Impac Secured Assets Corp., Impac Funding Corporation,
and Bankers Trust Company of California, N.A., Mortgage
Pass-Through Certificates Series 2002-1
------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as 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 2.01.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representation that any documents specified in clause (vi) of Section
2.01 should be included in any Mortgage File. The 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 Trustee.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
By:
------------------------
Name:
Title:
D-1
EXHIBIT E
FORM OF REMITTANCE REPORT
(Provided Upon Request)
EXHIBIT F-1
REQUEST FOR RELEASE
(for Trustee)
Loan Information
- ----------------
Name of Mortgagor:
----------------------------------
Master Servicer
Loan No.:
----------------------------------
Trustee
- -------
Name:
----------------------------------
Address:
----------------------------------
Trustee
Mortgage File No.:
----------------------------------
Request for Requesting Documents (check one):
- --------------------------------
1. Mortgage Loan Liquidated.
(The Master Servicer hereby certifies that all
proceeds of foreclosure, insurance or other
liquidation have been finally received and deposited
into the Custodial Account to the extent required
pursuant to the Pooling and Servicing Agreement.)
2. Mortgage Loan in Foreclosure.
3. Mortgage Loan Repurchased Pursuant to Section 9.01 of the
Pooling and Servicing Agreement.
4. Mortgage Loan Repurchased Pursuant to Article II of the
Pooling and Servicing Agreement.
(The Master Servicer hereby certifies that the
repurchase price has been deposited into the
Custodial Account pursuant to the Pooling and
Servicing Agreement.)
F-1-1
5. Other (explain).
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The undersigned Master Servicer hereby acknowledges that it
has received from the Trustee for the Holders of Mortgage Pass-Through
Certificates, Series 2002-1, the documents referred to below (the "Documents").
All capitalized terms not otherwise defined in this Request for Release shall
have the meanings given them in the Pooling and Servicing Agreement, dated as of
January 1, 2002 (the "Pooling and Servicing Agreement"), among Impac Secured
Assets Corp., Impac Funding Corporation and the Trustee.
( ) Promissory Note dated _________________, 200_, in the original
principal sum of $__________, made by __________________,
payable to, or endorsed to the order of, the Trustee.
( ) Mortgage recorded on _________________________ as instrument
no. ___________ in the County Recorders Office of the County
of ______________________, State of _____________________ in
book/reel/docket of official records at page/image
_______________.
( ) Deed of Trust recorded on ____________________ as instrument
no._____________ in the County Recorder's Office of the County
of ______________________, State of _____________________in
book/reel/docket __________________ of official records at
page/image ________________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee,
recorded on _______________ as instrument no. ______________
in the County Recorder's Office of the County of
________________, State of ___________________ in
book/reel/docket ____________ of official records at
page/image ___________.
( ) Other documents, including any amendments, assignments or
other assumptions of the Mortgage Note or Mortgage.
( ) ____________________________________
( ) ____________________________________
( ) ____________________________________
F-1-2
( ) ____________________________________
The undersigned Master Servicer hereby acknowledges and agrees
as follows:
(1) The Master Servicer shall hold and retain
possession of the Documents in trust for the benefit of the
Trustee, solely for the purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly
permit the Documents to become subject to, or encumbered by,
any claim, liens, security interest, charges, writs of
attachment or other impositions nor shall the Master Servicer
assert or seek to assert any claims or rights of setoff to or
against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every
Document previously requested from the Mortgage File to the
Custodian when the need therefor no longer exists, unless the
Mortgage Loan relating to the Documents has been liquidated
and the proceeds thereof have been remitted to the Custodial
Account and except as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including
any proceeds of proceeds, coming into the possession or
control of the Master Servicer shall at all times be earmarked
for the account of the Trustee, and the Master Servicer shall
keep the Documents and any proceeds separate and distinct from
all other property in the Master Servicer's possession,
custody or control.
IMPAC FUNDING CORPORATION
By:
------------------------
Title:
---------------------
Date: _________________, 200_
F-1-3
EXHIBIT F-2
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2002-1
_____________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN OFFICER
OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER SIGNATURE,
AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN
MADE.
LOAN NUMBER: BORROWER'S NAME:
--------------------- --------------------------
COUNTY:
--------------------------
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE CUSTODIAL ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
_________ ____________ DATED:
------------------------------
// VICE PRESIDENT
// ASSISTANT VICE PRESIDENT
F-2-1
EXHIBIT G-1
FORM OF INVESTOR REPRESENTATION LETTER
___________,200__
Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2002-1
Re: Impac Secured Assets Corp.
Mortgage Pass-Through Certificates Series 2002-1, Class
-------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ Initial Certificate Principal Balance
of Mortgage Pass-Through Certificates, Series 2002-1, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of January 1, 2002 among Impac
Secured Assets Corp., as company (the "Company"), Impac Funding Corporation, as
master servicer and Bankers Trust Company of California, N.A., as trustee (the
"Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Company and the
Trustee that:
1. The Purchaser understands that (a) the
Certificates have not been and will not be registered or
qualified under the Securities Act of 1933, as amended (the
"Act") or any state securities law, (b) the Company is not
required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and
qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the
Certificates and (e) the Certificates will bear a legend to
the foregoing effect.
G-1-1
2. The Purchaser is acquiring the Certificates for
its own account for investment only and not with a view to or
for sale in connection with any distribution thereof in any
manner that would violate the Act or any applicable state
securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such
matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor"
within the meaning of Rule 501 (a) promulgated pursuant to the
Act.
4. The Purchaser has been furnished with, and has had
an opportunity to review (a) [a copy of the Private Placement
Memorandum, dated January 31, 2002, relating to the
Certificates (b)] a copy of the Pooling and Servicing
Agreement and [(b)] [(c)] such other information concerning
the Certificates, the Mortgage Loans and the Company as has
been requested by the Purchaser from the Company or the Seller
and is relevant to the Purchaser's decision to purchase the
Certificates. The Purchaser has had any questions arising from
such review answered by the Company or the Seller to the
satisfaction of the Purchaser. [If the Purchaser did not
purchase the Certificates from the Seller in connection with
the initial distribution of the Certificates and was provided
with a copy of the Private Placement Memorandum (the
"Memorandum") relating to the original sale (the "Original
Sale") of the Certificates by the Company, the Purchaser
acknowledges that such Memorandum was provided to it by the
Seller, that the Memorandum was prepared by the Company solely
for use in connection with the Original Sale and the Company
did not participate in or facilitate in any way the purchase
of the Certificates by the Purchaser from the Seller, and the
Purchaser agrees that it will look solely to the Seller and
not to the Company with respect to any damage, liability,
claim or expense arising out of, resulting from or in
connection with (a) error or omission, or alleged error or
omission, contained in the Memorandum, or (b) any information,
development or event arising after the date of the
Memorandum.]
5. The Purchaser has not and will not nor has it
authorized or will it authorize any person to (a) offer,
pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any
offer to buy or to accept a pledge, disposition of other
transfer of any Certificate, any interest in any Certificate
or any other similar security from any person in any manner,
(c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in any
other manner or (e) take any other action, that (as to any of
(a) through (e) above) would constitute a distribution of any
Certificate under the Act,
G-1-2
that would render the disposition of any Certificate a
violation of Section 5 of the Act or any state securities law,
or that would require registration or qualification pursuant
thereto. The Purchaser will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions
of the Pooling and Servicing Agreement.
Very truly yours,
__________________________________
(Purchaser)
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
G-1-3
EXHIBIT G-2
FORM OF TRANSFEROR REPRESENTATION LETTER
______________,200___
Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2002-1
Re: Impac Secured Assets Corp.
Mortgage Pass-Through Certificates, Series 2002-1, Class
--------------------------------------------------------
Ladies and Gentlemen:
In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Mortgage Pass-Through Certificates, Series 2002-1, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of January 1, 2002 among Impac
Secured Assets Corp., as company (the "Company"), Impac Funding Corporation, as
master servicer and Bankers Trust Company of California, N.A., as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the
G-2-1
foregoing sentence with respect to any Certificate. The Seller has not and will
not sell or otherwise transfer any of the Certificates, except in compliance
with the provisions of the Pooling and Servicing Agreement.
Very truly yours,
_____________________________________
(Seller)
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
G-2-2
EXHIBIT G-3
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 2002-1, Class ____, No. ____
The undersigned seller, as registered holder (the
"Transferor"), intends to transfer the Rule 144A Securities described above to
the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Transferor hereby certifies the following facts: Neither the Transferor nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with,
the Transferor, the Trustee and the Master Servicer pursuant to Section 5.02 of
the Pooling and Servicing Agreement as follows:
a. The Buyer understands that the Rule 144A
Securities have not been registered under the 1933 Act or the
securities laws of any state.
b. The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is
capable of evaluating the merits and risks of investment in
the Rule 144A Securities.
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from
the Transferor, the Trustee or the Master Servicer.
G-3-1
d. Neither the Buyer nor anyone acting on its behalf
has offered, transferred, pledged, sold or otherwise disposed
of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition
of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A
Securities, any interest in the Rule 144A Securities or any
other similar security with, any person in any manner, or made
any general solicitation by means of general advertising or in
any other manner, or taken any other action, that would
constitute a distribution of the Rule 144A Securities under
the 1933 Act or that would render the disposition of the Rule
144A Securities a violation of Section 5 of the 1933 Act or
require registration pursuant thereto, nor will it act, nor
has it authorized or will it authorize any person to act, in
such manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144 under the 1933 Act and has
completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. The Buyer is aware that
the sale to it is being made in reliance on Rule 144A. The
Buyer is acquiring the Rule 144A Securities for its own
account or the account of other qualified institutional
buyers, understands that such Rule 144 Securities may be
resold, pledged or transferred only (i) to a person reasonably
believed to be a qualified institutional buyer that purchases
for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale,
pledge or transfer is being made in reliance on Rule 144A, or
(ii) pursuant to another exemption from registration under the
1933 Act.
3. The Buyer warrants and represents to, and covenants with,
the Transferor, the Servicer and the Company that either (1) the Buyer is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
(the "Code") (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer's
purchase of the Rule 144A Securities will not result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code.
4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
G-3-2
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
_______________________________________ ___________________________________
Print Name of Transferor Print Name of Buyer
By: By:
------------------------------------ -------------------------------
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
------------------------------------ --------------------------------
Date: Date:
---------------------------------- ------------------------------
G-3-3
ANNEX 1 TO EXHIBIT G-3
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $____________________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
____ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is
supervised by the State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statement, a copy of which is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements.
- --------
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
G-3-4
____ BROKER-DEALER. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
____ INSURANCE COMPANY. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of Columbia.
____ STATE OR LOCAL PLAN. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
____ INVESTMENT ADVISER. The Buyer is an investment adviser registered under
the Investment Advisers Act of 1940.
____ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
____ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers Act
of 1940.
____ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established
and maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in
G-3-5
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Buyer's direction. However, such
securities were not included if the Buyer is a majority-owned, consolidated
subsidiary of another enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
__________________________________________
Print Name of Buyer
By:
---------------------------------------
Name:
Title:
Date:
-------------------------------------
G-3-6
ANNEX 2 TO EXHIBIT G-3
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used.
____ The Buyer owned $_______________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $____________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
G-3-7
5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales to the
Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
_______________________________
Print Name of Buyer
By:____________________________
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
--------------------------
G-3-8
EXHIBIT G-4
FORM OF TRANSFEROR CERTIFICATE
______________, 200__
Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa A, California 92705
Attention: Impac Secured Assets Corp. Series 2002-1
Re: Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 2002-1, Class R
----------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the sale by
________________________ (the "Seller") to _____________________________________
(the "Purchaser") of a ____% Percentage Interest in the Mortgage Pass-Through
Certificates, Series 2002-1, Class R (the "Certificates"), issued pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of January 1, 2002, among Impac Secured Assets Corp., as
company (the "Company"), Impac Funding Corporation, as master servicer and
Bankers Trust Company of California, N.A., as trustee (the "Trustee"). All terms
used herein and not otherwise defined shall have the meaning set forth in the
Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the sale of the
Certificates by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to
the Trustee and the Master Servicer a transfer affidavit and agreement in the
form attached to the Pooling and Servicing Agreement as Exhibit G-5. The Seller
does not know or believe that any representation contained therein is false.
G-4-1
3. The Seller has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result
of that investigation, the Seller has determined that the Purchaser has
historically paid its debts as they have become due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Seller understands that the transfer of the
Certificates may not be respected for United States income tax purposes (and the
Seller may continue to be liable for United States income taxes associated
therewith) unless the Seller has conducted such an investigation.
4. The Seller has no actual knowledge that the proposed
Transferee is a Disqualified Organization, an agent of a Disqualified
Organization or a Non-United States Person.
Very truly yours,
___________________________________
(Seller)
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
G-4-2
EXHIBIT G-5
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
:ss.:
COUNTY OF )
___________________, being first duly sworn, deposes, represents and
warrants:
1. That he/she is [Title of Officer] of [Name of Owner], a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of __________] [the United States], (the "Owner"), (record or beneficial
owner of the Class R Certificates (the "Class R Certificates") on behalf of
which he/she makes this affidavit and agreement). This Class R Certificates were
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") dated as of January 1, 2002 among Impac Secured Assets
Corp., as company, Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Bankers Trust Company of California, N.A., as trustee (the
"Trustee").
2. That the Owner (i) is not and will not be a "disqualified
organization" as of _____________ [date of transfer] within the meaning of
Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the
"Code"), (ii) will endeavor to remain other than a disqualified organization for
so long as it retains its ownership interest in the Class R Certificates, and
(iii) is acquiring the Class R Certificates for its own account or for the
account of another Owner from which it has received an affidavit and agreement
in substantially the same form as this affidavit and agreement. (For this
purpose, a "disqualified organization" means the United States, any state or
political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality all of the activities of which are
subject to tax and, except for Freddie Mac, a majority of whose board of
directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge
G-5-1
that the affidavit is false; and (iv) that the Class R Certificates may be
"noneconomic residual interests" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class R Certificates if at any time during the taxable year of
the pass-through entity a disqualified organization is the record holder of an
interest in such entity. (For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. That the Owner is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.
6. That the Owner has reviewed the restrictions set forth on the face
of the Class R Certificates and the provisions of Section 5.02(f) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event the Owner holds such Certificates in
violation of Section 5.02(f)). The Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.
8. The Owner's Taxpayer Identification Number is _____________________.
9. This affidavit and agreement relates only to the Class R
Certificates held by the owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R Certificates.
10. That no purpose of the Owner relating to the transfer of any of the
Class R Certificates by the Owner is or will be to impede the assessment or
collection of any tax.
11. That the Owner has no present knowledge or expectation that it will
be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the
G-5-2
Class R Certificate that the Owner intends to pay taxes associated with holding
such Class R Certificate as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Class R
Certificate.
12. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class R Certificates remain outstanding.
13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, provided that
with respect to any partnership or other entity treated as a partnership for
United States federal income tax purposes, all persons that own an interest in
such partnership either directly or through any entity that is not a corporation
for United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate or trust whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States.
14. (a) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101
or otherwise under ERISA, and (iii) will not be transferred to any entity that
is deemed to be investing in plan assets within the meaning of the DOL
regulation, 29 C.F.R. ss. 2510.3-101 or otherwise under ERISA; or
(b) The Owner will provide the Trustee, the Company and the
Master Servicer with an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee, the Company and the Master Servicer to
the effect that the purchase of Certificates is permissible under applicable
law, will not constitute or result in any non-exempt prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Trustee, the
Company or the Master Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in addition
to those undertaken in the Pooling and Servicing Agreement.
In addition, the Owner hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Master Servicer that the
Owner will not transfer such Certificates to any Plan or person unless either
such Plan or person meets the requirements set forth in either (a) or (b) above.
G-5-3
Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
G-5-4
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed
on its behalf, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this ______ day of
_____________, _____.
[NAME OF OWNER]
By:_________________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
_________________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Owner, and acknowledged to me that such
person executed the same as such person's free act and deed and the free act and
deed of the Owner.
Subscribed and sworn before me this ____ day of ___________, 200__.
__________________________________
NOTARY PUBLIC
COUNTY OF__________________________
STATE OF___________________________
My Commission expires the ____ day
of __________, 200__.
G-5-5
EXHIBIT H
MORTGAGE LOAN SCHEDULE
(Provided Upon Request)
EXHIBIT I
SELLER REPRESENTATIONS AND WARRANTIES
Seller's Representations Assigned by Company to Trustee
Representations and Warranties. Pursuant to the Mortgage Loan Purchase
Agreement, the Seller has made certain representations and warranties to the
Company. The Seller shall confirm such representations and warranties and shall
deliver a Seller's Warranty Certificate and an Officer's Certificate on the
Closing Date (i) reaffirming such representations and warranties and (ii)
specifically restating and reaffirming the following representations and
warranties as of such date. The following representations are, pursuant to the
Pooling and Servicing Agreement, assigned by the Company to the Trustee for the
benefit of the Certificateholders, together with the related repurchase rights
specified in the Mortgage Loan Purchase Agreement. Pursuant to the Mortgage Loan
Purchase Agreement, the Seller's Warranty Certificate and related Officer's
Certificate, the Seller affirms each such representation and warranty and
agrees, consents to and acknowledges the assignment thereof to the Trustee. All
capitalized terms herein shall have the meanings assigned in the Pooling and
Servicing Agreement and the Seller's Warranty Certificate, as applicable.
The Seller hereby represents and warrants to the Company and Trustee,
as to each Mortgage Loan, that as of the Closing Date or as of such other date
specifically provided herein:
(i) the information set forth in the Mortgage Loan Schedule hereto is
true and correct in all material respects;
(ii) the terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, (i) if required by law in the jurisdiction where the
Mortgaged Property is located, or (ii) to protect the interests of the
Trustee on behalf of the Certificateholders;
(iii) the Mortgage File for each Mortgage Loan contains a true and
complete copy of each of the documents contained in such Mortgage File,
including all amendments, modifications and, if applicable, waivers and
assumptions that have been executed in connection with such Mortgage
Loan;
(iv) immediately prior to the transfer to the Purchaser, the Seller was
the sole owner of beneficial title and holder of each Mortgage and
Mortgage Note relating to the Mortgage Loans and is conveying the same
free and clear of any and all liens, claims, encumbrances,
participation interests, equities, pledges, charges or security
interests of any nature and the Seller has full right and authority to
sell or assign the same pursuant to this Agreement;
I-1
(v) each Mortgage is a valid and enforceable first lien on the property
securing the related Mortgage Note and each Mortgaged Property is owned
by the Mortgagor in fee simple (except with respect to common areas in
the case of condominiums, PUDs and de minimis PUDs) or by leasehold for
a term longer than the term of the related Mortgage, subject only to
(i) the lien of current real property taxes and assessments, (ii)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal
obtained in connection with the origination of the related Mortgage
Loan or referred to in the lender's title insurance policy delivered to
the originator of the related Mortgage Loan and (iii) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage;
(vi) no payment of principal of or interest on or in respect of any
Mortgage Loan is 30 or more days past due;
(vii) there is no mechanics' lien or claim for work, labor or material
affecting the premises subject to any Mortgage which is or may be a
lien prior to, or equal with, the lien of such Mortgage except those
which are insured against by the title insurance policy referred to in
(xii) below;
(viii) as of the Cut-off Date, (i) no Mortgage Loan had been 30 days or
more delinquent more than once during the preceding 12 months, (ii) no
Mortgage Loan had been delinquent for 60 days or more during the
preceding 12 months and (iii) to Seller's knowledge, there was no
delinquent tax or assessment lien against the property subject to any
Mortgage, except where such lien was being contested in good faith and
a stay had been granted against levying on the property;
(ix) there is no valid offset, defense or counterclaim to any Mortgage
Note or Mortgage, including the obligation of the Mortgagor to pay the
unpaid principal and interest on such Mortgage Note;
(x) to Seller's knowledge, except to the extent insurance is in place
which will cover such damage, the physical property subject to any
Mortgage is free of material damage and is in good repair and there is
no proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property;
(xi) to the best of Seller's knowledge, each Mortgage Loan at the time
it was made complied in all material respects with applicable state and
federal laws, including, without limitation, usury, equal credit
opportunity and disclosure laws; and each Mortgage Loan is being
serviced in all material respects in accordance with applicable state
and federal laws, including, without limitation, usury, equal credit
opportunity and disclosure laws;
I-2
(xii) a lender's title insurance policy (on an ALTA or CLTA form) or
binder, or other assurance of title customary in the relevant
jurisdiction therefor in a form acceptable to Fannie Mae or Freddie
Mac, was issued on the date that each Mortgage Loan was created by a
title insurance company which, to the best of Seller's knowledge, was
qualified to do business in the jurisdiction where the related
Mortgaged Property is located, insuring the Seller and its successors
and assigns that the Mortgage is a first priority lien on the related
Mortgaged Property in the original principal amount of the Mortgage
Loan. Seller is the sole insured under such lender's title insurance
policy, and such policy, binder or assurance is valid and remains in
full force and effect, and each such policy, binder or assurance shall
contain all applicable endorsements including a negative amortization
endorsement, if applicable;
(xiii) in the event the Mortgage constitutes a deed of trust, either a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the
Mortgage or if no duly qualified trustee has been properly designated
and so serves, the Mortgage contains satisfactory provisions for the
appointment of such trustee by the holder of the Mortgage at no cost or
expense to such holder, and no fees or expenses are or will become
payable by Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the mortgagor;
(xiv) (i) the Loan-to-Value Ratio of each Mortgage Loan at origination
was not more than _______ %; (ii) except with respect to approximately
______% of the Mortgage Loans (by aggregate outstanding principal
balance as of the Cut-off Date), each Mortgage Loan with a
Loan-to-Value Ratio at origination in excess of 80.00% will be insured
by one of the following: (i) a Primary Insurance Policy issued by a
private mortgage insurer or (ii) a Radian Lender-Paid PMI Policy. Each
Primary Insurance Policy will insure against default under each insured
Mortgage Note as follows: (i) for which the outstanding principal
balance at origination of such Mortgage Loan is greater than or
outstanding principal balance at origination of such Mortgage Loan is
greater than or equal to 80.01% and up to and including 90.00% of the
lesser of the Appraised Value and the sales price, such Mortgage Loan
is covered by a Primary Insurance Policy in an amount equal to at least
12.00% of the Allowable Claim and (ii) for which the outstanding
principal balance at origination of such Mortgage Loan exceeded 90.00%
of the lesser of the Appraised Value and the sales price, such Mortgage
Loan is covered by a Primary Insurance Policy in an amount equal to at
least 30.00% of the Allowable Claim. Each Radian Lender-Paid PMI Policy
will insure against default under each insured Mortgage Note related to
a covered Mortgage Loan as follows: (A) for which the outstanding
principal balance at origination of such Mortgage Loan is at least
80.01% and up and including 89.99% of the lesser of the Appraised Value
and the sales price, such Mortgage Loan is covered by such Radian
Lender-Paid PMI Policy in an amount equal to at least 22.00% of the
Allowable Claim, (B) for which the outstanding principal balance at
origination of such Mortgage Loan is at least 90.00% and up to and
including 95.00% of the lesser of the Appraised Value and the sales
price, such Mortgage Loan is covered by such Radian Lender-Paid PMI
Policy in an amount equal to at least 25.00% of
I-3
the Allowable Claim and (C) for which the outstanding principal balance
at origination of such Mortgage Loan is at least 95.01% and up to and
including 97.00% of the lesser of the Appraised Value and the sales
price, such Mortgage Loan is covered by such Radian Lender-Paid PMI
Policy in an amount equal to at least 35.00% of the Allowable Claim.
The "Appraised Value" is the appraised value of the related Mortgaged
Property at the time of origination of such Mortgage Loan. The
"Allowable Claim" for any Mortgage Loan covered by a Primary Insurance
Policy or a Radian PMI Pool Policy is the current principal balance of
such Mortgage Loan plus accrued interest and allowable expenses at the
time of the claim;
(xv) at the time of origination, each Mortgaged Property was the
subject of an appraisal which conforms to the Seller's underwriting
requirements, and a complete copy of such appraisal is contained in the
Mortgage File;
(xvi) on the basis of a representation by the borrower at the time of
origination of the Mortgage Loans, at least _______% of the Mortgage
Loans (by aggregate principal balance) will be secured by Mortgages on
owner-occupied primary residence properties;
(xvii) neither the Seller nor any servicer of the related Mortgage
Loans has advanced funds or knowingly received any advance of funds by
a party other than the Mortgagor, directly or indirectly, for the
payment of any amount required by the Mortgage, except for (i) interest
accruing from the date of the related Mortgage Note or date of
disbursement of the Mortgage Loan proceeds, whichever is later, to the
date which precedes by 30 days the first Due Date under the related
Mortgage Note, and (ii) customary advances for insurance and taxes;
(xviii) each Mortgage Note, the related Mortgage and other agreements
executed in connection therewith are genuine, and each is the legal,
valid and binding obligation of the maker thereof, enforceable in
accordance with its terms except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law); and, to the best of Seller's
knowledge, all parties to each Mortgage Note and the Mortgage had legal
capacity to execute the Mortgage Note and the Mortgage and each
Mortgage Note and Mortgage has been duly and properly executed by the
Mortgagor;
(xix) to the extent required under applicable law, each conduit seller
and subsequent mortgagee or servicer of the Mortgage Loans was
authorized to transact and do business in the jurisdiction in which the
related Mortgaged Property is located at all times when it held or
serviced the Mortgage Loan; and any obligations of the holder of the
related Mortgage Note, Mortgage and other loan documents have been
complied with in all material respects; servicing of each Mortgage Loan
has been in accordance with the servicing standard set forth in Section
3.01 of the Pooling and Servicing Agreement and the terms of the
Mortgage Notes, the Mortgage and other loan documents, whether the
creation of such Mortgage Loan and servicing was done by the Seller,
its affiliates, or any third party which created the
I-4
Mortgage Loan on behalf of, or sold the Mortgage Loan to, any of them,
or any servicing agent of any of the foregoing;
(xx) the related Mortgage Note and Mortgage contain customary and
enforceable provisions such as to render the rights and remedies of the
holder adequate for the realization against the Mortgaged Property of
the benefits of the security, including realization by judicial, or, if
applicable, nonjudicial foreclosure, and, to Seller's knowledge, there
is no homestead or other exemption available to the Mortgagor which
would interfere with such right to foreclosure;
(xxi) except with respect to holdbacks required by certain Mortgage
Loans which holdbacks create a fund for (i) the repair of Mortgaged
Property due to damage from adverse weather conditions, or (ii) the
completion of new construction, or both, the proceeds of the Mortgage
Loans have been fully disbursed, there is no requirement for future
advances thereunder and any and all requirements as to completion of
any on-site or off-site improvements and as to disbursements of any
escrow funds therefor have been complied with; and all costs, fees and
expenses incurred in making, closing or recording the Mortgage Loan
have been paid, except recording fees with respect to Mortgages not
recorded as of the Closing Date;
(xxii) as of the Closing Date, the improvements on each Mortgaged
Property securing a Mortgage Loan is insured (by an insurer which is
acceptable to the Seller) against loss by fire and such hazards as are
covered under a standard extended coverage endorsement in the locale in
which the Mortgaged Property is located, in an amount which is not less
than the lesser of the maximum insurable value of the improvements
securing such Mortgage Loan or the outstanding principal balance of the
Mortgage Loan, but in no event in an amount less than an amount that is
required to prevent the Mortgagor from being deemed to be a co-insurer
thereunder; if the improvement on the Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium project; if upon origination of the
related Mortgage Loan, the improvements on the Mortgaged Property were
in an area identified as a federally designated flood area, a flood
insurance policy is in effect in an amount representing coverage not
less than the least of (i) the outstanding principal balance of the
Mortgage Loan, (ii) the restorable cost of improvements located on such
Mortgaged Property or (iii) the maximum coverage available under
federal law; and each Mortgage obligates the Mortgagor thereunder to
maintain the insurance referred to above at the Mortgagor's cost and
expense;
(xxiii) there is no monetary default existing under any Mortgage or the
related Mortgage Note and there is no material event which, with the
passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach or event of acceleration;
and neither the Seller, any of its affiliates nor any servicer of any
related Mortgage Loan has taken any action to waive any default, breach
or event of acceleration;
I-5
no foreclosure action is threatened or has been commenced with respect
to the Mortgage Loan;
(xxiv) to Seller's knowledge, no Mortgagor, at the time of origination
of the applicable Mortgage, was a debtor in any state or federal
bankruptcy or insolvency proceeding;
(xxv) each Mortgage Loan was originated or funded by (a) a savings and
loan association, savings bank, commercial bank, credit union,
insurance company or similar institution which is supervised and
examined by a federal or state authority (or originated by (i) a
subsidiary of any of the foregoing institutions which subsidiary is
actually supervised and examined by applicable regulatory authorities
or (ii) a mortgage loan correspondent of any of the foregoing and that
was originated pursuant to the criteria established by any of the
foregoing) or (b) a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to sections 203 and 211 of the National
Housing Act, as amended;
(xxvi) all inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including, but not limited to, certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities;
(xxvii) to Seller's knowledge, the Mortgaged Property and all
improvements thereon comply with all requirements of any applicable
zoning and subdivision laws and ordinances;
(xxviii) no instrument of release or waiver has been executed in
connection with the Mortgage Loans, and no Mortgagor has been released,
in whole or in part, except in connection with an assumption agreement
which has been approved by the primary mortgage guaranty insurer, if
any, and which has been delivered to the Trustee;
(xxix) except with respect to __________% of the Mortgage Loans (by
aggregate principal balance) which provide for a balloon payment, each
Mortgage Note contains provisions providing for its full amortization
by the end of its original term and is payable on the first day of each
month in monthly installments of principal and interest, with interest
payable in arrears, over an original term of not more than 30 years;
(xxx) no Mortgage Loan was originated based on an appraisal of the
related Mortgaged Property made prior to completion of construction of
the improvements thereon unless a certificate of completion was
obtained prior to closing of the Mortgage Loan;
(xxxi) each of the Mortgaged Properties consists of a single parcel of
real property with a detached single-family residence erected thereon,
or a two- to four-family dwelling, or an individual condominium unit in
a condominium project or a townhouse, a condohotel, an individual unit
in a PUD or an individual unit in a de minimis PUD;
I-6
(xxxii) no Mortgaged Property consists of a single parcel of real
property with a cooperative housing development erected thereon. Any
condominium unit, PUD or de minimis PUD conforms with Progressive Loan
Series Program requirements regarding such dwellings or is covered by a
waiver confirming that such condominium unit, PUD or de minimis PUD is
acceptable to the Seller;
(xxxiii) as of the Cut-off Date, the Mortgage Rate of each Mortgage
Loan was not less than _______% per annum and not more than _________%
per annum, and the weighted average Mortgage Rate of the Mortgage Loans
was approximately ____________% per annum;
(xxxiv) measured by principal balance, no more than ________% ofthe
Mortgage Loans are secured by an individual unit in a condominium
project or hi-rise, and at least________% of the Mortgage Loans are
secured by real property with a detached single-family residence
erected thereon, including de minimis PUDs;
(xxxv) as of the Cut-off Date, the remaining term to scheduled maturity
of each Mortgage Loan is not less than ____ months and not more than
[360] months;
(xxxvi) as of the Cut-off Date, no more than _________% (by aggregate
principal balance) of the Mortgage Loans are cash-out refinances;
(xxxvi) as of the Cut-off Date, no more than ___________% (by aggregate
principal balance) of the Mortgage Loans are rate and term refinances;
(xxxviii) as of the Cut-off Date, no fewer than _______% (by aggregate
principal balance) of the Mortgage Loans are purchase money loans;
(xxxix) as of the Cut-off Date, no more than __________% and ______% of
the Mortgage Loans (by aggregate principal balance) are secured by
properties located in the states of California and [Florida],
respectively;
(xl) as of the Cut-off Date, the principal balances of the Mortgage
Loans range from approximately $_________ to approximately
$___________, and the average unpaid principal balance is $___________.
(xli) with respect to Mortgaged Properties at the time of origination
of the related Mortgage Loans, measured by aggregate unpaid principal
balance as of the Cut-off Date, at least ________% of the Mortgaged
Properties are owner occupied primary residences, no more than
____________% of the Mortgaged Properties are second homes and no more
than ________% of the Mortgaged Properties are investor owned
properties;
(xlii) as of the Cut-off Date, none of the Mortgage Loans (by aggregate
principal balance) are Buydown Mortgage Loans;
I-7
(xliii) each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(xliv) with respect to each Mortgage Loan directly originated by the
Seller (and not through a third-party broker or other third party) as
of the Closing Date, to the best of Seller's knowledge, there has been
no fraud, misrepresentation or dishonesty with respect to the
origination of any Mortgage Loan;
(xlv) no selection procedure reasonably believed by the Seller to be
adverse to the interests of the Certificateholders was utilized in
selecting the Mortgage Loans;
(xlvi) no Mortgage Loan is subject to the Home Ownership and Equity
Protection Act of 1994 or any comparable state law;
(xlvii) no proceeds from any Mortgage Loan were used to finance
single-premium credit insurance policies; and
(xlviii) no Mortgage Loan provides for payment of a Prepayment Charge
on Principal Prepayments made more than five years from the date of the
first contractual Due Date of the related Mortgage Loan.
I-8
EXHIBIT J
FORM OF NOTICE UNDER SECTION 3.24 OF POOLING AND SERVICING AGREEMENT
January__, 2002
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705
Re: Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 2002-1
----------------------------------
Pursuant to Section 3.25 of the Pooling and Servicing
Agreement, dated as of January 1, 2002, relating to the Certificates referenced
above, the undersigned does hereby notify you that:
(a) The prepayment assumption used in pricing the Certificates
with respect to the Mortgage Loans in Series 2002-1 consisted of a Prepayment
Assumption (the "Prepayment Assumption") of 100% per annum.
(b) With respect to each Class of Certificates comprising the
captioned series, set forth below is (i), the first price, as a percentage of
the Certificate Principal Balance or Notional Amount of each Class of
Certificates, at which 10% of the aggregate Certificate Principal Balance or
Notional Amount of each such Class of Certificates was first sold at a single
price, if applicable, or (ii) if more than 10% of a Class of Certificates have
been sold but no single price is paid for at least 10% of the aggregate
Certificate Principal Balance or Notional Amount of such Class of Certificates,
then the weighted average price at which the Certificates of such Class were
sold expressed as a percentage of the Certificate Principal Balance or Notional
Amount of such Class of Certificates, (iii) if less than 10% of the aggregate
Certificate Principal Balance or Notional Amount of a Class of Certificates has
been sold, the purchase price for each such Class of Certificates paid by Bear,
Stearns & Co. Inc. (the "Underwriter"), expressed as a percentage of the
Certificate Principal Balance or Notional Amount of such Class of Certificates
calculated by: (1) estimating the fair market value of each such Class of
Certificates as of January, 2002; (2) adding such estimated fair market value to
the aggregate purchase prices of each Class of Certificates described in clause
(i) or (ii) above; (3) dividing each of the fair market values determined in
clause (1) by the sum obtained in clause (2); (4) multiplying the quotient
obtained for each Class of Certificates in clause (3) by the purchase price paid
by the Underwriter for all the Certificates purchased by it; and (5) for each
Class of Certificates, dividing the product obtained from such Class of
Certificates in clause (4) by the initial Certificate Principal Balance or
Notional Amount of such Class of Certificates or
J-1
(iv) the fair market value (but not less than zero) as of the Closing Date of
each Certificate of each Class of Certificates retained by the Company or an
affiliate corporation, or delivered to the seller:
Series 2002-1
- -------------
Class A-I-1: ____%
Class A-I-2: ____%
Class A-1-3: ____%
Class A-I-4: ____%
Class A-I-5: ____%
Class A-I-6: ____%
Class A-II: ____%
Class A-IO: ____%
Class M-1: ____%
Class M-2: ____%
Class B: ____%
The prices and values set forth above do not include accrued
interest with respect to periods before the closing.
IMPAC SECURED ASSETS CORP.
By:
----------------------------------
Name:
Title:
J-2
EXHIBIT K
IMPAC SERVICING GUIDE
(Provided Upon Request)
K-1
EXHIBIT L
ADDITION NOTICE
February 4, 2002
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934
Impac Funding Corporation
1401 Dove Street
Newport Beach, CA 92660
RE: Pooling and Servicing Agreement, dated as of January 1, 2002
(the "Pooling and Servicing Agreement"), among Impac Funding
Corporation, as Master Servicer (the "Master Servicer"),
Bankers Trust Company of California, N.A., as Trustee (the
"Trustee") and Impac Secured Assets Corp., as Company (the
"Company") relating to Impac Secured Assets Corp., Mortgage
Pass-Through Certificates, Series 2002-1 Subsequent Transfer
------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.06 of the Pooling and Servicing
Agreement, Company has designated Subsequent Mortgage Loans to be transferred to
the Trustee on February 4, 2002, with an approximate aggregate principal balance
of [$____________________]. Capitalized terms not otherwise defined herein have
the meaning set forth in the Pooling and Servicing Agreement.
Please acknowledge your receipt of this notice by
countersigning the enclosed copy in the space indicated below and returning it
to the attention of the undersigned.
Very truly yours,
IMPAC SECURED ASSETS CORP.
By:
------------------------
Name: Richard J. Johnson
Title: Chief Financial Officer
L-1
ACKNOWLEDGED AND AGREED:
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee.
By:
-----------------------------------------------------
Name: James Noriega
Title: Associate
IMPAC FUNDING CORPORATION
By:
-----------------------------------------------------
Name: Lisa Duehring
Title: Senior Vice President
L-2
EXHIBIT M
SUBSEQUENT TRANSFER INSTRUMENT
(Provided Upon Request)
M-1