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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 29, 2000
IMPAC SECURED ASSETS CORP. (as company under a Pooling and Servicing Agreement,
dated as of March 1, 2000, providing for, inter alia, the issuance of Mortgage
Pass-Through Certificates, Series 2000-1)
Impac Secured Assets Corp.
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(Exact name of registrant as specified in its charter)
CALIFORNIA 333-44209 33-071-5871
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1401 Dove Street
Newport Beach, California 92660
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(Zip Code)
Registrant's telephone number, including area code, is (949) 475-3600
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<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
------------------------------------------------------------------
(a) Not applicable
(b) Not applicable
(c) Exhibits:
1. Pooling and Servicing Agreement, dated as of March 1, 2000
among Impac Secured Assets Corp., as company, Impac Funding Corporation, as
master servicer, and Norwest Bank Minnesota, National Association, as trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
IMPAC SECURED ASSETS CORP.
By: /s/ Richard Johnson
-------------------------------------
Name: Richard Johnson
Title: Chief Financial Officer and Secretary
Dated: April 11, 2000
EXHIBIT
<PAGE>
================================================================================
IMPAC SECURED ASSETS CORP.,
Company,
IMPAC FUNDING CORPORATION
Master Servicer,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2000
---------------------------------
Mortgage Pass-Through Certificates
Series 2000-1
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<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
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Page
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<S> <C>
ARTICLE I
DEFINITIONS..............................................................................................3
1.01. Defined Terms.....................................................................................3
Accrued Certificate Interest.............................................................................3
Advance ................................................................................................4
Aggregate Stated Principal Balance.......................................................................4
Agreement................................................................................................4
Anniversary..............................................................................................4
Assignment...............................................................................................4
Available Distribution Amount............................................................................4
Balloon Loan.............................................................................................5
Balloon Payment..........................................................................................5
Bankruptcy Amount........................................................................................5
Bankruptcy Code..........................................................................................5
Bankruptcy Loss..........................................................................................5
Book-Entry Certificate...................................................................................5
Business Day.............................................................................................5
Cash Liquidation.........................................................................................6
Certificate..............................................................................................6
Certificate Account......................................................................................6
Certificate Account Deposit Date.........................................................................6
Certificateholder" or "Holder............................................................................6
Certificate Owner........................................................................................7
Certificate Principal Balance............................................................................7
Certificate Register.....................................................................................8
Class ................................................................................................8
Class A Certificate......................................................................................8
Class B Certificate......................................................................................8
Class B Percentage.......................................................................................8
Class B-1 Certificate....................................................................................8
Class B-1 Percentage.....................................................................................8
Class B-1 Prepayment Distribution Trigger................................................................8
Class B-2 Certificate....................................................................................8
Class B-2 Percentage.....................................................................................9
Class B-2 Prepayment Distribution Trigger................................................................9
Class B-3 Certificate....................................................................................9
Class B-3 Percentage.....................................................................................9
Class B-3 Prepayment Distribution Trigger................................................................9
Class M Certificate......................................................................................9
Class M Percentage.......................................................................................9
Class M-1 Certificate...................................................................................10
i
<PAGE>
Page
Class M-1-X Component...................................................................................10
Class M-1 Percentage....................................................................................10
Class M-X Certificate...................................................................................10
Class M-2 Certificate...................................................................................10
Class M-2-X Component...................................................................................10
Class M-2 Percentage....................................................................................11
Class M-2 Prepayment Distribution Trigger...............................................................11
Class M-3 Certificate...................................................................................11
Class M-3 Percentage....................................................................................11
Class M-3 Prepayment Distribution Trigger...............................................................11
Closing Date............................................................................................12
Code ...............................................................................................12
Collateral Value........................................................................................12
Commission..............................................................................................12
Company ...............................................................................................12
Compensating Interest...................................................................................12
Component...............................................................................................12
Corporate Trust Office..................................................................................12
Curtailment.............................................................................................12
Custodial Account.......................................................................................12
Cut-off Date............................................................................................13
Debt Service Reduction..................................................................................13
Defaulted Mortgage Loan.................................................................................13
Deficient Valuation.....................................................................................13
Definitive Certificate..................................................................................13
Deleted Mortgage Loan...................................................................................13
Depository..............................................................................................13
Depository Participant..................................................................................13
Determination Date......................................................................................14
Discount Fraction.......................................................................................14
Discount Mortgage Loan..................................................................................14
Disqualified Organization...............................................................................14
Distribution Date.......................................................................................14
Due Date ...............................................................................................14
Due Period..............................................................................................14
Eligible Account........................................................................................15
Eligible Funds..........................................................................................15
Event of Default........................................................................................15
Excess Bankruptcy Loss..................................................................................15
Excess Fraud Loss.......................................................................................15
Excess Proceeds.........................................................................................15
Excess Special Hazard Loss..............................................................................15
Extraordinary Events....................................................................................16
Extraordinary Losses....................................................................................16
ii
<PAGE>
Page
Fannie Mae..............................................................................................16
FDIC ...............................................................................................16
Fraud Loss Amount.......................................................................................16
Fraud Losses............................................................................................17
Freddie Mac.............................................................................................17
Funding Date............................................................................................17
Initial Certificate Principal Balance...................................................................17
Initial Notional Amount.................................................................................17
Insurance Policy........................................................................................17
Insurance Proceeds......................................................................................17
Interest Accrual Period.................................................................................18
Interest Only Certificate...............................................................................18
Late Collections........................................................................................18
LIBOR ...............................................................................................18
LIBOR Business Day......................................................................................18
Liquidation Proceeds....................................................................................18
Loan-to-Value Ratio.....................................................................................18
Lockout Certificates....................................................................................18
Lockout Priority Amount.................................................................................19
Lockout Priority Percentage.............................................................................19
Lockout Prepayment Priority Percentage..................................................................19
Lockout Shift Percentage................................................................................19
Lost Note Affidavit.....................................................................................19
Maturity Date...........................................................................................19
Master Servicer.........................................................................................19
Monthly Payment.........................................................................................20
Moody's ...............................................................................................20
Mortgage ...............................................................................................20
Mortgage File...........................................................................................20
Mortgage Loan...........................................................................................20
Mortgage Loan Purchase Agreement........................................................................20
Mortgage Loan Schedule..................................................................................20
Mortgage Note...........................................................................................22
Mortgage Rate...........................................................................................22
Mortgaged Property......................................................................................22
Mortgagor...............................................................................................22
Net Mortgage Rate.......................................................................................22
Non-Discount Mortgage Loan..............................................................................22
Nonrecoverable Advance..................................................................................22
Non-United States Person................................................................................22
Notional Amount.........................................................................................22
Officers' Certificate...................................................................................23
Opinion of Counsel......................................................................................23
Original Senior Percentage..............................................................................24
iii
<PAGE>
Page
OTS ...............................................................................................24
Outstanding Mortgage Loan...............................................................................24
Ownership Interest......................................................................................24
Pass-Through Rate.......................................................................................24
Percentage Interest.....................................................................................25
Permitted Investment....................................................................................25
Permitted Transferee....................................................................................26
Person ...............................................................................................26
Pool Strip Rate.........................................................................................26
Prepayment Distribution Percentage......................................................................27
Prepayment Distribution Trigger.........................................................................28
Prepayment Interest Shortfall...........................................................................28
Prepayment Period.......................................................................................28
Primary Hazard Insurance Policy.........................................................................28
Primary Insurance Policy................................................................................28
Principal Only Certificates.............................................................................28
Principal Prepayment....................................................................................28
Principal Prepayment in Full............................................................................29
Purchase Price..........................................................................................29
Qualified Insurer.......................................................................................29
Qualified Substitute Mortgage Loan......................................................................29
Radian ...............................................................................................30
Radian Insured Loans....................................................................................30
Radian PMI Policy.......................................................................................30
Radian PMI Policy Rate..................................................................................30
Rate Adjustment Date....................................................................................30
Rating Agency...........................................................................................30
Realized Loss...........................................................................................31
Record Date.............................................................................................31
Regular Certificate.....................................................................................31
Relief Act..............................................................................................31
REMIC ...............................................................................................31
REMIC Provisions........................................................................................32
Remittance Report.......................................................................................32
REO Acquisition.........................................................................................32
REO Disposition.........................................................................................32
REO Imputed Interest....................................................................................32
REO Proceeds............................................................................................32
REO Property............................................................................................33
Request for Release.....................................................................................33
Reserve Banks...........................................................................................33
Reserve Interest Rate...................................................................................33
Residual Certificate....................................................................................33
Responsible Officer.....................................................................................33
iv
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Page
Seller ...............................................................................................33
Senior Accelerated Distribution Percentage..............................................................33
Senior Interest Distribution Amount.....................................................................35
Senior Percentage.......................................................................................35
Senior Principal Distribution Amount....................................................................35
Servicing Account.......................................................................................35
Servicing Advances......................................................................................35
Servicing Fees..........................................................................................35
Servicing Fee Rate......................................................................................35
Servicing Guide.........................................................................................36
Servicing Officer.......................................................................................36
Single Certificate......................................................................................36
Special Deposit.........................................................................................36
Special Hazard Amount...................................................................................36
Special Hazard Loss.....................................................................................37
Special Hazard Percentage...............................................................................37
Standard & Poor's.......................................................................................37
Startup Day.............................................................................................37
Stated Principal Balance................................................................................37
Subordinate Certificate.................................................................................37
Subordinate Percentage..................................................................................37
Subordinate Principal Distribution Amount...............................................................38
Sub-Servicer............................................................................................38
Sub-Servicer Remittance Date............................................................................38
Sub-Servicing Account...................................................................................38
Sub-Servicing Agreement.................................................................................38
Tax Returns.............................................................................................38
Transfer ...............................................................................................39
Transferor..............................................................................................39
Trust Fund..............................................................................................39
Trustee ...............................................................................................39
Trustee's Fee...........................................................................................39
Trustee Fee Rate........................................................................................39
Uncertificated Principal Balance........................................................................39
Uncertificated REMIC I Accrued Interest.................................................................39
Uncertificated REMIC I IO Notional Amount...............................................................40
Uncertificated REMIC I IO Regular Interests.............................................................41
Uncertificated REMIC I Pass-Through Rate................................................................41
Uncertificated REMIC I Regular Interest N...............................................................41
Uncertificated REMIC I Regular Interest O...............................................................41
Uncertificated REMIC I Regular Interest P...............................................................41
Uncertificated REMIC I Regular Interest Q...............................................................41
Uncertificated REMIC I Regular Interest R...............................................................42
Uncertificated REMIC I Regular Interest S...............................................................42
v
<PAGE>
Page
Uncertificated REMIC I Regular Interest T...............................................................42
Uncertificated REMIC I Regular Interest U...............................................................42
Uncertificated REMIC I Regular Interest W...............................................................42
Uncertificated REMIC I Regular Interest X...............................................................42
Uncertificated REMIC I Regular Interest Y...............................................................43
Uncertificated REMIC I Regular Interests................................................................43
Uncertificated REMIC I IO Regular Interest Distribution Amount..........................................43
Uncertificated REMIC I Regular Interest N Distribution Amount...........................................43
Uncertificated REMIC I Regular Interest O Distribution Amount...........................................43
Uncertificated REMIC I Regular Interest P Distribution Amount...........................................43
Uncertificated REMIC I Regular Interest Q Distribution Amount...........................................43
Uncertificated REMIC I Regular Interest R Distribution Amount...........................................43
Uncertificated REMIC I Regular Interest S Distribution Amount...........................................44
Uncertificated REMIC I Regular Interest T Distribution Amount...........................................44
Uncertificated REMIC I Regular Interest U Distribution Amount...........................................44
Uncertificated REMIC I Regular Interest W Distribution Amount...........................................44
Uncertificated REMIC I Regular Interest X Distribution Amount...........................................44
Uncertificated REMIC I Regular Interest Y Distribution Amount...........................................44
Uncertificated REMIC I Regular Interest Distribution Amounts............................................44
Uninsured Cause.........................................................................................44
United States Person....................................................................................44
Voting Rights...........................................................................................45
Wendover ...............................................................................................45
1.02 Determination of LIBOR.........................................................................45
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES.......................................................................47
2.01. Conveyance of Mortgage Loans...................................................................47
2.02. Acceptance of the Trust Fund by the Trustee....................................................50
2.03. Representations, Warranties and Covenants of the Master Servicer and the
Company........................................................................................51
2.04. Representations and Warranties of the Seller...................................................53
2.05. Issuance of Certificates Evidencing Interests in the REMIC I Certificates......................55
2.06. Conveyance of Uncertificated REMIC I Regular Interests; Acceptance by the
Trustee........................................................................................55
2.07. Issuance of Certificates Evidencing Interest in REMIC II.......................................56
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND.......................................................................................57
3.01. Master Servicer to Act as Master Servicer......................................................57
vi
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Page
3.02. Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.............................58
3.03. Successor Sub-Servicers........................................................................59
3.04. Liability of the Master Servicer...............................................................60
3.05. No Contractual Relationship Between Sub-Servicers and Trustee or
Certificateholders.............................................................................60
3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee...............................60
3.07. Collection of Certain Mortgage Loan Payments...................................................61
3.08. Sub-Servicing Accounts.........................................................................62
3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts.........................63
3.10. Custodial Account..............................................................................63
3.11. Permitted Withdrawals From the Custodial Account...............................................64
3.12. Permitted Investments..........................................................................65
3.13. Maintenance of Primary Hazard Insurance. ......................................................66
3.14. Enforcement of Due-on-Sale Clauses; Assumption Agreements......................................68
3.15. Realization Upon Defaulted Mortgage Loans......................................................69
3.16. Trustee to Cooperate; Release of Mortgage Files................................................70
3.17. Servicing Compensation.........................................................................72
3.18. Maintenance of Certain Servicing Policies......................................................72
3.19. Annual Statement as to Compliance..............................................................73
3.20. Annual Independent Public Accountants' Servicing Statement.....................................73
3.21. Access to Certain Documentation................................................................74
3.22. Title, Conservation and Disposition of REO Property............................................74
3.23. Additional Obligations of the Master Servicer..................................................76
3.24 Optional Purchase of Defaulted Mortgage Loans..................................................77
3.25. Additional Obligations of the Company..........................................................77
3.26. Periodic Filings with the Securities and Exchange Commission; Additional
Information....................................................................................78
3.27. Administration of Buydown Funds................................................................78
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS..........................................................................80
4.01. Certificate Account; Distributions.............................................................80
4.02. Statements to Certificateholders...............................................................88
4.03. Remittance Reports; Advances by the Master Servicer............................................91
4.04. Allocation of Realized Losses..................................................................92
4.05. Information Reports to Be Filed by the Master Servicer.........................................93
4.06. Compliance with Withholding Requirements.......................................................94
ARTICLE V
THE CERTIFICATES........................................................................................96
5.01. The Certificates...............................................................................96
5.02. Registration of Transfer and Exchange of Certificates..........................................98
vii
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Page
5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................103
5.04. Persons Deemed Owners.........................................................................103
5.05. Rule 144A Information.........................................................................103
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER..................................................................105
6.01. Liability of the Company and the Master Servicer..............................................105
6.02. Merger, Consolidation or Conversion of the Company or the Master Servicer
.............................................................................................105
6.03. Limitation on Liability of the Company, the Master Servicer and Others........................105
6.04. Limitation on Resignation of the Master Servicer..............................................106
6.05. Sale and Assignment of Master Servicing.......................................................107
ARTICLE VII
DEFAULT................................................................................................108
7.01. Events of Default.............................................................................108
7.02. Trustee to Act; Appointment of Successor......................................................110
7.03. Notification to Certificateholders............................................................111
7.04. Waiver of Events of Default...................................................................111
7.05. List of Certificateholders....................................................................111
ARTICLE VIII
CONCERNING THE TRUSTEE.................................................................................112
8.01. Duties of Trustee.............................................................................112
8.02. Certain Matters Affecting the Trustee.........................................................113
8.03. Trustee Not Liable for Certificates or Mortgage Loans.........................................114
8.04. Trustee May Own Certificates..................................................................115
8.05. Trustee's Fees................................................................................115
8.06. Eligibility Requirements for Trustee..........................................................115
8.07. Resignation and Removal of the Trustee........................................................116
8.08. Successor Trustee.............................................................................117
8.09. Merger or Consolidation of Trustee............................................................117
8.10. Appointment of Co-Trustee or Separate Trustee.................................................118
8.11. Appointment of Custodians.....................................................................119
ARTICLE IX
TERMINATION............................................................................................120
9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans or upon
Purchase of Certificates......................................................................120
9.02. Termination of REMIC II.......................................................................123
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9.03. Additional Termination Requirements...........................................................123
ARTICLE X
REMIC PROVISIONS.......................................................................................125
10.01. REMIC Administration..........................................................................125
10.02. Prohibited Transactions and Activities........................................................128
10.03. Master Servicer and Trustee Indemnification...................................................128
ARTICLE XI
MISCELLANEOUS PROVISIONS...............................................................................129
11.01. Amendment.....................................................................................129
11.02. Recordation of Agreement; Counterparts........................................................130
11.03. Limitation on Rights of Certificateholders....................................................131
11.04. Governing Law.................................................................................131
11.05. Notices.......................................................................................132
11.06. Severability of Provisions....................................................................132
11.07. Successors and Assigns; Third Party Beneficiary...............................................132
11.08. Article and Section Headings..................................................................132
11.09. Notice to Rating Agencies.....................................................................133
</TABLE>
Signatures
Acknowledgments
Exhibit A Form of Class A Certificate
Exhibit B-1 Form of Class M Certificate
Exhibit B-2 Form of Class B Certificate
Exhibit B-3 Form of Class R-I and Class R-II Certificate
Exhibit C [Reserved]
Exhibit D [Reserved]
Exhibit E Form of Remittance Report
Exhibit F Impac Funding Corporation Servicing Guide
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 G-6 Form of Investor Representation Letter for Insurance
Companies
Exhibit H Mortgage Loan Schedule
Exhibit I Seller Representations and Warranties
Exhibit J Form of Notice Under Section 3.25
Exhibit K Form of Custodial Agreement
ix
<PAGE>
This Pooling and Servicing Agreement, dated and effective as
of March 1, 2000, among Impac Secured Assets Corp., as company (the "Company"),
Impac Funding Corporation, as master servicer (the "Master Servicer"), and
Norwest Bank Minnesota, National Association, as trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell mortgage 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 Mortgage Loans (as defined herein). As provided herein, the Trustee will
make, in accordance with Section 10.01, an election to treat the entire
segregated pool of assets described in the definition of REMIC I (as defined
herein), and subject to this Agreement (including the Mortgage Loans), 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 I." The
Uncertificated REMIC I Regular Interests will be "regular interests" in REMIC I
and the Class R-I Certificates will be the sole class of "residual interests" in
REMIC I for purposes of the REMIC Provisions (as defined herein) under the
federal income tax law. A segregated pool of assets consisting of the
Uncertificated REMIC I Regular Interests will be designated as "REMIC II," and
the Trustee will make, in accordance with Section 10.01, a separate REMIC
election with respect thereto. The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class M-1, Class M-X, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Certificates will be "regular interests" in REMIC II, and the Class R-II
Certificates will be the sole class of "residual interests" therein 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 I Pass- Through Rate, the initial Uncertificated 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 I
Regular Interests. None of the REMIC I Regular Interests will be certificated.
<TABLE>
<CAPTION>
Uncertificated REMIC I Initial Uncertificated Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
<S> <C> <C> <C>
Uncertificated REMIC I 9.00% $80,115,000.00 April 25, 2030
Regular Interest N
Uncertificated REMIC I 9.00% $124,150,000.00 April 25, 2030
Regular Interest O
Uncertificated REMIC I 9.00% $2,410,000.00 April 25, 2030
Regular Interest P
Uncertificated REMIC I 9.00% $25,000,000.00 April 25, 2030
Regular Interest Q
Uncertificated REMIC I 9.00% $19,000,000.00 April 25, 2030
Regular Interest R
Uncertificated REMIC I 0.00% $2,418,208.00 April 25, 2030
Regular Interest S
<PAGE>
-2-
Uncertificated REMIC I 9.00% $100.00 April 25, 2030
Regular Interest T
Uncertificated REMIC I 9.00% $11,310,000.00 April 25, 2030
Regular Interest U
Uncertificated REMIC I 9.00% $4,965,000.00 April 25, 2030
Regular Interest W
REMIC I Regular Interest X 9.00% $2,345,000.00 April 25, 2030
REMIC I Regular Interest Y 9.00% $4,138,169.15 April 25, 2030
REMIC I IO Regular Interest Variable(2) $(3) April 25, 2030
</TABLE>
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the latest
possible maturity date for the Mortgage Loans has been designated as the
"latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
(3) Based on the Uncertificated REMIC I IO Notional Amount.
The following table sets forth the designation, initial
Pass-Through Rate, aggregate initial Certificate Principal Balance and certain
features for each Class of Certificates comprising the certificated interests in
the Trust Fund created hereunder.
<TABLE>
<CAPTION>
Aggregate Initial
Certificate Initial
Pass-Through Principal Maturity Ratings
Designation Type Rate Balance Designations Date S&P DCR
----------- ---- ------ -------- ------------ ------ ---- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Class A-1 Senior 7.50% $80,115,000.00 Senior/Sequential/Fixed Rate April 25, 2030 AAA AAA
Class A-2 Senior Adjustable Rate $124,150,000.00 Senior/Sequential/Floating Rate April 25, 2030 AAA AAA
Class A-3 Senior Adjustable Rate $0(1) Senior/Interest Only/ April 25, 2030 AAAr AAA
Inverse Floating Rate
Class A-4 Senior 9.00% $0(1) Senior/Interest Only/ April 25, 2030 AAAr AAA
Fixed Rate
Class A-5 Senior 8.00% $2,410,000.00 Senior/Sequential/Fixed Rate April 25, 2030 AAA AAA
Class A-6 Senior 9.00% $0(1) Senior/Interest Only/Fixed Rate April 25, 2030 AAAr AAA
Class A-7 Senior 9.00% $0(1) Senior/Interest Only/Fixed Rate April 25, 2030 AAAr AAA
Class A-8 Senior 8.15% $25,000,000.00 Senior/Lockout/Fixed Rate April 25, 2030 AAA AAA
Class A-9 Senior 7.90% $19,000,000.00 Senior/Lockout/Fixed Rate April 25, 2030 AAA AAA
Class A-10 Senior 0.00% $2,418,208.00 Senior/Principal Only April 25, 2030 AAAr AAA
Class A-11 Senior 9.00% $0(1) Senior/Interest Only/Fixed Rate April 25, 2030 AAAr AAA
Class R-I Senior 9.00% $100.00 Senior/Residual April 25, 2030 AAA AAA
Class R-II Senior 9.00% $100.00 Senior/Residual April 25, 2030 AAA AAA
Class M-1 Mezzanine 8.00% $11,310,000.00 Mezzanine/Fixed Rate April 25, 2030 N/A AA
Class M-X Mezzanine 9.00% 0(1) Mezzanine/Interest Only/ April 25, 2030 N/A A
Fixed Rate
Class M-2 Mezzanine 8.15% $4,965,000.00 Mezzanine/Fixed Rate April 25, 2030 N/A A
Class M-3 Mezzanine 9.00% $2,345,000.00 Mezzanine/Fixed Rate April 25, 2030 N/A BBB
Class B-1 Subordinate 9.00% $1,655,000.00 Subordinate/Fixed Rate April 25, 2030 N/A BB
<PAGE>
-3-
Class B-2 Subordinate 9.00% $690,000.00 Subordinate/Fixed Rate April 25, 2030 N/A B
Class B-3 Subordinate 9.00% $1,793,169.15 Subordinate/Fixed Rate April 25, 2030 N/A N/A
</TABLE>
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(1) Based on the related Notional Amount.
Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Mortgage Pool has been
designated as the "latest possible maturity date" for the Certificates.
As of the Cut-off Date, the Mortgage Loans have an aggregate Stated
Principal Balance equal to approximately $275,852,477.15.
In consideration of the mutual agreements herein contained, the
Company, the Master Servicer and the Trustee agree as follows:
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.
"Accrued Certificate Interest": With respect to each
Distribution Date, (a) as to any Certificate other than the Interest Only
Certificates and the Principal Only Certificates, interest accrued during the
related Interest Accrual Period at the related Pass-Through Rate on the
Certificate Principal Balance thereof immediately prior to such Distribution
Date; (b) as to any Interest Only Certificate (other than the Class A-11
Certificates), including the Components of the Class M-X Certificates, interest
accrued during the related Interest Accrual Period at the then-applicable Pass-
Through Rate on the related Notional Amount thereof immediately prior to such
Distribution Date; and (c) as to the Class A-11 Certificates, the aggregate
amount of interest accrued during the related Interest Accrual Period at the
then applicable Uncertificated REMIC I Pass-Through Rate on each Uncertificated
REMIC I IO Regular Interest on the related Uncertificated REMIC I IO Notional
Amount thereof immediately prior to such Distribution Date. Accrued Certificate
Interest will be calculated on the basis of a 360-day year consisting of twelve
30-day months. In each case Accrued Certificate Interest on any Class of
Certificates or Component of the Class M-X Certificates will be reduced by the
amount of (i) Prepayment Interest Shortfalls, if any, which are not covered by
the Master Servicer with a payment of Compensating Interest pursuant to Section
3.23 with respect to such Distribution Date, (ii) the interest portion (adjusted
to the related Net Mortgage Rate) of
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Realized Losses (including Excess Special Hazard Losses, Excess Fraud Losses,
Excess Bankruptcy Losses and Extraordinary Losses) not allocated solely to one
or more Classes of Certificates pursuant to Section 4.04 and (iii) any other
interest shortfalls not covered by the subordination provided by the Class M
Certificates or Class B Certificates, including interest that is not collectible
from the Mortgagor pursuant to the Relief Act or similar legislation or
regulations as in effect from time to time, with all such reductions in clauses
(i) through (iii) allocated among all of the Certificates in proportion to their
respective amounts of Accrued Certificate Interest payable on such Distribution
Date which would have resulted absent such reductions. In addition to that
portion of the reductions described in the preceding sentence that are allocated
to any Class of Class M Certificates or Class B Certificates, Accrued
Certificate Interest on any Class of the Class M Certificates, including the
Components of the Class M-X Certificates, or Class B Certificates, as
applicable, will be reduced by the interest portion (adjusted to the related Net
Mortgage Rate) of the portion of Realized Losses that are allocated solely to
the Class M Certificates, including the Components of the Class M-X
Certificates, and Class B Certificates, as applicable, pursuant to Section 4.04.
The Principal Only Certificates do not have a Pass-Through Rate and are not
entitled to Accrued Certificate Interest.
"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.
"Anniversary": Each anniversary of March 1, 2000.
"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 and (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, 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 Servicing Fees payable on such
Distribution Date and (v) Insurance Proceeds, Liquidation Proceeds, Principal
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Prepayments, REO Proceeds and the proceeds of Mortgage Loan purchases made
pursuant to Section 2.02, 2.04, 3.14, 3.22 or 3.24, in each case received or
made in the month of such Distribution Date.
"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 Amount": As of any date of determination prior to
the first Anniversary, an amount equal to the excess, if any, of (A) $151,819
over (B) the aggregate amount of Bankruptcy Losses allocated solely to one or
more specific Classes of Certificates in accordance with Section 4.04. As of any
date of determination on or after the first Anniversary, an amount equal to the
excess, if any, of the lesser of (a) the Bankruptcy Amount calculated as of the
close of business on the Business Day immediately preceding the most recent
Anniversary coinciding with or preceding such date of determination (or, if such
date of determination is an Anniversary, the Business Day immediately preceding
such date of determination) (for purposes of this definition, the "Relevant
Anniversary") and (b) the greater of (i) $75,000 and (ii) 0.0006 times the
aggregate principal balance of all the Mortgage Loans in the Mortgage Pool as of
the Relevant Anniversary having a Loan-to- Value Ratio at origination which
exceeds 75%.
The Bankruptcy Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall 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 and (ii) provide a copy of such
written confirmation to the Trustee.
"Bankruptcy Code": The Bankruptcy Code of 1978, as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Deficient Valuation or Debt Service Reduction.
"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, Maryland 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
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Corporate Trust Office of the Trustee is located are authorized or obligated by
law or executive order to close.
"Buydown Funds": Any amount contributed by the seller of a
Mortgaged Property, the Company or other source in order to enable the Mortgagor
to reduce the payments required to be made from the Mortgagor's funds in the
early years of a Mortgage Loan. Buydown Funds are not part of the Trust Fund
prior to deposit into the Custodial or Certificate Account.
"Buydown Mortgage Loan": Any Mortgage Loan as to which a
specified amount of interest is paid out of related Buydown Funds in accordance
with a related buydown agreement.
"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 Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class M-1, Class M-X, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3,
Class R-I or Class R-II Certificate.
"Certificate Account": The trust account or accounts created
and maintained pursuant to Section 4.01, which shall be entitled "Norwest Bank
Minnesota, National Association, in trust for registered holders of Impac
Secured Assets Corp., Mortgage Pass-Through Certificates, Series 2000- 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
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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
Certificate other than an Interest Only Certificate, on any date of
determination, an amount equal to (i) the Initial Certificate Principal Balance
of such Certificate as specified on the face thereof, minus (ii) the sum of (a)
the aggregate of all amounts previously distributed with respect to such
Certificate (or any predecessor Certificate) and applied to reduce the
Certificate Principal Balance thereof pursuant to Section 4.01, and (b) the
aggregate of all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were previously allocated to
such Certificate (or any predecessor Certificate) pursuant to Section 4.04. With
respect to each Class M Certificate (other than the Class M-X Certificates), on
any date of determination, an amount equal to (i) the Initial Certificate
Principal Balance of such Class M Certificate as specified on the face thereof,
minus (ii) the sum of (x) the aggregate of all amounts previously distributed
with respect to such Certificate (or any predecessor Certificate) and applied to
reduce the Certificate Principal Balance thereof pursuant to Section 4.01 and
(y) the aggregate of all reductions in Certificate Principal Balance deemed to
have occurred in connection with Realized Losses which were previously allocated
to such Certificate (or any predecessor Certificate) pursuant to Section 4.04;
provided, that if the Certificate Principal Balances of all of the Class B
Certificates have been reduced to zero, the Certificate Principal Balance of
each Class M Certificate of those Class M Certificates outstanding with the
highest numerical designation at any given time shall thereafter be calculated
to equal the Percentage Interest evidenced by such Certificate times the excess,
if any, of (A) the then aggregate Stated Principal Balance of the Mortgage Loans
over (B) the then aggregate Certificate Principal Balance of all Certificates of
all other Classes then outstanding. With respect to each Class B Certificate, on
any date of determination, an amount equal to (i) the Initial Certificate
Principal Balance of such Class B Certificate as specified on the face thereof,
minus (ii) the sum of (x) the aggregate of all amounts previously distributed
with respect to such Certificate (or any predecessor Certificate) and applied to
reduce the Certificate Principal Balance thereof pursuant to Section 4.01 and
(y) the aggregate of all reductions in Certificate Principal Balance deemed to
have occurred in connection with Realized Losses which were previously allocated
to such Certificate (or any predecessor Certificate) pursuant to Section 4.04;
provided, that the Certificate Principal Balance of each Class B Certificate of
those Class B Certificates outstanding with the highest numerical designation at
any given time shall be calculated to equal the Percentage Interest evidenced by
such Certificate times the excess, if any, of (A) the then aggregate Stated
Principal Balance of the Mortgage Loans over (B) the then aggregate Certificate
Principal Balance of all Certificates of all other Classes then outstanding. The
Interest Only Certificates have no Certificate Principal Balance.
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"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-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9,
Class A-10 or Class A-11 Certificates, each executed, authenticated and
delivered by the Trustee substantially in the form annexed hereto as Exhibit A
and each evidencing an interest designated as a "regular interest" in REMIC II
for purposes of the REMIC Provisions.
"Class B Certificate": Any one of the Class B-1 Certificates,
Class B-2 Certificates or Class B-3 Certificates.
"Class B Percentage": The Class B-1 Percentage, Class B-2
Percentage and Class B-3 Percentage.
"Class B-1 Certificate": Any one of the Class B-1 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-2, subordinate to the Class A Certificates and the
Class M Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.04 and evidencing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions.
"Class B-1 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-1
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or
related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date.
"Class B-1 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-1 Certificates, Class B-2 Certificates and Class B-3 Certificates
immediately prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date is greater than or equal to 1.50%.
"Class B-2 Certificate": Any one of the Class B-2 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-2, subordinate to the Class A Certificates, Class M
Certificates and Class B-1 Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.04 and evidencing an
interest designated as a "regular interest" in REMIC II for purposes of the
REMIC Provisions.
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"Class B-2 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans
(and related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date.
"Class B-2 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-2 Certificates and Class B-3 Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans (and related REO Properties) immediately prior to such
Distribution Date is greater than or equal to 0.90%.
"Class B-3 Certificate": Any one of the Class B-3 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-2, subordinate to the Class A Certificates, Class M
Certificates, Class B-1 Certificates and Class B-2 Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section 4.04
and evidencing an interest designated as a "regular interest" in REMIC II for
purposes of the REMIC Provisions.
"Class B-3 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-3
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans
(and related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date.
"Class B-3 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the aggregate Certificate Principal Balance of the
Class B-3 Certificates immediately prior to such Distribution Date divided by
the aggregate Stated Principal Balance of all of the Mortgage Loans (or related
REO Properties) immediately prior to such Distribution Date is greater than or
equal to 0.65%.
"Class M Certificate": Any one of the Class M-1 Certificates,
Class M-X Certificates, Class M-2 Certificates or Class M-3 Certificates.
"Class M Percentage": The Class M-1 Percentage, Class M-2
Percentage and Class M-3 Percentage.
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"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-1, subordinate to the Class A Certificates with
respect to distributions and the allocation of Realized Losses as set forth in
Section 4.04 and evidencing an interest designated as a "regular interest" in
REMIC II for purposes of the REMIC Provisions.
"Class M-1-X Component": One of the two Components of the
Class M-X Certificates. All distributions in respect of the Class M-1-X
Component shall be made to the Holder of the Class M-X Certificates.
"Class M-1 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class M-1
Certificates immediately prior to such date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
"Class M-X Certificate": Any one of the Class M-X Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-1, evidencing an interest designated as a "regular
interest" in REMIC II for purposes of the REMIC Provisions. The Class M-X
Certificates shall consist of two components, the Class M-1-X Component and the
Class M-2-X Component. Distributions of interest to the Class M-X Certificates
and the allocation of Realized Losses to the Class M-X Certificates will be
based on the Components thereof. The Class M-1-X Component is subordinate to the
Class A Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.04. The Class M-2-X Component is
subordinate to the Class A Certificates and the Class M-1 Certificates and the
Class M-1-X Component with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.04.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-1, subordinate to the Class A and Class M-1
Certificates and the Class M-1-X Component of the Class M-X Certificates with
respect to distributions and the allocation of Realized Losses as set forth in
Section 4.04 and evidencing an interest designated as a "regular interest" in
REMIC II for purposes of the REMIC Provisions.
"Class M-2-X Component": One of the two Components of the
Class M-X Certificates. All distributions in respect of the Class M-2-X
Component shall be made to the Holder of the Class M-X Certificates.
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"Class M-2 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class M-2
Certificates immediately prior to such date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
"Class M-2 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the sum of the Certificate Principal Balances of the
Class M-2 Certificates, Class M-3 Certificates, Class B-1 Certificates, Class
B-2 Certificates and Class B-3 Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans (or related REO Properties) immediately prior to such
Distribution Date is greater than or equal to 4.15%.
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-1, subordinate to the Class A, Class M-1, Class M-X
and Class M-2 Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.04 and evidencing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions.
"Class M-3 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class M-3
Certificates immediately prior to such date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
"Class M-3 Prepayment Distribution Trigger": With respect to
any Distribution Date, a test that shall be satisfied if the fraction (expressed
as a percentage) equal to the sum of the Certificate Principal Balances of the
Class M-3 Certificates, Class B-1 Certificates, Class B-2 Certificates and Class
B-3 Certificates immediately prior to such Distribution Date divided by the
aggregate Stated Principal Balance of all of the Mortgage Loans (and related REO
Properties) immediately prior to such Distribution Date is greater than or equal
to 2.35%.
"Class R Certificate": Any one of the Class R-I Certificates
or Class R-II Certificates.
"Class R-I Certificate": Any one of the Class R-I Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B-3 and evidencing an
interest designated as a "residual interest" in REMIC I for purposes of the
REMIC Provisions.
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"Class R-II Certificate": Any one of the Class R-II
Certificates executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B-3 and evidencing
an interest designated as a "residual interest" in REMIC II for purposes of the
REMIC Provisions.
"Closing Date": March 29, 2000.
"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
Servicing Fees for the immediately preceding Due Period.
"Component": The Class M-1-X Component or the Class M-2-X
Component.
"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, which office at the date of the
execution of this Agreement is located at Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Impac Secured Assets Corp. Series
2000-1.
"Credit Support Depletion Date": The first Distribution Date
on which the Senior Percentage equals 100%.
"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 Certificates. Any such account or accounts
shall be an Eligible Account.
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"Custodial Agreement": An agreement that may be entered into
among the Company, Impac Funding (individually and as Master Servicer), the
Trustee and a Custodian in substantially the form of Exhibit K hereto.
"Custodian": A custodian appointed pursuant to a Custodial
Agreement.
"Cut-off Date": March 1, 2000.
"DCR": Duff & Phelps Credit Rating Co., or any successor.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
"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.
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"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.
"Discount Fraction": With respect to each Discount Mortgage
Loan, the fraction expressed as a percentage, the numerator of which is 9.000%
minus the Net Mortgage Rate (or the initial Net Mortgage Rate with respect to
any Discount Mortgage Loans as to which the Mortgage Rate for such Mortgage Loan
is modified pursuant to Article III of this Agreement) and the denominator of
which is 9.000%.
"Discount Mortgage Loan": Any Mortgage Loan having a Net
Mortgage Rate (or the initial Net Mortgage Rate) of less than 9.000% per annum
and any Mortgage Loan deemed to be a Discount Mortgage Loan pursuant to the
definition of Qualified Substitute Mortgage Loan.
"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 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 I or REMIC II 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 April 2000.
"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 related Due Date.
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"Eligible Account": An account maintained with a federal or
state chartered depository institution (i) the short-term obligations of which
are rated A-1 or better by Standard & Poors and D-1 or better by DCR at the time
of any deposit therein, or (ii) 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 or (iii) a 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 (iv) an 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.
"Eligible Funds": On any Distribution Date, the portion, if
any, of the Available Distribution Amount remaining after reduction by the sum
of (i) the Trustee's Fees for such Distribution Date, (ii) the aggregate amount
of Accrued Certificate Interest on the Class A and Class R Certificates, (iii)
the Senior Principal Distribution Amount, (iv) the Principal Only Distribution
Amount (determined without regard to Section 4.01(d)(i)(E) hereof) and (v) the
aggregate amount of Accrued Certificate Interest on the Class M, Class B-1 and
Class B-2 Certificates.
"Event of Default": One or more of the events described in
Section 7.01.
"Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion
thereof, which exceeds the then applicable Bankruptcy Amount.
"Excess Fraud Loss": Any Fraud Loss, or portion thereof, which
exceeds the then applicable Fraud Loss Amount.
"Excess Proceeds": As defined in Section 3.22.
"Excess Special Hazard Loss": Any Special Hazard Loss, or
portion thereof, that exceeds the then applicable Special Hazard Amount.
<PAGE>
-16-
"Extraordinary Events": Any of the following conditions with
respect to a Mortgaged Property or Mortgage Loan causing or resulting in a loss
which causes the liquidation of such Mortgage Loan:
(a) losses which are otherwise covered by the fidelity bond
and the errors and omissions insurance policy maintained pursuant to
Section 3.18, but are in excess of the coverage maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all whether controlled or uncontrolled, or remote or be
in whole or in part caused by, contributed to or aggravated by a peril
covered by the definition of the term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war,
including action in hindering, combating or defending against an
actual, impending or expected attack;
1. by any government or sovereign power, de jure or
de facto, or by any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(d) any weapon of war employing atomic fission or radioactive
force whether in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority; or risks of contraband or illegal
transportation or trade.
"Extraordinary Losses": Any loss incurred on a Mortgage Loan
caused by or resulting from an Extraordinary Event.
"Fannie Mae": Federal National Mortgage Association or any
successor.
"FDIC": Federal Deposit Insurance Corporation or any
successor.
"Fraud Loss Amount": As of any date of determination after the
Cut-off Date, an amount equal to: (X) prior to the first Anniversary, an amount
equal to 2.00% of the aggregate outstanding principal balance of all of the
Mortgage Loans as of the Cut-off Date minus the aggregate amount of Fraud Losses
allocated solely to one or more specific Classes of Certificates
<PAGE>
-17-
in accordance with Section 4.04 since the Cut-off Date up to such date of
determination and (Y) from the first to the fifth Anniversary, an amount equal
to the lesser of (a) the Fraud Loss Amount as of the most recent anniversary of
the Cut-off Date and (b) 1.00% of the aggregate outstanding principal balance of
all of the Mortgage Loans as of the most recent Anniversary minus (2) the Fraud
Losses allocated solely to one or more specific Classes of Certificates in
accordance with Section 4.04 since the most recent Anniversary up to such date
of determination. On and after the fifth Anniversary, the Fraud Loss Amount
shall be zero.
The Fraud Loss Amount may be further reduced by the Master
Servicer (including accelerating the manner in which such coverage is reduced)
provided that prior to any such reduction, the Master Servicer shall (i) obtain
written confirmation from each Rating Agency that such reduction shall 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 and (ii) provide a
copy of such written confirmation to the Trustee.
"Fraud Losses": Losses on Mortgage Loans as to which there was
fraud in the origination of such Mortgage Loan.
"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.
"Initial Certificate Principal Balance": With respect to each
Class of Certificates (other than the Interest Only Certificates), the
Certificate Principal Balance of such Class of Certificates as of the Cut-off
Date 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 Notional Amount": With respect to the Class A-3,
Class A-4, Class A-6, Class A-7, Class A-11 and Class M-X Certificates,
$124,150,000.00, $13,352,500.00, $267,877.00, $4,683,333.00, $14,415,329.00 and
$1,725,583.00, respectively.
"Insurance Policy": With respect to any Mortgage Loan, any
insurance policy (including a Radian 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
<PAGE>
-18-
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 Accrual Period": With respect to any Certificate and
each Uncertificated REMIC I IO Regular Interest, and any Distribution Date
(other than the Class A-2 and Class A-3 Certificates) the calendar month
preceding the month in which the Distribution Date occurs. The Interest Accrual
Period for the Class A-2 and Class A-3 Certificates is the one-month period
commencing on the 25th day of the month preceding the month in which such
Distribution Date occurs and ending on the 24th day of the month in which such
Distribution Date occurs.
"Interest Only Certificate": Any Class A-3, Class A-4, Class
A-6, Class A-7 or Class A-11 Certificate or a Component of the Class M-X
Certificates.
"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, Liquida tion 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-2 and Class A-3 Certificates, the arithmetic
mean of the London 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) a 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.
"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.
"Lockout Certificates": The Class A-8 and Class A-9
Certificates.
<PAGE>
-19-
"Lockout Priority Amount": For any Distribution Date, the
lesser of (i) the aggregate Certificate Principal Balance of the Lockout
Certificates and (ii) the sum of (x) the product of (1) the Lockout Priority
Percentage, (2) the Lockout Shift Percentage, and (3) the amounts described in
Section 4.01(c)(ii)(Y)(A) (without giving effect to the Senior Percentage) and
(y) the product of (1) the Lockout Priority Percentage, (2) the Lockout
Prepayment Priority Percentage and (3) the amounts described in Section
4.01(c)(ii)(Y)(B) and (C) (in each case without giving effect to the Senior
Percentage or the Senior Accelerated Distribution Percentage).
"Lockout Priority Percentage" With respect to any Distribution
Date, the lesser of (i) 100% and (ii) a fraction equal to (x) the sum of (a) the
Certificate Principal Balance of the Lockout Certificates immediately prior to
such Distribution Date and (b) $20,350,000 divided by (y) the aggregate Stated
Principal Balance of the Mortgage Loans (other than the related Discount
Fraction of each Discount Mortgage Loan).
"Lockout Prepayment Priority Percentage" With respect to any
Distribution Date, the percentage indicated below:
<TABLE>
<CAPTION>
Lockout Prepayment
Month of Distribution Date Priority Percentage
-------------------------- -------------------
<S> <C>
April 2000 through March 2005........................... 0%
April 2005 through March 2006........................... 30%
April 2006 through March 2007........................... 40%
April 2007 through March 2008........................... 60%
April 2008 through March 2009........................... 80%
April 2009 and thereafter............................... 100%
</TABLE>
"Lockout Shift Percentage" With respect to any Distribution
Date on or prior to the Distribution Date occurring in March 2004, 0%, and
thereafter, 100%.
"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.
"Maturity Date": The latest possible maturity date, solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, by which
(i) the Certificate Principal Balance of each Class of Certificates (other than
the Interest Only Certificates) or (ii) the Notional Amount of each Class of
Interest Only Certificates would be reduced to zero, which is April 25, 2030,
the Distribution Date immediately following the latest scheduled maturity date
of any Mortgage Loan.
"Master Servicer": Impac Funding Corporation, or any successor
master servicer appointed as herein provided.
<PAGE>
-20-
"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 or Section 2.04 and from time
to time held in the Trust Fund (including any 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 March 1, 2000, among Impac Funding Corporation, as seller,
Impac Mortgage Holdings, Inc., as guarantor, and the Depositor as purchaser, and
all amendments thereof and supplements 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 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;
<PAGE>
-21-
(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;
(ix) the principal balance as of the Cut-off Date;
(xi) the Mortgage Rate as of the Cut-off Date and the Pool
Strip Rate;
(xii) the occupancy status;
(xiii) the purpose of the Mortgage Loan;
(xiv) the Collateral Value of the Mortgaged Property;
(xv) the original term to maturity;
(xvi) the paid-through date of the Mortgage Loan;
(xvii) the Servicing Fee Rate;
(xviii) the Net Mortgage Rate for such Mortgage Loan;
(xix) whether such Mortgage Loan is a Radian PMI 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; and
(xxi) the documentation type.
<PAGE>
-22-
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 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 and the Trustee Fee
Rate and, with respect to the Radian Insured Loans, the Radian PMI Policy Rate.
"Non-Discount Mortgage Loan": The Mortgage Loans other than
the Discount Mortgage Loans.
"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-3 Certificates
as of any Distribution Date, the Certificate Principal Balance of the Class A-2
Certificates immediately prior to such date. With respect to the Class A-4
Certificates as of any Distribution Date, 1/6 multiplied by the Certificate
Principal Balance of the Class A-1 Certificates, immediately prior to such date.
However, for federal income tax purposes, the Notional Amount of the Class A-4
Certificates will be the Uncertificated Principal Balance of Uncertificated
REMIC I Regular Interest N. With respect to the Class A-6 Certificates as of any
Distribution Date, 1/9 multiplied by the Certificate Principal Balance of the
Class A-5 Certificates, immediately prior to such date. However, for federal
income tax
<PAGE>
-23-
purposes, the Notional Amount of the Class A-6 Certificates will be the
Uncertificated Principal Balance of Uncertificated REMIC I Regular Interest P.
With respect to the Class A-7 Certificates as of any Distribution Date, the sum
of (a) 17/180 multiplied by the Certificate Principal Balance of the Class A-8
Certificates, immediately prior to such date and (b) 11/90 multiplied by the
Certificate Principal Balance of the Class A-9 Certificates, immediately prior
to such date. However, for federal income tax purposes, the Notional Amount of
the Class A-7 Certificates will be comprised of two Notional Amounts: the
Uncertificated Principal Balances of Uncertificated REMIC I Regular Interests Q
and R. With respect to the Class A-11 Certificates as of any Distribution Date,
the product of (x) the fraction, the numerator of which is the excess of the
weighted average (by Stated Principal Balance) of the Net Mortgage Rates of the
Non-Discount Mortgage Loans over 9.00%, and the denominator of which is 9.00%,
and (y) the aggregate Stated Principal Balance of the Non- Discount Mortgage
Loans as of the first date of the related Due Period for such Distribution Date.
With respect to the Class M-1-X Component of the Class M-X Certificates, as of
any Distribution Date, 1/9 multiplied by the Certificate Principal Balance of
the Class M-1 Certificates, immediately prior to such date. However, for federal
income tax purposes, the Notional Amount of the Class M-1- X Component of the
Class M-X Certificates will be the Uncertificated Principal Balance of
Uncertificated REMIC I Regular Interest U. With respect to the Class M-2-X
Component of the Class M-X Certificates as of any Distribution Date, 17/180
multiplied by the Certificate Principal Balance of the Class M-2 Certificates,
immediately prior to such date. However, for federal income tax purposes, the
Notional Amount of the Class M-2-X Component of the Class M-X Certificates will
be the Uncertificated Principal Balance of Uncertificated REMIC I Regular
Interest W. As of any date of determination, the Notional Amount of the Class
M-X Certificates shall equal the sum of the Notional Amounts of the Class M-1-X
and Class M-2-X Components of the Class M-X Certificates.
"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 I or REMIC II
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 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.
<PAGE>
-24-
"Original Senior Percentage": The fraction, expressed as a
percentage, the numerator of which is the aggregate Initial Certificate
Principal Balance of the Senior Certificates (other than the Principal Only
Certificates) and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans (other than the Discount Fraction of the Discount
Mortgage Loans) as of the Cut-off Date, which percentage is approximately 91.68%
as of the Closing Date.
"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, 3.14 or 3.24.
"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": A rate equal to, (i) with respect to all
Certificates other than the Class A-2 and Class A-3 Certificates and the
Principal Only Certificates, a fixed rate set forth in the Preliminary Statement
hereto; provided however, for federal income tax purposes, (a) the Pass- Through
Rate for the Class A-4 and Class A-6 Certificates will be 1.50% per annum and
1.00% per annum, respectively, (b) the Pass-Through Rate for the Class A-7
Certificates will be 0.85% per annum with respect to that portion of the Class
A-7 Certificates relating to Uncertificated REMIC I Regular Interest Q and 1.10%
per annum with respect to that portion of the Class A-7 Certificates relating to
Uncertificated REMIC I Regular Interest R, and (c) the Pass-Through Rate for the
Class M-1-X and Class M-2-X Components of the Class M-X Certificates will be
1.00% per annum and 0.85% per annum, respectively, and (ii) with respect to the
Class A-2 and Class A-3 Certificates, as follows:
(1) The Pass-Through Rate on the Class A-2 Certificates with
respect to the initial Interest Accrual Period is 6.72% per annum, and
as to any Interest Accrual Period thereafter, will be a per annum rate
equal to 0.75% plus LIBOR, with a maximum rate of 9.00% per annum and a
minimum rate of 0.75% per annum.
(2) The Pass-Through Rate on the Class A-3 Certificates with
respect to the initial Interest Accrual Period is 2.28% per annum, and
as to any Interest Accrual Period thereafter, will be a per annum rate
equal to 8.25% minus LIBOR, with a maximum rate of 8.25% per annum and
a minimum rate of 0.00% per annum.
The Principal Only Certificates do not have a Pass-Through Rate and are not
entitled to Accrued Certificate Interest.
<PAGE>
-25-
"Percentage Interest": With respect to any Certificate (other
than a Class R 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 thereof (in the case of the Interest Only Certificates) 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 a 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 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
<PAGE>
-26-
on the date of acquisition has been rated by DCR in its highest
short-term rating available and by Standard & Poor's at least A-1;
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 each Rating Agency in its highest long-term rating available,
including any such funds for which Norwest Bank Minnesota, National
Association 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 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.
"Pool Strip Rate": With respect to any Distribution Date and
any Non-Discount Mortgage Loan, the Net Mortgage Rate thereon minus 9.00%, but
not less than 0.00%.
"Prepayment Assumption": represents an assumed rate of
prepayment each month relative to the then outstanding principal balance of a
pool of new mortgage loans. A prepayment assumption of 100% of the Prepayment
Assumption assumes a constant prepayment rate of 4% per annum of the then
outstanding principal balance of such mortgage loans in the first month of the
life of the mortgage loans and an additional amount of approximately 1.2727% per
annum in each month thereafter until the twelfth month. Beginning in the twelfth
month and in each month thereafter during the life of the mortgage loans, 100%
of the Prepayment Assumption assumes a constant prepayment rate of 18% per annum
each month.
<PAGE>
-27-
"Prepayment Distribution Percentage": With respect to any
Distribution Date and each Class of Class M Certificates and Class B
Certificates, under the applicable circumstances set forth below, the respective
percentages set forth below:
(i) For any Distribution Date on which any Class of Class M
Certificates or Class B Certificates are outstanding:
(a) in the case of the Class of Class M Certificates
then outstanding with the lowest numerical designation, or in
the event the Class M Certificates are no longer outstanding,
the Class of Class B Certificates then outstanding with the
lowest numerical designation and each other Class of Class M
Certificates and Class B Certificates for which the related
Prepayment Distribution Trigger has been satisfied, a
fraction, expressed as a percentage, the numerator of which is
the Certificate Principal Balance of such Class immediately
prior to such date and the denominator of which is the sum of
the Certificate Principal Balances immediately prior to such
date of (1) the Class of Class M Certificates then outstanding
with the lowest numerical designation, or in the event the
Class M Certificates are no longer outstanding, the Class of
Class B Certificates then outstanding with the lowest
numerical designation and (2) all other Classes of Class M
Certificates and Class B Certificates for which the respective
Prepayment Distribution Triggers have been satisfied; and
(b) in the case of each other Class of Class M
Certificates and Class B Certificates for which the Prepayment
Distribution Triggers have not been satisfied, 0%; and
(ii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date as provided in Section
4.01 (determined without regard to the proviso to the definition of
"Subordinate Principal Distribution Amount") would result in a
distribution in respect of principal of any Class or Classes of Class M
Certificates and Class B Certificates in an amount greater than the
remaining Certificate Principal Balance thereof (any such class, a
"Maturing Class"), then: (a) the Prepayment Distribution Percentage of
each Maturing Class shall be reduced to a level that, when applied as
described above, would exactly reduce the Certificate Principal Balance
of such Class to zero; (b) the Prepayment Distribution Percentage of
each other Class of Class M Certificates and Class B Certificates (any
such Class, a "Non-Maturing Class") shall be recalculated in accordance
with the provisions in paragraph (i) above, as if the Certificate
Principal Balance of each Maturing Class had been reduced to zero (such
percentage as recalculated, the "Recalculated Percentage"); (c) the
total amount of the reductions in the Prepayment Distribution
Percentages of the Maturing Class or Classes pursuant to clause (a) of
this sentence, expressed as an aggregate percentage, shall be allocated
among the Non-Maturing Classes
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in proportion to their respective Recalculated Percentages (the portion
of such aggregate reduction so allocated to any Non-Maturing Class, the
"Adjustment Percentage"); and (d) for purposes of such Distribution
Date, the Prepayment Distribution Percentage of each Non- Maturing
Class shall be equal to the sum of (1) the Prepayment Distribution
Percentage thereof, calculated in accordance with the provisions in
paragraph (i) above as if the Certificate Principal Balance of each
Maturing Class had not been reduced to zero, plus (2) the related
Adjustment Percentage.
"Prepayment Distribution Trigger": The Class M-2 Prepayment
Distribution Trigger, Class M-3 Prepayment Distribution Trigger, Class B-1
Prepayment Distribution Trigger, Class B-2 Prepayment Distribution Trigger or
Class B-3 Prepayment Distribution Trigger.
"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 (other than a Radian PMI Policy) required to be maintained
pursuant to Section 3.13.
"Primary Insurance Policy": Any primary policy of mortgage
guaranty insurance other than the Radian PMI Policy, or any replacement policy
therefor providing coverage for certain Mortgage Loans included in the Trust
Fund with Loan-to-Value Ratios in excess of 80.00%.
"Principal Only Certificates": The Class A-10 Certificates.
"Principal Only Collection Shortfalls": With respect to the
Cash Liquidation or REO Disposition of a Discount Mortgage Loan and any
Distribution Date, the excess of the amount described in Section
4.01(d)(i)(C)(1) over the amount described in Section 4.01(d)(i)(C)(2).
"Principal Only Distribution Amount": As defined in Section
4.01(d)(i).
"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
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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.
"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 or
that the Master Servicer is entitled to repurchase pursuant to Section 3.24, 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 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 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; (vi) have a Pool Strip Rate equal to or greater than that
of the Deleted Mortgage Loan and, (vii) comply with each representation
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and warranty set forth in the Mortgage Loan Purchase Agreement. Notwithstanding
any other provisions herein, (x) with respect to any Qualified Substitute
Mortgage Loan substituted for a Deleted Mortgage Loan which was a Discount
Mortgage Loan, such Qualified Substitute Mortgage Loan shall be deemed to be a
Discount Mortgage Loan and to have a Discount Fraction equal to the Discount
Fraction of the Deleted Mortgage Loan and (y) in the event that the "Pool Strip
Rate" of any Qualified Substitute Mortgage Loan as calculated pursuant to the
definition of "Pool Strip Rate" is greater than the Pool Strip Rate of the
related Deleted Mortgage Loan, (i) the Pool Strip Rate of such Qualified
Substitute Mortgage Loan shall be equal to the Pool Strip Rate of the related
Deleted Mortgage Loan for purposes of calculating the Uncertificated REMIC I
Pass-Through Rate for the Uncertificated REMIC I IO Regular Interests and (ii)
the excess of the Pool Strip Rate on such Qualified Substitute Mortgage Loan as
calculated pursuant to the definition of "Pool Strip Rate" over the Pool Strip
Rate on the related Deleted Mortgage Loan shall be payable to the Class R-II
Certificates pursuant to Section 4.01 hereof.
"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 the Radian PMI Policy, as indicated on the Mortgage Loan
Schedule.
"Radian PMI Policy": Either one of the two modified primary
insurance pool policies issued with respect to certain of the Mortgage Loans by
Radian.
"Radian PMI Policy Rate": With respect to any Radian Insured
Loan, the rate per annum at which the related premium on the Radian PMI Policy
accrues.
"Rate Adjustment Date": With respect to each Distribution Date
and the Class A-2, Class A-3 and Class A-4 Certificates, the second LIBOR
Business Day immediately preceding the commencement of the related Interest
Accrual Period on which banks are open for dealing in foreign currency and
exchange in London, England.
"Rating Agency": Standard & Poor's or DCR 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 categories of a Rating Agency shall
mean "AA" or better in the case of DCR, and "AA" or better in the case of
Standard & Poor'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, and "D-1+"
in the case of DCR, and in the case of any other Rating Agency such references
shall mean such rating categories without regard to any plus or minus.
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"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": 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.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC I": The segregated pool of assets, with respect to
which a REMIC election is to be made, 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) the Radian PMI Policies; 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 I Certificates": The Class R-I Certificates.
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"REMIC II": The segregated pool of assets consisting of the
Uncertificated REMIC I Regular Interests conveyed in trust to the Trustee for
the benefit of the holders of the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class M-1, Class M-X, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and
Class R-II Certificates pursuant to Section 2.06, with respect to which a
separate REMIC election is to be made.
"REMIC II Certificates": Any of the Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9,
Class A-10, Class A-11, Class M-1, Class M-X, Class M-2, Class M-3, Class B-1,
Class B-2, Class B-3 and Class R-II Certificates.
"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.
"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.
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"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 Exhibit 3 to the Custodial Agreement attached hereto.
"Reserve Banks": Leading banks selected by the Trustee and
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, (ii) whose
quotations appear on the Telerate Screen Page 3750 on the Interest Determination
Date in question, (iii) which have been designated as such by the Trustee and
(iv) not controlling, controlled by, or under common control with, the Company
or the Seller.
"Reserve Interest Rate": As determined by the Trustee, either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 0.0625%) 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 time, on such date for loans in U.S. Dollars to the
principal London offices of leading 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-2 Certificates and the Class A-3 Certificates
then outstanding or (ii) if no such quotations can be obtained, the rate shall
be the lowest one-month United States dollar lending rate which New York City
banks selected by the Trustee are quoting on such Rate Adjustment Date to
leading European banks.
"Residual Certificate": Any of the Class R-I Certificates or
Class R-II Certificates.
"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, the Cashier, any
assistant cashier, any trust officer or assistant trust officer, the Controller
and any assistant controller 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.
"Senior Accelerated Distribution Percentage": With respect to
any Distribution Date, the percentage indicated below:
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Senior Accelerated
Distribution Date Distribution Percentage
- ----------------- -----------------------
April 2000 through 100%
March 2005
April 2005 through Senior Percentage, plus 70% of
March 2006 the Subordinate Percentage
April 2006 through Senior Percentage, plus 60% of
March 2007 the Subordinate Percentage
April 2007 through Senior Percentage, plus 40% of
March 2008 the Subordinate Percentage
April 2008 through Senior Percentage, plus 20% of
March 2009 the Subordinate Percentage
April 2009 and Senior Percentage,
thereafter
provided, however, (i) that any scheduled reduction to the Senior Accelerated
Distribution Percentage described above shall not occur as of any Distribution
Date unless either (a)(1)(x) the outstanding principal balance of Mortgage Loans
delinquent 60 days or more (including foreclosure and REO Property) averaged
over the last six months as a percentage of the aggregate outstanding
Certificate Principal Balance of the Class M Certificates and the Class B
Certificates, is less than 50%, or (y) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date
for such Distribution Date if occurring during the sixth, seventh, eighth, ninth
or tenth year (or any year thereafter) after the Closing Date are less than 30%,
35%, 40%, 45% or 50%, respectively, of the sum of the Initial Certificate
Principal Balances of the Class M Certificates and Class B Certificates or (b)
(1) the aggregate outstanding principal balance of the Mortgage Loans delinquent
60 days or more (including foreclosure and REO Property) averaged over the last
six months, as a percentage of the aggregate outstanding principal balance of
all Mortgage Loans averaged over the last six months, does not exceed 4% and (2)
Realized Losses on the Mortgage Loans on or prior to such Distribution Date are
less than 10% of the sum of the Initial Certificate Principal Balances of the
Class M Certificates and Class B Certificates and (ii) that for any Distribution
Date on which the Senior Percentage is greater than the Original Senior
Percentage, the Senior Accelerated Distribution Percentage for such Distribution
Date shall be 100%. Notwithstanding the foregoing, upon the
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reduction of the aggregate Certificate Principal Balance of the Class A
Certificates (other than the Certificate Principal Balance of the Principal Only
Certificates) and the Class R Certificates to zero, the Senior Accelerated
Distribution Percentage will equal 0%.
"Senior Interest Distribution Amount": As defined in Section
4.01(c)(i).
"Senior Percentage": As of any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class A Certificates (other than
the Principal Only Certificates) and Class R Certificates immediately prior to
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans or related REO Properties (other
than the Discount Fraction of the Discount Mortgage Loans) immediately prior to
such Distribution Date.
"Senior Principal Distribution Amount": As to any Distribution
Date, the lesser of (a) the balance of the Available Distribution Amount
remaining after the distribution of all amounts required to be distributed
pursuant to Section 4.01(c)(i) and (b) the sum of the amounts required to be
distributed to the Class A Certificates and Class R Certificates on such
Distribution Date pursuant to Section 4.01(c)(ii)(Y), (xv) and (xvi).
"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, (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 Fees": As to each Mortgage Loan, an amount, payable
out of any payment of interest on the Mortgage Loan, equal to interest at the
Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan for the
calendar month preceding the month in which the payment 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).
"Servicing Fee Rate": With respect to each Mortgage Loan, the
per annum rate of 0.28%.
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"Servicing Guide": The Impac Funding Corporation Servicing
Guide attached hereto as Exhibit F.
"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 Certificate of any Class evidencing an
Initial Certificate Principal Balance of $1,000.
"Special Deposit": As defined in Section 2.01(a).
"Special Hazard Amount": As of any Distribution Date, an
amount equal to $2,758,525.00 (the initial "Special Hazard Amount") minus the
sum of (i) the aggregate amount of Special Hazard Losses allocated solely to one
or more Classes of Certificates in accordance with Section 4.04 and (ii) the
Adjustment Amount (as defined below) as most recently calculated. For each
Anniversary, the "Adjustment Amount" shall be calculated and shall be equal to
the amount, if any, by which the amount calculated in accordance with the
preceding sentence (without giving effect to the deduction of the Adjustment
Amount for such Anniversary) exceeds the greater of (A) the greatest of (i)
twice the outstanding principal balance of the Mortgage Loan in the Trust Fund
which has the largest outstanding principal balance on the Distribution Date
immediately preceding such anniversary, (ii) the product of 1.00% multiplied by
the outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such anniversary and (iii) the aggregate outstanding
principal balance (as of the immediately preceding Distribution Date) of the
Mortgage Loans in any single five-digit California zip code area with the
largest amount of Mortgage Loans by aggregate principal balance as of such
anniversary and (B) the greater of (i) the product of 0.50% multiplied by the
outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such anniversary multiplied by a fraction, the numerator
of which is equal to the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage Loans secured by
Mortgaged Properties located in the State of California divided by the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of all of the Mortgage Loans, expressed as a percentage, and the
denominator of which is equal to 25.15% (which percentage is equal to the
percentage of Mortgage Loans initially secured by Mortgaged Properties located
in the State of California) and (ii) the aggregate outstanding principal balance
(as of the immediately preceding Distribution Date) of the largest Mortgage Loan
secured by a Mortgaged Property located in the State of California.
The Special Hazard Amount may be further reduced by the Master
Servicer (including accelerating the manner in which coverage is reduced)
provided that prior to any such reduction, the Master Servicer shall (i) obtain
written confirmation from each Rating Agency that
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such reduction shall 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 and
(ii) provide a copy of such written confirmation to the Trustee.
"Special Hazard Loss": Any Realized Loss not in excess of the
cost of the lesser of repair or replacement of a Mortgaged Property suffered by
such Mortgaged Property on account of direct physical loss, exclusive of (i) any
loss of a type covered by a hazard policy or a flood insurance policy required
to be maintained in respect of such Mortgaged Property pursuant to Section
3.13(a), except to the extent of the portion of such loss not covered as a
result of any coinsurance provision and (ii) any Extraordinary Loss.
"Special Hazard Percentage": As of each Anniversary, the
greater of (i) 1.00% and (ii) the largest percentage obtained by dividing the
aggregate outstanding principal balance (as of the immediately preceding
Distribution Date) of the Mortgage Loans secured by Mortgaged Properties located
in a single, five-digit zip code area in the State of California by the
outstanding principal balance of all the Mortgage Loans as of such immediately
preceding Distribution Date.
"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, 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 4.04 for any previous Distribution Date.
"Subordinate Certificate": Any of the Class M, Class B-1,
Class B-2 or Class B-3 Certificates.
"Subordinate Percentage": As of any date of determination, a
percentage equal to 100% minus Senior Percentage as of such date.
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"Subordinate Principal Distribution Amount": With respect to
any Distribution Date and each Class of Class M Certificates and Class B
Certificates, the sum of (i) the product of (x) the related Class M Percentage
or Class B Percentage for such Class and (y) the aggregate of the amounts
calculated for such Distribution Date under clauses (1), (2) and (3) of Section
4.01(c)(ii)(Y)(A) without giving effect to the Senior Percentage; (ii) such
Class's pro rata share, based on the Certificate Principal Balance of each Class
of Class M Certificates and Class B Certificates then outstanding, of the
principal collections described in Section 4.01(c)(ii)(Y)(B)(b) (without giving
effect to the Senior Accelerated Distribution Percentage), to the extent such
collections are not otherwise distributed to the Senior Certificates; (iii) the
product of (x) the related Prepayment Distribution Percentage for such
Distribution Date and (y) the aggregate of all Principal Prepayments in Full and
Curtailments received in the related Prepayment Period to the extent not payable
to the Senior Certificates; and (iv) any amounts described in clauses (i), (ii)
and (iii) as determined for any previous Distribution Date, that remain
undistributed to the extent that such amounts are not attributable to Realized
Losses which have been allocated to a subordinate Class of Class M Certificates
or Class B Certificates; provided, however, that such amount shall in no event
exceed the outstanding Certificate Principal Balance of such Class of
Certificates immediately prior to such date.
"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.
"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 I and REMIC II due to their classification as a
REMIC 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.
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"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trust Fund": REMIC I and REMIC II.
"Trustee": Norwest Bank Minnesota, National Association, 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": With respect to each Mortgage Loan, the
per annum rate of 0.01125%.
"Uncertificated Principal Balance": With respect to each
Uncertificated REMIC I Regular Interest on any date of determination, the amount
set forth in the Preliminary Statement hereto minus the sum of (x) the aggregate
of all amounts previously deemed distributed with respect to such interest and
applied to reduce the Uncertificated Principal Balance thereof pursuant to
Section 4.07(a)(ii) and (y) the aggregate of all reductions in Certificate
Principal Balance deemed to have occurred in connection with Realized Losses
that were previously deemed allocated to the Uncertificated Principal Balance of
such Uncertificated REMIC I Regular Interest pursuant to Section 4.07(d).
"Uncertificated REMIC I Accrued Interest": With respect to
each Distribution Date, (i) as to Uncertificated REMIC I Regular Interest N, an
amount equal to the aggregate amount of Accrued Certificate Interest that would
result under the terms of the definition thereof on the Class A-1 Certificates
if the Pass-Through Rate on such Class were equal to the Uncertificated REMIC I
Pass-Through Rate on Uncertificated REMIC I Regular Interest N; (ii) as to
Uncertificated REMIC I Regular Interest O, an amount equal to the aggregate
amount of Accrued Certificate Interest that would result under the terms of the
definition thereof on the Class A-2 Certificates if the Pass- Through Rate on
such Classes were equal to the Uncertificated REMIC I Pass-Through Rate on
Uncertificated REMIC I Regular Interest O; (iii) as to Uncertificated REMIC I
Regular Interest P, an amount equal to the aggregate amount of Accrued
Certificate Interest that would result under the terms of the definition thereof
on the Class A-5 Certificates if the Pass-Through Rate on such Classes were
equal to the Uncertificated REMIC I Pass-Through Rate on Uncertificated REMIC I
Regular Interest P; (iv) as to Uncertificated REMIC I Regular Interest Q, an
amount equal to the aggregate amount of Accrued Certificate Interest that would
result under the terms of the definition
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thereof on the Class A-8 Certificates if the Pass-Through Rate on such Class
were equal to the Uncertificated REMIC I Pass-Through Rate on Uncertificated
REMIC I Regular Interest Q; (v) as to Uncertificated REMIC I Regular Interest R,
an amount equal to the aggregate amount of Accrued Certificate Interest that
would result under the terms of the definition thereof on the Class A-9
Certificates if the Pass-Through Rate on such Class were equal to the
Uncertificated REMIC I Pass- Through Rate on Uncertificated REMIC I Regular
Interest R; (vi) as to Uncertificated REMIC I Regular Interest S, the
Uncertificated REMIC I Regular Interest S will receive no Uncertificated REMIC I
Accrued Interest; (vii) as to Uncertificated REMIC I Regular Interest T, an
amount equal to the aggregate amount of Accrued Certificate Interest that would
result under the terms of the definition thereof on the Class R-II Certificates
if the Pass-Through Rate on such Class were equal to the Uncertificated REMIC I
Pass-Through Rate on Uncertificated REMIC I Regular Interest T, (viii) as to
Uncertificated REMIC I Regular Interest U, an amount equal to the aggregate
amount of Accrued Certificate Interest that would result under the terms of the
definition thereof on the Class M-1 Certificates if the Pass-Through Rate on
such Class were equal to the Uncertificated REMIC I Pass-Through Rate on
Uncertificated REMIC I Regular Interest U; (ix) as to Uncertificated REMIC I
Regular Interest W, an amount equal to the aggregate amount of Accrued
Certificate Interest that would result under the terms of the definition thereof
on the Class M-2 Certificates if the Pass- Through Rate on such Class were equal
to the Uncertificated REMIC I Pass-Through Rate on Uncertificated REMIC I
Regular Interest W, (x) as to Uncertificated REMIC I Regular Interest X, an
amount equal to the aggregate amount of Accrued Certificate Interest that would
result under the terms of the definition thereof on the Class M-3 Certificates
if the Pass-Through Rate on such Class were equal to the Uncertificated REMIC I
Pass-Through Rate on Uncertificated REMIC I Regular Interest X; (xi) as to
Uncertificated REMIC I Regular Interest Y, an amount equal to the aggregate
amount of Accrued Certificate Interest that would result under the terms of the
definition thereof on the Class B-1 Certificates, Class B-2 Certificates and
Class B-3 Certificates if the Pass-Through Rate on such Classes were equal to
the Uncertificated REMIC I Pass-Through Rate on Uncertificated REMIC I Regular
Interest Y, and (xii) as to each Uncertificated REMIC I IO Regular Interest, an
amount equal to the aggregate amount of Accrued Certificate Interest that would
result under the terms of the definition thereof on each such uncertificated
interest, if the Pass-Through Rate on such uncertificated interest was equal to
the related Uncertificated REMIC I Pass-Through Rate and the notional amount of
such uncertificated interest was equal to the related Uncertificated REMIC I IO
Notional Amount; provided, that any reduction in the amount of Accrued
Certificate Interest resulting from the allocation of Prepayment Interest
Shortfalls, Realized Losses or other amounts to the Class A-11
Certificateholders pursuant to Sections 4.02(a) and 4.05 hereof shall be
allocated to the Uncertificated REMIC I IO Regular Interests pro rata in
accordance with the amount of interest accrued with respect to each related
Uncertificated REMIC I IO Notional Amount and such Distribution Date.
"Uncertificated REMIC I IO Notional Amount": With respect to
each Uncertificated REMIC I IO Regular Interest, the Stated Principal Balance of
the related Non-Discount Mortgage Loan.
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"Uncertificated REMIC I IO Regular Interests": The
uncertificated partial undivided beneficial ownership interests in REMIC I, each
relating to a particular Non-Discount Mortgage Loan, having no principal
balance, and bearing interest at the Uncertificated REMIC I Pass-Through Rate on
the Uncertificated REMIC I IO Notional Amount.
"Uncertificated REMIC I Pass-Through Rate": With respect to
each of Uncertificated REMIC I Regular Interests as follows:
(i) Uncertificated REMIC I Regular Interests N, O, P, R, Q, T, U, W, X
and Y, 9.00%;
(ii) Uncertificated REMIC I Regular Interest S, 0.00%; and
(iii) Uncertificated REMIC I IO Regular Interest, the Pool Strip Rate.
"Uncertificated REMIC I Regular Interest N": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the Stated Principal Balance of the Mortgage Loans and REO
Property from time to time multiplied by a fraction, the numerator of which is
the aggregate Certificate Principal Balance of the Class A-1 Certificates and
the denominator of which is the aggregate Certificate Principal Balance of all
of the Certificates, and which bears interest at a rate equal to 9.00% per
annum.
"Uncertificated REMIC I Regular Interest O": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the aggregate Stated Principal Balance of the Mortgage Loans
and REO Properties from time to time multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class A-2
Certificates and the denominator of which is the aggregate Certificate Principal
Balance of all of the Certificates, and which bears interest at a rate equal to
9.00% per annum.
"Uncertificated REMIC I Regular Interest P": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the aggregate Stated Principal Balance of the Mortgage Loans
and REO Properties from time to time multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class A-5
Certificates and the denominator of which is the aggregate Certificate Principal
Balance of all of the Certificates, and which bears interest at a rate equal to
9.00% per annum.
"Uncertificated REMIC I Regular Interest Q": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the aggregate Stated Principal Balance of the Mortgage Loans
and REO Properties from time to time multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class A-8
Certificates and the denominator of which is the aggregate Certificate Principal
Balance of all of the Certificates, and which bears interest at a rate equal to
9.00% per annum.
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"Uncertificated REMIC I Regular Interest R": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the Stated Principal Balance of the Mortgage Loans and REO
Properties from time to time multiplied by a fraction, the numerator of which is
the aggregate Certificate Principal Balance of the Class A-9 Certificates and
the denominator of which is the aggregate Certificate Principal Balance of all
of the Certificates, and which bears interest at a rate equal to 9.00% per
annum.
"Uncertificated REMIC I Regular Interest S": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the aggregate Stated Principal Balance of the Mortgage Loans
and REO Properties from time to time multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class A-10
Certificates and the denominator of which is the aggregate Certificate Principal
Balance of all of the Certificates, and which bears interest at a rate equal to
0.00% per annum.
"Uncertificated REMIC I Regular Interest T": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the aggregate Stated Principal Balance of the Mortgage Loans
and REO Properties from time to time multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class R-II
Certificates and the denominator of which is the aggregate Certificate Principal
Balance of all of the Certificates, and which bears interest at a rate equal to
9.00% per annum.
"Uncertificated REMIC I Regular Interest U": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the aggregate Stated Principal Balance of the Mortgage Loans
and REO Properties from time to time multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class M-1
Certificates and the denominator of which is the aggregate Certificate Principal
Balance of all of the Certificates, and which bears interest at a rate equal to
9.00% per annum.
"Uncertificated REMIC I Regular Interest W": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the aggregate Stated Principal Balance of the Mortgage Loans
and REO Properties from time to time multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class M-2
Certificates and the denominator of which is the aggregate Certificate Principal
Balance of all of the Certificates, and which bears interest at a rate equal to
9.00% per annum.
"Uncertificated REMIC I Regular Interest X": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the aggregate Stated Principal Balance of the Mortgage Loans
and REO Properties from time to time multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class M-3
Certificates and the denominator of which is the aggregate Certificate Principal
Balance of all of the Certificates, and which bears interest at a rate equal to
9.00% per annum.
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"Uncertificated REMIC I Regular Interest Y": An uncertificated
partial undivided beneficial ownership interest in REMIC I having a principal
balance equal to the aggregate Stated Principal Balance of the Mortgage Loans
and REO Properties from time to time multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-1, Class B-2
and Class B-3 Certificates and the denominator of which is the aggregate
Certificate Principal Balance of all of the Certificates, and which bears
interest at a rate equal to 9.00% per annum.
"Uncertificated REMIC I Regular Interests": Uncertificated
REMIC I Regular Interest N, Uncertificated REMIC I Regular Interest O,
Uncertificated REMIC I Regular Interest P, Uncertificated REMIC I Regular
Interest Q, Uncertificated REMIC I Regular Interest R, Uncertificated REMIC I
Regular Interest S, Uncertificated REMIC I Regular Interest T, Uncertificated
REMIC I Regular Interest U, Uncertificated REMIC I Regular Interest W,
Uncertificated REMIC I Regular Interest X, Uncertificated REMIC I Regular
Interest Y and the Uncertificated REMIC I IO Regular Interests.
"Uncertificated REMIC I IO Regular Interest Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I IO Regular Interest for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest N Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest N for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest O Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest O for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest P Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest P for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest Q Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest Q for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest R Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest R for such
Distribution Date pursuant to Section 4.07(a).
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"Uncertificated REMIC I Regular Interest S Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest S for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest T Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest T for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest U Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest U for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest W Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest W for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest X Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest X for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest Y Distribution
Amount": With respect to any Distribution Date, the sum of the amounts deemed to
be distributed on the Uncertificated REMIC I Regular Interest Y for such
Distribution Date pursuant to Section 4.07(a).
"Uncertificated REMIC I Regular Interest Distribution
Amounts": The Uncertificated REMIC I Regular Interest N Distribution Amount,
Uncertificated REMIC I Regular Interest O Distribution Amount, Uncertificated
REMIC I Regular Interest P Distribution Amount, Uncertificated REMIC I Regular
Interest Q Distribution Amount, Uncertificated REMIC I Regular Interest R
Distribution Amount, Uncertificated REMIC I Regular Interest S Distribution
Amount, Uncertificated REMIC I Regular Interest T Distribution Amount,
Uncertificated REMIC I Regular Interest U Distribution Amount, Uncertificated
REMIC I Regular Interest W Distribution Amount, Uncertificated REMIC I Regular
Interest X Distribution Amount, Uncertificated REMIC I Regular Interest Y
Distribution Amount and Uncertificated REMIC I IO Regular Interest Distribution
Amount.
"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
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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) 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.
"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, 93% of all of the Voting Rights shall be allocated among
Holders of the Certificates (other than the Interest Only and Residual
Certificates), 1% of all Voting Rights shall be allocated to the Holders of the
Class A-3 Certificates, 1% of all Voting Rights shall be allocated to the
Holders of the Class A-4 Certificates, 1% of all Voting Rights shall be
allocated to the Holders of the Class A-6 Certificates, 1% of all Voting Rights
shall be allocated to the Holders of the Class A-7 Certificates, 1% of all
Voting Rights shall be allocated to the Holders of the Class A-11 Certificates,
1% of all Voting Rights shall be allocated to the Holders of the Class M-X
Certificates, and the Holders of the Class R-I Certificates and Class R-II
Certificates shall be entitled to 0.5% and 0.5% of all of the Voting Rights,
respectively, allocated among the Certificates of each such Class in accordance
with their respective Percentage Interests.
"Wendover": Wendover Funding, Inc.
SECTION 1.02 Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rates on the
Class A-2 and Class A-3 Certificates for any Interest Accrual Period (other than
the initial Interest Accrual Period) will be determined on each Rate Adjustment
Date as follows:
For the first Interest Accrual Period, LIBOR will equal 5.97%. For any
Interest Accrual Period other than the first Interest Accrual Period, the rate
for United States dollar deposits on the basis of the offered rates of the
Reserve Banks for one-month United States dollar deposits, as such rate appears
on the Dow Jones Telerate Screen Page 3750 as of 11:00 A.M., London, England
time, on the second LIBOR Business Day prior to the first day of such Interest
Accrual Period. 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,
such other service for displaying LIBOR or comparable rates as may be reasonably
selected by the Trustee after consultation with the Master Servicer), the rate
will be the
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Reserve Interest Rate. If no such quotations can be obtained and no Reserve
Interest Rate is available, LIBOR will be LIBOR applicable to the preceding
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 Rate Adjustment Date
and the Trustee's subsequent calculation of the Pass-Through Rates applicable to
the Class A-2 and Class A-3 Certificates for the relevant Interest Accrual
Period, in the absence of manifest error, will be final and binding.
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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. 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).
The Master Servicer hereby acknowledges the receipt by it of
cash in an amount equal to $294,304.80 (the "Special Deposit"), representing
interest at the Mortgage Rate, for the calendar month of March 2000, for those
Mortgage Loans which do not have Monthly Payments due on April 1, 2000. 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 April 2000.
In connection with such transfer and assignment, the Company
has caused the Seller to deliver to, and deposit with the Custodian, for the
benefit of the Trustee, as described in the Mortgage Loan Purchase Agreement the
following documents or instruments:
(i) the original Mortgage Note endorsed without recourse,
"Norwest Bank Minnesota, National Association, as trustee under the
Pooling and Servicing Agreement relating to Impac Secured Assets Corp.,
Mortgage Pass-Through Certificates, Series 2000-1" 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 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) a duly executed original Assignment of the Mortgage, without
recourse, in recordable form to "Norwest Bank Minnesota, National
Association, as trustee," or to
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"Norwest Bank Minnesota, National Association, as trustee for holders
of Impac Secured Assets Corp., Mortgage Pass-Through Certificates,
Series 2000-1";
(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, 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;
(vii) a true and correct copy of any assumption, modification,
consolidation or substitution agreement; and
(viii) the original or a copy of the private mortgage insurance
policy or original certificate of private mortgage insurance for each
Mortgage Loan so identified on the Mortgage Loan Schedule.
The Seller is obligated as described in the Mortgage Loan
Purchase Agreement to deliver to the Custodian: (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 Custodian 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 Custodian pursuant to clause (iv) above.
However, pursuant to the Mortgage Loan Purchase Agreement, 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 Seller to the Trustee,
the Custodian 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, the Trustee or the Custodian, 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
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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 Custodian 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
Custodian because of any defect therein, the Seller is required, as described in
the Mortgage Loan Purchase Agreement, 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 to exercise its best reasonable efforts to deliver or cause
to be delivered to the Custodian within 120 days of the Closing Date the
original or a photocopy of the title insurance policy with respect to each
Mortgage Loan assigned to the Trustee pursuant to this Section 2.01.
All original documents relating to the Mortgage Loans which
are not delivered to the Custodian 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, the Trustee or the Custodian 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 Uncertificated REMIC I 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 Uncertificated REMIC I 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
Uncertificated REMIC I 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 Uncertificated REMIC I 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
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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 Uncertificated REMIC I 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, the Custodian 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 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 Uncertificated REMIC I 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 the assignment of the Mortgage Loans
to it for the benefit of the Certificateholders and declares that the Custodian,
as its agent, holds and will hold such documents and the other documents
delivered to the Custodian, as its agent, 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.
If in the process of reviewing the Mortgage Files and
preparing the certifications required by the Custodial Agreement and attached
thereto as Exhibits 1 and 2, the Custodian, as the
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Trustee's agent, 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. Pursuant
to Section 2.4 of the Custodial Agreement, the Custodian will notify the Master
Servicer, the Company, the Seller and the Trustee of any such omission or defect
found by it in respect of any Mortgage File held by it. 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 REMIC I 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 Custodian of a request for release including a
notification of such deposit signed by a Servicing Officer, the Custodian 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.
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 not violate the Master
Servicer's articles of incorporation or bylaws or
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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, 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; and
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(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 or omit a material fact necessary to make the
information, certificate, statement or report not misleading.
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.
(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 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 Custodian.
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.
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. Insofar as the Mortgage Loan
Purchase Agreement 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
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
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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 Custodian 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 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 (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
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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
I or REMIC II, 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 I or REMIC II 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 Evidencing Interests in
the REMIC I Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery of the Mortgage Files to the Custodian on its behalf,
subject to any exceptions noted by the Custodian in its initial certification
pursuant to the Custodial Agreement, together with the assignment to it of all
other assets included in REMIC I, receipt of which is hereby acknowledged.
Concurrently with such delivery and in exchange therefor, the Trustee, pursuant
to the written request of the Company, executed by an officer of the Company,
has executed and caused to be authenticated and delivered to, or upon the order
of, the Company the Class R-I Certificates in authorized denominations which
together with the Uncertificated REMIC I Regular Interests, evidence ownership
of REMIC I. The rights of the Class R-I Certificateholders and REMIC II to
receive distributions from the proceeds of REMIC I in respect of the Class R-I
Certificates and the Uncertificated REMIC I Regular Interests, and all ownership
interests of the Class R-I Certificateholders and REMIC II in such
distributions, shall be as set forth in this Agreement.
SECTION 2.06. Conveyance of Uncertificated REMIC I Regular
Interests; Acceptance by the Trustee.
The Company, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign without recourse all the
right, title and interest of the Company in and to the Uncertificated REMIC I
Regular Interests to the Trustee for the benefit of the Class A-
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1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8,
Class A-9, Class A-10, Class A-11, Class M-1, Class M-X, Class M-2, Class M-3,
Class B-1, Class B-2, Class B-3 and Class R-II Certificateholders. The Trustee
acknowledges receipt of the Uncertificated REMIC I Regular Interests and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of all present and future Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class M-1, Class M-X, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and
Class R-II Certificateholders. The rights of the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class
A-10, Class A-11, Class M-1, Class M-X, Class M-2, Class M-3, Class B-1, Class
B-2, Class B-3 and Class R-II Certificateholders to receive distributions from
the proceeds of REMIC II in respect of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10,
Class A-11, Class M-1, Class M-X, Class M-2, Class M-3, Class B-1, Class B-2,
Class B-3 and Class R-II Certificates, and all ownership interests of the Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class
A-8, Class A-9, Class A-10, Class A-11, Class M-1, Class M-X, Class M-2, Class
M-3, Class B-1, Class B-2, Class B-3 and Class R-II Certificateholders in such
distributions, shall be as set forth in this Agreement.
SECTION 2.07. Issuance of Certificates Evidencing Interest in
REMIC II.
The Trustee acknowledges the assignment to it of the
Uncertificated REMIC I Regular Interests and, concurrently therewith and in
exchange therefor, pursuant to the written request of the Company executed by an
officer of the Company, the Trustee has executed and caused to be authenticated
and delivered to or upon the order of the Company, the Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9,
Class A-10, Class A- 11, Class M-1, Class M-X, Class M-2, Class M-3, Class B-1,
Class B-2, Class B-3 and Class R-II Certificates in authorized denominations
evidencing ownership of the entire REMIC II.
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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. 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, 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.
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
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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.
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 either REMIC I or REMIC II 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.
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
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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 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 at least 85%
of the Mortgage Loans with Countrywide Home Loans, Inc. ("Countrywide") and
shall transfer the subservicing of such Mortgage Loans from Wendover to
Countrywide on or about May 1, 2000. The Trustee hereby consents to such
transfer.
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 accor dance 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.
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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.
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 minimum franchise tax imposed on REMICs
pursuant to Section 24874 of the California Revenue and Taxation Code that
accrues while the Master Servicer is the Master Servicer 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
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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.
(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.
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(c) Within five Business Days after the Master Servicer has
determined that all amounts which it expects to recover from or on account of a
Mortgage Loan have been recovered and that no further Liquidation Proceeds will
be received in connection therewith, the Master Servicer shall provide to the
Trustee a certificate of a Servicing Officer that such Mortgage Loan became a
Liquidated Mortgage Loan in a Cash Liquidation or REO Disposition as of the date
of such determination.
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- 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 the first
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 one
Business Day of
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receipt, the proceeds of any Principal Prepayment made by the Mortgagor and any
Insurance Proceeds or Liquidation Proceeds.
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, payments under the Radian PMI Policy 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 (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 received by it
prior to the Cut-off 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):
(i) all payments (including advances by a Sub-Servicer) on
account of principal, including Principal Prepayments, on the Mortgage
Loans;
(ii) all payments (including advances by a Sub-Servicer) on
account of interest on the Mortgage Loans, including Buydown Funds, if
any, net of any portion thereof retained by the Master Servicer or any
Sub-Servicer as Servicing Fees and net of any portion thereof payable
to Radian under a Radian PMI Policy;
(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
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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,
3.24 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 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, 3.24 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;
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(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
and, in the case of the Trustee, Section 3.4 of the Custodial
Agreement;
(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
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 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); and
(ix) to clear and terminate the Custodial Account at
the termination of this Agreement pursuant to Section 9.01.
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 (viii).
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
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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.
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 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.
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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 take all such actions on behalf of the Trust
Fund as are necessary to service, maintain and administer each Radian PMI Policy
and to enforce the Trust Fund's rights under each Radian PMI Policy. The Master
Servicer shall effect the timely payment of the premium on the Radian PMI
Policies. To the extent the Mortgagor with respect to a Radian PMI Insured Loan
is delinquent, the Master Servicer shall advance the related premium as a
Servicing Advance. Except as expressly set forth herein, the Master Servicer
shall have full authority on behalf of the Trust Fund to do anything it
reasonably deems appropriate or desirable in connection with the servicing,
maintenance and administration of the Radian PMI Policies. The Master Servicer
shall make its best reasonable efforts to file all insured claims under the
Radian PMI Policies and collect from Radian all Insurance Proceeds due to the
Trust Fund under the Radian PMI Policies. The Master Servicer shall not take, or
permit any subservicer to take, any action which would result in non-coverage
under the Radian PMI Policies of any loss which, but for the actions of the
Master Servicer or any Subservicer, would have been covered thereunder. To the
extent coverage is available, the Master Servicer shall keep or cause to be kept
in full force and effect each Radian PMI Policy for the life of the Mortgage
Loan. Neither the Master Servicer nor the Trustee shall terminate the Radian PMI
Policies with respect to any Mortgage Loan, except in accordance with the terms
thereof. 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 PMI Loan.
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.
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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 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-Servi cer 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
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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 either REMIC I or REMIC II 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 either REMIC I or REMIC II 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 forward to the Custodian
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.
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 other wise 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
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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 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, and second, for distribution 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 Custodian on behalf of the Trustee by a certification (which
certification shall include a statement to the effect that all amounts received
or to be received
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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 a Request for Release. Upon receipt of such certification and request,
the Custodian shall 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 cancelled Mortgage
Note. 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 Custodian 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 Custodian shall, upon
request of the Master Servicer and delivery to the Custodian of a Request for
Release, release the related Mortgage File to the Master Servicer and the
Custodian 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, or the Custodian as
agent for 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 Custodian a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
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 Custodian
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
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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.
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 prepayment charges, assumption fees, late payment charges and
reconveyance fees. 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 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.
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SECTION 3.19. Annual Statement as to Compliance.
Within 120 days after December 31 of each year, commencing
December 2001, 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 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
December, 2001, 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 2001, 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
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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 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 I and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from REMIC I pursuant to
Sections 2.02, 2.04, 3.14 or 3.24. 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 I, shall either sell any REO Property before the
close of the third taxable year following the taxable year in which REMIC I
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code or, at the expense of REMIC I, 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
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holding by REMIC I of such REO Property subsequent to the close of the third
taxable year following the taxable year in which REMIC I acquires ownership of
such REO Property will not result in the imposition on REMIC I of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause either REMIC I or REMIC II 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 either REMIC I or REMIC II 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 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.
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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.
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 reimburse-
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ment therefor, a total amount equal to the amount of Compensating Interest for
the related Distribution Date.
SECTION 3.24 Optional Purchase of Defaulted Mortgage Loans.
The Master Servicer or any affiliate of the Master Servicer, in its
sole discretion, shall have the right to elect (by written notice sent to the
Master Servicer, and the Trustee), but shall not be obligated, to purchase for
its own account from the Trust Fund any Mortgage Loan which is 90 days or more
delinquent in the manner and at the price specified in Section 2.04. The
purchase price for any Mortgage Loan purchased hereunder shall be deposited in
the Certificate Account and upon receipt of a Request for Release stating such,
the Custodian shall release to the purchaser of such Mortgage Loan the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment prepared by the purchaser of such Mortgage Loan, in each case without
recourse, as shall be necessary to vest in the purchaser of such Mortgage Loan
any Mortgage Loan released pursuant hereto and the purchaser of such Mortgage
Loan shall succeed to all the Trustee's right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The purchaser of such
Mortgage Loan shall thereupon own such Mortgage Loan, and all security and
documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
SECTION 3.25. 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 3.26. Periodic Filings with the Securities and
Exchange Commission; Additional Information.
Within 15 days after each Distribution Date, the Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System
(EDGAR) , a Form 8-K with a copy of the statement to the Certificateholders for
such Distribution Date as an exhibit thereto. Prior to January 30, 2001, the
Trustee shall file a Form 15 Suspension Notification with respect to the Trust
Fund, if applicable. Prior to March 30, 2001, the Trustee shall file a Form
10-K, in substance conforming to industry standards, with respect to the Trust
Fund. The Company hereby grants to the Trustee a limited power of attorney to
execute and file each such document on behalf of the Company. Such power of
attorney shall continue until either the earlier of (i) receipt by the Trustee
from the Company of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Company agrees to promptly furnish to the
Trustee, from time to time upon request, such further information, reports, and
financial statements within its 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. The Trustee shall have no
responsibility to file any items with the Commission other than those specified
in this section.
SECTION 3.27. Administration of Buydown Funds.
(a) With respect to any Buydown Mortgage Loan, the Master
Servicer or the related Sub-Servicer has deposited Buydown Funds in an account
that satisfies the requirements for a Sub-Servicing Account (the "Buydown
Account"). The Master Servicer shall cause the related Sub-Servicing Agreement
to require that upon receipt from the Mortgagor of the amount due on a Due Date
for each Buydown Mortgage Loan, the Subservicer will withdraw from the Buydown
Account the predetermined amount that, when added to the amount due on such date
from the Mortgagor, equals the full Monthly Payment and transmit that amount in
accordance with the terms of the Sub-Servicing Agreement to the Master Servicer
together with the related payment made by the Mortgagor or advanced by the
Sub-Servicer.
(b) If the Mortgagor on a Buydown Mortgage Loan prepays such
loan in its entirety during the period (the "Buydown Period") when Buydown Funds
are required to be applied to such Buydown Mortgage Loan, the Master Servicer or
Sub-Servicer shall be required to withdraw from the Buydown Account and remit
any Buydown Funds remaining in the Buydown Account in accordance with the
related buydown agreement. The amount of Buydown Funds which may be remitted in
accordance with the related buydown agreement may reduce the amount required to
be paid by the Mortgagor to fully prepay the related Mortgage Loan. If the
Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan during the
Buydown Period and the property securing such Buydown Mortgage Loan is sold in
the liquidation thereof (either by the Master Servicer or the insurer under any
related Primary Insurance Policy), the Master Servicer or the Sub- Servicer
shall be required to withdraw from the Buydown Account the Buydown Funds for
such
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Buydown Mortgage Loan still held in the Buydown Account and remit the same to
the Master Servicer in accordance with the terms of the Subservicing Agreement
for deposit in the Custodial Account or, if instructed by the Master Servicer,
pay to the insurer under any related Primary Insurance Policy if the Mortgaged
Property is transferred to such insurer and such insurer pays all of the loss
incurred in respect of such default. Any amount so remitted pursuant to the
preceding sentence will be deemed to reduce the amount owed on the Mortgage
Loan.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Certificate Account; 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, 3.22 or 3.23 and (iii) all other amounts constituting the
Available Distribution Amount for the immediately succeeding Distribution Date.
(b) 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.
(c) 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 following amounts, in the following order of
priority, in each case to the extent of the remaining Available Distribution
Amount:
(i) to the Class A Certificateholders (other than the
Principal Only Certificateholders) and the Class R
Certificateholders, on a pro rata basis based on Accrued
Certificate Interest payable on such Certificates with respect
to such Distribution Date, Accrued Certificate Interest on
such Classes of Certificates, as applicable, for such
Distribution Date, plus any Accrued Certificate Interest
thereon remaining unpaid from any previous Distribution Date
(the "Senior Interest Distribution Amount");
(ii) (X) to the Principal Only Certificateholders,
the Principal Only Distribution Amount; and
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(Y) to the Class A Certificateholders (other
than the Interest Only and Principal Only Certificateholders)
and Class R Certificateholders, in the priorities and amounts
set forth in Section 4.01(d)(ii) and (iii) and Sections
4.01(e), the sum of the following (applied to reduce the
Certificate Principal Balances of such Class A Certificates or
Class R Certificates, as applicable):
(A) the Senior Percentage for such
Distribution Date times the sum of the following:
(1) the principal portion of each
Monthly Payment due during the related Due
Period on each Outstanding Mortgage Loan
(other than the related Discount Fraction of
the principal portion of such payment with
respect to a Discount Mortgage Loan),
whether or not received on or prior to the
related Determination Date, minus the
principal portion of any Debt Service
Reduction (other than the related Discount
Fraction of the principal portion of such
Debt Service Reductions with respect to each
Discount Mortgage Loan) which together with
other Bankruptcy Losses exceeds the
Bankruptcy Amount;
(2) the Stated Principal Balance of
any Mortgage Loan repurchased during the
related Prepayment Period pursuant to
Section 2.02, 2.04, 3.14 or 3.24 and the
amount of any shortfall deposited in the
Custodial Account in connection with the
substitution of a Deleted Mortgage Loan
pursuant to Section 2.04 during the related
Prepayment Period (other than the related
Discount Fraction of such Stated Principal
Balance or shortfall with respect to a
Discount Mortgage Loan); and
(3) the principal portion of all
other unscheduled collections (other than
Principal Prepayments in Full and
Curtailments and amounts received in
connection with a Cash Liquidation or REO
Disposition of a Mortgage Loan described in
Section 4.01(c)(ii)(Y)(B), including without
limitation Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) received during
the related Prepayment Period to the extent
applied by the Master Servicer as recoveries
of principal of the related Mortgage Loan
pursuant to Section 3.15 (other than the
related Discount Fraction of the principal
portion of such unscheduled collections with
respect to a Discount Mortgage Loan);
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(B) with respect to each Mortgage Loan for
which a Cash Liquidation or a REO Disposition
occurred during the related Prepayment Period and did
not result in any Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses, an amount equal to the lesser
of (a) the Senior Percentage for such Distribution
Date times the Stated Principal Balance of such
Mortgage Loan (other than the related Discount
Fraction of such Stated Principal Balance, with
respect to a Discount Mortgage Loan) and (b) the
Senior Accelerated Distribution Percentage for such
Distribution Date times the related unscheduled
collections (including without limitation Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) to
the extent applied by the Master Servicer as
recoveries of principal of the related Mortgage Loan
pursuant to Section 3.15 (in each case other than the
portion of such unscheduled collections, with respect
to a Discount Mortgage Loan included in Section
4.01(d)(i)(C)));
(C) the Senior Accelerated Distribution
Percentage for such Distribution Date times the
aggregate of all Principal Prepayments in Full and
Curtailments received in the related Prepayment
Period (other than the related Discount Fraction of
such Principal Prepayments in Full and Curtailments,
with respect to a Discount Mortgage Loan); and
(D) any amounts described in subsection
(ii)(Y), clauses (A), (B) or (C) of this Section
4.01(c), as determined for any previous Distribution
Date, which remain unpaid after application of
amounts previously distributed pursuant to this
clause (D) to the extent that such amounts are not
attributable to Realized Losses which have been
allocated to the Class M Certificates or Class B
Certificates;
(iii) to the Holders of the Class M-1 Certificates
and to the Holders of the Class M-X Certificates in respect of
the Class M-1-X Component, on a pro rata basis, based on
Accrued Certificate Interest payable to such Certificate or
Component with respect to such Distribution Date, the Accrued
Certificate Interest thereon for such Distribution Date, plus
any Accrued Certificate Interest thereon remaining unpaid from
any previous Distribution Date, except as provided below;
(iv) to the Holders of the Class M-1 Certificates, an
amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date, minus (y) the amount of any Principal Only Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts
available pursuant to clause (x) of Sections 4.01(c)(vi),
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(viii), (x), (xii), (xiii) and (xiv) are insufficient
therefor, applied in reduction of the Certificate Principal
Balance of the Class M-1 Certificates;
(v) to the Holders of the Class M-2 Certificates and
to the Holders of the Class M-X Certificates in respect of the
Class M-2-X Component, on a pro rata basis, based on Accrued
Certificate Interest payable to such Certificate or Component
with respect to such Distribution Date, the Accrued
Certificate Interest thereon for such Distribution Date, plus
any Accrued Certificate Interest thereon remaining unpaid from
any previous Distribution Date, except as provided below;
(vi) to the Holders of the Class M-2 Certificates, an
amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date, minus (y) the amount of any Principal Only Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts
available pursuant to clause (x) of Sections 4.01(c)(viii),
(x), (xii), (xiii) and (xiv) are insufficient therefor,
applied in reduction of the Certificate Principal Balance of
the Class M-2 Certificates;
(vii) to the Holders of the Class M-3 Certificates,
the Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided
below;
(viii) to the Holders of the Class M-3 Certificates,
an amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date minus (y) the amount of any Principal Only Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts
available pursuant to clause (x) of Sections 4.01(c)(x),
(xii), (xiii) and (xiv) are insufficient therefor, applied in
reduction of the Certificate Principal Balance of the Class
M-3 Certificates;
(ix) to the Holders of the Class B-1 Certificates,
the Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided
below;
(x) to the Holders of the Class B-1 Certificates, an
amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date minus (y) the amount of any Principal Only Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts
available pursuant to clause (x) of Sections 4.01(c)(xii),
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(xiii) and (xiv) are insufficient therefor, applied in
reduction of the Certificate Principal Balance of the Class
B-1 Certificates;
(xi) to the Holders of the Class B-2 Certificates,
the Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided
below;
(xii) to the Holders of the Class B-2 Certificates,
an amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date minus (y) the amount of any Principal Only Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts
available pursuant to clause (x) of Sections 4.01(c)(xiii) and
(xiv) are insufficient therefor, applied in reduction of the
Certificate Principal Balance of the Class B-2 Certificates;
(xiii) to the Holders of the Class B-3 Certificates,
an amount equal to (x) the Accrued Certificate Interest
thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any
previous Distribution Date, except as provided below minus (y)
the amount of any Principal Only Collection Shortfalls for
such Distribution Date or remaining unpaid for all previous
Distribution Dates to the extent the amounts available
pursuant to clause (x) of Section 4.01(c)(xiv) are
insufficient therefor;
(xiv) to the Holders of the Class B-3 Certificates,
an amount equal to (x) the Subordinate Principal Distribution
Amount for such Class of Certificates for such Distribution
Date minus (y) the amount of any Principal Only Collection
Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates applied in reduction of the
Certificate Principal Balance of the Class B-3 Certificates;
(xv) to the Class A Certificateholders and Class R
Certificateholders in the priority set forth in Section
4.01(d), the portion, if any, of the Available Distribution
Amount remaining after the foregoing distributions, applied to
reduce the Certificate Principal Balances of such Class A
Certificates and Class R Certificates, but in no event more
than the aggregate of the outstanding Certificate Principal
Balances of each such Class of Class A Certificates and Class
R Certificates, and thereafter, to each Class of Class M
Certificates then outstanding beginning with such Class with
the lowest numerical designation, any portion of the Available
Distribution Amount remaining after the Class A Certificates
and Class R Certificates have been retired, applied to reduce
the Certificate Principal Balance of each such Class of Class
M Certificates, but in no event more than the outstanding
Certificate Principal Balance
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of each such Class of Class M Certificates; and thereafter to
each such Class of Class B Certificates then outstanding
beginning with such Class with the lowest numerical
designation, any portion of the Available Distribution Amount
remaining after the Class M Certificates have been retired,
applied to reduce the Certificate Principal Balance of each
such Class of Class B Certificates, but in no event more than
the outstanding Certificate Principal Balance of each such
Class of Class B Certificates; and
(xvi) to the Class R-II Certificateholders, the
balance, if any, of the Available Distribution Amount.
(d) Distributions of principal on the Class A Certificates
(other than the Interest Only Certificates) and Class R Certificates on each
Distribution Date occurring prior to the occurrence of the Credit Support
Depletion Date will be made as follows:
(i) first, to the Principal Only Certificates, until
the Certificate Principal Balance thereof is reduced to zero,
an amount (the "Principal Only Distribution Amount") equal to
the aggregate of:
(A) the related Discount Fraction of the
principal portion of each Monthly Payment on each
Discount Mortgage Loan due during the related Due
Period, whether or not received on or prior to the
related Determination Date, minus the Discount
Fraction of the principal portion of any related Debt
Service Reduction which together with other
Bankruptcy Losses exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the
principal portion of all unscheduled collections on
each Discount Mortgage Loan received during the
preceding calendar month (other than amounts received
in connection with the Cash Liquidation or REO
Disposition of a Discount Mortgage Loan described in
clause (C) below), including Principal Prepayments in
Full, Curtailments and repurchases of Discount
Mortgage Loans (or, in the case of a substitution of
a Deleted Mortgage Loan, the Discount Fraction of the
amount of any shortfall deposited in the Custodial
Account in connection with such substitution);
(C) in connection with the Cash Liquidation
or REO Disposition of a Discount Mortgage Loan that
did not result in any Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses, an amount equal to the lesser
of (1) the applicable Discount Fraction of the Stated
Principal Balance of such Discount Mortgage Loan
immediately
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prior to such Distribution Date and (2) the aggregate
amount of the collections on such Discount Mortgage
Loan to the extent applied as recoveries of
principal;
(D) any amounts allocable to principal for
any previous Distribution Date (calculated pursuant
to clauses (A) through (C) above) that remain
undistributed; and
(E) the amount of any Principal Only
Collection Shortfalls for such Distribution Date and
the amount of any Principal Only Collection
Shortfalls remaining unpaid for all previous
Distribution Dates, but only to the extent of the
Eligible Funds for such Distribution Date;
(ii) second, from the Senior Principal Distribution
Amount, to the Class A-8 Certificates and Class A-9
Certificates on a pro rata basis, based on the Certificate
Principal Balances thereof, in reduction of the Certificate
Principal Balances thereof, until the Certificate Principal
Balances thereof have been reduced to zero, an amount equal to
the lesser of (a) the Lockout Priority Amount for such
Distribution Date and (b) 98.6% of the Senior Principal
Distribution Amount;
(iii) third, the balance of the Senior Principal
Distribution Amount, if any, remaining after the distribution
described in clause (ii) above shall be distributed as
follows:
(A) first, to the to the Class R-I and Class
R-II Certificates on a pro rata basis, based on the
Certificate Principal Balances thereof, in reduction
of the Certificate Principal Balances thereof, until
the Certificate Principal Balances thereof have been
reduced to zero;
(B) second, up to $1,150,000 to be
distributed on each Distribution Date, concurrently,
in reduction of the Certificate Principal Balances of
the Class A-1 Certificates and Class A-2 Certificates
in the following manner and priority:
(1) 99.00% of such amount to the
Class A-1 Certificates; and
(2) 1.00% of such amount to the
Class A-2 Certificates;
(C) third, sequentially, to the Class A-2,
Class A-1 and Class A-5 Certificates, in that order,
in reduction of the Certificate Principal Balances
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thereof, until the Certificate Principal Balances
thereof have been reduced to zero; and
(D) fourth, to the Class A-8 Certificates
and Class A-9 Certificates on a pro rata basis, based
on the Certificate Principal Balances thereof, in
reduction of the Certificate Principal Balances
thereof, until the Certificate Principal Balances
thereof have been reduced to zero.
(e) On or after the occurrence of the Credit Support Depletion
Date, all priorities relating to distributions as described above in respect of
principal among the Senior Certificates (other than the Principal Only
Certificates) will be disregarded, an amount equal to the Discount Fraction of
the principal portion of scheduled payments and unscheduled collections received
or advanced in respect of Discount Mortgage Loans will be distributed to the
Principal Only Certificates, and the Senior Principal Distribution Amount will
be distributed to all classes of Senior Certificates (other than the Principal
Only Certificates) pro rata in accordance with their respective outstanding
Certificate Principal Balances and the Senior Interest Distribution Amount will
be distributed as set forth in Section 4.01(c)(i) above.
(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 may 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 (except that (i) any investment in the institution with which
the Certificate Account is maintained may mature on such Distribution Date and
(ii) any other investment may mature on such Distribution Date if the Trustee
shall advance funds on such Distribution Date to the Certificate Account in the
amount payable on such investment on such Distribution Date, pending receipt
thereof to the extent necessary to make distributions on the Certificates) 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 Trustee 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
Certificate Account by the Trustee out of its own funds immediately as realized
without any right of reimbursement.
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(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.
On each Distribution Date the Trustee shall make available to
each Holder of a Certificate and to the Company, the Master Servicer and the
Rating Agencies, a statement based on information provided by the Master
Servicer as to such distribution setting forth:
(i) (a) the amount of such distribution to the
Certificateholders of each Class applied to reduce the Certificate
Principal Balance thereof, and (b) the aggregate amount included
therein representing Principal Prepayments;
(ii) the amount of such distribution to Holders of each Class
of Certificates and each Component of the Class M-X Certificates
allocable to interest and the Pass-Through
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Rate on each Class of Certificates and each Component of the Class M-X
Certificates for such Distribution Date;
(iii) if the distribution to the Holders of any Class of
Certificates or Component of the Class M-X Certificates is less than
the full amount that would be distributable to such Holders if there
were sufficient funds available therefor, the amount of the shortfall;
(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 aggregate Certificate Principal Balance or Notional
Amount, as applicable, of each Class of Certificates and the Components
of the Class M-X Certificates, the Senior Accelerated Distribution
Percentage and each of the Senior, Class M and Class B Percentages,
after giving effect to the amounts distributed on such Distribution
Date, separately identifying any reduction thereof due to Realized
Losses other than pursuant to an actual distribution of principal;
(vii) the related Subordinate Principal Distribution Amount
and Prepayment Distribution Percentage, if applicable;
(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;
(x) the aggregate Accrued Certificate Interest remaining
unpaid, if any, for each Class of Certificates, after giving effect to
the distribution made on such Distribution Date;
(xi) the Special Hazard Amount, Fraud Loss Amount and
Bankruptcy Amount as of the close of business on such Distribution Date
and a description of any change in the calculation of such amounts;
(xii) the weighted average Net Mortgage Rate for such
Distribution Date;
(xiii) the occurrence of the Credit Support Depletion Date;
(xiv) the Senior Accelerated Distribution Percentage
applicable to such distribution;
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(xv) the Senior Percentage and Lockout Priority Percentage for
such Distribution Date;
(xvi) the aggregate amount of Realized Losses for such
Distribution Date;
(xvii) the weighted average remaining term to maturity of the
Mortgage Loans prior to giving effect to the amounts distributed on
such Distribution Date; and
(xviii) the weighted average Mortgage Rates of the Mortgage
Loans prior to giving effect to the amounts distributed on such
Distribution Date.
The Trustee will make the monthly statements (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders, and other parties to the
Pooling and Servicing Agreement via the Trustee's internet website and its
fax-on-demand service. The Trustee's fax-on-demand service may be accessed by
calling (301) 815- 6610. The Trustee's internet website shall initially be
located at "www.ctslink.com". Assistance in using the website or the
fax-on-demand service can be obtained by calling the Trustee's customer service
desk at (301) 815-6600. Parties that are unable to use the above distribution
options are entitled to have a paper copy mailed to them via first class mail by
calling the customer service desk and indicating such. The Trustee shall have
the right to change the way monthly statements are distributed in order to make
such distribution more convenient and/or more accessible to the above parties
and the Trustee shall provide timely and adequate notification to all above
parties regarding any such changes.
In the case of information furnished pursuant to subclauses
(i) - (iii) 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.
The Trustee shall provide to each Certificateholder any
written reports or other information required by the Code and regulations
thereunder as from time to time are in force. In addition, upon written request,
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 Certificateholder, a statement containing the information
set forth in subclauses (i) - (iii) above, aggregated for such calendar year or
applicable portion thereof during which such person was a Certificateholder.
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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 Servicing Fee 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 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
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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 Trustee
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, unless 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 (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. Allocation of Realized Losses.
Prior to each Distribution Date, the Master Servicer shall
determine the total amount of Realized Losses, if any, that resulted from any
Cash Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition
that occurred during the related Prepayment Period. The amount of each Realized
Loss shall be evidenced by an Officers' Certificate. All Realized Losses, other
than Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy
Losses or Excess Fraud Losses, shall be allocated as follows: first, to the
Class B-3 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; second, to the Class B-2 Certificates until the Certificate
Principal Balance thereof has been reduced to zero; third, to the Class B-1
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; fourth, to the Class M-3 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; fifth, to the Class M-2 Certificates
until the Certificate Principal Balance thereof has been reduced to zero and, to
the extent of the interest portion of such Realized Losses, to the Class M-2-X
Component of the Class M-X Certificates on a pro rata basis; sixth, to the Class
M-1 Certificates until the Certificate Principal Balance thereof has been
reduced to zero and, to the extent of the interest portion of such Realized
Losses, to the Class M-1-X Component of the Class M Certificates on a pro rata
basis; and, thereafter, if such Realized Losses are on a Discount Mortgage Loan,
to the Principal Only
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Certificates, in an amount equal to the Discount Fraction of the principal
portion thereof, and the remainder of such Realized Losses and the entire amount
of such Realized Losses on Non-Discount Mortgage Loans among all the Class A
Certificates (other than the Principal Only Certificates) and Class R
Certificates, on a pro rata basis, as described below. Any Excess Special Hazard
Losses, Excess Bankruptcy Losses, Excess Fraud Losses and Extraordinary Losses
on Non-Discount Mortgage Loans will be allocated among the Class A (other than
the Principal Only Certificates), Class M, Class B and Class R Certificates, on
a pro rata basis, as described below. The principal portion of such losses on
Discount Mortgage Loans will be allocated to the Principal Only Certificates in
an amount equal to the related Discount Fraction thereof, and the remainder of
such losses on Discount Mortgage Loans will be allocated among the Class A
Certificates (other than the Principal Only Certificates), Class M, Class B and
Class R Certificates on a pro rata basis, as described below.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates and/or Components of the
Class M-X Certificates means an allocation on a pro rata basis, among the
various Classes and/or Components so specified, to each such Class of
Certificates and/or Components of the Class M-X Certificates on the basis of
their then outstanding Certificate Principal Balances prior to giving effect to
distributions to be made on such Distribution Date in the case of the principal
portion of a Realized Loss or based on the Accrued Certificate Interest thereon
payable on such Distribution Date (without regard to any Compensating Interest
for such Distribution Date) in the case of an interest portion of a Realized
Loss. Any allocation of the principal portion of Realized Losses (other than
Debt Service Reductions) to the Class B Certificates or, after the Certificate
Principal Balances of the Class B Certificates have been reduced to zero, to the
Class of Class M Certificates then outstanding with the highest numerical
designation shall be made by operation of the definition of "Certificate
Principal Balance" and by operation of the provisions of Section 4.01.
Allocations of the interest portions of Realized Losses shall be made by
operation of the definition of "Accrued Certificate Interest" and by operation
of the provisions of Section 4.01. Allocations of the principal portion of Debt
Service Reductions shall be made by operation of the provisions of Section 4.01.
All Realized Losses and all other losses allocated to a Class of Certificates or
Component of the Class M-X Certificates hereunder will be allocated among the
Certificates of such Class (in the case of a Component of the Class M-X
Certificates, to the Class M-X Certificates) in proportion to the Percentage
Interests evidenced thereby.
SECTION 4.05. 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
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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 4.06. 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 4.07. Distributions on the Uncertificated REMIC I
Regular Interests.
(a) On each Distribution Date the Trustee shall be deemed to distribute
to itself, as the holder of the Uncertificated REMIC I Regular Interests, the
Uncertificated REMIC I Regular Interest Distribution Amounts in the following
order of priority to the extent of the Available Distribution Amount (less the
Trustee's Fees for such Distribution Date) reduced by distributions made to the
Class R-I Certificates pursuant to Section 4.01(a):
(i) Uncertificated REMIC I Accrued Interest on the
Uncertificated REMIC I Regular Interests for such Distribution Date,
plus any Uncertificated REMIC I Accrued Interest thereon remaining
unpaid from any previous Distribution Date; and
(ii) In accordance with the priority set forth in Section
4.07(b), an amount equal to the sum of the amounts in respect of
principal distributable on the Class A-1, Class A-2, Class A-5, Class
A-8, Class A-9, Class A-10, Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2, Class B-3 and Class R-II Certificates under Section 4.01(c),
as allocated thereto.
(b) The amount described in Section 4.07(a)(ii) shall be deemed
distributed to (i) Uncertificated REMIC I Regular Interest N, (ii)
Uncertificated REMIC I Regular Interest O, (iii) Uncertificated REMIC I Regular
Interest P, (iv) Uncertificated REMIC I Regular Interest Q, (v) Uncertificated
REMIC I Regular Interest R, (vi) Uncertificated REMIC I Regular Interest S,
(vii) Uncertificated REMIC I Regular Interest T, (viii) Uncertificated REMIC I
Regular Interest U, (ix) Uncertificated REMIC I Regular Interest W, (x)
Uncertificated REMIC I Regular Interest X and (xi) Uncertificated REMIC I
Regular Interest Y with the amount to be distributed allocated among such
interests in accordance with the priority assigned to the (i) Class A-1
Certificates, (ii) Class A-2 Certificates, (iii) Class A-5 Certificates, (iv)
Class A-8 Certificates, (v) Class A-9 Certificates, (vi)
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Class A-10 Certificates, (vii) Class R-I Certificates, (viii) Class M-1
Certificates, (ix) Class M-2 Certificates, (x) Class M-3 Certificates, (xi)
Class B-1, Class B-2 and Class B-3 Certificates, respectively, under Section
4.01(c) and (d) until the Uncertificated Principal Balance of each such interest
is reduced to zero.
(c) The portion of the Uncertificated REMIC I Regular Interest
Distribution Amounts described in Section 4.07(a)(ii) shall be deemed
distributed by REMIC I to REMIC II in accordance with the priority assigned to
the REMIC II Certificates relative to that assigned to the REMIC I Certificates
under Section 4.01(c).
(d) In determining from time to time the Uncertificated REMIC I Regular
Interest N Distribution Amount, Uncertificated REMIC I Regular Interest P
Distribution Amount, Uncertificated REMIC I Regular Interest Q Distribution
Amount, Uncertificated REMIC I Regular Interest R Distribution Amount,
Uncertificated REMIC I Regular Interest S Distribution Amount, Uncertificated
REMIC I Regular Interest T Distribution Amount, Uncertificated REMIC I Regular
Interest U Distribution Amount, Uncertificated REMIC I Regular Interest X
Distribution Amount, Uncertificated REMIC I Regular Interest Y Distribution
Amount and Uncertificated REMIC I IO Regular Interest Distribution Amount,
Realized Losses allocated to the Certificates under Section 4.04 shall be
allocated to the Uncertificated REMIC I Regular Interests in the same amounts
and priorities as allocated to the Certificates in the corresponding numercial
designation in 4.07(b) above.
(e) On each Distribution Date the Trustee shall be deemed to distribute
from REMIC II, in the priority set forth in Sections 4.01(a) and (b), to the
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11, Class M-1, Class M-X, Class M-2,
Class M-3, Class B-1, Class B-2, Class B-3 and Class R-II Certificates the
amounts distributable thereon, from the Uncertificated REMIC I Regular Interest
Distribution Amounts deemed to have been received by REMIC II from REMIC I under
this Section 4.07.
(f) Notwithstanding the deemed distributions on the Uncertificated
REMIC I Regular Interests described in this Section 4.07, distributions of funds
from the Certificate Account shall be made only in accordance with Section 4.01.
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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, B-1, B-2 and B-3. The Certificates will be
issuable in registered form only. The Class A and Class M-1 Certificates (other
than the Class A-5 Certificates) will be issued in minimum denominations of
$25,000 and integral multiples of $1 in excess thereof. The Class A-5
Certificates will be issued in minimum denominations of $1,000 and integral
multiples of $1 in excess thereof. The Class M-X, Class M-2 and Class M-3
Certificates of each Class will be offered in registered, certificated form in
minimum denominations of $250,000 and integral multiples of $1 in excess
thereof. The Class B Certificates of each Class will be offered in registered,
certificated form in minimum denominations of $250,000 and integral multiples of
$1 in excess thereof, with one Certificate of each such Class evidencing the
remainder of the aggregate initial Certificate Principal Balance of such Class.
The Residual 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. Cer tificates 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 Certif icates 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 Class M 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
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in and to each of such Class A Certificates and Class M 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 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 Class M Certificates (so long as they are Book-Entry
Certificates), and the Trustee shall have no liability for transfers of Class M
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.
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(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.
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 Certif icates 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 B 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 B 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 B 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
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deemed to have complied with the requirements of Section 5.02(b) hereof;
provided, however, that no Transfer of any of the Class B 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.
(d) The Trustee shall require an Opinion of Counsel from a
prospective transferee prior to the transfer of any Residual Certificate or
Class B 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 disposition will not violate the
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of
the Code. Neither the Company, the Master Servicer nor the Trustee will be
required to obtain such Opinion of Counsel on behalf of any prospective
transferee. In the case of the Class B Certificates, in lieu of such Opinion of
Counsel, the Trustee shall require a certification in the form of Exhibit G-6
(or in a form substantially similar to such Exhibit G-6 as shall be agreed upon
by the Trustee), in the case of the transfer of any of the foregoing Class B
Certificates to a person capable of providing such certification, substantially
to the effect that all funds used by such transferee to purchase such Class B
Certificates will be funds held by it in its general account which it reasonably
believes do not constitute "plan assets" of any Plan (as defined above);
provided however that such certification will not be required in connection with
any transfer of any such Class B 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. The permission of any transfer in violation of the
restriction on transfer set forth in this paragraph shall not constitute a
default or an Event of Default.
Any person purchasing a Class M Certificate shall be deemed to have
represented that either: (i) such person is not a Plan subject to ERISA or the
Code (or comparable provisions of any subsequent enactments) and is not acting,
directly or indirectly, on behalf of any such Plan or acquiring such Certificate
with Plan Assets; or (ii) the purchase of such Certificate is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code, will not subject the
Company, the Trustee or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement and the exemptive relief
granted by the DOL pursuant to Sections I and Sections III of Prohibited
Transaction Class Exemption 95-60 is available with respect to the purchase,
sale and holding of such Certificate.
<PAGE>
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(e) (i) Each Person who has or who acquires any Ownership
Interest in a Residual 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 Residual Certificate are expressly subject
to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in
a Residual 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 Residual Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of any Residual 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, that it is a
Permitted Transferee, that it is not acquiring its Ownership Interest
in the Residual 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 Residual 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 Residual 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 Residual
Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in
a Residual 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 Residual 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.
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(E) Each Person holding or acquiring an Ownership Interest in
a Residual 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 Residual Certificate, if it is "a pass-through
interest holder", or is holding an Ownership Interest in a Residual
Certificate on behalf of a "pass-through interest holder."
(ii) The Trustee will register the Transfer of any Residual
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 Residual Certificates other
than to Permitted Transferees are prohibited.
(iii) (A) If any Person other than a Permitted Transferee
shall become a Holder of a Residual 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 Residual Certificate. If a Non-United States Person
shall become a Holder of a Residual 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 Residual Certificate. If a transfer of a Residual
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 Residual Certificate. The prior Holder shall be entitled to
recover from any purported Holder of a Residual 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 Residual Certificate. Each Holder of a Residual
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 Residual Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Residual 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 Residual 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 Residual 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 Residual Certificate as described in clause (iii)(A)
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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 Residual
Certificate, to sell such Residual 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 Residual 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 Residual 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 Residual Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of such
Residual 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 Residual 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 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.
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(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 Certi ficates.
(i) All Certificates surrendered for transfer and exchange
shall be cancelled 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 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 B 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
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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 DEPOSITOR 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, consol idated 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
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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 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 lia bility 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
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(vi) the Master Servicer shall fail to deposit in the Certificate
Account on any 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. Notwithstanding the foregoing, the parties
hereto and the Certificateholders by their acceptance of any Certificate,
acknowledge and agree that there will be a period of transition before the
actual servicing functions can be fully transferred to the Trustee, as successor
Master Servicer, or to a successor Master Servicer appointed by the Trustee
pursuant to the provisions hereof; provided, that the Trustee shall use its
reasonable best efforts to succeed to the actual servicing functions or find a
successor Master Servicer as soon as possible but no later than 90 days after
such termination; and provided, further, that the successor Master Servicer or
the Trustee shall continue to make Advances during the transition period. 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
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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; (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; and (v)
all costs or expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Trustee or any successor Master Servicer to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Trustee or successor Master Servicer to service the Mortgage Loans properly and
effectively. 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 deemed to have knowledge of an Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
corporate trust division has actual knowledge thereof or unless notice of any
event which is in fact such an Event of Default is received by the Trustee 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(g)) 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
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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, the Custodian and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
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.
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
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 both
REMIC I and REMIC II 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 both REMIC I
and REMIC II under the REMIC Provisions and to prevent the imposition of any
federal, state or local income, prohibited transaction, contribution or other
tax on either REMIC I or REMIC II to the extent that maintaining such status and
avoiding such taxes are within the control of the Trustee and are within the
scope of specific responsibilities 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:
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(i) Prior to the occurrence of an Event of Default, and
after the curing or waiver of all such Events of Default which
may have occurred, the duties and obliga tions 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 rely upon and shall be 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 reasonable
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security or indemnity 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 Office of the Trustee's
corporate trust department has actual knowledge (which has not been
waived or cured), to exercise such of the 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, state ment,
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 or attorneys; and
(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.
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 and the
representations and warranties of the Trustee in Section 8.12) 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 the
validity or sufficiency of this Agreement (other than as specifically set forth
in Section 8.12) or of the Certificates (other than the signature and
authentication of the Trustee on the Certificates) or of any Mortgage Loan or
related document. 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
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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 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 (a) 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 Certificates or (b) arising from the selection of the
Custodian or from the failure of the Custodian to perform its obligations under
the Custodial Agreement, other than any claim, loss, liability or expense (i)
sustained in connection with this Agreement or the Mortgage Loan Purchase
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 and under the Custodial
Agreement.
The provisions of this Section 8.05 shall survive the
resignation or removal of the Trustee or the termination of this Agreement.
SECTION 8.06. Eligibility Requirements for Trustee.
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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. 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;
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.
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 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.
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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 (other than any
Mortgage Files at the time held by a Custodian, which shall become the agent of
any successor trustee named 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.
Any state bank or trust company 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
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which the Trustee shall be a party, or any state bank or trust company 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 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 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,
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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.
SECTION 8.11. Appointment of Custodians.
The Company has appointed Bankers Trust Company of California, N.A., to
serve as initial Custodian. If the initial Custodian is removed or resigns, the
Trustee may, with the consent of the Master Servicer and the Company appoint one
or more Custodians who are not Affiliates of the Company, the Master Servicer or
any Seller to hold all or a portion of the Mortgage Files as agent for the
Trustee, by entering into a Custodial Agreement, or, with the consent of the
Master Servicer and the Company, assume the responsibilities and duties of the
Custodian contained in the Custodial Agreement. Subject to Article VIII, the
Trustee agrees to comply with the terms of each Custodial Agreement and to
enforce the terms and provisions thereof against the Custodian for the benefit
of the Certificateholders. Each Custodian shall be a depository institution
subject to supervision by federal or state authority, shall have a combined
capital and surplus of at least $15,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. Each Custodial
Agreement may be amended only in accordance with the terms thereof. The Trustee
shall notify the Certificateholders of the appointment of any Custodian (other
than the Custodian appointed as of the Closing Date) pursuant to this Section
8.11.
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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 Master Servicer 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 Master Servicer 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 Master Servicer 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 2033 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 Master Servicer, to avoid disqualification of
either REMIC I or REMIC II as a REMIC. In the case of any repurchase by the
Master Servicer pursuant to clause (i), the Master Servicer shall include in
such repurchase price the amount of any Advances that will be reimbursed to the
Master Servicer pursuant to Section 3.11(iii) and 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 Master Servicer.
The right of the Master Servicer 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 to or less than 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date. If such
right
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is exercised, the Master Servicer 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.
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 Master Servicer'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
Master Servicer or its designee's election to repurchase, the Master Servicer 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
Master Servicer's election to repurchase, or (ii) if the Master Servicer elected
to so repurchase, an amount determined as follows: with respect to each Class A
Certificate and Subordinate Certificate, the outstanding Certificate Principal
Balance thereof, plus one month's interest thereon at the applicable
Pass-Through Rate and any previously unpaid Accrued Certificate Interest; and
with respect to the Residual Certificates, the Percentage Interest evidenced
thereby multiplied by the difference, if any, between the above de scribed
repurchase price and the aggregate amount to be distributed to the Holders of
the Class A Certificates and Subordinate Certificates, subject to the priorities
set forth in Section 4.01(c). Upon certification to the Custodian by a Servicing
Officer, following such final deposit, the Custodian shall promptly release the
Mortgage Files as directed by the Master Servicer for the remaining Mortgage
Loans, and the Trustee acknowledges that the Custodian shall execute all
assignments, endorsements and other instruments required by the Master Servicer
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
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shall take reasonable steps as directed by the Company, 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 Residual Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto.
(b) On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to ten percent of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
either the Master Servicer or the Company, whichever gives notice first, shall
have the right, at its option, to purchase the Certificates in whole, but not in
part, at a price equal to the outstanding Certificate Principal Balance of such
Certificates plus the sum of one month's Accrued Certificate Interest thereon
and any previously unpaid Accrued Certificate Interest.
The Master Servicer or the Company, as applicable, shall give
the Trustee not less than 60 days' prior notice of the Distribution Date on
which the Master Servicer or the Company, as applicable, anticipates that it
will purchase the Certificates pursuant to Section 9.01(b). Notice of any such
purchase, specifying the Distribution Date upon which the Holders may surrender
their Certificates to the Trustee for payment in accordance with this Section
9.01(b), shall be given promptly by the Master Servicer or the Company, as
applicable, by letter to Certificateholders (with a copy to the Trustee and each
Rating Agency) mailed not earlier than the 15th day and not later than the 25th
day of the month next preceding the month of such final distribution,
specifying:
(i) the Distribution Date upon which purchase of the
Certificates is anticipated to be made upon presentation and surrender
of such Certificates at the office or agency of the Trustee therein
designated,
(ii) the purchase price therefor, 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 or agency
of the Trustee therein specified.
If either the Master Servicer or the Company gives the notice specified above,
the Master Servicer or the Company, as applicable, shall deposit in the
Certificate Account before the Distribution Date on which the purchase pursuant
to Section 9.01(b) is to be made, in immediately available funds, an amount
equal to the purchase price for the Certificates computed as provided above.
Upon presentation and surrender of the Certificates to be
purchased pursuant to Section 9.01(b) by the Holders thereof, the Trustee shall
first, pay itself the Trustee's Fees for such
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Distribution Date and any other amounts owing to the Trustee under this
Agreement, and second, distribute to such Holders an amount equal to the
outstanding Certificate Principal Balance thereof plus the sum of one month's
Accrued Certificate Interest thereon and any previously unpaid Accrued
Certificate Interest with respect thereto.
In the event that any Certificateholders do not surrender
their Certificates on or before the Distribution Date on which a purchase
pursuant to this Section 9.01(b) is to be made, the Trustee shall on such date
cause all funds in the Certificate Account deposited therein by the Master
Servicer or the Company, as applicable, pursuant to this Section 9.01(b) to be
withdrawn therefrom and deposited in a separate escrow account for the benefit
of such Certificateholders, and the Master Servicer or the Company, as
applicable, shall give a second written notice to such Certificateholders to
surrender their Certificates for payment of the purchase price therefor. If
within six months after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee shall take appropriate steps as
directed by the Master Servicer or the Company, as applicable, to contact the
Holders of such Certificates concerning surrender of their Certificates. The
costs and expenses of maintaining the escrow account and of contacting
Certificateholders shall be paid out of the assets which remain in the escrow
account. No interest shall accrue or be payable to any Certificateholder on any
amount held in the escrow account or by the Master Servicer or the Company, as
applicable, as a result of such Certificateholder's failure to surrender its
Certificate(s) for payment in accordance with this Section 9.01. Any Certificate
that is not surrendered on the Distribution Date on which a purchase pursuant to
this Section 9.01 occurs as provided above will be deemed to have been purchased
and the Holder as of such date will have no rights with respect thereto except
to receive the purchase price therefor minus any costs and expenses associated
with such escrow account and notices allocated thereto. Any Certificates so
purchased or deemed to have been purchased on such Distribution Date shall
remain outstanding hereunder. The Master Servicer or the Company, as applicable,
shall be for all purposes the Holder thereof as of such date.
SECTION 9.02. Termination of REMIC II.
REMIC II 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 Uncertificated REMIC I Regular Interests and the last
distribution due on the Class A, Class M, Class B and Class R-II Certificates is
made.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Master Servicer repurchases the Mortgage
Loans as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional re quirements, unless the Master
Servicer, 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,"
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as described in Section 860F of the Code, or (ii) cause either REMIC I or REMIC
II to fail to qualify as a REMIC at any time that any Certificate is
outstanding:
(i) The Master Servicer shall establish a 90-day liquidation
period for REMIC I and REMIC II, 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
Master Servicer also shall satisfy all of the requirements of a
qualified liquidation for REMIC I and REMIC II, as the case may be,
under Section 860F of the Code and regulations thereunder;
(ii) The Master Servicer 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; and
(iii) If the Master Servicer or the Company is exercising its
right to purchase the assets of the Trust Fund, the Master Servicer
shall, during the 90-day liquidation period and at or prior to the
Final Distribution Date, purchase all of the assets of the Trust Fund
for cash; provided, however, that in the event that a calendar quarter
ends after the commencement of the 90-day liquidation period but prior
to the Final Distribution Date, the Master Servicer or the Company
shall not purchase any of the assets of the Trust Fund prior to the
close of that calendar quarter.
(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 I and REMIC II 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 each of REMIC I and
REMIC II as a REMIC 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 I election in respect of
the Trust Fund, Uncertificated REMIC I Regular Interests shall be designated as
the "regular interests" and the Class R-I Certificates shall be designated as
the sole class of "residual interest" in REMIC I. For the purposes of the REMIC
II election in respect of the Trust Fund, the Class A Certificates, Class M
Certificates and Class B Certificates shall be designated as the "regular
interests" and the Class R-II Certificates shall be designated as the sole class
of "residual interests" in REMIC II. 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 I or REMIC II other than the Uncertificated REMIC I
Regular Interests and the Class R-I Certificates and the REMIC II Certificates,
respectively.
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 I and REMIC
II.
(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 REMIC I or
REMIC II other than the expense of obtaining any tax related Opinion of Counsel
except as specified herein and except that the Trustee shall be entitled to be
reimbursed from the Custodial Account for any professional fees and expenses
related to any non-routine audits or any administrative or judicial proceedings
that do not result from any breach of its tax duties under this Section 10.01.
The Trustee, as agent for REMIC I and REMIC II's tax matters person, shall (i)
act on behalf of REMIC I and REMIC II 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 Residual 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 REMIC I and REMIC II.
(d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of the REMICs created hereunder. The expenses of preparing
and filing such returns shall be borne by the
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Trustee without any right of reimbursement therefor. The Master Servicer shall
provide on a timely basis to the Trustee or its designee such information with
respect to the assets of REMIC I and REMIC II 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 REMIC I and REMIC
II all reporting and other tax compliance duties that are the responsibility of
the REMIC 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
Residual Certificate such information as is necessary for the application of any
tax relating to the transfer of a Residual 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 REMIC I and REMIC II. The Master Servicer shall
provide on a timely basis to the Trustee such information with respect to the
assets of REMIC I and REMIC II, 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) To the extent that the affairs of the Trust Fund are
within its control and the scope of its specific responsibilities under this
Agreement, the Trustee shall take such action and shall cause either REMIC
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not knowingly take any action, cause REMIC I and REMIC II 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 REMIC I and REMIC II as a REMIC or (ii) result in the
imposition of a tax upon REMIC I and REMIC II (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
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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
REMIC I and REMIC II or the assets of REMIC I and REMIC II, or causing REMIC I
and REMIC II to take any action, which is not contemplated under the terms of
this Agreement, the Master Servicer will consult with counsel with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
either REMIC I or REMIC II, and the Master Servicer shall not take any such
action or cause either REMIC I or REMIC II to take any such action as to which
counsel 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.
(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 REMIC as
defined in Section 860G(c) of the Code, on any contributions to REMIC I or REMIC
II 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, 2001, the Trustee shall deliver to the Master Servicer and the Rating
Agency a Certificate from a Responsible Officer of the Trustee stating (without
regard to any action taken by any party other than the Trustee) the Trustee's
compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to REMIC I and REMIC II on a calendar
year and on an accrual basis.
(j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to REMIC I and REMIC II 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 (which shall be at the
expense of the party requesting to make such contribution and not at the expense
of the Trustee) to the effect that the inclusion of such assets in the REMIC
will not cause either REMIC I or REMIC II to fail to qualify as a REMIC at any
time that any Certificates are outstanding or subject either REMIC to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
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(k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which either REMIC I and REMIC II will receive a fee or
other compensation for services nor knowingly permit the REMIC 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 I and REMIC II 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 either REMIC I or REMIC II (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 REMIC I or REMIC II after the Closing Date (other than a
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03),
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 either REMIC I or REMIC II as a REMIC or (b)
cause either REMIC I or REMIC II 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 REMIC I and REMIC II, the
Company, and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by REMIC I and
REMIC II, the Company or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in this Article X, subject, however, to the
provision of Sections 8.01 and 8.02 of this Agreement.
(b) The Master Servicer agrees to indemnify REMIC I and REMIC
II, the Company and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by either
REMIC I or REMIC II, 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.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement or any Custodial Agreement may be amended from
time to time by the Company, the Master Servicer and the Trustee, without the
consent of any of the Certificate holders, (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 or any Custodial 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 or any Custodial 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 such Custodial 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.
<PAGE>
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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 (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 I or REMIC II pursuant to the REMIC
Provisions or cause either REMIC I or REMIC II 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 counter parts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
<PAGE>
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SECTION 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this 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.
<PAGE>
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SECTION 11.05. Notices.
All demands, notices and direction hereunder shall be in
writing and shall be deemed effective upon receipt when delivered to (a) in the
case of the Company, 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; (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, at to Norwest Bank
Minnesota, National Association, 11000 Broken Land Parkway, Columbia, Maryland
21044 (Attn: Corporate Trust Services -- Impac 2000-1) with a copy 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 and DCR, Duff & Phelps Credit Rating
Co., 17 State Street, 12th Floor New York, New York 10004, Attention of Mortgage
Backed Securities Department, IMPAC 2000-1. 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 Certificate
holder 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, provi sions 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; Third Party
Beneficiary.
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.
<PAGE>
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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;
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 2.03;
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 DCR, Duff & Phelps Credit Rating Co., 17 State Street, 12th
Floor New York, New York 10004, Attention of Mortgage Backed Securities
Department, IMPAC 2000-1, (ii) in the case of Standard & Poor's, 55 Water
Street, 41st Floor, New York, New York 10041 or, in each case, such other
address as either such Rating Agency may designate in writing to the parties
thereto.
<PAGE>
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/ Lisa Duehring
----------------------------------
Name: Lisa Duehring
Title: Vice President
IMPAC FUNDING CORPORATION,
Master Servicer
By: /s/ Lisa Duehring
----------------------------------
Name: Lisa Duehring
Title: Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
Trustee
By: /s/ Peter A. Bobell
----------------------------------
Name: Peter A. Bogell
Title: Assistant Vice President
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of March, 2000 before me, a notary public in
and for said State, personally appeared Lisa Duehring, known to me to be the
Vice President of Impac Secured Assets Corp., the corporation that executed the
within instrument, and also known to me to be the persons 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.
/s/ J. Smith
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of March, 2000 before me, a notary public in
and for said State, personally appeared Lisa Duehring, known to me to be the
Vice President of Impac Funding Corporation, and also known to me to be the
person who executed the within instrument as a duly authorized officer of said
corporation 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.
/s/ J. Smith
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF MARYLAND )
) ss.:
COUNTY OF BALTIMORE )
On the 29th day of March, 2000, before me, a notary public in
and for said State, personally appeared Peter A. Bogell, known to me to be an
Assistant Vice President of Norwest Bank Minnesota, National Association, 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.
/s/ Sharon Surguy
------------------------------
Notary Public
[Notarial Seal]
