Exhibit 4.2
================================================================================
[IMPAC SECURED ASSETS CORP.]
Depositor,
[NAME OF MASTER SERVICER]
Master Servicer,
and
[NAME OF TRUSTEE],
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of_____________1, 200_
Mortgage Pass-Through Certificates
Series 200_-__
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined
Terms
Accrued
Certificate Interest
Adjustment Date
Advance
Agreement
Anniversary
Assignment
Assignment Agreement
Available Distribution Amount
Bankruptcy Amount
Bankruptcy Code
Bankruptcy Loss
Business Day
Cash
Liquidation
Certificate
Certificate Account
Certificate Account Deposit Date
Certificateholder
Holder
Certificate Owner
Certificate Principal Balance
Certificate Register
Closing Date
Code
Collateral Value
Converted Mortgage Loan
Convertible Mortgage Loan
Converting Mortgage Loan
Corporate Trust Office
Custodial Account
Cut-off Date
Debt
Service Reduction
Deficient Valuation
Definitive Certificate
Deleted Mortgage Loan
Company
Determination Date
Distribution Date
Due
Date
Due
Period
Duff
& Phelps
Eligible Account
Event of Default
Excess Bankruptcy Loss
Excess Fraud Loss
Excess Special Hazard Loss
Extraordinary Events
Extraordinary Losses
FDIC
FHLMC
Fitch
FNMA
Fraud Losses
Fraud Loss Amount
Funding Date
Gross Margin
Index
ICI
Funding Corporation
Initial Certificate Principal Balance
Insurance Policy
Insurance Proceeds
Late
Collections
Letter of Credit
Letter of Credit Issuer
Liquidation Proceeds
Loan-to-Value Ratio
Master Servicer
Maximum Interest Rate
Minimum Interest Rate
Monthly Payment
Moody's
Mortgage
Mortgage File
Mortgage Loan
Mortgage Loan Schedule
Mortgage
Note
Mortgage Rate
Mortgaged Property
Mortgagor
Net
Mortgage Rate
Nonrecoverable Advance
Officers' Certificate
Opinion of Counsel
OTS
Outstanding Mortgage Loan
Ownership Interest
Pass-Through Rate
Percentage Interest
Periodic Cap
Permitted Instrument
Person
Prepayment Assumption
Prepayment Interest Shortfall
Prepayment Period
Primary Hazard Insurance Policy
Primary
Mortgage Insurance Policy
Principal Prepayment
Purchase Price
Qualified Insurer
Qualified Substitute Mortgage Loan
Rating Agency
Realized Loss
Record Date
Relief Act
Remittance Report
REO
Acquisition
REO
Disposition
REO
Imputed Interest
REO
Proceeds
REO
Property
Request for Release
Required Insurance Policy
Responsible Officer
Seller's Warranty Certificate
Servicing Account
Servicing Advances
Servicing Fee
Servicing Fee Rate
Servicing Officer
Single Certificate
Special Hazard Amount
Special Hazard Percentag
Seller
Standard & Poor's
Stated Principal Balance
Sub-Servicer
Sub-Servicer Remittance Date
Sub-Servicing Account
Sub-Servicing Agreement
Tax
Returns
Transfer
Transferor
Trust Fund
Trustee
Trustee's Fee
Uninsured Cause
Voting
Rights
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of
Mortgage Loans
Section 2.02 Acceptance of
the Trust Fund by the Trustee
Section 2.03 Representations,
Warranties and Covenants of the Master
Servicer and the Depositor
Section 2.04 Representations
and Warranties of the Sponsor; Repurchase and
Substitution
Section 2.05 Issuance of
Certificates Evidencing Interests in the Trust
Fund
Section 2.06 Purposes and
Powers of the Trust
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Master Servicer
to Act as Master Servicer
Section 3.02 Sub-Servicing
Agreements Between Master Servicer and
Sub-Servicers
Section 3.03 Successor
Sub-Servicers
Section 3.04 Liability of the
Master Servicer
Section 3.05 No Contractual
Relationship Between Sub-Servicers and Trustee
or Certificateholders
Section 3.06 Assumption or
Termination of Sub-Servicing Agreements by
Trustee
Section 3.07 Collection of
Certain Mortgage Loan Payments
Section 3.08 Sub-Servicing
Accounts
Section 3.09 Collection of
Taxes, Assessments and Similar Items; Servicing
Accounts
Section 3.10 Custodial
Account
Section 3.11 Permitted
Withdrawals From the Custodial Account
Section 3.12 Permitted
Instruments
Section 3.13 Maintenance of
the Letter of Credit, Primary Mortgage Insurance
and Primary Hazard Insurance
Section 3.14 Enforcement of
Due-on-Sale Clauses; Assumption Agreements
Section 3.15 Realization Upon
Defaulted Mortgage Loans
Section 3.16 Trustee to
Cooperate; Release of Mortgage Files
Section 3.17 Servicing
Compensation
Section 3.18 Maintenance of
Certain Servicing Policies
Section 3.19 Annual Statement
as to Compliance
Section 3.20 Assessments of
Compliance and Attestation Reports
Section 3.21 Access to
Certain Documentation
Section 3.22 Title,
Conservation and Disposition of REO Property
Section 3.23 Additional
Obligations of the Master Servicer
Section 3.24 Additional
Obligations of the Depositor
Section 3.25 Converted
Mortgage Loans; Purchase Obligations Upon Conversion;
Administration by the Trustee
Section 3.26 Exchange Act
Reporting
Section 3.27 Intention of the
Parties and Interpretation
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01 Certificate
Account; Distributions
Section 4.02 Statements to
Certificateholders
Section 4.03 Remittance
Reports; Advances by the Master Servicer
Section 4.04 Allocation of
Realized Losses
Section 4.05 Information
Reports to be Filed by the Master Servicer
Section 4.06 The Letter of
Credit
Section 4.07 Compliance with
Withholding Requirements
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates
Section 5.02 Registration of
Transfer and Exchange of Certificates
Section 5.03 Mutilated,
Destroyed, Lost or Stolen Certificates
Section 5.04 Persons Deemed
Owners
ARTICLE VI
THE Depositor AND THE MASTER SERVICER
Section 6.01 Liability of the
Depositor and the Master Servicer
Section 6.02 Merger,
Consolidation or Conversion of the Depositor or the
Master Servicer
Section 6.03 Limitation on
Liability of the Depositor, the Master Servicer
and Others
Section 6.04 Limitation on
Resignation of the Master Servicer
ARTICLE VII
DEFAULT
Section 7.01 Events of
Default
Section 7.02 Trustee to Act;
Appointment of Successor
Section 7.03 Notification to
Certificateholders
Section 7.04 Waiver of Events
of Default
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of
Trustee
Section 8.02 Certain Matters
Affecting the Trustee
Section 8.03 Trustee Not
Liable for Certificates or Mortgage Loans
Section 8.04 Trustee May Own
Certificates
Section 8.05 Payment of
Trustee's Fees
Section 8.06 Eligibility
Requirements for Trustee
Section 8.07 Resignation and
Removal of the Trustee
Section 8.08 Successor
Trustee
Section 8.09 Merger or
Consolidation of Trustee
Section 8.10 Appointment of
Co-Trustee or Separate Trustee
Section 8.11 Information
Reports and Tax Returns
ARTICLE IX
TERMINATION
Section 9.01 Termination Upon
Repurchase or Liquidation of All Mortgage
Loans
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment
Section 10.02 Recordation of
Agreement; Counterparts
Section 10.03 Limitation on Rights
of Certificateholders
Section 10.04 Governing Law
Section 10.05 Notices
Section 10.06 Severability of
Provisions
Section 10.07 Successors and
Assigns; Third Party Beneficiary
Section 10.08 Article and Section
Headings
Section 10.09 Notice to Rating
Agencies and Certificateholder
<PAGE>
Signatures
Acknowledgments
Exhibit A
Form of A Certificate
Exhibit B
Form of Irrevocable Letter of Credit
Exhibit C Form of Trustee
Initial Certification
Exhibit D
Form of Trustee Final Certification
Exhibit E
Form of Remittance Report
Exhibit F-1 Request
for Release
Exhibit F-2 Request
for Release for Mortgage Loans Paid in Full
Exhibit G-1
Form
of Investor Representation Letter
Exhibit G-2 Form of
Transferor Representation Letter
Exhibit G-3 Form of
Investor Representation Letter for Insurance Companies
Exhibit H
Mortgage Loan Schedule Exhibit I Sponsor 's Warranty
Certificate
Exhibit J
Form of Notice Under Section 3.24
Exhibit K
Form of Back-Up Certification to Form 10-K Certification
Exhibit L
Servicing Criteria to Be Addressed in Assessment of Compliance
Exhibit M
Form 10-D, Form 8-K and Form 10-K Reporting Responsibility
<PAGE>
This Pooling and Servicing Agreement, effective as of ___________
1,
200_, among IMPAC SECURED ASSETS CORP., as the depositor (together
with its
permitted successors and assigns, the "Depositor"), [NAME OF MASTER
SERVICER]
[IMPAC FUNDING CORPORATION], as master servicer (together with its
permitted
successors and assigns, the "Master Servicer"), and [NAME OF
TRUSTEE], as
trustee (together with its permitted successors and assigns, the
"Trustee"),
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage pass-through certificates
(the
"Certificates"), which will evidence the entire beneficial
ownership interest in
the Mortgage Loans (as defined herein). The Mortgage Loans have an
aggregate
Stated Principal Balance as of the Cut-off Date equal to
$_____________. The
Mortgage Loans are adjustable rate mortgage loans having terms to
maturity at
origination or modification of not more than 30 years.
In
consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee agree as
follows:
<PAGE>
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,
one month's interest accrued at the then applicable Pass-Through
Rate on the
Certificate Principal Balance of the Certificates 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 the Certificates will be reduced by the
amount of (i)
Prepayment Interest Shortfalls, if any, which are not covered by
payments by the
Master Servicer pursuant to Section 3.23 with respect to such
Distribution Date,
(ii) the interest portion (adjusted to the related Net Mortgage
Rate) of any of
Realized Losses (including Excess Special Hazard Losses, Excess
Fraud Losses,
Excess Bankruptcy Losses and Extraordinary Losses) not covered by
draws on the
Letter of Credit pursuant to Section 4.04, (iii) the interest
portion of
Advances previously made with respect to a Mortgage Loan or REO
Property which
remained unreimbursed following the Cash Liquidation or REO
Disposition of such
Mortgage Loan or REO Property that was made with respect to
delinquencies that
were ultimately determined to be Excess Special Hazard Losses,
Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses, and (iv)
any other
interest shortfalls, 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 allocated to
the
Certificates, in proportion to their respective amounts of Accrued
Certificate
Interest which would have resulted absent such reductions.
"Adjustment Date": With respect to each Mortgage Loan, the date
set
forth in the related Mortgage Note on which the Mortgage Rate may
change and
each semi-annual anniversary of such date. The first Adjustment
Date as to each
Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan, any advance made by the
Master
Servicer on any Distribution Date pursuant to Section 4.03.
"Agreement": This Pooling and Servicing Agreement and all
amendments
hereof.
"Anniversary": Each anniversary of ___________ 1, 20__.
"Assessment of Compliance": As defined in Section 3.20.
"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, which assignment, notice of
transfer or
equivalent instrument may be in the form of one or more blanket
assignments
covering Mortgages secured by Mortgaged Properties located in the
same county,
if permitted by law.
"Assignment Agreement": The Assignment and Assumption Agreement,
dated
as of ____________, 200_, between [Impac Funding Corporation] and
the Depositor
relating to the transfer and assignment of the Mortgage Loans.
"Attestation Report" As defined in Section 3.20.
"Available Distribution Amount": With respect to each
Distribution
Date, the Available Distribution Amount will be 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, all required amounts pursuant to Section 3.22 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, (iii) any other amounts
reimbursable or
payable to the Master Servicer or any other Person pursuant to
Section 3.11,
(iv) Insurance Proceeds, Liquidation Proceeds, Principal
Prepayments, REO
Proceeds and the proceeds of Mortgage Loan purchases (or amounts
received in
connection with substitutions) made pursuant to Section 2.02, 2.04
and 3.25, in
each case received or made in the month of such Distribution Date
and (v) the
Trustee's Fee.
"Bankruptcy Amount": As of any date of determination, an amount,
equal
to the excess, if any, of (A) $ , over (B) the aggregate amount of
draws made
under the Letter of Credit with respect to Bankruptcy Losses since
the Cut- off
Date up to such date of determination in accordance with Section
4.04.
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 the 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 United States Bankruptcy Code of 1978,
as
amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Deficient
Valuation or Debt Service Reduction; provided, however, that a
Deficient
Valuation or a Debt Service Reduction shall not be deemed a
Bankruptcy Loss
hereunder so long as the Master Servicer has notified the Trustee
in writing
that the Master Servicer is diligently pursuing any remedies that
may exist in
connection with the related Mortgage Loan and either (A) the
related Mortgage
Loan is not in default with regard to payments due thereunder or
(B) delinquent
payments of principal and interest under the related Mortgage Loan
and any
related escrow payments in respect of such Mortgage Loan are being
advanced on a
current basis by the Master Servicer, in either case without giving
effect to
any Deficient Valuation or Debt Service Reduction.
"Business Day": Any day other than (i) a Saturday or a Sunday or
(ii) a
day on which banking institutions in the State of or the State of
(and such
other state or states in which the Custodial Account, the
Certificate Account or
the office of the Letter of Credit Issuer at which draws under the
Letter of
Credit are to be made is at the time located) are required or
authorized by law
or executive order to be closed.
"Cash Liquidation": As to any defaulted Mortgage Loan other than
a
Mortgage Loan as to which an REO Acquisition occurred, the final
receipt by or
on behalf of the Master Servicer of 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 one of the Certificates, executed by the Trustee
and
authenticated by the Certificate Registrar substantially in the
form annexed
hereto as Exhibit A.
"Certificate Account": The account or accounts created and
maintained
pursuant to Section 4.01, which shall be entitled
"_________________________________, as trustee, in trust for the
registered
holders of Impac Secured Assets Corp., Mortgage Pass-Through
Certificates,
Series 200_" and which must be an Eligible Account.
"Certificate Account Deposit Date": The 20th day (or if such 20th
day
is not a Business Day, the Business Day immediately preceding such
20th day) of
the month.
"Certificateholder" or "Holder": The Person in whose name a
Certificate
is registered in the Certificate Register, except that any
Certificate
registered in the name of the Depositor or the Master Servicer or
any affiliate
thereof shall be deemed not to be outstanding and the Voting Rights
to which it
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 10.01. The
Trustee shall be
entitled to rely upon a certification of the Depositor or the
Master Servicer in
determining if any Certificates are registered in the name of a
respective
affiliate.
"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
Depositor
Participant acts as agent, if any, and otherwise on the books of a
Depositor
Participant, if any, and otherwise on the books of the
Depositor.
"Certificate Principal Balance": With respect to each 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 (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 4.02(b) 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.
"Certificate Register": The register maintained pursuant to
Section
5.02.
"Closing Date": ___________ ___, 200_.
"Code": The Internal Revenue Code of 1986.
"Collateral Value": The appraised value of a Mortgaged Property
based
upon the lesser of (i) the appraisal made at the time of the
origination of the
related Mortgage Loan, or (ii) the sales price of such Mortgaged
Property at
such time of origination. With respect to a Mortgage Loan the
proceeds of which
were used to refinance an existing mortgage loan, the appraised
value of the
Mortgaged Property based upon the appraisal (as reviewed and
approved by the
Sponsor) obtained at the time of refinancing.
"Converted Mortgage Loan": Any Convertible Mortgage Loan with
respect
to which the interest rate borne by such Mortgage Loan has been
converted from
an adjustable interest rate to a fixed interest rate.
"Convertible Mortgage Loan": Any Mortgage Loan which by its
terms
grants to the related Mortgagor the option to convert the interest
rate borne by
such Mortgage Loan from an adjustable interest rate to a fixed
interest rate.
"Converting Mortgage Loan": Any Convertible Mortgage Loan with
respect
to which the related Mortgagor has given notice of his intent to
convert from an
adjustable interest rate to a fixed interest rate and prior to the
conversion of
such Mortgage Loan.
"Corporate Trust Office": The principal office of the Trustee at
which
at any particular time its corporate trust business with respect to
this
Agreement shall be administered, which office at the date of the
execution of
this instrument is located at
_______________________________________________,
Attention: __________________________ Series 200_-__.
"Custodial Account": The custodial account or accounts created
and
maintained pursuant to Section 3.10 in a depository institution, as
custodian
for the holders of the Certificates, for the holders of certain
other interests
in mortgage loans serviced or sold by the Master Servicer and for
the Master
Servicer, into which the amounts set forth in Section 3.10 shall be
deposited
directly. Any such account or accounts shall be an Eligible
Account.
"Cut-off Date": ____________ 1, 200_.
"Current Report" The Current Report pursuant to Section 13 or 15(d)
of
the Exchange Act.
"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.
"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,
which valuation
results from a proceeding initiated by the Mortgagor 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.
"Depositor": Impac Secured Assets Corp., or its successor in
interest.
"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.
"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 on _________ 25, 200_.
"Distribution Report" The Asset-Backed Issuer Distribution
Report
pursuant to Section 13 or 15(d) of the Exchange Act.
"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.
["Duff & Phelps": Duff & Phelps Credit Rating Company or
its successor
in interest.]
"Eligible Account": An account maintained with a federal or
state
chartered depository institution (i) the short-term obligations of
which are
rated by each of the Rating Agencies in its highest rating 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 and at the
expense of
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 Instruments, 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 Instrument 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
Certificates).
Eligible Accounts may bear interest.
"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 Special Hazard Loss": Any Special Hazard Loss, or
portion
thereof, that exceeds the then applicable Special Hazard
Amount.
"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 that are of a type that would be covered by the
fidelity
bond and the errors and omissions insurance policy required to be
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, and whether such loss be
direct or
indirect, proximate 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, combatting 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, combatting 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":
Fannie Mae (formerly, Federal National Mortgage
Association) or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor.
"FHLMC": Federal Home Loan Mortgage Corporation or any
successor.
["Fitch": Fitch Investors Service, Inc., or its successor in
interest.]
"FNMA": Federal National Mortgage Association or any successor.
"Fraud Losses": Any Realized Loss sustained by reason of a
default
arising from fraud, dishonesty or misrepresentation in connection
with the
related Mortgage Loan.
"Fraud Loss Amount": As of any date of determination after the Cut-
off
Date, an amount equal to: (X) up to and including the [first]
anniversary of the
Cut-off Date an amount equal to ______% of the aggregate
outstanding principal
balance of all of the Mortgage Loans as of the Cut-off Date minus
the aggregate
amount of draws made under the Letter of Credit with respect to
Fraud Losses
since the Cut-off Date up to such date of determination, (Y) from
the [first] to
the fifth anniversary of the Cut-off Date, an amount equal to (1)
the lesser of
(a) the Fraud Loss Amount as of the most recent anniversary of the
Cut-off Date
and (b) ______% of the aggregate outstanding principal balance of
all of the
Mortgage Loans as of the most recent anniversary of the Cut-off
Date minus (2)
the aggregate amount of draws made under the Letter of Credit with
respect to
Fraud Losses since the most recent anniversary of the Cut-off Date
up to such
date of determination. On and after the fifth anniversary of the
Cut-off Date
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 the 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.
"Funding Date": With respect to each Mortgage Loan, the date on
which
funds were advanced by or on behalf of the Sponsor and interest
began to accrue
thereunder.
"Gross Margin": As to each Mortgage Loan, the fixed percentage
set
forth in the related Mortgage Note and indicated in Exhibit H
hereto which
percentage is added to the Index on each Adjustment Date to
determine (subject
to rounding in accordance with the related Mortgage Note, Periodic
Cap, Maximum
Interest Rate and Minimum Interest Rate) the interest rate to be
borne by such
Mortgage Loan until the next Adjustment Date.
"Index": With respect to any Mortgage Loan, the Cost of Funds
Index
reflecting the monthly weighted average cost of funds of savings
and loan
associations and savings banks, the home offices of which are
located in
Arizona, California and Nevada, that are member institutions of the
FHLB of San
Francisco, as published in The Wall Street Journal, as most
recently available
----------------------- as of the date ____ days prior to the
relevant
Adjustment Date, or in the event that such index is no longer
available, an
index selected by the Master Servicer and reasonably acceptable to
the Trustee
that is based on comparable information.
["Impac Funding Corporation: Impac Funding Corporation, a
___________________ corporation, and any successor thereto.]
"Initial Certificate Principal Balance": With respect to the
Certificates, $_____________.
"Insurance Policy": With respect to any Mortgage Loan, any
insurance
policy which is required to be maintained from time to time under
this Agreement
in respect of such Mortgage Loan.
"Insurance Proceeds": Proceeds paid by any insurer pursuant to
the
Primary Mortgage Insurance Policy and any other insurance policy
covering a
Mortgage Loan to the extent such proceeds are not applied to the
restoration of
the related Mortgaged Property or released to the Mortgagor in
accordance with
the procedures that the Master Servicer would follow in servicing
mortgage loans
held for its own account.
"Late Collections": With respect to any Mortgage Loan, all
amounts
received during any Due Period, whether as late payments of Monthly
Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late
payments or collections of Monthly Payments due but delinquent for
a previous
Due Period and not previously recovered.
"Letter of Credit": The irrevocable letter of credit covering
certain
losses on the Mortgage Loans in all of the Mortgage Pools, in the
form of
Exhibit B hereto, issued by the letter of Credit Issuer, naming the
Trustee as
beneficiary for the benefit of the Certificateholders, as the same
may be
terminated, modified or reduced from time to time pursuant to its
terms and
Section 4.06, and any replacement letter of credit obtained
pursuant to Section
4.06.
"Letter of Credit Issuer": ______________, or if a replacement
Letter
of Credit is issued in accordance with the terms hereof, the issuer
of such
replacement Letter of Credit.
"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 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.
"Master Servicer": [Impac Funding Corporation] [Name of Master
Servicer], or any successor master servicer appointed as herein
provided.
"Maximum Interest Rate": As to any Mortgage Loan, the maximum
interest
rate that may be borne by such Mortgage Loan as set forth in the
related
Mortgage Note and indicated in Exhibit H, which rate may be
applicable to such
Mortgage Loan at any time during the life of such Mortgage
Loan.
"Minimum Interest Rate": As to any Mortgage Loan, the minimum
interest
rate that may be borne by such Mortgage Loan as set forth in the
related
Mortgage Note and indicated in Exhibit H hereto, which rate may be
applicable to
such Mortgage Loan at any time during the life of such Mortgage
Loan.
"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 Principal Prepayments and
for Deficient
Valuations occuring 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 2.03 and from
time to time
held in the Trust Fund, the Mortgage Loans originally so
transferred, assigned
and held being identified in the Mortgage Loan Schedule attached
hereto as
Exhibit H (and any Qualified Substitute Mortgage Loans). As used
herein, the
term "Mortgage Loan" includes the related Mortgage Note and
Mortgage.
"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's
review of the
Mortgage Files pursuant to Section 2.02, in computer-readable form
as delivered
to the Trustee), which list shall set forth the following
information, if
applicable, with respect to each Mortgage Loan:
(i) the loan number and name of the Mortgagor;
(ii) the street address, city, state and zip code of the
Mortgaged Property;
(iii) the Mortgage Rate;
(iv) Maximum Interest Rate;
(v) Minimum Interest Rate;
(vi) Gross Margin;
(vii) the first Adjustment Rate;
(viii) the Periodic Cap;
(ix) the maturity date;
(x) the original principal balance;
(xi) the first payment date;
(xii) the type of Mortgaged Property;
(xiii) the Monthly Payment in effect as of the Cut-off Date;
(xiv) the principal balance as of the Cut-off Date;
(xv) the occupancy status;
(xvi) the purpose of the Mortgage Loan;
(xvii) the Collateral Value of the Mortgaged Property;
(xviii) the original term to maturity;
(xix) the paid-through date of the Mortgage Loan;
(xx) the Loan-to-Value Ratio; and
(xxi) whether or not the Mortgage Loan was underwritten
pursuant to a limited documentation program.
The Mortgage Loan Schedule shall also set forth the total of
the
amounts described under (xiv) above for all of the Mortgage Loans.
The Mortgage
Loan Schedule may be in the form of more than one schedule,
collectively setting
forth all of the information required. With respect to any
Qualified Substitute
Mortgage Loan, the item described in clause (xiii) shall be set
forth as the
date of substitution.
"Mortgage Note": The note or other evidence of the indebtedness of
a
Mortgagor under a Mortgage Loan.
"Mortgage Rate": With respect to any Mortgage Loan, the annual rate
at
which interest accrues on such Mortgage Loan.
"Mortgaged Property": The underlying property securing a Mortgage
Loan.
"Mortgagor": The obligor or obligors on a Mortgage Note.
"Net Mortgage Rate": As to each Mortgage Loan, a per annum rate
of
interest equal to the related Mortgage Rate as in effect from time
to time minus
the Servicing Fee Rate.
"Nonrecoverable Advance": Any 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,
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 would
constitute a Nonrecoverable Advance, shall be evidenced by an
Officers'
Certificate delivered to the Depositor and the Trustee.
"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 Master Servicer or of the Sub-Servicer and
delivered to the
Depositor and Trustee.
"Opinion of Counsel": A written opinion of counsel, who may be
counsel
for the Depositor 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, or (b) resignation of the Master Servicer pursuant to
Section 6.04 must
be an opinion of counsel who (i) is in fact independent of the
Depositor and the
Master Servicer, (ii) does not have any direct financial interest
or any
material indirect financial interest in the Depositor or the Master
Servicer or
in an affiliate of either and (iii) is not connected with the
Depositor or the
Master Servicer as an officer, employee, director or person
performing similar
functions.
"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 or
substituted for prior to such Due Date pursuant to Sections 2.02,
2.04 or 3.25.
"Ownership Interest": As to any Certificate, any ownership or
security
interest in such Certificate, including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to the Certificates and any
Distribution Date, a rate equal to the weighted average, expressed
as a
percentage, of the Net Mortgage Rates of all Mortgage Loans in the
Trust Fund as
of the Due Date in the month immediately preceding the month in
which such
Distribution Date occurs, weighted on the basis of the respective
Stated
Principal Balances of such Mortgage Loans, which Stated Principal
Balances shall
be the Stated Principal Balances of such Mortgage Loans at the
close of business
on the immediately preceding Distribution Date after giving effect
to the
distributions thereon allocable to principal (or, in the case of
the initial
Distribution Date, at the close of business on the Cut-off
Date).
"Percentage Interest": With respect to any Certificate, the
undivided
percentage ownership interest equal to the initial Certificate
Principal Balance
thereof divided by the aggregate Initial Certificate Principal
Balance of all of
the Certificates.
"Periodic Cap": With respect to the Mortgage Loans, the periodic
rate
cap which limits the increase or the decrease of the related
Mortgage Rate on
any Adjustment Date to _______%.
"Permitted Instruments": Any one or more of the following:
(i) (a) direct obligations of, or obligations fully guaranteed
as to principal and interest by, the United States or any agency
or
instrumentality thereof, provided such obligations are backed by
the
full faith and credit of the United States and (b) direct
obligations
of, and obligations guaranteed as to timely payment by FHLMC or
FNMA
if,
at the time of investment, they are assigned the highest credit
rating by the Rating Agencies;
(ii) repurchase obligations (the collateral for which is held
by a third party or the Trustee) with respect to any security
described
in clause (i) above, provided that the short-term unsecured
obligations
of the party agreeing to repurchase such obligations are at the
time
rated by each Rating Agency in one of its two highest long-term
rating
categories;
(iii) certificates of deposit, time deposits, demand deposits
and bankers' acceptances of any bank or trust company
incorporated
under the laws of the United States or any state thereof or the
District of Columbia, provided that the short-term commercial paper
of
such bank or trust company (or, in the case of the principal
depository
institution in a depository institution holding company, the
long-term
unsecured debt obligations of the depository institution
holding
company) at the date of acquisition thereof has been rated by
each
Rating Agency in its highest short-term rating;
(iv) commercial paper (having original maturities of not more
than nine months) of any corporation incorporated under the laws of
the
United States or any state thereof or the District of Columbia
which on
the date of acquisition has been rated by each Rating Agency in
its
highest short- term rating;
(v) a money market fund or a qualified investment fund rated
by each Rating Agency in its highest rating available; and
(vi) if previously confirmed in writing to the Trustee, any
other obligation or security acceptable to each Rating Agency
in
respect of mortgage pass-through certificates rated in each
Rating
Agency's highest rating category;
provided, that no such instrument shall be a Permitted Instrument
if such
instrument evidences either (a) the right to receive interest only
payments with
respect to the obligations underlying such instrument or (b) both
principal and
interest payments derived from obligations underlying such
instrument where the
principal and interest payments with respect to such instrument
provide a yield
to maturity exceeding 120% of the yield to maturity at par of such
underlying
obligation.
"Person": Any individual, corporation, partnership, joint
venture,
association, joint-stock company, trust, unincorporated
organization or
government or any agency or political subdivision thereof.
"Prepayment Assumption": A prepayment assumption of ____% of
the
standard prepayment assumption, used for determining the accrual of
original
issue discount and market discount and premium on the Certificates
for federal
income tax purposes. The standard prepayment assumption assumes a
constant rate
of prepayment of mortgage loans of ___% per annum of the then
outstanding
principal balance of such mortgage loans in the first month of the
life of the
mortgage loans, increasing by an additional ___% per annum in each
succeeding
month until the thirtieth month, and a constant ___% per annum rate
of
prepayment thereafter for the life of such mortgage loans.
"Prepayment Interest Shortfall": With respect to any Distribution
Date,
for each Mortgage Loan that was the subject of a partial Principal
Prepayment, a
Principal Prepayment in full, or of a Cash Liquidation or an REO
Disposition
during the related Prepayment Period, an amount equal to the amount
of interest
that would have accrued at the applicable Net Mortgage Rate (i) in
the case of a
Principal Prepayment in full, Cash Liquidation or REO Disposition
on the
principal balance of such Mortgage Loan immediately prior to such
prepayment (or
liquidation), commencing on the date of prepayment (or liquidation)
and ending
on the last day of the month of prepayment or liquidation or (ii)
in the case of
a partial Principal Prepayment, on the amount of such prepayment,
commencing on
the date as of which the prepayment is applied and ending on the
last day of the
month of prepayment.
"Prepayment Period": As to any Distribution Date, the calendar
month
preceding the month in which such Distribution Date occurs.
"Primary Hazard Insurance Policy": Each primary hazard insurance
policy
required to be maintained pursuant to Section 3.13.
"Primary Mortgage Insurance Policy": Each primary mortgage
insurance
policy required to be maintained pursuant to Section 3.13.
"Principal Prepayment": Any payment of principal made by the
Mortgagor
on a Mortgage Loan which is received in advance of its scheduled
Due Date and
which is not accompanied by an amount of interest representing
scheduled
interest due on any date or dates in any month or months subsequent
to the month
of prepayment.
"Purchase Price": With respect to any Mortgage Loan (or REO
Property)
required to be purchased pursuant to Section 2.02, 2.04 or 3.25, 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 sum of the
applicable Net
Mortgage Rate, the rate at which the Trustee's Fee accrues 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 related Servicing Fees 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
made in respect thereof that were not previously reimbursed.
"Qualified Insurer": An insurance company duly qualified as such
under
the laws of the state of its principal place of business and each
state having
jurisdiction over such insurer in connection with the insurance
policy issued by
such insurer, duly authorized and licensed in such states to
transact business
in such states and to write the insurance provided by the insurance
policy
issued by it, approved as an insurer by the Master Servicer, as a
FNMA approved
mortgage insurer and having a claims paying ability rating of at
least "AA" by
____________________ and which is acceptable to _________________.
Any
replacement insurer with respect to a Mortgage Loan must have at
least as high a
claims paying ability rating by ____________ and _______________ as
the insurer
it replaces had on the Closing Date.
"Qualified Substitute Mortgage Loan": A Mortgage Loan substituted
by
the Depositor for a Deleted Mortgage Loan which must, on the date
of such
substitution, as confirmed in an Officers' Certificate 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 deposited by the Master Servicer, 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 remaining term to stated maturity not
greater than
(and not more than one year less than) that of the Deleted Mortgage
Loan; (iv)
comply with each representation and warranty set forth in Section 2
of the
Sponsor's Warranty Certificate; (v) have a Loan-to-Value Ratio as
of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted
Mortgage Loan as of such date; and (vi) be covered under a Primary
Insurance
Policy if such Qualified Substitute Mortgage Loan has a
Loan-to-Value Ratio in
excess of 80%. In the event that one or more mortgage loans are
substituted for
one or more Deleted Mortgage Loans, the amounts described in clause
(i) hereof
shall be determined on the basis of aggregate principal balances,
the Mortgage
Rates described in clause (ii) hereof shall be determined on the
basis of
weighted average Mortgage Rates, the Net Mortgage Rates described
in clause (ii)
hereof shall be satisfied as to each such mortgage loan, the terms
described in
clause (iii) shall be determined on the basis of weighted average
remaining
terms to maturity, the Loan-to-Value Ratios described in clause (v)
hereof shall
be satisfied as to each such mortgage loan and, except to the
extent otherwise
provided in this sentence, the representations and warranties
described in
clause (iv) hereof must be satisfied as to each Qualified
Substitute Mortgage
Loan or in the aggregate, as the case may be.
"Rating Agency": [Standard & Poor's] [Moody's] [Fitch] [Duff
& Phelps].
If either agency or a successor is no longer in existence, "Rating
Agency" shall
be such statistical credit rating agency, or other comparable
Person, designated
by the Depositor, notice of which designation shall be given to the
Trustee and
the 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 [Standard
& Poor's] [Fitch] [Duff & Phelps] and "Aa2" or better in
the case of Moody's and
references herein to the highest short-term debt rating of a Rating
Agency shall
mean "D-1" or better in the case of [Duff & Phelps] and "A- 1"
in the case of
[Standard & Poor's, ] and in the case of any other Rating
Agency such references
shall mean such rating categories without regard to any plus or
minus.
"Realized Loss": With respect to any Mortgage Loan or related
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 related 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
related 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 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. With respect to each Mortgage Loan which
has become the
subject of a Debt Service Reduction, the amount of such Debt
Service Reduction.
"Record Date": The last Business Day of the month immediately
preceding
the month of the related Distribution Date.
"Regulation AB" Subpart 229,1100 - Asset Backed Securities
(Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to
time, and subject to such clarification and interpretation as have
been provided
by the Commission in the adopting
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940,
as
amended.
"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 by any income from the REO Property treated
as a
recovery of principal pursuant to Section 3.15) .
"REO Proceeds": Proceeds, net of directly related expenses,
received in
respect of any REO Property (including, without limitation,
proceeds from the
rental of the related Mortgaged Property and of any REO
Disposition), which
proceeds are required to be deposited into the Custodial Account as
and when
received.
"REO Property": A Mortgaged Property acquired by the Master
Servicer
through foreclosure or deed-in-lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
"Request for Release": A release signed by a Servicing Officer, in
the
form of Exhibits F-1 or F-2 attached hereto.
"Required Insurance Policy": With respect to any Mortgage Loan,
any
Insurance Policy or any other insurance policy that is required to
be maintained
from time to time under this Agreement or pursuant to the
provisions of a
Mortgage Loan.
"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.
"Sponsor 's Warranty Certificate": The Sponsor 's Warranty
Certificate
of the Sponsor, dated ________ __, 200_, in the form of Exhibit I
attached
hereto.
"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 by the Master Servicer in the performance
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 and (iv) compliance
with the
obligations under the second paragraph of Section 3.01 and Section
3.09.
"Servicing Criteria" The "servicing criteria" set forth in Item
1122(d)
of Regulation AB, as such may be amended from time to time, or
those Servicing
Criteria otherwise mutually agreed to by Sponsor and the applicable
Servicer in
response to evolving interpretations of Regulation AB and
incorporated into a
revised Exhibit L.
"Servicing Fee": As to each Mortgage Loan, an amount, payable out
of
any payment of interest on the Mortgage Loan, equal to interest at
the related
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 _______%."
"Servicing Officer": Any officer of the Master Servicer involved
in, or
responsible for, the administration and servicing of the Mortgage
Loans, whose
name appears 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 evidencing the minimum denomination
of the Certificates as set forth in Section 5.01.
"Special Hazard Amount": As of any Distribution Date, an amount
equal
to $___________ (the initial "Special Hazard Amount") minus the sum
of (i) the
aggregate amount of draws made under the Letter of Credit in
accordance with
Section 4.04 since the Cut-off Date and (ii) the Adjustment Amount
(as defined
below) as most recently calculated. For each anniversary of the
Cut-off Date,
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 product of the Special
Hazard
Percentage for such anniversary multiplied by the outstanding
principal balance
of all of the Mortgage Loans on such anniversary and (B) twice the
outstanding
principal balance of the Mortgage Loan which has the largest
outstanding
principal balance on such Anniversary.
"Special Hazard Percentage": As of each anniversary of the
Cut-off
Date, the greater of (i) 1% and (ii) the largest percentage
obtained by dividing
the aggregate outstanding principal balance on such anniversary 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 on such anniversary.
"Sponsor": [Impac
Funding Corporation], and its successors and assigns.
"[Standard & Poor's": Standard & Poor's Ratings Group, a
division of
McGraw Hill, Inc. or its successor in interest.]
"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, (b) all Principal Prepayments with respect to such
Mortgage Loan or
REO Property, and all Insurance Proceeds, Liquidation Proceeds and
net income
from a REO Property 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.
"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": [To be provided.]]
"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": The corpus of the trust created by this Agreement, to
the
extent described herein, consisting of the Mortgage Loans, such
assets as shall
from time to time be identified as deposited in respect of the
Mortgage Loans in
the Custodial Account and in the Certificate Account, property
which secured a
Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of
foreclosure, proceeds of any Primary Hazard Insurance Policies, if
any, and the
Letter of Credit (or any alternate form of credit support
substituted therefor)
and all proceeds thereof.
"Trustee": [Name of Trustee], or its successor in interest, or
any
successor trustee appointed as herein provided.
"Trustee's Fee": As to each Mortgage Loan and as the Distribution
Date,
an amount, payable out of any payment of interest on the Mortgage
Loan, equal to
interest at _____% per annum on the Stated Principal Balance of
such Mortgage
Loan as of the Due Date immediately preceding the month in which
such
Distribution Date occurs.
"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.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting
Rights shall be
allocated among Holders of the Certificates, in proportion to the
outstanding
Certificate Principal Balances of their respective
Certificates.
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01
Conveyance of Mortgage Loans.
The Depositor, 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 Depositor in and to the Mortgage Loans identified
on the
Mortgage Loan Schedule 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).
In connection with such transfer and assignment, the Depositor
has
requested the Sponsor to deliver to, and deposit with the Trustee,
the following
documents or instruments:
(i) the original Mortgage Note, endorsed by the Sponsor "Pay
to the order of [Name of Trustee], as trustee without recourse" or
to
"Pay to the order of [Name of Trustee], as trustee for holders of
Impac
Secured Assets Corp., Mortgage Pass-Through Certificates,
Series
200---, without recourse" with all intervening endorsements showing
a
complete chain of endorsements from the originator to the
Person
endorsing it to the Trustee;
(ii) the original recorded Mortgage or, if the original
Mortgage has not been returned from the applicable public
recording
office, a copy of the Mortgage certified by the Sponsor to be a
true
and complete copy of the original Mortgage submitted to the
title
insurance company for recording;
(iii) a duly executed original Assignment of the Mortgage
endorsed by the Sponsor, without recourse, to "[Name of Trustee],
as
trustee" or to "[Name of Trustee], as trustee for holders of
Impac
Secured Assets Corp. Mortgage Pass-Through Certificates, Series
200---", with evidence of recording thereon;
(iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete 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 Sponsor to be a
true
and complete copy of the original Assignment submitted to the
title
insurance company for recording;
(v) the original lender's 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) the original of any assumption, modification, extension
or guaranty agreement;
(vii) the original or a copy of the private mortgage insurance
policy or original certificate of private mortgage insurance,
if
applicable; and
(viii) if any of the documents or instruments referred to
above were executed on behalf of the Mortgagor by another Person,
the
original power of attorney or other instrument that authorized
and
empowered such Person to sign, or a copy thereof certified by
the
Sponsor (or by an officer of the applicable title insurance or
escrow
company) to be a true and correct copy of the original.
The Sponsor is obligated pursuant to the Sponsor's Warranty
Certificate
to deliver to the Trustee: (a) either the original recorded
Mortgage, or in the
event such original cannot be delivered by the Sponsor, 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 Sponsor was
delivered to the
Trustee pursuant to clause (ii) above; and (b) either the original
Assignment or
Assignments of the Mortgage, with evidence of recording thereon,
showing a
complete chain of assignment from the originator to the Sponsor, or
in the event
such original cannot be delivered by the Sponsor, 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 Sponsor
were delivered
to the Trustee pursuant to clause (iv) above. 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
Sponsor shall be deemed to have satisfied its obligations hereunder
upon
delivery to the Trustee of a copy of such Mortgage certified by the
public
recording office to be a true and complete copy of the recorded
original
thereof.
If any Assignment is lost or returned unrecorded to the Trustee
because
of any defect therein, the Sponsor is required to prepare a
substitute
Assignment or cure such defect, as the case may be, and the Trustee
shall cause
such Assignment to be recorded in accordance with this
paragraph.
The Sponsor is required, as described in the Sponsor's Warranty
Certificate, to deliver to the Trustee the original of any
documents assigned to
the Trustee pursuant to this Section 2.01 not later than 120 days
after the
Closing Date.
All original documents relating to the Mortgage Loans which are
not
delivered to the Trustee, to the extent delivered by the Sponsor to
the Master
Servicer, 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, neither
the
Depositor, the Master Servicer nor the Trustee shall (and the
Master Servicer
shall ensure that no Sub-Servicer shall) assign, sell, dispose of
or transfer
any interest in the Trust Fund or any portion thereof, or pen-nit
the Trust Fund
or any portion thereof to be subject to any lien, claim, mortgage,
security
interest, pledge or other encumbrance of, any other Person.
It is intended that the conveyance of the Mortgage Loans by the
Depositor to the Trustee as provided in this Section be, and be
construed as, a
sale of the Mortgage Loans by the Depositor 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 by the Depositor to the
Trustee to secure
a debt or other obligation of the Depositor. However, in the event
that the
Mortgage Loans are held to be property of the Depositor, or if for
any reason
this Agreement is held or deemed to create a security interest in
the Mortgage
Loans, then it is intended that, (a) this Agreement shall also be
deemed to be a
security agreement within the meaning of Articles 8 and 9 of the
New York
Uniform Commercial Code and the Uniform Commercial Code of any
other applicable
jurisdiction; (b) the conveyance provided for in this Section shall
be deemed to
be (1) a grant by the Depositor to the Trustee of a security
interest in all of
the Depositor '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 and (C) 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 Depositor
to the Trustee of any security interest in any and all of the
Sponsor'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 (C) granted by Impac Funding Corporation to
the Depositor
pursuant to the Assignment Agreement; (c) the possession by the
Trustee or its
agent 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 9-305, 8-313 or 8-321 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 Depositor 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, such security interest would be
deemed to be a
perfected security interest of first priority under applicable law
and will be
maintained as such throughout the term of the Agreement.
Section 2.02 Acceptance of the Trust Fund by the Trustee.
The Trustee acknowledges receipt (subject to any exceptions noted
in
the Initial Certification described below) of the documents
referred to in
Section 2.01 above and all other assets included in the Trust Fund
and declares
that it holds and will hold such documents and the other documents
delivered to
it constituting the Mortgage Files, and that it holds or will hold
such other
assets included in the Trust Fund (to the extent delivered or
assigned to the
Trustee), in trust for the exclusive use and benefit of all present
and future
Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders,
to
review each Mortgage File on or before the Closing Date to
ascertain that all
documents required to be delivered to it are in its possession, and
the Trustee
agrees to execute and deliver to the Depositor and the Master
Servicer on the
Closing Date an Initial Certification in the form annexed hereto as
Exhibit C to
the effect that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan
specifically
identified in such certification as not covered by such
certification), (i) all
documents required to be delivered to it pursuant to this Agreement
with respect
to such Mortgage Loan are in its possession, (ii) such documents
have been
reviewed by it and appear regular on their face and relate to such
Mortgage Loan
and (iii) based on its examination and only as to the foregoing
documents, the
information set forth in items (i) - (vi) and (xiii) of the
definition of the
"Mortgage Loan Schedule" accurately reflects information set forth
in the
Mortgage File. Neither the Trustee nor the Master Servicer shall be
under any
duty to determine whether any Mortgage File should include any of
the documents
specified in clause (vi) of Section 2.01. Neither the Trustee nor
the Master
Servicer shall be under any duty or obligation to inspect, review
or examine
said documents, instruments, certificates or other papers to
determine that the
same are genuine, enforceable or appropriate for the represented
purpose or that
they have actually been recorded or that they are other than what
they purport
to be on their face.
Within 90 days of the Closing Date the Trustee shall deliver to
the
Depositor and the Master Servicer a Final Certification in the form
annexed
hereto as Exhibit D evidencing the completeness of the Mortgage
Files, with any
applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and preparing
the
certifications referred to above the Trustee finds any document or
documents
constituting a part of a Mortgage File to be missing or defective
in any
material respect, the Trustee shall promptly notify the Sponsor,
the Master
Servicer and the Depositor. The Trustee shall promptly notify the
Sponsor of
such defect and request that the Sponsor cure any such defect
within 60 days
from the date on which the Sponsor was notified of such defect, and
if the
Sponsor does not cure such defect in all material respects during
such period,
request that the Sponsor purchase such Mortgage Loan from the Trust
Fund on
behalf of the Certificateholders at the Purchase Price within 90
days after the
date on which the Sponsor was notified of such defect. It is
understood and
agreed that the obligation of the Sponsor to cure a material defect
in, or
purchase any Mortgage Loan as to which a material defect in a
constituent
document exists shall constitute the sole remedy respecting such
defect
available to Certificateholders or the Trustee on behalf of
Certificateholders.
The Purchase Price for the purchased Mortgage Loan shall be
deposited or caused
to be deposited upon receipt by the Master Servicer in the
Custodial Account
and, upon receipt by the Trustee of written notification of such
deposit signed
by a Servicing Officer, the Trustee shall release or cause to be
released to the
Sponsor the related Mortgage File and shall execute and deliver
such instruments
of transfer or assignment, in each case without recourse, as the
Sponsor shall
require as necessary to vest in the Sponsor 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 Depositor.
(a) The Master Servicer hereby represents and warrants to and
covenants
with the Depositor and the Trustee for the benefit of
Certificateholders that:
(i) The Master Servicer is, and throughout the term hereof
shall remain, a duly organized, validly existing and in good
standing
under the laws of the State of (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 FNMA
and
FHLMC;
(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 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 Depositor 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 or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer
which
would prohibit its entering into this Agreement or performing
its
obligations under this Agreement or is likely to affect materially
and
adversely either the ability of the Master Servicer to perform
its
obligations under this Agreement or the financial condition of
the
Master Servicer;
(vii) The Master Servicer will comply in all material respects
in the performance of this Agreement and with all reasonable rules
and
requirements of each insurer under each Insurance Instrument;
(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
(ix) No information, certificate of an officer, statement
furnished in writing or report delivered to the Depositor, any
affiliate of the Depositor or the Trustee by the Master Servicer
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;
and
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
Depositor, the
Trustee and the Certificateholders. Upon discovery by the
Depositor, 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 Depositor or the Trustee, the party discovering such breach
shall give
prompt written notice to the other parties.
(b) The Depositor hereby represents and warrants to the Master
Servicer
and the Trustee for the benefit of Certificateholders that as of
the Closing
Date (or, if otherwise specified below, as of the date so
specified):
(i) Immediately prior to the assignment of the Mortgage Loans
to the Trustee, the Depositor had good title to, and was the sole
owner
of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance
or security interest (other than rights to servicing and
related
compensation) and such assignment validly transfers ownership of
the
Mortgage Loans to the Trustee free and clear of any pledge,
lien,
encumbrance or security interest;
(ii) No Mortgage Loan is one month or more delinquent in
payment of principal and interest as of the Cut-off Date and no
Mortgage Loan has been so delinquent more than once in the
12-month
period prior to the Cut-off Date;
(iii) The information set forth in the Mortgage Loan Schedule
with respect to each Mortgage Loan or the Mortgage Loans, as the
case
may be, is true and correct in all material respects at the date
or
dates respecting which such information is furnished;
(iv) The Mortgage Loans are fully-amortizing, adjustable- rate
mortgage loans with Monthly Payments due on the first day of each
month
and terms to maturity at origination or modification of not more
than
30 years;
(v) Each Mortgage Loan secured by a Mortgaged Property with a
Loan-to-Value Ratio at origination in excess of 80% is the subject
of a
Primary Mortgage Insurance Policy that insures that portion of
the
principal balance thereof that exceeds the amount equal to 75% of
the
appraised value of the related Mortgaged Property. Each such
Primary
Mortgage Insurance Policy is in full force and effect and the
Trustee
is entitled to the benefits thereunder; and
(vi) The representations and warranties of the Sponsor with
respect to the Mortgage Loans and the remedies therefor are as
set
forth in the Sponsor's Warranty Certificate.
[Other representations and warranties as applicable.]
It is understood and agreed that the representations and warranties
set
forth in this Section 2.03(b) shall survive delivery of the
respective Mortgage
Files to the Trustee.
Upon discovery by either the Depositor, 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 Sponsor;
Repurchase
and Substitution.
The Depositor hereby assigns to the Trustee for the benefit of
Certificateholdersits interest in respect of the representations
and warranties
made by the Sponsor in the Sponsor 's Warranty Certificate or the
exhibits
thereto. Insofar as the Sponsor's Warranty Certificate 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 Depositor, the Master Servicer or the Trustee of a
breach of
any of the representations and warranties made in the Sponsor's
Warranty
Certificate 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 Sponsor of such breach and
request that
such Sponsor shall, within 90 days from the date that the
Depositor, the Sponsor
or the Trustee was notified of such breach, either (i) cure such
breach in all
material respects or (ii) purchase such Mortgage Loan from the
Trust Fund at the
Purchase Price and in the manner set forth in Section 2.02;
provided that in the
case of such breach, the Sponsor shall have the option to
substitute a Qualified
Substitute Mortgage Loan or Loans for such Mortgage Loan if such
substitution
occurs within 90 days following the Closing Date. Any such
substitution must
occur within 90 days from the date the Sponsor was notified of the
breach if
such 90 day period expires before two years following the Closing
Date. In the
event that the Sponsor elects to substitute a Qualified Substitute
Mortgage Loan
or Loans for a Deleted Mortgage Loan pursuant to this Section 2.04,
the Sponsor
shall deliver to the Trustee for the benefit of the
Certificateholders 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 shall not be part of the Trust Fund and will be
retained by the
Master Servicer and remitted by the Master Servicer to the Sponsor
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 Sponsor shall be entitled to
retain all
amounts received in respect of such Deleted Mortgage Loan. The
Depositor 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
Depositor 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 Sponsor
shall be
deemed to have made the representations and warranties with respect
to the
Qualified Substitute Mortgage Loan contained in the Sponsor 's
Warranty
Certificate as of the date of substitution, and the Depositor 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
Section 2.03 hereof, and the Sponsor shall be obligated to
repurchase or
substitute for any Qualified Substitute Mortgage Loan as to which a
repurchase
or substitution obligation has occurred pursuant to Section 3 of
the Sponsor 's
Warranty Certificate.
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 Sponsor shall
provide the
Master Servicer on the day of substitution for immediate deposit in
to the
Custodial Account the amount of such shortfall, without any
reimbursement
therefor. The Sponsor 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. The costs of any substitution as
described above,
including any related assignments, opinions or other documentation
in connection
therewith shall be dome by the Sponsor.
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 Sponsor to cure such breach or to so purchase or substitute
for any
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.
In addition,
if the first scheduled Monthly Payment is due during the first
month after its
closing date (as such term is used in the Sponsor 's Warranties
Certificate) and
such Monthly Payment is not received by the Master Servicer within
30 days of
the due date in accordance with the terms of the related Mortgage
Note, the
Master Servicer shall promptly notify the Sponsor and the Trustee
and the
Sponsor shall purchase such Mortgage Loan from the Trust Fund at
the Purchase
Price or substitute a Qualified Substitute Mortgage Loan therefor
within 15 days
from the date that the Sponsor was notified.
Section 2.05 Issuance of Certificates Evidencing Interests in the
Trust
Fund.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and
the delivery of the Mortgage Files to it together with the
assignment to it of
all other assets included in the Trust Fund, receipt of which is
hereby
acknowledged. Concurrently with such delivery and in exchange
therefor, the
Trustee, pursuant to the written request of the Depositor executed
by an officer
of the Depositor, has executed and caused to be authenticated, and
delivered to
or upon the order of the Depositor, the Certificates in authorized
denominations
which evidence ownership of the entire Trust Fund.
Section 2.06 Purposes and Powers of the Trust.
The purpose of the common law trust, as created hereunder, is to
engage
in the following activities:
(a) acquire and hold the Mortgage Loans and the other assets of
the
Trust Fund and the proceeds therefrom;
(b) to issue the Certificates sold to the Depositor in exchange for
the
Mortgage Loans;
(c) to make payments on the Certificates;
(d) to engage in those activities that are necessary, suitable
or
convenient to accomplish the foregoing or are incidental thereto or
connected
therewith; and
(e) subject to compliance with this Agreement, to engage in such
other
activities as may be required in connection with conservation of
the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing
activities.
The Trustee shall not cause the trust to engage in any activity
other
than in connection with the foregoing or other than as required
or
authorized by the terms of this Agreement while any Certificate
is
outstanding, and this Section 2.06 may not be amended, without
the
consent of the Certificateholders evidencing 51% or more of the
aggregate voting rights of the Certificates.
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans
for
the benefit of the Certificateholders, in accordance with this
Agreement and the
customary and usual standards of practice of prudent institutional
mortgage
lenders servicing comparable mortgage loans for their own account
in the
respective states in which the Mortgaged Properties are located.
Subject to the
foregoing, the Master Servicer shall have full power and authority,
acting alone
and/or through Sub-Servicers as provided in Section 3.02, to do or
cause to be
done any and all things in connection with such servicing and
administration
that it may deem necessary or desirable. Without limiting the
generality of the
foregoing, the Master Servicer in its own name or in the name of a
Sub-Servicer
is hereby authorized and empowered by the Trustee when the Master
Servicer
believes it appropriate in its best judgment, to (i) execute and
deliver, on
behalf of the Certificateholders and the Trustee or any of them,
any and all
instruments of satisfaction or cancellation, or of partial or full
release or
discharge, and all other comparable instruments, with respect to
the Mortgage
Loans and the Mortgaged Properties, (ii) institute foreclosure
proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership
of such
properties, and (iii) hold or cause to be held title to such
properties, on
behalf of the Trustee and Certificateholders. The Master Servicer
shall service
and administer the Mortgage Loans in accordance with applicable
state and
federal law and shall provide to the Mortgagors any reports
required to be
provided to them thereby. Subject to Section 3.16, the Trustee
shall furnish to
the Master Servicer and any Sub-Servicer any powers of attorney and
other
documents necessary or appropriate to enable the Master Servicer
and any Sub-
Servicer to carry out their servicing and administrative duties
hereunder. The
Trustee shall not be responsible for any action taken by the Master
Servicer or
any Sub-Servicer pursuant to the application of such powers of
attorney.
In accordance with the standards of the preceding paragraph, the
Master
Servicer shall advance or cause to be advanced funds as necessary
for the
purpose of effecting the payment of taxes and assessments on the
Mortgaged
Properties, which advances shall be reimbursable in the first
instance from
related collections from the Mortgagors pursuant to Section 3.09,
and further as
provided in Section 3.11. No costs incurred by the Master Servicer
or by Sub-
Servicers in effecting the payment of taxes and assessments on the
Mortgaged
Properties shall, for the purpose of calculating distributions
to
Certificateholders, be added to the amount owing under the related
Mortgage
Loans, notwithstanding that the terms of such Mortgage Loans so
permit.
The Master Servicer may approve a request for a partial release of
the
Mortgaged Property, easement, consent to alteration or demolition
and other
similar matters if it has determined, exercising its good faith
business
judgement in the same manner as it would if it were the owner of
the related
Mortgage Loan, that such approval will not adversely affect the
security for, or
the timely and full collectability of, the related Mortgage Loan.
Any fee
collected by the Master Servicer for processing such request will
be retained by
the Master Servicer as additional servicing compensation.
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. 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, 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 SubServicer to perform its
obligations
hereunder and under the Sub-Servicing Agreement, and in either case
shall be a
FHLMC or FNMA approved mortgage servicer. Each Sub-Servicing
Agreement must
impose on the Sub-Servicer requirements conforming to the
provisions set forth
in Section 3.08 and provide for servicing of the Mortgage Loans
consistent with
the terms of this Agreement. With the consent of the Trustee, which
consent
shall not be unreasonably withheld, 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; provided,
however, that any such amendments or different forms shall be
consistent with
and not violate the provisions of this Agreement.
(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 SubServicer under the related Sub-Servicing
Agreement,
including, without limitation, any obligation to make advances in
respect of
delinquent payments as required by a Sub-Servicing Agreement, or to
purchase a
Mortgage Loan on account of defective documentation or on account
of a breach of
a representation or warranty, as described in Section 2.02. 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
Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees
against the party against whom such enforcement is directed.
Section 3.03 Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any
Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer
pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions
of such
Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed
simultaneously by
the Master Servicer without any act or deed on the part of such
Sub-Servicer or
the Master Servicer, and the Master Servicer either shall service
directly the
related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a
successor Sub-Servicer which qualifies under Section 3.02.
Section 3.04 Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions
of
this Agreement relating to agreements or arrangements between the
Master
Servicer and a SubServicer or reference to actions taken through a
Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and
primarily liable to
the Trustee and Certificateholders for the servicing and
administering of the
Mortgage Loans in accordance with the provisions of Section 3.01
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.
Section 3.06 Assumption or Termination of Sub-Servicing Agreements
by
Trustee.
In the event the Master Servicer shall for any reason no longer be
the
master servicer (including by reason of an Event of Default), the
Trustee or its
designee shall thereupon assume all of the rights and obligations
of the Master
Servicer under each Sub-Servicing Agreement that the Master
Servicer may have
entered into, unless the Trustee is then permitted and elects to
terminate any
Sub-Servicing Agreement in accordance with its terms. The Trustee,
its designee
or the successor servicer for the Trustee shall be deemed to have
assumed all of
the Master Servicer's interest therein and to have replaced the
Master Servicer
as a party to each Sub-Servicing Agreement to the same extent as if
the Sub-
Servicing Agreements had been assigned to the assuming party,
except that the
Master Servicer shall not thereby be relieved of any liability or
obligations
under the Sub-Servicing Agreements, and the Master Servicer shall
continue to be
entitled to any rights or benefits which arose prior to its
termination as
master servicer.
The Master Servicer at its expense shall, upon request of the
Trustee,
deliver to the assuming party all documents and records relating to
each Sub-
Servicing Agreement and the Mortgage Loans then being serviced and
an accounting
of amounts collected and held by it and otherwise use its best
efforts to effect
the orderly and efficient transfer of the Sub-Servicing Agreements
to the
assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments.
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, Primary Mortgage 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. Consistent with the foregoing, the Master Servicer may in
its
discretion waive any prepayment fees, late payment charge or other
charge,
except as otherwise required under applicable law. 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. 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 into 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 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 SubServicing Agreement. The Sub-Servicer will also be
required to
remit to the Master Servicer, within one Business Day of 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 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 no later than the first
Business Day
after receipt 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 and identified 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 on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans, not including any portion thereof representing interest
on
account of the related Servicing Fee Rate;
(iii) all Insurance Proceeds, other than proceeds that
represent reimbursement of costs and expenses incurred by the
Master
Servicer in connection with presenting claims under the related
Insurance Policies, Liquidation Proceeds and REO Proceeds;
(iv) all proceeds of any Mortgage Loan or REO Property
repurchased or
purchased in accordance with Sections 2.02, 2.04, 3.25
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;
(v) any amounts required to be deposited in the Custodial
Account pursuant to Section 3.12, 3.13 or 3.22; and
(vi) all amounts required to be deposited pursuant to Section
3.25.
For purposes of the immediately preceding sentence, the Cut-off
Date
with respect to any Qualified Substitute Mortgage Loan shall be
deemed to be the
date of substitution.
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
Instruments in accordance with the provisions set forth in Section
3.12, The
Master Servicer shall give notice to the Trustee and the Depositor
of the
location of the Custodial Account after any change thereof.
(c) Payments in the nature of late payment charges, prepayment
fees,
assumption fees and reconveyance fees received on the Mortgage
Loans shall not
be deposited in the Custodial Account, but rather shall be received
and held by
the Master Servicer as additional servicing compensation.
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, such
deposit to
include interest collections on the Mortgage Loans at the Net
Mortgage
Rate [and net of amounts reimbursed therefrom];
(ii) to pay to itself, the Depositor, the Sponsor or any other
appropriate person, as the case may be, with respect to each
Mortgage
Loan that has previously been purchased, repurchased or
replaced
pursuant to Sections 2.02, 2.04 or 9.01 all amounts received
thereon
and not yet distributed as of the date of purchase, repurchase
or
substitution;
(iii) to
reimburse itself or any Sub-Servicer for Advances not
previously reimbursed, the Master Servicer's or any
Sub-Servicer's
right to reimbursement pursuant to this clause (iii) being limited
to
amounts received which represent Late Collections (net of the
related
Servicing Fees) of Monthly Payments on Mortgage Loans with respect
to
which such Advances were made and as further provided in Section
3.15;
(iv) to reimburse or pay itself, the Trustee or the Depositor
for expenses incurred by or reimbursable to the Master Servicer,
the
Trustee or the Depositor pursuant to Sections 3.22, 6.03, 8.05,
10.01(c) or 10.01(g), except as otherwise provided in such
Sections;
(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, subject to
Section
8.05;
(viii) to reimburse itself or any Sub-Servicer for any Advance
previously made which itself has determined to be a
Nonrecoverable
Advance, provided that such Advance was made with respect to a
delinquency that ultimately constituted an Excess Special Hazard
Loss,
Excess Fraud Loss, Excess Bankruptcy Loss or Extraordinary Loss;
and 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 clauses
(ii), (iii),
(iv), (v), (vi), (vii) and (viii). Reconciliations will be prepared
for the
Custodial Account within 45 Calendar days after the bank statement
cut-off date.
All items requiring reconciliation will be resolved within 90
calendar days of
their original identification.
Section 3.12 Permitted Instruments.
Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account
in Permitted
Instruments, each of which shall mature not later than the Business
Day
immediately preceding the Distribution Date next following the date
of such
investment (except that if such Permitted Instrument is an
obligation of the
institution that maintains such account, then such Permitted
Instrument shall
mature not later than such Distribution Date) and shall not be sold
or disposed
of prior to its maturity. All income and gain realized from any
such investment
as well as any interest earned on deposits in the Custodial Account
shall be for
the benefit of the Master Servicer. The Master Servicer shall
deposit in the
Custodial Account (with respect to investments made hereunder of
funds held
therein) 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 the Letter of Credit, Primary
Mortgage
Insurance and Primary Hazard Insurance.
(a) The Master Servicer covenants and agrees to exercise its
best
reasonable efforts to maintain and keep the Letter of Credit in
full force and
effect in accordance with Section 4.06 until the termination of the
Trust Fund
created hereby, unless the amount available to be drawn thereunder
has been
exhausted or unless the Letter of Credit has been terminated
pursuant to the
terms thereof or hereof. As to any Distribution Date, with respect
to any
Mortgage Loan as to which liquidation has been completed (which
shall be deemed
to have occurred when the Master Servicer determines that it has
received all
Insurance Proceeds (other than proceeds from a drawing under the
Letter of
Credit), Liquidation Proceeds and other recoveries which the Master
Servicer
deems to be recoverable) during the preceding calendar month or was
deemed to
have occurred during such preceding calendar month in accordance
with Section
3.07 (other than any Mortgage Loan relating to a Mortgaged Property
which has
suffered an Extraordinary Loss), by 12:00 Noon, New York City time,
on the
related Certificate Account Deposit Date, the Trustee shall draw on
the Letter
of Credit, after receipt of the written statement of the Master
Servicer
delivered pursuant to Section 4.04, pursuant to the terms thereof.
In lieu of a
draw under the Letter of Credit as provided above, Southern Pacific
Funding, at
its sole option, may, on the Certificate Account Deposit Date upon
which such
draw could otherwise be made, deposit an amount equal to such draw
into the
Certificate Account. After any drawing under the Letter of Credit
or payment by
Southern Pacific Funding pursuant to this Section 3.13(a), the
Trustee shall
assign to Southern Pacific Funding any rights in or to the related
Mortgage Loan
and such Mortgage Loan will thereafter no longer be part of the
Trust Fund. Upon
receipt by Southern Pacific Funding of any amounts in connection
with a Mortgage
Loan so assigned to it, Southern Pacific Funding shall supply the
Trustee with
an Officers' Certificate which sets forth such amount, and (except
in the case
of a payment made by Southern Pacific Funding in lieu of a draw on
the Letter of
Credit) Southern Pacific Funding shall cause the Letter of Credit
Issuer to be
reimbursed to the extent required for reinstatement of the
available amount
under the Letter of Credit. Upon receipt by the Trustee of such an
Officers'
Certificate, if the Letter of Credit remains outstanding, the
Trustee shall
request the reinstatement of the amount remaining under the Letter
of Credit in
an amount equal to such recovered amount by delivering a
certificate to the
Letter of Credit Issuer substantially in the form of Annex B to the
Letter of
Credit.
Notwithstanding the foregoing, draws on the Letter of Credit,
or
payments in lieu thereof, in connection with Fraud Losses shall not
exceed in
the aggregate Fraud Loss Amount.
(b) The Master Servicer may terminate the Letter of Credit or
reduce
the amount thereof (pursuant to Section 4.06(d)) or substitute an
alternative
form of credit enhancement therefor, provided that prior to any
such reduction,
termination or substitution, the Master Servicer shall obtain
written
confirmation from the Rating Agency that such reduction,
termination or
substitution would not adversely affect the then-current rating
assigned to the
Certificates by such Rating Agency and provide a copy of such
confirmation to
the Trustee and, provided that the Master Servicer obtains on
Opinion of Counsel
to the effect that obtaining any such alternative form of credit
support will
not adversely affect the classification of the Trust Fund as a
grantor trust for
federal income tax purposes.
(c) The Master Servicer shall not take, or permit any Sub-servicer
to
take, any action which would result in non-coverage under any
applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of
the Master
Servicer or Sub-servicer, 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 such Primary Mortgage Insurance Policy
until the
principal balance of the related Mortgage Loan secured by a
Mortgaged Property
is reduced to 75% or less of the Collateral Value in the case of
such a Mortgage
Loan having a Loan-to-Value Ratio at origination in excess of 80%.
The Master
Servicer shall not cancel or refuse to renew any such Primary
Mortgage Insurance
Policy, or consent to any Sub-servicer canceling or refusing to
renew any such
Primary Mortgage Insurance Policy applicable to a Mortgage Loan
subserviced by
it, that is in effect at the date of the initial issuance of the
Certificates
and is required to be kept in force hereunder unless the
replacement Primary
Mortgage Insurance Policy for such canceled or non-renewed policy
is maintained
with a Qualified Insurer.
(d) In connection with its activities as administrator and servicer
of
the Mortgage Loans, the Master Servicer agrees to present or to
cause the
related Sub-servicer to present, on behalf of the Master Servicer,
the
Sub-servicer, if any, the Trustee and Certificateholders, claims to
the insurer
under any Primary Mortgage Insurance Policies, in a timely manner
in accordance
with such policies, and, in this regard, to take or cause to be
taken such
reasonableaction as shall be necessary to permit recovery under any
Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to
Section 3.10, any Insurance Proceeds collected by or remitted to
the Master
Servicer under any Primary Mortgage Insurance Policies shall be
deposited in the
Custodial Account, subject to withdrawal pursuant to Section
3.11.
(e) The Master Servicer shall cause to be maintained for each
Mortgage
Loan primary hazard insurance with extended coverage on the related
Mortgaged
Property in an amount equal to the lesser of 100% of the
replacement value of
the improvements, as determined by the insurance company, on such
Mortgaged
Property or 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. 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. When the improvements securing a
Mortgage
Loan are located at the time of origination of such Mortgage Loan
in a federally
designated special flood hazard area, the Master Servicer shall
cause flood
insurance (to the extent available) to be maintained in respect
thereof. Such
flood insurance shall be in an amount equal to the lesser of (i)
the replacement
value of the improvements, which are part of such Mortgaged
Property on a
replacement cost basis and (ii) the maximum amount of such
insurance available
for the related Mortgaged Property under the national flood
insurance program
(assuming that the area in which such Mortgaged Property is located
is
participating in such program).
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 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. 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 or
if such enforcement will adversely affect or jeopardize required
coverage under
the Insurance Instruments. If the Master Servicer is unable to
enforce such "due
on- sale" clause (as provided in the previous sentence) or if no
"due-on-sale"
clause is applicable, the Master Servicer or the Sub-Servicer will
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 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, if the
Master
Servicer shall have determined in good faith that such substitution
will not
adversely affect the collectability of the Mortgage Loan. 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 notify the Trustee that any such
substitution
or assumption agreement has been completed by forwarding to the
Trustee the
original copy of such substitution or assumption agreement, which
copy shall be
added to the related Mortgage File and shall, for all purposes, be
considered a
part of such Mortgage File to the same extent as all other
documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this
Agreement, the Master Servicer shall not be deemed to be in
default, breach or
any other violation of its obligations hereunder by reason of any
assumption of
a Mortgage Loan by operation of law or any assumption that the
Master Servicer
may be restricted by law from preventing, for any reason
whatsoever. For
purposes of this Section 3.14, the term "assumption" is deemed to
also include a
sale of a Mortgaged Property that is not accompanied by an
assumption or
substitution of liability agreement.
Section 3.15 Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall exercise reasonable efforts, consistent
with
the procedures that the Master Servicer would use in servicing
loans for its own
account, to foreclose upon or otherwise comparably convert (which
may include an
REO Acquisition) the ownership of properties securing such of the
Mortgage Loans
as come into and continue in default and as to which no
satisfactory
arrangements can be made for collection of delinquent payments
pursuant to
Section 3.07, and which are not released from the Trust Fund
pursuant to any
other provision hereof. The Master Servicer shall use reasonable
efforts to
realize upon such defaulted Mortgage Loans in such manner 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 (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 Mortgaged
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
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, on a pro rata basis, to unpaid Servicing Fees; and second,
to interest at
the related 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 related Net Mortgage Rate and to
principal of the
Mortgage Loan shall be applied as follows: first, to reimburse the
Trustee for
any unpaid Trustee's Fees, second, 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 third, for distribution in accordance with the
provisions of
Section 4.01(b).
Section 3.16 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by
the
Master Servicer of a notification that payment in full shall be
escrowed in a
manner customary for such purposes, the Master Servicer will
immediately notify
the Trustee by a certification (which certification shall include a
statement to
the effect that all amounts received or to be received in
connection with such
payment which are required to be deposited in the Custodial Account
pursuant to
Section 3.10 have been or will be so deposited) of a Servicing
Officer and shall
request delivery to it of the Mortgage File in the form of the
Request for
Release attached hereto as Exhibit F-2. Upon receipt of such
certification and
request, the Trustee shall promptly release the related Mortgage
File to the
Master Servicer. Subject to the receipt by the Master Servicer of
the proceeds
of such payment in full and the payment of all related fees and
expenses, the
Master Servicer shall arrange for the release to the Mortgagor of
the original
cancelled Mortgage Note. The Master Servicer shall provide for
preparation of
the appropriate instrument of satisfaction covering any Mortgage
Loan which pays
in full and the Trustee shall cooperate in the execution and return
of such
instrument to provide for its delivery or recording as may be
required. All
other documents in the Mortgage File shall be retained by the
Master Servicer to
the extent required by applicable law. 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
