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IMPAC SECURED ASSETS CORP.,
Company,
IMPAC FUNDING CORPORATION
Master Servicer,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2003
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Mortgage Pass-Through Certificates
Series 2003-2
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS .............................................................. 3
Section 1.01. Defined Terms .............................................. 3
Accrued Certificate Interest ......................................... 3
Advance .............................................................. 3
Aggregate Stated Principal Balance ................................... 3
Agreement ............................................................ 3
Assignment ........................................................... 4
Available Distribution Amount ........................................ 4
Balloon Loan ......................................................... 4
Balloon Payment ...................................................... 4
Bankruptcy Amount .................................................... 4
Bankruptcy Code ...................................................... 5
Bankruptcy Loan ...................................................... 5
Bankruptcy Loss ...................................................... 5
Book-Entry Certificate ............................................... 5
Business Day ......................................................... 5
Cash Liquidation ..................................................... 5
Certificate .......................................................... 5
Certificate Account .................................................. 5
Certificate Account Deposit Date ..................................... 6
Certificateholder .................................................... 6
Certificate Owner .................................................... 6
Certificate Principal Balance ........................................ 6
Certificate Register ................................................. 7
Class ................................................................ 7
Class A Certificate .................................................. 7
Class A-1 Certificate ................................................ 7
Class A-2 Certificate ................................................ 7
Class A-3 Certificate ................................................ 7
Class A-4 Certificate ................................................ 7
Class A-IO Certificate ............................................... 7
Class A-IO Regular Interest .......................................... 7
Class A-PO Certificate ............................................... 8
Class B Certificate .................................................. 8
Class B-1 Certificate ................................................ 8
Class B-2 Certificate ................................................ 8
Class B-3 Certificate ................................................ 8
Class B Percentage ................................................... 8
Class B-1 Prepayment Distribution Trigger ............................ 8
Class B-2 Percentage ................................................. 8
Class B-2 Prepayment Distribution Trigger ............................ 9
Class B-3 Percentage ................................................. 9
Class B-3 Prepayment Distribution Trigger ............................ 9
Class M-1 Certificate ................................................ 9
Class M-2 Certificate ................................................ 9
Class M-2 Percentage ................................................. 9
Class M-2 Prepayment Distribution Trigger ............................ 10
Class M-3 Certificate ................................................ 10
Class M-3 Percentage ................................................. 10
Class M-3 Prepayment Distribution Trigger ............................ 10
Class P Certificate .................................................. 10
Class R Certificate .................................................. 10
Class R-1 Interest ................................................... 10
Class R-2 Interest ................................................... 10
Closing Date ......................................................... 10
Code ................................................................. 11
Collateral Value ..................................................... 11
Commission ........................................................... 11
Company .............................................................. 11
Compensating Interest ................................................ 11
Corporate Trust Office ............................................... 11
Countrywide .......................................................... 11
Credit Support Depletion Date ........................................ 11
Curtailment .......................................................... 11
Custodial Account .................................................... 11
Cut-off Date ......................................................... 11
Debt Service Reduction ............................................... 11
Defaulted Mortgage Loan .............................................. 11
Deficient Valuation .................................................. 12
Definitive Certificate ............................................... 12
Deleted Mortgage Loan ................................................ 12
Depository ........................................................... 12
Depository Participant ............................................... 12
Determination Date ................................................... 12
Discount Fraction .................................................... 12
Discount Mortgage Loan ............................................... 12
Disqualified Organization ............................................ 12
Distribution Date .................................................... 13
Due Date ............................................................. 13
Due Period ........................................................... 13
Eligible Account ..................................................... 13
Eligible Funds ....................................................... 13
Event of Default ..................................................... 13
Excess Bankruptcy Loss ............................................... 14
Excess Fraud Loss .................................................... 14
Excess Proceeds ...................................................... 14
Excess Special Hazard Loss ........................................... 14
Extraordinary Events ................................................. 14
Extraordinary Losses ................................................. 14
Fannie Mae ........................................................... 14
FDIC ................................................................. 15
Final Scheduled Distribution Date .................................... 15
Foreclosure Loan ..................................................... 15
Fraud Loss Amount .................................................... 15
Fraud Losses ......................................................... 15
Freddie Mac .......................................................... 15
Initial Certificate Principal Balance ................................ 15
Initial Notional Amount .............................................. 15
Insurance Policy ..................................................... 15
Insurance Proceeds ................................................... 15
Interest Accrual Period .............................................. 16
Interest Only Certificates ........................................... 16
Interest Remittance Amount ........................................... 16
Late Collections ..................................................... 16
Liquidated Mortgage Loan ............................................. 16
Liquidation Proceeds ................................................. 16
Loan-to-Value Ratio .................................................. 16
Lost Note Affidavit .................................................. 16
Master Servicer ...................................................... 16
Master Servicer Prepayment Charge Payment Amount ..................... 16
Master Servicing Fees ................................................ 16
Master Servicing Fee Rate ............................................ 17
MERS ................................................................. 17
MERS(R) System ....................................................... 17
MIN .................................................................. 17
MOM Loan ............................................................. 17
Monthly Payment ...................................................... 17
Moody's .............................................................. 17
Mortgage ............................................................. 17
Mortgage File ........................................................ 17
Mortgage Loan ........................................................ 17
Mortgage Loan Purchase Agreement ..................................... 18
Mortgage Loan Schedule ............................................... 18
Mortgage Note ........................................................ 19
Mortgage Pool ........................................................ 19
Mortgage Rate ........................................................ 19
Mortgaged Property ................................................... 19
Mortgagor ............................................................ 19
Net Liquidation Proceeds ............................................. 19
Net Mortgage Rate .................................................... 19
Net Prepayment Interest Shortfall .................................... 19
Non-Discount Mortgage Loan ........................................... 19
Non-Primary Residence Loan ........................................... 19
Nonrecoverable Advance ............................................... 20
Non-United States Person ............................................. 20
Notional Amount ...................................................... 20
Officers' Certificate ................................................ 20
Opinion of Counsel ................................................... 20
Optional Termination Date ............................................ 20
OTS .................................................................. 20
Outstanding Mortgage Loan ............................................ 20
Ownership Interest ................................................... 21
Pass-Through Rate .................................................... 21
Percentage Interest .................................................. 21
Permitted Investment ................................................. 21
Permitted Transferee ................................................. 22
Person ............................................................... 23
Pool Strip Rate ...................................................... 23
Prepayment Assumption ................................................ 23
Prepayment Charge .................................................... 23
Prepayment Distribution Percentage ................................... 23
Prepayment Distribution Trigger ...................................... 24
Prepayment Interest Shortfall ........................................ 24
Prepayment Period .................................................... 24
Primary Hazard Insurance Policy ...................................... 24
Primary Insurance Policy ............................................. 24
Principal Only Collection Shortfalls ................................. 24
Principal Only Certificates .......................................... 24
Principal Only Distribution Amount ................................... 25
Principal Prepayment ................................................. 25
Principal Prepayment in Full ......................................... 25
Prospectus Supplement ................................................ 25
Purchase Price ....................................................... 25
Qualified Insurer .................................................... 26
Qualified Substitute Mortgage Loan ................................... 26
Radian ............................................................... 26
Radian Insured Loans ................................................. 26
Radian Lender-Paid PMI Policy ........................................ 26
Radian PMI Policy Rate ............................................... 26
Rating Agency ........................................................ 27
Realized Loss ........................................................ 27
Record Date .......................................................... 27
Regular Certificate .................................................. 27
Relief Act ........................................................... 27
Relief Act Interest Shortfall ........................................ 27
REMIC ................................................................ 27
REMIC 1 .............................................................. 27
REMIC 2 .............................................................. 28
REMIC Provisions ..................................................... 28
Remittance Report .................................................... 28
REO Acquisition ...................................................... 28
REO Disposition ...................................................... 28
REO Imputed Interest ................................................. 28
REO Mortgage Loan .................................................... 28
REO Proceeds ......................................................... 28
REO Property ......................................................... 29
Request for Release .................................................. 29
Residual Interest .................................................... 29
Responsible Officer .................................................. 29
Seller ............................................................... 29
Senior Certificates .................................................. 30
Senior Percentage .................................................... 30
Senior Principal Distribution Amount ................................. 31
Servicing Account .................................................... 31
Servicing Advances ................................................... 31
Servicing Guide ...................................................... 31
Servicing Officer .................................................... 31
Single Certificate ................................................... 31
Special Hazard Amount ................................................ 31
Special Hazard Loss .................................................. 32
Standard & Poor's .................................................... 32
Startup Day .......................................................... 32
Stated Principal Balance ............................................. 32
Subordinate Certificate .............................................. 33
Subordinate Percentage ............................................... 33
Subordinate Principal Distribution Amount ............................ 33
Sub-Servicer ......................................................... 33
Sub-Servicer Remittance Date ......................................... 33
Sub-Servicing Account ................................................ 33
Sub-Servicing Agreement .............................................. 33
Sub-Servicing Fees ................................................... 33
Sub-Servicing Fee Rate ............................................... 33
Substitution Adjustment .............................................. 34
Tax Returns .......................................................... 34
Transfer ............................................................. 34
Transferor ........................................................... 34
Trustee .............................................................. 34
Trustee's Fee ........................................................ 34
Trustee Fee Rate ..................................................... 34
Trust Fund ........................................................... 34
Uncertificated Principal Balance ..................................... 34
Uncertificated REMIC 1 Accrued Interest .............................. 34
Uncertificated REMIC 1 IO Notional Amount ............................ 35
Uncertificated REMIC 1 Pass-Through Rate ............................. 35
Uncertificated REMIC 1 Regular Interest LTA2 ......................... 36
Uncertificated REMIC 1 Regular Interest LTA4 ......................... 36
Uncertificated REMIC Regular Interest LTIO ........................... 36
Uncertificated REMIC 1 Regular Interest LTMB ......................... 36
Uncertificated REMIC 1 Regular Interest LTP .......................... 36
Uncertificated REMIC 1 Regular Interest LTPO ......................... 36
Uncertificated REMIC 1 Regular Interests ............................. 37
Uncertificated REMIC 1 Regular Interest LTA1 Distribution Amount ..... 37
Uncertificated REMIC 1 Regular Interest LTA2 Distribution Amount ..... 37
Uncertificated REMIC 1 Regular Interest LTA4 Distribution Amount ..... 37
Uncertificated REMIC 1 Regular Interest LTIO Distribution Amount ..... 37
Uncertificated REMIC 1 Regular Interest LTMB Distribution Amount ..... 37
Uncertificated REMIC 1 Regular Interest LTP Distribution Amount ...... 37
Uncertificated REMIC 1 Regular Interest LTPO Distribution Amount ..... 37
Uncertificated REMIC 1 Regular Interest LTR2 Distribution Amount ..... 37
Uncertificated REMIC 1 Regular Interest Distribution Amounts ......... 38
Underwriter .......................................................... 38
Uninsured Cause ...................................................... 38
United States Person ................................................. 38
Voting Rights ........................................................ 38
Wendover ............................................................. 38
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES ........................................ 39
Section 2.01. Conveyance of Mortgage Loans ............................... 39
Section 2.02. Acceptance of the Trust Fund by the Trustee ................ 42
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Company ................................... 44
Section 2.04. Representations and Warranties of the Seller ............... 46
Section 2.05. Issuance of Certificates; Conveyance of REMIC Regular
Interests and Acceptance of REMIC 2 by the Trustee ......... 47
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND ........................................................ 49
Section 3.01. Master Servicer to Act as Master Servicer .................. 49
Section 3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers .............................................. 50
Section 3.03. Successor Sub-Servicers .................................... 52
Section 3.04. Liability of the Master Servicer ........................... 52
Section 3.05. No Contractual Relationship Between Sub-Servicers and
Trustee or Certificateholders .............................. 52
Section 3.06. Assumption or Termination of Sub-Servicing Agreements by
Trustee .................................................... 52
Section 3.07. Collection of Certain Mortgage Loan Payments ............... 53
Section 3.08. Sub-Servicing Accounts ..................................... 54
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts ......................................... 54
Section 3.10. Custodial Account .......................................... 55
Section 3.11. Permitted Withdrawals From the Custodial Account ........... 56
Section 3.12. Permitted Investments ...................................... 57
Section 3.13. Maintenance of Primary Hazard Insurance .................... 57
Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption Agreements .. 59
Section 3.15. Realization Upon Defaulted Mortgage Loans .................. 61
Section 3.16. Trustee to Cooperate; Release of Mortgage Files ............ 62
Section 3.17. Servicing Compensation ..................................... 63
Section 3.18. Maintenance of Certain Servicing Policies .................. 63
Section 3.19. Annual Statement as to Compliance .......................... 64
Section 3.20. Annual Independent Public Accountants' Servicing Statement . 64
Section 3.21. Access to Certain Documentation ............................ 65
Section 3.22. Title, Conservation and Disposition of REO Property ........ 66
Section 3.23. Additional Obligations of the Master Servicer .............. 68
Section 3.24. Additional Obligations of the Company ...................... 68
Section 3.25. Exchange Act Reporting ..................................... 68
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS ........................................... 71
Section 4.01. Distributions .............................................. 71
Section 4.02. Statements to Certificateholders ........................... 77
Section 4.03. Remittance Reports; Advances by the Master Servicer ........ 79
Section 4.04. Distributions on the REMIC 1 Regular Interests ............. 81
Section 4.05. Allocation of Realized Losses .............................. 82
Section 4.06. Information Reports to Be Filed by the Master Servicer ..... 83
Section 4.07. Compliance with Withholding Requirements ................... 83
ARTICLE V
THE CERTIFICATES ......................................................... 84
Section 5.01. The Certificates ........................................... 84
Section 5.02. Registration of Transfer and Exchange of Certificates ...... 85
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates .......... 90
Section 5.04. Persons Deemed Owners ...................................... 90
Section 5.05. Rule 144A Information ...................................... 90
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER ...................................... 92
Section 6.01. Liability of the Company and the Master Servicer ........... 92
Section 6.02. Merger, Consolidation or Conversion of the Company or the
Master Servicer ............................................ 92
Section 6.03. Limitation on Liability of the Company, the Master Servicer
and Others ................................................. 92
Section 6.04. Limitation on Resignation of the Master Servicer ........... 93
Section 6.05. Sale and Assignment of Master Servicing .................... 93
ARTICLE VII
DEFAULT .................................................................. 95
Section 7.01. Events of Default .......................................... 95
Section 7.02. Trustee to Act; Appointment of Successor ................... 96
Section 7.03. Notification to Certificateholders ......................... 98
Section 7.04. Waiver of Events of Default ................................ 98
Section 7.05. List of Certificateholders ................................. 98
ARTICLE VIII
CONCERNING THE TRUSTEE ................................................... 99
Section 8.01. Duties of Trustee .......................................... 99
Section 8.02. Certain Matters Affecting the Trustee ...................... 100
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans ...... 101
Section 8.04. Trustee May Own Certificates ............................... 101
Section 8.05. Trustee's Fees ............................................. 102
Section 8.06. Eligibility Requirements for Trustee ....................... 102
Section 8.07. Resignation and Removal of the Trustee ..................... 103
Section 8.08. Successor Trustee .......................................... 103
Section 8.09. Merger or Consolidation of Trustee ......................... 104
Section 8.10. Appointment of Co-Trustee or Separate Trustee .............. 104
ARTICLE IX
TERMINATION .............................................................. 106
Section 9.01. Termination Upon Purchase or Liquidation of All Mortgage
Loans ...................................................... 106
Section 9.02. Termination of REMIC 2 ..................................... 107
Section 9.03. Additional Termination Requirements ........................ 107
ARTICLE X
REMIC PROVISIONS ......................................................... 109
Section 10.01. REMIC Administration ...................................... 109
Section 10.02. Prohibited Transactions and Activities .................... 111
Section 10.03. Master Servicer and Trustee Indemnification ............... 112
ARTICLE XI
MISCELLANEOUS PROVISIONS ................................................. 113
Section 11.01. Amendment ................................................. 113
Section 11.02. Recordation of Agreement; Counterparts .................... 114
Section 11.03. Limitation on Rights of Certificateholders ................ 114
Section 11.04. Governing Law ............................................. 115
Section 11.05. Notices ................................................... 115
Section 11.06. Severability of Provisions ................................ 116
Section 11.07. Successors and Assigns .................................... 116
Section 11.08. Article and Section Headings .............................. 116
Section 11.09. Notice to Rating Agencies ................................. 116
Signatures
Acknowledgments
Exhibit A Form of Class A Certificate
Exhibit B-1 Form of Class M Certificate
Exhibit B-2 Form of Class B Certificate
Exhibit B-3 Form of Class R Certificate
Exhibit B-4 Form of Class P Certificate
Exhibit C Form of Trustee Initial Certification
Exhibit D Form of Trustee Final Certification
Exhibit E Form of Remittance Report
Exhibit F-1 Request for Release
Exhibit F-2 Request for Release for Mortgage Loans Paid in Full
Exhibit G-1 Form of Investor Representation Letter
Exhibit G-2 Form of Transferor Representation Letter
Exhibit G-3 Form of Rule 144A Investment Representation
Exhibit G-4 Transferor Certificate for Transfers of Residual Certificates
Exhibit G-5 Transfer Affidavit and Agreement for Transfers of Residual
Certificates
Exhibit G-6 Form of ERISA Investor Representation Letter
Exhibit H Mortgage Loan Schedule
Exhibit I Seller Representations and Warranties
Exhibit J Form of Notice Under Section 3.24
Exhibit K Impac Funding Corporation Servicing Guide
Exhibit L Schedule of Discount Fractions
Exhibit M-1 Form 10-K Certification
Exhibit M-2 Form 10-K Back-up Certification (Master Servicer)
Exhibit M-3 Form 10-K Back-up Certification (Trustee)
This Pooling and Servicing Agreement, dated and effective as of June 1,
2003, is entered into among Impac Secured Assets Corp., as company (the
"Company"), Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee").
PRELIMINARY STATEMENT:
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC 1." The Class R-1 Interest will represent
the sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through
Rate, the initial Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC 1 Regular Interests. None of the REMIC 1
Regular Interests will be certificated.
Uncertificated
REMIC 1 Uncertificated REMIC 1 Initial Uncertificated Assumed Final
Regular Interest Pass-Through Rate Principal Balance Maturity Date (1)
- ---------------- ---------------------- ---------------------- -----------------
LTR2 5.50% $ 50.00 August 25, 2033
LTA1 5.50% 62,730,000.00 August 25, 2033
LTA2 8.26% 47,498,000.00 August 25, 2033
LTA4 3.75% 75,000,000.00 August 25, 2033
LTMB 5.50% 13,500,629.76 August 25, 2033
LTIO 5.50% N/A(2) August 25, 2033
LTPO 0.00% 1,271,388.00 August 25, 2033
LTP 5.50% 100.00 August 25, 2033
- ----------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC 1 Regular
Interest.
(2) Based on the Uncertificated REMIC 1 IO Notional Amount.
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Uncertificated REMIC 1 Regular
Interests as a real estate mortgage investment conduit (a "REMIC") for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC 2." The Class A-1, Class A-2, Class A-3, Class A-4, Class A-IO Regular
Interest, Class A-PO, Class P, Class M-1, Class M-2, Class M-3, Class B-1, Class
B-2 and Class B-3 Certificates will be "regular interests" in REMIC 2, and the
Class R-2 Interest will represent the sole class of "residual interests" therein
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the designation, the
Certificates, the initial Certificate Principal Balance, the Pass-Through Rate
and solely for purposes of satisfying
1
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity
date" for the Certificates.
Aggregate Initial
Pass- Certificate Ratings
Through Principal Moody's/
Designation Rate Balance Features Maturity Date S&P
- ------------- ------- ----------------- --------------------------- --------------- ---------
Class A-1 5.50% $62,730,000.00 Senior/Fixed Rate August 25, 2033 Aaa/AAA
Class A-2 6.00% $47,498,000.00 Senior/Fixed Rate August 25, 2033 Aaa/AAA
Senior/Interest Only/
Class A-3 5.50% $ 0 Fixed Rate August 25, 2033 Aaa/AAA
Class A-4 3.75% $75,000,000.00 Senior/Fixed Rate August 25, 2033 Aaa/AAA
Class A-PO 0.00% $ 1,271,388.00 Senior/Principal Only August 25, 2033 Aaa/AAA
Class A-IO(1) 5.50% $ 0.00 Senior/Interest Only August 25, 2033 Aaa/AAA
Class R(2) 5.50% $ 100.00 Senior/Residual August 25, 2033 Aaa/AAA
Class P 5.50% $ 100.00 Senior/Prepayment Penalties August 25, 2033 NA/NA
Class M-1 5.50% $ 7,500,000.00 Mezzanine August 25, 2033 --/AA
Class M-2 5.50% $ 1,000,000.00 Mezzanine August 25, 2033 A3/A+
Class M-3 5.50% $ 2,000,000.00 Mezzanine August 25, 2033 Baa3/BBB+
Class B-1 5.50% $ 1,400,000.00 Subordinate August 25, 2033 --/BB
Class B-2 5.50% $ 800,000.00 Subordinate August 25, 2033 --/B
Class B-3 5.50% $ 800,629.76 Subordinate August 25, 2033 --/--
- ----------
(1) For federal income tax purposes, the Class A-IO Certificates shall be
entitled to 100% of amounts received in respect of Uncertificated REMIC 1
Regular Interest LTIO.
(2) The Class R Certificates are comprised of the following two components:
Initial Component
Principal Balance Pass-Through Rate Designations
----------------------------------------------------------
Class R-1 Component $50.00 5.50% Senior/Fixed Rate
Class R-2 Component $50.00 5.50% Senior/Fixed Rate
2
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
"Accrued Certificate Interest": With respect to each Distribution Date,
(a) as to any Certificate other than the Interest Only Certificates and the
Principal Only Certificates, interest accrued during the related Interest
Accrual Period at the related Pass-Through Rate on the Certificate Principal
Balance thereof immediately prior to such Distribution Date; and (b) as to any
Interest Only Certificate, interest accrued during the related Interest Accrual
Period at the then-applicable Pass-Through Rate on the related Notional Amount
thereof immediately prior to such Distribution Date. In each case Accrued
Certificate Interest on any Class of Certificates will be reduced by the amount
of (i) Prepayment Interest Shortfalls, if any, which are not covered by the
Master Servicer with a payment of Compensating Interest pursuant to Section 3.23
with respect to such Distribution Date, (ii) the interest portion (adjusted to
the related Net Mortgage Rate) of Realized Losses (including Excess Special
Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses and Extraordinary
Losses) not allocated solely to one or more other Classes of Certificates
pursuant to Section 4.07, (iii) the interest portion of any Advances that were
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 not covered by the
subordination provided by the Class M Certificates or Class B Certificates,
including interest that is not collectible from the Mortgagor pursuant to the
Relief Act or similar legislation or regulations as in effect from time to time,
with all such reductions in clauses (i) through (iii) allocated among all of the
Certificates in proportion to their respective amounts of Accrued Certificate
Interest payable on such Distribution Date which would have resulted absent such
reductions. In addition to that portion of the reductions described in the
preceding sentence that are allocated to any Class of Class M Certificates or
Class B Certificates, Accrued Certificate Interest on any Class of the Class M
Certificates or the Class B Certificates, as applicable, will be reduced by the
interest portion (adjusted to the related Net Mortgage Rate) of the portion of
Realized Losses that are allocated solely to the Class M Certificate or the
Class B Certificates, as applicable, pursuant to Section 4.07. The Principal
Only Certificates do not have a Pass-Through Rate and are not entitled to
Accrued Certificate Interest. Accrued Certificate Interest on each Class of
Certificates is calculated on the basis of a 360-day year consisting of twelve
30-day months.
"Advance": As to any Mortgage Loan, any advance made by the Master
Servicer on any Distribution Date pursuant to Section 4.03.
"Aggregate Stated Principal Balance": As of any date of determination, the
aggregate Stated Principal Balance of the Mortgage Loans.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof.
3
"Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form, which is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Available Distribution Amount": With respect to any Distribution Date, an
amount equal to (a) the sum of (i) the balance on deposit in the Custodial
Account as of the close of business on the related Determination Date, (ii) the
aggregate amount of any Advances made and all amounts required to be paid by the
Master Servicer pursuant to Sections 3.13 and 3.23 by deposits into the
Certificate Account on the immediately preceding Certificate Account Deposit
Date, (iii) the aggregate amount deposited by the Master Servicer in connection
with a purchase of the Mortgage Loans pursuant to Section 9.01 and (iv) the
aggregate amount required to be deposited by the Trustee pursuant to Section
4.01(g), reduced by (b) the sum, as of the close of business on the related
Determination Date, of (i) Monthly Payments collected but due during a Due
Period subsequent to the Due Period ending on the first day of the month of the
related Distribution Date, (ii) all interest or other income earned on deposits
in the Custodial Account or the Certificate Account, (iii) any other amounts
reimbursable or payable to the Trustee, Master Servicer or any Sub-Servicer
pursuant to Section 3.11, (iv) the Master Servicing Fees, the Sub-Servicing Fees
and the fees of the Trustee payable on such Distribution Date, (v) any amounts
in respect of the premium payable to Radian under the Radian Lender-Paid PMI
Policy and (vi) Insurance Proceeds, Liquidation Proceeds, Principal Prepayments,
REO Proceeds and the proceeds of Mortgage Loan purchases made pursuant to
Sections 2.02, 2.04, 3.14, 3.22 or 3.24, in each case received or made in the
month of such Distribution Date.
"Balloon Loan": Each of the Mortgage Loans identified in the Mortgage Loan
Schedule as having an original term to maturity that is shorter than the related
amortization term.
"Balloon Payment": With respect to any Balloon Loan, the related Monthly
Payment payable on the stated maturity date of such Balloon Loan.
"Bankruptcy Amount": As of any date of determination prior to the first
anniversary of the Cut-off Date, an amount equal to the excess, if any, of (A)
$150,000 over (B) the aggregate amount of Bankruptcy Losses allocated solely to
one or more specific Classes of Certificates in accordance with Section 4.07. As
of any date of determination on or after the first anniversary of the Cut-off
Date, an amount equal to the lesser of (a) the Bankruptcy Amount calculated as
of the close of business on the Business Day immediately preceding the most
recent anniversary of the Cut-off Date coinciding with or preceding such date of
determination (or, if such date of determination is an anniversary of the
Cut-off Date, the Business Day immediately preceding such date of determination)
(for purposes of this definition, the "Relevant Anniversary") and (b) the
greater of
(A) the greater of (i) $75,000 and (ii) 0.0006 times the
aggregate principal balance of all the Mortgage Loans in the
Mortgage Pool as of the Relevant Anniversary having a Loan-to-Value
Ratio at origination which exceeds 75%; and
(B) the greater of (i) the product of (x) an amount equal to
the largest difference in the related Monthly Payment for any
Non-Primary Residence Loan remaining in the Mortgage Pool which had
an original Loan-to-Value Ratio of 80%
4
or greater that would result if the Net Mortgage Rate thereof was
equal to the weighted average (based on the principal balance of the
Mortgage Loans as of the Relevant Anniversary) of the Net Mortgage
Rates of all Mortgage Loans as of the Relevant Anniversary less
1.25% per annum, (y) a number equal to the weighted average
remaining term to maturity, in months, of all Non-Primary Residence
Loans remaining in the Mortgage Pool as of the Relevant Anniversary,
and (z) one plus the quotient of the number of all Non-Primary
Residence Loans remaining in the Mortgage Pool divided by the total
number of Outstanding Mortgage Loans in the Mortgage Pool as of the
Relevant Anniversary, and (ii) an amount equal to the excess, if
any, of (1) $50,000, over (2) the aggregate amount of Bankruptcy
Losses allocated solely to one or more specific Classes of
Certificates in accordance with Section 4.06 since the Relevant
Anniversary.
The Bankruptcy Amount may be further reduced by the Master Servicer (including
accelerating the manner in which such coverage is reduced) provided that prior
to any such reduction, the Master Servicer shall (i) obtain written confirmation
from each Rating Agency that such reduction shall not reduce the rating assigned
to any Class of Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency and (ii) provide a copy of such written
confirmation to the Trustee.
"Bankruptcy Code": The Bankruptcy Code of 1978, as amended.
"Bankruptcy Loan": A delinquent Mortgage Loan as to which the related
Mortgagor is in bankruptcy proceedings.
"Bankruptcy Loss": With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction.
"Book-Entry Certificate": Any Certificate registered in the name of the
Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a day on which
the banking institutions in California or New York (and such other state or
states in which the Custodial Account or the Certificate Account are at the time
located) or in the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law or executive order to close.
"Cash Liquidation": As to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received a substantial portion or all Insurance
Proceeds, Liquidation Proceeds and other payments or cash recoveries which the
Master Servicer reasonably and in good faith expects to be finally recoverable
with respect to such Mortgage Loan.
"Certificate": Any Class A, Class M, Class B, Class P or Class R
Certificate.
"Certificate Account": The trust account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled Deutsche Bank
National Trust Company, in trust for registered
5
holders of Impac Secured Assets Corp., Mortgage Pass-Through Certificates,
Series 2003-2, and which account or accounts must each be an Eligible Account.
"Certificate Account Deposit Date": With respect to any Distribution Date,
the third Business Day immediately preceding such Distribution Date.
"Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register, except that only a Permitted Transferee
shall be a holder of a Residual Certificate for any purposes hereof and, solely
for the purposes of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Company or the Master Servicer or any
affiliate thereof shall be deemed not to be outstanding and the Voting Rights to
which such Certificate is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent has been obtained, except as otherwise provided in
Section 11.01. The Trustee shall be entitled to rely upon a certification of the
Company or the Master Servicer in determining if any Certificates are registered
in the name of the respective affiliate. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Depository and participating members
thereof, except as otherwise specified herein; provided, however, that the
Trustee shall be required to recognize as a "Holder" or "Certificateholder" only
the Person in whose name a Certificate is registered in the Certificate
Register.
"Certificate Owner": With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate, as reflected on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent, if any, and otherwise on the books of a Depository Participant, if any,
and otherwise on the books of the Depository.
"Certificate Principal Balance": With respect to any Senior Certificate
other than an Interest Only Certificate, on any date of determination, an amount
equal to (i) the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof, minus (ii) the sum of (a) the aggregate of all
amounts previously distributed with respect to such Certificate (or any
predecessor Certificate) and applied to reduce the Certificate Principal Balance
thereof pursuant to Section 4.01, and (b) except with respect to the Class P
Certificates, 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 4.07. With respect to each Class M Certificate, on any date of
determination, an amount equal to (i) the Initial Certificate Principal Balance
of such Class M Certificate as specified on the face thereof, minus (ii) the sum
of (x) the aggregate of all amounts previously distributed with respect to such
Certificate (or any predecessor Certificate) and applied to reduce the
Certificate Principal Balance thereof pursuant to Section 4.01 and (y) the
aggregate of all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were previously allocated to
such Certificate (or any predecessor Certificate) pursuant to Section 4.05. With
respect to each Class B Certificate, on any date of determination, an amount
equal to (i) the Initial Certificate Principal Balance of such Class B
Certificate as specified on the face thereof, minus (ii) the sum of (x) the
aggregate of all amounts previously distributed with respect to such Certificate
(or any predecessor Certificate) and applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.01 and (y) the aggregate of all reductions
in Certificate Principal Balance deemed to have occurred in
6
connection with Realized Losses which were previously allocated to such
Certificate (or any predecessor Certificate) pursuant to Section 4.05; provided,
that the Certificate Principal Balance of each Class B Certificate of those
Class B Certificates outstanding with the highest numerical designation at any
given time shall be calculated to equal the Percentage Interest evidenced by
such Certificate times the excess, if any, of (A) the then aggregate Stated
Principal Balance of the Mortgage Loans over (B) the then aggregate Certificate
Principal Balance of all Certificates of all other Classes then outstanding. The
Interest Only Certificates have no Certificate Principal Balance.
"Certificate Register": The register maintained pursuant to Section 5.02.
"Class": Collectively, all of the Certificates bearing the same
designation.
"Class A Certificate": Any one of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-PO or Class A-IO Certificates.
"Class A-1 Certificate": Any one of the Class A-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a "regular interest" in REMIC 2 for purposes of the REMIC
Provisions.
"Class A-2 Certificate": Any one of the Class A-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a "regular interest" in REMIC 2 for purposes of the REMIC
Provisions.
"Class A-3 Certificate": Any one of the Class A-3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a "regular interest" in REMIC 2 for purposes of the REMIC
Provisions.
"Class A-4 Certificate": Any one of the Class A-4 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a "regular interest" in REMIC 2 for purposes of the REMIC
Provisions.
"Class A-IO Certificate": Any one of the Class A-IO Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing the Class A-IO Regular Interest.
"Class A-IO Regular Interest": A "regular interest" in REMIC 2 for
purposes of the REMIC Provisions representing Accrued Certificate Interest at
the related Pool Strip Rate on a Notional Amount equal to the aggregate Stated
Principal Balance of the Non-Discount Mortgage Loans that are Mortgage Loans as
of the beginning of the related Due Period.
7
"Class A-PO Certificate": Any one of the Class A-PO Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-3, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a "regular interest" in REMIC 2 for purposes of the REMIC
Provisions.
"Class B Certificate": Any one of the Class B-1, Class B-2 or Class B-3
Certificates.
"Class B-1 Certificate": Any one of the Class B-1 Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B-2, subordinate to the Class A Certificates and Class M
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05 and evidencing an interest designated as a "regular
interest" in REMIC 2 for purposes of the REMIC Provisions.
"Class B-2 Certificate": Any one of the Class B-2 Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B-2, subordinate to the Class A Certificates, Class M
Certificates and Class B-1 Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05 and evidencing an
interest designated as a "regular interest" in REMIC 2 for purposes of the REMIC
Provisions.
"Class B-3 Certificate": Any one of the Class B-3 Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B-2, subordinate to the Class A Certificates, Class M
Certificates, Class B-1 Certificates and Class B-2 Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section 4.05
and evidencing an interest designated as a "regular interest" in REMIC 2 for
purposes of the REMIC Provisions.
"Class B Percentage": The Class B-1 Percentage, Class B-2 Percentage and
Class B-3 Percentage.
"Class B-1 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-1 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
"Class B-1 Prepayment Distribution Trigger": With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-1 Certificates, Class B-2 Certificates and Class B-3 Certificates
immediately prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date is greater than or equal to 1.50%.
"Class B-2 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal
8
Balance of the Class B-2 Certificates immediately prior to such Distribution
Date and the denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans (and related REO Properties) (other than the related
Discount Fraction of each Discount Mortgage Loan) immediately prior to such
Distribution Date.
"Class B-2 Prepayment Distribution Trigger": With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-2 Certificates and Class B-3 Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans (and related REO Properties) immediately prior to such
Distribution Date is greater than or equal to 0.80%.
"Class B-3 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-3 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (and related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
"Class B-3 Prepayment Distribution Trigger": With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the aggregate Certificate Principal Balance of the Class
B-3 Certificates immediately prior to such Distribution Date divided by the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date is greater than or equal
to 0.40%.
"Class M Certificate": Any one of the Class M-1, Class M-2 or Class M-3
Certificates.
"Class M-1 Certificate": Any one of the Class M-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a Regular Interest in REMIC 2 for purposes of the REMIC
Provisions.
"Class M-1 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
"Class M-2 Certificate": Any one of the Class M-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a "regular interest" in REMIC 2 for purposes of the REMIC
Provisions.
"Class M-2 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal
9
Balance of the Class M-2 Certificates immediately prior to such date and the
denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans (or related REO Properties) (other than the related Discount
Fraction of each Discount Mortgage Loan) immediately prior to such Distribution
Date.
"Class M-2 Prepayment Distribution Trigger": With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the sum of the Certificate Principal Balances of the
Class M-2 Certificates, Class M-3 Certificates, Class B-1 Certificates, Class
B-2 Certificates and Class B-3 Certificates immediately prior to such
Distribution Date divided by the sum of the aggregate Stated Principal Balance
of all of the Mortgage Loans (or related REO Properties) immediately prior to
such Distribution Date is greater than or equal to 3.00%.
"Class M-3 Certificate": Any one of the Class M-3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a "regular interest" in REMIC 2 for purposes of the REMIC
Provisions.
"Class M-3 Percentage": With respect to any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class M-3 Certificates
immediately prior to such date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
"Class M-3 Prepayment Distribution Trigger": With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the sum of the Certificate Principal Balances of the
Class M-3 Certificates, Class B-1 Certificates, Class B-2 Certificates and Class
B-3 Certificates immediately prior to such Distribution Date divided by the
aggregate Stated Principal Balance of all of the Mortgage Loans (and related REO
Properties) immediately prior to such Distribution Date is greater than or equal
to 2.50%.
"Class P Certificate": Any one of the Class P Certificates as designated
on the face thereof substantially in the form annexed hereto as Exhibit B-4,
executed by the Trustee and authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein and therein and
evidencing a REMIC Regular Interest in REMIC 2.
"Class R Certificate": Any one of the Class R Certificates as designated
on the face thereof substantially in the form annexed hereto as Exhibit B-3,
executed by the Trustee and authenticated and delivered by the Trustee,
evidencing the ownership of the Class R-1 Interest and Class R-2 Interest.
"Class R-1 Interest": The uncertificated Residual Interest in REMIC 1.
"Class R-2 Interest": The uncertificated Residual Interest in REMIC 2.
"Closing Date": June 30, 2003.
10
"Code": The Internal Revenue Code of 1986.
"Collateral Value": The appraised value of a Mortgaged Property based upon
the lesser of (i) the appraisal (as reviewed and approved by the Seller) made at
the time of the origination of the related Mortgage Loan, or (ii) the sales
price of such Mortgaged Property at such time of origination. With respect to a
Mortgage Loan the proceeds of which were used to refinance an existing mortgage
loan, the appraised value of the Mortgaged Property based upon the appraisal (as
reviewed and approved by the Seller) obtained at the time of refinancing.
"Commission": The Securities and Exchange Commission.
"Company": Impac Secured Assets Corp., or its successor in interest.
"Compensating Interest": With respect to any Distribution Date, an amount
equal to Prepayment Interest Shortfalls resulting from Principal Prepayments
during the related Prepayment Period, but not more than the sum of the Master
Servicing Fees and the Subservicing Fees for the immediately preceding Due
Period.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business related to
this Agreement shall be administered, which office at the date of the execution
of this Agreement is located at 1761 East St. Andrew Place, Santa Ana,
California 92705, Attention: Corporate Trust, Impac Secured Assets Corp. Series
2003-2.
"Countrywide": Countrywide Home Loans Servicing LP.
"Credit Support Depletion Date": The first Distribution Date on which the
Senior Percentage equals 100%.
"Curtailment": Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
"Custodial Account": The custodial account or accounts created and
maintained pursuant to Section 3.10 in the name of a depository institution, as
custodian for the holders of the Certificates. Any such account or accounts
shall be an Eligible Account.
"Cut-off Date": June 1, 2003.
"Debt Service Reduction": With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
"Defaulted Mortgage Loan" means any Mortgage Loan as to which the
Mortgagor has failed to make unexcused three or more consecutive scheduled
Monthly Payments.
11
"Deficient Valuation": With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
"Definitive Certificate": Any definitive, fully registered Certificate.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
"Depository" The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(5) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
"Depository Participant": A broker, dealer, bank or other financial
institutions or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": The 15th day (or if such 15th day is not a Business
Day, the Business Day immediately preceding such 15th day) of the month of the
related Distribution Date.
"Discount Fraction": With respect to each Discount Mortgage Loan, the
fraction expressed as a percentage, the numerator of which is 5.50% minus the
Net Mortgage Rate (or the initial Net Mortgage Rate with respect to any Discount
Mortgage Loans as to which the Mortgage Rate for such Mortgage Loan is modified
pursuant Article III of this Agreement) and the denominator of which is 5.50%.
The Discount Fraction with respect to each Discount Mortgage Loan as of the
Cut-off Date is set forth on Exhibit L attached hereto.
"Discount Mortgage Loan": Any Mortgage Loan or REO Property having a Net
Mortgage Rate of less than 5.50% per annum and any Mortgage Loan deemed to be a
Discount Mortgage Loan pursuant to the definition of Qualified Substitute
Mortgage Loan.
"Disqualified Organization": Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, which includes any of the
following: (i) the United States, any State or political subdivision thereof,
any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for Freddie Mac, a majority of its
board of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C)
12
of the Code and (v) any other Person so designated by the Company based upon an
Opinion of Counsel that the holding of an Ownership Interest in a Class R
Certificate by such Person may cause either REMIC 1 or REMIC 2 or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Class R Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
"Distribution Date": The 25th day of any month, or if such 25th day is not
a Business Day, the Business Day immediately following such 25th day, commencing
in July 2003.
"Due Date": The first day of the month of the related Distribution Date.
"Due Period": With respect to any Distribution Date, the period commencing
on the second day of the month preceding the month of such Distribution Date
(or, with respect to the first Due Period, the day following the Cut-off Date)
and ending on the first day of the month of the related Distribution Date.
"Eligible Account": Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1+ or better by Standard & Poor's (and P-1 by Moody's if
rated by Moody's) at the time of any deposit therein or (B) insured by the FDIC
(to the limits established by such Corporation), the uninsured deposits in which
account are otherwise secured such that, as evidenced by an Opinion of Counsel
(obtained by the Person requesting that the account be held pursuant to this
clause (ii)) delivered to the Trustee prior to the establishment of such
account, the Certificateholders will have a claim with respect to the funds in
such account and a perfected first priority security interest against any
collateral (which shall be limited to Permitted Investments, each of which shall
mature not later than the Business Day immediately preceding the Distribution
Date next following the date of investment in such collateral or the
Distribution Date if such Permitted Investment is an obligation of the
institution that maintains the Certificate Account or Custodial Account)
securing such funds that is superior to claims of any other depositors or
general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) a segregated account or
accounts of a depository institution acceptable to the Rating Agencies (as
evidenced in writing by the Rating Agencies that use of any such account as the
Custodial Account or the Certificate Account will not have an adverse effect on
the then-current ratings assigned to the Classes of the Certificates then rated
by the Rating Agencies). Eligible Accounts may bear interest.
"Eligible Funds": On any Distribution Date, the portion, if any, of the
Available Distribution Amount remaining after reduction by the sum of (i) the
aggregate amount of Accrued Certificate Interest on the Senior Certificates,
(ii) the Senior Principal Distribution Amount, (iii) the Principal Only
Distribution Amount (determined without regard to subsection (E) of the
definition of Principal Only Distribution Amount) and (iv) the aggregate amount
of Accrued Certificate Interest on the Class M Certificates, Class B-1
Certificates and Class B-2 Certificates.
"Event of Default": One or more of the events described in Section 7.01.
13
"Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
"Excess Fraud Loss": Any Fraud Loss, or portion thereof, which exceeds the
then applicable Fraud Loss Amount.
"Excess Proceeds": As defined in Section 3.22.
"Excess Special Hazard Loss": Any Special Hazard Loss, or portion thereof,
that exceeds the then applicable Special Hazard Amount.
"Extraordinary Events": Any of the following conditions with respect to a
Mortgaged Property or Mortgage Loan causing or resulting in a loss which causes
the liquidation of such Mortgage Loan:
(a) losses which are otherwise covered by the fidelity bond and the
errors and omissions insurance policy maintained pursuant to Section 3.18,
but are in excess of the coverage maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all whether controlled or uncontrolled, or remote or be in
whole or in part caused by, contributed to or aggravated by a peril
covered by the definition of the term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual, impending
or expected attack;
1. by any government or sovereign power, de jure or de facto,
or by any authority maintaining or using military, naval or air
forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(d) any weapon of war employing atomic fission or radioactive force
whether in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or
defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any government
or public authority; or risks of contraband or illegal transportation or
trade.
"Extraordinary Losses": Any loss incurred on a Mortgage Loan caused by or
resulting from an Extraordinary Event.
"Fannie Mae": Federal National Mortgage Association or any successor.
14
"FDIC": Federal Deposit Insurance Corporation or any successor.
"Final Scheduled Distribution Date": The Distribution Date in April 2033.
"Foreclosure Loan": A delinquent Mortgage Loan that is in foreclosure.
"Fraud Loss Amount": As of any date of determination after the Cut-off
Date, an amount equal to: (X) prior to the first anniversary of the Cut-off
Date an amount equal to 3.00% of the aggregate principal balance of all of the
Mortgage Loans as of the Cut-off Date minus the aggregate amounts allocated
through subordination with respect to Fraud Losses up to that date of
determination, (Y) from the first to the second 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) 2.00% of the aggregate principal
balance of all of the Mortgage Loans as of the most recent anniversary of the
Cut-off Date minus (2) the aggregate amounts allocated through subordination
with respect to Fraud Losses since the most recent anniversary of the Cut-off
Date up to that date of determination and (Z) from the second 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)
1.00% of the aggregate principal balance of all of the Mortgage Loans as of the
most recent anniversary of the Cut-off Date minus (2) the aggregate amounts
allocated through subordination with respect to Fraud Losses since the most
recent anniversary of the Cut-off Date up to that date of determination. On and
after the fifth anniversary of the Cut-off Date, the Fraud Loss Amount shall be
zero and Fraud Losses shall not be allocated through subordination.
"Fraud Losses": Losses on Mortgage Loans as to which there was fraud in
the origination of such Mortgage Loan.
"Freddie Mac": Federal Home Loan Mortgage Corporation or any successor.
"Initial Certificate Principal Balance": With respect to each Class of
Regular Certificates (other than the Interest Only Certificates), the Initial
Certificate Principal Balance of such Class of Certificates as set forth in the
Preliminary Statement hereto, or with respect to any single Certificate, the
Initial Certificate Principal Balance as stated on the face thereof.
"Initial Notional Amount": With respect to the Class A-3 and Class A-IO
Certificates, $19,545,636 and $29,397,735, respectively, or with respect to any
single Certificate, the Initial Notional Amount as stated on the face thereof.
"Insurance Policy": With respect to any Mortgage Loan, any insurance
policy (including a Radian Lender-Paid PMI Policy) which is required to be
maintained from time to time under this Agreement in respect of such Mortgage
Loan.
"Insurance Proceeds": Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Hazard Insurance Policy, any title insurance policy or
any other insurance policy covering a Mortgage Loan, to the extent such proceeds
are not applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with the procedures that the Master Servicer
would follow in servicing mortgage loans held for its own account.
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"Interest Accrual Period": With respect to any Certificate and any
Distribution Date the calendar month preceding the month in which the
Distribution Date occurs.
"Interest Only Certificates": The Class A-3 Certificates and the Class
A-IO Certificates.
"Interest Remittance Amount": With respect to any Distribution Date, that
portion of the Available Distribution Amount for such Distribution Date
allocable to interest received or advanced on the Mortgage Loans.
"Late Collections": With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage Loan
in respect of which the Master Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Prepayment
Period, that all Liquidation Proceeds which it expects to recover with respect
to the liquidation of the Mortgage Loan or disposition of the related REO
Property have been recovered.
"Liquidation Proceeds": Amounts (other than Insurance Proceeds) received
by the Master Servicer in connection with the taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or in
connection with the liquidation of a defaulted Mortgage Loan through trustee's
sale, foreclosure sale or otherwise, other than amounts received in respect of
any REO Property.
"Loan-to-Value Ratio": As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Collateral Value of the related Mortgaged Property.
"Lost Note Affidavit": With respect to any Mortgage Note, an original lost
note affidavit from the Seller stating that the original Mortgage Note was lost,
misplaced or destroyed, together with a copy of the related Mortgage Note.
"Master Servicer": Impac Funding Corporation, or any successor master
servicer appointed as herein provided.
"Master Servicer Prepayment Charge Payment Amount": The amounts payable by
the Master Servicer in respect of any waived Prepayment Charges pursuant to
Section 2.03, and any amount paid to the Trust Fund by any Person to remedy any
breach of any representation, warranty of covenant made with respect to the
Prepayment Charges to the extent the Trust Fund, as assignee, is the beneficiary
of such representation, warranty or covenant.
"Master Servicing Fees": As to each Mortgage Loan, an amount, payable out
of any payment of interest on the Mortgage Loan, equal to interest at the Master
Servicing Fee Rate on the Stated
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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). The Master
Servicing Fee consists of servicing compensation payable to the Master Servicer
in respect of its master servicing responsibilities.
"Master Servicing Fee Rate": With respect to each Mortgage Loan, the per
annum rate of 0.03%.
"MERS": Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
"MERS(R) System": The system of recording transfers of Mortgages
electronically maintained by MERS.
"MIN": The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
"MOM Loan": With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by a Mortgagor from time to time under the related Mortgage Note as originally
executed (after adjustment, if any, for Deficient Valuations occurring prior to
such Due Date, and after any adjustment by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period).
"Moody's": Moody's Investors Service, Inc.
"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 and from time to time held in the Trust
Fund (including any Qualified Substitute Mortgage Loans), the Mortgage Loans so
transferred, assigned and held being identified in the Mortgage Loan Schedule.
As used herein, the term "Mortgage Loan" includes the related Mortgage Note and
Mortgage.
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"Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase Agreement
dated as of June 1, 2003, among Impac Funding Corporation, as seller, Impac
Mortgage Holdings, Inc., as guarantor, and the Company as purchaser, and all
amendments thereof and supplements thereto.
"Mortgage Loan Schedule": As of any date of determination, the schedule of
Mortgage Loans included in the Trust Fund. The schedule of Mortgage Loans with
accompanying information transferred on the Closing Date to the Trustee as part
of the Trust Fund for the Certificates, the initial schedule of which is
attached hereto as Exhibit H (as amended from time to time to reflect the
addition of Qualified Substitute Mortgage Loans) (and, for purposes of the
Trustee pursuant to Section 2.02, in computer-readable form as delivered to the
Trustee), which list shall set forth the following information with respect to
each Mortgage Loan:
(i) the loan number and name of the Mortgagor;
(ii) the street address, city, state and zip code of the Mortgaged
Property;
(iii) (A) the original term to maturity and (B) if such Mortgage Loan is a
Balloon Loan, the amortization term thereof;
(iv) the original principal balance and the original Mortgage Rate;
(v) the first payment date;
(vi) whether the Mortgage Loan is a Balloon Mortgage Loan or a Mortgage
Loan the terms of which do not provide for a Balloon Payment;
(vii) the type of Mortgaged Property;
(viii) the Monthly Payment in effect as of the Cut-off Date;
(ix) the principal balance as of the Cut-off Date;
(x) the Mortgage Rate as of the Cut-off Date;
(xi) the occupancy status;
(xii) the purpose of the Mortgage Loan;
(xiii) the Collateral Value of the Mortgaged Property;
(xiv) the original term to maturity;
(xv) the paid-through date of the Mortgage Loan;
(xvi) the Master Servicing Fee Rate;
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(xvii) the Sub-Servicing Fee Rate;
(xviii) the Net Mortgage Rate for such Mortgage Loan;
(xix) whether such Mortgage Loan is a Radian Insured Loan and, if so, the
related Radian PMI Policy Rate;
(xx) whether the Mortgage Loan is covered by a private mortgage insurance
policy or an original certificate of private mortgage insurance; and
(xxi) the documentation type.
The Mortgage Loan Schedule may be in the form of more than one schedule,
collectively setting forth all of the information required.
"Mortgage Note": The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of mortgage loans consisting of the Mortgage
Loans.
"Mortgage Rate": With respect to any Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan, as adjusted from time to time in
accordance with the provisions of the Mortgage Note.
"Mortgaged Property": The underlying property securing a Mortgage Loan.
"Mortgagor": The obligor or obligors on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage Loan
or any other disposition of related Mortgaged Property (including REO Property)
the related Liquidation Proceeds net of Advances, Servicing Advances, Servicing
Fees and any other accrued and unpaid servicing fees received and retained in
connection with the liquidation of such Mortgage Loan or Mortgaged Property.
"Net Mortgage Rate": With respect to each Mortgage Loan Due Date, a per
annum rate of interest equal to the then-applicable Mortgage Rate on such
Mortgage Loan less the sum of the Master Servicing Fee Rate, the Trustee Fee
Rate and the Sub-Servicing Fee Rate and with respect to the Radian Insured
Loans, the Radian PMI Policy Rate.
"Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.
"Non-Discount Mortgage Loan": Any Mortgage Loan other than a Discount
Mortgage Loan.
"Non-Primary Residence Loan": The Mortgage Loans designated as secured by
second or vacation residences, or by non-owner occupied residences, on the
Mortgage Loan Schedule.
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"Nonrecoverable Advance": Any Advance or Servicing Advance previously made
or proposed to be made in respect of a Mortgage Loan which, in the good faith
judgment of the Master Servicer, will not or, in the case of a proposed Advance
or Servicing Advance, would not be ultimately recoverable from related Late
Collections, Insurance Proceeds, Liquidation Proceeds or REO Proceeds. The
determination by the Master Servicer that it has made a Nonrecoverable Advance
or that any proposed Advance or Servicing Advance would constitute a
Nonrecoverable Advance, shall be evidenced by a certificate of a Servicing
Officer delivered to the Company and the Trustee.
"Non-United States Person": Any Person other than a United States Person.
"Notional Amount": With respect to the Class A-3 Certificates and any
Distribution Date, 41.15044% multiplied by the Certificate Principal Balance of
the Class A-2 Certificates immediately prior to such Distribution Date. With
respect to the Class A-IO Certificates and any Distribution Date, the aggregate
Stated Principal Balance of the Non-Discount Mortgage Loans as of the beginning
of the related Due Period multiplied by a fraction, the numerator of which is
the weighted average of the Pool Strip Rates and the denominator of which is
5.50%. However, for federal income tax purposes, the Notional Amount of the
Class A-3 Certificates will be the Uncertificated Principal Balance of
Uncertificated REMIC 1 Regular Interest LTA2 immediately prior to such
Distribution Date and the Class A-IO Certificates will be entitled to 100% of
amounts received on Uncertificated REMIC 1 Regular Interest LTIO on such
Distribution Date.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president and by
the Treasurer, the Secretary, or one of the assistant treasurers or assistant
secretaries of the Company, the Seller, the Master Servicer or of any
Sub-Servicer and delivered to the Company and Trustee.
"Opinion of Counsel": A written opinion of counsel, who may be counsel for
the Company, the Seller, or the Master Servicer, reasonably acceptable to the
Trustee; except that any opinion of counsel relating to (a) the qualification of
any account required to be maintained pursuant to this Agreement as an Eligible
Account, (b) the qualification of REMIC 1 or REMIC 2 as REMICs, (c) compliance
with the REMIC Provisions or (d) resignation of the Master Servicer pursuant to
Section 6.04 must be an opinion of counsel who (i) is in fact independent of the
Company and the Master Servicer, (ii) does not have any direct financial
interest or any material indirect financial interest in the Company or the
Master Servicer or in an affiliate of either and (iii) is not connected with the
Company or the Master Servicer as an officer, employee, director or person
performing similar functions.
"Optional Termination Date": The first Distribution Date on which the
Master Servicer may opt to terminate the Trust Fund pursuant to Section 9.01.
"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
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Disposition and which was not purchased prior to such Due Date pursuant to
Sections 2.02, 2.04 or 3.14.
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to any Distribution Date and
(i) the Class A-1 Certificates, 5.50% per annum;
(ii) the Class A-2 Certificates, 6.00% per annum;
(iii) the Class A-3 Certificates, 5.50% per annum;
(iv) the Class A-4 Certificates, 3.75% per annum;
(v) the Class A-IO Certificates, 5.50% per annum;
(vi) the Class M Certificates, 5.50% per annum;
(vii) the Class B Certificates, 5.50% per annum; and
(viii) the Class P Certificates, 5.50% per annum.
The Class A-PO Certificates will not accrue interest and therefore will
not have a Pass-Through Rate.
"Percentage Interest": With respect to any Regular Certificate, the
undivided percentage ownership interest in the related Class evidenced by such
Certificate, which percentage ownership interest shall be equal to the Initial
Certificate Principal Balance thereof or Initial Notional Amount, as applicable,
thereof divided by the aggregate Initial Certificate Principal Balance or
Initial Notional Amount, as applicable, of all of the Certificates of the same
Class. With respect to any Class R Certificate, the interest in distributions to
be made with respect to such Class evidenced thereby, expressed as a percentage,
as stated on the face of each such Certificate.
"Permitted Investment": One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i) maturing
not more than one month from the date of acquisition thereof, provided that the
unsecured obligations of the party agreeing to repurchase such obligations are
at the time rated by each Rating Agency in its highest short-term rating
available;
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(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original maturity of
not more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining maturity of
more than 30 days) denominated in United States dollars of any U.S. depository
institution or trust company incorporated under the laws of the United States or
any state thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard &
Poor's, in the case of the principal depository institution in a depository
institution holding company, debt obligations of the depository institution
holding company) at the date of acquisition thereof have been rated by each
Rating Agency in its highest short-term rating available; and provided further
that, if the only Rating Agency is Standard & Poor's and if the depository or
trust company is a principal subsidiary of a bank holding company and the debt
obligations of such subsidiary are not separately rated, the applicable rating
shall be that of the bank holding company; and, provided further that, if the
original maturity of such short-term obligations of a domestic branch of a
foreign depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of Standard &
Poor's if Standard & Poor's is the Rating Agency;
(iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the United States or any
state thereof which on the date of acquisition has been rated by Standard &
Poor's (and by Moody's if rated by Moody's) in their highest short-term ratings
available; provided that such commercial paper shall have a remaining maturity
of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by Moody's in
its highest long-term ratings available and rated AAAm or AAAm-G by Standard &
Poor's, including any such funds for which Deutsche Bank National Trust Company
or any affiliate thereof serves as an investment advisor, manager,
administrator, shareholder, servicing agent, and/or custodian or sub-custodian;
and
(vi) other obligations or securities that are acceptable to each Rating
Agency as a Permitted Investment hereunder and will not reduce the rating
assigned to any Class of Certificates by such Rating Agency below the lower of
the then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency, as evidenced in writing;
provided, however, that no instrument shall be a Permitted Investment if
it represents, either (1) the right to receive only interest payments with
respect to the underlying debt instrument or (2) the right to receive both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying obligations.
"Permitted Transferee": Any transferee of a Residual Certificate other
than a Disqualified Organization, a Non-United States Person or an "electing
large partnership" (as defined in Section 775 of the Code).
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"Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Pool Strip Rate": With respect to any Non-Discount Mortgage Loan, the
excess, if any, of the Net Mortgage Rate, over 5.50%.
"Prepayment Assumption": As defined in the Prospectus Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Master
Servicer Prepayment Charge Payment Amount).
"Prepayment Distribution Percentage": With respect to any Distribution
Date and each Class of Class M Certificates and Class B Certificates, under the
applicable circumstances set forth below, the respective percentages set forth
below:
(i) For any Distribution Date on which any Class of Class M or
Class B Certificates are outstanding:
(a) in the case of the Class of Class M Certificates then
outstanding with the lowest numerical designation, or in the event
the Class M Certificates are no longer outstanding, the Class of
Class B Certificates then outstanding with the lowest numerical
designation and each other Class of Class M Certificates and Class B
Certificates for which the related Prepayment Distribution Trigger
has been satisfied, a fraction, expressed as a percentage, the
numerator of which is the Certificate Principal Balance of such
Class immediately prior to such date and the denominator of which is
the sum of the Certificate Principal Balances immediately prior to
such date of (1) the Class of Class M Certificates then outstanding
with the lowest numerical designation, or in the event the Class M
Certificates are no longer outstanding, the Class of Class B
Certificates then outstanding with the lowest numerical designation
and (2) all other Classes of Class M Certificates and Class B
Certificates for which the respective Prepayment Distribution
Triggers have been satisfied; and
(b) in the case of each other Class of Class M Certificates
and Class B Certificates for which the Prepayment Distribution
Triggers have not been satisfied, 0%; and
(ii) Notwithstanding the foregoing, if the application of the foregoing
percentages on any Distribution Date as provided in Section 4.01
(determined without regard to the proviso to the definition of
"Subordinate Principal Distribution Amount") would result in a
distribution in respect of principal of any Class or Classes of
Class M Certificates and Class B Certificates in an amount greater
than the remaining Certificate Principal Balance thereof (any such
class, a "Maturing Class"), then: (a) the Prepayment Distribution
Percentage of each Maturing Class shall be reduced to
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a level that, when applied as described above, would exactly reduce
the Certificate Principal Balance of such Class to zero; (b) the
Prepayment Distribution Percentage of each other Class of Class M
Certificates and Class B Certificates (any such Class, a
"Non-Maturing Class") shall be recalculated in accordance with the
provisions in paragraph (i) above, as if the Certificate Principal
Balance of each Maturing Class had been reduced to zero (such
percentage as recalculated, the "Recalculated Percentage"); (c) the
total amount of the reductions in the Prepayment Distribution
Percentages of the Maturing Class or Classes pursuant to clause (a)
of this sentence, expressed as an aggregate percentage, shall be
allocated among the Non-Maturing Classes in proportion to their
respective Recalculated Percentages (the portion of such aggregate
reduction so allocated to any Non-Maturing Class, the "Adjustment
Percentage"); and (d) for purposes of such Distribution Date, the
Prepayment Distribution Percentage of each Non- Maturing Class shall
be equal to the sum of (1) the Prepayment Distribution Percentage
thereof, calculated in accordance with the provisions in paragraph
(i) above as if the Certificate Principal Balance of each Maturing
Class had not been reduced to zero, plus (2) the related Adjustment
Percentage.
"Prepayment Distribution Trigger": The Class M-2 Prepayment Distribution
Trigger, Class M-3 Prepayment Distribution Trigger, Class B-1 Prepayment
Distribution Trigger, Class B-2 Prepayment Distribution Trigger or Class B-3
Prepayment Distribution Trigger.
"Prepayment Interest Shortfall": As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the Net Mortgage Rate on the amount of such Curtailment.
"Prepayment Period": As to any Distribution Date, the calendar month
preceding the month in which such Distribution Date occurs.
"Primary Hazard Insurance Policy": Each primary hazard insurance policy
required to be maintained pursuant to Section 3.13.
"Primary Insurance Policy": Any primary policy of mortgage guaranty
insurance including the Radian Lender-Paid PMI Policy, or any replacement policy
therefor.
"Principal Only Collection Shortfalls": With respect to the Cash
Liquidation or REO Disposition of a Discount Mortgage Loan and any Distribution
Date, the excess of the amount described in subsection (C)(1) of the definition
of Principal Only Distribution Amount over the amount described in subsection
(C)(2) of the definition of Principal Only Distribution Amount.
"Principal Only Certificates": The Class A-PO Certificates.
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"Principal Only Distribution Amount": an amount equal to the aggregate of:
(A) the related Discount Fraction of the principal portion of
each Monthly Payment on each Discount Mortgage Loan due during the related
Due Period, whether or not received on or prior to the related
Determination Date, minus the Discount Fraction of the principal portion
of any related Debt Service Reduction which together with other Bankruptcy
Losses exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the principal portion of
all unscheduled collections on each Discount Mortgage Loan received during
the preceding calendar month (other than amounts received in connection
with the Cash Liquidation or REO Disposition of a Discount Mortgage Loan
described in clause (C) below), including Principal Prepayments in Full,
Curtailments and repurchases of Discount Mortgage Loans (or, in the case
of a substitution of a Deleted Mortgage Loan, the Discount Fraction of the
amount of any shortfall deposited in the Custodial Account in connection
with such substitution);
(C) in connection with the Cash Liquidation or REO Disposition
of a Discount Mortgage Loan that did not result in any Excess Special
Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses, an amount equal to the lesser of (1) the applicable
Discount Fraction of the Stated Principal Balance of such Discount
Mortgage Loan immediately prior to such Distribution Date and (2) the
aggregate amount of the collections on such Discount Mortgage Loan to the
extent applied as recoveries of principal;
(D) any amounts allocable to principal for any previous
Distribution Date (calculated pursuant to clauses (A) through (C) above)
that remain undistributed; and
(E) the amount of any Principal Only Collection Shortfalls for
such Distribution Date and the amount of any Principal Only Collection
Shortfalls remaining unpaid for all previous Distribution Dates, but only
to the extent of the Eligible Funds for such Distribution Date;
"Principal Prepayment": Any payment of principal made by the Mortgagor on
a Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing scheduled interest due
on any date or dates in any month or months subsequent to the month of
prepayment.
"Principal Prepayment in Full": Any Principal Prepayment made by a
Mortgagor of the entire unpaid principal balance of the Mortgage Loan.
"Prospectus Supplement": That certain Prospectus Supplement dated June 26,
2003 relating to the public offering of the Senior Certificates and the Class M
Certificates.
"Purchase Price": With respect to any Mortgage Loan (or REO Property)
required to be purchased pursuant to Section 2.02, 2.04 or 3.14, an amount equal
to the sum of (i) 100% of the
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Stated Principal Balance thereof, (ii) unpaid accrued interest (or REO Imputed
Interest) at the applicable Net Mortgage Rate on the Stated Principal Balance
thereof outstanding during each Due Period that such interest was not paid or
advanced, from the date through which interest was last paid by the Mortgagor or
advanced and distributed to Certificateholders together with unpaid Master
Servicing Fees, Sub-Servicing Fees, Trustee's Fees and, if such Mortgage Loan is
a Radian Insured Loan, fees due Radian at the Radian PMI Policy Rate, from the
date through which interest was last paid by the Mortgagor, in each case to the
first day of the month in which such Purchase Price is to be distributed, plus
(iii) the aggregate of all Advances and Servicing Advances made in respect
thereof that were not previously reimbursed.
"Qualified Insurer": Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
"Qualified Substitute Mortgage Loan": A Mortgage Loan substituted by the
Company for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officers' Certificate of the Seller delivered
to the Trustee, (i) have an outstanding principal balance, after deduction of
the principal portion of the monthly payment due in the month of substitution
(or in the case of a substitution of more than one Mortgage Loan for a Deleted
Mortgage Loan, an aggregate outstanding principal balance, after such
deduction), not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any shortfall to be paid to the Master Servicer for
deposit in the Custodial Account in the month of substitution); (ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more than 1% per
annum higher than the Mortgage Rate and Net Mortgage Rate, respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iii) have a Loan-to-Value
Ratio at the time of substitution no higher than that of the Deleted Mortgage
Loan at the time of substitution; (iv) have a remaining term to stated maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (v) comply with each representation and warranty set forth in
Section 2.04 hereof; and, (vi) comply with each representation and warranty set
forth in the Mortgage Loan Purchase Agreement (other than representations (xiv),
(xvi), (xxix) and (xxxiii) through (xli)).
"Radian": Radian Guaranty, Inc. (f/k/a Commonwealth Mortgage Assurance
Company), or its successors or assigns.
"Radian Insured Loans": The Mortgage Loans included in the Trust Fund
covered by a Radian Lender-Paid PMI Policy, as indicated on the Mortgage Loan
Schedule.
"Radian Lender-Paid PMI Policy": A Primary Insurance Policy issued by
Radian in accordance with a March 29, 2002 letter between the Seller and Radian.
"Radian PMI Policy Rate": With respect to any Radian Insured Loan, the
rate per annum at which the related premium on the Radian Lender-Paid PMI Policy
accrues.
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"Rating Agency": Standard & Poor's or Moody's and each of their
successors. If such agencies and their successors are no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating agency,
or other comparable Person, designated by the Company, notice of which
designation shall be given to the Trustee and Master Servicer. References herein
to the two highest long term debt rating of a Rating Agency shall mean "AAA" or
better in the case of Standard & Poor's and "Aaa" or better in the case of
Moody's and references herein to the highest short-term debt rating of a Rating
Agency shall mean "A-1+" in the case of Standard & Poor's and P-1 in the case of
Moody's.
"Realized Loss": With respect to each Mortgage Loan or REO Property as to
which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan as of
the date of Cash Liquidation or REO Disposition, plus (ii) interest (and REO
Imputed Interest, if any) at the Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced to Certificateholders up to the date of the
Cash Liquidation or REO Disposition on the Stated Principal Balance of such
Mortgage Loan outstanding during each Due Period that such interest was not paid
or advanced, minus (iii) the proceeds, if any, received during the month in
which such Cash Liquidation or REO Disposition occurred, to the extent applied
as recoveries of interest at the Net Mortgage Rate and to principal of the
Mortgage Loan, net of the portion thereof reimbursable to the Master Servicer or
any Sub-Servicer with respect to related Advances or Servicing Advances not
previously reimbursed. With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.
"Record Date": With respect to each Class of Certificates and each
Distribution Date, the last Business Day of the month immediately preceding the
month of the related Distribution Date.
"Regular Certificate": Any of the Certificates other than a Residual
Certificate.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period as
a result of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Principal Balance of such Mortgage Loan at the Loan Rate
for such Mortgage Loan before giving effect to the application of the Relief
Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
"REMIC 1": The segregated pool of assets, with respect to which a REMIC
election is to be made, conveyed in trust to the Trustee, for the benefit of the
Holders of the REMIC 1 Regular Interests and the Holders of the Class R
Certificates (as holders of the Class R-1 Interest), consisting of: (i) each
Mortgage Loan (exclusive of payments of principal and interest due on or before
the Cut-off Date, if any, received by the Master Servicer which shall not
constitute an asset of the Trust
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Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of such Mortgage Loans, together with all documents included in the
related Mortgage File, subject to Section 2.01; (ii) such funds or assets as
from time to time are deposited in the Custodial Account or the Certificate
Account and belonging to the Trust Fund; (iii) any REO Property; (iv) the
Primary Hazard Insurance Policies, if any, the Primary Insurance Policies, if
any, and all other Insurance Policies with respect to the Mortgage Loans; (v)
[reserved]; and (vi) the Company's interest in respect of the representations
and warranties made by the Seller in the Mortgage Loan Purchase Agreement as
assigned to the Trustee pursuant to Section 2.04 hereof.
"REMIC 2": The segregated pool of assets consisting of all of the REMIC 1
Regular Interests conveyed in trust to the Trustee, for the benefit of the
Certificateholders, and the Class R Certificateholders (as holders of the Class
R-2 Interest) pursuant to Article II hereunder, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.
"REMIC Provisions": Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
"Remittance Report": A report prepared by the Master Servicer providing
the information set forth in Exhibit E attached hereto.
"REO Acquisition": The acquisition by the Master Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.15.
"REO Disposition": The receipt by the Master Servicer of Insurance
Proceeds, Liquidation Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.
"REO Imputed Interest": As to any REO Property, for any period, an amount
equivalent to interest (at the Mortgage Rate that would have been applicable to
the related Mortgage Loan had it been outstanding) on the unpaid principal
balance of the Mortgage Loan as of the date of acquisition thereof (as such
balance is reduced pursuant to Section 3.15 by any income from the REO Property
treated as a recovery of principal).
"REO Mortgage Loan": A Mortgage Loan where title to the related Mortgaged
Property has been obtained by the Trustee on behalf of the Certificateholders.
"REO Proceeds": Proceeds, net of directly related expenses, received in
respect of any REO Property (including, without limitation, proceeds from the
rental of the related Mortgaged Property and of any REO Disposition), which
proceeds are required to be deposited into the Custodial Account as and when
received.
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"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Mortgage Loan.
"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibits F-1 or F-2 attached hereto.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, the Chairman
or Vice Chairman of the Board of Directors or Trustees, the Chairman or Vice
Chairman of the Executive or Standing Committee of the Board of Directors or
Trustees, the President, the Chairman of the Committee on Trust Matters, any
vice president, any assistant vice president, the Secretary, any assistant
secretary, the Treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Seller": Impac Funding Corporation, or its successor in interest.
"Senior Accelerated Distribution Amount": For any Distribution Date
occurring during the first five years after the Closing Date, 100%. The Senior
Accelerated Distribution Percentage for any Distribution Date occurring after
the first five years following the Closing Date will be as follows:
(i) for any Distribution Date during the sixth year after the Closing
Date, the Senior Percentage for such Distribution Date plus 70% of
the Subordinate Percentage for such Distribution Date;
(ii) for any Distribution Date during the seventh year after the Closing
Date, the Senior Percentage for such Distribution Date plus 60% of
the Subordinate Percentage for such Distribution Date;
(iii) for any Distribution Date during the eighth year after the Closing
Date, the Senior Percentage for such Distribution Date plus 40% of
the Subordinate Percentage for such Distribution Date;
(iv) for any Distribution Date during the ninth year after the Closing
Date, the Senior Percentage for such Distribution Date plus 20% of
the Subordinate Percentage for such Distribution Date; and
(v) for any Distribution Date thereafter, the Senior Percentage for such
Distribution Date.
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If on any Distribution Date the Senior Percentage exceeds the initial Senior
Percentage, the Senior Accelerated Distribution Percentage for that Distribution
Date will once again equal 100%.
Any scheduled reduction to the Senior Accelerated Distribution Percentage
described above shall not be made as of any Distribution Date unless either:
(a)(i) (X) the outstanding principal balance of Mortgage Loans (including
Bankruptcy Loans, Foreclosure Loans and REO Mortgage Loans) delinquent 60 days
or more averaged over the last six months, as a percentage of the aggregate
outstanding Certificate Principal Balance of the Class M Certificates and Class
B Certificates, is less than 50% or (Y) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more averaged over the last six months, as
a percentage of the aggregate outstanding principal balance of all Mortgage
Loans averaged over the last six months, does not exceed 2%, and
(ii) Realized Losses on the Mortgage Loans to date for such
Distribution Date, if occurring during the sixth, seventh, eighth, ninth or
tenth year (or any year thereafter) after the Closing Date, are less than 30%,
35%, 40%, 45% or 50%, respectively, of the sum of the initial Certificate
Principal Balances of the Class M Certificates and Class B Certificates; or
(b)(i) the outstanding principal balance of Mortgage Loans (including
Bankruptcy Loans, Foreclosure Loans and REO Mortgage Loans) delinquent 60 days
or more averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 4%, and
(ii) Realized Losses on the Mortgage Loans to date for such
Distribution Date are less than 10% of the sum of the initial Certificate
Principal Balances of the Class M Certificates and Class B Certificates.
Notwithstanding the foregoing, upon reduction of the Certificate Principal
Balances of the Senior Certificates (other than the Principal Only Certificates)
to zero, the Senior Accelerated Distribution Percentage will equal 0%.
"Senior Certificates": The Class A Certificates and Class R Certificates.
"Senior Interest Distribution Amount": For any Distribution Date, the
amount to be distributed to the holders of the Senior Certificates in the
priority set forth under Section 4.01 herein and to the extent of the portion of
the Available Distribution Amount remaining after the aggregate amount of
Accrued Certificate Interest to be distributed to such holders for such
Distribution Date has been distributed.
"Senior Percentage": As of any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Senior Certificates (other than the
Principal Only Certificates) immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans or related REO Properties (other than the Discount Fraction of
the Discount Mortgage Loans) immediately prior to such Distribution Date.
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"Senior Principal Distribution Amount": As to any Distribution Date, the
lesser of (a) the balance of the Available Distribution Amount remaining after
the distribution of all amounts required to be distributed pursuant to Section
4.01(a)(i) and (b) the sum of the amounts required to be distributed to the
Senior Certificates on such Distribution Date pursuant to Section
4.01(a)(ii)(Y), (a)(xv) and (a)(xvi).
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event in the performance by the Master Servicer or any
Sub-Servicer of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
and any expenses incurred in relation to any such proceedings that result from
the Mortgage Loan being registered on the MERS System, (iii) the management and
liquidation of any REO Property, including reasonable fees paid to any
independent contractor in connection therewith, and (iv) compliance with the
obligations under the second paragraph of Section 3.01, Section 3.09 and Section
3.13 (other than any deductible described in the last paragraph thereof).
"Servicing Guide": The Impac Funding Corporation Servicing Guide attached
hereto as Exhibit K.
"Servicing Officer": Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer, as such list may from time to time be
amended.
"Single Certificate": A Regular Certificate of any Class (other than a
Class A-PO Certificate and Class P Certificate) evidencing an Initial
Certificate Principal Balance or Initial Notional Amount, as applicable, of
$1,000, or, in the case of a Class A-PO Certificate and Class P Certificate, a
Certificate of such Class evidencing an Initial Certificate Principal Balance of
$100.
"Special Hazard Amount": As of any Distribution Date, an amount equal to
$2,000,002 (the initial "Special Hazard Amount") minus the sum of (i) the
aggregate amount of Special Hazard Losses allocated solely to one or more
Classes of Certificates in accordance with Section 4.05 and (ii) the Adjustment
Amount (as defined below) as most recently calculated. For each anniversary, the
"Adjustment Amount" shall be calculated and shall be equal to the amount, if
any, by which the amount calculated in accordance with the preceding sentence
(without giving effect to the deduction of the Adjustment Amount for such
anniversary) exceeds the greater of (A) the greatest of (i) twice the
outstanding principal balance of the Mortgage Loan in the Trust Fund which has
the largest outstanding principal balance on the Distribution Date immediately
preceding such anniversary, (ii) the product of 1.00% multiplied by the
outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such anniversary and (iii) the aggregate outstanding
principal balance (as of the immediately preceding Distribution Date) of the
Mortgage Loans in any single five-digit California zip code area with the
largest amount of Mortgage Loans by aggregate
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principal balance as of such anniversary and (B) the greater of (i) the product
of 0.50% multiplied by the outstanding principal balance of all Mortgage Loans
on the Distribution Date immediately preceding such anniversary multiplied by a
fraction, the numerator of which is equal to the aggregate outstanding principal
balance (as of the immediately preceding Distribution Date) of all of the
Mortgage Loans secured by Mortgaged Properties located in the State of
California divided by the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage Loans, expressed
as a percentage, and the denominator of which is equal to 56.15% (which
percentage is equal to the percentage of Mortgage Loans initially secured by
Mortgaged Properties located in the State of California) and (ii) the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of the largest Mortgage Loan secured by a Mortgaged Property located in
the State of California.
The Special Hazard Amount may be further reduced by the Master Servicer
(including accelerating the manner in which coverage is reduced) provided that
prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency (such determination to be made without
regard to the Certificate Policy) and (ii) provide a copy of such written
confirmation to the Trustee.
"Special Hazard Loss": Any Realized Loss not in excess of the cost of the
lesser of repair or replacement of a Mortgaged Property suffered by such
Mortgaged Property on account of direct physical loss, exclusive of (i) any loss
of a type covered by a hazard policy or a flood insurance policy required to be
maintained in respect of such Mortgaged Property pursuant to Section 3.13(a),
except to the extent of the portion of such loss not covered as a result of any
coinsurance provision and (ii) any Extraordinary Loss.
"Standard & Poor's": Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc., or its successor in interest.
"Startup Day": The day designated as such pursuant to Article X hereof.
"Stated Principal Balance": With respect to any Mortgage Loan or related
REO Property at any given time, (i) the principal balance of the Mortgage Loan
outstanding as of the Cut-off Date after application of principal payments due
on or before such date, whether or not received, minus (ii) the sum of (a) the
principal portion of the Monthly Payments due with respect to such Mortgage Loan
or REO Property during each Due Period ending prior to the most recent
Distribution Date which were received or with respect to which an Advance was
made, and (b) all Principal Prepayments with respect to such Mortgage Loan or
REO Property, and all Insurance Proceeds, Liquidation Proceeds and REO Proceeds
to the extent applied by the Master Servicer as recoveries of principal in
accordance with Section 3.15 with respect to such Mortgage Loan or REO Property,
which were distributed pursuant to Section 4.01 on any previous Distribution
Date, and (c) any Realized Loss with respect thereto allocated pursuant to
Section 4.05 for any previous Distribution Date.
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"Subordinate Certificate": Any of the Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2 or Class B-3 Certificates.
"Subordinate Percentage": As of any date of determination, a percentage
equal to 100% minus Senior Percentage as of such date.
"Subordinate Principal Distribution Amount": With respect to any
Distribution Date and each Class of Class M Certificates and Class B
Certificates, the sum of (i) the product of (x) the related Class M Percentage
or Class B Percentage for such Class and (y) the aggregate of the amounts
calculated for such Distribution Date under clauses (1), (2) and (3) of Section
4.01(a)(ii)(Y)(A) without giving effect to the Senior Percentage; (ii) such
Class's pro rata share, based on the Certificate Principal Balance of each Class
of Class M Certificates and Class B Certificates then outstanding, of the
principal collections described in Section 4.01(a)(ii)(Y)(B)(b) (without giving
effect to the Senior Accelerated Distribution Percentage), to the extent such
collections are not otherwise distributed to the Senior Certificates; (iii) the
product of (x) the related Prepayment Distribution Percentage for such
Distribution Date and (y) the aggregate of all Principal Prepayments in Full and
Curtailments received in the related Prepayment Period to the extent not payable
to the Senior Certificates; and (iv) any amounts described in clauses (i), (ii)
and (iii) as determined for any previous Distribution Date, that remain
undistributed to the extent that such amounts are not attributable to Realized
Losses which have been allocated to a subordinate Class of Class M or Class B
Certificates; provided, however, that such amount shall in no event exceed the
outstanding Certificate Principal Balance of such Class of Certificates
immediately prior to such date.
"Sub-Servicer": Any Person with which the Master Servicer has entered into
a Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02.
"Sub-Servicer Remittance Date": The 18th day of each month, or if such day
is not a Business Day, the immediately preceding Business Day.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub-Servicer and any successor Sub-Servicer relating to servicing
and administration of certain Mortgage Loans as provided in Section 3.02.
"Sub-Servicing Fees": As to each Mortgage Loan, an amount, payable out of
any payment of interest on the Mortgage Loan, equal to interest at the
Sub-Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan 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).
"Sub-Servicing Fee Rate": With respect to each Mortgage Loan, the per
annum rate of 0.25%.
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"Substitution Adjustment": As defined in Section 2.04 hereof.
"Tax Returns": The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of REMIC 1 and REMIC 2 due to their classification as REMICs under the
REMIC Provisions, together with any and all other information, reports or
returns that may be required to be furnished to the Certificateholders or filed
with the Internal Revenue Service or any other governmental taxing authority
under any applicable provisions of federal, state or local tax laws.
"Transfer": Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trustee": Deutsche Bank National Trust Company, or its successor in
interest, or any successor trustee appointed as herein provided.
"Trustee's Fee": As to each Mortgage Loan and Distribution Date, an amount
equal to interest at the Trustee Fee Rate on the Stated Principal Balance of
such Mortgage Loan as of the Due Date in the month immediately preceding the
month in which such Distribution Date occurs.
"Trustee Fee Rate": On each Mortgage Loan, a rate equal to 0.0135% per
annum.
"Trust Fund": REMIC 1 and REMIC 2.
"Uncertificated Principal Balance": With respect to each Uncertificated
REMIC 1 Regular Interest on any date of determination, the amount set forth in
the Preliminary Statement hereto minus the sum of (x) the aggregate of all
amounts previously deemed distributed with respect to such interest and applied
to reduce the Uncertificated Principal Balance thereof pursuant to Section
4.04(a)(ii) and (y) the aggregate of all reductions in Certificate Principal
Balance deemed to have occurred in connection with Realized Losses that were
previously deemed allocated to the Uncertificated Principal Balance of such
Uncertificated REMIC 1 Regular Interest pursuant to Section 4.04(d).
"Uncertificated REMIC 1 Accrued Interest": With respect to each
Distribution Date:
(i) as to Uncertificated REMIC 1 Regular Interest LTR2, an amount equal to
the aggregate amount of Accrued Certificate Interest that would result under the
terms of the definition thereof on the Class R Certificates (in respect of the
Class R-2 Interest) if the Pass-Through Rate on such Class were equal to the
Uncertificated REMIC 1 Pass-Through Rate on Uncertificated REMIC 1 Regular
Interest LTR2;
34
(ii) as to Uncertificated REMIC 1 Regular Interest LTA1, an amount equal
to the aggregate amount of Accrued Certificate Interest that would result under
the terms of the definition thereof on the Class A-1 Certificates if the
Pass-Through Rate on such Class were equal to the Uncertificated REMIC 1
Pass-Through Rate on Uncertificated REMIC 1 Regular Interest LTA1;
(iii) as to Uncertificated REMIC 1 Regular Interest LTA2, an amount equal
to the aggregate amount of Accrued Certificate Interest that would result under
the terms of the definition thereof on the Class A-2 Certificates if the
Pass-Through Rate on such Class were equal to the Uncertificated REMIC 1
Pass-Through Rate on Uncertificated REMIC 1 Regular Interest LTA2;
(iv) as to Uncertificated REMIC 1 Regular Interest LTA4, an amount equal
to the aggregate amount of Accrued Certificate Interest that would result under
the terms of the definition thereof on the Class A-4 Certificates if the
Pass-Through Rate on such Class were equal to the Uncertificated REMIC 1
Pass-Through Rate on Uncertificated REMIC 1 Regular Interest LTA4;
(v) as to Uncertificated REMIC 1 Regular Interest LTMB, an amount equal to
the aggregate amount of Accrued Certificate Interest that would result under the
terms of the definition thereof on the Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2 and Class B-3 Certificates if the Pass-Through Rate on such Class
were equal to the Uncertificated REMIC 1 Pass-Through Rate on Uncertificated
REMIC 1 Regular Interest LTMB;
(vi) as to Uncertificated REMIC 1 Regular Interest LTP, an amount equal to
the aggregate amount of Accrued Certificate Interest that would result under the
terms of the definition thereof on the Class P Certificates if the Pass-Through
Rate on such Class were equal to the Uncertificated REMIC 1 Pass-Through Rate on
Uncertificated REMIC 1 Regular Interest LTP; and
(vii) as to Uncertificated REMIC 1 Regular Interest LTIO, an amount equal
to the aggregate amount of Accrued Certificate Interest that would result under
the terms of the definition thereof on the Class A-IO Certificates, if the
Pass-Through Rate were equal to the Uncertificated REMIC 1 Pass-Through Rate and
the Notional Amount were equal to the Uncertificated REMIC 1 IO Notional Amount.
Uncertificated REMIC 1 Regular Interest LTPO shall not accrue interest.
"Uncertificated REMIC 1 IO Notional Amount": With respect to
Uncertificated REMIC 1 Regular Interest LTIO, the aggregate Stated Principal
Balance as of the related Due Period of the Non-Discount Mortgage Loans
multiplied by a fraction, the numerator of which is the weighted average of the
Pool Strip Rates and the denominator of which is 5.50%.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to each of
Uncertificated REMIC 1 Regular Interests, the Uncertificated REMIC 1
Pass-Through Rate as provided in the Preliminary Statement.
"Uncertificated REMIC 1 Regular Interest LTA1": An uncertificated partial
undivided beneficial ownership interest in REMIC 1 having a principal balance
equal to the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties from time to time multiplied by a
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fraction, the numerator of which is the aggregate Certificate Principal Balance
of the Class A-1 Certificates and the denominator of which is the aggregate
Certificate Principal Balance of all of the Certificates, and which bears
interest at a rate equal to the related Uncertificated REMIC 1 Pass-Through
Rate.
"Uncertificated REMIC 1 Regular Interest LTA2": An uncertificated partial
undivided beneficial ownership interest in REMIC 1 having a principal balance
equal to the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties from time to time multiplied by a fraction, the numerator of which is
the aggregate Certificate Principal Balance of the Class A-2 Certificates and
the denominator of which is the aggregate Certificate Principal Balance of all
of the Certificates, and which bears interest at a rate equal to the related
Uncertificated REMIC 1 Pass-Through Rate.
"Uncertificated REMIC 1 Regular Interest LTA4": An uncertificated partial
undivided beneficial ownership interest in REMIC 1 having a principal balance
equal to the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties from time to time multiplied by a fraction, the numerator of which is
the aggregate Certificate Principal Balance of the Class A-4 Certificates and
the denominator of which is the aggregate Certificate Principal Balance of all
of the Certificates, and which bears interest at a rate equal to the related
Uncertificated REMIC 1 Pass-Through Rate.
"Uncertificated REMIC Regular Interest LTIO": The uncertificated partial
undivided beneficial ownership interests in REMIC 1, relating to the
Non-Discount Mortgage Loans, having no principal balance, and bearing interest
at the Uncertificated REMIC 1 Pass-Through Rate on the Uncertificated REMIC 1 IO
Notional Amount.
"Uncertificated REMIC 1 Regular Interest LTMB": An uncertificated partial
undivided beneficial ownership interest in REMIC 1 having a principal balance
equal to the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties from time to time multiplied by a fraction, the numerator of which is
the aggregate Certificate Principal Balance of the Class M Certificates and
Class B Certificates and the denominator of which is the aggregate Certificate
Principal Balance of all of the Certificates, and which bears interest at a rate
equal to the related Uncertificated REMIC 1 Pass-Through Rate.
"Uncertificated REMIC 1 Regular Interest LTP": An uncertificated partial
undivided beneficial ownership interest in REMIC 1 having a principal balance
equal to the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties from time to time multiplied by a fraction, the numerator of which is
the aggregate Certificate Principal Balance of the Class P Certificates and the
denominator of which is the aggregate Certificate Principal Balance of all of
the Certificates, and which bears interest at a rate equal to the related
Uncertificated REMIC 1 Pass-Through Rate.
"Uncertificated REMIC 1 Regular Interest LTPO": An uncertificated partial
undivided beneficial ownership interest in REMIC 1 having a principal balance
equal to the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties from time to time multiplied by a fraction, the numerator of which is
the aggregate Certificate Principal Balance of the Class A-PO
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Certificates and the denominator of which is the aggregate Certificate Principal
Balance of all of the Certificates, and which bears interest at a rate equal to
0.00% per annum.
"Uncertificated REMIC 1 Regular Interest LTR2": An uncertificated partial
undivided beneficial ownership interest in REMIC 1 having a principal balance
equal to the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties from time to time multiplied by a fraction, the numerator of which is
the aggregate Certificate Principal Balance of the Class R Certificates (in
respect of the Class R-2 Interest) and the denominator of which is the aggregate
Certificate Principal Balance of all of the Certificates, and which bears
interest at a rate equal to the related Uncertificated REMIC 1 Pass-Through
Rate.
"Uncertificated REMIC 1 Regular Interests": The Uncertificated REMIC 1
Regular Interests identified in the Preliminary Statement.
"Uncertificated REMIC 1 Regular Interest LTA1 Distribution Amount": With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC 1 Regular Interest LTA1 for such
Distribution Date pursuant to Section 4.06(a).
"Uncertificated REMIC 1 Regular Interest LTA2 Distribution Amount": With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC 1 Regular Interest LTA2 for such
Distribution Date pursuant to Section 4.06(a).
"Uncertificated REMIC 1 Regular Interest LTA4 Distribution Amount": With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC 1 Regular Interest LTA4 for such
Distribution Date pursuant to Section 4.06(a).
"Uncertificated REMIC 1 Regular Interest LTIO Distribution Amount": With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC 1 Regular Interest LTIO for such
Distribution Date pursuant to Section 4.06(a).
"Uncertificated REMIC 1 Regular Interest LTMB Distribution Amount": With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC 1 Regular Interest LTMB for such
Distribution Date pursuant to Section 4.06(a).
"Uncertificated REMIC 1 Regular Interest LTP Distribution Amount": With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC 1 Regular Interest LTP for such
Distribution Date pursuant to Section 4.06(a).
"Uncertificated REMIC 1 Regular Interest LTPO Distribution Amount": With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC 1 Regular Interest LTPO for such
Distribution Date pursuant to Section 4.06(a).
"Uncertificated REMIC 1 Regular Interest LTR2 Distribution Amount": With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC 1 Regular Interest LTR2 for such
Distribution Date pursuant to Section 4.06(a).
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"Uncertificated REMIC 1 Regular Interest Distribution Amounts": The
Uncertificated REMIC 1 Regular Interest LTA1 Distribution Amount, the
Uncertificated REMIC 1 Regular Interest LTA2 Distribution Amount, the
Uncertificated REMIC 1 Regular Interest LTA4 Distribution Amount, the
Uncertificated REMIC 1 Regular Interest LTA6 Distribution Amount, the
Uncertificated REMIC 1 Regular Interest LTA7 Distribution Amount, the
Uncertificated REMIC 1 Regular Interest LTIO Distribution Amount, the
Uncertificated REMIC 1 Regular Interest LTMB Distribution Amount, the
Uncertificated REMIC 1 Regular Interest LTP Distribution Amount, the
Uncertificated REMIC 1 Regular Interest LTPO Distribution Amount and the
Uncertificated REMIC 1 Regular Interest LTR2 Distribution Amount.
"Underwriter": UBS Securities LLC.
"Uninsured Cause": Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies or flood insurance policies required to be
maintained pursuant to Section 3.13.
"United States Person": A citizen or resident of the United States, a
corporation or a partnership (including an entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States or any State thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations) provided that, for purposes solely of the restrictions on the
transfer of Class R Certificates, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States Person unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation for United
States federal income tax purposes are required by the applicable operative
agreement to be United States Persons or an estate whose income is subject to
United States federal income tax regardless of its source, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more such United States Persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, which have not yet
been issued, a trust which was in existence on August 20, 1996 (other than a
trust treated as owned by the grantor under subpart E of part I of subchapter J
of chapter 1 of the Code), and which was treated as a United States person on
August 20, 1996 may elect to continue to be treated as a United States person
notwithstanding the previous sentence.
"Voting Rights": At all times 96% of all Voting Rights will be allocated
among the holders of the Class A Certificates (other than the Interest Only
Certificates), the Class M Certificates and the Class B Certificates in
proportion to the then outstanding Certificate Principal Balances of their
respective certificates. At all times 1% and 1% of all Voting Rights will be
allocated to the holders of the Class A-3 Certificates and Class A-IO
Certificates, respectively. At all times 1% and 1% of all Voting Rights will be
allocated to the holders of the Class P Certificates and Class R Certificates,
respectively. The Voting Rights allocated to any class of certificates shall be
allocated among all holders of the certificates of such class in proportion to
the outstanding percentage interests in such class represented thereby.
"Wendover": Wendover Funding, Inc.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
The Company, as of the Closing Date, and concurrently with the execution
and delivery hereof, does hereby assign, transfer, sell, set over and otherwise
convey to the Trustee without recourse all the right, title and interest of the
Company in and to the Mortgage Loans identified on the Mortgage Loan Schedule
(exclusive of any prepayment fees and late payment charges received thereon) and
all other assets included or to be included in the Trust Fund for the benefit of
the Certificateholders. Such assignment includes all principal and interest
received by the Master Servicer on or with respect to the Mortgage Loans.
The Master Servicer hereby acknowledges the receipt by it of cash in an
amount equal to $611,489.10 (the "Special Deposit"), representing interest at
the Mortgage Rate, for the calendar month of June 2003, for those Mortgage Loans
which do not have Monthly Payments due on July 1, 2003. The Master Servicer
shall hold such amount in the Custodial Account and shall include such amount in
the Available Distribution Amount for the Distribution Date in July 2003.
In connection with such transfer and assignment, the Company has caused
the Seller to deliver to, and deposit with the Trustee, as described in the
Mortgage Loan Purchase Agreement, with respect to each Mortgage Loan, the
following documents or instruments:
(i) the original Mortgage Note endorsed without recourse, in blank or to
"Deutsche Bank National Trust Company, as trustee under the Pooling and
Servicing Agreement relating to Impac Secured Assets Corp., Mortgage
Pass-Through Certificates, Series 2003-2" with all intervening endorsements
showing an unbroken chain of endorsements from the originator to the Person
endorsing it to the Trustee or, with respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, a Lost Note Affidavit;
(ii) the original recorded Mortgage, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan if
the Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon
or, if the original Mortgage has not been returned from the public recording
office, a copy of the Mortgage certified by the Seller or the public recording
office in which such Mortgage has been recorded to be a true and complete copy
of the original Mortgage submitted for recording;
(iii) unless the Mortgage Loan is registered on the MERS(R) System, a duly
executed original Assignment of the Mortgage, without recourse, in recordable
form in blank or to "Deutsche Bank National Trust Company, as trustee," or to
"Deutsche Bank National Trust Company, as trustee for holders of Impac Secured
Assets Corp., Mortgage Pass-Through Certificates, Series 2003-2";
39
(iv) the original recorded Assignment or Assignments of the Mortgage
showing an unbroken chain of assignment from the originator thereof to the
Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS(R) System and noting the presence of a MIN) or, if any
such Assignment has not been returned from the applicable public recording
office, a copy of such Assignment certified by the Seller to be a true and
complete copy of the original Assignment submitted to the title insurance
company for recording;
(v) the original title insurance policy, or, if such policy has not been
issued, any one of an original or a copy of the preliminary title report, title
binder or title commitment on the Mortgaged Property with the original policy of
the insurance to be delivered promptly following the receipt thereof;
(vi) a copy of the related hazard insurance policy; and
(vii) a true and correct copy of any assumption, modification,
consolidation or substitution agreement.
The Seller is obligated as described in the Mortgage Loan Purchase
Agreement, with respect to the Mortgage Loans, to deliver to the Trustee: (a)
either the original recorded Mortgage, or in the event such original cannot be
delivered by the Seller, a copy of such Mortgage certified as true and complete
by the appropriate recording office, in those instances where a copy thereof
certified by the Seller was delivered to the Trustee pursuant to clause (ii)
above; and (b) either the original Assignment or Assignments of the Mortgage,
with evidence of recording thereon, showing an unbroken chain of assignment from
the originator to the Seller, or in the event such original cannot be delivered
by the Seller, a copy of such Assignment or Assignments certified as true and
complete by the appropriate recording office, in those instances where copies
thereof certified by the Seller were delivered to the Trustee pursuant to clause
(iv) above. However, pursuant to the Mortgage Loan Purchase Agreement, the
Seller need not cause to be recorded any assignment in any jurisdiction under
the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller
to the Trustee and the Rating Agencies, the recordation of such assignment is
not necessary to protect the Trustee's interest in the related Mortgage Loan;
provided, however, notwithstanding the delivery of any Opinion of Counsel, each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust or the Trustee, upon the earliest to
occur of: (i) direction by the Holders of Certificates evidencing at least 25%
of the Voting Rights, (ii) the occurrence of a Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller,
(iv) the occurrence of a servicing transfer as described in Section 7.02 hereof
and (v) if the Seller is not the Master Servicer and with respect to any one
assignment, the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Mortgagor under the related Mortgage.
Notwithstanding anything to the contrary contained in this Section 2.01,
in those instances where the public recording office retains the original
Mortgage after it has been recorded, the Seller shall be deemed to have
satisfied its obligations hereunder upon delivery to the Trustee of a copy of
such Mortgage certified by the public recording office to be a true and complete
copy of the recorded original thereof.
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If any Assignment is lost or returned unrecorded to the Trustee because of
any defect therein, the Seller is required, as described in the Mortgage Loan
Purchase Agreement to prepare a substitute Assignment or cure such defect, as
the case may be, and the Seller shall cause such Assignment to be recorded in
accordance with this section.
The Seller is required as described in the Mortgage Loan Purchase
Agreement, with respect to the Mortgage Loans, to exercise its best reasonable
efforts to deliver or cause to be delivered to the Trustee within 120 days of
the Closing Date, with respect to the Mortgage Loans, the original or a
photocopy of the title insurance policy with respect to each such Mortgage Loan
assigned to the Trustee pursuant to this Section 2.01.
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Seller further agrees that it will cause, at the Seller's
own expense, as of the Closing Date, the MERS(R) System to indicate that such
Mortgage Loans have been assigned by the Seller to the Trustee in accordance
with this Agreement for the benefit of the Certificateholders by including (or
deleting, in the case of Mortgage Loans which are repurchased in accordance with
this Agreement) in such computer files (a) the code in the field which
identifies the specific Trustee and (b) the code in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Company further agrees that it will not, and will not permit
the Master Servicer to, and the Master Servicer agrees that it will not, alter
the codes referenced in this paragraph with respect to any Mortgage Loan during
the term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.
All original documents relating to the Mortgage Loans which are not
delivered to the Trustee are and shall be held by the Master Servicer in trust
for the benefit of the Trustee on behalf of the Certificateholders.
Except as may otherwise expressly be provided herein, none of the Company,
the Master Servicer or the Trustee shall (and the Master Servicer shall ensure
that no Sub-Servicer shall) assign, sell, dispose of or transfer any interest in
the Trust Fund or any portion thereof, or cause the Trust Fund or any portion
thereof to be subject to any lien, claim, mortgage, security interest, pledge or
other encumbrance.
It is intended that the conveyance of the Mortgage Loans by the Company to
the Trustee as provided in this Section be, and be construed as, a sale of the
Mortgage Loans and the REMIC 1 Regular Interests as provided for in this Section
2.01 by the Company to the Trustee for the benefit of the Certificateholders. It
is, further, not intended that such conveyance be deemed a pledge of the
Mortgage Loans and the REMIC 1 Regular Interests by the Company to the Trustee
to secure a debt or other obligation of the Company. However, in the event that
the Mortgage Loans and the REMIC 1 Regular Interests are held to be property of
the Company, or if for any reason this Agreement is held or deemed to create a
security interest in the Mortgage Loans and the REMIC 1 Regular Interests, then
it is intended that, (a) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in this Section shall be deemed to
be (1) a grant by the Company to the Trustee of a security interest in all of
the Company's right (including the power to convey title thereto), title and
interest, whether now
41
owned or hereafter acquired, in and to (A) the Mortgage Loans, including the
Mortgage Notes, the Mortgages, any related Insurance Policies and all other
documents in the related Mortgage Files, (B) all amounts payable to the holders
of the Mortgage Loans in accordance with the terms thereof, (C) the REMIC 1
Regular Interests and (D) all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts from time to time held or
invested in the Certificate Account or the Custodial Account, whether in the
form of cash, instruments, securities or other property and (2) an assignment by
the Company to the Trustee of any security interest in any and all of the
Seller's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to the property
described in the foregoing clauses (1)(A) through (D); (c) the possession by the
Trustee or any other agent of the Trustee of Mortgage Notes and such other items
of property as constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" or possession by a
purchaser or a person designated by such secured party, for purposes of
perfecting the security interest pursuant to the New York Uniform Commercial
Code and the Uniform Commercial Code of any other applicable jurisdiction
(including, without limitation, Sections 9-115, 9-305, 8-102, 8-301, 8-501 and
8-503 thereof); and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law. The
Company and the Trustee shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans and the REMIC 1
Regular Interests, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement.
Section 2.02. Acceptance of the Trust Fund by the Trustee.
The Trustee acknowledges receipt (subject to any exceptions noted in the
Initial Certification described below), of the documents referred to in Section
2.01 above and all other assets included in the definition of "Trust Fund" and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will hold
such other assets included in the definition of "Trust Fund" (to the extent
delivered or assigned to the Trustee), in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to review
or cause to be reviewed on its behalf, each Mortgage File on or before the
Closing Date to ascertain that all documents required to be delivered to it are
in its possession, and the Trustee agrees to execute and deliver, or cause to be
executed and delivered, to the Company and the Master Servicer on the Closing
Date, with respect to each Mortgage Loan, an Initial Certification in the form
annexed hereto as Exhibit C to the effect that, as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as not covered by
such certification), (i) all documents required to be delivered to it pursuant
to this Agreement with respect to such Mortgage Loan are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and
relate to such Mortgage Loan and (iii) based on its examination and only as to
the foregoing documents, the information set
42
forth in items (i), (ii), (iii)(A) and (iv) of the definition of the "Mortgage
Loan Schedule" accurately reflects information set forth in the Mortgage File.
Neither the Trustee nor the Master Servicer shall be under any duty to determine
whether any Mortgage File should include any of the documents specified in
clause (vi) or (vii) of Section 2.01. Neither the Trustee nor the Master
Servicer shall be under any duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable or appropriate for the represented purpose or that
they have actually been recorded, or they are in recordable form or that they
are other than what they purport to be on their face.
Within 90 days of the Closing Date, with respect to the Mortgage Loans,
the Trustee shall deliver to the Company and the Master Servicer a Final
Certification in the form annexed hereto as Exhibit D evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.
If in the process of reviewing the Mortgage Files and preparing the
certifications referred to above the Trustee finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, the Trustee shall promptly notify the Seller, the Master
Servicer and the Company. The Trustee shall promptly notify the Seller of such
defect and request that the Seller cure any such defect within 60 days from the
date on which the Seller was notified of such defect, and if the Seller does not
cure such defect in all material respects during such period, request on behalf
of the Certificateholders that the Seller purchase such Mortgage Loan from the
Trust Fund at the Purchase Price within 90 days after the date on which the
Seller was notified of such defect; provided that if such defect would cause the
Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. It is understood and agreed that the
obligation of the Seller to cure a material defect in, or purchase any Mortgage
Loan as to which a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders. The Purchase
Price for the purchased Mortgage Loan shall be deposited or caused to be
deposited upon receipt by the Master Servicer in the Custodial Account and, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall release or cause to be released to the
Seller the related Mortgage File and shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as the Seller shall
require as necessary to vest in the Seller ownership of any Mortgage Loan
released pursuant hereto and at such time the Trustee shall have no further
responsibility with respect to the related Mortgage File. In furtherance of the
foregoing, if the Seller is not a member of MERS and the Mortgage is registered
on the MERS(R) System, the Master Servicer, at its own expense and without any
right of reimbursement, shall cause MERS to execute and deliver an assignment of
the Mortgage in recordable form to transfer the Mortgage from MERS to the Seller
and shall cause such Mortgage to be removed from registration on the MERS(R)
System in accordance with MERS' rules and regulations.
43
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Company.
(a) The Master Servicer hereby represents and warrants to and covenants
with the Company and the Trustee for the benefit of Certificateholders that:
(i) The Master Servicer is, and throughout the term hereof shall
remain, a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation (except as otherwise permitted
pursuant to Section 6.02), the Master Servicer is, and shall remain, in
compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to perform its obligations under this Agreement,
and the Master Servicer is, and shall remain, approved to sell mortgage loans to
and service mortgage loans for Fannie Mae and Freddie Mac;
(ii) The execution and delivery of this Agreement by the Master
Servicer, and the performance and compliance with the terms of this Agreement by
the Master Servicer, will not violate the Master Servicer's articles of
incorporation or bylaws or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a party or
which is applicable to it or any of its assets;
(iii) The Master Servicer has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and has
duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization, execution and
delivery by the Company and the Trustee, constitutes a valid, legal and binding
obligation of the Master Servicer, enforceable against the Master Servicer in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the enforcement
of creditors' rights generally, and (B) general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at law;
(v) The Master Servicer is not in violation of, and its execution
and delivery of this Agreement and its performance and compliance with the terms
of this Agreement will not constitute a violation of, any law, any order or
decree of any court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority, which violation is
likely to affect materially and adversely either the ability of the Master
Servicer to perform its obligations under this Agreement or the financial
condition of the Master Servicer;
(vi) No litigation is pending (other than litigation with respect to
which pleadings or documents have been filed with a court, but not served on the
Master Servicer) or, to the best of the Master Servicer's knowledge, threatened
against the Master Servicer which would prohibit its entering into this
Agreement or performing its obligations under this Agreement or is likely to
affect materially and adversely either the ability of the Master Servicer to
perform its obligations under this Agreement or the financial condition of the
Master Servicer;
44
(vii) The Master Servicer will comply in all material respects in
the performance of this Agreement with all reasonable rules and requirements of
each insurer under each Insurance Policy;
(viii) The execution of this Agreement and the performance of the
Master Servicer's obligations hereunder do not require any license, consent or
approval of any state or federal court, agency, regulatory authority or other
governmental body having jurisdiction over the Master Servicer, other than such
as have been obtained;
(ix) No information, certificate of an officer, statement furnished
in writing or report delivered to the Company, any affiliate of the Company or
the Trustee by the Master Servicer in its capacity as Master Servicer, and not
in its capacity as a Seller hereunder, will, to the knowledge of the Master
Servicer, contain any untrue statement of a material fact;
(x) The Master Servicer will not waive any Prepayment Charge unless
it is waived in accordance with the standard set forth in Section 3.01; and
(xi) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.03(a) shall survive the execution and
delivery of this Agreement, and shall inure to the benefit of the Company, the
Trustee and the Certificateholders. Upon discovery by the Company, the Trustee
or the Master Servicer of a breach of any of the foregoing representations,
warranties and covenants that materially and adversely affects the interests of
the Company or the Trustee, the party discovering such breach shall give prompt
written notice to the other parties. Notwithstanding the foregoing, within 90
days of the earlier of discovery by the Master Servicer or receipt of notice by
the Master Servicer of the breach of the covenant of the Master Servicer set
forth in Section 2.03(x) above which materially and adversely affects the
interests of the Holders of the Class P Certificates in any Prepayment Charge,
the Master Servicer shall remedy such breach as follows: the Master Servicer
shall pay the amount of such waived Prepayment Charge, for the benefit of the
holders of the Class P Certificates, by depositing such amount into the
Custodial Account (net of any amount actually collected by the Master Servicer
in respect of such Prepayment Charge and remitted by the Master Servicer, for
the benefit of the Holders of the Class P Certificates, in respect of such
Prepayment Charge, into the Custodial Account). The foregoing shall not,
however, limit any remedies available to the Certificateholders, the Company or
the Trustee on behalf of the Certificateholders, pursuant to the Mortgage Loan
Purchase Agreement respecting a breach of any of the representations, warranties
and covenants contained in the Mortgage Loan Purchase Agreement.
(b) The Company hereby represents and warrants to the Master Servicer and
the Trustee for the benefit of Certificateholders that as of the Closing Date,
the representations and warranties of the Seller with respect to the Mortgage
Loans and the remedies therefor that are contained in the Mortgage Loan Purchase
Agreement are as set forth in Exhibit I hereto.
45
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the respective Mortgage
Files to the Trustee.
Upon discovery by either the Company, the Master Servicer or the Trustee
of a breach of any representation or warranty set forth in this Section 2.03
which materially and adversely affects the interests of the Certificateholders
in any Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other parties.
Section 2.04. Representations and Warranties of the Seller.
The Company hereby assigns to the Trustee for the benefit of
Certificateholders all of its rights (but none of its obligations) in, to and
under the Mortgage Loan Purchase Agreement. Insofar as the Mortgage Loan
Purchase Agreement, with respect to the Mortgage Loans, relates to such
representations and warranties and any remedies provided thereunder for any
breach of such representations and warranties, such right, title and interest
may be enforced by the Trustee on behalf of the Certificateholders. Upon the
discovery by the Company, the Master Servicer or the Trustee of a breach of any
of the representations and warranties made in the Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially and adversely affects
the interests of the Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.
The Trustee shall promptly notify the Seller of such breach and request that the
Seller shall, within 90 days from the date that the Seller was notified or
otherwise obtained knowledge of such breach, either (i) cure such breach in all
material respects or (ii) purchase such Mortgage Loan from the Trust Fund at the
Purchase Price and in the manner set forth in Section 2.02; provided that if
such breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure or
repurchase must occur within 90 days from the date such breach was discovered.
However, in the case of a breach under the Mortgage Loan Purchase Agreement,
subject to the approval of the Company the Seller shall have the option to
substitute a Qualified Substitute Mortgage Loan or Loans for such Mortgage Loan
if such substitution occurs within two years following the Closing Date, except
that if the breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such substitution
must occur within 90 days from the date the breach was discovered if such 90 day
period expires before two years following the Closing Date. In the event that
the Seller elects to substitute a Qualified Substitute Mortgage Loan or Loans
for a Deleted Mortgage Loan pursuant to this Section 2.04, the Trustee shall
enforce the obligation of the Seller under the Mortgage Loan Purchase Agreement
to deliver to the Trustee and the Master Servicer, as appropriate, with respect
to such Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note,
the Mortgage, an Assignment of the Mortgage in recordable form, and such other
documents and agreements as are required by Section 2.01, with the Mortgage Note
endorsed as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of
substitution, to the extent received by the Master Servicer or any Sub-Servicer,
shall not be part of the Trust Fund and will be retained by the Master Servicer
and remitted by the Master Servicer to the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Monthly Payment due on a Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Company shall
amend or cause
46
to be amended the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Qualified Substitute Mortgage Loan or Loans and the Company
shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Qualified Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, the Seller shall be deemed to
have made the representations and warranties with respect to the Qualified
Substitute Mortgage Loan contained in the Mortgage Loan Purchase Agreement as of
the date of substitution, and the Company shall be deemed to have made with
respect to any Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Exhibit I hereof
(other than representations (xiv), (xvi), (xxix) and (xxxiii) through (xli)).
In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (the "Substitution Adjustment"), if any, by which the
aggregate principal balance of all such Qualified Substitute Mortgage Loans as
of the date of substitution is less than the aggregate Stated Principal Balance
of all such Deleted Mortgage Loans (in each case after application of the
principal portion of the Monthly Payments due in the month of substitution that
are to be distributed to Certificateholders in the month of substitution). The
Trustee shall enforce the obligation of the Seller under the Mortgage Loan
Purchase Agreement to provide the Master Servicer on the day of substitution for
immediate deposit into the Custodial Account the amount of such shortfall,
without any reimbursement therefor. In accordance with the Mortgage Loan
Purchase Agreement, the Seller shall give notice in writing to the Trustee of
such event, which notice shall be accompanied by an Officers' Certificate as to
the calculation of such shortfall and by an Opinion of Counsel to the effect
that such substitution will not cause (a) any federal tax to be imposed on REMIC
1 or REMIC 2, including without limitation, any federal tax imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code or
(b) any portion of REMIC 1 or REMIC 2 to fail to qualify as a REMIC at any time
that any Certificate is outstanding. The costs of any substitution as described
above, including any related assignments, opinions or other documentation in
connection therewith shall be borne by the Seller.
Except as expressly set forth herein neither the Trustee nor the Master
Servicer is under any obligation to discover any breach of the above-mentioned
representations and warranties. It is understood and agreed that the obligation
of the Seller to cure such breach, purchase or to substitute for such Mortgage
Loan as to which such a breach has occurred and is continuing shall constitute
the sole remedy respecting such breach available to Certificateholders or the
Trustee on behalf of Certificateholders.
Section 2.05. Issuance of Certificates; Conveyance of REMIC Regular
Interests and Acceptance of REMIC 2 by the Trustee.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, together with the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Company executed by an officer
of the Company, has executed, authenticated and delivered to or upon the order
of the Company, the Certificates in
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authorized denominations. The interests evidenced by the Certificates,
constitute the entire beneficial ownership interest in the Trust Fund.
(b) The Company, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Company in and to the
REMIC 1 Regular Interests for the benefit of the Holders of the REMIC 2 Regular
Interests and Holders of the Class R Certificates (as holders of the Class R-1
Interest). The Trustee acknowledges receipt of the REMIC 1 Regular Interests
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the Holders of the REMIC 2 Regular
Interests and Holders of the Class R Certificates (as holders of the Class R-1
Interest). The interests evidenced by the Class R-2 Interest, together with the
Regular Certificates, constitute the entire beneficial ownership interest in
REMIC 2.
(c) In exchange for the REMIC 1 Regular Interests and, concurrently with
the assignment to the Trustee thereof, pursuant to the written request of the
Company executed by an officer of the Company, the Trustee has executed,
authenticated and delivered to or upon the order of the Company, the Regular
Certificates in authorized denominations evidencing (together with the Class R-2
Interest) the entire beneficial ownership interest in REMIC 2.
(d) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof and (ii) the assignment and
delivery to the Trustee of REMIC 2 (including the Residual Interest therein
represented by the Class R-2 Interest) and the acceptance by the Trustee
thereof, the Trustee, pursuant to the written request of the Company executed by
an officer of the Company, has executed, authenticated and delivered to or upon
the order of the Company, the Class R Certificates in authorized denominations
evidencing the Class R-1 Interest and the Class R-2 Interest.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01. Master Servicer to Act as Master Servicer.
The Master Servicer shall supervise, or take such actions as are necessary
to ensure, the servicing and administration of the Mortgage Loans and any REO
Property in accordance with this Agreement and its normal servicing practices,
which generally shall conform to the standards (i) of the Servicing Guide, if
Impac Funding Corporation is Master Servicer, or (ii) if Impac Funding
Corporation is not the Master Servicer, of an institution prudently servicing
mortgage loans for its own account and shall have full authority to do anything
it reasonably deems appropriate or desirable in connection with such servicing
and administration. To the extent consistent with the foregoing, the Master
Servicer shall waive (or permit a Sub-Servicer to waive) a Prepayment Charge
only under the following circumstances: (i) such waiver would, in the reasonable
judgement of the Master Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan
and, if such waiver is made in connection with a refinancing of the related
Mortgage Loan, such refinancing is related to a default or a reasonably
foreseeable default, or (ii) such waiver is otherwise required by applicable
law.
The Master Servicer may perform its responsibilities relating to servicing
through other agents or independent contractors, but shall not thereby be
released from any of its responsibilities as hereinafter set forth. The
authority of the Master Servicer, in its capacity as master servicer, and any
Sub-Servicer acting on its behalf, shall include, without limitation, the power
to (i) consult with and advise any Sub-Servicer regarding administration of a
related Mortgage Loan, (ii) approve any recommendation by a Sub-Servicer to
foreclose on a related Mortgage Loan, (iii) supervise the filing and collection
of insurance claims and take or cause to be taken such actions on behalf of the
insured Person thereunder as shall be reasonably necessary to prevent the denial
of coverage thereunder, and (iv) effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing a related Mortgage Loan,
including the employment of attorneys, the institution of legal proceedings, the
collection of deficiency judgments, the acceptance of compromise proposals, the
filing of claims under any Insurance Policy and any other matter pertaining to a
delinquent Mortgage Loan. The authority of the Master Servicer shall include, in
addition, the power on behalf of the Certificateholders, the Trustee or any of
them to (i) execute and deliver customary consents or waivers and other
instruments and documents, (ii) consent to transfer of any related Mortgaged
Property and assumptions of the related Mortgage Notes and Security Instruments
(in the manner provided in this Agreement) and (iii) collect any Insurance
Proceeds and Liquidation Proceeds. Without limiting the generality of the
foregoing, the Master Servicer and any Sub-Servicer acting on its behalf may,
and is hereby authorized, and empowered by the Trustee to, execute and deliver,
on behalf of itself, the Certificateholders or the Trustee or any of them, any
instruments of satisfaction, cancellation, partial or full release, discharge
and all other comparable instruments, with respect to the related Mortgage
Loans, the Insurance Policies and the accounts related thereto, and the
Mortgaged Properties. The Master Servicer may exercise this power in its own
name or in the name of a Sub-Servicer.
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Subject to Section 3.16, the Trustee shall execute, at the written request
of the Master Servicer, and furnish to the Master Servicer and any Sub-Servicer
such documents as are necessary or appropriate to enable the Master Servicer or
any Sub-Servicer to carry out their servicing and administrative duties
hereunder, and the Trustee hereby grants to the Master Servicer a power of
attorney to carry out such duties. The Trustee shall not be liable for the
actions of the Master Servicer or any Sub-Servicers under such powers of
attorney.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11; provided that the Master Servicer shall not be
obligated to make such advance if, in its good faith judgment, the Master
Servicer determines that such advance to be a Nonrecoverable Advance.
The Master Servicer is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of any
Subservicer, when the Master Servicer or such Subservicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS(R) System, or cause the removal from the registration of any Mortgage
Loan on the MERS(R) System, to execute and deliver, on behalf of the Trustee and
the Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. Any expenses incurred in connection with the actions
described in the preceding sentence shall be borne by the Master Servicer in
accordance with Section 3.17, with no right of reimbursement; provided, that if,
as a result of MERS discontinuing or becoming unable to continue operations in
connection with the MERS System, it becomes necessary to remove any Mortgage
Loan from registration on the MERS System and to arrange for the assignment of
the related Mortgages to the Trustee, then any related expenses shall be
reimbursable to the Master Servicer from the Trust Fund.
Notwithstanding anything in this Agreement to the contrary, the Master
Servicer shall not (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Master Servicer,
reasonably foreseeable) make or permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (i) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury
regulations promulgated thereunder) and (ii) cause any of REMIC 1 or REMIC 2 to
fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions" after the startup date under the
REMIC Provisions.
The relationship of the Master Servicer (and of any successor to the
Master Servicer under this Agreement) to the Trustee under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or agent.
Section 3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers.
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(a) The Master Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans and for
the performance of any and all other activities of the Master Servicer
hereunder; provided, however, that such agreements would not result in a
withdrawal or a downgrading by Standard & Poor's of its rating on any Class of
Certificates. Each Sub-Servicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans comparable to the Mortgage
Loans, and in either case shall be authorized to transact business in the state
or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, and in either case shall be a Freddie Mac or Fannie Mae approved
mortgage servicer. Any Sub-Servicing Agreement entered into by the Master
Servicer shall include the provision that such Agreement may be immediately
terminated (x) with cause and without any termination fee by any Master Servicer
hereunder or (y) without cause in which case the Master Servicer shall be
responsible for any termination fee or penalty resulting therefrom. In addition,
each Sub-Servicing Agreement shall provide for servicing of the Mortgage Loans
consistent with the terms of this Agreement. With the consent of the Trustee,
the Master Servicer and the Sub-Servicers may enter into Sub-Servicing
Agreements and make amendments to the Sub-Servicing Agreements or enter into
different forms of Sub-Servicing Agreements providing for, among other things,
the delegation by the Master Servicer to a Sub-Servicer of additional duties
regarding the administration of the Mortgage Loans; provided, however, that any
such amendments or different forms shall be consistent with and not violate the
provisions of this Agreement, and that no such amendment or different form shall
be made or entered into which could be reasonably expected to be materially
adverse to the interests of the Certificateholders, without the consent of the
Holders of Certificates entitled to at least 51% of the Voting Rights. The
parties hereto acknowledge that the initial Sub-Servicer shall be Wendover.
The Master Servicer has entered into a Sub-Servicing Agreement with
Wendover for the servicing and administration of the Mortgage Loans and may
enter into additional Sub-Servicing Agreements with Sub-Servicers acceptable to
the Trustee for the servicing and administration of certain of the Mortgage
Loans.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, but shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement only
to the extent, if any, that such recovery exceeds all amounts due in respect of
the related Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
(c) The Master Servicer represents that it has entered into a contract
regarding the sale of sub-servicing rights with respect to the Mortgage Loans
with Countrywide and shall transfer the
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subservicing of the Mortgage Loans from Wendover to Countrywide on or about
September 1, 2003. The Trustee hereby consents to such transfer.
Section 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Master Servicer without any act or deed on the part of such Sub-Servicer or
the Master Servicer, and the Master Servicer either shall service directly the
related Mortgage Loans or shall enter into a Sub-Servicing Agreement with a
successor Sub-Servicer which qualifies under Section 3.02.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer and
a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Master Servicer shall under all circumstances remain obligated
and primarily liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans and any REO Property in accordance with the
provisions of Article III without diminution of such obligation or liability by
virtue of such Sub-Servicing Agreements or arrangements or by virtue of
indemnification from the Sub-Servicer and to the same extent and under the same
terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. For purposes of this Agreement, the Master
Servicer shall be deemed to have received payments on Mortgage Loans when the
Sub-Servicer has received such payments. The Master Servicer shall be entitled
to enter into any agreement with a Sub-Servicer for indemnification of the
Master Servicer by such Sub-Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between Sub-Servicers and
Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any transactions
or services relating to the Mortgage Loans involving a Sub-Servicer in its
capacity as such and not as an originator shall be deemed to be between the
Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.06. The Master Servicer (or Sub-Servicer) shall
be liable for the payment of any franchise taxes which may be assessed by the
California Franchise Tax Board in connection with the activities of the Trust
under this Agreement.
Section 3.06. Assumption or Termination of Sub-Servicing Agreements by
Trustee.
(a) If the Trustee or its designee shall assume the master servicing
obligations of the Master Servicer in accordance with Section 7.02 below, the
Trustee, to the extent necessary to permit the Trustee to carry out the
provisions of Section 7.02 with respect to the Mortgage Loans, shall
52
succeed to all of the rights and obligations of the Master Servicer under each
of the Sub-Servicing Agreements. In such event, the Trustee or its designee as
the successor master servicer shall be deemed to have assumed all of the Master
Servicer's rights and obligations therein and to have replaced the Master
Servicer as a party to such Sub-Servicing Agreements to the same extent as if
such Sub-Servicing Agreements had been assigned to the Trustee or its designee
as a successor master servicer, except that the Trustee or its designee as a
successor master servicer shall not be deemed to have assumed any obligations or
liabilities of the Master Servicer arising prior to such assumption (other than
the obligation to make any Advances hereunder) and the Master Servicer shall not
thereby be relieved of any liability or obligations under such Sub-Servicing
Agreements arising prior to such assumption. Nothing in the foregoing shall be
deemed to entitle the Trustee or its designee as a successor master servicer at
any time to receive any portion of the servicing compensation provided under
Section 3.17 except for such portion as the Master Servicer would be entitled to
receive.
(b) In the event that the Trustee or its designee as successor master
servicer for the Trustee assumes the servicing obligations of the Master
Servicer under Section 7.02, upon the reasonable request of the Trustee or such
designee as successor master servicer the Master Servicer shall at its own
expense deliver to the Trustee, or at its written request to such designee,
photocopies of all documents, files and records, electronic or otherwise,
relating to the Sub-Servicing Agreements and the related Mortgage Loans or REO
Property then being serviced and an accounting of amounts collected and held by
it, if any, and will otherwise cooperate and use its reasonable efforts to
effect the orderly and efficient transfer of the Sub-Servicing Agreements, or
responsibilities hereunder to the Trustee, or at its written request to such
designee as successor master servicer.
Section 3.07. Collection of Certain Mortgage Loan Payments.
(a) The Master Servicer will coordinate and monitor remittances by
Sub-Servicers to the Master Servicer with respect to the Mortgage Loans in
accordance with this Agreement.
(b) The Master Servicer shall make its reasonable efforts to collect or
cause to be collected all payments required under the terms and provisions of
the Mortgage Loans and shall follow, and use its reasonable efforts to cause
Sub-Servicers to follow, collection procedures comparable to the collection
procedures of prudent mortgage lenders servicing mortgage loans for their own
account to the extent such procedures shall be consistent with this Agreement.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive or permit to be waived any late payment charge, prepayment charge,
assumption fee, or any penalty interest in connection with the prepayment of a
Mortgage Loan and (ii) suspend or reduce or permit to be suspended or reduced
regular monthly payments for a period of up to six months, or arrange or permit
an arrangement with a Mortgagor for a scheduled liquidation of delinquencies. In
the event the Master Servicer shall consent to the deferment of the due dates
for payments due on a Mortgage Note, the Master Servicer shall nonetheless make
an Advance or shall cause the related Sub-Servicer to make an advance to the
same extent as if such installment were due, owing and delinquent and had not
been deferred through liquidation of the Mortgaged Property; provided, however,
that the obligation of the Master Servicer or related Sub-Servicer to make an
Advance shall apply only to the extent that the Master Servicer believes, in
good faith, that such advances are not Nonrecoverable Advances.
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(c) On each Determination Date, with respect to each Mortgage Loan for
which during the related Prepayment Period the Master Servicer has determined
that all amounts which it expects to recover from or on account of each such
Mortgage Loan have been recovered and that no further Liquidation Proceeds will
be received in connection therewith, the Master Servicer shall provide to the
Trustee a certificate of a Servicing Officer that such Mortgage Loan became a
Liquidated Mortgage Loan in a Cash Liquidation or REO Disposition.
The Master Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any related Insurance Policy, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. The Master Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note, Primary Hazard Insurance
Policy or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that it is prohibited by
applicable law from enforcing the provision of the Mortgage or other instrument
pursuant to which such payment is required. The Master Servicer shall be
responsible for preparing and distributing all information statements relating
to payments on the Mortgage Loans, in accordance with all applicable federal and
state tax laws and regulations.
Section 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant
to a Sub-Servicing Agreement, the Sub-Servicer will be required to establish and
maintain one or more accounts (collectively, the "Sub-Servicing Account"). The
Sub-Servicing Account shall be an Eligible Account and shall otherwise be
acceptable to the Master Servicer. All amounts held in a Sub-Servicing Account
shall be held in trust for the Trustee for the benefit of the
Certificateholders. Any investment of funds held in such an account shall be in
Permitted Investments maturing not later than the Business Day immediately
preceding the next Sub-Servicer Remittance Date. The Sub-Servicer will be
required to deposit into the Sub-Servicing Account no later than two Business
Days after receipt all proceeds of Mortgage Loans received by the Sub-Servicer,
less its servicing compensation and any unreimbursed expenses and advances, to
the extent permitted by the Sub-Servicing Agreement. On each Sub-Servicer
Remittance Date the Sub-Servicer will be required to remit to the Master
Servicer for deposit in the Custodial Account all funds held in the
Sub-Servicing Account with respect to any Mortgage Loan as of the Sub-Servicer
Remittance Date, after deducting from such remittance an amount equal to the
servicing compensation (including interest on Permitted Investments) and
unreimbursed expenses and advances to which it is then entitled pursuant to the
related Sub-Servicing Agreement, to the extent not previously paid to or
retained by it. In addition, on each Sub-Servicer Remittance Date the
Sub-Servicer will be required to remit to the Master Servicer any amounts
required to be advanced pursuant to the related Sub-Servicing Agreement. The
Sub-Servicer will also be required to remit to the Master Servicer, within five
Business Days of receipt, the proceeds of any Principal Prepayment made by the
Mortgagor, and, on each Sub-Servicer Remittance Date, the amount of any
Insurance Proceeds or Liquidation Proceeds received during the related
Prepayment Period.
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
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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 on a daily basis, or as and when received from
the Sub-Servicers, the following payments and collections received or made by or
on behalf of it subsequent to the Cut-off Date, or received by it prior to the
Cut-off Date but allocable to a period subsequent thereto (other than in respect
of principal and interest on the Mortgage Loans due on or before the Cut-off
Date):
(i) all payments (including advances by a Sub-Servicer) on account
of principal, including Principal Prepayments, on the Mortgage Loans;
(ii) all payments (including advances by a Sub-Servicer) on account
of interest on the Mortgage Loans net of any portion thereof retained by the
Master Servicer or any Sub-Servicer as Servicing Fees;
(iii) all Insurance Proceeds, other than proceeds that represent
reimbursement of costs and expenses incurred by the Master Servicer or any
Sub-Servicer in connection with presenting claims under the related Insurance
Policies, Liquidation Proceeds and REO Proceeds;
(iv) all proceeds of any Mortgage Loan or REO Property repurchased
or purchased in accordance with Sections 2.02, 2.04, 3.14 or 9.01; and all
amounts required to be deposited in connection with the substitution of a
Qualified Substitute Mortgage Loan pursuant to Section 2.04; and
(v) any amounts required to be deposited pursuant to Section 3.12,
3.13, 3.15 or 3.22.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive. In the event the Master Servicer shall deposit in the Custodial
Account any amount not required to be
55
deposited therein, it may withdraw such amount from the Custodial Account, any
provision herein to the contrary notwithstanding. The Custodial Account shall be
maintained as a segregated account, separate and apart from trust funds created
for mortgage pass-through certificates of other series, and the other accounts
of the Master Servicer.
(b) Funds in the Custodial Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Master Servicer shall give notice to the Trustee and the Company of the location
of the Custodial Account after any change thereof.
Section 3.11. Permitted Withdrawals From the Custodial Account.
The Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit therein pursuant to
Section 3.10 that are attributable to the Mortgage Loans for the following
purposes:
(i) to make deposits into the Certificate Account in the amounts and in
the manner provided for in Section 4.01;
(ii) to pay to itself, the Company, the Seller or any other appropriate
person, as the case may be, with respect to each Mortgage Loan that has
previously been purchased or repurchased pursuant to Sections 2.02, 2.04, 3.14
or 9.01 all amounts received thereon and not yet distributed as of the date of
purchase or repurchase;
(iii) to reimburse itself or any Sub-Servicer for Advances not previously
reimbursed, the Master Servicer's or any Sub-Servicer's right to reimbursement
pursuant to this clause (iii) being limited to amounts received which represent
Late Collections (net of the related Servicing Fees) of Monthly Payments on
Mortgage Loans with respect to which such Advances were made and as further
provided in Section 3.15;
(iv) to reimburse or pay itself, the Trustee or the Company for expenses
incurred by or reimbursable to the Master Servicer, the Trustee or the Company
pursuant to Sections 3.22, 6.03, 8.05 or 10.01(g), except as otherwise provided
in such Sections hereof;
(v) to reimburse itself or any Sub-Servicer for costs and expenses
incurred by or reimbursable to it relating to the prosecution of any claims
pursuant to Section 3.13 that are in excess of the amounts so recovered;
(vi) to reimburse itself or any Sub-Servicer for unpaid Master Servicing
Fees, Sub-Servicing Fees and unreimbursed Servicing Advances, the Master
Servicer's or any Sub-Servicer's right to reimbursement pursuant to this clause
(vi) with respect to any Mortgage Loan being limited to late recoveries of the
payments for which such advances were made pursuant to Section 3.01 or Section
3.09 and any other related Late Collections;
(vii) to pay itself as servicing compensation (in addition to the Master
Servicing Fee and Sub-Servicing Fee), on or after each Distribution Date, any
interest or investment income earned on funds deposited in the Custodial Account
for the period ending on such Distribution Date;
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(viii) to reimburse itself or any Sub-Servicer for any Advance or
Servicing Advance previously made, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Advance or Servicing Advance was not
reimbursed pursuant to clauses (iii) and (vi);
(ix) to pay Radian the premium under the Radian Lender-Paid PMI Policies;
and
(x) to clear and terminate the Custodial Account at the termination of
this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate accounting records on
a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii) through
(x).
Section 3.12. Permitted Investments.
Any institution maintaining the Custodial Account shall at the direction
of the Master Servicer invest the funds in such account in Permitted
Investments, each of which shall mature not later than (i) the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon and shall not be sold or disposed of prior to its
maturity. All income and gain realized from any such investment as well as any
interest earned on deposits in the Custodial Account shall be for the benefit of
the Master Servicer. The Master Servicer shall deposit in the Custodial Account
an amount equal to the amount of any loss incurred in respect of any such
investment immediately upon realization of such loss without right of
reimbursement.
The Trustee or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Trustee's economic self-interest
for (i) serving as investment adviser, administrator, shareholder servicing
agent, custodian or sub-custodian with respect to certain of the Permitted
Investments, (ii) using Affiliates to effect transactions in certain Permitted
Investments and (iii) effecting transactions in certain Permitted Investments.
Section 3.13. Maintenance of Primary Hazard Insurance.
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan primary hazard insurance by a Qualified Insurer or other insurer
satisfactory to the Rating Agencies with extended coverage on the related
Mortgaged Property in an amount equal to the lesser of (i) 100% of the
replacement value of the improvements, as determined by the insurance company,
on such Mortgaged Property or (ii) the unpaid principal balance of the Mortgage
Loan. The Master Servicer shall also cause to be maintained on property acquired
upon foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount equal to the replacement value of
the improvements thereon. Any costs incurred in maintaining any insurance
described in this Section 3.13 (other than any deductible described in the last
paragraph hereof) shall be recoverable as a Servicing Advance. The Master
Servicer shall not be obligated to advance any amounts pursuant to this Section
3.13 if, in its good faith judgment, the Master Servicer determines
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that such advance would be a Nonrecoverable Advance. Pursuant to Section 3.10,
any amounts collected by the Master Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.11. Any cost incurred by the Master Servicer in maintaining any such insurance
shall not, for the purpose of calculating monthly distributions to
Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. It is understood
and agreed that no earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired in respect of a Mortgage Loan
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance.
The Master Servicer shall, or shall cause the related Sub-Servicer to,
exercise its best reasonable efforts to maintain and keep in full force and
effect each Primary Insurance Policy by a Qualified Insurer, or other insurer
satisfactory to the Rating Agencies, with respect to each first lien Mortgage
Loan as to which as of the Cut-Off Date such a Primary Insurance Policy was in
effect (or, in the case of a Qualified Substitute Mortgage Loan, the date of
substitution) and the original principal amount of the related Mortgage Note
exceeded 80% of the Collateral Value in an amount at least equal to the excess
of such original principal amount over 75% of such Collateral Value until the
principal amount of any such first lien Mortgage Loan is reduced below 80% of
the Collateral Value or, based upon a new appraisal, the principal amount of
such first lien Mortgage Loan represents less than 80% of the new appraised
value. The Master Servicer shall, or shall cause the related Sub-Servicer to,
effect the timely payment of the premium on each Primary Insurance Policy. The
Master Servicer and the related Sub-Servicer shall have the power to substitute
for any Primary Insurance Policy another substantially equivalent policy issued
by another Qualified Insurer, provided, that, such substitution shall be subject
to the condition that it will not cause the ratings on the Certificates to be
downgraded or withdrawn, as evidenced in writing from each Rating Agency.
The Master Servicer shall cooperate with Radian and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Master Servicer or to which the Master Servicer has access
with respect to any Radian Insured Loan.
The Master Servicer shall cooperate with Radian and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Master Servicer or to which the Master Servicer has access
with respect to any Radian Insured Loan.
In the event of a default by Radian under the Radian Lender-Paid PMI
Policy (a "Replacement Event"), the Master Servicer shall use its best efforts
to obtain a substitute lender-paid primary mortgage insurance policy (a
"Substitute PMI Policy"); provided, however, that the Master Servicer shall not
be obligated, and shall have no liability for failing, to obtain a Substitute
PMI Policy unless such Substitute PMI Policy can be obtained on the following
terms and conditions: (i) the Certificates shall be rated no lower than the
rating assigned by each Rating Agency to the Certificates immediately prior to
such Replacement Event, as evidenced by a letter from each Rating Agency
addressed to the Company, the Master Servicer and the Trustee, (ii) the timing
and mechanism for drawing on such new Substitute PMI Policy shall be reasonably
acceptable to the
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Master Servicer and the Trustee and (iii) the premiums under the proposed
Substitute PMI Policy shall not exceed such premiums under the existing Radian
Lender-Paid PMI Policy.
With respect to the Radian PMI Insured Loans covered by a Radian
Lender-Paid PMI Policy, the Master Servicer will confirm with Radian, and Radian
will certify to the Trustee, on or before July 15, 2003, that the Mortgage Loans
indicated on the Mortgage Loan Schedule as being covered by Radian Lender-Paid
PMI Policy are so covered.
No earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired with respect to a security
instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. When, at
the time of origination of the Mortgage Loan or at any subsequent time, the
Mortgaged Property is located in a federally designated special flood hazard
area, the Master Servicer shall cause with respect to the Mortgage Loans and
each REO Property flood insurance (to the extent available and in accordance
with mortgage servicing industry practice) to be maintained. Such flood
insurance shall cover the Mortgaged Property, including all items taken into
account in arriving at the Collateral Value on which the Mortgage Loan was
based, and shall be in an amount equal to the lesser of (i) the Stated Principal
Balance of the related Mortgage Loan and (ii) the minimum amount required under
the terms of coverage to compensate for any damage or loss on a replacement cost
basis, but not more than the maximum amount of such insurance available for the
related Mortgaged Property under either the regular or emergency programs of the
National Flood Insurance Program (assuming that the area in which such Mortgaged
Property is located is participating in such program). Unless applicable state
law requires a higher deductible, the deductible on such flood insurance may not
exceed $1,000 or 1% of the applicable amount of coverage, whichever is less.
In the event that the Master Servicer shall obtain and maintain a blanket
fire insurance policy with extended coverage insuring against hazard losses on
all of the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first two sentences of this Section 3.13, it
being understood and agreed that such policy may contain a deductible clause, in
which case the Master Servicer shall, in the event that there shall not have
been maintained on the related Mortgaged Property a policy complying with the
first two sentences of this Section 3.13 and there shall have been a loss which
would have been covered by such policy, deposit in the Certificate Account from
its own funds the amount not otherwise payable under the blanket policy because
of such deductible clause. Any such deposit by the Master Servicer shall be made
on the Certificate Account Deposit Date next preceding the Distribution Date
which occurs in the month following the month in which payments under any such
policy would have been deposited in the Custodial Account. Any such deposit
shall not be deemed Servicing Advances and the Master Servicer shall not be
entitled to reimbursement therefor. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
present, on behalf of itself, the Trustee and Certificateholders, claims under
any such blanket policy.
Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption Agreements.
The Master Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage
59
Note or the Mortgage), exercise or cause to be exercised its rights to
accelerate the maturity of such Mortgage Loan under any "due-on-sale" clause
applicable thereto; provided, however, that the Master Servicer shall not
exercise any such rights if it reasonably believes that it is prohibited by law
from doing so. The Master Servicer or the related Sub-Servicer may repurchase a
Mortgage Loan at the Purchase Price when the Master Servicer requires
acceleration of the Mortgage Loan, but only if the Master Servicer is satisfied,
as evidenced by an Officer's Certificate delivered to the Trustee, that either
(i) such Mortgage Loan is in default or default is reasonably foreseeable or
(ii) if such Mortgage Loan is not in default or default is not reasonably
foreseeable, such repurchase will have no adverse tax consequences for the Trust
Fund or any Certificateholder. If the Master Servicer is unable to enforce such
"due-on-sale" clause (as provided in the second preceding sentence) or if no
"due-on-sale" clause is applicable, the Master Servicer or the Sub-Servicer is
authorized to enter into an assumption and modification agreement with the
Person to whom such property has been conveyed or is proposed to be conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and, to the
extent permitted by applicable state law, the Mortgagor remains liable thereon;
provided, however, that the Master Servicer shall not enter into any assumption
and modification agreement if the coverage provided under the Primary Insurance
Policy, if any, would be impaired by doing so. The Master Servicer shall notify
the Trustee, whenever possible, before the completion of such assumption
agreement, and shall forward to the Trustee the original copy of such assumption
agreement, which copy shall be added by the Trustee to the related Mortgage File
and which shall, for all purposes, be considered a part of such Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. In connection with any such assumption agreement, the interest rate on
the related Mortgage Loan shall not be changed and no other material alterations
in the Mortgage Loan shall be made unless such material alteration would not
cause any of REMIC 1 or REMIC 2 to fail to qualify as a REMIC for federal income
tax purposes, as evidenced by an Opinion of Counsel. The Master Servicer is also
authorized to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as the Mortgagor and becomes liable under the Mortgage
Note. Any fee collected by or on behalf of the Master Servicer for entering into
an assumption or substitution of liability agreement will be retained by or on
behalf of the Master Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the Mortgage Rate, the amount of the Monthly
Payment and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. The Master Servicer shall not enter into any
substitution or assumption if such substitution or assumption shall (i) both
constitute a "significant modification" effecting an exchange or reissuance of
such Mortgage Loan under the Code (or Treasury regulations promulgated
thereunder) and cause any of REMIC 1 or REMIC 2 to fail to qualify as a REMIC
under the REMIC Provisions or (ii) cause the imposition of any tax on
"prohibited transactions" or "contributions" after the Startup Day under the
REMIC Provisions. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original copy of such substitution or assumption agreement, which
copy shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. A portion equal to up to
2% of the Collateral Value of the related Mortgage Loan, of any fee or
additional interest collected by the related Sub-Servicer for consenting in any
such conveyance or entering into any such assumption agreement may be retained
by the related Sub-Servicer as additional servicing compensation.
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Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption that the Master Servicer
may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Section 3.14, the term "assumption" is deemed to also include a
sale of a Mortgaged Property that is not accompanied by an assumption or
substitution of liability agreement.
Section 3.15. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall exercise reasonable efforts, consistent with the
procedures that the Master Servicer would use in servicing loans for its own
account, to foreclose upon or otherwise comparably convert (which may include an
REO Acquisition) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from the Trust Fund pursuant to any
other provision hereof. The Master Servicer shall use reasonable efforts to
realize proceeds from such defaulted Mortgage Loans in such manner (including
short sales and passing through to the Trust Fund less than the full amount it
expects to receive from the related Mortgage Loan) as will maximize the receipt
of principal and interest by Certificateholders, taking into account, among
other things, the timing of foreclosure proceedings. The foregoing is subject to
the provisions that, in any case in which Mortgaged Property shall have suffered
damage from an Uninsured Cause, the Master Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its sole discretion (i) that such restoration will increase the net
proceeds of liquidation of the related Mortgage Loan to Certificateholders after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Master Servicer through Insurance Proceeds or Liquidation
Proceeds from the related Mortgaged Property, as contemplated in Section 3.11.
The Master Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the related property, as contemplated in
Section 3.11.
The proceeds of any Cash Liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds or any income from an REO Property, will be deposited into
the Custodial Account and applied in the following order of priority: first, to
reimburse the Master Servicer or any Sub-Servicer for any related unreimbursed
Servicing Advances, pursuant to Section 3.11(vi) or 3.22; second, to accrued and
unpaid interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage
Rate, to the date of the Cash Liquidation or REO Disposition, or to the Due Date
prior to the Distribution Date on which such amounts are to be distributed if
not in connection with a Cash Liquidation or REO Disposition; and third, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, to interest
at the Net Mortgage Rate. The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 3.11(vi). The portions of the recovery so allocated to
interest at the Net Mortgage Rate and to principal of the Mortgage Loan shall be
applied as follows: first, to reimburse the Master Servicer or any Sub-Servicer
for any related unreimbursed Advances in accordance with Section 3.11(iii) or
3.22, second, payment to Radian in accordance with Sections 3.11(ix) and third,
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for payment to the Trustee and distribution to the Certificateholders in
accordance with the provisions of Section 4.01, subject to Section 3.22 with
respect to certain recoveries from an REO Disposition constituting Excess
Proceeds. To the extent the Master Servicer receives additional recoveries
following a Cash Liquidation, the amount of the Realized Loss will be restated,
and the additional recoveries will be passed through the Trust Fund as
Liquidation Proceeds.
Section 3.16. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by a certification (which certification shall include a statement to
the effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Mortgage File in the form of the Request for
Release attached hereto as Exhibit F-2. Upon receipt of such certification and
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. Subject to the receipt by the Master Servicer of the proceeds
of such payment in full and the payment of all related fees and expenses, the
Master Servicer shall arrange for the release to the Mortgagor of the original
canceled Mortgage Note. In connection with the satisfaction of any MOM Loan, the
Master Servicer is authorized to cause the removal from the registration on the
MERS(R) System of such Mortgage. All other documents in the Mortgage File shall
be retained by the Master Servicer to the extent required by applicable law. The
Master Servicer shall provide for preparation of the appropriate instrument of
satisfaction covering any Mortgage Loan which pays in full and the Trustee shall
cooperate in the execution and return of such instrument to provide for its
delivery or recording as may be required. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Custodial Account or the Certificate Account.
From time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan, including, for this purpose, collection under any insurance
policy relating to the Mortgage Loan, the Trustee shall, upon request of the
Master Servicer and delivery to the Trustee of a Request for Release in the form
attached hereto as Exhibit F-1, release the related Mortgage File to the Master
Servicer and the Trustee shall execute such documents as the Master Servicer
shall prepare and request as being necessary to the prosecution of any such
proceedings. Such Request for Release shall obligate the Master Servicer to
return each document previously requested from the Mortgage File to the Trustee
when the need therefor by the Master Servicer no longer exists; and in any event
within 21 days of the Master Servicer's receipt thereof, unless the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a Request for
Release stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation which are
required to be deposited into the Custodial
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Account have been or will be so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee to the Master Servicer.
Upon written request of a Servicing Officer, the Trustee shall execute and
deliver to the Master Servicer any court pleadings, requests for trustee's sale
or other documents prepared by the Master Servicer that are necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Each such request that such pleadings or documents be executed by
the Trustee shall include a certification signed by a Servicing Officer as to
the reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.
Section 3.17. Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer shall be
entitled to withhold and retain, from deposits to the Custodial Account of
amounts representing payments or recoveries of interest, the Servicing Fees with
respect to each Mortgage Loan (less any portion of such amounts retained by any
Sub-Servicer). In addition, the Master Servicer shall be entitled to recover
unpaid Servicing Fees out of related Late Collections to the extent permitted in
Section 3.11.
Each Sub-Servicing Agreement shall permit the related Sub-Servicer to
retain the Sub-Servicer Fees from collections on the related Mortgage Loans, or
shall provide that the Sub-Servicer be paid directly by the Master Servicer from
collections on the related Mortgage Loans. To the extent the Master Servicer
directly services a Mortgage Loan, the Master Servicer shall be entitled to
retain the Sub-Servicing Fees for that Mortgage Loan.
The Master Servicer also shall be entitled pursuant to Section 3.11 to
receive from the Custodial Account as additional servicing compensation interest
or other income earned on deposits therein, subject to Section 3.23, as well as
any assumption fees, late payment charges and reconveyance fees. The Master
Servicer shall not be entitled to retain any Prepayment Charges. Any Prepayment
Charges shall be paid to the Holders of the Class P Certificates. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of the premiums for any
blanket policy insuring against hazard losses pursuant to Section 3.13 and
servicing compensation of the Sub-Servicer to the extent not retained by it),
and shall not be entitled to reimbursement therefor except as specifically
provided in Section 3.11. The Master Servicing Fee may not be transformed in
whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement.
Section 3.18. Maintenance of Certain Servicing Policies.
The Master Servicer shall obtain and maintain at its own expense and shall
cause each Sub-Servicer to obtain and maintain for the duration of this
Agreement a blanket fidelity bond and
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an errors and omissions insurance policy covering the Master Servicer's and such
Sub-Servicer's officers, employees and other persons acting on its behalf in
connection with its activities under this Agreement. The amount of coverage
shall be at least equal to the coverage maintained by the Master Servicer or
Sub-Servicer in order to be acceptable to Fannie Mae or Freddie Mac to service
loans for it or otherwise in an amount as is commercially available at a cost
that is generally not regarded as excessive by industry standards. The Master
Servicer shall promptly notify the Trustee in writing of any material change in
the terms of such bond or policy. The Master Servicer shall provide annually to
the Trustee a certificate of insurance that such bond and policy are in effect.
If any such bond or policy ceases to be in effect, the Master Servicer shall, to
the extent possible, give the Trustee ten days' notice prior to any such
cessation and shall use its reasonable best efforts to obtain a comparable
replacement bond or policy, as the case may be.
Section 3.19. Annual Statement as to Compliance.
Not later than the earlier of (a) March 15 of each calendar year (other
than the calendar year during which the Closing Date occurs) or (b) with respect
to any calendar year during which the Company's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, 15 Business Days before the date on which the
Company's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer at its own expense shall deliver to the Trustee, with
a copy to the Rating Agencies, a certificate signed by a Servicing Officer
stating, as to the signers thereof, that (i) a review of the activities of the
Master Servicer during the preceding calendar year and of performance under this
Agreement has been made under such officers' supervision, (ii) to the best of
such officers' knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Agreement for such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof including
the steps being taken by the Master Servicer to remedy such default; (iii) a
review of the activities of each Sub-Servicer during the Sub-Servicer's most
recently ended fiscal year on or prior to such December 31 and its performance
under its Sub-Servicing Agreement has been made under such officer's
supervision; and (iv) to the best of the Servicing Officer's knowledge, based on
his review and the certification of an officer of the Sub-Servicer (unless the
Servicing Officer has reason to believe that reliance on such certification is
not justified), either each Sub-Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement and its Sub-Servicing
Agreement in all material respects throughout the year, or, if there has been a
default in performance or fulfillment of any such duties, responsibilities or
obligations, specifying the nature and status of each such default known to the
Servicing Officer. Copies of such statements shall be provided by the Master
Servicer to the Certificateholders upon request or by the Trustee at the expense
of the Master Servicer should the Master Servicer fail to provide such copies.
Section 3.20. Annual Independent Public Accountants' Servicing Statement.
(a) Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b) with
respect to any calendar year during which the Company's annual report on Form
10-K is required to be filed in accordance with the
64
Exchange Act and the rules and regulations of the Commission, 15 Business Days
before the date on which the Company's annual report on Form 10-K is required to
be filed in accordance with the Exchange Act and the rules and regulations of
the Commission (or, in each case, if such day is not a Business Day, the
immediately preceding Business Day), the Master Servicer, at its expense, shall
cause a firm of independent public accountants who are members of the American
Institute of Certified Public Accountants and who are currently, as of the date
of this Agreement KPMG LLP (or a successor thereof) to furnish a statement to
the Master Servicer, which will be provided to the Trustee and the Rating
Agencies, to the effect that, in connection with the firm's examination of the
Master Servicer's financial statements as of the end of such calendar year,
nothing came to their attention that indicated that the Master Servicer was not
in compliance with the provisions of this Agreement except for (i) such
exceptions as such firm believes to be immaterial and (ii) such other exceptions
as are set forth in such statement.
(b) Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b) with
respect to any calendar year during which the Company's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, 15 Business Days before the date on which the
Company's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer, at its expense, shall or shall cause each
Sub-Servicer to cause a nationally recognized firm of independent certified
public accountants to furnish to the Master Servicer or such Sub-Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer or such Sub-Servicer
which includes an assertion that the Master Servicer or such Sub-Servicer has
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to commercial and multifamily mortgage loans) identified in the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America with respect to the servicing of first
and second lien conventional single family mortgage loans during the most
recently completed calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. Immediately upon receipt of such report, the Master
Servicer shall or shall cause each Sub-Servicer to furnish a copy of such report
to the Trustee and the Rating Agencies.
Section 3.21. Access to Certain Documentation.
The Master Servicer shall provide, and shall cause any Sub-Servicer to
provide, to the Trustee, access to the documentation in their possession
regarding the related Mortgage Loans and REO Properties and to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC (to which the Trustee shall also provide) access to the documentation
regarding the related Mortgage Loans required by applicable regulations, such
access being afforded without charge but only upon reasonable request and during
normal business hours at the offices of the Master Servicer or the Sub-Servicers
that are designated by these entities; provided, however, that, unless otherwise
required by law, the Trustee, the Master Servicer or the Sub-Servicer shall not
be required to provide access to such documentation if the provision thereof
would violate the legal
65
right to privacy of any Mortgagor; provided, further, however, that the Trustee
shall coordinate its requests for such access so as not to impose an
unreasonable burden on, or cause an unreasonable interruption of, the business
of the Master Servicer or any Sub-Servicer. The Master Servicer, the
Sub-Servicers and the Trustee shall allow representatives of the above entities
to photocopy any of the documentation and shall provide equipment for that
purpose at a charge that covers their own actual out-of-pocket costs.
Section 3.22. Title, Conservation and Disposition of REO Property.
This Section shall apply only to REO Properties acquired for the account
of REMIC 1 and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from REMIC 1 pursuant to Sections 2.02, 2.04
or 3.14. In the event that title to any such REO Property is acquired, the deed
or certificate of sale shall be issued to the Trustee, or to its nominee, on
behalf of the Certificateholders. The Master Servicer, on behalf of REMIC 1,
shall either sell any REO Property before the close of the third taxable year
following the taxable year in which REMIC 1 acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or, at the expense of
REMIC 1, request, more than 60 days before the day on which the three-year grace
period would otherwise expire an extension of the three-year grace period,
unless the Master Servicer has delivered to the Trustee an Opinion of Counsel
(which shall not be at the expense of the Trustee), addressed to the Trustee and
the Master Servicer, to the effect that the holding by REMIC 1 of such REO
Property subsequent to the close of the third taxable year following the taxable
year in which REMIC 1 acquires ownership of such REO Property will not result in
the imposition on REMIC 1 of taxes on "prohibited transactions" thereof, as
defined in Section 860F of the Code, or cause any of REMIC 1 or REMIC 2 to fail
to qualify as a REMIC under the REMIC Provisions or comparable provisions of the
laws of the State of California at any time that any Certificates are
outstanding. The Master Servicer shall manage, conserve, protect and operate
each REO Property for the Certificateholders solely for the purpose of its
prompt disposition and sale in a manner which does not cause such REO Property
to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) or result in the receipt by any of REMIC 1 or REMIC 2 of any "income
from non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the
Code or any "net income from foreclosure property" which is subject to taxation
under the REMIC Provisions. Pursuant to its efforts to sell such REO Property,
the Master Servicer shall either itself or through an agent selected by the
Master Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Master Servicer
deems to be in the best interest of the Certificateholders for the period prior
to the sale of such REO Property.
Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).
The Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets. The Master Servicer shall deposit, or
cause to be deposited, on a daily basis in the Custodial Account all revenues
received with respect to the REO Properties, net of any directly related
expenses
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incurred or withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
If as of the date of acquisition of title to any REO Property there remain
outstanding unreimbursed Servicing Advances with respect to such REO Property or
any outstanding Advances allocated thereto the Master Servicer, upon an REO
Disposition, shall be entitled to reimbursement for any related unreimbursed
Servicing Advances and any unreimbursed related Advances as well as any unpaid
Servicing Fees from proceeds received in connection with the REO Disposition, as
further provided in Section 3.15. The Master Servicer shall not be obligated to
advance any amounts with respect to an REO Property if, in its good faith
judgment, the Master Servicer determines that such advance would constitute a
Nonrecoverable Advance.
The REO Disposition shall be carried out by the Master Servicer at such
price and upon such terms and conditions as the Master Servicer shall determine.
The Master Servicer shall deposit the proceeds from the REO Disposition,
net of any payment to the Master Servicer as provided above, in the Custodial
Account upon receipt thereof for distribution in accordance with Section 4.01;
provided, that any such net proceeds received by the Master Servicer which are
in excess of the applicable Stated Principal Balance plus all unpaid REO Imputed
Interest thereon through the last day of the month in which the REO Disposition
occurred ("Excess Proceeds") shall be retained by the Master Servicer as
additional servicing compensation.
With respect to any Mortgage Loan as to which the Master Servicer has
received notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the Mortgaged Property, the Master Servicer shall not, on
behalf of the Trustee, either (i) obtain title to the related Mortgaged Property
as a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire
possession of, the related Mortgaged Property, unless the Master Servicer has,
at least 30 days prior to taking such action, obtained and delivered to the
Trustee an environmental audit report prepared by a Person who regularly
conducts environmental audits using customary industry standards. The Master
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund (other than proceeding against the Mortgaged Property) and is
hereby authorized at such time as it deems appropriate to release such Mortgaged
Property from the lien of the related Mortgage.
The cost of the environmental audit report contemplated by this Section
3.22 shall be advanced by the Master Servicer as an expense of the Trust Fund,
and the Master Servicer shall be reimbursed therefor from the Custodial Account
as provided in Section 3.11, any such right of reimbursement being prior to the
rights of the Certificateholders to receive any amount in the Custodial Account.
If the Master Servicer determines, as described above, that it is in the
best economic interest of the Trust Fund to take such actions as are necessary
to bring any such Mortgaged Property in compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials affecting any such Mortgaged Property, then the Master
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund. The
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cost of any such compliance, containment, clean-up or remediation shall be
advanced by the Master Servicer as an expense of the Trust Fund, and the Master
Servicer shall be entitled to be reimbursed therefor from the Custodial Account
as provided in Section 3.11, any such right of reimbursement being prior to the
rights of the Certificateholders to receive any amount in the Custodial Account.
Section 3.23. Additional Obligations of the Master Servicer.
On each Certificate Account Deposit Date, the Master Servicer shall
deliver to the Trustee for deposit in the Certificate Account from its own funds
and without any right of reimbursement therefor, a total amount equal to the
amount of Compensating Interest for the related Distribution Date.
Section 3.24. Additional Obligations of the Company.
The Company agrees that on or prior to the tenth day after the Closing
Date, the Company shall provide the Trustee with a written notification,
substantially in the form of Exhibit J attached hereto, relating to each Class
of Certificates, setting forth (i) in the case of each Class of such
Certificates, (a) if less than 10% of the aggregate Certificate Principal
Balance or Notional Amount of such Class of Certificates has been sold as of
such date, the value calculated pursuant to clause (b)(iii) of Exhibit J hereto,
or, (b) if 10% or more of such Class of Certificates has been sold as of such
date but no single price is paid for at least 10% of the aggregate Certificate
Principal Balance or Notional Amount of such Class of Certificates, then the
weighted average price at which the Certificates of such Class were sold and the
aggregate percentage of Certificates of such Class sold, (c) the first single
price at which at least 10% of the aggregate Certificate Principal Balance or
Notional Amount of such Class of Certificates was sold, or (d) if any
Certificates of each Class of Certificates are retained by the Company or an
affiliate corporation, or are delivered to the Seller, the fair market value of
such Certificates as of the Closing Date, (ii) the Prepayment Assumption used in
pricing the Certificates, and (iii) such other information as to matters of fact
as the Trustee may reasonably request to enable it to comply with its reporting
requirements with respect to each Class of such Certificates to the extent such
information can in the good faith judgment of the Company be determined by it.
Section 3.25. Exchange Act Reporting. (a) The Trustee and the Master
Servicer shall reasonably cooperate with the Company in connection with the
Trust's satisfying the reporting requirements under the Exchange Act. The
Trustee shall prepare on behalf of the Trust any Forms 8-K and 10-K customary
for similar securities as required by the Exchange Act and the Rules and
Regulations of the Commission thereunder, and the Master Servicer shall sign (or
shall cause another entity acceptable to the Commission to sign) and the Trustee
shall file (via the Commission's Electronic Data Gathering and Retrieval System)
such forms on behalf of the Company (or such other entity). The Company hereby
grants to the Trustee a limited power of attorney to execute any Form 8-K and
file each such document on behalf of the Company. Such power of attorney shall
continue until the earlier of (i) receipt by the Trustee from the Company of
written termination of such power of attorney and (ii) the termination of the
Trust. Notwithstanding anything herein to the contrary, the Master Servicer, and
not the Trustee, shall be responsible for executing each Form 10-K filed on
behalf of the Trust.
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(b) Each Form 8-K shall be filed by the Trustee within 15 days after each
Distribution Date, with a copy of the statement to the Certificateholders for
such Distribution Date as an exhibit thereto. Prior to March 30th of each year
(or such earlier date as may be required or permitted by the Exchange Act and
the Rules and Regulations of the Commission), the Trustee shall file a Form
10-K, in substance as required by applicable law or applicable Commission
staff's interpretations. The Trustee shall prepare the Form 10-K and provide the
Master Servicer with the Form 10-K no later than March 20th of each year. The
Master Servicer shall execute such Form 10-K upon its receipt and shall provide
the original of such executed Form 10-K to the Trustee no later than March 25th
of each year. Such Form 10-K shall include as exhibits the Master Servicer's
annual statement of compliance described under Section 3.19 and the accountant's
report described under Section 3.20(a), in each case to the extent they have
been timely delivered to the Trustee. If they are not so timely delivered, the
Trustee shall file an amended Form 10-K including such documents as exhibits
reasonably promptly after they are delivered to the Trustee. The Trustee shall
have no liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Trustee's inability or
failure to obtain any information not resulting from its own negligence or
willful misconduct. The Form 10-K shall also include a certification in the form
attached hereto as Exhibit M-1 (the "Certification"), in compliance with Rules
13a-14 and 15d-14 under the Exchange Act and any additional directives of the
Commission, which shall be signed by the senior officer of the Master Servicer
in charge of securitization.
(c) In addition, the Trustee shall sign a certification (in the form
attached hereto as Exhibit M-2) for the benefit of the Master Servicer and its
officers, directors and Affiliates regarding certain aspects of items 1 through
3 of the Certification (provided, however, that the Trustee shall not undertake
an analysis of any accountant's report attached as an exhibit to the Form 10-K).
(d) In addition, (i) the Trustee shall indemnify and hold harmless the
Master Servicer and the Company and their officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Trustee's obligations
under this Section 3.25 caused by the Trustee's negligence, bad faith or willful
misconduct in connection therewith, and (ii) the Master Servicer shall indemnify
and hold harmless the Trustee, the Master Servicer, the Company and their
respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of the Master Servicer's obligations under this Section 3.25 or
the Master Servicer's negligence, bad faith or willful misconduct in connection
therewith. If (i) the indemnification provided for herein is unavailable or
insufficient to hold harmless the Master Servicer, then the Trustee agrees that
it shall contribute to the amount paid or payable by the Master Servicer as a
result of the losses, claims, damages or liabilities of the Master Servicer in
such proportion as is appropriate to reflect the relative fault of the Master
Servicer on the one hand and the Trustee on the other in connection with a
breach of the Trustee's obligations under this Section 3.25 caused by the
Trustee's negligence, bad faith or willful misconduct in connection therewith
and (ii) the indemnification provided for herein is unavailable or insufficient
to hold harmless the Trustee, then the Master Servicer agrees that it shall
contribute to the amount paid or payable by the Trustee as a result of the
losses, claims, damages or liabilities of the Trustee in such proportion as is
appropriate to reflect the relative fault of the Trustee on the one hand and the
Master Servicer on the other in connection with a breach of
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the Master Servicer's obligations under this Section 3.25 or the Master
Servicer's negligence, bad faith or willful misconduct in connection therewith.
(e) In the event the Commission permits separate or split certifications
to be made with respect to the items currently contained in the Certification,
the Trustee shall provide a certification with respect to items 1 and 2 and the
Master Servicer shall provide a certification with respect to items 3, 4 and 5
contained within the Certification, in each case substantially in the form of
the Certification attached as Exhibit M-1, or other form as indicated by the
Commission for this purpose. In addition, the Trustee shall sign a certification
(in the form attached hereto as Exhibit M-3) for the benefit of the Master
Servicer and its officers, directors and Affiliates regarding certain aspects of
item 3 of the Certification (provided, however, that the Trustee shall not
undertake an analysis of any accountant's report attached as an exhibit to the
Form 10-K).
(f) Notwithstanding any other provision of the Agreement, the provisions
of this Section 3.25 may be amended by the Master Servicer, the Company and the
Trustee without the consent of the Certificateholders.
(g) Prior to January 30th of the first year in which the Trustee is able
to do so under applicable law, the Trustee shall file with the Commission a Form
15D Suspension Notification with respect to the Trust.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Distributions.
(a) The Trustee shall establish and maintain a Certificate Account, in
which the Master Servicer shall cause to be deposited on behalf of the Trustee
on or before 5:00 P.M. New York time on each Certificate Account Deposit Date by
wire transfer of immediately available funds an amount equal to the sum of (i)
any Advance for the immediately succeeding Distribution Date, (ii) any amount
required to be deposited in the Certificate Account pursuant to Sections 3.11,
3.13, 3.22 or 3.23 and (iii) all other amounts constituting the Available
Distribution Amount for the immediately succeeding Distribution Date.
On each Distribution Date, prior to making any other distributions
referred to in Section 4.01, the Trustee shall withdraw from the Certificate
Account and pay itself the Trustee's Fee for such Distribution Date.
On each Distribution Date the Trustee shall distribute to each
Certificateholder of record as of the next preceding Record Date (other than as
provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least 5
Business Days prior to the related Record Date, or otherwise by check mailed to
such Certificateholder at the address of such Holder appearing in the
Certificate Register, such Certificateholder's share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the following amounts, in the following order of
priority, in each case to the extent of the Available Distribution Amount:
(i) to the Class A Certificateholders (other than the Principal Only
Certificateholders), Class P Certificateholders and the Class R
Certificateholders, on a pro rata basis based on Accrued Certificate Interest
payable on such Certificates with respect to such Distribution Date, Accrued
Certificate Interest on such Classes of Certificates, as applicable, for such
Distribution Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date (the "Senior Interest Distribution
Amount");
(ii) (X) to the Principal Only Certificateholders, the Principal
Only Distribution Amount; and
(Y) to the Class A Certificateholders (other than the Interest
Only and Principal Only Certificateholders), Class P Certificateholders
and Class R Certificateholders, in the priorities and amounts set forth in
Section 4.01(b)(ii), (iii), (iv) and (v), Section 4.01(c) and Section
4.01(d), the sum of the following (applied to reduce the Certificate
Principal Balances of such Class A Certificates or Class R Certificates,
as applicable):
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(A) the then-applicable Senior Percentage for such
Distribution Date times the sum of the following:
(1) the principal portion of each Monthly Payment
due during the related Due Period on each Outstanding Mortgage
Loan (other than the related Discount Fraction of the
principal portion of such payment with respect to a Discount
Mortgage Loan), whether or not received on or prior to the
related Determination Date, minus the principal portion of any
Debt Service Reduction (other than the related Discount
Fraction of the principal portion of such Debt Service
Reductions with respect to each Discount Mortgage Loan)which
together with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
(2) the Stated Principal Balance of any Mortgage
Loan repurchased during the related Prepayment Period pursuant
to Section 2.02, 2.04, 3.14 or 3.24 and the amount of any
shortfall deposited in the Custodial Account in connection
with the substitution of a Deleted Mortgage Loan pursuant to
Section 2.04 during the related Prepayment Period (other than
the related Discount Fraction of such Stated Principal Balance
or shortfall with respect to a Discount Mortgage Loan); and
(3) the principal portion of all other unscheduled
collections (other than Principal Prepayments in Full and
Curtailments and amounts received in connection with a Cash
Liquidation or REO Disposition of a Mortgage Loan described in
Section 4.01(a)(ii)(Y)(B), including without limitation
Insurance Proceeds, Liquidation Proceeds and REO Proceeds)
received during the related Prepayment Period to the extent
applied by the Master Servicer as recoveries of principal of
the related Mortgage Loan pursuant to Section 3.15 (other than
the related Discount Fraction of the principal portion of such
unscheduled collections with respect to a Discount Mortgage
Loan);
(B) with respect to each Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the related
Prepayment Period and did not result in any Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses, an amount equal to the lesser of (a) the
then-applicable Senior Percentage for such Distribution Date times
the Stated Principal Balance of such Mortgage Loan (other than the
related Discount Fraction of such Stated Principal Balance, with
respect to a Discount Mortgage Loan) and (b) the then-applicable
Senior Accelerated Distribution Percentage for such Distribution
Date times the related unscheduled collections (including without
limitation Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to the extent applied by the Master Servicer as recoveries
of principal of the related Mortgage Loan pursuant to Section 3.15
(in each case other than the portion of such unscheduled
collections, with respect to a Discount Mortgage Loan included in
clause (C) of the definition of Principal Only Distribution Amount);
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(C) the then-applicable Senior Accelerated Distribution
Percentage for such Distribution Date times the aggregate of all
Principal Prepayments in Full and Curtailments received in the
related Prepayment Period (other than the related Discount Fraction
of such Principal Prepayments in Full and Curtailments, with respect
to a Discount Mortgage Loan); and
(D) any amounts described in subsection (ii)(Y), clauses
(A), (B) or (C) of this Section 4.01(a), as determined for any
previous Distribution Date, which remain unpaid after application of
amounts previously distributed pursuant to this clause (D) to the
extent that such amounts are not attributable to Realized Losses
which have been allocated to the Class M Certificates or Class B
Certificates;
(iii) to the Holders of the Class M-1 Certificates, based on Accrued
Certificate Interest payable to such Certificate with respect to such
Distribution Date, the Accrued Certificate Interest thereon for such
Distribution Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided below;
(iv) to the Holders of the Class M-1 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Principal
Only Collection Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts available pursuant to
clause (x) of Sections 4.01(a)(viii), (x), (xii), (xiii) and (xiv) are
insufficient therefor, applied in reduction of the Certificate Principal Balance
of the Class M-1 Certificates;
(v) to the Holders of the Class M-2 Certificates, based on Accrued
Certificate Interest payable to such Certificate with respect to such
Distribution Date, the Accrued Certificate Interest thereon for such
Distribution Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided below;
(vi) to the Holders of the Class M-2 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Principal
Only Collection Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts available pursuant to
clause (x) of Sections 4.01(a)(x), (xii), (xiii) and (xiv) are insufficient
therefor, applied in reduction of the Certificate Principal Balance of the Class
M-2 Certificates;
(vii) to the Holders of the Class M-3 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous Distribution
Date, except as provided below;
(viii) to the Holders of the Class M-3 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Principal
Only Collection Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts available pursuant to
clause (x) of Sections 4.01(a)(x), (xii), (xiii) and (xiv) are insufficient
therefor, applied in reduction of the Certificate Principal Balance of the Class
M-3 Certificates;
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(ix) to the Holders of the Class B-1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous Distribution
Date, except as provided below;
(x) to the Holders of the Class B-1 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of Certificates
for such Distribution Date minus (y) the amount of any Principal Only Collection
Shortfalls for such Distribution Date or remaining unpaid for all previous
Distribution Dates, to the extent the amounts available pursuant to clause (x)
of Sections 4.01(a)(xii), (xiii) and (xiv) are insufficient therefor, applied in
reduction of the Certificate Principal Balance of the Class B-1 Certificates;
(xi) to the Holders of the Class B-2 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous Distribution
Date, except as provided below;
(xii) to the Holders of the Class B-2 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Principal
Only Collection Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates, to the extent the amounts available pursuant to
clause (x) of Sections 4.01(a)(xiii) and (xiv) are insufficient therefor,
applied in reduction of the Certificate Principal Balance of the Class B-2
Certificates;
(xiii) to the Holders of the Class B-3 Certificates, an amount equal
to (x) the Accrued Certificate Interest thereon for such Distribution Date, plus
any Accrued Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below minus (y) the amount of any
Principal Only Collection Shortfalls for such Distribution Date or remaining
unpaid for all previous Distribution Dates to the extent the amounts available
pursuant to clause (x) of Section 4.01(a)(xiv) are insufficient therefor;
(xiv) to the Holders of the Class B-3 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Principal
Only Collection Shortfalls for such Distribution Date or remaining unpaid for
all previous Distribution Dates applied in reduction of the Certificate
Principal Balance of the Class B-3 Certificates;
(xv) to the Class A Certificateholders and Class R
Certificateholders in the priority set forth in Section 4.01(b), the portion, if
any, of the Available Distribution Amount remaining after the foregoing
distributions, applied to reduce the Certificate Principal Balances of such
Class A and Class R Certificates, but in no event more than the aggregate of the
outstanding Certificate Principal Balances of each such Class of Class A and
Class R Certificates, and thereafter, to each Class of Class M Certificates then
outstanding beginning with such Class with the lowest numerical designation, any
portion of the Available Distribution Amount remaining after the Senior
Certificates have been retired, applied to reduce the Certificate Principal
Balance of each such Class of Class M Certificates, but in no event more than
the outstanding Certificate Principal Balance of each such Class of Class M
Certificates; and thereafter to each such Class of Class B Certificates then
outstanding beginning with such Class with the lowest numerical designation, any
portion of
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the Available Distribution Amount remaining after the Class M Certificates have
been retired, applied to reduce the Certificate Principal Balance of each such
Class of Class B Certificates, but in no event more than the outstanding
Certificate Principal Balance of each such Class of Class B Certificates; and
(xvi) to the Class R Certificateholders, the balance, if any, of the
Available Distribution Amount.
(b) Distributions of principal on the Class A Certificates (other than the
Interest Only Certificates) and Class R Certificates on each Distribution Date
occurring prior to the occurrence of the Credit Support Depletion Date will be
made as follows:
(i) first, to the Principal Only Certificates, until the Certificate
Principal Balance thereof is reduced to zero, the Principal Only Distribution
Amount;
(ii) second, the Senior Principal Distribution Amount shall be
distributed to the Class R Certificates, in reduction of the Certificate
Principal Balance thereof, until the Certificate Principal Balance thereof has
been reduced to zero;
(iii) third, the balance of the Senior Principal Distribution
Amount, if any, remaining after the distribution described in clause (ii) above
shall be distributed, on the Distribution Date for which during the related Due
Period, the last prepayment penalty on the Mortgage Loans expires, to the Class
P Certificates, in reduction of the Certificate Principal Balance thereof, until
the Certificate Principal Balance thereof is reduced to zero; such amounts shall
be deemed distributed to Uncertificated REMIC 1 Regular Interest LTP; and
(iv) fourth, the balance of the Senior Principal Distribution
Amount, if any, remaining after the distribution described in clauses (ii) and
(iii) above shall be distributed to the Class A-1, Class A-2 and Class A-4
Certificates, pro rata, based on the Certificate Principal Balances thereof,
until the Certificate Principal Balance thereof is reduced to zero.
(c) On or after the occurrence of the Credit Support Depletion Date, all
priorities relating to distributions as described above in respect of principal
among the Senior Certificates (other than the Principal Only Certificates) will
be disregarded. Instead, an amount equal to the Discount Fraction of the
principal portion of scheduled payments and unscheduled collections received or
advanced in respect of Discount Mortgage Loans will be distributed to the
Principal Only Certificates, and the Senior Principal Distribution Amount will
be distributed to all classes of Senior Certificates (other than the Principal
Only Certificates) pro rata in accordance with their respective outstanding
Certificate Principal Balances and the Senior Interest Distribution Amount will
be distributed as set forth in Section 4.01(a)(i) above.
(d) After the reduction of the Certificate Principal Balances of the
Senior Certificates (other than the Class A-PO Certificates and Class A-IO
Certificates) to zero but prior to the Credit Support Depletion Date, the Senior
Certificates (other than the Class A-PO Certificates and Class A-IO
Certificates) will be entitled to no further distributions of principal thereon
and the Available
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Distribution Amount will be paid solely to the holders of the Class A-PO
Certificates, Class M Certificates and Class B Certificates in each case as
described herein. In the event the amount of a Realized Loss is restated
pursuant to Section 3.15, the amount of the Certificate Principal Balance of the
then most subordinate class of Certificates in the Trust Fund may be increased;
provided, however, that the Holders of such Certificates will not be entitled to
a reimbursement of Accrued Certificate Interest for the period during which the
Certificate Principal Balance of such Certificates were lower.
On each Distribution Date, all amounts representing Prepayment Charges in
respect of the Mortgage Loans received during the related Prepayment Period and
any Master Servicer Prepayment Charge Payment Amounts paid by the Master
Servicer during the related Prepayment Period will be withdrawn from the
Certificate Account and distributed by the Trustee to the Holders of the Class P
Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.
(e) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Company
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.
(f) The Trustee upon written direction of the Master Servicer, shall
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders, which shall
mature not later than the Business Day next preceding the Distribution Date next
following the date of such investment and shall not be sold or disposed of prior
to maturity. All income and gain realized from any such investment shall be for
the benefit of the Trustee and shall be subject to its withdrawal or order from
time to time. The amount of any losses incurred in respect of any such
investments shall be deposited in the Certificate Account by the Trustee out of
its own funds immediately as realized without any right of reimbursement.
(g) Except as otherwise provided in Section 9.01, if the Master Servicer
anticipates that a final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Master Servicer shall, no later
than the Determination Date in the month of such final distribution, notify the
Trustee and the Trustee shall, no later than two (2) Business Days after such
Determination Date, mail on such date to each Holder of such Class of
Certificates a notice to the effect that: (i) the Trustee anticipates that the
final distribution with respect to such Class of Certificates will be made on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee or as otherwise specified therein, and
(ii) no interest shall accrue on such Certificates from and after the end of the
prior calendar month.
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Any funds not distributed to any Holder or Holders of Certificates of such
Class on such Distribution Date because of the failure of such Holder or Holders
to tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non-tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
4.01(g) shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within six months after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee shall take reasonable steps as
directed by the Company, or appoint an agent to take reasonable steps, to
contact the remaining non-tendering Certificateholders concerning surrender of
their Certificates. The costs and expenses of maintaining the funds in trust and
of contacting such Certificateholders shall be paid out of the assets remaining
in the Trust Fund. If within nine months after the second notice any such
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(g).
Section 4.02. Statements to Certificateholders.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Trustee shall prepare and make
available on the Trustee's website, http://www-apps.gis.deutsche-bank.com/invr
(or deliver at the recipient's option), to each Holder of the Regular
Certificates, the Master Servicer and the Rating Agencies, a statement as to the
distributions made on such Distribution Date setting forth:
(i) (A) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates (other than the Class
A-IO Certificates), separately identified, allocable to principal and (B) (i)
the aggregate amount included therein representing Principal Prepayments and
(ii) the amount of the distribution made on such Distribution Date to the
Holders of the Class P Certificates allocable to Prepayment Charges and Master
Servicer Prepayment Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Regular Certificates (other than the Principal
Only Certificates) allocable to interest, separately identified;
(iii) the Pass-Through Rate on each Class of Regular Certificates
(other than the Principal Only Certificates) for such Distribution Date;
(iv) the aggregate amount of Advances for such Distribution Date;
(v) the number and aggregate Stated Principal Balance of the
Mortgage Loans as of the end of the related Due Period;
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(vi) the aggregate Certificate Principal Balance or Notional Amount,
as applicable, of each Class of Regular Certificates, and each of the Senior,
Class M and Class B Percentages, after giving effect to the amounts distributed
on such Distribution Date, separately identifying any reduction thereof due to
the allocation of Realized Losses thereto;
(vii) the related Senior Principal Distribution Amount and
Subordinate Principal Distribution Amount;
(viii) the number and aggregate Stated Principal Balance of Mortgage
Loans (a) delinquent 31 to 60 days, (b) delinquent 61 to 90 days, (c) delinquent
91 days or more, in each case as of the end of the calendar month prior to such
Distribution Date;
(ix) the number, aggregate principal balance and book value of any
REO Properties as of the close of business on the last day of the calendar month
preceding the month in which such Distribution Date occurs;
(x) the aggregate Accrued Certificate Interest remaining unpaid, if
any, for each Class of Certificates, after giving effect to the distribution
made on such Distribution Date
(xi) the weighted average remaining term to maturity of the Mortgage
Loans prior to giving effect to the amounts distributed on such Distribution
Date;
(xii) the aggregate amount of Realized Losses incurred during the
related Prepayment Period and the cumulative amount of Realized Losses;
(xiii) the aggregate amount of extraordinary Trust Fund expenses
withdrawn from the Custodial Account or the Certificate Account for such
Distribution Date;
(xiv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the Master
Servicer pursuant to Section 3.23, and the aggregate amount of Relief Act
Interest Shortfalls for such Distribution Date;
(xv) the Special Hazard Amount, Fraud Loss Amount and Bankruptcy
Amount as of the close of business on such Distribution Date and a description
of any change in the calculation of such amounts;
(xvi) the weighted average Net Mortgage Rate for such Distribution
Date;
(xvii) the aggregate amount of servicing compensation received by
the Master Servicer with respect to the related Due Period and such other
customary information as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable Certificateholders to prepare
their tax returns;
(xviii) the occurrence of the Credit Support Depletion Date;
(xix) the Senior Accelerated Distribution Percentage applicable to
such distribution;
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(xx) the Senior Percentage for such Distribution Date; and
(xxi) the weighted average Mortgage Rates of the Mortgage Loans
prior to giving effect to the amounts distributed on such Distribution Date.
In the case of information furnished pursuant to subclauses (i) and (ii)
above, the amounts shall also be expressed as a dollar amount per Single
Certificate.
On each Distribution Date the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP level factors for each Class of Certificates
as of such Distribution Date, using a format and media mutually acceptable to
the Trustee and Bloomberg.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and forward, to each Person who at any time during the
calendar year was a Holder of a Certificate, a statement containing the
information set forth in subclauses (i) and (ii) above, aggregated for such
calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code and regulations
thereunder as from time to time are in force.
On each Distribution Date the Trustee shall prepare and make available on
the Trustee's website, https://www.corporatetrust.db.com/invr (or deliver at the
recipient's option), to each Holder of a Class R Certificate a copy of the
reports forwarded to the other Certificateholders on such Distribution Date.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and forward, to each Person who at any time during the
calendar year was a Holder of a Class R Certificate a statement containing the
information provided pursuant to the previous paragraph aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in force.
Section 4.03. Remittance Reports; Advances by the Master Servicer.
(a) On the Business Day following each Determination Date, the Master
Servicer shall deliver to the Trustee a report, prepared as of the close of
business on the Determination Date (the "Remittance Report"), in the form of an
electromagnetic tape or disk. The Remittance Report and any written information
supplemental thereto shall include such information with respect to the Mortgage
Loans that is required by the Trustee for purposes of making the calculations
and preparing the statement described in Sections 4.01 and 4.02, as set forth in
written specifications or guidelines issued by the Trustee from time to time.
The Trustee shall have no obligation to recompute, recalculate or verify any
information provided to it by the Master Servicer.
(b) The Master Servicer shall determine the aggregate amount of Advances
required to be made for the related Distribution Date, which shall be in an
aggregate amount equal to the sum
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of (1) the aggregate amount of Monthly Payments (with each interest portion
thereof adjusted to the Mortgage Rate less the sum of the Master Servicing Fee
Rate, the Sub-Servicing Fee Rate and any applicable Radian PMI Policy Rate,
other than Balloon Payments, less the amount of any related Debt Service
Reductions or reductions in the amount of interest collectable from the
Mortgagor pursuant to the Relief Act, on the Outstanding Mortgage Loans as of
the related Due Date, which Monthly Payments were delinquent as of the close of
business as of the related Determination Date plus (2) with respect to each
Balloon Loan delinquent in respect of its Balloon Payment as of the close of
business on the related Determination Date, an amount equal to the assumed
Monthly Payment (net of the related Servicing Fees) that would have been due on
the related Due Date based on the original principal amortization scheduled for
such Balloon Loan until such Balloon Loan is finally liquidated; provided that
no Advance shall be made if it would be a Nonrecoverable Advance. On or before
4:00 P.M. New York time on each Certificate Account Deposit Date, the Master
Servicer shall either (i) deposit in the Certificate Account from its own funds,
or funds received therefor from the Sub-Servicers, an amount equal to the
Advances to be made by the Master Servicer in respect of the related
Distribution Date, (ii) withdraw from amounts on deposit in the Custodial
Account and deposit in the Certificate Account all or a portion of the amounts
held for future distribution in discharge of any such Advance, or (iii) make
advances in the form of any combination of (i) and (ii) aggregating the amount
of such Advance. Any portion of the amounts held for future distribution so used
shall be replaced by the Master Servicer by deposit in the Certificate Account
on or before 1:00 P.M. New York time on any future Certificate Account Deposit
Date to the extent that funds attributable to the Mortgage Loans that are
available in the Custodial Account for deposit in the Certificate Account on
such Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date. The
amount of any reimbursement pursuant to Section 3.11 in respect of outstanding
Advances on any Distribution Date shall be allocated to specific Monthly
Payments due but delinquent for previous Due Periods, which allocation shall be
made, to the extent practicable, to Monthly Payments which have been delinquent
for the longest period of time. Such allocations shall be conclusive for
purposes of reimbursement to the Master Servicer from recoveries on related
Mortgage Loans pursuant to Section 3.11. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance,
if made, would constitute a Nonrecoverable Advance, shall be evidenced by a
certificate of a Servicing Officer delivered to the Seller and the Trustee with
the Remittance Report. The Trustee shall deposit all funds it receives pursuant
to this Section 4.03 into the Certificate Account.
(c) In the event that the Master Servicer determines as of any Certificate
Account Deposit Date that it will be unable to deposit in the Certificate
Account an amount equal to the Advance required to be made for the immediately
succeeding Distribution Date in the amount determined by the Master Servicer
pursuant to paragraph (b) above, it shall give notice to the Trustee of its
inability to Advance (such notice may be given by telecopy), not later than 4:00
P.M., New York time, on such date, specifying the portion of such amount that it
will be unable to deposit. Not later than 4:00 P.M., New York time, on the
earlier of (x) two Business Days following such Certificate Account Deposit Date
or (y) the Business Day preceding the related Distribution Date, unless by such
time the Master Servicer shall have directly or indirectly deposited in the
Certificate Account the entire amount of the Advances required to be made for
the related Distribution Date, pursuant to Section 7.01, the Trustee shall (a)
terminate all of the rights and obligations of the Master Servicer under this
Agreement in accordance with Section 7.01 and (b) assume the rights and
obligations of the Master
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Servicer hereunder, including the obligation to deposit in the Certificate
Account an amount equal to the Advance for the immediately succeeding
Distribution Date.
Section 4.04. Distributions on the REMIC 1 Regular Interests.
(a) On each Distribution Date the Trustee shall be deemed to
distribute to itself, as the holder of the Uncertificated REMIC 1 Regular
Interests, the Uncertificated REMIC 1 Regular Interest Distribution Amounts in
the following order of priority to the extent of the Available Distribution
Amount reduced by distributions made to the Class R Certificates (in respect of
the Class R-1 Interest) pursuant to Section 4.01(a):
(i) Uncertificated REMIC 1 Accrued Interest on the
Uncertificated REMIC 1 Regular Interests for such Distribution Date,
plus any Uncertificated REMIC 1 Accrued Interest thereon remaining
unpaid from any previous Distribution Date; and
(ii) In accordance with the priority set forth in Section
4.06(b), an amount equal to the sum of the amounts in respect of
principal distributable on the Class A-1, Class A-2, Class A-4,
Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3,
Class P, Class A-PO and Class R Certificates (in respect of the
Class R-2 Interest) under Section 4.01(a), as allocated thereto.
(b) The amount described in Section 4.06(a)(ii) shall be deemed
distributed to (i) Uncertificated REMIC 1 Regular Interest LTA1, (ii)
Uncertificated REMIC 1 Regular Interest LTA2, (iii) Uncertificated REMIC 1
Regular Interest LTA4, (iv) Uncertificated REMIC 1 Regular Interest LTMB, (v)
Uncertificated REMIC 1 Regular Interest LTP, (vi) Uncertificated REMIC 1 Regular
Interest LTPO and (vii) Uncertificated REMIC 1 Regular Interest LTR2 with the
amount to be distributed allocated among such interests in accordance with the
priority assigned to the (i) Class A-1 Certificates, (ii) Class A-2
Certificates, (iii) Class A-4 Certificates, (iv) the Class M Certificates and
Class B Certificates, (v) Class P Certificates, (vi) Class A-PO Certificates and
(vii) Class R Certificates (in respect of the Class R-2 Interest), respectively,
under Section 4.01(a) and (b) until the Uncertificated Principal Balance of each
such interest is reduced to zero. In addition, amounts described in 4.01(b)(iii)
shall be deemed distributed to Uncertificated REMIC 1 Regular Interest LTP.
(c) The portion of the Uncertificated REMIC 1 Regular Interest
Distribution Amounts described in Section 4.06(a)(ii) shall be deemed
distributed by REMIC 1 to REMIC 2 in accordance with the priority assigned to
the REMIC 2 Certificates relative to that assigned to the REMIC 1 Certificates
under Section 4.01(b).
(d) In determining from time to time the Uncertificated REMIC 1
Regular Interest Distribution Amount for a particular Uncertificated REMIC 1
Regular Interest, Realized Losses allocated to the Certificates under Section
4.07 shall be allocated to the Uncertificated REMIC 1 Regular Interests in the
same amounts and priorities as allocated to the Certificates in the
corresponding numerical designation in 4.06(b) above.
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(e) On each Distribution Date the Trustee shall be deemed to
distribute from REMIC 2, in the priority set forth in Sections 4.01(a) and (b),
to the Class A-1, Class A-2, Class A-3, Class A-4, Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2, Class B-3 and Class R Certificates (in respect of
REMIC 2) the amounts distributable thereon, from the Uncertificated REMIC 1
Regular Interest Distribution Amounts deemed to have been received by REMIC 2
from REMIC 1 under this Section 4.06.
(f) Notwithstanding the deemed distributions on the Uncertificated
REMIC 1 Regular Interests described in this Section 4.06, distributions of funds
from the Certificate Account shall be made only in accordance with Section 4.01.
Section 4.05. Allocation of Realized Losses.
Prior to each Distribution Date, the Master Servicer shall determine the
total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition that
occurred during the related Prepayment Period. The amount of each Realized Loss
shall be evidenced by an Officers' Certificate. All Realized Losses, other than
Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or
Excess Fraud Losses, shall be allocated as follows: first, to the Class B-3
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; second, to the Class B-2 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class B-1 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-3 Certificates until the Certificate Principal Balance
thereof has been reduced to zero; fifth, to the Class M-2 Certificates until the
Certificate Principal Balance thereof has been reduced to zero; sixth, to the
Class M-1 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; and thereafter, if such Realized Losses are on a Discount
Mortgage Loan, to the Principal Only Certificates, in an amount equal to the
Discount Fraction of the principal portion thereof, and the remainder of such
Realized Losses and the entire amount of such Realized Losses on Non-Discount
Mortgage Loans among all the Class A Certificates (other than the Principal Only
Certificates) and Class R Certificates, on a pro rata basis, as described below.
Any Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses
and Extraordinary Losses on Non-Discount Mortgage Loans will be allocated among
the Class A (other than the Principal Only Certificates), Class M, Class B and
Class R Certificates, on a pro rata basis, as described below. The principal
portion of such losses on Discount Mortgage Loans will be allocated to the
Principal Only Certificates in an amount equal to the related Discount Fraction
thereof, and the remainder of such losses on Discount Mortgage Loans will be
allocated among the Class A Certificates (other than the Principal Only
Certificates), Class M, Class B and Class R Certificates on a pro rata basis, as
described below.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date in the case of the principal portion of a Realized Loss or based on the
Accrued Certificate Interest thereon payable on such Distribution Date (without
regard to any Compensating Interest for such Distribution Date) in the case of
an interest portion of a Realized Loss. Any allocation of the
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principal portion of Realized Losses (other than Debt Service Reductions) to the
Class B Certificates or, after the Certificate Principal Balances of the Class B
Certificates have been reduced to zero, to the Class of Class M Certificates
then outstanding with the highest numerical designation shall be made by
operation of the definition of "Certificate Principal Balance" and by operation
of the provisions of Section 4.01. Allocations of the interest portions of
Realized Losses shall be made by operation of the definition of "Accrued
Certificate Interest" and by operation of the provisions of Section 4.01.
Allocations of the principal portion of Debt Service Reductions shall be made by
operation of the provisions of Section 4.01. All Realized Losses and all other
losses allocated to a Class of Certificates hereunder will be allocated among
the Certificates of such Class in proportion to the Percentage Interests
evidenced thereby.
Section 4.06. Information Reports to Be Filed by the Master Servicer.
The Master Servicer or the Sub-Servicers shall file information reports
with respect to the receipt of mortgage interest received in a trade or
business, foreclosures and abandonments of any Mortgaged Property and the
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of the
Code, respectively, and deliver to the Trustee an Officers' Certificate stating
that such reports have been filed. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.
Section 4.07. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee shall
comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together with its monthly report to
such Certificateholders pursuant to Section 4.02 hereof, indicate such amount
withheld.
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ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Certificates will be substantially in the respective forms annexed
hereto as Exhibits A and B-1 through B-4. The Certificates will be issuable in
registered form only. The Certificates (other than the Class P and Class R
Certificates) will be issued in minimum denominations of $25,000 Initial
Certificate Principal Balance or Initial Notional Amount, as applicable, and
integral multiples of $1 in excess thereof. The Class P and Class R Certificates
will each be issuable in minimum denominations of any Percentage Interest
representing 20.00% and multiples of 0.01% in excess thereof.
Upon original issue, the Certificates shall, upon the written request of
the Company executed by an officer of the Company, be executed and delivered by
the Trustee, authenticated by the Trustee and delivered to or upon the order of
the Company upon receipt by the Trustee of the documents specified in Section
2.01. The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee in its capacity as trustee hereunder by a Responsible
Officer. Certificates bearing the manual or facsimile signatures of individuals
who were at the time they signed the proper officers of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates issued on the Closing
Date shall be dated the Closing Date and any Certificates delivered thereafter
shall be dated the date of their authentication.
(b) The Class A Certificates and the Class M Certificates shall initially
be issued as one or more Certificates registered in the name of the Depository
or its nominee and, except as provided below, registration of such Certificates
may not be transferred by the Trustee except to another Depository that agrees
to hold such Certificates for the respective Certificate Owners with Ownership
Interests therein. The Certificate Owners shall hold their respective Ownership
Interests in and to each of such Book-Entry Certificates through the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to Definitive Certificates in respect of such Ownership Interests. All
transfers by Certificate Owners of their respective Ownership Interests in the
Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall transfer the Ownership
Interests only in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures. The Trustee shall not be required to
monitor, determine or inquire as to compliance with the transfer restrictions
with respect to the Book-Entry Certificates, and the Trustee shall have no
liability for transfers of Ownership Interests in the Book Entry Certificates
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made through the book-entry facilities of the Depositary or between or among
Depositary Participants or Certificate Owners, made in violation of the
applicable restrictions.
The Trustee, the Master Servicer and the Company may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
If (i)(A) the Company advises the Trustee in writing that the Depository
is no longer willing or able to properly discharge its responsibilities as
Depository and (B) the Company is unable to locate a qualified successor or (ii)
the Company at its option advises the Trustee in writing that it elects to
terminate the book-entry system through the Depository, the Trustee shall notify
all Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration of transfer, the Trustee shall, at the expense
of the Company, issue the Definitive Certificates. Neither the Company, the
Master Servicer nor the Trustee shall be liable for any actions taken by the
Depository or its nominee, including, without limitation, any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates the
Trustee and the Master Servicer shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(c) Each Certificate is intended to be a "security" governed by Article 8
of the Uniform Commercial Code as in effect in the State of New York and any
other applicable jurisdiction, to the extent that any of such laws may be
applicable.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided.
(b) Except as provided in Section 5.02(c), no transfer, sale, pledge or
other disposition of a Class P Certificate or Class B Certificate shall be made
unless such transfer, sale, pledge or other disposition is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
and any applicable state securities laws or is made in accordance with said Act
and laws. In the event that a transfer of a Class P Certificate or Class B
Certificate is to be made
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under this Section 5.02(b), (i) the Trustee shall require an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee that such
transfer shall be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer, provided that such Opinion
of Counsel will not be required in connection with the initial transfer of any
such Certificate by the Company or any affiliate thereof, to a non-affiliate of
the Company and (ii) the Trustee shall require the transferee to execute a
representation letter, substantially in the form of Exhibit G-1 hereto, and the
Trustee shall require the transferor to execute a representation letter,
substantially in the form of Exhibit G-2 hereto, each acceptable to and in form
and substance satisfactory to the Trustee certifying to the Company and the
Trustee the facts surrounding such transfer, which representation letters shall
not be an expense of the Trustee, the Company or the Master Servicer; provided,
however, that such representation letters will not be required in connection
with any transfer of any such Certificate by the Company to an affiliate of the
Company and the Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Trustee, shall be a written
representation) from the Company of the status of such transferee as an
affiliate of the Company. Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Company and
the Master Servicer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such applicable federal and state
laws.
(c) Notwithstanding the requirements of Section 5.02(b), transfers of
Class P and Class B Certificates may be made in accordance with this Section
5.02(c) if the prospective transferee of a Certificate provides the Trustee and
the Company with an investment letter substantially in the form of Exhibit G-3
attached hereto, which investment letter shall not be an expense of the Trustee,
the Company or the Master Servicer, and which investment letter states that,
among other things, such transferee is a "qualified institutional buyer" as
defined under Rule 144A. Such transfers shall be deemed to have complied with
the requirements of Section 5.02(b) hereof; provided, however, that no Transfer
of any of the Class B Certificates may be made pursuant to this Section 5.02(c)
by the Company. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Company and the
Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such applicable federal and state laws.
The Trustee shall require an Opinion of Counsel from a prospective
transferee prior to the transfer of any Class P Certificate, Class B Certificate
or Class R Certificate to any employee benefit plan or other retirement
arrangement, including individual retirement accounts and Keogh plans, that is
subject to Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") or Section 4975 of the Code (any of the foregoing, a
"Plan"), to a trustee or other Person acting on behalf of any Plan, or to any
other person who is using "plan assets" of any Plan to effect such acquisition
(including any insurance company using funds in its general or separate accounts
that may constitute "plan assets"). Such Opinion of Counsel must establish to
the satisfaction of the Trustee that such transfer is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction of Section 406 of ERISA or Section 4975 of the Code and will not
subject the Trustee, the Master Servicer or the Company to any obligation in
addition to those undertaken in this Agreement. Neither the Company, the Master
Servicer nor the Trustee will be required to obtain such Opinion of Counsel on
behalf of any prospective transferee.
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(d) In the case of the Class B Certificates, in lieu of such Opinion of
Counsel, the prospective transferee may provide a certification in the form of
Exhibit G-6 (or in a form substantially similar to such Exhibit G-6 as shall be
agreed upon by the Trustee), in the case of the transfer of any of the foregoing
Class B Certificates to a person capable of providing such certification,
substantially to the effect that the purchase of Class B Certificates by or on
behalf of such Plan is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code, will not subject the Company, the Trustee or the
Master Servicer to any obligation in addition to those undertaken in this
Agreement and the following conditions are satisfied: (i) the transferee is an
insurance company, (ii) the source of funds used to purchase such Class B
Certificates is an "insurance company general account" (as such term is defined
in Prohibited Transaction Class Exemption ("PTCE") 95-60), and (iii) the
conditions set forth in Sections I and III of PTCE 95-60 have been satisfied.
(e) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery to it, and
shall not register the Transfer of any Class R Certificate until its receipt of
(I) an affidavit and agreement (a "Transfer Affidavit and Agreement" in the form
attached hereto as Exhibit G-5) from the proposed Transferee, in form and
substance satisfactory to the Trustee representing and warranting, among other
things, that it is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Class R Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person who is not a
Permitted Transferee, that for so long as it retains its Ownership Interest in a
Class R Certificate, it will endeavor to remain a Permitted Transferee, and that
it has reviewed the provisions of this Section 5.02 and agrees to be bound by
them, and (II) a certificate, in the form attached hereto as Exhibit G-4, from
the Holder wishing to transfer the Class R Certificate, in form and substance
satisfactory to the Trustee representing and warranting, among other things,
that no purpose of the proposed Transfer is to impede the assessment or
collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a Responsible
Officer of the Trustee assigned to this transaction has actual knowledge that
the proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee shall be
effected.
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(D) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer its
Ownership Interest in a Class R Certificate and (y) not to transfer its
Ownership Interest unless it provides a certificate to the Trustee in the form
attached hereto as Exhibit G-4.
(E) Each Person holding or acquiring an Ownership Interest in a
Class R Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Class
R Certificate, if it is "a pass-through interest holder", or is holding an
Ownership Interest in a Class R Certificate on behalf of a "pass-through
interest holder."
(ii) The Trustee will register the Transfer of any Class R Certificate
only if it shall have received the Transfer Affidavit and Agreement in the form
attached hereto as Exhibit G-5, a certificate of the Holder requesting such
transfer in the form attached hereto as Exhibit G-4 and all of such other
documents as shall have been reasonably required by the Trustee as a condition
to such registration. Transfers of the Class R Certificates other than to
Permitted Transferees are prohibited.
(iii) (A) If any Person other than a Permitted Transferee shall become a
Holder of a Class R Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a Holder of
a Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a transfer of a Class R Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such transfer of such Class R
Certificate. The prior Holder shall be entitled to recover from any purported
Holder of a Class R Certificate that was in fact not a Permitted Transferee
under this Section 5.05(b) at the time it became a Holder all payments made on
such Class R Certificate. Each Holder of a Class R Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this clause (b) and to any amendment of this Agreement deemed necessary (whether
as a result of new legislation or otherwise) by counsel of the Company to ensure
that the Class R Certificates are not transferred to any Person who is not a
Permitted Transferee and that any transfer of such Class R Certificates will not
cause the imposition of a tax upon the Trust or cause any such REMIC to fail to
qualify as a REMIC. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact not
permitted by this Section 5.02 or for making any payments due on such
Certificate to the holder thereof or for taking any other action with respect to
such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class R
Certificate in violation of the restrictions in this Section 5.02 and to the
extent that the retroactive restoration of the rights of the Holder of such
Class R Certificate as described in clause (iii)(A) above shall be invalid,
illegal or unenforceable, then the Trustee shall have the right, without notice
to the holder
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or any prior holder of such Class R Certificate, to sell such Class R
Certificate to a purchaser selected by the Trustee on such terms as the Trustee
may choose. Such purported Transferee shall promptly endorse and deliver each
Class R Certificate in accordance with the instructions of the Trustee. Such
purchaser may be the Trustee itself. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Trustee), expenses and
taxes due, if any, will be remitted by the Trustee to such purported Transferee.
The terms and conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Trustee, and the Trustee shall not be
liable to any Person having an Ownership Interest in a Class R Certificate as a
result of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal Revenue Service and
those Persons specified by the REMIC Provisions, all information necessary to
compute any tax imposed (A) as a result of the transfer of an ownership interest
in a Class R Certificate to any Person who is a Disqualified Organization,
including the information regarding "excess inclusions" of such Class R
Certificates required to be provided to the Internal Revenue Service and certain
Persons as described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E-2(a)(5), and (B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust, estate or
organization described in Section 1381 of the Code that holds an Ownership
Interest in a Class R Certificate having as among its record holders at any time
any Person who is a Disqualified Organization. The Trustee may charge and shall
be entitled to reasonable compensation for providing such information as may be
required from those Persons which may have had a tax imposed upon them as
specified in clauses (A) and (B) of this paragraph for providing such
information.
(F) Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate at the office of the Trustee
maintained for such purpose, the Trustee shall execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest. Every Certificate surrendered for transfer shall be
accompanied by notification of the account of the designated transferee or
transferees for the purpose of receiving distributions pursuant to Section 4.01
by wire transfer, if any such transferee desires and is eligible for
distribution by wire transfer.
(G) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of the same Class
of a like aggregate Percentage Interest, upon surrender of the Certificates to
be exchanged at the office of the Trustee. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in the form satisfactory to the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing. In
addition, with respect to each Class R Certificate, the Holder thereof may
exchange, in the manner described above, such Class R Certificate for two
separate Certificates, each representing such Holder's respective Percentage
Interest in the Class R-1 Interest and the Class R-2 Interest, respectively, in
each case that was evidenced by the Class R Certificate being exchanged.
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(H) No service charge shall be made to the Certificateholders for
any transfer or exchange of Certificates, but the Trustee may require payment of
a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(I) All Certificates surrendered for transfer and exchange shall be
canceled and retained by the Trustee in accordance with the Trustee's standard
procedures.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as may be required by it to save it harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 5.04. Persons Deemed Owners.
The Company, the Master Servicer, the Trustee and any agent of any of them
may treat the person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
4.01 and for all other purposes whatsoever, and neither the Company, the Master
Servicer, the Trustee nor any agent of any of them shall be affected by notice
to the contrary.
Section 5.05. Rule 144A Information.
For so long as any Class P and Class B Certificates are outstanding and
are "restricted securities" within the meaning of Rule 144(a)(3) of the
Securities Act, (1) the Company will provide or cause to be provided to any
holder of such Certificates and any prospective purchaser thereof designated by
such a holder, upon the request of such holder or prospective purchaser, the
information required to be provided to such holder or prospective purchaser by
Rule 144A(d)(4) under the Securities Act; and (2) the Company shall update such
information from time to time in order to prevent such information from becoming
false and misleading and will take such other actions as are necessary to ensure
that the safe harbor exemption from the registration requirements of the
Securities Act under Rule 144A is and will be available for resales of such
Certificates conducted in accordance with Rule 144A. The Master Servicer shall
cooperate with the Company and furnish the Company such information in the
Master Servicer's possession as the Company may reasonably request.
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ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01. Liability of the Company and the Master Servicer.
The Company and the Master Servicer each shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Company and the Master Servicer herein. Only the Master
Servicer, any successor Master Servicer or the Trustee acting as Master Servicer
shall be liable with respect to the servicing of the Mortgage Loans and the REO
Property for actions taken by any such Person in contravention of the Master
Servicer's duties hereunder.
Section 6.02. Merger, Consolidation or Conversion of the Company or the
Master Servicer.
The Company and the Master Servicer each will keep in full effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and each will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
Any Person into which the Company or the Master Servicer may be merged,
consolidated or converted, or any corporation resulting from any merger or
consolidation to which the Company or the Master Servicer shall be a party, or
any Person succeeding to the business of the Company or the Master Servicer,
shall be the successor of the Company or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to sell mortgage loans to and service
mortgage loans for Fannie Mae or Freddie Mac.
Section 6.03. Limitation on Liability of the Company, the Master Servicer
and Others.
Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Company or the Master Servicer (but this
provision shall protect the above described persons) against any breach of
warranties or representations made herein, or against any specific liability
imposed on the Master Servicer pursuant to Section 3.01 or any other Section
hereof; and provided further that this provision shall not protect the Company,
the Master Servicer or any such person, against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Company, the Master Servicer and any
director, officer, employee or agent of the Company or the Master Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters
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arising hereunder. The Company, the Master Servicer and any director, officer,
employee or agent of the Company or the Master Servicer shall be indemnified and
held harmless by the Trust Fund against any loss, liability or expense incurred
in connection with any legal action relating to this Agreement or the
Certificates (including reasonable legal fees and disbursements of counsel),
other than (a) any loss, liability or expense related to Master Servicer's
servicing obligations with respect to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or related to the Master Servicer's
obligations under Section 3.01, or (b) any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Company nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its respective duties under this Agreement and which
in its opinion may involve it in any expense or liability; provided, however,
that the Company or the Master Servicer may in its sole discretion undertake any
such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom (except any action or
liability related to the Master Servicer's obligations under Section 3.01) shall
be expenses, costs and liabilities of the Trust Fund, and the Company and the
Master Servicer shall be entitled to be reimbursed therefor from the Certificate
Account as provided in Section 3.11, any such right of reimbursement being prior
to the rights of Certificateholders to receive any amount in the Certificate
Account.
Section 6.04. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment of a successor servicer
reasonably acceptable to the Trustee upon receipt by the Trustee of a letter
from each Rating Agency (obtained by the Master Servicer and at its expense)
that such a resignation and appointment will not, in and of itself, result in a
downgrading of the Certificates or (b) upon determination that its duties
hereunder are no longer permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel (at the expense of the resigning Master Servicer) to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer shall have assumed the Master
Servicer's responsibilities, duties, liabilities and obligations hereunder.
Section 6.05. Sale and Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its duties
and obligations in their entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Fannie Mae or Freddie Mac; (b) shall, in the case of
successor master servicers only, have a net worth of not less than $10,000,000
(unless otherwise approved by each Rating Agency pursuant to clause (ii) below);
(c) shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee) as having a comparable servicing ability to that of the
Master Servicer on the Closing Date; (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such
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Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by it as master servicer under this
Agreement and any custodial agreement, from and after the effective date of such
agreement; (ii) each Rating Agency shall be given prior written notice of the
identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded or withdrawn as a result
of such assignment, sale and delegation, as evidenced by a letter to such effect
obtained by the Master Servicer at its expense and delivered to the Trustee; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee an Officer's Certificate and an Opinion of Counsel (at
the expense of the Master Servicer), each stating that all conditions precedent
to such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising prior to
the effective date thereof.
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ARTICLE VII
DEFAULT
Section 7.01.Events of Default.
"Event of Default", wherever used herein, means any one of the following
events:
(i) any failure by the Master Servicer to deposit into the Certificate
Account on each Certificate Account Deposit Date the amounts required to be
deposited therein (other than an Advance) under the terms of this Agreement
which continues unremedied for two (2) Business Days after such amount was
required to be remitted; or
(ii) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in the Certificates or in this Agreement
(including any breach of the Master Servicer's representations and warranties
pursuant to Section 2.03(a) which materially and adversely affects the interests
of the Certificateholders) which continues unremedied for a period of 60 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee, or to the
Master Servicer and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its property; or
(v) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations; or
(vi) the Master Servicer shall fail to deposit in the Certificate Account
on any Certificate Account Deposit Date an amount equal to any required Advance
which continues unremedied for the earlier of (a) a period of two (2) Business
Days or (b) the Business Day immediately preceding the Distribution Date.
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If an Event of Default described in clauses (i) - (v) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Trustee or the Holders of Certificates
entitled to at least 51% of the Voting Rights, by notice in writing to the
Master Servicer (and to the Trustee if given by such Holders of Certificates),
with a copy to the Rating Agencies, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; provided, however, that the successor to the Master
Servicer appointed pursuant to Section 7.02 shall have accepted the duties of
Master Servicer effective upon the resignation or termination of the Master
Servicer. If an Event of Default described in clause (vi) hereof shall occur,
the Trustee shall, by notice to the Master Servicer, and the Company, terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Trust Fund, other than its rights as a Certificateholder
hereunder; provided, however, that if the Trustee determines (in its sole
discretion) that the failure by the Master Servicer to make any required Advance
was due to circumstances beyond its control, and the required Advance was
otherwise made, the Trustee shall not terminate the Master Servicer. On or after
the receipt by the Master Servicer of such notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a holder thereof) or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise at the
expense of the Master Servicer. The Master Servicer agrees to cooperate with
(and pay any related costs and expenses of) the Trustee in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee or the successor
Master Servicer for administration by it of (i) the property and amounts which
are then or should be part of the Trust Fund or which thereafter become part of
the Trust Fund; (ii) originals or copies of all documents of the Master Servicer
reasonably requested by the Trustee to enable it to assume the Master Servicer's
duties thereunder; (iii) the rights and obligations of the Master Servicer under
the Sub-Servicing Agreements with respect to the Mortgage Loans; and (iv) all
cash amounts which shall at the time be deposited by the Master Servicer or
should have been deposited to the Custodial or the Certificate Account or
thereafter be received with respect to the Mortgage Loans. The Trustee shall not
be deemed to have breached any obligation hereunder as a result of a failure to
make or delay in making any distribution as and when required hereunder caused
by the failure of the Master Servicer to remit any amounts received by it or to
deliver any documents held by it with respect to the Mortgage Loans. For
purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge
of an Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless notice of any event which is in fact such an Event
of Default is received by the Trustee as provided in Section 11.05 and such
notice references the Certificates, the Trust Fund or this Agreement.
Section 7.02. Trustee to Act; Appointment of Successor.
Within 90 days of the time the Master Servicer receives a notice of
termination pursuant to Section 7.01(i) - (v), the Trustee or its appointed
agent shall be the successor in all respects to the Master Servicer in its
capacity as Master Servicer under this Agreement and the transactions set forth
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or provided for herein and shall be subject thereafter to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer including the obligation to make Advances which have been or will be
required to be made (except for the responsibilities, duties and liabilities
contained in Section 2.03 and its obligations to deposit amounts in respect of
losses pursuant to Section 3.12 and 4.01(h)) by the terms and provisions hereof;
and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide information
required by Section 4.03 shall not be considered a default by the Trustee
hereunder. As compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans which the Master Servicer would have been
entitled to charge to the Custodial Account and the Certificate Account if the
Master Servicer had continued to act hereunder. If the Trustee has become the
successor to the Master Servicer in accordance with Section 6.04 or Section
7.02, then notwithstanding the above, if the Trustee shall be unwilling to so
act, or shall be unable to so act, the Trustee may appoint, or petition a court
of competent jurisdiction or appoint, any established housing and home finance
institution, which is also a Fannie Mae- or Freddie Mac-approved mortgage
servicing institution, having a net worth of not less than $10,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as herein above provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Master Servicer hereunder. Each of the Seller, the
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. In no event
shall the successor Master Servicer be liable for the acts or omissions of the
predecessor Master Servicer.
In connection with the termination or resignation of the Master Servicer
hereunder, either (i) the successor Master Servicer, including the Trustee if
the Trustee is acting as successor Master Servicer, shall represent and warrant
that it is a member of MERS in good standing and shall agree to comply in all
material respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS, in which case the
predecessor Master Servicer shall cooperate with the successor Master Servicer
in causing MERS to revise its records to reflect the transfer of servicing to
the successor Master Servicer as necessary under MERS' rules and regulations, or
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Trustee and to execute
and deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor Master Servicer.
The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master Servicer
shall bear any and all fees of MERS, costs of preparing any assignments of
Mortgage, and fees and costs of filing any assignments of Mortgage that may be
required under this Section 7.02. The successor Master Servicer shall cause such
assignment to be delivered to the Trustee promptly upon receipt of the original
with evidence of recording thereon or a copy certified by the public recording
office in which such assignment was recorded.
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Any successor, including the Trustee, to the Master Servicer shall
maintain in force during its term as master servicer hereunder policies and
fidelity bonds to the same extent as the Master Servicer is so required pursuant
to Section 3.18.
Notwithstanding anything else herein to the contrary, in no event shall
the Trustee be liable for any Servicing Fee or for any differential in the
amount of the Servicing Fee paid hereunder and the amount necessary to induce
any successor Master Servicer or Servicer, as applicable, to act as successor
Master Servicer or Servicer, as applicable, under this Agreement and the
transactions set forth or provided for herein.
Section 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt notice thereof to Certificateholders and
to the Rating Agencies.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
Section 7.04. Waiver of Events of Default.
The Holders representing at least 51% of the Voting Rights of Certificates
affected by a default or Event of Default hereunder, may waive such default or
Event of Default (other than an Event of Default set forth in Section 7.01(vi));
provided, however, that (a) a default or Event of Default under clause (i) of
Section 7.01 may be waived only by all of the Holders of Certificates affected
by such default or Event of Default and (b) no waiver pursuant to this Section
7.04 shall affect the Holders of Certificates in the manner set forth in the
second paragraph of Section 11.01 or materially adversely affect any
non-consenting Certificateholder. Upon any such waiver of a default or Event of
Default by the Holders representing the requisite percentage of Voting Rights of
Certificates affected by such default or Event of Default, such default or Event
of Default shall cease to exist and shall be deemed to have been remedied for
every purpose hereunder. No such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon except to the
extent expressly so waived. The Master Servicer shall give notice of any such
waiver to the Rating Agencies.
Section 7.05. List of Certificateholders.
Upon written request of three or more Certificateholders of record, for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Trustee will afford such Certificateholders
access during business hours to the most recent list of Certificateholders held
by the Trustee.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Default occurs, is continuing and has not been waived,
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs. Any permissive right of the Trustee enumerated in this Agreement
shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them in accordance with the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, the Trustee shall
take such action as it deems appropriate to have the instrument corrected, and
if the instrument is not corrected to the Trustee's satisfaction, the Trustee
will provide notice thereof to the Certificateholders. Notwithstanding the
foregoing, the Trustee shall not be responsible for the accuracy or content of
any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Master Servicer hereunder or any Opinion of
Counsel required hereunder.
The Trustee shall prepare and file or cause to be filed on behalf of the
Trust Fund any tax return that is required with respect to REMIC 1 and REMIC 2
pursuant to applicable federal, state or local tax laws.
The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of REMIC 1 and REMIC 2 under
the REMIC Provisions and to prevent the imposition of any federal, state or
local income, prohibited transaction, contribution or other tax on any of REMIC
1 or REMIC 2 to the extent that maintaining such status and avoiding such taxes
are within the control of the Trustee and are reasonably within the scope of its
duties under this Agreement.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the curing
or waiver of all such Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of
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the statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) The Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Certificates entitled to at least 25% of the Voting
Rights relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement.
Section 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(a) The Trustee may conclusively rely upon and shall be fully protected in
acting or refraining from acting in reliance upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) The Trustee may consult with counsel and any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in accordance
therewith;
(c) The Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Agreement, other than its obligation to give
notice pursuant to this Agreement, or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction of
any of the Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Office of the Trustee's corporate trust
department has actual knowledge (which has not been waived or cured), to
exercise such of the rights and powers vested in it by this Agreement, and to
use the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs;
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(e) Prior to the occurrence of an Event of Default hereunder and after the
curing or waiver of all Events of Default which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument,
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opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Holders of Certificates
entitled to at least 25% of the Voting Rights; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement reasonable expense of every such
examination shall be paid by the Certificateholders requesting the
investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys appointed with due care, and shall not be responsible
for any willful misconduct or negligence on the part of any agent, attorney,
custodian or nominee so appointed;
(g) The Trustee shall not be required to give any bond or surety with
respect to the execution of the trust created hereby or the powers granted
hereunder; and
(h) Whenever in the administration of the provisions of this Agreement the
Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action to be taken hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of gross negligence or bad faith on the part of
the Trustee, be deemed to be conclusively proved and established by a
certificate signed and delivered to the Trustee and such certificate, in the
absence of gross negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Agreement upon the faith thereof.
The Trustee shall have no obligation to invest and reinvest any cash held
in the absence of timely and specific written investment direction from the
Master Servicer. In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The Trustee shall have no
liability in respect of losses incurred as a result of the liquidation of any
investment incurred as a result of the liquidation of any investment prior to
its stated maturity or the failure of the Master Servicer to provide timely
written investment direction.
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature of the Trustee, the authentication of the Trustee on the Certificates,
the acknowledgments of the Trustee contained in Article II) shall be taken as
the statements of the Company and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Company of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to the
Company or the Master Servicer in respect of the Mortgage Loans or deposited in
or withdrawn from the Custodial Account by the Master Servicer.
Section 8.04. Trustee May Own Certificates.
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The Trustee in its individual or any other capacity (other than as Trustee
hereunder) may become the owner or pledgee of Certificates with the same rights
it would have if it were not Trustee and may otherwise deal with the parties
hereto.
Section 8.05. Trustee's Fees.
On each Distribution Date, the Trustee shall be entitled to withdraw from
the Certificate Account as compensation hereunder the Trustee Fees. Such
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) shall be paid for all
services rendered by it (except as otherwise reimbursed by the Seller pursuant
to a separate fee letter between the Seller and the Trustee) in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder or of the Trustee. Except as otherwise provided in
this Agreement, the Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified and held harmless by the Trust Fund against any
claim, loss, liability, fee or expense incurred in connection with any Event of
Default, any breach of this Agreement or any claim or legal action (including
any pending or threatened claim or legal action) relating to the acceptance or
administration of its trusts hereunder or the Trustee's performance under the
Certificates, other than any claim, loss, liability or expense (i) sustained in
connection with this Agreement related to the willful misfeasance, bad faith or
negligence of the Master Servicer in the performance of its duties hereunder or
(ii) incurred in connection with a breach constituting willful misfeasance, bad
faith or negligence of the Trustee in the performance of its duties hereunder or
by reason of reckless disregard of its obligations and duties hereunder.
The Master Servicer shall indemnify the Trustee and any director, officer,
employee or agent of the Trustee against any such claim or legal action
(including any pending or threatened claim or legal action), loss, liability,
fee or expense that may be sustained in connection with this Agreement related
to the willful misfeasance, bad faith, or negligence in the performance of the
Master Servicer's duties hereunder.
The provisions of this Section 8.05 shall survive the resignation or
removal of the Trustee or the termination of this Agreement.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a national
banking association organized and doing business under the laws of any state or
the United States of America or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. In addition, the Trustee shall at all times be acceptable to
the Rating Agency rating the Certificates. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
The corporation or national banking association serving as Trustee may have
normal banking
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and trust relationships with the Seller and their affiliates or the Master
Servicer and its affiliates; provided, however, that such corporation cannot be
an affiliate of the Master Servicer other than the Trustee in its role as
successor to the Master Servicer.
Section 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Master Servicer; with a
copy to the Rating Agencies; provided, that such resignation shall not be
effective until a successor trustee is appointed and accepts appointment in
accordance with the following provisions; provided, however, that the resigning
Trustee shall not resign and be discharged from the trusts hereby created until
such time as the Rating Agency rating the Certificates approves the successor
trustee. Upon receiving such notice of resignation, the Master Servicer shall
promptly appoint a successor trustee who meets the eligibility requirements of
Section 8.06 by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee and to the successor
trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
therefor by the Master Servicer, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, the Master Servicer
may remove the Trustee and appoint a successor trustee who meets the eligibility
requirements of Section 8.06 by written instrument, in triplicate, which
instrument shall be delivered to the Trustee so removed and to the successor
trustee.
The Holders of Certificates entitled to at least 51% of the Voting Rights,
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Master Servicer, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Company by the Master
Servicer.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee as provided
in Section 8.08.
Section 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Master Servicer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder,
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with the like effect as if originally named as trustee herein. The predecessor
trustee shall after payment of its outstanding fees and expenses, promptly
deliver to the successor trustee all assets and records of the Trust Fund held
by it hereunder, and the Master Servicer and the predecessor trustee shall
execute and deliver all such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 8.06.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the Master Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Master Servicer fails to mail such notice within
ten days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Master
Servicer.
Section 8.09. Merger or Consolidation of Trustee.
Any state bank or trust company or corporation or national banking
association into which the Trustee may be merged or converted or with which it
may be consolidated or any state bank or trust company or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any state bank or trust company or corporation or
national banking association succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such state bank or trust company or corporation or national
banking association shall be eligible under the provisions of Section 8.06
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the Master
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment
without the Master Servicer. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.
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In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred or such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion thereof in any
such jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase or Liquidation of All Mortgage
Loans.
(a) Subject to Section 9.03, the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders of all amounts held by or on
behalf of the Trustee and required to be paid to them hereunder following the
earlier to occur of (i) the repurchase by the Master Servicer or its designee of
all Mortgage Loans and each REO Property in respect thereof remaining in the
Trust Fund at a price equal to (a) 100% of the unpaid principal balance of each
Mortgage Loan (other than one as to which a REO Property was acquired) on the
day of repurchase together with accrued interest on such unpaid principal
balance at the Net Mortgage Rate to the first day of the month in which the
proceeds of such repurchase are to be distributed, plus (b) the appraised value
of any REO Property (but not more than the unpaid principal balance of the
related Mortgage Loan, together with accrued interest on that balance at the Net
Mortgage Rate to the first day of the month such repurchase price is
distributed), less the good faith estimate of the Master Servicer of liquidation
expenses to be incurred in connection with its disposal thereof, such appraisal
to be conducted by an appraiser mutually agreed upon by the Master Servicer and
the Trustee at the expense of the Master Servicer, and (ii) the final payment or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund (or the disposition of all REO Property in
respect thereof); provided, however, that in no event shall the trust created
hereby continue beyond the earlier of (i) the Distribution Date occurring in
April 2033 and (ii) the expiration of 21 years from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late ambassador of the
United States to the Court of St. James, living on the date hereof, and provided
further, that the purchase price set forth above shall be increased as is
necessary, as determined by the Master Servicer, to avoid disqualification of
any of REMIC 1 or REMIC 2 as a REMIC.
The right of the Master Servicer or its designee to repurchase all
Mortgage Loans pursuant to (i) above shall be conditioned upon the aggregate
Stated Principal Balance of such Mortgage Loans at the time of any such
repurchase aggregating an amount equal to or less than 5% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date. If such
right is exercised, the Master Servicer, upon such repurchase, shall provide to
the Trustee notice of such exercise prior to the Determination Date in the month
preceding the month of purchase and the certification required by Section 3.16.
Written notice of any termination, specifying the Distribution Date upon
which the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to the Certificateholders mailed (a) in the event such
notice is given in connection with the Master Servicer's election to repurchase,
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution or (b) otherwise during the month
of such final distribution on or before the Determination Date in such month, in
each case specifying (i) the Distribution Date upon which
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final payment of the Certificates will be made upon presentation and surrender
of Certificates at the office of the Trustee therein designated, (ii) the amount
of any such final payment and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Trustee
therein specified. In the event such notice is given in connection with the
Master Servicer or its designee's election to repurchase, the Master Servicer or
its designee shall deliver to the Trustee for deposit in the Certificate Account
on the Business Day immediately preceding the Distribution Date specified in
such notice an amount equal to the above-described repurchase price payable out
of its own funds. Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall first, pay itself the Trustee's Fees for
such Distribution Date and any other amounts owing to the Trustee under this
Agreement, and second, distribute to the Certificateholders (i) the amount
otherwise distributable on such Distribution Date, if not in connection with the
Master Servicer's election to repurchase, or (ii) if the Master Servicer elected
to so repurchase, an amount determined as follows: with respect to each Regular
Certificate (other than the Class A-IO Certificates and the Class A-3
Certificates), the outstanding Certificate Principal Balance thereof, plus with
respect to each Regular Certificate (other than the Class A-PO Certificates),
one month's interest thereon at the applicable Pass-Through Rate; and with
respect to the Class R Certificates, the Percentage Interest evidenced thereby
multiplied by the difference, if any, between the above described repurchase
price and the aggregate amount to be distributed to the Holders of the Regular
Certificates, subject to the priorities set forth in Section 4.01. Upon
certification to the Trustee by a Servicing Officer, following such final
deposit, the Trustee shall promptly release the Mortgage Files as directed by
the Master Servicer for the remaining Mortgage Loans, and the Trustee shall
execute all assignments, endorsements and other instruments required by the
Master Servicer as being necessary to effectuate such transfer.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned notice, the Trustee shall give a second notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within six months after the
second notice all of the Certificates shall not have been surrendered for
cancellation, the Trustee shall take reasonable steps as directed by the Company
in writing, or appoint an agent to take reasonable steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets which remain
subject hereto. If within nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto.
Section 9.02. Termination of REMIC 2.
REMIC 2 shall be terminated on the earlier of the Final Distribution Date
and the date on which it is deemed to receive the last deemed distributions on
the REMIC 1 Regular Interests and the last distribution due on the REMIC 2
Regular Interests and the Class R Certificates (in respect of the Class R-2
Interest) is made.
Section 9.03. Additional Termination Requirements.
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(a) In the event the Master Servicer or its designee repurchases the
Mortgage Loans as provided in Section 9.01, the Trust Fund shall be terminated
in accordance with the following additional requirements, unless the Master
Servicer, at its own expense, obtains for the Trustee an Opinion of Counsel to
the effect that the failure of the Trust Fund to comply with the requirements of
this Section 9.03 will not (i) result in the imposition on the Trust of taxes on
"prohibited transactions," as described in Section 860F of the Code, or (ii)
cause either REMIC 1 or REMIC 2 to fail to qualify as a REMIC at any time that
any Certificate is outstanding:
(i) The Trustee shall establish a 90-day liquidation period for
REMIC 1 and REMIC 2, as the case may be, and specify the first day of such
period in a statement attached to the Trust Fund's final Tax Return pursuant to
Treasury regulations Section 1.860F-1. The Trustee also shall satisfy all of the
requirements of a qualified liquidation for REMIC 1 and REMIC 2, as the case may
be, under Section 860F of the Code and regulations thereunder; and
(ii) The Master Servicer shall notify the Trustee at the
commencement of such 90-day liquidation period and, at or prior to the time of
making of the final payment on the Certificates, the Trustee shall sell or
otherwise dispose of all of the remaining assets of the Trust Fund in accordance
with the terms hereof.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Master Servicer as its attorney-in-fact to adopt a
plan of complete liquidation for REMIC 1 and REMIC 2 at the expense of the Trust
Fund in accordance with the terms and conditions of this Agreement.
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ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The Trustee shall make an election to treat the Trust Fund as two
REMICs under the Code and, if necessary, under applicable state law. Each such
election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC elections in respect of
the Trust Fund, (i) the Class R-1 Interest will constitute the sole class of
"residual interest" in REMIC 1, and (ii) the Class R-2 Interest will constitute
the sole class of "residual interest" in REMIC 2. The Master Servicer and the
Trustee shall not permit the creation of any "interests" (within the meaning of
Section 860G of the Code) in REMIC 1 or REMIC 2 other than the Uncertificated
REMIC 1 Regular Interests and the Class R-1 Interest (in the case of REMIC 1)
and the REMIC 2 "regular interests" and the Class R-2 Interest (in the case of
REMIC 2). The Trustee will apply for an Employee Identification Number from the
IRS via form SS-4 or any other acceptable method for each of REMIC 1 and REMIC
2.
(b) The Closing Date is hereby designated as the "startup day" of the
Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the REMICs
(including, but not limited to, any professional fees or any administrative or
judicial proceedings with respect to the REMICs that involve the Internal
Revenue Service or state tax authorities), other than the expense of obtaining
any tax-related Opinion of Counsel except as specified herein. The Trustee, as
agent for the REMICs' tax matters person, shall (i) act on behalf of the REMICs
in relation to any tax matter or controversy involving the Trust Fund and (ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. By their acceptance thereof, the holder of the largest Percentage
Interest of the Class R Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the REMICs.
(d) The Trustee shall prepare, sign and file all of the Tax Returns
(including Form 8811, which must be filed within 30 days of the Closing Date) in
respect of the REMICs created hereunder. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely basis to the Trustee or
its designee such information with respect to the assets of the REMICs as is in
its possession and reasonably required by the Trustee to enable it to perform
its obligations under this Article X.
(e) The Trustee shall perform on behalf of the REMICs all reporting and
other tax compliance duties that are the responsibility of the REMICs under the
Code, the REMIC Provisions or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
as required by the Code, the REMIC Provisions or other such compliance guidance,
the Trustee shall provide (i) to any Transferor of a Class R Certificate such
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information as is necessary for the application of any tax relating to the
transfer of a Class R Certificate to any Person who is not a Permitted
Transferee, (ii) to the Certificateholders such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of the REMICs. The Master Servicer shall provide on a timely
basis to the Trustee such information with respect to the assets of the REMICs,
including, without limitation, the Mortgage Loans, as is in its possession and
reasonably required by the Trustee to enable it to perform its obligations under
this subsection. In addition, the Company shall provide or cause to be provided
to the Trustee, within ten (10) days after the Closing Date, all information or
data that the Trustee reasonably determines to be relevant for tax purposes as
to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.
(f) The Trustee shall take such action and shall cause the REMICs created
hereunder to take such action as shall be necessary to create or maintain the
status thereof as REMICs under the REMIC Provisions (and the Master Servicer
shall assist it, to the extent reasonably requested by it). The Trustee shall
not take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if taken
or not taken, as the case may be, could (i) endanger the status of the REMIC 1
or REMIC 2 as REMICs or (ii) result in the imposition of a tax upon the REMICs
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee has received an Opinion of Counsel, addressed to the Trustee
(at the expense of the party seeking to take such action but in no event at the
expense of the Trustee) to the effect that the contemplated action will not,
with respect to the REMICs created hereunder, endanger such status or result in
the imposition of such a tax, nor shall the Master Servicer take or fail to take
any action (whether or not authorized hereunder) as to which the Trustee has
advised it in writing that it has received an Opinion of Counsel to the effect
that an Adverse REMIC Event could occur with respect to such action. In
addition, prior to taking any action with respect to the REMICs or the assets of
the REMICs, or causing the REMICs to take any action, which is not contemplated
under the terms of this Agreement, the Master Servicer will consult with the
Trustee or its designee, in writing, with respect to whether such action could
cause an Adverse REMIC Event to occur with respect to the Trust Fund, and the
Master Servicer shall not take any such action or cause the Trust Fund to take
any such action as to which the Trustee has advised it in writing that an
Adverse REMIC Event could occur. The Trustee may consult with counsel to make
such written advice, and the cost of same shall be borne by the party seeking to
take the action not permitted by this Agreement, but in no event shall such cost
be an expense of the Trustee. At all times as may be required by the Code, the
Trustee will ensure that substantially all of the assets of the REMICs created
hereunder will consist of "qualified mortgages" as defined in Section 860G(a)(3)
of the Code and "permitted investments" as defined in Section 860G(a)(5) of the
Code.
(g) In the event that any tax is imposed on "prohibited transactions" of
the REMICs created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the REMICs as defined in Section
860G(c) of the Code, on any contributions to the REMICs after the Startup Day
therefor pursuant to Section 860G(d) of the Code, or any other tax
110
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise, (iii) to the Master Servicer as provided in Section 3.05 and (iv)
against amounts on deposit in the Certificate Account and shall be paid by
withdrawal therefrom to the extent not required to be paid by the Master
Servicer or the Trustee pursuant to another provision of this Agreement.
(h) On or before April 15 of each calendar year, commencing April 15,
2002, the Trustee shall deliver to the Master Servicer and the Rating Agency a
Certificate from a Responsible Officer of the Trustee stating the Trustee's
compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes, maintain books and
records with respect to the REMICs on a calendar year and on an accrual basis.
(j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to the REMICs other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the REMICs will not cause the REMIC 1 or REMIC 2 to
fail to qualify as REMICs at any time that any Certificates are outstanding or
subject either REMIC 1 or REMIC 2 to any tax under the REMIC Provisions or other
applicable provisions of federal, state and local law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which the REMICs will receive a fee or other compensation for
services nor permit the REMICs to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.
Section 10.02. Prohibited Transactions and Activities.
None of the Company, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of
REMIC 1 or REMIC 2 pursuant to Article IX of this Agreement, (iv) a substitution
pursuant to Article II of this Agreement or (v) a purchase of Mortgage Loans
pursuant to Article II or III of this Agreement), nor acquire any assets for the
Trust Fund (other than REO Property acquired in respect of a defaulted Mortgage
Loan), nor sell or dispose of any investments in the Custodial Account or the
Certificate Account for gain, nor accept any contributions to the REMICs after
the Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it has received an Opinion of Counsel,
addressed to the Trustee (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of REMIC 1
or REMIC 2 as REMICs or (b) cause the Trust Fund to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
111
Section 10.03. Master Servicer and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Company, and the
Master Servicer for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Company
or the Master Servicer, as a result of a breach of the Trustee's covenants set
forth in this Article X.
(b) The Master Servicer agrees to indemnify the Trust Fund, the Company
and the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Company
or the Trustee, as a result of a breach of the Master Servicer's covenants set
forth in Article III or this Article X, in each case with respect to compliance
with the REMIC Provisions.
112
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
This Agreement may be amended from time to time by the Company, the Master
Servicer and the Trustee, without the consent of any of the Certificateholders,
(i) to cure any ambiguity, (ii) to correct or supplement any provisions herein
which may be defective or inconsistent with any other provisions herein or to
correct any error, (iii) to amend this Agreement in any respect subject to the
provisions in clauses (A) and (B) below, or (iv) if such amendment, as evidenced
by an Opinion of Counsel (provided by the Person requesting such amendment)
delivered to the Trustee, is reasonably necessary to comply with any
requirements imposed by the Code or any successor or amendatory statute or any
temporary or final regulation, revenue ruling, revenue procedure or other
written official announcement or interpretation relating to federal income tax
laws or any proposed such action which, if made effective, would apply
retroactively to the Trust Fund at least from the effective date of such
amendment; provided that such action (except any amendment described in (iv)
above) shall not adversely affect in any material respect the interests of any
Certificateholder (other than Certificateholders who shall consent to such
amendment), as evidenced by (A) an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, and (B) a letter from each
Rating Agency, confirming that such amendment shall not cause it to lower its
rating on any of the Certificates.
This Agreement may also be amended from time to time by the Company, the
Master Servicer and the Trustee and Holders of Certificates entitled to at least
66-2/3% of the Voting Rights for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing at
least 66-2/3% of the Voting Rights of such Class, or (iii) reduce the aforesaid
percentage of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all Certificates then
outstanding. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 11.01,
Certificates registered in the name of the Seller or the Master Servicer or any
affiliate thereof shall be entitled to Voting Rights with respect to matters
described in (i), (ii) and (iii) of this paragraph.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (provided by the Person requesting such
amendment) to the effect that such amendment will not result in the imposition
of any tax on either REMIC 1 or REMIC 2 pursuant to the REMIC Provisions or
cause either REMIC 1 or REMIC 2 to fail to qualify as a REMIC at any time that
any Certificates are outstanding.
113
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment or a written statement describing the amendment
to each Certificateholder, with a copy to the Rating Agencies.
It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Prior to executing any amendment pursuant to this Section, the Trustee
shall be entitled to receive an Opinion of Counsel (provided by the Person
requesting such amendment) to the effect that such amendment is authorized or
permitted by this Agreement. The cost of any Opinion of Counsel delivered
pursuant to this Section 11.01 shall be an expense of the party requesting such
amendment, but in any case shall not be an expense of the Trustee.
The Trustee may, but shall not be obligated to, enter into any amendment
pursuant to this Section that affects its rights, duties and immunities under
this Agreement or otherwise.
Section 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Certificateholders, but only upon
direction of the Company accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or
114
members of an association; nor shall any Certificateholder be under any
liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a notice of an Event of Default, or of a default
by the Seller or the Trustee in the performance of any obligation hereunder, and
of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 51% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Section 11.04. Governing Law.
This Agreement and the Certificates shall be construed in accordance with
the laws of the State of New York and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
Section 11.05. Notices.
All demands, notices and direction hereunder shall be in writing and shall
be deemed effective upon receipt when delivered to (a) in the case of the
Company, Impac Funding, 1401 Dove Street, Newport Beach, California 92660,
Attention: General Counsel, or such other address as may hereafter be furnished
to the other parties hereto in writing; (b) in the case of Impac Funding, 1401
Dove Avenue, Newport Beach, California 92660, Attention: General Counsel, or
such other address as may hereafter be furnished to the other parties hereto in
writing; (c) in the case of the Trustee, to its Corporate Trust Office, or such
other address as may hereafter be furnished to the other parties hereto in
writing; or (d) in the case of the Rating Agencies, Standard & Poor's, 55 Water
Street, 41st Floor, New York, NY 10041 Attention: Residential Mortgage
Surveillance Group, or Moody's Investors Service, Inc., 99 Church Street, New
York, New York 10007. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
115
Section 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Trustee and the
Certificateholders.
Section 11.08. Article and Section Headings.
The article and Section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
Section 11.09. Notice to Rating Agencies.
The Trustee shall use its best efforts to promptly provide notice to each
Rating Agency referred to below with respect to each of the following of which
it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer or the Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant to Section
2.03;
5. The final payment to Certificateholders; and
6. Any change in the location of the Custodial Account or the Certificate
Account.
In addition, the Trustee shall promptly furnish to the Rating Agency
copies of each report to Certificateholders described in Section 4.02; and the
Master Servicer shall promptly furnish to the Rating Agency copies of each
annual independent public accountants' servicing report received as described in
Section 3.20.
Any such notice pursuant to this Section 11.09 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to, in the
case of Standard & Poor's, 55 Water Street, 41st Floor, New York, New York
10041, in the case of Moody's, 99 Church Street, New York, New York 10007, or,
in
116
each case, such other address as either such Rating Agency may designate in
writing to the parties thereto.
117
IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized all as of the day and year first above written.
IMPAC SECURED ASSETS CORP.,
Company
By: /s/ Richard J. Johnson
------------------------------------
Name: Richard J. Johnson
Title: Chief Financial Officer
IMPAC FUNDING CORPORATION,
Master Servicer
By: /s/ Lisa Duehring
------------------------------------
Name: Lisa Duehring
Title: Senior Vice President
DEUTSCHE BANK NATIONAL TRUST
COMPANY
Trustee
By: /s/ James F. Noriega
------------------------------------
Name: James F. Noriega
Title: Associate
By: /s/ Alan Sueda
------------------------------------
Name: Alan Sueda
Title: Associate
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 30th day of June 2003 before me, a notary public in and for said
State, personally appeared Richard J. Johnson, known to me to be the Chief
Financial Officer of Impac Secured Assets Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________________
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 30th day of June 2003, before me, a notary public in and for said
State, personally appeared Lisa Duehring, known to me to be a Senior Vice
President of Impac Funding Corporation, one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________________
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 30th day of June 2003, before me, a notary public in and for said
State, personally appeared James F. Noriega, known to me to be an Associate of
Deutsche Bank National Trust Company, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
________________________________
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 30th day of June 2003, before me, a notary public in and for said
State, personally appeared Alan Sueda, known to me to be an Associate of
Deutsche Bank National Trust Company, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
________________________________
Notary Public
[Notarial Seal]
EXHIBIT A
FORM OF CLASS [A-_] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
A-1
Certificate No.__ _____% Pass-Through Rate
Class A-____
Date of Pooling and Servicing Percentage Interest:____%
Agreement and Cut-off Date:
June 1, 2003
First Distribution Date: Aggregate Initial [Certificate Principal
July 25, 2003 Balance]
[Notional Amount] of the Class A-__
Certificates:
$_____________
Master Servicer: Initial [Certificate Principal
Impac Funding Corporation Balance] [Notional Amount] of this
Certificate:
$_____________
Assumed Final CUSIP:__________
Distribution Date:
August 25, 2033
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-2
evidencing a percentage interest in the distributions allocable to the
Class A- ___ Certificates with respect to a Trust Fund consisting
primarily of a pool of conforming one- to four-family fixed-rate first
lien mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Impac Secured Assets Corp.,
the Master Servicer, the Trustee referred to below or any of their affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Impac Secured Assets
Corp., the Master Servicer, the Trustee or any of their affiliates. None of the
Company, the Master Servicer or any of their affiliates will have any obligation
with respect to any certificate or other obligation secured by or payable from
payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate by the
aggregate Initial [Certificate Principal Balance] [Notional Amount] of all Class
A-____ Certificates, both as specified above) in certain distributions with
respect to the Trust Fund consisting primarily of an interest in a pool of
conventional one- to four-family fixed-rate first lien mortgage loans (the
"Mortgage Loans"), formed and sold by Impac Secured Assets Corp. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to a Pooling
and Servicing Agreement
A-2
dated as specified above (the "Agreement") among the Company, the Master
Servicer and Deutsche Bank National Trust Company, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the month immediately preceding
the month of such Distribution Date (the "Record Date"), from the Available
Distribution Amount in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount of [interest and] [principal], if
any, required to be distributed to Holders of Class A-____Certificates on such
Distribution Date.
Distributions on this Certificate will be made either by the Trustee or by
a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. The [Certificate Principal Balance] [Notional Amount] hereof will
be reduced to the extent of [distributions allocable to principal and] any
Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
A-3
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
A-4
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Aggregate
[Stated Principal Balance] [Notional Amount] of the Mortgage Loans as of the
Distribution Date upon which the proceeds of any such purchase are distributed
is less than five percent of the Aggregate [Stated Principal Balance] [Notional
Amount] of the Mortgage Loans at the Cut-off Date.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June __, 2003 DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-____ Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: _____________________________
________________________________________________________________________________
Dated: ___________________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
A-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________, as its agent.
A-8
EXHIBIT B-1
FORM OF CLASS M-_ CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, [THE CLASS M-1 CERTIFICATES] [AND THE CLASS M-2 CERTIFICATES] AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
B-1-1
Certificate No.______ _______% Pass-Through Rate
Class [M-_] Subordinate Aggregate Initial [Certificate Principal
Balance] [Notional Amount] of the Class
[M-__] Certificates:
$_____________
Date of Pooling and Servicing Initial [Certificate Principal Balance]
Agreement and Cut-off Date: [Notional Amount] of this Certificate:
June 1, 2003 $_____________
First Distribution Date: CUSIP:______________
July 25, 2003
Master Servicer:
Impac Funding Corporation
Assumed Final Distribution Date:
August 25, 2003
MORTGAGE PASS-THROUGH CERTIFICATE
Series 2003-2
evidencing a percentage interest in any distributions allocable to the
Class [M-__] Certificates with respect to the Trust Fund consisting
primarily of a pool of conforming one- to four-family fixed-rate first
lien mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Impac Secured Assets Corp.,
the Master Servicer, the Trustee referred to below or any of their affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Impac Secured Assets
Corp., the Master Servicer, the Trustee or any of their affiliates. None of the
Company, the Master Servicer or any of their affiliates will have any obligation
with respect to any certificate or other obligation secured by or payable from
payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate by the
aggregate Initial [Certificate Principal Balance] [Notional Amount] of all Class
[M-_] Certificates, both as specified above) in certain distributions with
respect to a Trust Fund consisting primarily of a pool of conforming one- to
four-family fixed-rate first lien mortgage loans (the "Mortgage Loans"), formed
and sold by Impac Secured Assets Corp. (hereinafter called the "Company," which
term includes any successor entity under the Agreement referred to below). The
Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above
B-1-2
(the "Agreement") among the Company, the Master Servicer and Deutsche Bank
National Trust Company, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the month immediately preceding
the month of such Distribution Date (the "Record Date"), from the Available
Distribution Amount in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest [and principal], if
any) required to be distributed to Holders of Class [M-__] Certificates on such
Distribution Date.
Distributions on this Certificate will be made either by the Trustee or by
a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. The [Certificate Principal Balance] [Notional Amount] hereof will
be reduced to the extent of [the distributions allocable to principal and] any
Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including
B-1-3
without limitation reimbursement to the Trustee, the Company and the Master
Servicer of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
B-1-4
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Aggregate
[Stated Principal Balance] [Notional Amount] of the Mortgage Loans as of the
Distribution Date upon which the proceeds of any such purchase are distributed
is less than five percent of the Aggregate [Stated Principal Balance] [Notional
Amount] of the Mortgage Loans at the Cut-off Date.
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
B-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June __, 2003 DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [M-_] Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
B-1-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: __________________________________________
________________________________________________________________________________
Dated: ___________________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
B-1-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________ Applicable statements should be mailed
to____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________, as its agent.
B-1-8
EXHIBIT B-2
FORM OF CLASS B-_ CERTIFICATES
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AND THE CLASS M CERTIFICATES [THE CLASS B-1 CERTIFICATES] [AND THE
CLASS B-2 CERTIFICATES], AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON WHICH IS A
PLAN OR USING ASSETS OF A PLAN, UNLESS THE TRANSFEREE PROVIDES EITHER A
CERTIFICATION PURSUANT TO SECTION 5.02(d) OF THE AGREEMENT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE IS
PERMISSIBLE UNDER LOCAL LAW AND WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL
NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
B-2-1
Certificate No. 1 _______% Pass-Through Rate
Class [B-_] Aggregate Initial [Certificate Principal
Balance] [Notional Amount] of the
Class [B-_] Certificates:
$_____________
Date of Pooling and Servicing Initial [Certificate Principal Balance]
Agreement and Cut-off Date: [Notional Amount]
June 1, 2003 of this Certificate ("Denomination"):
$_____________
First Distribution Date:
July 25, 2003
Master Servicer: CUSIP:
Impac Funding Corporation
Assumed Final Distribution Date: Percentage Interest of this Certificate:
August 25, 2003 100.00%
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-2
evidencing percentage interest in the distributions allocable to the Class
[B-_] Certificates with respect to a Trust Fund consisting primarily of a
pool of conforming one- to four- family fixed-rate first lien mortgage
loans formed and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Impac Secured Assets Corp.,
the Master Servicer, the Trustee referred to below or any of their affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Impac Secured Assets
Corp., the Master Servicer, the Trustee or any of their affiliates. None of the
Company, the Master Servicer or any of their affiliates will have any obligation
with respect to any certificate or other or obligation secured by or payable
from payments on the Certificates.
This certifies that ___________ is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate by the
aggregate Initial [Certificate Principal Balance] [Notional Amount] of all Class
[B-_] Certificates, both as specified above), in certain distributions with
respect to a Trust Fund consisting primarily of a pool of one- to four-family
fixed-rate first lien mortgage loans (the "Mortgage Loans"), formed and sold by
Impac Secured Assets Corp. (hereinafter called the "Company," which term
includes any successor entity under the Agreement referred to below). The
B-2-2
Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Company, the Master Servicer and
Deutsche Bank National Trust Company, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the month immediately preceding
the month of such Distribution Date (the "Record Date"), from the Available
Distribution Amount in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to Holders of Class [B-_] Certificates on such
Distribution Date.
Distributions on this Certificate will be made either by the Trustee or by
a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York.The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. The [Certificate Principal Balance] [Notional Amount] hereof will
be reduced to the extent of [the distributions allocable to principal and] any
Realized Losses allocable hereto.
No transfer of this Class [B-_] Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Trustee shall require an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee that such transfer is exempt
(describing the applicable exemption and the basis therefor) from or is being
made pursuant to the registration requirements of the Securities Act of 1933, as
amended, and of any applicable statute of any state and (ii) the transferee and
transferor shall execute a representation letter in the form described by the
Agreement. The Holder hereof desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Company, the Master Servicer and the
Certificate Registrar acting on behalf of the Trustee against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such Federal and state laws. In connection with any such transfer, the Trustee
will
B-2-3
also require either (i) an opinion of counsel acceptable to and in form and
substance as required by Section 5.02(c) of the Pooling Agreement and
satisfactory to the Trustee with respect to the permissibility of such transfer
under the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
and Section 4975 of the Internal Revenue Code (the "Code") and stating, among
other things, that the transferee's acquisition of a Class B-3 Certificate will
not constitute or result in a non-exempt prohibited transaction under Section
406 of ERISA or Section 4975 of the Code or (ii) a representation letter, in the
form as described by the Agreement, either stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan, or stating that the transferee is an insurance company, the
source of funds to be used by it to purchase the Certificate is an "insurance
company general account" (within the meaning of Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60), and the conditions set forth in
Sections I and III of PTCE 95-60 have been satisfied.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
B-2-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Aggregate
[Stated Principal Balance] [Notional Amount] of the Mortgage Loans as of the
Distribution Date upon which the proceeds of any such purchase are distributed
is less than five percent of the Aggregate [Stated Principal Balance] [Notional
Amount] of the Mortgage Loans at the Cut-off Date.
B-2-5
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
B-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June __, 2003 DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [B-_] Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
B-2-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: __________________________________________
________________________________________________________________________________
Dated: ___________________________________________________
Signature by or on behalf of assignor
B-2-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________________________,
for the account of ______________________________________________, account
number __________________, or, if mailed by check, to _________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or __________________________________________________,
as its agent.
B-2-9
EXHIBIT B-3
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES
PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"RESIDUAL INTEREST" IN ONE OR MORE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS" AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON WHICH IS A PLAN
OR USING PLAN ASSETS, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION
PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE MASTER SERVICER, THE COMPANY AND THE TRUSTEE THAT THE
PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY
OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AND SERVICING AGREEMENT (THE "AGREEMENT").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE
B-3-1
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL
FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE, EACH HOLDER OF THIS CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.
B-3-2
Certificate No. 1 _______% Pass-Through Rate
Class R Senior
Date of Pooling and, Servicing Percentage Interest: 100.00%
Agreement and Cut-off Date:
June 1, 2003
First Distribution Date: Aggregate Initial [Certificate Principal
July 25, 2003 Balance] [Notional Amount] of the
Class R Certificates:
$_____________
Master Servicer: Initial [Certificate Principal Balance]
Impac Funding Corporation [Notional Amount] of this
Class R Certificates:
$_____________
Assumed Final Distribution Date: CUSIP:
August 25, 2003
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-2
evidencing a percentage interest in any distributions allocable to the
Class R Certificates with respect to a Trust Fund consisting primarily of
a pool of one- to four-family fixed-rate first lien mortgage loans formed
and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Impac Secured Assets Corp.,
the Master Servicer, the Trustee referred to below or any of their affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Impac Secured Assets
Corp., the Master Servicer, the Trustee or any of their affiliates. None of the
Company, the Master
B-3-3
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate stated above in certain
distributions with respect to a Trust Fund, consisting primarily of a pool of
one- to four-family fixed-rate first lien mortgage loans (the "Mortgage Loans"),
formed and sold by Impac Secured Assets Corp. (hereinafter called the "Company,"
which term includes any successor entity under the Agreement referred to below).
The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") among the Company, the Master Servicer and
Deutsche Bank National Trust Company, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the month immediately preceding
the month of such Distribution Date (the "Record Date"), from the Available
Distribution Amount in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount of interest and principal, if any ,
required to be distributed to Holders of Class R Certificates on such
Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
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forth above. The [Certificate Principal Balance] [Notional Amount] hereof will
be reduced to the extent of [distributions allocable to principal] and any
Realized Losses allocable hereto. Notwithstanding the reduction of the
[Certificate Principal Balance] [Notional Amount] hereof to zero, this
Certificate will remain outstanding under the Agreement and the Holder hereof
may have additional obligations with respect to this Certificate, including tax
liabilities, and may be entitled to certain additional distributions hereon, in
accordance with the terms and provisions of the Agreement.
In connection with any transfer of this Certificate, the Trustee will also
require either (i) an opinion of counsel acceptable to and in form and substance
as required by Section 5.02(c) of the Pooling Agreement and satisfactory to the
Trustee with respect to the permissibility of such transfer under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and Section 4975 of
the Internal Revenue Code (the "Code") and stating, among other things, that the
transferee's acquisition of a Class R Certificate will not constitute or result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code or (ii) a representation letter, in the form as described by
the Agreement, stating that the transferee is not an employee benefit or other
plan subject to the prohibited transaction provisions of ERISA or Section 4975
of the Code (a "Plan"), or any other person (including an investment manager, a
named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive
B-3-5
and binding on such Holder and upon all future holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain
circumstances without the consent of the Holders of any of the Certificates and,
in certain additional circumstances, without the consent of the Holders of
certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an, assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein ,set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property
B-3-6
acquired in respect of any Mortgage Loan or (ii) purchase in whole, but not in
part, all of the Certificates from the Holders thereof; provided, that any such
option may only be exercised if the Aggregate [Stated Principal Balance]
[Notional Amount] of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than five percent of
the Aggregate [Stated Principal Balance] [Notional Amount] of the Mortgage Loans
at the Cut-off Date.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purpose have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
B-3-7
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June __, 2003 DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
B-3-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________
Dated: _________________
___________________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________________________,
for the account of ______________________________________________, account
number __________________, or, if mailed by check, to __________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by __________________________________________
the assignee named above, or ___________________________________________________
as its agent.
B-3-10
EXHIBIT B-4
FORM OF CLASS P CERTIFICATE
SOLELY FOR U S FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINEDRESPECT1VELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(d) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE
OF THIS CERTIFICATE IS PERMISSIBLE UNDER LOCAL LAW, WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO
ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
B-4-1
Certificate No. 1 ____% Initial Pass-Through Rate
Class P Senior Aggregate Initial [Certificate Principal
Balance] [Notional Amount] of the Class
P Certificates:
$_____________
Date of Pooling and Servicing Initial [Certificate Principal Balance]
[Notional Amount]
Agreement and Cut-off Date: of this Certificate:
June 1, 2003 $_____________
First Distribution Date CUSIP: _____________
July 25, 2003
Master Servicer
Impac Funding Corporation
Assumed Final Distribution Date:
August 25, 2003
MORTGAGE PASS-THROUGH CERTIFICATE
Series 2003-2
evidencing a percentage interest in any distributions allocable to the
Class P Certificates with respect to the Trust Fund consisting primarily
of a pool of one- to four-family fixed-rate first lien mortgage loans
formed and sold by IMPAC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Impac Secured Assets Corp.,
the Master Servicer, the Trustee referred to below or any of their affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Impac Secured Assets
Corp., the Master Servicer, the Trustee or any of their affiliates. None of the
Company, the Master Servicer or any of their affiliates will have any obligation
with respect to any certificate or other obligation secured by or payable from
payments on the Certificates
This certifies that______ is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate by the
aggregate Initial [Certificate Principal Balance] [Notional Amount] of all Class
P Certificates, both as specified above), in certain distributions with respect
to a Trust Fund consisting primarily of a pool of one- to four-family fixed-rate
first lien mortgage loans (the "Mortgage Loans"), formed and sold by Impac
Secured Assets Corp. (hereinafter called the
B-4-2
"Company," which term includes any successor entity under the Agreement referred
to below). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as specified above (the "Agreement") among the Company, the
Master Servicer and Deutsche Bank National Trust Company, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the Distribution Date") described in the Agreement,
to the Person in whose name this certificate is registered at the c1ose of
business on the last Business Day of the month immediately, preceding the month
of such Distribution Date (the "Record Date"), from the Available Distribution
Amount in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to Holders of Class P Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Trustee or by
a Paying Agent appointed by the Trustee either in immediately available funds
(by transfer or otherwise) for the account of the Person entitled thereto if
such Person shall have so notified the Trustee or such Paying Agent at least 5
Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. The [Certificate Principal Balance] [Notional Amount] hereof will
be reduced to the extent of the [distributions allocable to principal and] any
Realized Losses allocable hereto.
No transfer of this Class P Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event that such a transfer is to be made, (i) the
Trustee shall require an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee that such transfer is exempt (describing
the applicable exemption and the basis therefor) from or is being made pursuant
to the registration requirements of the Securities Act of 1933, as amended, and
of any applicable statute of any state and (ii) the transferee and transferor
shall execute a representation letter in the form described by the Agreement.
The Holder hereof desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee, the Company, the Master Servicer and the Certificate
Registrar acting on behalf of the Trustee against any liability that may result
if the transfer is not so exempt or is not made in
B-4-3
accordance with such Federal and state laws. In connection with any such
transfer, the Trustee will also require either (i) an opinion of counsel
acceptable to and in form and substance as required by Section 5.02(c) of the
Pooling Agreement and satisfactory to the Trustee with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class P Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, either
stating that the transferee is not an employee benefit or other plan subject to
the prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
further holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for
B-4-4
registration of transfer at the offices or agencies appointed by the Trustee,
duly endorsed by, or accompanied by an assignment m the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Aggregate
Stated Principal Balance of the Mortgage Loans as of the Distribution Date upon
which the proceeds of any such purchase are distributed is less than five
percent of the Aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
B-4-5
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
B-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June __, 2003 DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
James F. Noriega
Associate
CERTIFICATE OF AUTHENTICATION
This is one of the Class P Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK NATIONAL
TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
James F. Noriega
Associate
B-4-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: _____________________________
________________________________________________________________________________
________________________________________________________________________________
Dated: ___________________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
B-4-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _______________________________________ for the account of
_________________________________ account number __________________, or, if
mailed by check, to _______________________________________ Applicable
statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________, the assignee named
above, or _____________________, as its agent.
B-4-9
EXHIBIT C
FORM OF TRUSTEE'S INITIAL CERTIFICATION
June__, 2003
Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660
Re: Pooling and Servicing Agreement, dated as of June 1, 2003 among
Impac Secured Assets Corp., Impac Funding Corporation, and Deutsche
Bank National Trust Company, Mortgage Pass-Through Certificates
Series 2003-2
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto) it has reviewed the
Mortgage File and the Mortgage Loan Schedule and has determined that: (i) all
documents required to be included in the Mortgage File are in its possession;
(ii) such documents have reviewed by it and appear regular on their face and
relate to such Mortgage Loan; and (iii) base on examination by it, and only as
to such documents, the information set forth in items (i), (ii), (iii) (iv) of
the definition or description of "Mortgage Loan Schedule" is correct.
The trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan, or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.
C-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
DEUTSCHE BANK NATIONAL
TRUST COMPANY
By:_____________________________________
Name:
Title:
C-2
EXHIBIT D
FORM OF TRUSTEE FINAL CERTIFICATION
________, 2003
Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660
Re: Pooling and Servicing Agreement, dated as of June 1, 2003 among
Impac Secured Assets Corp., Impac Funding Corporation, and Deutsche
Bank National Trust Company, Mortgage Pass-Through Certificates
Series 2003-2
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto) it has received the
documents set forth in Section 2.01.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in, the above-captioned Pooling and Servicing
Agreement.
DEUTSCHE BANK NATIONAL
TRUST COMPANY
By:_____________________________________
Name:
Title:
D-1
EXHIBIT E
FORM OF REMITTANCE REPORT
(Provided Upon Request)
E-1
EXHIBIT F-1
REQUEST FOR RELEASE
(for Trustee)
Loan Information
Name of Mortgagor: __________________________
Master Servicer
Loan No.: __________________________
Trustee
Name: __________________________
Address: __________________________
__________________________
Trustee
Mortgage File No.: __________________________
Request for Requesting Documents (check one):
1. Mortgage Loan Liquidated.
(The Master Servicer hereby certifies that all proceeds of
foreclosure, insurance or other liquidation have been finally
received and deposited into the Custodial Account to the
extent required pursuant to the Pooling and Servicing
Agreement.)
2. Mortgage Loan in Foreclosure.
3. Mortgage Loan Repurchased Pursuant to Section 9.01 of the Pooling
and Servicing Agreement.
4. Mortgage Loan Repurchased Pursuant to Article II of the Pooling and
Servicing Agreement.
(The Master Servicer hereby certifies that the repurchase
price has been deposited into the Custodial Account pursuant
to the Pooling and Servicing Agreement.)
F-1-1
5. Other (explain).
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from the Trustee for the Holders of Mortgage Pass-Through Certificates,
Series 2003-2, the documents referred to below (the "Documents"). All
capitalized terms not otherwise defined in this Request for Release shall have
the meanings given them in the Pooling and Servicing Agreement, dated as of June
1, 2003 (the "Pooling and Servicing Agreement"), among Impac Secured Assets
Corp., Impac Funding Corporation and the Trustee.
( ) Promissory Note dated _________________, 200_, in the original
principal sum of $__________, made by __________________, payable
to, or endorsed to the order of, the Trustee.
( ) Mortgage recorded on _________________________ as instrument no.
___________ in the County Recorders Office of the County of
______________________, State of _____________________ in
book/reel/docket of official records at page/image _______________.
( ) Deed of Trust recorded on ____________________ as instrument
no._____________ in the County Recorder's Office of the County of
______________________, State of _____________________in
book/reel/docket __________________ of official records at
page/image ________________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_______________ as instrument no. ______________ in the County
Recorder's Office of the County of ________________, State of
___________________ in book/reel/docket ____________ of official
records at page/image ___________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) __________________________
( ) __________________________
( ) __________________________
F-1-2
( ) __________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of
the Documents in trust for the benefit of the Trustee, solely for
the purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit
the Documents to become subject to, or encumbered by, any claim,
liens, security interest, charges, writs of attachment or other
impositions nor shall the Master Servicer assert or seek to assert
any claims or rights of setoff to or against the Documents or any
proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Custodian when
the need therefor no longer exists, unless the Mortgage Loan
relating to the Documents has been liquidated and the proceeds
thereof have been remitted to the Custodial Account and except as
expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of
the Trustee, and the Master Servicer shall keep the Documents and
any proceeds separate and distinct from all other property in the
Master Servicer's possession, custody or control.
IMPAC FUNDING CORPORATION
By: ____________________________________
Title: _________________________________
Date: _________________, 200_
F-1-3
EXHIBIT F-2
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2003-2
_____________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN OFFICER
OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER SIGNATURE,
AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER: _________________________ BORROWER'S NAME: _______________________
COUNTY: ______________________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE CUSTODIAL ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
_________ ____________ DATED: _____________________
|_| VICE PRESIDENT
|_| ASSISTANT VICE PRESIDENT
F-2-1
EXHIBIT G-1
FORM OF INVESTOR REPRESENTATION LETTER
___________,200__
Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660
Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2003-2
Re: Impac Secured Assets Corp. Mortgage Pass-Through Certificates
Series 2003-2, Class
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ______________
(the "Seller") $_________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 2003-2, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of June 1, 2003 among Impac Secured Assets
Corp., as company (the "Company"), Impac Funding Corporation, as master servicer
and Deutsche Bank National Trust Company, as trustee (the "Trustee"). All terms
used herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Purchaser hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. The Purchaser understands that (a) the Certificates have
not been and will not be registered or qualified under the
Securities Act of 1933, as amended (the "Act") or any state
securities law, (b) the Company is not required to so register or
qualify the Certificates, (c) the Certificates may be resold only if
registered and qualified pursuant to the provisions of the Act or
any state securities law, or if an exemption from such registration
and qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the
Certificates and (e) the Certificates will bear a legend to the
foregoing effect.
2. The Purchaser is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution
G-1-1
thereof in any manner that would violate the Act or any applicable
state securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Certificates, such that it is
capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of
Rule 501 (a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review (a) [a copy of the Private Placement
Memorandum, dated June 30, 2003, relating to the Certificates (b)] a
copy of the Pooling and Servicing Agreement and [(b)] [(c)] such
other information concerning the Certificates, the Mortgage Loans
and the Company as has been requested by the Purchaser from the
Company or the Seller and is relevant to the Purchaser's decision to
purchase the Certificates. The Purchaser has had any questions
arising from such review answered by the Company or the Seller to
the satisfaction of the Purchaser. [If the Purchaser did not
purchase the Certificates from the Seller in connection with the
initial distribution of the Certificates and was provided with a
copy of the Private Placement Memorandum (the "Memorandum") relating
to the original sale (the "Original Sale") of the Certificates by
the Company, the Purchaser acknowledges that such Memorandum was
provided to it by the Seller, that the Memorandum was prepared by
the Company solely for use in connection with the Original Sale and
the Company did not participate in or facilitate in any way the
purchase of the Certificates by the Purchaser from the Seller, and
the Purchaser agrees that it will look solely to the Seller and not
to the Company with respect to any damage, liability, claim or
expense arising out of, resulting from or in connection with (a)
error or omission, or alleged error or omission, contained in the
Memorandum, or (b) any information, development or event arising
after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or
will it authorize any person to (a) offer, pledge, sell, dispose of
or otherwise transfer any Certificate, any interest in any
Certificate or any other similar security to any person in any
manner, (b) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other similar
security with any person in any manner, (d) make any general
solicitation by means of general advertising or in any other manner
or (e) take any other action, that (as to any of (a) through (e)
above) would constitute a distribution of any Certificate under the
Act, that would render the disposition of any Certificate a
violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant
G-1-2
thereto. The Purchaser will not sell or otherwise transfer any of
the Certificates, except in compliance with the provisions of the
Pooling and Servicing Agreement.
Very truly yours,
________________________________________
(Purchaser)
By:_____________________________________
Name:___________________________________
Title:__________________________________
G-1-3
EXHIBIT G-2
FORM OF TRANSFEROR REPRESENTATION LETTER
______________,200___
Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660
Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2003-2
Re: Impac Secured Assets Corp. Mortgage Pass-Through Certificates,
Series 2003-2, Class
Ladies and Gentlemen:
In connection with the sale by ___________ (the "Seller") to ________ (the
"Purchaser") of $_________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 2003-2, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of June 1, 2003 among Impac Secured Assets
Corp., as company (the "Company"), Impac Funding Corporation, as master servicer
and Deutsche Bank National Trust Company, as trustee (the "Trustee"). The Seller
hereby certifies, represents and warrants to, a covenants with, the Company and
the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the
G-2-1
foregoing sentence with respect to any Certificate. The Seller has not and will
not sell or otherwise transfer any of the Certificates, except in compliance
with the provisions of the Pooling and Servicing Agreement.
Very truly yours,
________________________________________
(Seller)
By:_____________________________________
Name:___________________________________
Title:__________________________________
G-2-2
EXHIBIT G-3
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 2003-2, Class ____, No. ____
The undersigned seller, as registered holder (the "Transferor"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Transferor hereby certifies the following facts: Neither the Transferor nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the
Transferor, the Trustee and the Master Servicer pursuant to Section 5.02 of the
Pooling and Servicing Agreement as follows:
a. The Buyer understands that the Rule 144A Securities have
not been registered under the 1933 Act or the securities laws of any
state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of investment in the Rule 144A Securities.
G-3-1
c. The Buyer has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Transferor,
the Trustee or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or
any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with
respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Rule 144A Securities under
the 1933 Act or that would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner
with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term
is defined in Rule 144 under the 1933 Act and has completed either
of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the account of other qualified
institutional buyers, understands that such Rule 144 Securities may
be resold, pledged or transferred only (i) to a person reasonably
believed to be a qualified institutional buyer that purchases for
its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is
being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the 1933 Act.
3. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
G-3-2
IN WITNESS WHEREOF, each of the parties has executed this document
as of the date set forth below.
____________________________________ ________________________________________
Print Name of Transferor Print Name of Buyer
By:_________________________________ By:_____________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.__________________________ No.____________________________
Date:________________________ Date:__________________________
G-3-3
ANNEX 1 TO EXHIBIT G-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $____________________(1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
____ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised
by the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statement, a copy of which is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has
an audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements.
- ----------
(1) Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least $10,000,000
in securities.
G-3-4
____ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar official
or agency of a State, territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Adviser. The Buyer is an investment adviser registered under
the Investment Advisers Act of 1940.
____ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
____ Business Development Company. The Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
____ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the meaning
of Title I of the Employee Retirement Income Security Act of 1974, but is
not a trust fund that includes as participants individual retirement
accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in
G-3-5
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Buyer's direction. However, such
securities were not included if the Buyer is a majority-owned, consolidated
subsidiary of another enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that,
in connection with any purchase of securities sold to the Buyer for the account
of a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice is given, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification as of the date of such purchase.
________________________________________
Print Name of Buyer
By:_____________________________________
Name:
Title:
Date:___________________________________
G-3-6
ANNEX 2 TO EXHIBIT G-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $_______________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $____________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
G-3-7
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
________________________________________
Print Name of Buyer
By:_____________________________________
Name:
Title:
IF AN ADVISER:
________________________________________
Print Name of Buyer
________________________________________
Date:
G-3-8
EXHIBIT G-4
FORM OF TRANSFEROR CERTIFICATE
______________, 200__
Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660
Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa A, California 92705
Attention: Impac Secured Assets Corp. Series 2003-2
Re: Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 2003-2, Class R
Ladies and Gentlemen:
This letter is delivered to you in connection with the sale by
________________________ (the "Seller") to ___________________________________
(the "Purchaser") of a ____% Percentage Interest in the Mortgage Pass-Through
Certificates, Series 2003-2, Class R (the "Certificates"), issued pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of June 1, 2003, among Impac Secured Assets Corp., as
company (the "Company"), Impac Funding Corporation, as master servicer and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meaning set forth in the Pooling
and Servicing Agreement. The Seller hereby certifies, represents and warrants
to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the sale of the Certificates
by the Seller to the Purchaser is or will be to impede the assessment or
collection of any tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee and the Master Servicer a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit G-5. The Seller does
not know or believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-
G-4-1
1(c)(4)(i) and, as a result of that investigation, the Seller has determined
that the Purchaser has historically paid its debts as they have become due and
has found no significant evidence to indicate that the Purchaser will not
continue to pay its debts as they become due in the future. The Seller
understands that the transfer of the Certificates may not be respected for
United States income tax purposes (and the Seller may continue to be liable for
United States income taxes associated therewith) unless the Seller has conducted
such an investigation.
4. The Seller has no actual knowledge that the proposed Transferee
is a Disqualified Organization, an agent of a Disqualified Organization or a
Non-United States Person.
Very truly yours,
________________________________________
(Seller)
By:_____________________________________
Name:___________________________________
Title:__________________________________
G-4-2
EXHIBIT G-5
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
:ss.:
COUNTY OF )
___________________, being first duly sworn, deposes, represents and
warrants:
1. That he/she is [Title of Officer] of [Name of Owner], a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of __________] [the United States], (the "Owner"), (record or beneficial
owner of the Class R Certificates (the "Class R Certificates") on behalf of
which he/she makes this affidavit and agreement). This Class R Certificates were
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") dated as of June 1, 2003 among Impac Secured Assets Corp.,
as company, Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee").
2. That the Owner (i) is not and will not be a "disqualified organization"
as of _____________ [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) will
endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Class R Certificates, and (iii) is
acquiring the Class R Certificates for its own account or for the account of
another Owner from which it has received an affidavit and agreement in
substantially the same form as this affidavit and agreement. (For this purpose,
a "disqualified organization" means the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality all of the activities of which are subject to tax
and, except for Freddie Mac, a majority of whose board of directors is not
selected by any such governmental entity) or any foreign government,
international organization or any agency or instrumentality of such foreign
government or organization, any rural electric or telephone cooperative, or any
organization (other than certain farmers' cooperatives) that is generally exempt
from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge
G-5-1
that the affidavit is false; and (iv) that the Class R Certificates may be
"noneconomic residual interests" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through entity"
holding Class R Certificates if at any time during the taxable year of the
pass-through entity a disqualified organization is the record holder of an
interest in such entity. (For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. That the Owner is aware that the Trustee will not register the transfer
of any Class R Certificates unless the transferee, or the transferee's agent,
delivers to it an affidavit and agreement, among other things, in substantially
the same form as this affidavit and agreement. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. That the Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 5.02(f) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event the Owner holds such Certificates in
violation of Section 5.02(f)). The Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.
7. That the Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is not a disqualified organization.
8. The Owner's Taxpayer Identification Number is _____________________.
9. This affidavit and agreement relates only to the Class R Certificates
held by the owner and not to any other holder of the Class R Certificates. The
Owner understands that the liabilities described herein relate only to the Class
R Certificates.
10. That no purpose of the Owner relating to the transfer of any of the
Class R Certificates by the Owner is or will be to impede the assessment or
collection of any tax.
11. That the Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the
G-5-2
Class R Certificate that the Owner intends to pay taxes associated with holding
such Class R Certificate as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Class R
Certificate.
12. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class R Certificates remain outstanding.
13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, provided that
with respect to any partnership or other entity treated as a partnership for
United States federal income tax purposes, all persons that own an interest in
such partnership either directly or through any entity that is not a corporation
for United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate or trust whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States.
14. (a) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101
or otherwise under ERISA, and (iii) will not be transferred to any entity that
is deemed to be investing in plan assets within the meaning of the DOL
regulation, 29 C.F.R. ss. 2510.3-101 or otherwise under ERISA; or
(b) The Owner will provide the Trustee, the Company and the Master
Servicer with an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Company and the Master Servicer to the effect
that the purchase of Certificates is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Trustee, the Company or the
Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Pooling and Servicing Agreement.
In addition, the Owner hereby certifies, represents and warrants to, and
covenants with, the Company, the Trustee and the Master Servicer that the Owner
will not transfer such Certificates to any Plan or person unless either such
Plan or person meets the requirements set forth in either (a) or (b) above.
G-5-3
Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
G-5-4
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this _______ day of
_____________, _____.
[NAME OF OWNER]
By:_____________________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
________________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known or
proved to me to be the same person who executed the foregoing instrument and to
be the [Title of Officer] of the Owner, and acknowledged to me that such person
executed the same as such person's free act and deed and the free act and deed
of the Owner.
Subscribed and sworn before me this ____ day of ___________, 200__.
________________________________________
NOTARY PUBLIC
COUNTY OF_______________________________
STATE OF________________________________
My Commission expires the ____ day of
__________ ,200__.
EXHIBIT G-6
FORM OF ERISA INVESTOR REPRESENTATION LETTER
________, 200__
Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660
Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2003-2
Re: Impac Secured Assets Corp.
Mortgage Pass-Through Certificates, Series 2003-2, Class [B-1][B-2]
[B-3]
Ladies and Gentlemen:
_______________ (the "Purchaser") intends to purchase from __________ (the
"Seller") $____________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 2003-2, Class __ (the "Certificate"), issued
pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of June 1, 2003, among Impac Secured Assets Corp., as
company (the "Company"), Impac Funding Corporation, as master servicer and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Purchaser hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. The Certificates purchased pursuant hereto are not being, and will not
be transferred to any employee benefit plan or other retirement arrangement
including individual retirement accounts and Keogh plans that is subject to
Section 406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986 (the "Code") (any
of the foregoing, a "Plan"), or to a trustee or anyone acting on behalf of any
Plan or to any other person who is using "plan assets" of any Plan to effect
such acquisition; or
G-6-1
2. The purchase of such Certificate is permissible under applicable law,
will not constitute or result in any non-exempt prohibited transaction under
ERISA or Section 4975 of the Code, will not subject the Company, the Trustee or
the Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement and the following conditions are satisfied: (i) the
transferee is an insurance company and the source of funds used to purchase such
Certificates is an "insurance company general account" (as such term is defined
in Prohibited Transaction Class Exemption ("PTCE") 95-60), (ii) the conditions
set forth in Sections I and III of PTCE 95-60 have been satisfied and (iii)
there is no Plan with respect to which the amount of such general account's
reserves and liabilities for contracts held by or on behalf of such Plan and all
other Plans maintained by the same employer (or any "affiliate" thereof, as
defined in PTCE 95-60) or by the same employee organization exceeds 10% of the
total of all reserves and liabilities of such general account (as determined
under PTCE 95-60) as of the date of the acquisition of such Certificates.
Very truly yours,
_________________________ (Purchaser)
By:_____________________________________
Name:___________________________________
Title:__________________________________
G-6-2
EXHIBIT H
MORTGAGE LOAN SCHEDULE
(Filed Manually)
EXHIBIT I
SELLER REPRESENTATIONS AND WARRANTIES
Seller's Representations Assigned by Company to Trustee
Representations and Warranties. Pursuant to the Mortgage Loan Purchase
Agreement, the Seller has made certain representations and warranties to the
Company. The Seller shall confirm such representations and warranties and shall
deliver a Seller's Warranty Certificate and an Officers' Certificate on the
Closing Date (i) reaffirming such representations and warranties and (ii)
specifically restating and reaffirming the following representations and
warranties as of such date. The following representations are, pursuant to the
Pooling and Servicing Agreement, assigned by the Company to the Trustee for the
benefit of the Certificateholders, together with the related repurchase rights
specified in the Mortgage Loan Purchase Agreement. Pursuant to the Mortgage Loan
Purchase Agreement, the Seller's Warranty Certificate and related Officer's
Certificate, the Seller affirms each such representation and warranty and
agrees, consents to and acknowledges the assignment thereof to the Trustee. All
capitalized terms herein shall have the meanings assigned in the Pooling and
Servicing Agreement and the Seller's Warranty Certificate, as applicable.
The Seller hereby represents and warrants to the Company and Trustee, as
to each Mortgage Loan, that as of the Closing Date or as of such other date
specifically provided herein:
(i) the information set forth in the Mortgage Loan Schedule hereto is true
and correct in all material respects;
(ii) the terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, (i) if required by law in the jurisdiction where the
Mortgaged Property is located, or (ii) to protect the interests of the
Trustee on behalf of the Certificateholders;
(iii) the Mortgage File for each Mortgage Loan contains a true and
complete copy of each of the documents contained in such Mortgage File,
including all amendments, modifications and, if applicable, waivers and
assumptions that have been executed in connection with such Mortgage Loan;
(iv) immediately prior to the transfer to the Purchaser, the Seller was
the sole owner of beneficial title and holder of each Mortgage and
Mortgage Note relating to the Mortgage Loans and is conveying the same
free and clear of any and all liens, claims, encumbrances, participation
interests, equities, pledges, charges or security interests of any nature
and the Seller has full right and authority to sell or assign the same
pursuant to this Agreement;
I-1
(v) each Mortgage is a valid and enforceable first lien on the property
securing the related Mortgage Note and each Mortgaged Property is owned by
the Mortgagor in fee simple (except with respect to common areas in the
case of condominiums, PUDs and de minimis PUDs) or by leasehold for a term
longer than the term of the related Mortgage, subject only to (i) the lien
of current real property taxes and assessments, (ii) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions being
acceptable to mortgage lending institutions generally or specifically
reflected in the appraisal obtained in connection with the origination of
the related Mortgage Loan or referred to in the lender's title insurance
policy delivered to the originator of the related Mortgage Loan and (iii)
other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage;
(vi) no payment of principal of or interest on or in respect of any
Mortgage Loan is 30 or more days past due;
(vii) there is no mechanics' lien or claim for work, labor or material
affecting the premises subject to any Mortgage which is or may be a lien
prior to, or equal with, the lien of such Mortgage except those which are
insured against by the title insurance policy referred to in (xii) below;
(viii) as of the Cut-off Date, (i) no Mortgage Loan had been 30 days or
more delinquent more than once during the preceding 12 months, (ii) no
Mortgage Loan had been delinquent for 60 days or more during the preceding
12 months and (iii) to Seller's knowledge, there was no delinquent tax or
assessment lien against the property subject to any Mortgage, except where
such lien was being contested in good faith and a stay had been granted
against levying on the property;
(ix) there is no valid offset, defense or counterclaim to any Mortgage
Note or Mortgage, including the obligation of the Mortgagor to pay the
unpaid principal and interest on such Mortgage Note;
(x) to Seller's knowledge, except to the extent insurance is in place
which will cover such damage, the physical property subject to any
Mortgage is free of material damage and is in good repair and there is no
proceeding pending or threatened for the total or partial condemnation of
any Mortgaged Property;
(xi) to the best of Seller's knowledge, each Mortgage Loan at the time it
was made complied in all material respects with applicable state and
federal laws, including, without limitation, usury, equal credit
opportunity and disclosure laws; and each Mortgage Loan is being serviced
in all material respects in accordance with applicable state and federal
laws, including, without limitation, usury, equal credit opportunity and
disclosure laws;
I-2
(xii) a lender's title insurance policy (on an ALTA or CLTA form) or
binder, or other assurance of title customary in the relevant jurisdiction
therefor in a form acceptable to Fannie Mae or Freddie Mac, was issued on
the date that each Mortgage Loan was created by a title insurance company
which, to the best of Seller's knowledge, was qualified to do business in
the jurisdiction where the related Mortgaged Property is located, insuring
the Seller and its successors and assigns that the Mortgage is a first
priority lien on the related Mortgaged Property in the original principal
amount of the Mortgage Loan. Seller is the sole insured under such
lender's title insurance policy, and such policy, binder or assurance is
valid and remains in full force and effect, and each such policy, binder
or assurance shall contain all applicable endorsements including a
negative amortization endorsement, if applicable;
(xiii) in the event the Mortgage constitutes a deed of trust, either a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage
or if no duly qualified trustee has been properly designated and so
serves, the Mortgage contains satisfactory provisions for the appointment
of such trustee by the holder of the Mortgage at no cost or expense to
such holder, and no fees or expenses are or will become payable by
Purchaser to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the mortgagor;
(xiv) (i) the Loan-to-Value Ratio of each Mortgage Loan at origination was
not more than _______ %; (ii) except with respect to approximately ______%
of the Mortgage Loans (by aggregate outstanding principal balance as of
the Cut-off Date), each Mortgage Loan with a Loan-to-Value Ratio at
origination in excess of 80.00% will be insured by one of the following:
(i) a Primary Insurance Policy issued by a private mortgage insurer or
(ii) a Radian Lender-Paid PMI Policy. Each Primary Insurance Policy will
insure against default under each insured Mortgage Note as follows: (i)
for which the outstanding principal balance at origination of such
Mortgage Loan is greater than or outstanding principal balance at
origination of such Mortgage Loan is greater than or equal to 80.01% and
up to and including 90.00% of the lesser of the Appraised Value and the
sales price, such Mortgage Loan is covered by a Primary Insurance Policy
in an amount equal to at least 12.00% of the Allowable Claim and (ii) for
which the outstanding principal balance at origination of such Mortgage
Loan exceeded 90.00% of the lesser of the Appraised Value and the sales
price, such Mortgage Loan is covered by a Primary Insurance Policy in an
amount equal to at least 30.00% of the Allowable Claim. Each Radian
Lender-Paid PMI Policy will insure against default under each insured
Mortgage Note related to a covered Mortgage Loan as follows: (A) for which
the outstanding principal balance at origination of such Mortgage Loan is
at least 80.01 % and up and including 89.99% of the lesser of the
Appraised Value and the sales price, such Mortgage Loan is covered by such
Radian Lender-Paid PMI Policy in an amount equal to at least 22.00% of the
Allowable Claim, (B) for which the outstanding principal balance at
origination of such Mortgage Loan is at least 90.00% and up to and
including 95.00% of the lesser of the Appraised Value and the sales price,
such Mortgage Loan is covered by such Radian Lender-Paid PMI Policy in an
amount equal to at least
I-3
25.00% of the Allowable Claim and (C) for which the outstanding principal
balance at origination of such Mortgage Loan is at least 95.01% and up to
and including 97.00% of the lesser of the Appraised Value and the sales
price, such Mortgage Loan is covered by such Radian Lender-Paid PMI Policy
in an amount equal to at least 35.00% of the Allowable Claim. The
"Appraised Value" is the appraised value of the related Mortgaged Property
at the time of origination of such Mortgage Loan. The "Allowable Claim"
for any Mortgage Loan covered by a Primary Insurance Policy or a Radian
PMI Pool Policy is the current principal balance of such Mortgage Loan
plus accrued interest and allowable expenses at the time of the claim;
(xv) at the time of origination, each Mortgaged Property was the subject
of an appraisal which conforms to the Seller's underwriting requirements,
and a complete copy of such appraisal is contained in the Mortgage File;
(xvi) on the basis of a representation by the borrower at the time of
origination of the Mortgage Loans, at least _______% of the Mortgage Loans
(by aggregate principal balance) will be secured by Mortgages on
owner-occupied primary residence properties;
(xvii) neither the Seller nor any servicer of the related Mortgage Loans
has advanced funds or knowingly received any advance of funds by a party
other than the Mortgagor, directly or indirectly, for the payment of any
amount required by the Mortgage, except for (i) interest accruing from the
date of the related Mortgage Note or date of disbursement of the Mortgage
Loan proceeds, whichever is later, to the date which precedes by 30 days
the first Due Date under the related Mortgage Note, and (ii) customary
advances for insurance and taxes;
(xviii) each Mortgage Note, the related Mortgage and other agreements
executed in connection therewith are genuine, and each is the legal, valid
and binding obligation of the maker thereof, enforceable in accordance
with its terms except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in
equity or at law); and, to the best of Seller's knowledge, all parties to
each Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage has
been duly and properly executed by the Mortgagor;
(xix) to the extent required under applicable law, each conduit seller and
subsequent mortgagee or servicer of the Mortgage Loans was authorized to
transact and do business in the jurisdiction in which the related
Mortgaged Property is located at all times when it held or serviced the
Mortgage Loan; and any obligations of the holder of the related Mortgage
Note, Mortgage and other loan documents have been complied with in all
material respects; servicing of each Mortgage Loan has been in accordance
with the servicing standard set forth in Section 3.01 of the Pooling and
Servicing Agreement and the terms of the Mortgage Notes, the Mortgage and
other loan documents, whether the creation of such Mortgage Loan
I-4
and servicing was done by the Seller, its affiliates, or any third party
which created the Mortgage Loan on behalf of, or sold the Mortgage Loan
to, any of them, or any servicing agent of any of the foregoing;
(xx) the related Mortgage Note and Mortgage contain customary and
enforceable provisions such as to render the rights and remedies of the
holder adequate for the realization against the Mortgaged Property of the
benefits of the security, including realization by judicial, or, if
applicable, non judicial foreclosure, and, to Seller's knowledge, there is
no homestead or other exemption available to the Mortgagor which would
interfere with such right to foreclosure;
(xxi) except with respect to holdbacks required by certain Mortgage Loans
which holdbacks create a fund for (i) the repair of Mortgaged Property due
to damage from adverse weather conditions, or (ii) the completion of new
construction, or both, the proceeds of the Mortgage Loans have been fully
disbursed, there is no requirement for future advances thereunder and any
and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with; and all costs, fees and expenses incurred in making,
closing or recording the Mortgage Loan have been paid, except recording
fees with respect to Mortgages not recorded as of the Closing Date;
(xxii) as of the Closing Date, the improvements on each Mortgaged Property
securing a Mortgage Loan is insured (by an insurer which is acceptable to
the Seller) against loss by fire and such hazards as are covered under a
standard extended coverage endorsement in the locale in which the
Mortgaged Property is located, in an amount which is not less than the
lesser of the maximum insurable value of the improvements securing such
Mortgage Loan or the outstanding principal balance of the Mortgage Loan,
but in no event in an amount less than an amount that is required to
prevent the Mortgagor from being deemed to be a co-insurer thereunder; if
the improvement on the Mortgaged Property is a condominium unit, it is
included under the coverage afforded by a blanket policy for the
condominium project; if upon origination of the related Mortgage Loan, the
improvements on the Mortgaged Property were in an area identified as a
federally designated flood area, a flood insurance policy is in effect in
an amount representing coverage not less than the least of (i) the
outstanding principal balance of the Mortgage Loan, (ii) the restorable
cost of improvements located on such Mortgaged Property or (iii) the
maximum coverage available under federal law; and each Mortgage obligates
the Mortgagor thereunder to maintain the insurance referred to above at
the Mortgagor's cost and expense;
(xxiii) there is no monetary default existing under any Mortgage or the
related Mortgage Note and there is no material event which, with the
passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach or event of acceleration; and
neither the Seller, any of its affiliates nor any servicer of any related
Mortgage Loan has taken any action to waive any default, breach or event
of acceleration;
I-5
no foreclosure action is threatened or has been commenced with respect to
the Mortgage Loan;
(xxiv) to Seller's knowledge, no Mortgagor, at the time of origination of
the applicable Mortgage, was a debtor in any state or federal bankruptcy
or insolvency proceeding;
(xxv) each Mortgage Loan was originated or funded by (a) a savings and
loan association, savings bank, commercial bank, credit union, insurance
company or similar institution which is supervised and examined by a
federal or state authority (or originated by (i) a subsidiary of any of
the foregoing institutions which subsidiary is actually supervised and
examined by applicable regulatory authorities or (ii) a mortgage loan
correspondent of any of the foregoing and that was originated pursuant to
the criteria established by any of the foregoing) or (b) a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to
sections 203 and 211 of the National Housing Act, as amended;
(xxvi) all inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property
and, with respect to the use and occupancy of the same, including, but not
limited to, certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate authorities;
(xxvii) to Seller's knowledge, the Mortgaged Property and all improvements
thereon comply with all requirements of any applicable zoning and
subdivision laws and ordinances;
(xxviii) no instrument of release or waiver has been executed in
connection with the Mortgage Loans, and no Mortgagor has been released, in
whole or in part, except in connection with an assumption agreement which
has been approved by the primary mortgage guaranty insurer, if any, and
which has been delivered to the Trustee;
(xxix) except with respect to __________% of the Mortgage Loans (by
aggregate principal balance) which provide for a balloon payment, each
Mortgage Note contains provisions providing for its full amortization by
the end of its original term and is payable on the first day of each month
in monthly installments of principal and interest, with interest payable
in arrears, over an original term of not more than 30 years;
(xxx) no Mortgage Loan was originated based on an appraisal of the related
Mortgaged Property made prior to completion of construction of the
improvements thereon unless a certificate of completion was obtained prior
to closing of the Mortgage Loan;
(xxxi) each of the Mortgaged Properties consists of a single parcel of
real property with a detached single-family residence erected thereon, or
a two- to four-family dwelling, or an individual condominium unit in a
condominium project or a townhouse, a condohotel, an individual unit in a
PUD or an individual unit in a de minimis PUD;
I-6
(xxxii) no Mortgaged Property consists of a single parcel of real property
with a cooperative housing development erected thereon. Any condominium
unit, PUD or de minimis PUD conforms with Progressive Loan Series Program
requirements regarding such dwellings or is covered by a waiver confirming
that such condominium unit, PUD or de minimis PUD is acceptable to the
Seller;
(xxxiii) as of the Cut-off Date, the Mortgage Rate of each Mortgage Loan
was not less than _______% per annum and not more than _________% per
annum, and the weighted average Mortgage Rate of the Mortgage Loans was
approximately ____________% per annum;
(xxxiv) measured by principal balance, no more than ________% ofthe
Mortgage Loans are secured by an individual unit in a condominium project
or hi-rise, and at least________% of the Mortgage Loans are secured by
real property with a detached single-family residence erected thereon,
including de minimis PUDs;
(xxxv) as of the Cut-off Date, the remaining term to scheduled maturity of
each Mortgage Loan is not less than ____ months and not more than [360]
months;
(xxxvi) as of the Cut-off Date, no more than _________% (by aggregate
principal balance) of the Mortgage Loans are cash-out refinances;
(xxxvi) as of the Cut-off Date, no more than ___________% (by aggregate
principal balance) of the Mortgage Loans are rate and term refinances;
(xxxviii) as of the Cut-off Date, no fewer than _______% (by aggregate
principal balance) of the Mortgage Loans are purchase money loans;
(xxxix) as of the Cut-off Date, no more than __________% and ______% of
the Mortgage Loans (by aggregate principal balance) are secured by
properties located in the states of California and [Florida],
respectively;
(xl) as of the Cut-off Date, the principal balances of the Mortgage Loans
range from approximately $_________ to approximately $___________, and the
average unpaid principal balance is $___________.
(xli) with respect to Mortgaged Properties at the time of origination of
the related Mortgage Loans, measured by aggregate unpaid principal balance
as of the Cut-off Date, at least ________% of the Mortgaged Properties are
owner occupied primary residences, no more than ____________% of the
Mortgaged Properties are second homes and no more than ________% of the
Mortgaged Properties are investor owned properties;
(xlii) as of the Cut-off Date, none of the Mortgage Loans (by aggregate
principal balance) are Buydown Mortgage Loans;
I-7
(xliii) each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(xliv) with respect to each Mortgage Loan directly originated by the
Seller (and not through a third-party broker or other third party) as of
the Closing Date, to the best of Seller's knowledge, there has been no
fraud, misrepresentation or dishonesty with respect to the origination of
any Mortgage Loan;
(xlv) no selection procedure reasonably believed by the Seller to be
adverse to the interests of the Certificateholders was utilized in
selecting the Mortgage Loans;
(xlvi) no Mortgage Loan is subject to the Home Ownership and Equity
Protection Act of 1994 or any comparable state law;
(xlvii) no proceeds from any Mortgage Loan were used to finance
single-premium credit insurance policies; and
(xlviii) no Mortgage Loan provides for payment of a Prepayment Charge on
Principal Prepayments made more than five years from the date of the first
contractual Due Date of the related Mortgage Loan.
I-8
EXHIBIT J
FORM OF NOTICE UNDER SECTION 3.24 OF POOLING AND SERVICING AGREEMENT
June __, 2003
Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Re: Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Series 2003-2
Pursuant to Section 3.25 of the Pooling and Servicing Agreement,
dated as of June 1, 2003, relating to the Certificates referenced above, the
undersigned does hereby notify you that:
(a) The prepayment assumption used in pricing the Certificates with
respect to the Mortgage Loans in Series 2003-2 consisted of a Prepayment
Assumption (the "Prepayment Assumption") of 100% per annum.
(b) With respect to each Class of Certificates comprising the
captioned series, set forth below is (i), the first price, as a percentage of
the Certificate Principal Balance or Notional Amount of each Class of
Certificates, at which 10% of the aggregate Certificate Principal Balance or
Notional Amount of each such Class of Certificates was first sold at a single
price, if applicable, or (ii) if more than 10% of a Class of Certificates have
been sold but no single price is paid for at least 10% of the aggregate
Certificate Principal Balance or Notional Amount of such Class of Certificates,
then the weighted average price at which the Certificates of such Class were
sold expressed as a percentage of the Certificate Principal Balance or Notional
Amount of such Class of Certificates, (iii) if less than 10% of the aggregate
Certificate Principal Balance or Notional Amount of a Class of Certificates has
been sold, the purchase price for each such Class of Certificates paid by
Countrywide Securities Corporation (the "Underwriter"), expressed as a
percentage of the Certificate Principal Balance or Notional Amount of such Class
of Certificates calculated by: (1) estimating the fair market value of each such
Class of Certificates as of June 1, 2003; (2) adding such estimated fair market
value to the aggregate purchase prices of each Class of Certificates described
in clause (i) or (ii) above; (3) dividing each of the fair market values
determined in clause (1) by the sum obtained in clause (2); (4) multiplying the
quotient obtained for each Class of Certificates in clause (3) by the purchase
price paid by the Underwriter for all the Certificates purchased by it; and (5)
for each Class of Certificates, dividing the product obtained from such Class of
Certificates in clause (4) by the initial Certificate Principal Balance or
Notional Amount of such Class of Certificates or (iv) the fair market value (but
not less than zero) as of the Closing Date of each
J-1
Certificate of each Class of Certificates retained by the Company or an
affiliate corporation, or delivered to the seller:
Series 2003-2
Class A-1: ____%
Class A-2: ____%
Class A-3: ____%
Class A-4: ____%
Class A-PO: ____%
Class A-IO: ____%
Class R: ____%
Class P: ____%
Class M-1: ____%
Class M-2: ____%
Class M-3: ____%
Class B-1: ____%
Class B-2: ____%
Class B-3: ____%
The prices and values set forth above do not include accrued
interest with respect to periods before the closing.
IMPAC SECURED ASSETS CORP.
By:_____________________________________
Name:
Title:
J-2
EXHIBIT K
IMPAC SERVICING GUIDE
(Provided Upon Request)
K-1
EXHIBIT L
SCHEDULE OF DISCOUNT FRACTIONS
(Provided Upon Request)
L-1
EXHIBIT M-1
FORM CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER
WITH FORM 10-K
Re: Impac Secured Assets Corp.,
Mortgage Pass-Through Certificates, Series 2003-2
I, [Identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all reports
on Form 8-K containing distribution or servicing reports filed in respect of
periods included in the year covered by this annual report, of Impac Secured
Assets Corp. (the "Registrant");
2. Based on my knowledge, the information in these reports, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be
provided to the Trustee by the Master Servicer under the Agreement for inclusion
in these reports is included in these reports;
4. I am responsible for reviewing the activities performed by the
Master Servicer under the Agreement and based upon my knowledge and the annual
compliance review required under the Agreement, and except as disclosed in the
reports, the Master Servicer has fulfilled its obligations under the Agreement;
and
5. The reports disclose all significant deficiencies relating to the
Master Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
as set forth in the Agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the Trustee].
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2003 (the
"Agreement"), among Impac Secured Assets Corp., as Company, Impac Funding
Corporation, as Master Servicer, and Deutsche Bank National Trust Company, as
Trustee.
M-1-1
IMPAC FUNDING CORPORATION
By:_____________________________________
Name:
Title:
Date:
M-1-2
EXHIBIT M-2
FORM CERTIFICATION TO BE
PROVIDED TO MASTER SERVICER BY THE INDENTURE TRUSTEE
Re: Impac Secured Assets Corp.,
Mortgage Pass-Through Certificates, Series 2003-2
I, [Identify the certifying individual], a [______________] of
Deutsche Bank National Trust Company, as Trustee, hereby certify to Impac
Funding Corporation and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal
year [__], and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report, of the
Issuer relating to the above-referenced trust;
2. Based on my knowledge, the information in these distribution
reports prepared by the Trustee, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the period covered by that
annual report; and
3. Based on my knowledge, the distribution information required to
be provided by the Trustee under the Agreement is included in these distribution
reports.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2003 (the
"Agreement"), among Impac Secured Assets Corp., as Company, Impac Funding
Corporation, as Master Servicer, and Deutsche Bank National Trust Company, as
Trustee.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:_____________________________________
Name:
Title:
Date:
M-2-1
EXHIBIT M-3
FORM CERTIFICATION TO BE
PROVIDED TO MASTER SERVICER BY THE TRUSTEE
Re: Impac Secured Assets Corp.,
Mortgage Pass-Through Certificates, Series 2003-2
I, [Identify the certifying individual], a [_________________] of
Deutsche Bank National Trust Company, as Trustee, hereby certify to Impac
Funding Corporation and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. Based on my knowledge, the distribution information required to
be provided by the Trustee under the Agreement is included in these distribution
reports.
Capitalized terms used but not defined herein have the meanings ascribed
to them in the Pooling and Servicing Agreement, dated June 1, 2003 (the
"Agreement"), among Impac Secured Assets Corp., as Company, Impac Funding
Corporation, as Master Servicer, and Deutsche Bank National Trust Company, as
Trustee.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:_____________________________________
Name:
Title:
Date:
M-3-1