================================================================================
INDYMAC MBS, INC.
Depositor
INDYMAC BANK, F.S.B.
Seller and Servicer
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
----------------------------------------
RESIDENTIAL ASSET SECURITIZATION TRUST
Series 2006-A12
MORTGAGE PASS-THROUGH CERTIFICATES
Series 2006-L
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S>
<C>
<C>
<C>
ARTICLE ONE
DEFINITIONS............................................................................................................5
Section 1.01
Definitions.........................................................................................5
Section 1.02
Rules of
Construction..............................................................................34
ARTICLE TWO CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES..........................................................36
Section 2.01
Conveyance of Mortgage
Loans.......................................................................36
Section 2.02
Acceptance by the Trustee of the Mortgage
Loans....................................................39
Section 2.03
Representations, Warranties, and Covenants of the Seller and the
Servicer..........................41
Section 2.04
Representations and Warranties of the Depositor as to the Mortgage
Loans...........................42
Section 2.05
Delivery of Opinion of Counsel in Connection with
Substitutions....................................42
Section 2.06
Execution and Delivery of
Certificates.............................................................43
Section 2.07
REMIC
Matters......................................................................................43
ARTICLE THREE ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS......................................................................44
Section 3.01
Servicer to Service Mortgage
Loans.................................................................44
Section 3.02
[Reserved].........................................................................................45
Section 3.03
Rights of the Depositor and the Trustee in Respect of the
Servicer.................................45
Section 3.04
[Reserved].........................................................................................45
Section 3.05
Trustee to Act as
Servicer.........................................................................45
Section 3.06
Collection of Mortgage Loan Payments; Servicing Accounts;
Collection Account; Certificate
Account; Distribution
Account......................................................................45
Section 3.07
Collection of Taxes, Assessments and Similar Items; Escrow
Accounts................................49
Section 3.08
Access to Certain Documentation and Information Regarding the
Mortgage Loans.......................49
Section 3.09
Permitted Withdrawals from the Certificate Account and the
Distribution Account....................50
Section 3.10
Maintenance of Hazard Insurance; Maintenance of Primary Insurance
Policies.........................51
Section 3.11
Enforcement of Due-On-Sale Clauses; Assumption
Agreements..........................................52
Section 3.12
Realization Upon Defaulted Mortgage
Loans..........................................................53
Section 3.13
Trustee to Cooperate; Release of Mortgage
Files....................................................55
Section 3.14
Documents, Records and Funds in Possession of the Servicer to be
Held for the Trustee..............56
Section 3.15
Servicing
Compensation.............................................................................56
Section 3.16
Access to Certain
Documentation....................................................................57
Section 3.17
Annual Statement as to
Compliance..................................................................57
Section 3.18
Errors and Omissions Insurance; Fidelity
Bonds.....................................................57
Section 3.19
[Reserved].........................................................................................57
Section 3.20
Prepayment
Charges.................................................................................57
ARTICLE FOUR DISTRIBUTIONS AND ADVANCES BY THE
SERVICER...........................................................................59
i
<PAGE>
Section 4.01
Advances...........................................................................................59
Section 4.02
Priorities of
Distribution.........................................................................60
Section
4.03
[Reserved].........................................................................................64
Section 4.04
[Reserved].........................................................................................64
Section 4.05
Allocation of Realized
Losses......................................................................64
Section 4.06
Monthly Statements to
Certificateholders...........................................................65
Section 4.07
[Reserved].........................................................................................68
Section 4.08
[Reserved].........................................................................................68
Section 4.09
Determination of Pass-Through Rates for LIBOR
Certificates.........................................68
ARTICLE FIVE THE
CERTIFICATES.....................................................................................................70
Section 5.01
The
Certificates...................................................................................70
Section 5.02
Certificate Register; Registration of Transfer and Exchange of
Certificates........................70
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates..................................................74
Section 5.04
Persons Deemed
Owners..............................................................................74
Section 5.05
Access to List of Certificateholders' Names and
Addresses..........................................75
Section 5.06
Maintenance of Office or
Agency....................................................................75
ARTICLE SIX THE DEPOSITOR AND THE
SERVICER........................................................................................76
Section 6.01
Respective Liabilities of the Depositor and the
Servicer...........................................76
Section 6.02
Merger or Consolidation of the Depositor or the
Servicer...........................................76
Section 6.03
Limitation on Liability of the Depositor, the Seller, the Servicer,
and Others.....................76
Section 6.04
Limitation on Resignation of the
Servicer..........................................................77
ARTICLE SEVEN
DEFAULT.............................................................................................................78
Section 7.01
Events of
Default..................................................................................78
Section 7.02
Trustee to Act; Appointment of
Successor...........................................................79
Section 7.03
Notification to
Certificateholders.................................................................81
ARTICLE EIGHT CONCERNING THE
TRUSTEE..............................................................................................82
Section 8.01
Duties of the
Trustee..............................................................................82
Section 8.02
Certain Matters Affecting the
Trustee..............................................................82
Section 8.03
Trustee Not Liable for Certificates or Mortgage
Loans..............................................84
Section 8.04
Trustee May Own
Certificates.......................................................................84
Section 8.05
Trustee's Fees and
Expenses........................................................................84
Section 8.06
Eligibility Requirements for the
Trustee...........................................................85
Section 8.07
Resignation and Removal of the
Trustee.............................................................85
Section 8.08
Successor
Trustee..................................................................................86
Section 8.09
Merger or Consolidation of the
Trustee.............................................................87
Section 8.10
Appointment of Co-Trustee or Separate
Trustee......................................................87
Section 8.11
Tax
Matters........................................................................................88
ARTICLE NINE
TERMINATION..........................................................................................................91
Section 9.01
Termination upon Liquidation or Purchase of the Mortgage
Loans.....................................91
ii
<PAGE>
Section 9.02
Final Distribution on the
Certificates.............................................................91
Section 9.03
Additional Termination
Requirements................................................................92
ARTICLE TEN MISCELLANEOUS
PROVISIONS..............................................................................................94
Section 10.01
Amendment..........................................................................................94
Section 10.02
Recordation of Agreement;
Counterparts.............................................................95
Section 10.03
Governing
Law......................................................................................96
Section 10.04
Intention of
Parties...............................................................................96
Section 10.05
Notices............................................................................................96
Section 10.06
Severability of
Provisions.........................................................................97
Section 10.07
Assignment.........................................................................................97
Section 10.08
Limitation on Rights of
Certificateholders.........................................................97
Section 10.09
Inspection and Audit
Rights........................................................................98
Section 10.10
Certificates Nonassessable and Fully
Paid..........................................................98
Section 10.11
Official
Record....................................................................................98
Section 10.12
Protection of
Assets...............................................................................99
Section 10.13
Qualifying Special Purpose
Entity..................................................................99
ARTICLE ELEVEN EXCHANGE ACT
REPORTING............................................................................................100
Section 11.01
Filing
Obligations................................................................................100
Section 11.02 Form
10-D
Filings.................................................................................100
Section 11.03 Form
8-K
Filings..................................................................................101
Section 11.04 Form
10-K
Filings.................................................................................101
Section 11.05
Sarbanes-Oxley
Certification......................................................................102
Section 11.06 Form 15
Filing....................................................................................102
Section 11.07
Report on Assessment of Compliance and
Attestation................................................102
Section 11.08 Use
of
Subcontractors.............................................................................104
Section 11.09
Amendments........................................................................................104
iii
<PAGE>
SCHEDULES
Schedule I:
Mortgage Loan
Schedule................................................................................S-I-1
Schedule II:
Representations and Warranties of the
Seller/Servicer................................................S-II-1
Schedule III:
Representations and Warranties as to the Mortgage
Loans.............................................S-III-1
Schedule IV:
[Reserved]...........................................................................................S-IV-1
Schedule V:
Form of Monthly
Report................................................................................S-V-1
EXHIBITS
Exhibit A:
Form of Senior Certificate (other than the Notional Amount
Certificates)................................A-1
Exhibit B:
Form of Subordinated
Certificate........................................................................B-1
Exhibit C:
Form of Class A-R
Certificate...........................................................................C-1
Exhibit D:
Form of Notional Amount
Certificate.....................................................................D-1
Exhibit E:
Form of Reverse of
Certificates.........................................................................E-1
Exhibit F:
Form of Class P
Certificates............................................................................F-1
Exhibit G-1:
Form of Initial Certification of Trustee
.............................................................G-1-1
Exhibit G-2:
Form of Delay Delivery
Certification..................................................................G-2-1
Exhibit H:
Form of Final Certification of
Trustee..................................................................H-1
Exhibit I:
Form of Transfer
Affidavit..............................................................................I-1
Exhibit J:
Form of Transferor
Certificate..........................................................................J-1
Exhibit K:
Form of Investment Letter (Non-Rule
144A)...............................................................K-1
Exhibit L:
Form of Rule 144A
Letter................................................................................L-1
Exhibit M:
Form of Request for Release (for
Trustee)...............................................................M-1
Exhibit N:
Request for Release of
Documents........................................................................N-1
Exhibit O:
[Reserved]..............................................................................................O-1
Exhibit P:
[Reserved]..............................................................................................P-1
Exhibit Q
[Reserved]..............................................................................................Q-1
iv
<PAGE>
Exhibit R:
Form of Performance Certification
(Trustee).............................................................R-1
Exhibit S:
Compliance
Statement....................................................................................S-1
Exhibit T:
List of 1119
Parties....................................................................................T-1
Exhibit U:
Form of Sarbanes-Oxley Certification (Replacement of
Servicer)..........................................U-1
</TABLE>
v
<PAGE>
THIS
POOLING AND SERVICING AGREEMENT, dated as of September 1, 2006,
among INDYMAC MBS, INC., a Delaware corporation, as depositor
(the
"Depositor"), IndyMac Bank, F.S.B. ("IndyMac"), a federal savings
bank, as
seller (in that capacity, the "Seller") and as Servicer (in that
capacity, the
"Servicer"), and Deutsche Bank National Trust Company, a national
banking
association, as trustee (the "Trustee"),
W I T N E
S S E T H T H A T
In
consideration of the mutual agreements set forth in this
Agreement,
the parties agree as follows:
P R E L I M I N A R Y S T A T E M E N T
The
Depositor is the owner of the Trust Fund that is hereby conveyed
to
the Trustee in return for the Certificates. The Trust Fund for
federal income
tax purposes will consist of two REMICs (the "Lower Tier REMIC" and
the
"Master REMIC"). Each Certificate, other than the Class A-R
Certificate, will
represent ownership of one or more regular interests in the Master
REMIC for
purposes of the REMIC Provisions. The Class A-R Certificate
represents
ownership of the sole class of residual interest in each REMIC
created
hereunder. The Master REMIC will hold as assets the Lower Tier
REMIC Regular
Interests. The Lower Tier REMIC will hold as assets all property of
the Trust
Fund other than the interests in the Lower Tier REMIC. For federal
income tax
purposes, each Certificate (other than the Class A-R Certificate)
is hereby
designated as a regular interest in the Master REMIC and each Lower
Tier REMIC
Regular Interest, as defined below, is designated as a regular
interest in the
Lower Tier REMIC. The latest possible maturity date of all REMIC
regular
interests created in this Agreement shall be the Latest Possible
Maturity
Date. All amounts in respect of waived Prepayment Charges paid by
the Servicer
to the Class P Certificates pursuant to the second paragraph of
Section 3.20
will be treated as paid directly by the Servicer to the Class P
Certificates
and not as paid by or through any REMIC created hereunder.
Lower Tier REMIC
The
following table sets forth characteristics of the Lower Tier
REMIC
Regular Interests:
<TABLE>
<CAPTION>
============================= ========================
==================== ==============================
=========================
Lower Tier REMIC Regular
Allocation of
Interest
Principal Balance
Pass-Through Rate
Interest
Allocation of Principal
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
<S>
<C>
<C>
<C>
<C>
LT-A-1
(1)
6.25%
Class A-1
Class A-1
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-A-2
(1)
6.25%
Class A-2
Class A-2
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-A-3
(1)
6.25%
Class A-3, A-4
Class A-3
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-PO
(1)
0.00%
Class PO
Class PO
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-A-X
(1)
6.25%
Class A-X
Class A-X
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-$100
(1)
6.25%
Class A-R
Class A-R
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-B-1
(1)
6.25%
Class B-1
Class B-1
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-B-2
(1)
6.25%
Class B-2
Class B-2
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-B-3
(1)
6.25%
Class B-3
Class B-3
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-B-4
(1)
6.25%
Class B-4
Class B-4
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-B-5
(1)
6.25%
Class B-5
Class B-5
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-B-6
(1)
6.25%
Class B-6
Class B-6
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-P
(1)
N/A(2)
N/A
Class P
----------------------------- ------------------------
-------------------- ------------------------------
-------------------------
LT-R(3)
N/A
N/A
N/A
N/A
============================= ========================
==================== ==============================
=========================
</TABLE>
1
<PAGE>
(1) For each
Distribution Date, following the allocation of scheduled
principal,
Principal Prepayments and Realized Losses, the principal
balance
for each such Lower Tier REMIC Regular Interest will be the
principal
balance in respect of the corresponding Class of Certificates
(or the
sum of the principal balances if there is more than one
corresponding Class) set forth under the Column titled "Allocation
of
Principal". The notional principal balance of the Class LT-A-X
Interest
will be
the principal balance of the Non-Discount Mortgage Loans.
(2) The LT-P
Interest will not be entitled to any interest, but will be
entitled
to 100% of any Prepayment Charges paid on the Mortgage Loans.
(3) The Class
LT-R Interest is the sole class of residual interest in the
Lower Tier
REMIC and will not be entitled to distributions of principal
or
interest.
The Master REMIC
The
following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in
excess
thereof in which such Classes shall be issuable (except that one
Certificate
of each Class of Certificates may be issued in a different
amount):
<TABLE>
<CAPTION>
========================== ==============================
======================= ========================
======================
Class Designation
Initial Class Certificate
Pass-Through Rate Minimum
Denomination Integral
Multiples
Balance
in Excess of Minimum
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
<S>
<C>
<C>
<C>
<C>
Class A-1
$289,176,000
6.25%
$
25,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class A-2
$22,259,000
6.25%
$
25,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class A-3
$37,407,000
6.00%
$
25,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class A-4
Notional (1)
0.25%
$
25,000 (2)
$1,000 (2)
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class PO
$917,300
N/A (3)
$
25,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class A-X
Notional (4)
6.25%
$
25,000 (2)
$1,000 (2)
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class A-R
$100.00
6.25%
$
100
N/A
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class B-1
$10,475,000
6.25%
$
25,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class B-2
$4,863,000
6.25%
$
25,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class B-3
$2,619,000
6.25%
$
25,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class B-4
$2,806,000
6.25%
$ 100,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class B-5
$2,057,000
6.25%
$ 100,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class B-6
$1,495,523
6.25%
$ 100,000
$1,000
-------------------------- ------------------------------
----------------------- ------------------------
----------------------
Class P
$100.00
N/A(5)
$
100
N/A
========================== ==============================
======================= ========================
======================
</TABLE>
(1) The Class
A-4 Certificates will be Notional Amount Certificates, will
have no
Class Certificate Balance and will bear interest on its
Notional
Amount,
which will be $37,407,000 for the initial Interest Accrual
Period.
(2) Denomination
is based on Notional Amount.
(3) The Class PO
Certificates are Principal Only Certificates and are not
entitled
to receive distributions of interest.
(4) The Class
A-X Certificates will be Notional Amount Certificates, will
have no
Class Certificate Balance and will bear interest on its
Notional
Amount,
which will be $39,564,940 for the initial
2
<PAGE>
Interest
Accrual Period. For federal income tax purposes, the Class A-X
Certificates will be entitled to 100% of the Class LT-A-X
Regular
Interest
cash flow.
(5) The Class P
Certificate will not be entitled to any interest, but will
be
entitled to 100% of any Prepayment Charges paid on the Mortgage
Loans. For
federal income tax purposes, the Class P Certificate will be
entitled
to 100% of the Class LT-P Regular Interest cash flow.
The
foregoing REMIC structure is intended to cause all of the cash
from
the Mortgage Loans to flow through to the Master REMIC as cash flow
on a REMIC
regular interest, without creating any shortfall--actual or
potential (other
than for credit losses) to any REMIC regular interest.
Scheduled
Principal Prepayments and Realized Losses will be allocated to
the Lower Tier REMIC Regular Interests in the same manner as such
amounts are
allocated to the Master REMIC Classes referenced under the column
titled
"Allocation of Principal."
Set forth below are designations of Classes of Certificates to the
categories
used herein:
<TABLE>
<CAPTION>
<S>
<C>
Accretion Directed Certificates....................................
None.
Accrual Certificates...............................................
None
Book-Entry Certificates............................................
All
Classes of Certificates other than the Physical
Certificates.
COFI Certificates..................................................
None.
Delay Certificates.................................................
All
interest-bearing Classes of Certificates other than any
Non-Delay Certificates.
ERISA-Restricted Certificates......................................
The
Residual Certificates and the Private Certificates; the
Retained Certificates until they have been the subject of an
ERISA-Qualifying Underwriting; and Certificates of any Class
that ceases to have a rating of BBB- (or its equivalent) or
better from at least one Rating Agency.
LIBOR Certificates.................................................
None.
Non-Delay Certificates.............................................
LIBOR Certificates.
Notional Amount Certificates.......................................
Class A-4 and Class A-X Certificates
Offered Certificates...............................................
All
Classes of Certificates other than the Private
Certificates.
Physical Certificates..............................................
Class A-R Certificates
Planned Principal Classes..........................................
None.
Principal Only Certificates........................................
None.
3
<PAGE>
Private Certificates...............................................
Class P, Class B-4, Class B-5 and Class B-6 Certificates.
Rating Agencies....................................................
S&P & Fitch.
Regular Certificates...............................................
All
Classes of Certificates other than the Class A-R
Certificates.
Residual Certificate...............................................
Class A-R Certificates.
Retained Certificates..............................................
Class A-X Certificates.
Senior Certificates................................................
Class A-1, Class A-2, Class A-3, Class A-4, Class A-X, Class
PO and Class A-R Certificates
Subordinated Certificates..........................................
Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates.
Targeted Principal Classes.........................................
None.
Targeted Principal Component.......................................
None.
</TABLE>
With
respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions
in this
Agreement relating solely to such designations shall be of no force
or effect,
and any calculations in this Agreement incorporating references to
such
designations shall be interpreted without reference to such
designations and
amounts. Defined terms and provisions in this Agreement relating
to
statistical rating agencies not designated above as Rating Agencies
shall be
of no force or effect.
4
<PAGE>
ARTICLE ONE
DEFINITIONS
Section
1.01 Definitions.
Unless the
context requires a different meaning, capitalized terms are
used in this Agreement as defined below.
Accretion
Directed Certificates: As specified in the Preliminary
Statement.
Accretion
Direction Rule: Not applicable.
Accrual
Amount: Not applicable.
Accrual
Certificates: As specified in the Preliminary Statement.
Accrual
Termination Date: Not applicable.
Additional
Designated Information: As defined in Section 11.02.
Adjusted
Mortgage Rate: As to each Mortgage Loan and at any time, the
per annum rate equal to the Mortgage Rate less the Servicing Fee
Rate.
Adjusted Net
Mortgage Rate: As to each Mortgage Loan and any
Distribution Date, the per annum rate equal to the Mortgage Rate of
that
Mortgage Loan (as of the Due Date in the month preceding the month
in which
such Distribution Date occurs) less the Expense Fee Rate for that
Mortgage
Loan.
Adjustment
Date: Not applicable.
Advance:
The payment required to be made by the Servicer with respect to
any Distribution Date pursuant to Section 4.01, the amount of any
such payment
being equal to the aggregate of payments of principal and interest
(net of the
Servicing Fee) on the Mortgage Loans that were due during the
related Due
Period and not received as of the close of business on the
related
Determination Date, together with an amount equivalent to interest
on each REO
Property, net of any net income from such REO Property, less the
aggregate
amount of any such delinquent payments that the Servicer has
determined would
constitute a Nonrecoverable Advance if advanced.
Advance
Notice: As defined in Section 4.01(b).
Advance
Deficiency: As defined in Section 4.01(b).
Affiliate:
With respect to any Person, any other Person controlling,
controlled or under common control with such Person. For purposes
of this
definition, "control" means the power to direct the management and
policies of
a Person, directly or indirectly, whether through ownership of
voting
securities, by contract, or otherwise and "controlling" and
"controlled" shall
have meanings correlative to the foregoing. Affiliates also include
any
entities consolidated with the requirements of generally accepted
accounting
principles.
Agreement:
This Pooling and Servicing Agreement and all amendments and
supplements.
5
<PAGE>
Allocable Share:
As to any Distribution Date and any Mortgage Loan (i)
[reserved]; (ii) with respect to the Class PO Certificates, zero
and (iii)
with respect to each other Class of Certificates the product of (a)
the lesser
of (I) the ratio that the Required Coupon bears to such Adjusted
Net Mortgage
Rate of such Mortgage Loan and (II) one, multiplied by (b) the
ratio that the
amount calculated with respect to such Distribution Date for such
Class,
pursuant to clause (i) of the definition of Class Optimal
Interest
Distribution Amount (without giving effect to any reduction of such
amount
pursuant to Section 4.02(d)) bears to the aggregate amount
calculated with
respect to such Distribution Date for each such Class of
Certificates pursuant
to clause (i) of the definition of Class Optimal Interest
Distribution Amount
(without giving effect to any reduction of such amounts pursuant to
Section
4.02(d)).
Amount
Available for Senior Principal: As to any Distribution Date,
the
Available Funds for such Distribution Date, reduced by the
aggregate amount
distributable (or allocable to the Accrual Amount, if applicable)
on such
Distribution Date in respect of interest on the Senior Certificates
pursuant
to Section 4.02(a)(1)(iii).
Amount
Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Certificate Account at the close of
business on
the related Determination Date on account of (i) Principal
Prepayments
received after the last day of the related Prepayment Period and
Liquidation
Proceeds and Subsequent Recoveries received in the month of such
Distribution
Date and (ii) all Scheduled Payments due after the related Due
Date.
Applicable
Credit Support Percentage: As defined in Section 4.02(e).
Appraised
Value: With respect to any Mortgage Loan, the Appraised Value
of the related Mortgaged Property shall be: (i) with respect to a
Mortgage
Loan other than a Refinance Loan, the lesser of (a) the value of
the Mortgaged
Property based upon the appraisal made at the time of the
origination of such
Mortgage Loan and (b) the sales price of the Mortgaged Property at
the time of
the origination of such Mortgage Loan; and (ii) with respect to a
Refinance
Loan, the value of the Mortgaged Property based upon the appraisal
made at the
time of the origination of such Refinance Loan.
Available
Funds: As to any Distribution, the sum of (a) the aggregate
amount held in the Certificate Account at the close of business on
the related
Determination Date, including any Subsequent Recoveries, net of the
Amount
Held for Future Distribution, net of Prepayment Charges and net of
amounts
permitted to be withdrawn from the Certificate Account pursuant to
clauses (i)
- (viii), inclusive, of Section 3.09(a) and amounts permitted to be
withdrawn
from the Distribution Account pursuant to clauses (i) - (ii),
inclusive, of
Section 3.09(b), (b) the amount of the Advances for that
Distribution Date,
(c) in connection with Defective Mortgage Loans, the aggregate of
the Purchase
Prices and Substitution Adjustment Amounts deposited on the
related
Distribution Account Deposit Date, and (d) any amount deposited on
the related
Distribution Account Deposit Date pursuant to Section 3.10. The
Holders of the
Class P Certificates will be entitled to all Prepayment Charges
received on
the Mortgage Loans and such amounts will not be available for
distribution to
the Holders of any other Class of Certificates.
Bankruptcy
Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Bankruptcy
Coverage Termination Date: The point in time at which the
Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy
Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction; provided, however, that a
Bankruptcy Loss
shall not be deemed a Bankruptcy Loss under this Agreement so long
as the
Servicer has notified the Trustee in writing that the Servicer is
diligently
pursuing any remedies that may exist in connection with the related
Mortgage
Loan and either (A) the
6
<PAGE>
related Mortgage Loan is not in default with regard to payments due
under the
Mortgage Loan or (B) delinquent payments of principal and interest
under the
related Mortgage Loan and any related escrow payments in respect of
such
Mortgage Loan are being advanced on a current basis by the
Servicer, in either
case without giving effect to any Debt Service Reduction or
Deficient
Valuation.
Bankruptcy
Loss Coverage Amount: As of any date of determination, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy
Loss
Coverage Amount as reduced by (i) the aggregate amount of
Bankruptcy Losses
allocated to the Certificates since the Cut-off Date and (ii) any
permissible
reductions in the Bankruptcy Loss Coverage Amount as evidenced by a
letter of
each Rating Agency to the Trustee to the effect that any such
reduction will
not result in a downgrading, qualification or withdrawal of the
then current
ratings assigned to the Classes of Certificates rated by it.
Blanket
Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.
Book-Entry
Certificates: As specified in the Preliminary Statement.
Business
Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of New York, New
York, the State
of California or the city in which the Corporate Trust Office of
the Trustee
is located are authorized or obligated by law or executive order to
be closed.
Certificate: Any one of the certificates issued by the Trust Fund
and
executed by the Trustee in substantially the forms attached as
exhibits.
Certificate Account: The separate Eligible Account or Accounts
created
and maintained by the Servicer pursuant to Section 3.06(d) with a
depository
institution in the name of the Servicer for the benefit of the
Trustee on
behalf of Certificateholders and designated "IndyMac Bank, F.S.B.,
in trust
for the registered holders of Residential Asset Securitization
Trust 2006-A12,
Mortgage Pass-Through Certificates, Series 2006-L."
Certificate Balance: With respect to any Certificate (other than
the
Notional Amount Certificates) at any date of determination, the
maximum dollar
amount of principal to which the Holder thereof is then entitled
under this
Agreement, such amount being equal to the Denomination thereof (A)
plus any
increase in the Certificate Balance of such Certificate pursuant to
Section
4.02 due to the receipt of Subsequent Recoveries, (B) minus the sum
of (i) all
distributions of principal previously made with respect thereto and
(ii) all
Realized Losses allocated to that Certificate and, in the case of
any
Subordinated Certificates, all other reductions in Certificate
Balance
previously allocated to that Certificate pursuant to Section 4.05
and (C) in
the case of any Class of Accrual Certificates, plus the Accrual
Amount added
to the Class Certificate Balance of such Class prior to such date.
The
Notional Amount Certificates do not have Certificate Balances.
Certificate Group: Not applicable.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
who is the beneficial owner of the Book-Entry Certificate. For the
purposes of
this Agreement, in order for a Certificate Owner to enforce any of
its rights
under this Agreement, it shall first have to provide evidence of
its
beneficial ownership interest in a Certificate that is reasonably
satisfactory
to the Trustee, the Depositor and/or the Servicer, as
applicable.
Certificate Register: The register maintained pursuant to Section
5.02.
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<PAGE>
Certificate Registrar: Deutsche Bank National Trust Company and
its
successors and, if a successor trustee is appointed under this
Agreement, the
successor.
Certificateholder or Holder: The person in whose name a Certificate
is
registered in the Certificate Register, except that, solely for the
purpose of
giving any consent pursuant to this Agreement, any Certificate
registered in
the name of the Depositor or any affiliate of the Depositor is not
Outstanding
and the Percentage Interest evidenced thereby shall not be taken
into account
in determining whether the requisite amount of Percentage Interests
necessary
to effect a consent has been obtained, except that if the Depositor
or its
affiliates own 100% of the Percentage Interests evidenced by a
Class of
Certificates, the Certificates shall be Outstanding for purposes of
any
provision of this Agreement requiring the consent of the Holders
of
Certificates of a particular Class as a condition to the taking of
any action.
The Trustee is entitled to rely conclusively on a certification of
the
Depositor or any affiliate of the Depositor in determining which
Certificates
are registered in the name of an affiliate of the Depositor.
Certification Party: As defined in Section 11.05.
Certifying
Person: As defined in Section 11.05.
Class: All
Certificates bearing the same class designation as set forth
in the Preliminary Statement.
Class
Certificate Balance: For any Class as of any date of
determination, the aggregate of the Certificate Balances of all
Certificates
of the Class as of that date.
Class
Interest Shortfall: As to any Distribution Date and Class, the
amount by which the amount described in clause (i) of the
definition of Class
Optimal Interest Distribution Amount for such Class exceeds the
amount of
interest actually distributed on such Class on such Distribution
Date pursuant
to such clause (i).
Class
Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest-bearing Class, the sum of (i) one
month's
interest accrued during the related Interest Accrual Period at
the
Pass-Through Rate for such Class, on the related Class Certificate
Balance or
Notional Amount, as applicable, immediately prior to such
Distribution Date,
subject to reduction pursuant to Section 4.02(d), and (ii) any
Class Unpaid
Interest Amounts for such Class.
Class PO
Deferred Amount: As to any Distribution Date, the aggregate of
the applicable PO Percentage of each Realized Loss, other than any
Excess
Loss, on a Discount Mortgage Loan to be allocated to the Class PO
Certificates
on such Distribution Date on or prior to the Senior Credit Support
Depletion
Date or previously allocated to that Class PO Certificates and not
yet paid to
the Holders of the Class PO Certificates.
Class
Subordination Percentage: With respect to any Distribution Date
and each Class of Subordinated Certificates, the fraction
(expressed as a
percentage) the numerator of which is the Class Certificate Balance
of such
Class of Subordinated Certificates immediately prior to such
Distribution Date
and the denominator of which is the aggregate Class Certificate
Balance of all
Classes of Certificates immediately prior to such Distribution
Date.
Class
Unpaid Interest Amounts: As to any Distribution Date and Class
of
interest-bearing Certificates, the amount by which the aggregate
Class
Interest Shortfalls for such Class on prior Distribution Dates
exceeds the
amount distributed on such Class on prior Distribution Dates
pursuant to
clause (ii) of the definition of Class Optimal Interest
Distribution Amount.
8
<PAGE>
Closing
Date: September 27, 2006.
Code: The
Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COFI: Not
applicable.
COFI
Certificates: Not applicable.
Collection
Account: As defined in Section 3.06(c).
Commission: The
United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, 0.125% multiplied
by
one-twelfth multiplied by the aggregate Stated Principal Balance of
the
Mortgage Loans as of the first day of the prior month.
Component:
As specified in the Preliminary Statement.
Component
Balance: With respect to any Component and any Distribution
Date, its Initial Component Balance (A) plus any Subsequent
Recoveries added
to the Component Balance of such Component pursuant to Section
4.02, (B) minus
the sum of all amounts applied in reduction of the principal
balance of such
Component and Realized Losses allocated thereto and increased due
to the
receipt of Subsequent Recoveries.
Component
Certificates: As specified in the Preliminary Statement.
Co-op
Shares: Shares issued by a Cooperative Corporation.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and
improvements
constituting the Cooperative Property and that governs the
Cooperative
Property, which Cooperative Corporation must qualify as a
Cooperative Housing
Corporation under section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Co-op Shares and
a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by
the
Cooperative Corporation, including the allocation of individual
dwelling units
to the holders of the Co-op Shares of the Cooperative
Corporation.
Cooperative Unit: A single family dwelling located in a
Cooperative
Property.
Corporate
Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate
trust
business with respect to this Agreement is administered, which
office at the
date of the execution of this Agreement is located at 1761 East St.
Andrew
Place, Santa Ana, California 92705, Attn: Mortgage
Administration-IN0612
(IndyMac MBS, Inc., Residential Asset Securitization Trust
2006-A12, Mortgage
Pass-Through Certificates, Series 2006-L), and which is the address
to which
notices to and correspondence with the Trustee should be directed.
With
respect to the Certificate Registrar and presentment of
Certificates for
registration or transfer, exchange or final payment, the Corporate
Trust
Office is located at DB Services Tennessee, 648 Grassmere Park
Road,
Nashville, Tennessee 37211-3658, Attention: Transfer Unit.
Cut-off
Date: September 1, 2006.
9
<PAGE>
Cut-off
Date Pool Principal Balance: $374,074,923.19.
Cut-off
Date Principal Balance: As to any Mortgage Loan, its Stated
Principal Balance as of the close of business on the Cut-off
Date.
Debt
Service Reduction: For any Mortgage Loan, a reduction by a court
of
competent jurisdiction in a proceeding under the Bankruptcy Code in
the
Scheduled Payment for the Mortgage Loan that became final and
non-appealable,
except a reduction resulting from a Deficient Valuation or a
reduction that
results in a permanent forgiveness of principal.
Defective
Mortgage Loan: Any Mortgage Loan that is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deficient
Valuation: For 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
Payment that
results in a permanent forgiveness of principal, which valuation or
reduction
results from an order of the court that is final and non-appealable
in a
proceeding under the Bankruptcy Code.
Definitive
Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 5.02(e).
Delay
Certificates: As specified in the Preliminary Statement.
Delay
Delivery Certification: A certification substantially in the
form
of Exhibit G-2.
Delay
Delivery Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule for which none of a related Mortgage File or
neither
the Mortgage Note nor a lost note affidavit for a lost Mortgage
Note has been
delivered to the Trustee by the Closing Date. The Depositor shall
deliver the
Mortgage Files to the Trustee:
(A) for at
least 70% of the Mortgage Loans, not later than the Closing
Date, and
(B) for
the remaining 30% of the Mortgage Loans, not later than five
Business Days following the Closing Date.
To the
extent that the Seller is in possession of any Mortgage File
for
any Delay Delivery Mortgage Loan, until delivery of the Mortgage
File to the
Trustee as provided in Section 2.01, the Seller shall hold the
files as
Servicer, as agent and in trust for the Trustee.
Deleted
Mortgage Loan: As defined in Section 2.03(c).
Delinquent: A Mortgage Loan is "Delinquent" if any monthly payment
due
on a Due Date is not made by the close of business on the next
scheduled Due
Date for such Mortgage Loan. A Mortgage Loan is "30 days
Delinquent" if such
monthly payment has not been received by the close of business on
the
corresponding day of the month immediately succeeding the month in
which such
monthly payment was due. The determination of whether a Mortgage
Loan is "60
days Delinquent", "90 days Delinquent", etc. shall be made in a
like manner.
10
<PAGE>
Denomination: For each Certificate, the amount on the face of
the
Certificate as the "Initial Certificate Balance of this
Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the
foregoing,
the Percentage Interest appearing on the face of the
Certificate.
Depositor:
IndyMac MBS, Inc., a Delaware corporation, or its successor
in interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which is CEDE & Co., as the registered
Holder of the
Book-Entry Certificates. The Depository shall at all times be a
"clearing
corporation" as defined in Section 8-102(a)(5) of the UCC.
Depository
Participant: A broker, dealer, bank, or other financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Derivative
Notional Balance: For each Distribution Date prior to the
Termination Date, the amount described in Schedule 1 to the
Prospectus
Supplement. After the Termination Date, the Derivative Notional
Balance will
be equal to zero.
Determination Date: As to any Distribution Date, the 18th day of
each
month or if that day is not a Business Day the next Business Day,
except that
if the next Business Day is less than two Business Days before the
related
Distribution Date, then the Determination Date shall be the
Business Day
preceding the 18th day of the month.
Discount
Mortgage Loan: Any Mortgage Loan with an Adjusted Net Mortgage
Rate that is less than the Required Coupon.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.06(e) in the name
of the
Trustee for the benefit of the Certificateholders and designated
"Deutsche
Bank National Trust Company in trust for registered holders of
Residential
Asset Securitization Trust 2006-A12, Mortgage Pass-Through
Certificates,
Series 2006-L." Funds in the Distribution Account shall be held in
trust for
the Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:30
P.M. Pacific time on the Business Day preceding the Distribution
Date.
Distribution Date: The 25th day of each calendar month after the
initial
issuance of the Certificates, or if that day is not a Business Day,
the next
Business Day, commencing in October 2006.
Due Date:
For any Mortgage Loan and Distribution Date, the first day of
the month in which such Distribution Date occurs.
Due
Period: For any Distribution Date, the period commencing on the
second day of the month preceding the month in which the
Distribution Date
occurs and ending on the first day of the month in which the
Distribution Date
occurs.
EDGAR: The
Commission's Electronic Data Gathering, Analysis and
Retrieval System.
Eligible
Account: Any of
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<PAGE>
(i) an
account or accounts maintained with a federal or state
chartered
depository institution or trust company the short-term unsecured
debt
obligations of which (or, in the case of a depository institution
or trust
company that is the principal subsidiary of a holding company, the
debt
obligations of such holding company) have the highest short-term
ratings of
Moody's or Fitch and one of the two highest short-term ratings of
S&P, if S&P
is a Rating Agency at the time any amounts are held on deposit
therein, or
(ii) an
account or accounts in a depository institution or trust
company
in which such accounts are insured by the FDIC (to the limits
established by
the FDIC) and the uninsured deposits in which accounts are
otherwise secured
such that, as evidenced by an Opinion of Counsel delivered to the
Trustee and
to each Rating Agency, the Certificateholders have a claim with
respect to the
funds in such account or a perfected first priority security
interest against
any collateral (which shall be limited to Permitted Investments)
securing such
funds that is superior to claims of any other depositors or
creditors of the
depository institution or trust company in which such account is
maintained,
or
(iii) a
trust account or accounts maintained with (a) the trust
department of a federal or state chartered depository institution
or (b) a
trust company, acting in its fiduciary capacity or
(iv) any
other account acceptable to each Rating Agency..
Eligible
Accounts may bear interest, and may include, if otherwise
qualified under this definition, accounts maintained with the
Trustee.
ERISA: The
Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
the
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow
Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.07(a).
Event of
Default: As defined in Section 7.01.
Excess
Loss: The amount of any (i) Fraud Loss on the Mortgage Loans
realized after the Fraud Loss Coverage Termination Date, (ii)
Special Hazard
Loss on the Mortgage Loans realized after the Special Hazard
Coverage
Termination Date or (iii) Bankruptcy Loss on the Mortgage Loans
realized after
the Bankruptcy Coverage Termination Date.
Excess
Proceeds: For any Liquidated Mortgage Loan, the excess of
(a) all
Liquidation Proceeds from the Mortgage Loan received in the
calendar month in which the Mortgage Loan became a Liquidated
Mortgage Loan,
net of any amounts previously reimbursed to the Servicer as
Nonrecoverable
Advances with respect to the Mortgage Loan pursuant to Section
3.09(a)(iii),
over
(b) the
sum of (i) the unpaid principal balance of the Liquidated
Mortgage Loan as of the Due Date in the month in which the Mortgage
Loan
became a Liquidated Mortgage Loan plus (ii) accrued interest at the
Mortgage
Rate from the Due Date for which interest was last paid or advanced
(and not
12
<PAGE>
reimbursed) to Certificateholders up to the Due Date applicable to
the
Distribution Date following the calendar month during which the
liquidation
occurred.
Exchange
Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
Exchange
Act Reports: Any reports on Form 10-D, Form 8-K and Form 10-K
required to be filed by the Depositor with respect to the Trust
Fund under the
Exchange Act.
Expense
Fee Rate: As to each Mortgage Loan, the sum of (a) the related
Servicing Fee Rate and (b) the Trustee Fee Rate.
FDIC: The
Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The
Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under
Title III of
the Emergency Home Finance Act of 1970, as amended, or any
successor thereto.
Fitch:
Fitch, Inc., or any successor thereto. If Fitch is designated
as
a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b)
the address for notices to Fitch shall be Fitch, Inc., One State
Street Plaza,
New York, NY 10004, Attention: MBS Monitoring - IndyMac 2006-L, or
any other
address Fitch furnishes to the Depositor and the Servicer.
FNMA: The
Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the
Federal
National Mortgage Association Charter Act, or any successor
thereto.
Form 10-D
Disclosure Item: With respect to any Person, any material
litigation or governmental proceedings pending against such Person,
or against
any of the Trust Fund, the Depositor, the Trustee or the Servicer,
if such
Person has actual knowledge thereof.
Form 10-K
Disclosure Item: With respect to any Person, (a) Form 10-D
Disclosure Item, and (b) any affiliations or relationships between
such Person
and any Item 1119 Party.
Fraud
Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred.
Fraud Loss
Coverage Amount: As of the Closing Date, $7,481,498.46,
subject to reduction from time to time, by the amount of Fraud
Losses
allocated to the Certificates. In addition, on each anniversary of
the Cut-off
Date, the Fraud Loss Coverage Amount will be reduced as follows:
(a) on the
first, second, third and fourth anniversaries of the Cut-off Date,
to an
amount equal to the lesser of (i) 1% of the then-current Stated
Principal
Balance of the Mortgage Loans in the case of the first, second,
third and
fourth such anniversaries and (ii) the excess of the Fraud Loss
Coverage
Amount as of the preceding anniversary of the Cut-off Date over the
cumulative
amount of Fraud Losses allocated to the Certificates since such
preceding
anniversary; and (b) on the fifth anniversary of the Cut-off Date,
to zero.
Fraud Loss
Coverage Termination Date: The point in time at which the
Fraud Loss Coverage Amount is reduced to zero.
Fraud
Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty
or
misrepresentation in connection with the related Mortgage Loan,
13
<PAGE>
including a loss by reason of the denial of coverage under any
related Primary
Insurance Policy because of such fraud, dishonesty or
misrepresentation.
Indirect
Participant: A broker, dealer, bank, or other financial
institution or other Person that clears through or maintains a
custodial
relationship with a Depository Participant.
Initial
Bankruptcy Loss Coverage Amount: $100,000.
Initial
Component Balance: As specified in the Preliminary Statement.
Initial
LIBOR Rate: Not applicable.
Insurance
Policy: For any Mortgage Loan included in the Trust Fund, any
insurance policy, including all riders and endorsements thereto in
effect,
including any replacement policy or policies for any Insurance
Policies.
Insurance
Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in
such
Insurance Proceeds in respect of Insured Expenses.
Insured
Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest
Accrual Period: With respect to each Class of Delay
Certificates and any Distribution Date, the calendar month prior to
the month
of such Distribution Date. With respect to each Class of
Non-Delay
Certificates and any Distribution Date, the one-month period
commencing on the
25th day of the month preceding the month in which such
Distribution Date
occurs and ending on the 24th day of the month in which such
Distribution Date
occurs. All Classes of Certificates will accrue interest on the
basis of a
360-day year consisting of twelve 30-day months.
Interest
Determination Date: With respect to (a) any Interest Accrual
Period for any LIBOR Certificates and (b) any Interest Accrual
Period for the
COFI Certificates for which the applicable Index is LIBOR, the
second Business
Day prior to the first day of such Interest Accrual Period.
Interest
Settlement Rate: As defined in Section 4.09.
Item 1119
Party: The Depositor, the Seller, the Servicer, the Trustee
and any other material transaction party, as identified in Exhibit
T, as
updated pursuant to Section 11.04.
Last
Scheduled Distribution Date: The Distribution Date in the month
immediately following the month of the latest scheduled maturity
date for any
of the Mortgage Loans.
Latest
Possible Maturity Date: The Distribution Date following the
third
anniversary of the scheduled maturity date of the Mortgage Loan
having the
latest scheduled maturity date as of the Cut-off Date.
Lender PMI
Loans: Mortgage Loans with respect to which the lender rather
than the borrower acquired the primary mortgage guaranty insurance
and charged
the related borrower an interest premium.
LIBOR: The
London interbank offered rate for one month United States
dollar deposits calculated in the manner described in Section
4.09.
14
<PAGE>
LIBOR
Determination Date: For any Interest Accrual Period, the second
London Business Day prior to the commencement of such Interest
Accrual Period.
Limited
Exchange Act Reporting Obligations: The obligations of the
Servicer under Section 3.17(b), Section 6.02 and Section 6.04 with
respect to
notice and information to be provided to the Depositor and Article
11 (except
Section 11.07(a)(i) and (ii)).
Liquidated
Mortgage Loan: For any Distribution Date, a defaulted
Mortgage Loan (including any REO Property) that was liquidated in
the calendar
month preceding the month of the Distribution Date and as to which
the
Servicer has certified (in accordance with this Agreement) that it
has
received all amounts it expects to receive in connection with the
liquidation
of the Mortgage Loan, including the final disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds
regardless
of when received, received in connection with the partial or
complete
liquidation of defaulted Mortgage Loans, whether through trustee's
sale,
foreclosure sale, or otherwise or amounts received in connection
with any
condemnation or partial release of a Mortgaged Property, and any
other
proceeds received in connection with an REO Property, less the sum
of related
unreimbursed Servicing Fees, Servicing Advances, and Advances.
Loan-to-Value Ratio: For any Mortgage Loan and as of any date
of
determination, is the fraction whose numerator is the original
principal
balance of the related Mortgage Loan at that date of determination
and whose
denominator is the Appraised Value of the related Mortgaged
Property.
London
Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lost
Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Maintenance: For any Cooperative Unit, the rent paid by the
Mortgagor to
the Cooperative Corporation pursuant to the Proprietary Lease.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or
any
successor thereto.
MERS
Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R)
System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The
mortgage identification number for any MERS Mortgage Loan.
MOM Loan:
Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its
successors
and assigns.
Moneyline
Telerate Page 3750: The display page currently so designated
on the Moneyline Telerate Information Services, Inc. (or any page
replacing
that page on that service for the purpose of displaying London
inter-bank
offered rates of major banks).
Monthly
Statement: The statement delivered to the Certificateholders
pursuant to Section 4.06.
15
<PAGE>
Moody's:
Moody's Investors Service, Inc., or any successor thereto. If
Moody's is designated as a Rating Agency in the Preliminary
Statement, for
purposes of Section 10.05(b) the address for notices to Moody's
shall be
Moody's Investors Service, Inc., 99 Church Street, New York, New
York 10007,
Attention: Residential Loan Monitoring Group, or any other address
that
Moody's furnishes to the Depositor and the Servicer.
Mortgage:
The mortgage, deed of trust, or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real
property
securing a Mortgage Note.
Mortgage
File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents
delivered to the
Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage
Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to this Agreement, as from time to time are
held as a
part of the Trust Fund (including any REO Property), the Mortgage
Loans so
held being identified on the Mortgage Loan Schedule,
notwithstanding
foreclosure or other acquisition of title of the related Mortgaged
Property.
Mortgage
Loan Schedule: As of any date, the list set forth in Schedule I
of Mortgage Loans included in the Trust Fund on that date. The
Mortgage Loan
Schedule shall be prepared by the Seller and shall set forth the
following
information with respect to each Mortgage Loan:
(i) the loan
number;
(ii) the street
address of the Mortgaged Property, including the
zip code;
(iii) the maturity date;
(iv) the original
principal balance;
(v) the Cut-off
Date Principal Balance;
(vi) the first payment
date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating
whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(x) a code
indicating whether the residential dwelling is either
(a) a detached single family dwelling, (b) a dwelling in a
PUD, (c) a condominium unit, (d) a two- to four-unit
residential property, or (e) a Cooperative Unit;
(xi) the Mortgage
Rate;
(xii) the purpose for the Mortgage Loan;
(xiii) the type of documentation program pursuant to which the
Mortgage Loan was originated;
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(xiv) a code indicating whether the Mortgage Loan is a
borrower-paid mortgage insurance loan;
(xv) the Servicing Fee
Rate;
(xvi) a code indicating whether the Mortgage Loan is a Lender
PMI
Loan;
(xvii) the coverage amount of any mortgage insurance;
(xviii) with respect to the Lender PMI Loans, the interest
premium
charged by the lender;
(xix) a code indicating whether the Mortgage Loan is a Delay
Delivery Mortgage Loan; and
(xx) a code indicating
whether the Mortgage Loan is a MERS
Mortgage Loan.
The schedule shall also set forth the total of the amounts
described under (v)
above for all of the Mortgage Loans.
Mortgage
Note: The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage
Rate: The annual rate of interest borne by a Mortgage Note from
time to time (net of the interest premium for any Lender PMI
Loan).
Mortgaged
Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Co-op
Shares and
Proprietary Lease.
Mortgagor:
The obligors on a Mortgage Note.
National
Cost of Funds Index: The National Monthly Median Cost of Funds
Ratio to SAIF-Insured Institutions published by the OTS.
Net
Prepayment Interest Shortfall: As to any Distribution Date, the
amount by which the aggregate of Prepayment Interest Shortfalls for
such
Distribution Date exceeds the Compensating Interest for such
Distribution
Date.
Non-Delay
Certificates: As specified in the Preliminary Statement.
Non-Discount Mortgage Loan: As to any Mortgage Loan with an
Adjusted Net
Mortgage Rate that is greater than or equal to the Required
Coupon.
Non-PO
Formula Principal Amount: As to any Distribution Date, the sum
of
(i) the applicable Non-PO Percentage of (a) all monthly payments of
principal
due on each Mortgage Loan on the related Due Date, (b) the
principal portion
of the purchase price of each Mortgage Loan that was repurchased by
the Seller
pursuant to this Agreement as of such Distribution Date, excluding
any
Mortgage Loan that was repurchased due to a modification of the
Mortgage Rate,
(c) the Substitution Adjustment Amount in connection with any
Deleted Mortgage
Loan received with respect to such Distribution Date, (d) any
Insurance
Proceeds or Liquidation Proceeds allocable to recoveries of
principal of
Mortgage Loans that are not yet Liquidated Mortgage Loans received
during the
calendar month preceding the month of such Distribution Date, (e)
with respect
to each Mortgage Loan that became a Liquidated Mortgage Loan
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during the calendar month preceding the month of such Distribution
Date, the
amount of Liquidation Proceeds allocable to principal received with
respect to
such Mortgage Loan, and (f) all partial and full Principal
Prepayments
received during the related Prepayment Period and (ii) (A) any
Subsequent
Recoveries received during the calendar month preceding the month
of such
Distribution Date, or (B) with respect to Subsequent Recoveries
attributable
to a Discount Mortgage Loan that incurred (1) an Excess Loss or (2)
a Realized
Loss after the Senior Credit Support Depletion Date, the Non-PO
Percentage of
any Subsequent Recoveries received during the calendar month
preceding the
month of such Distribution Date.
Non-PO
Percentage: As to any Discount Mortgage Loan, a fraction
(expressed as a percentage) the numerator of which is the Adjusted
Net
Mortgage Rate of such Discount Mortgage Loan and the denominator of
which is
the Required Coupon. As to any Non-Discount Mortgage Loan,
100%.
Nonrecoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Servicer, that, in the good faith
judgment of the
Servicer, will not be ultimately recoverable by the Servicer from
the related
Mortgagor, related Liquidation Proceeds or otherwise.
Notice of
Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the
Certificates
shall be made only upon presentation and surrender thereof.
Notional
Amount: With respect to the Class A-X Certificates and any
Distribution Date, an amount equal to the product of (i) a
fraction, the
numerator of which is the excess of (a) the weighted average of the
Adjusted
Net Mortgage Rates for the Non-Discount Mortgage Loans as of the
Due Date in
the prior month (after giving effect to Principal Prepayments
received in the
Prepayment Period related to that prior Due Date) over (b) the
Required
Coupon, and the denominator of which is the Required Coupon and
(ii) the
aggregate Stated Principal Balance of the Non-Discount Mortgage
Loans as of
the Due Date in the prior month (after giving effect to Principal
Prepayments
received in the Prepayment Period related to that prior Due Date).
With
respect to the Class A-4 Certificates and any Distribution Date, an
amount
equal to the Class Certificate Balance of the Class A-3
Certificates
immediately prior to that Distribution Date.
Notional
Amount Certificates: As specified in the Preliminary Statement.
Offered
Certificates: As specified in the Preliminary Statement.
Officer's
Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing
Director, a
Vice President (however denominated), an Assistant Vice President,
the
Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant
Secretaries of the Depositor or the Servicer, or (ii) if provided
for in this
Agreement, signed by a Servicing Officer, as the case may be, and
delivered to
the Depositor and the Trustee as required by this Agreement.
Opinion of
Counsel: For the interpretation or application of the REMIC
Provisions, a written opinion of counsel who (i) is in fact
independent of the
Depositor and the Servicer, (ii) does not have any direct financial
interest
in the Depositor or the Servicer or in any affiliate of either, and
(iii) is
not connected with the Depositor or the Servicer as an officer,
employee,
promoter, underwriter, trustee, partner, director, or person
performing
similar functions. Otherwise, a written opinion of counsel who may
be counsel
for the Depositor or the Servicer, including in-house counsel,
reasonably
acceptable to the Trustee.
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Original
Applicable Credit Support Percentage: With respect to each of
the following Classes of Subordinated Certificates, the
corresponding
percentage described below, as of the Closing Date:
Class B-1.......................... 6.50%
Class B-2.......................... 3.70%
Class B-3.......................... 2.40%
Class B-4.......................... 1.70%
Class B-5.......................... 0.95%
Class B-6.......................... 0.40%
Original
Mortgage Loan: The Mortgage Loan refinanced in connection with
the origination of a Refinance Loan.
Original
Subordinated Principal Balance: The aggregate Class Certificate
Balance of the Subordinated Certificates as of the Closing Date
OTS: The
Office of Thrift Supervision.
Outside
Reference Date: Not applicable.
Outstanding: For the Certificates as of any date of determination,
all
Certificates theretofore executed and authenticated under this
Agreement
except:
(i) Certificates
theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in
exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a
Stated Principal Balance greater than zero that was not the subject
of a
Principal Prepayment in Full before the Due Date or during the
related
Prepayment Period and that did not become a Liquidated Mortgage
Loan before
the Due Date.
Overcollateralized Group: Not applicable.
Ownership
Interest: As to any Residual Certificate, any ownership
interest in the Certificate including any interest in the
Certificate as its
Holder and any other interest therein, whether direct or indirect,
legal or
beneficial.
Pass-Through Rate: For each Class of Certificates, the per annum
rate
set forth or calculated in the manner described in the Preliminary
Statement.
Percentage
Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the
related Class,
the percentage interest being set forth on its face or equal to the
percentage
obtained by dividing the Denomination of the Certificate by the
aggregate of
the Denominations of all Certificates of the same Class.
Performance Certification: As defined in Section 11.05.
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Permitted
Investments: At any time, any of the following:
(i)
obligations of the United States or any agency thereof backed by
the
full faith and credit of the United States;
(ii)
general obligations of or obligations guaranteed by any state
of
the United States or the District of Columbia receiving the highest
long-term
debt rating of each Rating Agency, or any lower rating that will
not result in
the downgrading, qualification or withdrawal of the ratings then
assigned to
the Certificates by the Rating Agencies, as evidenced by a signed
writing
delivered by each Rating Agency;
(iii)
commercial or finance company paper that is then receiving the
highest commercial or finance company paper rating of each Rating
Agency, or
any lower rating that will not result in the downgrading,
qualification or
withdrawal of the ratings then assigned to the Certificates by the
Rating
Agencies , as evidenced by a signed writing delivered by each
Rating Agency;
(iv)
certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated
under the laws of the United States or of any state thereof and
subject to
supervision and examination by federal or state banking
authorities, provided
that the commercial paper or long-term unsecured debt obligations
of the
depository institution or trust company (or in the case of the
principal
depository institution in a holding company system, the commercial
paper or
long-term unsecured debt obligations of the holding company, but
only if
Moody's is not a Rating Agency) are then rated one of the two
highest
long-term and the highest short-term ratings of each Rating Agency
for the
securities, or any lower rating that will not result in the
downgrading,
qualification or withdrawal of the ratings then assigned to the
Certificates
by the Rating Agencies, as evidenced by a signed writing delivered
by each
Rating Agency;
(v) demand
or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that the
deposits
are fully insured by the FDIC;
(vi)
guaranteed reinvestment agreements issued by any bank,
insurance
company, or other corporation acceptable to the Rating Agencies at
the time of
the issuance of the agreements, as evidenced by a signed writing
delivered by
each Rating Agency;
(vii)
repurchase obligations with respect to any security described
in
clauses (i) and (ii) above, in either case entered into with a
depository
institution or trust company (acting as principal) described in
clause (iv)
above; provided that such repurchase obligation would be accounted
for as a
financing arrangement under generally accepted accounting
principles;
(viii)
securities (other than stripped bonds, stripped coupons, or
instruments sold at a purchase price in excess of 115% of their
face amount)
bearing interest or sold at a discount issued by any corporation
incorporated
under the laws of the United States or any state thereof that, at
the time of
the investment, have one of the two highest ratings of each Rating
Agency
(except if the Rating Agency is Moody's the rating shall be the
highest
commercial paper rating of Moody's for the securities), or any
lower rating
that will not result in the downgrading, qualification or
withdrawal of the
ratings then assigned to the Certificates by the Rating Agencies,
as evidenced
by a signed writing delivered by each Rating Agency and that have a
maturity
date occurring no more than 365 days from their date of
issuance;
(ix) units
of a taxable money-market portfolio having the highest rating
assigned by each Rating Agency (except (i) if Fitch is a Rating
Agency and has
not rated the portfolio, the highest rating assigned by Moody's and
(ii) if
S&P is a Rating Agency, "AAAm" or "AAAM-G" by S&P) and
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restricted to obligations issued or guaranteed by the United States
of America
or entities whose obligations are backed by the full faith and
credit of the
United States of America and repurchase agreements collateralized
by such
obligations; and
(x) any
other investments bearing interest or sold at a discount
acceptable to each Rating Agency that will not result in the
downgrading,
qualification or withdrawal of the ratings then assigned to the
Certificates
by the Rating Agencies, as evidenced by a signed writing delivered
by each
Rating Agency.
No
Permitted Investment may (i) evidence the right to receive
interest
only payments with respect to the obligations underlying the
instrument, (ii)
be sold or disposed of before its maturity or (iii) be any
obligation of the
Seller or any of its Affiliates. Any Permitted Investment shall be
relatively
risk free and no options or voting rights shall be exercised with
respect to
any Permitted Investment. Any Permitted Investment shall be sold or
disposed
of in accordance with Financial Accounting Standard 140, paragraph
35c(6) in
effect as of the Closing Date.
Permitted
Transferee: Any person other than
(i) the
United States, any State or political subdivision thereof, or
any agency or instrumentality of any of the foregoing,
(ii) a
foreign government, International Organization, or any agency
or
instrumentality of either of the foregoing,
(iii) an
organization (except certain farmers' cooperatives described in
section 521 of the Code) that is exempt from tax imposed by Chapter
1 of the
Code (including the tax imposed by section 511 of the Code on
unrelated
business taxable income) on any excess inclusions (as defined in
section
860E(c)(1) of the Code) with respect to any Residual
Certificate,
(iv) a
rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code,
(v) an
"electing large partnership" as defined in section 775 of the
Code,
(vi) a
Person that is not a U.S. Person, and
(vii) any
other Person so designated by the Depositor based on an
Opinion of Counsel that the Transfer of an Ownership Interest in a
Residual
Certificate to the Person may cause any REMIC created hereunder to
fail to
qualify as a REMIC at any time that the Certificates are
outstanding.
Person:
Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization, or government, or any agency or
political
subdivision thereof.
Physical
Certificates: As specified in the Preliminary Statement.
Planned
Balance: With respect to any Planned Principal Classes and any
Distribution Date appearing in the Principal Balance Schedule, the
applicable
amount appearing opposite such Distribution Date for such Planned
Principal
Classes..
Planned
Principal Classes: As specified in the Preliminary Statement.
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<PAGE>
PO Formula
Principal Amount: As to any Distribution Date and the Class
PO Certificates, the sum of (i) the sum of the applicable PO
Percentage of (a)
the principal portion of each Scheduled Payment (without giving
effect, prior
to the Bankruptcy Coverage Termination Date, to any reductions
thereof caused
by any Debt Service Reductions or Deficient Valuations) due on each
Mortgage
Loan on the related Due Date, (b) the Stated Principal Balance of
each
Mortgage Loan that was repurchased by the Seller or purchased by
the Servicer
pursuant to this Agreement as of such Distribution Date, excluding
any
Mortgage Loan that was repurchased due to a modification of the
Mortgage Rate,
(c) the Substitution Adjustment Amount in connection with any
Deleted Mortgage
Loan received with respect to such Distribution Date, (d) any
Insurance
Proceeds or Liquidation Proceeds allocable to recoveries of
principal of
Mortgage Loans that are not yet Liquidated Mortgage Loans received
during the
calendar month preceding the month of such Distribution Date, (e)
with respect
to each Mortgage Loan that became a Liquidated Mortgage Loan during
the month
preceding the calendar month of such Distribution Date, the amount
of
Liquidation Proceeds allocable to principal received with respect
to such
Mortgage Loan during the month preceding the month of such
Distribution Date,
and (f) all Principal Prepayments with respect to the Mortgage
Loans received
during the related Prepayment Period, and (ii) with respect to
Subsequent
Recoveries attributable to a Discount Mortgage Loan that incurred
(1) an
Excess Loss or (2) a Realized Loss after the Senior Credit Support
Depletion
Date, the PO Percentage of any Subsequent Recoveries received
during the
calendar month preceding the month of such Distribution Date.
PO
Percentage: As to any Discount Mortgage Loan, a fraction
(expressed
as a percentage) the numerator of which is the excess of the
Required Coupon
over the Adjusted Net Mortgage Rate of such Discount Mortgage Loan
and the
denominator of which is such Required Coupon. As to any
Non-Discount Mortgage
Loan, 0%.
Pool
Stated Principal Balance: The aggregate Stated Principal Balance
of
the Mortgage Loans.
Prepayment
Assumption: The prepayment model used in the Prospectus
Supplement, which represents an assumed rate of prepayment each
month relative
to the then outstanding principal balance of a pool of mortgage
loans for the
life of those mortgage loans. A 100% Prepayment Assumption assumes
a constant
prepayment rate (a "CPR") of 8% per annum and an additional
approximately
1.090909% per annum in each month thereafter until the twelfth
month.
Beginning in the twelfth month and in each month thereafter during
the life of
the mortgage loans, a 100% Prepayment Assumption assumes a CPR of
20]% per
annum each month. 0% PPC assumes no prepayments. Correspondingly,
200% PPC
assumes prepayment rates equal to two times the related PPC, and so
forth.
Prepayment
Charge: As to a Mortgage Loan, any charge payable by a
Mortgagor in connection with certain partial prepayments and all
prepayments
in full made within the related Prepayment Charge Period, the
Prepayment
Charges with respect to each applicable Mortgage Loan so held by
the Trust
Fund being identified in the Mortgage Loan Schedule.
Prepayment
Charge Period: As to any Mortgage Loan, the period of time
during which a Prepayment Charge may be imposed.
Prepayment
Interest Excess: As to any Principal Prepayment received by
the Servicer on a Mortgage Loan from the first day through the
fifteenth day
of any calendar month other than the month of the Cut-off Date, all
amounts
paid by the related Mortgagor in respect of interest on such
Principal
Prepayment. All Prepayment Interest Excess shall be retained by the
Servicer
as additional servicing compensation.
Prepayment
Interest Shortfall: As to any Distribution Date, Mortgage
Loan and Principal Prepayment received on or after the sixteenth
day of the
month preceding the month of such Distribution
22
<PAGE>
Date (or, in the case of the first Distribution Date, on or after
the Cut-off
Date) and on or before the last day of the month preceding the
month of such
Distribution Date, the amount, if any, by which one month's
interest at the
related Mortgage Rate, net of the Servicing Fee Rate, on such
Principal
Prepayment exceeds the amount of interest paid in connection with
such
Principal Prepayment.
Prepayment
Period: As to any Distribution Date and related Due Date, the
period from and including the 16th day of the month immediately
prior to the
month of such Distribution Date (or, in the case of the first
Distribution
Date, from the Cut-off Date) and to and including the 15th day of
the month of
such Distribution Date.
Primary
Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any
Mortgage
Loan.
Principal
Balance Schedule: Not applicable.
Principal
Only Certificates: As specified in the Preliminary Statement.
Principal
Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan (including the principal portion of the Purchase
Price of any
Mortgage Loan purchased pursuant to Section 3.12) that is received
in advance
of its scheduled Due Date and is not accompanied by an amount
representing
scheduled interest due on any date in any month after the month of
prepayment.
The Servicer shall apply partial Principal Prepayments in
accordance with the
related Mortgage Note.
Principal
Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Priority
Amount: For any Distribution Date, the sum of (i) the product
of (A) the Scheduled Principal Distribution Amount, (B) the
Priority
Percentage and (C) the Shift Percentage and (ii) the product of (A)
the
Unscheduled Principal Distribution Amount, (B) the Priority
Percentage and (C)
the Shift Percentage.
Priority
Percentage: For any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the Class
Certificate
Balance of the Class A-3 Certificates immediately prior to that
Distribution
Date, and the denominator of which is the aggregate Class
Certificate Balance
of all of the Certificates (other than the Class PO Certificates)
immediately
prior to that Distribution Date.
Private
Certificates: As specified in the Preliminary Statement.
Pro Rata
Share: As to any Distribution Date and any Class of
Subordinated Certificates, the portion of the Subordinated
Principal
Distribution Amount allocable to such Class, equal to the product
of the
Subordinated Principal Distribution Amount on such Distribution
Date and a
fraction, the numerator of which is the related Class Certificate
Balance
thereof and the denominator of which is the aggregate Class
Certificate
Balance of the Subordinated Certificates, in each case immediately
prior to
such Distribution Date.
Proprietary Lease: For any Cooperative Unit, a lease or
occupancy
agreement between a Cooperative Corporation and a holder of related
Co-op
Shares.
Prospectus
Supplement: The Prospectus Supplement dated September 27,
2006, relating to the Offered Certificates, and any supplement
thereto.
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<PAGE>
PUD:
Planned Unit Development.
Purchase
Price: For any Mortgage Loan required to be purchased by the
Seller pursuant to Section 2.02 or 2.03 or purchased by the
Servicer pursuant
to Section 3.12, the sum of
(i) 100%
of the unpaid principal balance of the Mortgage Loan on the
date of the purchase,
(ii)
accrued and unpaid interest on the Mortgage Loan at the
applicable
Mortgage Rate (or at the applicable Adjusted Mortgage Rate if (x)
the
purchaser is the Servicer or (y) if the purchaser is the Seller and
the Seller
is the Servicer) from the date through which interest was last paid
by the
Mortgagor to the Due Date in the month in which the Purchase Price
is to be
distributed to Certificateholders, net of any unreimbursed Advances
made by
the Servicer on the Mortgage Loan, and
(iii) any
costs and damages incurred by the Trust Fund in connection
with any violation by the Mortgage Loan of any predatory or abusive
lending
law.
If the
Mortgage Loan is purchased pursuant to Section 3.12, the
interest
component of the Purchase Price shall be computed (i) on the basis
of the
applicable Adjusted Mortgage Rate before giving effect to the
related
modification and (ii) from the date to which interest was last paid
to the
date on which the Mortgage Loan is assigned to the Servicer
pursuant to
Section 3.12.
Qualified
Insurer: A mortgage guaranty insurance company duly qualified
as such under the laws of the state of its principal place of
business and
each state having jurisdiction over the insurer in connection with
the
insurance policy issued by the insurer, duly authorized and
licensed in such
states to transact a mortgage guaranty insurance business in such
states and
to write the insurance provided by the insurance policy issued by
it, approved
as a FNMA- or FHLMC-approved mortgage insurer or having a claims
paying
ability rating of at least "AA" or equivalent rating by a
nationally
recognized statistical rating organization. Any replacement insurer
with
respect to a Mortgage Loan must have at least as high a claims
paying ability
rating as the insurer it replaces had on the Closing Date.
Rating
Agency: Each of the Rating Agencies specified in the
Preliminary
Statement. If any of them or a successor is no longer in existence,
"Rating
Agency" shall be the nationally recognized statistical rating
organization, or
other comparable Person, designated by the Depositor and named in
the
Underwriters' Exemption, notice of which designation shall be given
to the
Trustee. References to a given rating or rating category of a
Rating Agency
means the rating category without giving effect to any
modifiers.
Realized
Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of
the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated
Principal
Balance of the Liquidated Mortgage Loan as of the date of such
liquidation,
plus (ii) interest at the Adjusted Net Mortgage Rate from the Due
Date as to
which interest was last paid or advanced (and not reimbursed)
to
Certificateholders up to the Due Date in the month in which
Liquidation
Proceeds are required to be distributed on the Stated Principal
Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the
Liquidation
Proceeds, if any, received during the month in which such
liquidation
occurred, to the extent applied as recoveries of interest at the
Adjusted Net
Mortgage Rate and to principal of the Liquidated Mortgage Loan.
With respect
to each Mortgage Loan that has become the subject of a Deficient
Valuation, if
the principal amount due under the related Mortgage Note has been
reduced, the
difference between the principal balance of the Mortgage Loan
outstanding
immediately prior to such Deficient Valuation and the principal
balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect
to each
Mortgage Loan that has become the
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<PAGE>
subject of a Debt Service Reduction and any Distribution Date, the
amount, if
any, by which the principal portion of the related Scheduled
Payment has been
reduced.
To the
extent the Servicer receives Subsequent Recoveries with respect
to any Mortgage Loan, the amount of the Realized Loss with respect
to that
Mortgage Loan will be reduced by such Subsequent Recoveries.
Recognition Agreement: For any Cooperative Loan, an agreement
between
the Cooperative Corporation and the originator of the Mortgage Loan
that
establishes the rights of the originator in the Cooperative
Property.
Record
Date: With respect to any Distribution Date and any Definitive
Certificate and the Delay Certificates, the close of business on
the last
Business Day of the month preceding the month of that Distribution
Date. With
respect to any Distribution Date and the Non-Delay Certificates as
long as
they are Book-Entry Certificates, the Business Day immediately
prior to such
Distribution Date.
Reference
Bank: As defined in Section 4.09.
Refinance
Loan: Any Mortgage Loan the proceeds of which are used to
refinance an Original Mortgage Loan.
Regular
Certificates: As specified in the Preliminary Statement.
Regulation
AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to
time, and subject to such clarification and interpretation as have
been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan.
7, 2005))
or by the staff of the Commission, or as may be provided by the
Commission or
its staff from time to time.
Relief
Act: The Servicemembers Civil Relief Act.
Relief Act
Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount
of interest
collectible thereon for the most recently ended calendar month as a
result of
the application of the Relief Act or any similar state or local
laws, the
amount, if any, by which (i) interest collectible on such Mortgage
Loan for
the most recently ended calendar month is less than (ii) interest
accrued
thereon for such month pursuant to the Mortgage Note.
REMIC: A
"real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
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 regulations promulgated thereunder, as the foregoing may be in
effect from
time to time as well as provisions of applicable state laws.
REO
Property: A Mortgaged Property acquired by the Trust Fund
through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
Reportable
Event: Any event required to be reported on Form 8-K, and in
any event, the following:
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(a) entry
into a definitive agreement related to the Trust Fund, the
Certificates or the Mortgage Loans, or an amendment to a
Transaction Document,
even if the Depositor is not a party to such agreement (e.g., a
servicing
agreement with a servicer contemplated by Item 1108(a)(3) of
Regulation AB);
(b)
termination of a Transaction Document (other than by expiration
of
the agreement on its stated termination date or as a result of all
parties
completing their obligations under such agreement), even if the
Depositor is
not a party to such agreement (e.g., a servicing agreement with a
servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(c) with
respect to the Servicer only, if the Servicer becomes aware of
any bankruptcy or receivership with respect to the Seller, the
Depositor, the
Servicer, the Trustee, any enhancement or support provider
contemplated by
Items 1114(b) or 1115 of Regulation AB, or any other material
party
contemplated by Item 1101(d)(1) of Regulation AB;
(d) with respect
to the Trustee, the Servicer and the Depositor only,
the occurrence of an early amortization, performance trigger or
other event,
including an Event of Default under this Agreement;
(e) any
amendment to this Agreement;
(f) the
resignation, removal, replacement, substitution of the Servicer
or the Trustee;
(g) with
respect to the Servicer only, if the Servicer becomes aware
that (i) any material enhancement or support specified in Item
1114(a)(1)
through (3) of Regulation AB or Item 1115 of Regulation AB that was
previously
applicable regarding one or more classes of the Certificates has
terminated
other than by expiration of the contract on its stated termination
date or as
a result of all parties completing their obligations under such
agreement;
(ii) any material enhancement specified in Item 1114(a)(1) through
(3) of
Regulation AB or Item 1115 of Regulation AB has been added with
respect to one
or more Classes of the Certificates; or (iii) any existing
material
enhancement or support specified in Item 1114(a)(1) through (3) of
Regulation
AB or Item 1115 of Regulation AB with respect to one or more
Classes of the
Certificates has been materially amended or modified; and
(h) with
respect to the Trustee, the Servicer and the Depositor only, a
required distribution to Holders of the Certificates is not made as
of the
required Distribution Date under this Agreement.
Reporting
Subcontractor: With respect to the Servicer or the Trustee,
any Subcontractor determined by such Person pursuant to Section
11.08(b) to be
"participating in the servicing function" within the meaning of
Item 1122 of
Regulation AB. References to a Reporting Subcontractor shall refer
only to the
Subcontractor of such Person and shall not refer to Subcontractors
generally.
Request
for Release: The Request for Release submitted by the Servicer
to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required
Coupon: 6.25% per annum.
Required
Insurance Policy: For any Mortgage Loan, any insurance policy
that is required to be maintained from time to time under this
Agreement.
Residual
Certificates: As specified in the Preliminary Statement.
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<PAGE>
Responsible Officer:
When used with respect to the Trustee, any Managing
Director, any Director, Vice President, any Assistant Vice
President, any
Associate, any Assistant Secretary, any Trust Officer, or any other
officer of
the Trustee customarily performing functions similar to those
performed by any
of the above designated officers who at such time shall be officers
to whom,
with respect to a particular matter, the matter is referred because
of the
officer's knowledge of and familiarity with the particular subject
and who has
direct responsibility for the administration of this Agreement.
Restricted
Classes: As defined in Section 4.02(e).
SAIF: The
Savings Association Insurance Fund, or any successor thereto.
Sarbanes-Oxley Certification: As defined in Section 11.05.
S&P:
Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. If
S&P is designated as a Rating Agency in the Preliminary
Statement, for
purposes of Section 10.05(b) the address for notices to S&P
shall be Standard
& Poor's, a division of The McGraw-Hill Companies, Inc., 55
Water Street, New
York, New York 10041, Attention: Mortgage Surveillance Monitoring,
or any
other address that S&P furnishes to the Depositor and the
Servicer.
Scheduled
Balance: Not applicable.
Scheduled
Classes: As specified in the Preliminary Statement.
Scheduled
Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such
Mortgage Loan
which, unless otherwise specified herein, shall give effect to any
related
Debt Service Reduction and any Deficient Valuation that affects the
amount of
the monthly payment due on such Mortgage Loan.
Scheduled
Principal Distribution Amount: For any Distribution Date, an
amount equal to the Senior Percentage of the Non-PO Percentage of
all amounts
described in subclauses (a) through (d) of clause (i) of the
definition of
Non-PO Formula Principal Amount for such Distribution Date;
provided, however,
that if a Bankruptcy Loss that is an Excess Loss is sustained with
respect to
a Mortgage Loan that is not a Liquidated Mortgage Loan, the
Scheduled
Principal Distribution Amount will be reduced on the related
Distribution Date
by the Non-PO Percentage of the principal portion of such
Bankruptcy Loss.
Securities
Act: The Securities Act of 1933, as amended.
Security
Agreement: For any Cooperative Loan, the agreement between the
owner of the related Co-op Shares and the originator of the related
Mortgage
Note that defines the security interest in the Co-op Shares and the
related
Proprietary Lease.
Seller:
IndyMac Bank, F.S.B., a federal savings bank, and its
successors
and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Senior
Certificate Group: None.
Senior
Certificates: As specified in the Preliminary Statement.
Senior
Credit Support Depletion Date: The date on which the Class
Certificate Balance of each Class of Subordinated Certificates has
been
reduced to zero.
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<PAGE>
Senior
Liquidation Amount: For any Distribution Date and for each
Mortgage Loan that became a Liquidated Mortgage Loan during the
calendar month
preceding the month of the Distribution Date, the lesser of (a) the
Senior
Percentage of the applicable Non-PO Percentage of the Stated
Principal Balance
of the Mortgage Loan and (b) either (x) if an Excess Loss was not
sustained on
the Liquidated Mortgage Loan during the preceding calendar month,
the Senior
Prepayment Percentage of the Non-PO Percentage of the amount of
the
Liquidation Proceeds allocable to principal received on the
Mortgage Loan or
(y) if an Excess Loss was sustained on the Liquidated Mortgage Loan
during the
preceding calendar month, the Senior Percentage of the applicable
Non-PO
Percentage of the amount of the Liquidation Proceeds allocable to
principal
received on the Mortgage Loan.
Senior
Percentage: As to any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the aggregate
Class
Certificate Balance of the Senior Certificates (other than the
Class PO
Certificates and the Notional Amount Certificates) immediately
before the
Distribution Date and the denominator of which is the aggregate
Class
Certificate Balance of the Certificates (other than the Class PO
Certificates
and the Notional Amount Certificates) immediately before the
Distribution
Date.
Senior
Prepayment Percentage: As to any Distribution Date during the
five years beginning on the first Distribution Date, 100%. The
Senior
Prepayment Percentage for any Distribution Date occurring on or
after the
fifth anniversary of the first Distribution Date will, except as
provided in
this Agreement, be as follows: for any Distribution Date in the
first year
thereafter, the Senior Percentage plus 70% of the Subordinated
Percentage for
such Distribution Date; for any Distribution Date in the second
year
thereafter, the Senior Percentage plus 60% of the Subordinated
Percentage for
such Distribution Date; for any Distribution Date in the third
year
thereafter, the Senior Percentage plus 40% of the Subordinated
Percentage for
such Distribution Date; for any Distribution Date in the fourth
year
thereafter, the Senior Percentage plus 20% of the Subordinated
Percentage for
such Distribution Date; and for any Distribution Date thereafter,
the Senior
Percentage for such Distribution Date (unless on any Distribution
Date the
Senior Percentage exceeds the initial Senior Percentage, in which
case the
Senior Prepayment Percentage for such Distribution Date will once
again equal
100%). Notwithstanding the foregoing, no decrease in the Senior
Prepayment
Percentage will occur unless both Senior Step Down Conditions are
satisfied.
Senior
Principal Distribution Amount: As to any Distribution Date, the
sum of (i) the related Senior Percentage of the Non-PO Percentage
of all
amounts described in subclauses (a) through (d) of clause (i) of
the
definition of Non-PO Formula Principal Amount for such Distribution
Date, (ii)
the Senior Liquidation Amount for that Distribution Date, and (iii)
the Senior
Prepayment Percentage of the applicable Non-PO Percentage of the
amounts
described in subclause (f) of clause (i) of the definition of
Non-PO Formula
Principal Amount for such Distribution Date, and (iv) the Senior
Prepayment
Percentage of any Subsequent Recoveries described in clause (ii) of
the
definition of Non-PO Formula Principal Amount for such Distribution
Date;
provided, however, that if a Bankruptcy Loss that is an Excess Loss
is
sustained with respect to a Mortgage Loan that is not a Liquidated
Mortgage
Loan, the Senior Principal Distribution Amount will be reduced on
the related
Distribution Date by the Senior Percentage of the applicable Non-PO
Percentage
of the principal portion of such Bankruptcy Loss.
Senior
Step Down Conditions: As to any Distribution Date: (i) the
aggregate Stated Principal Balance of all Mortgage Loans 60 days or
more
Delinquent (averaged over the preceding six month period)
(including any
Mortgage Loans subject to foreclosure proceedings, REO Property
(regardless of
whether that Mortgage Loan is 60 days or more Delinquent) and
Mortgage Loans
the mortgagors of which are in bankruptcy), as a percentage of the
aggregate
Class Certificate Balance of the Subordinated Certificates, does
not equal or
exceed 50%, and (ii) cumulative Realized Losses do not exceed: (a)
commencing
with the Distribution Date on the fifth anniversary of the first
Distribution
Date, 30% of the Original Subordinated Principal Balance, (b)
commencing with
the Distribution Date on the sixth anniversary of the first
Distribution Date,
35% of the Original Subordinated Principal Balance,
28
<PAGE>
(c) commencing with the Distribution Date on the seventh
anniversary of the
first Distribution Date, 40% of the Original Subordinated Principal
Balance,
(d) commencing with the Distribution Date on the eighth anniversary
of the
first Distribution Date, 45% of the Original Subordinated Principal
Balance,
and (e) commencing with the Distribution Date on the ninth
anniversary of the
first Distribution Date, 50% of the Original Subordinated Principal
Balance.
Senior Termination Date: Not applicable.
Servicer:
IndyMac Bank, F.S.B., a federal savings bank, and its
successors and assigns, in its capacity as Servicer under this
Agreement.
Servicer
Advance Date: As to any Distribution Date, 12:30 P.M. Pacific
time on the Business Day preceding the Distribution Date.
Servicing
Account: The separate Eligible Account or Accounts created and
maintained pursuant to Section 3.06(b).
Servicing
Advances: All customary, reasonable, and necessary "out of
pocket" costs and expenses incurred in the performance by the
Servicer of its
servicing obligations, including the cost of
(a) the preservation, restoration, and protection of a
Mortgaged
Property,
(b) expenses reimbursable to the Servicer pursuant to Section
3.12
and any
enforcement or judicial proceedings, including foreclosures,
(c) the maintenance and liquidation of any REO Property,
(d) compliance with the obligations under Section 3.10; and
(e) reasonable compensation to the Servicer or its affiliates
for
acting as
broker in connection with the sale of foreclosed Mortgaged
Properties
and for performing certain default management and other
similar
services (including appraisal services) in connection with the
servicing
of defaulted Mortgage Loans. For purposes of this clause (e),
only costs
and expenses incurred in connection with the performance of
activities
generally considered to be outside the scope of customary
servicing
duties shall be treated as Servicing Advances.
Servicing
Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB.
Servicing
Fee: As to each Mortgage Loan and any Distribution Date, one
month's interest at the applicable Servicing Fee Rate on the Stated
Principal
Balance of the Mortgage Loan, or, whenever a payment of interest
accompanies a
Principal Prepayment in Full made by the Mortgagor, interest at the
Servicing
Fee Rate on the Stated Principal Balance of the Mortgage Loan for
the period
covered by the payment of interest, subject to reduction as
provided in
Section 3.15.
Servicing
Fee Rate: For each Mortgage Loan, the per annum rate specified
on the Mortgage Loan Schedule.
Servicing
Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name and facsimile signature appear on a list of servicing officers
furnished
to the Trustee by the Servicer on the Closing Date pursuant to this
Agreement,
as the list may from time to time be amended.
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<PAGE>
Servicing
Standard: That degree of skill and care exercised by the
Servicer with respect to mortgage loans comparable to the Mortgage
Loans
serviced by the Servicer for itself or others.
Shift
Percentage: For any Distribution Date occurring during the five
years beginning on the first Distribution Date, 0%. Thereafter, the
Shift
Percentage for any Distribution Date occurring on or after the
fifth
anniversary of the first Distribution Date will be as follows: for
any
Distribution Date in the first year thereafter, 30%; for any
Distribution Date
in the second year thereafter, 40%; for any Distribution Date in
the third
year thereafter, 60%; for any Distribution Date in the fourth year
thereafter,
80%; and for any Distribution Date thereafter, 100%.
Special
Hazard Coverage Termination Date: The point in time at which
the
Special Hazard Loss Coverage Amount is reduced to zero.
Special
Hazard Loss: Any Realized Loss suffered by a Mortgaged Property
on account of direct physical loss, but not including (i) any loss
of a type
covered by a hazard insurance policy or a flood insurance policy
required to
be maintained with respect to such Mortgaged Property pursuant to
Section 3.10
to the extent of the amount of such loss covered thereby, or (ii)
any loss
caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of the
Trustee,
the Servicer or any of their agents or employees (without
regard to
any portion of the loss not covered by any errors and
omissions
policy);
(c) errors in design, faulty workmanship or faulty materials,
unless the
collapse of the property or a part thereof ensues and then
only for
the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled
or
uncontrolled, and whether such loss be direct or indirect,
proximate or
remote or
be in whole or in part caused by, contributed to or aggravated
by a peril
covered by the definition of the term "Special Hazard Loss";
(e) hostile or warlike action in time of peace and 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;
(f) any weapon of war employing nuclear fission, fusion or
other
radioactive force, whether in time of peace or war; or
(g) 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.
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<PAGE>
Special
Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $2,244,449.54. With respect to any Distribution
Date after
the first Distribution Date, the lesser of (a) the greatest of (i)
1% of the
aggregate of the principal balances of the Mortgage Loans, (ii)
twice the
principal balance of the largest Mortgage Loan and (iii) the
aggregate of the
principal balances of all Mortgage Loans secured by Mortgaged
Properties
located in the single California postal zip code area having the
highest
aggregate principal balance of any such zip code area and (b) the
Special
Hazard Loss Coverage Amount as of the Closing Date less the amount,
if any, of
Special Hazard Losses allocated to the Certificates since the
Closing Date.
All principal balances for the purpose of this definition will be
calculated
as of the first day of the calendar month preceding the month of
such
Distribution Date after giving effect to Scheduled Payments on the
Mortgage
Loans then due, whether or not paid.
Special
Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.
Startup
Day: The Closing Date.
Stated
Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date,
as
specified in the amortization schedule at the time relating thereto
(before
any adjustment to such amortization schedule by reason of any
moratorium or
similar waiver or grace period) after giving effect to the sum of:
(i) the
payment of principal due on such Due Date and irrespective of any
delinquency
in payment by the related Mortgagor and (ii) any Liquidation
Proceeds
allocable to principal received in the prior calendar month and
Principal
Prepayments received through the last day of the Prepayment Period
in which
the Due Date occurs, in each case with respect to such Mortgage
Loan.
Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing (as "servicing" is commonly
understood
by participants in the mortgage-backed securities market) of
Mortgage Loans
but performs one or more discrete functions identified in Item
1122(d) of
Regulation AB with respect to the Mortgage Loans under the
direction or
authority of the Servicer or the Trustee, as the case may be.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordinated Percentage: As to any Distribution Date, 100% minus
the
Senior Percentage for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution Date,
100%
minus the Senior Prepayment Percentage for such Distribution
Date.
Subordinated Principal Distribution Amount: As to any Distribution
Date,
the sum of the following: (i) the Subordinated Percentage of the
applicable
Non-PO Percentage of all amounts described in subclauses (a)
through (d) of
clause (i) of the definition of Non-PO Formula Principal Amount
with respect
to such Distribution Date, (ii) for each Mortgage Loan that became
a
Liquidated Mortgage Loan during the calendar month preceding the
month of the
Distribution Date, the applicable Non-PO Percentage of the portion
of the
Liquidation Proceeds allocable to principal received on the
Mortgage Loan,
after application of the amounts pursuant to clause (ii) of the
definition of
Senior Principal Distribution Amount, up to the Subordinated
Percentage of the
applicable Non-PO Percentage of the Stated Principal Balance of the
Mortgage
Loan, and (iii) the Subordinated Prepayment Percentage of the
applicable
Non-PO Percentage of the amounts described in subclause (f) of
clause (i) and
in clause (ii) of the definition of Non-PO Formula Principal Amount
with
respect to such Distribution Date, reduced by the amount of any
payments in
respect of Class PO Deferred Amounts for such Distribution
Date.
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<PAGE>
Subsequent
Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a
prior calendar
month, unexpected amounts received by the Servicer (net of any
related
expenses permitted to be reimbursed pursuant to Section 3.09)
specifically
related to such Liquidated Mortgage Loan.
Substitute
Mortgage Loan: A Mortgage Loan substituted by the Seller for
a Deleted Mortgage Loan that must, on the date of substitution, as
confirmed
in a Request for Release, substantially in the form of Exhibit
M,
(i) have a
Stated Principal Balance, after deduction of the principal
portion of the Scheduled Payment due in the month of substitution,
not in
excess of, and not more than 10% less than, the Stated Principal
Balance of
the Deleted Mortgage Loan (unless the amount of any shortfall is
deposited by
the Seller in the Certificate Account and held for distribution to
the
Certificateholders on the related Distribution Date);
(ii) have
a Mortgage Rate no lower than and not more than 1% per annum
higher than the Deleted Mortgage Loan;
(iii) have
a Loan-to-Value Ratio no higher than that of the Deleted
Mortgage Loan;
(iv) have
a remaining term to maturity no greater than (and not more
than one year less than) that of the Deleted Mortgage Loan;
(v) not be
a Cooperative Loan unless the Deleted Mortgage Loan was a
Cooperative Loan; and
(vi)
comply with each representation and warranty in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Supplemental Interest Reserve Fund: Not applicable.
Supplemental Interest Trust: Not applicable.
Supplemental Interest Trustee: Not applicable.
Suspension
Notification: Notification to the Commission of the
suspension of the Trust Fund's obligation to file reports pursuant
to Section
15(d) of the Exchange Act.
Targeted Balance: Not
applicable.
Targeted
Principal Classes: As specified in the Preliminary Statement.
Termination Date: Not applicable.
Transaction Documents: This Agreement and any other document or
agreement entered into in connection with the Trust Fund, the
Certificates or
the Mortgage Loans.
Transfer:
Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer
Payment Made: Not applicable.
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<PAGE>
Transfer
Payment Received: Not applicable.
Trust
Fund: The corpus of the trust created under this Agreement
consisting of
(i) the
Mortgage Loans and all interest and principal received on them
after the Cut-off Date, other than amounts due on the Mortgage
Loans by the
Cut-off Date;
(ii) the
Certificate Account, the Distribution Account and all amounts
deposited therein pursuant to this Agreement (including amounts
received from
the Seller on the Closing Date that will be deposited by the
Trustee in the
Certificate Account pursuant to Section 2.01);
(iii)
property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure, or otherwise;
(iv) the
right to collect any amounts under any mortgage insurance
policies covering any Mortgage Loan and any collections received
under any
mortgage insurance policies covering any Mortgage Loan;
(v)
[reserved]; and
(vi) all
proceeds of the conversion, voluntary or involuntary, of any of
the foregoing.
Trustee:
Deutsche Bank National Trust Company and its successors and, if
a successor trustee is appointed under this Agreement, the
successor.
Trustee
Fee: The fee payable to the Trustee on each Distribution Date
for its services as Trustee hereunder, in an amount equal to
one-twelfth of
the Trustee Fee Rate multiplied by the aggregate Stated Principal
Balance of
the Mortgage Loans immediately prior to such Distribution Date.
Trustee
Fee Rate: 0.0085% per annum.
The terms
"United States," "State," and "International Organization"
have the meanings in section 7701 of the Code or successor
provisions. A
corporation will not be treated as an instrumentality of the United
States or
of any State or political subdivision thereof for these purposes if
all of its
activities are subject to tax and, with the exception of the
Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not
selected by
such government unit.
UCC: The
Uniform Commercial Code for the State of New York.
Undercollateralized Group: Not applicable.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41,
67
Fed. Reg. 54487 (2002) (or any successor thereto), or any
substantially
similar administrative exemption granted by the U.S. Department of
Labor.
United
States Person or U.S. Person:
(i) A
citizen or resident of the United States;
(ii) a
corporation (or entity treated as a corporation for tax
purposes)
created or organized in the United States or under the laws of the
United
States or of any state thereof, including, for this purpose, the
District of
Columbia;
33
<PAGE>
(iii) a
partnership (or entity treated as a partnership for tax
purposes) organized in the United States or under the laws of the
United
States or of any state thereof, including, for this purpose, the
District of
Columbia (unless provided otherwise by future Treasury
regulations);
(iv) an
estate whose income is includible in gross income for United
States income tax purposes regardless of its source; or
(v) 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 U.S.
Persons have authority to control all substantial decisions of the
trust.
Notwithstanding the last clause of the preceding sentence, to the
extent
provided in Treasury regulations, certain trusts in existence on
August 20,
1996, and treated as U.S. Persons before that date, may elect to
continue to
be U.S. Persons.
Unscheduled Principal Distribution Amount: For any Distribution
Date,
the sum of (i) the sum of (A) the Senior Liquidation Amount and (B)
the amount
set forth under clause (ii) of the definition of Subordinated
Principal
Distribution Amount, (ii) the Non-PO Percentage of the sum of the
amounts set
forth under subclause (f) of clause (i) of the definition of Non-PO
Formula
Principal Amount for such Distribution Date and (iii) any
Subsequent
Recoveries described in clause (ii) of the definition of Non-PO
Formula
Principal Amount for that Distribution Date.
U.S.A.
Patriot Act: The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001.
Voting
Rights: The portion of the voting rights of all of the
Certificates that is allocated to any Certificate. As of any date
of
determination, (a) 1% of all Voting Rights shall be allocated to
each Class of
Notional Amount Certificates (the Voting Rights to be allocated
among the
holders of Certificates of each Class in accordance with their
respective
Percentage Interests), (b) 1% of all Voting Rights shall be
allocated to the
Holder of the Class A-R Certificates and (c) the remaining Voting
Rights shall
be allocated among Holders of the remaining Classes of Offered
Certificates in
proportion to the Certificate Balances of the respective
Certificates on the
date.
Withdrawal
Date: The 18th day of each month, or if such day is not a
Business Day, the next preceding Business Day.
Yield
Supplement Amount: Not applicable.
Section
1.02 Rules of Construction.
Except as
otherwise expressly provided in this Agreement or unless the
context clearly requires otherwise
(a) References to designated articles, sections, subsections,
exhibits,
and other subdivisions of this Agreement, such as "Section
6.12 (a),"
refer to the designated article, section, subsection,
exhibit,
or other subdivision of this Agreement as a whole and to all
subdivisions of the designated article, section, subsection,
exhibit, or
other
subdivision. The words "herein," "hereof," "hereto,"
"hereunder,"
and other
words of similar import refer to this Agreement as a whole and
not to any
particular article, section, exhibit, or other subdivision of
this
Agreement.
(b) Any term that relates to a document or a statute, rule, or
regulation
includes any amendments, modifications, supplements, or any
other
changes that may have occurred since
34
<PAGE>
the
document, statute, rule, or regulation came into being,
including
changes
that occur after the date of this Agreement.
(c) Any party may execute any of the requirements under this
Agreement
either directly or through others, and the right to cause
something
to be done rather than doing it directly shall be implicit in
every
requirement under this Agreement. Unless a provision is
restricted
as to time
or limited as to frequency, all provisions under this
Agreement
are implicitly available and things may happen from time to
time.
(d) The term "including" and all its variations mean "including
but not
limited to." Except when used in conjunction with the word
"either,"
the word "or" is always used inclusively (for example, the
phrase "A
or B" means "A or B or both," not "either A or B but not
both").
(e) A reference to "a [thing]" or "any [of a thing]" does not
imply the
existence or occurrence of the thing referred to even though
not
followed by "if any," and "any [of a thing]" is any of it. A
reference
to the plural of anything as to which there could be either
one or
more than one does not imply the existence of more than one
(for
instance,
the phrase "the obligors on a note" means "the obligor or
obligors
on a note"). "Until [something occurs]" does not imply that it
must
occur, and will not be modified by the word "unless." The word
"due" and
the word "payable" are each used in the sense that the stated
time for
payment has passed. The word "accrued" is used in its
accounting
sense, i.e., an amount paid is no longer accrued. In the
calculation of amounts of things, differences and sums may
generally
result in
negative numbers, but when the calculation of the excess of
one thing
over another results in zero or a negative number, the
calculation is disregarded and an "excess" does not exist. Portions
of
things may
be expressed as fractions or percentages interchangeably.
(f) All accounting terms used in an accounting context and not
otherwise
defined, and accounting terms partly defined in this
Agreement,
to the extent not completely defined, shall be construed in
accordance
with generally accepted accounting principles. To the extent
that the
definitions of accounting terms in this Agreement are
inconsistent with their meanings under generally accepted
accounting
principles, the definitions contained in this Agreement shall
control.
Capitalized terms used in this Agreement without definition that
are
defined in
the Uniform Commercial Code are used in this Agreement as
defined in
the Uniform Commercial Code.
(g) In the computation of a period of time from a specified
date
to a later
specified date or an open-ended period, the words "from" and
"beginning" mean "from and including," the word "after" means "from
but
excluding," the words "to" and "until" mean "to but excluding," and
the
word
"through" means "to and including." Likewise, in setting
deadlines
or other
periods, "by" means "by." The words "preceding," "following,"
and words
of similar import, mean immediately preceding or following.
References
to a month or a year refer to calendar months and calendar
years.
(h) Any reference to the enforceability of any agreement against
a
party
means that it is enforceable, subject as to enforcement against
the party,
to applicable bankruptcy, insolvency, reorganization, and
other
similar laws of general applicability relating to or affecting
creditors'
rights and to general equity principles.
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ARTICLE TWO
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section
2.01 Conveyance of Mortgage Loans.
(a) The
Seller, concurrently with the execution and delivery of this
Agreement, hereby transfers to the Depositor, without recourse, all
the
interest of the Seller in each Mortgage Loan, including all
interest and
principal received or receivable by the Seller on each Mortgage
Loan after the
Cut-off Date and all interest and principal payments on each
Mortgage Loan
received before the Cut-off Date for installments of interest and
principal
due after the Cut-off Date but not including payments of principal
and
interest due by the Cut-off Date. By the Closing Date, the Seller
shall
deliver to the Depositor or, at the Depositor's direction, to the
Trustee or
other designee of the Depositor, the Mortgage File for each
Mortgage Loan
listed in the Mortgage Loan Schedule (except that, in the case of
Mortgage
Loans that are Delay Delivery Mortgage Loans, such delivery may
take place
within five Business Days of the Closing Date) as of the Closing
Date. The
delivery of the Mortgage Files shall be made against payment by the
Depositor
of the purchase price, previously agreed to by the Seller and
Depositor, for
the Mortgage Loans. With respect to any Mortgage Loan that does not
have a
first payment date on or before the Due Date in the month of the
first
Distribution Date, the Seller shall deposit into the Distribution
Account on
the first Distribution Account Deposit Date an amount equal to one
month's
interest at the related Adjusted Mortgage Rate on the Cut-off Date
Principal
Balance of such Mortgage Loan. Also on the Closing Date the
Depositor shall
deposit $100 into the Certificate Account.
(b) The
Depositor, concurrently with the execution and delivery of this
Agreement, hereby transfers to the Trustee for the benefit of
the
Certificateholders, without recourse, all the interest of the
Depositor in the
Trust Fund, together with the Depositor's right to require the
Seller to cure
any breach of a representation or warranty made in this Agreement
by the
Seller or to repurchase or substitute for any affected Mortgage
Loan in
accordance with this Agreement.
(c) In
connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered (or, in the case of the Delay
Delivery
Mortgage Loans, will deliver to the Trustee within the time periods
specified
in the definition of Delay Delivery Mortgage Loans), for the
benefit of the
Certificateholders the following documents or instruments with
respect to each
Mortgage Loan so assigned:
(i) The
original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
_______________
______________without recourse," with all intervening endorsements
showing a
complete chain of endorsement from the originator to the Person
endorsing the
Mortgage Note (each endorsement being sufficient to transfer all
interest of
the party so endorsing, as noteholder or assignee thereof, in that
Mortgage
Note) or a lost note affidavit for any Lost Mortgage Note from the
Seller
stating that the original Mortgage Note was lost or destroyed,
together with a
copy of the Mortgage Note;
(ii)
Except as provided below and for each Mortgage Loan that is not
a
MERS Mortgage Loan, the original recorded Mortgage or a copy of
such Mortgage
certified by the Seller as being a true and complete copy of the
Mortgage (or,
in the case of a Mortgage for which the related Mortgaged Property
is located
in the Commonwealth of Puerto Rico, a true copy of the Mortgage
certified as
such by the applicable notary) and in the case of each MERS
Mortgage
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Loan, the original Mortgage, noting the presence of the MIN of the
Mortgage
Loan and either language indicating that the Mortgage Loan is a MOM
Loan if
the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a
MOM Loan at
origination, the original Mortgage and the assignment thereof to
MERS, with
evidence of recording indicated thereon, or a copy of the Mortgage
certified
by the public recording office in which such Mortgage has been
recorded;
(iii) in
the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage (which may be
included in a
blanket assignment or assignments), together with, except as
provided below,
all interim recorded assignments of the mortgage (each assignment,
when duly
and validly completed, to be in recordable form and sufficient to
effect the
assignment of and transfer to its assignee of the Mortgage to which
the
assignment relates). If the related Mortgage has not been returned
from the
applicable public recording office, the assignment of the Mortgage
may exclude
the information to be provided by the recording office. The
assignment of
Mortgage need not be delivered in the case of a Mortgage for which
the related
Mortgage Property is located in the Commonwealth of Puerto
Rico;
(iv) The
original or copies of each assumption, modification, written
assurance, or substitution agreement;
(v) Except
as provided below, the original or duplicate original
lender's title policy and all its riders;
(vi) The
originals of the following documents for each Cooperative Loan:
(A) the Co-op
Shares, together with a stock power in blank;
(B) the executed
Security Agreement;
(C) the executed
Proprietary Lease;
(D) the executed
Recognition Agreement;
(E) the executed
UCC-1 financing statement that has been filed
in all places required to perfect the Seller's interest in
the Co-op Shares and the Proprietary Lease with evidence of
recording on it; and
(F) executed
UCC-3 financing statements or other appropriate UCC
financing statements required by state law, evidencing a
complete and unbroken line from the mortgagee to the Trustee
with evidence of recording thereon (or in a form suitable
for recordation). If in connection with any Mortgage Loan
the Depositor cannot deliver
(a) the original
recorded Mortgage,
(b) all interim
recorded assignments, or
(c)
the lender's
title policy (together with all its
riders).
In
addition, in connection with the assignment of any MERS
Mortgage
Loan, the Seller agrees that it will cause, at the Seller's
expense, the
MERS(R) System to indicate that the Mortgage Loans
37
<PAGE>
sold by the Seller to the Depositor 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
that are repurchased in accordance with this Agreement) in such
computer files
the information required by the MERS(R) System to identify the
series of the
Certificates issued in connection with such Mortgage Loans. The
Seller further
agrees that it will not, and will not permit the Servicer to, and
the Servicer
agrees that it will not, alter the information referenced in this
paragraph
with respect to any Mortgage Loan sold by the Seller to the
Depositor during
the term of this Agreement unless and until such Mortgage Loan is
repurchased
in accordance with the terms of this Agreement.
In the
event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Depositor cannot deliver (a) the original
recorded
Mortgage, (b) all interim recorded assignments or (c) the lender's
title
policy (together with all riders thereto) satisfying the
requirements of
clause (ii), (iii) or (v) above, respectively, concurrently with
the execution
and delivery of this Agreement because such document or documents
have not
been returned from the applicable public recording office in the
case of
clause (ii) or (iii) above, or because the title policy has not
been delivered
to either the Servicer or the Depositor by the applicable title
insurer in the
case of clause (v) above, then the Depositor shall promptly deliver
to the
Trustee, in the case of clause (ii) or (iii) above, the original
Mortgage or
the interim assignment, as the case may be, with evidence of
recording
indicated on when it is received from the public recording office,
or a copy
of it, certified, if appropriate, by the relevant recording office
and in the
case of clause (v) above, the original or a copy of a written
commitment or
interim binder or preliminary report of title issued by the title
insurance or
escrow company, with the original or duplicate copy thereof to be
delivered to
the Trustee upon receipt thereof. The delivery of the original
Mortgage Loan
and each interim assignment or a copy of them, certified, if
appropriate, by
the relevant recording office, shall not be made later than one
year following
the Closing Date, or, in the case of clause (v) above, later than
120 days
following the Closing Date. If the Depositor is unable to deliver
each
Mortgage by that date and each interim assignment because any
documents have
not been returned by the appropriate recording office, or, in the
case of each
interim assignment, because the related Mortgage has not been
returned by the
appropriate recording office, the Depositor shall deliver the
documents to the
Trustee as promptly as possible upon their receipt and, in any
event, within
720 days following the Closing Date.
The
Depositor shall forward to the Trustee (a) from time to time
additional original documents evidencing an assumption or
modification of a
Mortgage Loan and (b) any other documents required to be delivered
by the
Depositor or the Servicer to the Trustee. If the original Mortgage
is not
delivered and in connection with the payment in full of the related
Mortgage
Loan the public recording office requires the presentation of a
"lost
instruments affidavit and indemnity" or any equivalent document,
because only
a copy of the Mortgage can be delivered with the instrument of
satisfaction or
reconveyance, the Servicer shall execute and deliver the required
document to
the public recording office. If a public recording office retains
the original
recorded Mortgage or if a Mortgage is lost after recordation in a
public
recording office, the Seller shall deliver to the Trustee a copy of
the
Mortgage certified by the public recording office to be a true and
complete
copy of the original recorded Mortgage.
As
promptly as practicable after any transfer of a Mortgage Loan
under
this Agreement, and in any event within thirty days after the
transfer, the
Trustee shall (i) affix the Trustee's name to each assignment of
Mortgage, as
its assignee, and (ii) cause to be delivered for recording in the
appropriate
public office for real property records the assignments of the
Mortgages to
the Trustee, except that, if the Trustee has not received the
information
required to deliver any assignment of a Mortgage for recording, the
Trustee
shall deliver it as soon as practicable after receipt of the
needed
information and in any event within thirty days.
The
Trustee need not record any assignment that relates to a
Mortgage
Loan (a) the Mortgaged Property and Mortgage File relating to which
are
located in California or (b) in any other jurisdiction
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<PAGE>
(including Puerto Rico) under the laws of which, as evidenced by an
Opinion of
Counsel delivered by the Seller (at the Seller's expense) to the
Trustee,
recording the assignment is not necessary to protect the Trustee's
and the
Certificateholders' interest in the related Mortgage Loan. The
Seller shall
deliver such Opinion of Counsel within 90 days of the Closing
Date.
If any
Mortgage Loans have been prepaid in full as of the Closing
Date,
the Depositor, in lieu of delivering the above documents to the
Trustee, will
deposit in the Certificate Account the portion of the prepayment
that is
required to be deposited in the Certificate Account pursuant to
Section 3.06.
Notwithstanding anything to the contrary in this Agreement, within
five
Business Days after the Closing Date, the Seller shall either
(x) deliver to the Trustee the Mortgage File as required
pursuant
to this Section 2.01 for each Delay Delivery Mortgage Loan or
(y) (A) repurchase the Delay Delivery Mortgage Loan or (B)
substitute the Substitute Mortgage Loan for a Delay Delivery
Mortgage Loan, which repurchase or substitution shall be
accomplished in the manner and subject to the conditions in
Section 2.03 (treating each such Delay Delivery Mortgage Loan as
a
Deleted Mortgage Loan for purposes of such Section 2.03);
provided, however, that if the Seller fails to deliver a Mortgage
File for any
Delay Delivery Mortgage Loan within the period specified herein,
the Seller
shall use its best reasonable efforts to effect a substitution,
rather than a
repurchase of, such Deleted Mortgage Loan and provided further that
the cure
period provided for in Section 2.02 or in Section 2.03 shall not
apply to the
initial delivery of the Mortgage File for such Delay Delivery
Mortgage Loan,
but rather the Seller shall have five (5) Business Days to cure
such failure
to deliver. At the end of such period, the Trustee shall send a
Delay Delivery
Certification for the Delay Delivery Mortgage Loans delivered
during such
period in accordance with the provisions of Section 2.02.
(d) The Seller agrees to treat the transfer of the Mortgage
Loans
to the Depositor
as a sale for all tax, accounting, and regulatory
purposes.
Section
2.02 Acceptance by the Trustee of the Mortgage Loans.
The
Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form of Exhibit G-1, and declares that
it holds
and will hold such documents and the other documents delivered to
it
constituting the Mortgage Files for the Mortgage Loans, and that it
holds or
will hold such other assets as are included in the Trust Fund, in
trust for
the exclusive use and benefit of all present and future
Certificateholders.
The
Trustee acknowledges that it will maintain possession of the
related
Mortgage Notes in the State of California, unless otherwise
permitted by the
Rating Agencies. The Trustee agrees to execute and deliver on the
Closing Date
to the Depositor, the Servicer and the Seller an Initial
Certification in the
form of Exhibit G-1. Based on its review and examination, and only
as to the
documents identified in such Initial Certification, the Trustee
acknowledges
that such documents appear regular on their face and relate to such
Mortgage
Loans. The Trustee shall be under no 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 in the real estate
records or
that they are other than what they purport to be on their face.
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<PAGE>
By the
thirtieth day after the Closing Date (or if that day is not a
Business Day, the succeeding Business Day), the Trustee shall
deliver to the
Depositor, the Servicer, and the Seller a Delay Delivery
Certification with
respect to the Mortgage Loans substantially in the form of Exhibit
G-2, with
any applicable exceptions noted thereon.
By the
ninetieth day after the Closing Date (or if that day is not a
Business Day, the succeeding Business Day), the Trustee shall
deliver to the
Depositor, the Servicer and the Seller a Final Certification with
respect to
the Mortgage Loans in the form of Exhibit H, with any applicable
exceptions
noted thereon.
If, in the
course of its review, the Trustee finds any document
constituting a part of a Mortgage File that does not meet the
requirements of
Section 2.01, the Trustee shall list such as an exception in the
Final
Certification. The Trustee shall not make any determination as to
whether (i)
any endorsement is sufficient to transfer all interest of the party
so
endorsing, as noteholder or assignee thereof, in that Mortgage Note
or (ii)
any assignment is in recordable form or is sufficient to effect the
assignment
of and transfer to the assignee thereof under the mortgage to which
the
assignment relates. The Seller shall promptly correct any defect
that
materially and adversely affects the interests of the
Certificateholders
within 90 days from the date it was so notified of the defect and,
if the
Seller does not correct the defect within that period, the Seller
shall either
(a) substitute for the related Mortgage Loan a Substitute Mortgage
Loan, which
substitution shall be accomplished in the pursuant Section 2.03, or
(b)
purchase the Mortgage Loan at its Purchase Price from the Trustee
within 90
days from the date the Seller was notified of the defect in
writing.
If a
substitution or purchase of a Mortgage Loan pursuant to this
provision is required because of a delay in delivery of any
documents by the
appropriate recording office, or there is a dispute between either
the
Servicer or the Seller and the Trustee over the location or status
of the
recorded document, then the substitution or purchase shall occur
within 720
days from the Closing Date. In no other case may a substitution or
purchase
occur more than 540 days from the Closing Date.
The
Trustee shall deliver written notice to each Rating Agency
within
270 days from the Closing Date indicating each Mortgage Loan (a)
that has not
been returned by the appropriate recording office or (b) as to
which there is
a dispute as to location or status of the Mortgage Loan. The notice
shall be
delivered every 90 days thereafter until the related Mortgage Loan
is returned
to the Trustee. Any substitution pursuant to (a) above or purchase
pursuant to
(b) above shall not be effected before the delivery to the Trustee
of the
Opinion of Counsel required by Section 2.05, and any substitution
pursuant to
(a) above shall not be effected before the additional delivery to
the Trustee
of a Request for Release substantially in the form of Exhibit N.
No
substitution is permitted to be made in any calendar month after
the
Determination Date for the month.
The
Purchase Price for any Mortgage Loan shall be deposited by the
Seller in the Certificate Account by the Distribution Account
Deposit Date for
the Distribution Date in the month following the month of
repurchase and, upon
receipt of the deposit and certification with respect thereto in
the form of
Exhibit N, the Trustee shall release the related Mortgage File to
the Seller
and shall execute and deliver at the Seller's request any
instruments of
transfer or assignment prepared by the Seller, in each case without
recourse,
necessary to vest in the Seller, or a designee, the Trustee's
interest in any
Mortgage Loan released pursuant hereto.
If
pursuant to the foregoing provisions the Seller repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Servicer shall
either (i)
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
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regulations or (ii) cause MERS to designate on the MERS(R) System
the Seller
as the beneficial holder of such Mortgage Loan.
The
Trustee shall retain possession and custody of each Mortgage File
in
accordance with and subject to the terms and conditions set forth
herein. The
Servicer shall promptly deliver to the Trustee, upon the execution
or receipt
thereof, the originals of any other documents or instruments
constituting the
Mortgage File that come into the possession of the Servicer from
time to time.
Section
2.03 Representations, Warranties, and Covenants of the Seller
and the Servicer.
(a)
IndyMac, in its capacities as Seller and Servicer, makes the
representations and warranties in Schedule II, and by this
reference
incorporated in this Agreement, to the Depositor and the Trustee,
as of the
Closing Date.
(b) The
Seller, in its capacity as Seller, makes the representations
and
warranties in Schedule III, and by this reference incorporated in
this
Agreement, to the Depositor and the Trustee, as of the Closing
Date, or if so
specified in Schedule III, as of the Cut-off Date.
(c) Upon
discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(b) that
materially
and adversely affects the interests of the Certificateholders in
any Mortgage
Loan, the party discovering such breach shall give prompt notice
thereof to
the other parties. The Seller covenants that within 90 days of the
earlier of
its discovery or its receipt of written notice from any party of a
breach of
any representation or warranty made pursuant to Section 2.03(b)
which
materially and adversely affects the interests of the
Certificateholders in
any Mortgage Loan, it shall cure such breach in all material
respects, and if
such breach is not so cured, shall, (i) if the 90-day period
expires before
the second anniversary of the Closing Date, remove the Mortgage
Loan (a
"Deleted Mortgage Loan") from the Trust Fund and substitute in its
place a
Substitute Mortgage Loan, in accordance with this Section 2.03; or
(ii)
repurchase the affected Mortgage Loan or Mortgage Loans from the
Trustee at
the Purchase Price in the manner set forth below. Any substitution
pursuant to
(i) above shall not be effected before the delivery to the Trustee
of the
Opinion of Counsel required by Section 2.05 and a Request for
Release
substantially in the form of Exhibit N, and the Mortgage File for
any
Substitute Mortgage Loan. The Seller shall promptly reimburse the
Servicer and
the Trustee for any expenses reasonably incurred by the Servicer or
the
Trustee in respect of enforcing the remedies for the breach.
With
respect to any Substitute Mortgage Loan or Loans, the Seller
shall
deliver to the Trustee for the benefit of the Certificateholders
the Mortgage
Note, the Mortgage, the related assignment of the Mortgage, and
such other
documents and agreements as are required by Section 2.01, with the
Mortgage
Note endorsed and the Mortgage assigned as required by Section
2.01. No
substitution is permitted to be made in any calendar month after
the
Determination Date for such month. Scheduled Payments due with
respect to
Substitute Mortgage Loans in the month of substitution shall not be
part of
the Trust Fund and will be retained by the Seller on the next
succeeding
Distribution Date. For the month of substitution, distributions
to
Certificateholders will include the monthly payment due on any
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
Servicer shall amend the Mortgage Loan Schedule for the benefit
of
the Certificateholders to reflect the removal of the Deleted
Mortgage Loan and
the substitution of the Substitute Mortgage Loans and the Servicer
shall
deliver the amended Mortgage Loan Schedule to the Trustee. Upon
the
substitution, the Substitute Mortgage Loans shall be subject to
this Agreement
in all respects, and the Seller shall be deemed to have made with
respect to
the Substitute Mortgage Loans, as of the date of
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substitution, the representations and warranties made pursuant to
Section
2.03(b) with respect to the Mortgage Loan. Upon any substitution
and the
deposit to the Certificate Account of the amount required to be
deposited
therein in connection with the substitution as described in the
following
paragraph, the Trustee shall release the Mortgage File held for the
benefit of
the Certificateholders relating to the Deleted Mortgage Loan to the
Seller and
shall execute and deliver at the Seller's direction such
instruments of
transfer or assignment prepared by the Seller, in each case without
recourse,
as shall be necessary to vest title in the Seller, or its designee,
the
Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to
this Section 2.03.
For any
month in which the Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will
determine the amount (if any) by which the aggregate principal
balance of all
such Substitute Mortgage Loans as of the date of substitution is
less than the
aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after
application of the scheduled principal portion of the monthly
payments due in
the month of substitution). The amount of such shortage (the
"Substitution
Adjustment Amount") plus, if the Seller is not the Servicer, an
amount equal
to the aggregate of any unreimbursed Advances and Servicer Advances
with
respect to such Deleted Mortgage Loans shall be deposited into the
Certificate
Account by the Seller by the Distribution Account Deposit Date for
the
Distribution Date in the month succeeding the calendar month during
which the
related Mortgage Loan became required to be purchased or replaced
hereunder.
If the Seller repurchases a Mortgage Loan, the Purchase Price
therefor shall
be deposited in the Certificate Account pursuant to Section 3.06 by
the
Distribution Account Deposit Date for the Distribution Date in the
month
following the month during which the Seller became obligated
hereunder to
repurchase or replace the Mortgage Loan and upon such deposit of
the Purchase
Price and receipt of a Request for Release in the form of Exhibit
N, the
Trustee shall release the related Mortgage File held for the
benefit of the
Certificateholders to such Person, and the Trustee shall execute
and deliver
at such Person's direction such instruments of transfer or
assignment prepared
by such Person, in each case without recourse, as shall be
necessary to
transfer title from the Trustee. The obligation under this
Agreement of any
Person to cure, repurchase, or replace any Mortgage Loan as to
which a breach
has occurred and is continuing shall constitute the sole remedy
against the
Person respecting the breach available to Certificateholders, the
Depositor,
or the Trustee on their behalf.
The
representations and warranties made pursuant to this Section
2.03
shall survive delivery of the respective Mortgage Files to the
Trustee for the
benefit of the Certificateholders.
Section
2.04 Representations and Warranties of the Depositor as to the
Mortgage Loans.
(a) The
Depositor represents and warrants to the Trustee with respect
to
each Mortgage Loan as of the date of this Agreement or such other
date set
forth in this Agreement that as of the Closing Date, and following
the
transfer of the Mortgage Loans to it by the Seller, the Depositor
had good
title to the Mortgage Loans and the Mortgage Notes were subject to
no offsets,
defenses, or counterclaims.
(b) The
representations and warranties in this Section 2.04 shall
survive delivery of the Mortgage Files to the Trustee. Upon
discovery by the
Depositor or the Trustee of any breach of any of the
representations and
warranties in this Section that materially and adversely affects
the interest
of the Certificateholders, the party discovering the breach shall
give prompt
written notice to the others and to each Rating Agency.
Section
2.05 Delivery of Opinion of Counsel in Connection with
Substitutions.
(a)
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or 2.03 shall be made more
than 90 days
after the Closing Date unless the Seller delivers to
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the Trustee an Opinion of Counsel, which Opinion of Counsel shall
not be at
the expense of either the Trustee or the Trust Fund, addressed to
the Trustee,
to the effect that such substitution will not (i) result in the
imposition of
the tax on "prohibited transactions" on the Trust Fund or
contributions after
the Startup Date, as defined in sections 860F(a)(2) and 860G(d) of
the Code,
respectively or (ii) cause any REMIC created under this Agreement
to fail to
qualify as a REMIC at any time that any Certificates are
outstanding.
(b) Upon
discovery by the Depositor, the Seller, the Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified
mortgage"
within the meaning of section 860G(a)(3) of the Code, the party
discovering
such fact shall promptly (and in any event within five Business
Days of
discovery) give written notice thereof to the other parties. In
connection
therewith, the Trustee shall require the Seller, at the Seller's
option, to
either (i) substitute, if the conditions in Section 2.03(c) with
respect to
substitutions are satisfied, a Substitute Mortgage Loan for the
affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within
90 days of
such discovery in the same manner as it would a Mortgage Loan for a
breach of
representation or warranty made pursuant to Section 2.03. The
Trustee shall
reconvey to the Seller the Mortgage Loan to be released pursuant
hereto in the
same manner, and on the same terms and conditions, as it would a
Mortgage Loan
repurchased for breach of a representation or warranty contained in
Section
2.03.
Section
2.06 Execution and Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the
Trust
Fund and, concurrently with such transfer and assignment, has
executed and
delivered to or upon the order of the Depositor, the Certificates
in
authorized denominations evidencing directly or indirectly the
entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust
Fund and
exercise the rights referred to above for the benefit of all
present and
future Holders of the Certificates.
Section
2.07 REMIC Matters.
The
Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all
interests
created under this Agreement. The "Startup Day" for purposes of the
REMIC
Provisions shall be the Closing Date. Each REMIC's fiscal year
shall be the
calendar year.
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ARTICLE THREE
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section
3.01 Servicer to Service Mortgage Loans.
For and on
behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in accordance with this Agreement
and the
Servicing Standard.
The
Servicer shall not make or permit any modification, waiver, or
amendment of any term of any Mortgage Loan that would cause any
REMIC created
under this Agreement to fail to qualify as a REMIC or result in the
imposition
of any tax under section 860F(a) or section 860G(d) of the
Code.
Without
limiting the generality of the foregoing, the Servicer, in its
own name or in the name of the Depositor and the Trustee, is hereby
authorized
and empowered by the Depositor and the Trustee, when the Servicer
believes it
appropriate in its reasonable judgment, to execute and deliver, on
behalf of
the Trustee, the Depositor, the Certificateholders, or any of them,
any
instruments of satisfaction or cancellation, or of partial or full
release or
discharge, and all other comparable instruments, with respect to
the Mortgage
Loans, and with respect to the Mortgaged Properties held for the
benefit of
the Certificateholders. The Servicer shall prepare and deliver to
the
Depositor or the Trustee any documents requiring execution and
delivery by
either or both of them appropriate to enable the Servicer to
service and
administer the Mortgage Loans to the extent that the Servicer is
not permitted
to execute and deliver such documents pursuant to the preceding
sentence. Upon
receipt of the documents, the Depositor or the Trustee shall
execute the
documents and deliver them to the Servicer.
The
Servicer further is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name
when the
Servicer believes it 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.
In
accordance with and to the extent of the Servicing Standard,
the
Servicer shall advance funds necessary to effect 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 3.07, and further as provided in Section 3.09. The costs
incurred by
the Servicer in effecting the timely payments of taxes and
assessments on the
Mortgaged Properties and related insurance premiums shall not, for
the purpose
of calculating monthly distributions to the Certificateholders, be
added to
the Stated Principal Balances of the related Mortgage Loans,
notwithstanding
that the Mortgage Loans so permit.
Nothing in
this Agreement to the contrary shall limit the Servicer from
undertaking any legal action that it may deem appropriate with
respect to the
Mortgage Loans including, without limitation, any rights or causes
of actions
arising out of the origination of the Mortgage Loans.
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<PAGE>
Section
3.02 [Reserved].
Section
3.03 Rights of the Depositor and the Trustee in Respect of the
Servicer.
The
Depositor may, but is not obligated to, enforce the obligations
of
the Servicer under this Agreement and may, but is not obligated to,
perform,
or cause a designee to perform, any defaulted obligation of the
Servicer under
this Agreement and in connection with any such defaulted obligation
to
exercise the related rights of the Servicer under this Agreement;
provided
that the Servicer shall not be relieved of any of its obligations
under this
Agreement by virtue of such performance by the Depositor or its
designee.
Neither the Trustee nor the Depositor shall have any responsibility
or
liability for any action or failure to act by the Servicer nor
shall the
Trustee or the Depositor be obligated to supervise the performance
of the
Servicer under this Agreement or otherwise.
Section
3.04 [Reserved].
Section
3.05 Trustee to Act as Servicer.
If the
Servicer for any reason is no longer the Servicer under this
Agreement (including because of the occurrence or existence of an
Event of
Default or termination by the Depositor), the Trustee or its
successor shall
assume all of the rights and obligations of the Servicer under this
Agreement
arising thereafter (except that the Trustee shall not be
(i) liable for losses of the Servicer pursuant to Section 3.10
or
any acts
or omissions of the predecessor Servicer hereunder,
(ii) obligated to make Advances if it is prohibited from doing
so
by
applicable law,
(iii) obligated to effectuate repurchases or substitutions of
Mortgage
Loans hereunder, including repurchases or substitutions
pursuant
to Section 2.02 or 2.03,
(iv) responsible for expenses of the Servicer pursuant to
Section
2.03,
or
(v) deemed to have made any representations and warranties of
the
Servicer
hereunder). Any assumption shall be subject to Section 7.02.
Notwithstanding anything else in this Agreement 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 under this
Agreement and
the amount necessary to induce any successor Servicer to act as
successor
Servicer under this Agreement and the transactions provided for in
this
Agreement.
Section
3.06 Collection of Mortgage Loan Payments; Servicing Accounts;
Collection Account; Certificate Account; Distribution Account.
(a) In accordance with and to the extent of the Servicing
Standard,
the Servicer shall make reasonable efforts in accordance with
the
customary and usual standards of practice of prudent mortgage
servicers
to collect all payments called for under the Mortgage Loans to
the extent
the procedures are consistent with this Agreement and any
related
Required Insurance Policy. Consistent with the foregoing, the
Servicer
may in its discretion (i) waive any late payment charge or,
subject to
Section 3.20, any Prepayment Charge in connection with the
prepayment
of a Mortgage Loan and (ii) extend the due dates for payments
due on a
Delinquent Mortgage Loan for a period not greater than 125
days. In
connection with a seriously
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<PAGE>
delinquent
or defaulted Mortgage Loan, the Servicer may, consistent with
the
Servicing Standard, waive, modify or vary any term of that
Mortgage
Loan
(including modifications that change the Mortgage Rate, forgive
the
payment of
principal or interest or extend the final maturity date of
that
Mortgage Loan ), accept payment from the related Mortgagor of
an
amount
less than the Stated Principal Balance in final satisfaction of
that
Mortgage Loan, or consent to the postponement of strict
compliance
with any
such term or otherwise grant indulgence to any Mortgagor if in
the
Servicer's determination such waiver, modification, postponement
or
indulgence
is not materially adverse to the interests of the
Certificateholders (taking into account any estimated loss that
might
result
absent such action) and is expected to minimize the loss on
such
Mortgage
Loan; provided, however, the Servicer shall not initiate new
lending to
such Mortgagor through the Trust and cannot, except as
provided
in the immediately succeeding sentence, extend the maturity of
any
Mortgage Loan past the date on which the final payment is due on
the
latest
maturing Mortgage Loan as of the Cut-off Date. With respect to
no
more than
5% of the Mortgage Loans (measured by aggregate Cut-off Date
Principal
Balance of the Mortgage Loans), the Servicer may extend the
maturity
of a Mortgage Loan past the date on which the final payment is
due on the
latest maturing Mortgage Loan as of the Cut-off Date, but in
no event
more than one year past such date. In the event of any such
arrangement, the Servicer shall make Advances on the related
Mortgage
Loan in
accordance with Section 4.01 during the scheduled period in
accordance
with the amortization schedule of the Mortgage Loan without
modification thereof because of the arrangements. The Servicer
shall not
be
required to institute or join in litigation with respect to
collection
of any payment (whether under a Mortgage, Mortgage Note, or
otherwise
or against any public or governmental authority with respect
to a
taking or condemnation) if it reasonably believes that
enforcing
the
provision of the Mortgage or other instrument pursuant to which
the
payment is
required is prohibited by applicable law. The Servicer shall
not have
the discretion to sell any Delinquent or defaulted Mortgage
Loan.
(b) The Servicer shall establish and maintain one or more
Servicing
Accounts (the "Servicing Account") into which the Servicer
shall
deposit on a daily basis within one Business Day of receipt,
the
following
payments and collections received by it in respect of Mortgage
Loans
after the Cut-off Date (other than in respect of principal and
interest
due on the Mortgage Loans by the Cut-off Date):
(i) all payments on account of principal on the Mortgage Loans,
including
Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net of the
related Servicing Fee; and
(iii) all Insurance Proceeds, Subsequent Recoveries and
Liquidation Proceeds, other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to
the
Mortgagor
in accordance with the Servicer's normal servicing procedures.
By the
Withdrawal Date in each calendar month, the Servicer shall (a)
withdraw from the Servicing Account all amounts on deposit therein
pursuant to
clauses (i) and (ii) above (other than amounts attributable to a
Principal
Prepayment in Full) and (b) deposit such amounts in the Collection
Account.
By the
Business Day in each calendar month following the deposit in
the
Servicing Account of amounts on deposit therein pursuant to clause
(iii) above
or pursuant to any Principal Prepayment in Full,
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<PAGE>
the Servicer shall (a) withdraw such amounts from the Servicing
Account and
(b) deposit such amounts in the Collection Account.
(c) The Servicer shall establish and maintain a Collection
Account
(the
"Collection Account") into which the Servicer shall deposit, as
and
when
required by paragraph (b) of this Section 3.06, all amounts
required
to be deposited into the Collection Account pursuant to that
paragraph.
The Collection Account shall be an Eligible Account held for
the
benefit of the Certificateholders.
(d) The Servicer shall establish and maintain a Certificate
Account
into which the Servicer shall deposit on a daily basis (i)
within one
Business Day of deposit in the Collection Account (in the
case of
items (i) through (iii) below) and (2) within one Business Day
of receipt
(in the case of all other items), except as otherwise
specified
herein, the following payments and collections received by it
in respect
of Mortgage Loans after the Cut-off Date (other than in
respect of
principal and interest due on the Mortgage Loans by the
Cut-off
Date) and the following amounts required to be deposited
hereunder:
(i) all payments on account of principal on the Mortgage Loans,
including
Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net of the
Servicing Fee;
(iii) all Insurance Proceeds, Subsequent Recoveries and
Liquidation
Proceeds, other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to
the
Mortgagor
in accordance with the Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Servicer
pursuant
to Section
3.06(f) in connection with any losses on Permitted
Investments;
(v) any amounts required to be deposited by the Servicer
pursuant
to
Sections 3.10 and 3.12;
(vi) all Purchase Prices from the Servicer or Seller and all
Substitution Adjustment Amounts;
(vii) all Advances made by the Servicer pursuant to Section
4.01;
(viii) any other amounts required to be deposited under this
Agreement;
and
(ix) all Prepayment Charges collected.
In
addition, with respect to any Mortgage Loan that is subject to
a
buydown agreement, on each Due Date for the Mortgage Loan, in
addition to the
monthly payment remitted by the Mortgagor, the Servicer shall cause
funds to
be deposited into the Certificate Account in an amount required to
cause an
amount of interest to be paid with respect to the Mortgage Loan
equal to the
amount of interest that has accrued on the Mortgage Loan from the
preceding
Due Date at the Mortgage Rate net of the Servicing Fee Rate on that
date.
The
foregoing requirements for remittance by the Servicer shall be
exclusive, it being understood and agreed that, without limiting
the
generality of the foregoing, payments in the nature of late
payment
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<PAGE>
charges or assumption fees, if collected, need not be remitted by
the
Servicer. If the Servicer remits any amount not required to be
remitted, it
may at any time withdraw that amount from the Certificate Account,
any
provision in this Agreement to the contrary notwithstanding. The
withdrawal or
direction may be accomplished by delivering written notice of it to
the
Trustee or any other institution maintaining the Certificate
Account that
describes the amounts deposited in error in the Certificate
Account. The
Servicer shall maintain adequate records with respect to all
withdrawals made
pursuant to this Section 3.06. All funds deposited in the
Certificate Account
shall be held in trust for the Certificateholders until withdrawn
in
accordance with Section 3.09.
(e) The Trustee shall establish and maintain the Distribution
Account on
behalf of the Certificateholders. The Trustee shall, promptly
upon receipt,
deposit in the Distribution Account and retain in the
Distribution Account the following:
(i) the aggregate amount remitted by the Servicer to the
Trustee
pursuant
to Section 3.09(a);
(ii) any amount deposited by the Servicer pursuant to Section
3.06(f) in
connection with any losses on Permitted Investments; and
(iii) any other amounts deposited under this Agreement that are
required
to be deposited in the Distribution Account.
If the
Servicer remits any amount not required to be remitted, it may
at
any time direct the Trustee in writing to withdraw that amount from
the
Distribution Account, any provision in this Agreement to the
contrary
notwithstanding. The direction may be accomplished by delivering an
Officer's
Certificate to the Trustee that describes the amounts deposited in
error in
the Distribution Account. All funds deposited in the Distribution
Account
shall be held by the Trustee in trust for the Certificateholders
until
disbursed in accordance with this Agreement or withdrawn in
accordance with
Section 3.09. In no event shall the Trustee incur liability for
withdrawals
from the Distribution Account at the direction of the Servicer.
(f) Each institution at which the Certificate Account is
maintained
shall invest the funds in such account as directed in writing
by the
Servicer in Permitted Investments, which shall mature not later
than the
second Business Day preceding the related Distribution Account
Deposit
Date (except that if the Permitted Investment is an obligation
of the
institution that maintains the account, then the Permitted
Investment
shall mature not later than the Business Day preceding the
Distribution Account Deposit Date) and which shall not be sold
or
disposed
of before its maturity. The funds in the Distribution Account
shall
remain uninvested. All such Permitted Investments shall be made
in
the name
of the Trustee, for the benefit of the Certificateholders. All
income
realized from any such investment of funds on deposit in the
Certificate Account shall be for the benefit of the Servicer as
servicing
compensation and shall be remitted to it monthly as provided
in this
Agreement. The amount of any realized losses on Permitted
Investments in the Certificate Account shall promptly be deposited
by
the
Servicer in the Certificate Account. The Trustee shall not be
liable
for the
amount of any loss incurred in respect of any investment or
lack
of
investment of funds held in the Certificate Account and made in
accordance
with this Section 3.06.
(g) [reserved].
(h) [reserved].
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<PAGE>
(i) The Servicer shall give notice to the Trustee, the Seller,
each
Rating Agency and the Depositor of any proposed change of the
location
of the Certificate Account not later than 30 days and not more
than 45
days prior to any change of this Agreement. The Trustee shall
give
notice to the Servicer, the Seller, each Rating Agency and the
Depositor
of any proposed change of the location of the Distribution
Account
not later than 30 days and not more than 45 days prior to any
change of
this Agreement.
Section
3.07 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
(a) To the extent required by the related Mortgage Note and not
violative
of current law, the Servicer shall establish and maintain one
or more
accounts (each, an "Escrow Account") and deposit and retain
therein
all collections from the Mortgagors (or advances) for the
payment of
taxes, assessments, hazard insurance premiums or comparable
items for
the account of the Mortgagors. Nothing herein shall require
the
Servicer to compel a Mortgagor to establish an Escrow Account
in
violation
of applicable law.
(b) Withdrawals of amounts so collected from the Escrow
Accounts
may be
made only to effect timely payment of taxes, assessments,
hazard
insurance
premiums, condominium or PUD association dues, or comparable
items, to
reimburse (without duplication) the Servicer out of related
collections for any payments made pursuant to Section 3.01 (with
respect
to taxes
and assessments and insurance premiums) and Section 3.10 (with
respect to
hazard insurance), to refund to any Mortgagors any sums
determined
to be overages, to pay interest, if required by law or the
related
Mortgage or Mortgage Note, to Mortgagors on balances in the
Escrow
Account or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 9.01.
The
Escrow
Accounts shall not be a part of the Trust Fund.
(c) The Servicer shall advance any payments referred to in
Section
3.07(a)
that are not timely paid by the Mortgagors or advanced by the
Servicer
on the date when the tax, premium or other cost for which such
payment is
intended is due, but the Servicer shall be required so to
advance
only to the extent that such advances, in the good faith
judgment
of the Servicer, will be recoverable by the Servicer out of
Insurance
Proceeds, Liquidation Proceeds or otherwise.
Section
3.08 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The
Servicer shall afford the Depositor and the Trustee reasonable
access to all records and documentation regarding the Mortgage
Loans and all
accounts, insurance information and other matters relating to this
Agreement,
such access being afforded without charge, but only upon reasonable
request
and during normal business hours at the office designated by the
Servicer.
Upon
reasonable advance notice in writing, the Servicer will provide
to
each Certificateholder or Certificate Owner that is a savings and
loan
association, bank, or insurance company certain reports and
reasonable access
to information and documentation regarding the Mortgage Loans
sufficient to
permit the Certificateholder or Certificate Owner to comply with
applicable
regulations of the OTS or other regulatory authorities with respect
to
investment in the Certificates. The Servicer shall be entitled to
be
reimbursed by each such Certificateholder or Certificate Owner for
actual
expenses incurred by the Servicer in providing the reports and
access.
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<PAGE>
Section 3.09
Permitted Withdrawals from the Certificate Account and the
Distribution Account.
(a) The Servicer may (and, in the case of clause (ix) below,
shall)
from time to time make withdrawals from the Certificate Account
for the
following purposes:
(i) to pay to the Servicer (to the extent not previously
retained)
the
servicing compensation to which it is entitled pursuant to
Section
3.15, and
to pay to the Servicer, as additional servicing compensation,
earnings
on or investment income with respect to funds in or credited to
the
Certificate Account;
(ii) to reimburse the Servicer or successor Servicer for the
unreimbursed Advances made by it, such right of reimbursement
pursuant
to this
subclause (ii) being limited to amounts received on the
Mortgage
Loans in
respect of which the Advance was made;
(iii) to reimburse the Servicer or successor Servicer for any
Nonrecoverable Advance previously made by it;
(iv) to reimburse the Servicer for Insured Expenses from the
related
Insurance Proceeds;
(v) to reimburse the Servicer for (a) unreimbursed Servicing
Advances,
the Servicer's right to reimbursement pursuant to this clause
(a) with
respect to any Mortgage Loan being limited to amounts received
on the
Mortgage Loans that represent late recoveries of the payments
for
which the
advances were made pursuant to Section 3.01 or Section 3.07,
(b) unreimbursed
Servicing Advances made in respect of a Mortgage Loan
for which
such Servicing Advances are not recoverable from the Mortgagor
and (b)
for unpaid Servicing Fees as provided in Section 3.12;
(vi) to pay to the purchaser, with respect to each Mortgage
Loan
or
property acquired in respect of such Mortgage Loan that has
been
purchased
pursuant to Section 2.02, 2.03, or 3.12, all amounts received
thereon
after the date of such purchase;
(vii) to reimburse the
Seller, the Servicer, or the Depositor for
expenses
incurred by any of them and reimbursable pursuant to Section
6.03;
(viii) to withdraw any amount deposited in the Certificate
Account
and not
required to be deposited in the Certificate Account;
(ix) by the Distribution Account Deposit Date, to withdraw (1)
the
Available
Funds and the Trustee Fee for the Distribution Date, to the
extent on
deposit, and (2) the Prepayment Charges on deposit, and remit
such
amount to the Trustee for deposit in the Distribution Account;
and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01.
The
Servicer shall keep and maintain separate accounting, on a
Mortgage
Loan by Mortgage Loan basis, to justify any withdrawal from the
Certificate
Account pursuant to subclauses (i), (ii), (iv), (v), and (vi).
Before making
any withdrawal from the Certificate Account pursuant to subclause
(iii), the
Servicer shall deliver to the Trustee an Officer's Certificate of a
Servicing
Officer indicating the amount
50
<PAGE>
of any previous Advance determined by the Servicer to be a
Nonrecoverable
Advance and identifying the related Mortgage Loans and their
respective
portions of the Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account
for
distributions to Certificateholders in the manner specified in
this
Agreement
(and to withhold from the amounts so withdrawn the amount of
any taxes
that it is authorized to withhold pursuant to the last
paragraph
of Section 8.11). In addition, the Trustee may from time to
time make
withdrawals from the Distribution Account for the following
purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution
Date;
(ii) to withdraw and return to the Servicer any amount
deposited
in the
Distribution Account and not required to be deposited therein;
and
(iii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01.
Section
3.10 Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.
(a) The Servicer shall maintain, for each Mortgage Loan, hazard
insurance
with extended coverage in an amount that is at least equal to
the lesser
of
(i) the
maximum insurable value of the improvements securing the
Mortgage Loan and
(ii) the
greater of (y) the outstanding principal balance of the
Mortgage Loan and (z) an amount such that the proceeds of the
policy are
sufficient to prevent the Mortgagor or the mortgagee from becoming
a
co-insurer.
Each
policy of standard hazard insurance shall contain, or have an
accompanying endorsement that contains, a standard mortgagee
clause. Any
amounts collected under the policies (other than the amounts to be
applied to
the restoration or repair of the related Mortgaged Property or
amounts
released to the Mortgagor in accordance with the Servicer's normal
servicing
procedures) shall be deposited in the Certificate Account. Any cost
incurred
in maintaining any insurance shall not, for the purpose of
calculating monthly
distributions to the Certificateholders or remittances to the
Trustee for
their benefit, be added to the principal balance of the Mortgage
Loan,
notwithstanding that the Mortgage Loan so permits. Such costs shall
be
recoverable by the Servicer out of late payments by the related
Mortgagor or
out of Liquidation Proceeds to the extent permitted by Section
3.09. No
earthquake or other additional insurance is to be required of any
Mortgagor or
maintained on property acquired in respect of a Mortgage other than
pursuant
to any applicable laws and regulations in force that require
additional
insurance. If the Mortgaged Property is located at the time of
origination of
the Mortgage Loan in a federally designated special flood hazard
area and the
area is participating in the national flood insurance program, the
Servicer
shall maintain flood insurance for the Mortgage Loan. The flood
insurance
shall be in an amount equal to the least of (i) the original
principal balance
of the related Mortgage Loan, (ii) the replacement value of the
improvements
that are part of the Mortgaged Property, and (iii) the maximum
amount of flood
insurance available for the related Mortgaged Property under the
national
flood insurance program.
If the
Servicer obtains and maintains a blanket policy insuring
against
hazard losses on all of the Mortgage Loans, it shall have satisfied
its
obligations in the first sentence of this Section 3.10. The policy
may contain
a deductible clause on terms substantially equivalent to those
commercially
available and
51
<PAGE>
maintained by comparable servicers. If the policy contains a
deductible clause
and a policy complying with the first sentence of this Section 3.10
has not
been maintained on the related Mortgaged Property, and if a loss
that would
have been covered by the required policy occurs, the Servicer shall
deposit in
the Certificate Account, without any right of reimbursement, the
amount not
otherwise payable under the blanket policy because of the
deductible clause.
In connection with its activities as Servicer of the Mortgage
Loans, the
Servicer agrees to present, on behalf of itself, the Depositor, and
the
Trustee for the benefit of the Certificateholders, claims under any
blanket
policy.
(b) The Servicer shall not take any action that would result in
non-coverage under any applicable Primary Insurance Policy of any
loss
that, but
for the actions of the Servicer, would have been covered
thereunder. The Servicer shall not cancel or refuse to renew any
Primary
Insurance
Policy that is in effect at the date of the initial issuance
of the
Certificates and is required to be kept in force hereunder
unless
the replacement
Primary Insurance Policy for the canceled or non-renewed
policy is
maintained with a Qualified Insurer. The Servicer need not
maintain
any Primary Insurance Policy if maintaining the Primary
Insurance
Policy is prohibited by applicable law. The Servicer agrees,
to the
extent permitted by applicable law, to effect the timely
payment
of the
premiums on each Primary Insurance Policy, and any costs not
otherwise
recoverable shall be recoverable by the Servicer from the
related
liquidation proceeds.
In
connection with its activities as Servicer of the Mortgage Loans,
the
Servicer agrees to present, on behalf of itself, the Trustee and
the
Certificateholders, claims to the insurer under any Primary
Insurance Policies
and, in this regard, to take any reasonable action in accordance
with the
Servicing Standard necessary to permit recovery under any Primary
Insurance
Policies respecting defaulted Mortgage Loans. Any amounts collected
by the
Servicer under any Primary Insurance Policies shall be deposited in
the
Certificate Account or the Collection Account (as applicable).
Section
3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.11, when any
property
subject to a Mortgage has been conveyed by the Mortgagor, the
Servicer
shall to the extent that it has knowledge of the conveyance and
in
accordance with the Servicing Standard, enforce any due-on-sale
clause contained
in any Mortgage Note or Mortgage, to the extent
permitted
under applicable law and governmental regulations, but only to
the extent
that enforcement will not adversely affect or jeopardize
coverage
under any Required Insurance Policy. Notwithstanding the
foregoing,
the Servicer is not required to exercise these rights with
respect to
a Mortgage Loan if the Person to whom the related Mortgaged
Property
has been conveyed or is proposed to be conveyed satisfies the
conditions
contained in the Mortgage Note and Mortgage related thereto
and the
consent of the mortgagee under the Mortgage Note or Mortgage is
not
otherwise so required under the Mortgage Note or Mortgage as a
condition
to the transfer.
If (i) the
Servicer is prohibited by law from enforcing any due-on-sale
clause, (ii) coverage under any Required Insurance Policy would be
adversely
affected, (iii) the Mortgage Note does not include a due-on-sale
clause, or
(iv) nonenforcement is otherwise permitted hereunder, the Servicer
is
authorized, subject to Section 3.11(b), to take or enter into an
assumption
and modification agreement from or with the person to whom the
property has
been or is about to be conveyed, pursuant to which the person
becomes liable
under the Mortgage Note and, unless prohibited by applicable state
law, the
Mortgagor remains liable thereon. The Mortgage Loan must continue
to be
covered (if so covered before the Servicer enters into the
agreement) by the
applicable Required Insurance Policies.
The
Servicer, subject to Section 3.11(b), is also authorized with
the
prior approval of the insurers under any Required Insurance
Policies to enter
into a substitution of liability agreement with the Person,
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pursuant to which the original Mortgagor is released from liability
and the
Person is substituted as Mortgagor and becomes liable under the
Mortgage Note.
Notwithstanding the foregoing, the Servicer shall not be deemed to
be in
default under this Section 3.11 because of any transfer or
assumption that the
Servicer reasonably believes it is restricted by law from
preventing, for any
reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale
clause to
the extent set forth in Section 3.11(a), in any case in which
a
Mortgaged Property has been conveyed to a Person by a Mortgagor,
and
the Person
is to enter into an assumption agreement or modification
agreement or
supplement to the Mortgage Note or Mortgage that requires
the
signature of the Trustee, or if an instrument of release signed
by
the
Trustee is required releasing the Mortgagor from liability on
the
Mortgage
Loan, the Servicer shall prepare and deliver to the Trustee for
signature
and shall direct the Trustee, in writing, to execute the
assumption
agreement with the Person to whom the Mortgaged Property is
to be
conveyed, and the modification agreement or supplement to the
Mortgage
Note or Mortgage or other instruments appropriate to carry out
the terms
of the Mortgage Note or Mortgage or otherwise to comply with
any
applicable laws regarding assumptions or the transfer of the
Mortgaged
Property to the Person. In connection with any such
assumption, no material term of the Mortgage Note may be
changed.
In
addition, the substitute Mortgagor and the Mortgaged Property must
be
acceptable to the Servicer in accordance with its underwriting
standards as
then in effect. Together with each substitution, assumption, or
other
agreement or instrument delivered to the Trustee for execution by
it, the
Servicer shall deliver an Officer's Certificate signed by a
Servicing Officer
stating that the requirements of this subsection have been met in
connection
with such Officer's Certificate. The Servicer shall notify the
Trustee that
any substitution or assumption agreement has been completed by
forwarding to
the Trustee the original of the substitution or assumption
agreement, which in
the case of the original shall be added to the related Mortgage
File and
shall, for all purposes, be considered a part of the Mortgage File
to the same
extent as all other documents and instruments constituting a part
of the
Mortgage File. The Servicer will retain any fee collected by it for
entering
into an assumption or substitution of liability agreement as
additional
servicing compensation.
Section
3.12 Realization Upon Defaulted Mortgage Loans.
The Servicer shall use
reasonable efforts in accordance with the
Servicing Standard to foreclose on or otherwise comparably convert
the
ownership of assets 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. In connection with the
foreclosure or
other conversion, the Servicer shall follow the Servicing Standard
and shall
follow the requirements of the insurer under any Required Insurance
Policy.
The Servicer shall not be required to expend its own funds in
connection with
any foreclosure or towards the restoration of any property unless
it
determines (i) that the restoration or foreclosure will increase
the proceeds
of liquidation of the Mortgage Loan after reimbursement to itself
of
restoration expenses and (ii) that restoration expenses will be
recoverable to
it through Liquidation Proceeds (respecting which it shall have
priority for
purposes of withdrawals from the Certificate Account). The Servicer
shall be
responsible for all other costs and expenses incurred by it in any
foreclosure
proceedings. The Servicer is entitled to reimbursement of such
costs and
expenses from the liquidation proceeds with respect to the related
Mortgaged
Property, as provided in the definition of Liquidation Proceeds. If
the
Servicer has knowledge that a Mortgaged Property that the Servicer
is
contemplating acquiring in foreclosure or by deed in lieu of
foreclosure is
located within a one mile radius of any site listed in the
Expenditure Plan
for the Hazardous Substance Clean Up Bond Act of 1984 or other site
with
environmental or hazardous waste risks known to the Servicer, the
Servicer
will, before acquiring the Mortgaged Property, consider the risks
and only
take action in accordance with its established environmental
review
procedures.
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With
respect to any REO Property, the deed or certificate of sale
shall
be taken in the name of the Trustee for the benefit of the
Certificateholders,
or its nominee, on behalf of the Certificateholders. The Trustee's
name shall
be placed on the title to the REO Property solely as the Trustee
hereunder and
not in its individual capacity. The Servicer shall ensure that the
title to
the REO Property references the Pooling and Servicing Agreement and
the
Trustee's capacity hereunder. Pursuant to its efforts to sell the
REO
Property, the Servicer shall either itself or through an agent
selected by the
Servicer protect and conserve the REO Property in accordance with
the
Servicing Standard.
The
Servicer shall perform the tax reporting and withholding required
by
sections 1445 and 6050J of the Code with respect to foreclosures
and
abandonments, the tax reporting required by section 6050H of the
Code with
respect to the receipt of mortgage interest from individuals and,
if required
by section 6050P of the Code with respect to the cancellation of
indebtedness
by certain financial entities, by preparing any required tax and
information
returns, in the form required.
If the
Trust Fund acquires any Mortgaged Property as aforesaid or
otherwise in connection with a default or imminent default on a
Mortgage Loan,
the REO Property shall only be held temporarily, shall be actively
marketed
for sale, and the Servicer shall dispose of the Mortgaged Property
as soon as
practicable, and in any case before the end of the third calendar
year
following the calendar year in which the Trust Fund acquires the
property.
Notwithstanding any other provision of this Agreement, no Mortgaged
Property
acquired by the Trust Fund shall be rented (or allowed to continue
to be
rented) or otherwise used for the production of income by or on
behalf of the
Trust Fund.
The
decision of the Servicer to foreclose on a defaulted Mortgage
Loan
shall be subject to a determination by the Servicer that the
proceeds of the
foreclosure would exceed the costs and expenses of bringing a
foreclosure
proceeding. The proceeds received from the maintenance of any REO
Properties,
net of reimbursement to the Servicer for costs incurred (including
any
property or other taxes) in connection with maintenance of the REO
Properties
and net of unreimbursed Servicing Fees, Advances, and Servicing
Advances,
shall be applied to the payment of principal of and interest on the
related
defaulted Mortgage Loans (with interest accruing as though the
Mortgage Loans
were still current and adjustments, if applicable, to the Mortgage
Rate were
being made in accordance with the Mortgage Note) and all such
proceeds shall
be deemed, for all purposes in this Agreement, to be payments on
account of
principal and interest on the related Mortgage Notes and shall be
deposited
into the Certificate Account. To the extent the net proceeds
received during
any calendar month exceeds the amount attributable to amortizing
principal and
accrued interest at the related Mortgage Rate on the related
Mortgage Loan for
the calendar month, the excess shall be considered to be a partial
prepayment
of principal of the related Mortgage Loan.
The
proceeds from any liquidation of a Mortgage Loan, as well as
any
proceeds from an REO Property, will be applied in the following
order of
priority: first, to reimburse the Servicer for any related
unreimbursed
Servicing Advances or Servicing Fees or for any related
unreimbursed Advances,
as applicable; second, to reimburse the Servicer, as applicable,
and to
reimburse the Certificate Account for any Nonrecoverable Advances
(or portions
thereof) that were previously withdrawn by the Servicer pursuant to
Section
3.09(a)(iii) that related to the Mortgage Loan; third, to accrued
and unpaid
interest (to the extent no Advance has been made for such amount or
any such
Advance has been reimbursed) on the Mortgage Loan or related REO
Property, at
the Adjusted Net Mortgage Rate to the Due Date occurring in the
month in which
such amounts are required to be distributed; and fourth, as a
recovery of
principal of the Mortgage Loan. The Servicer will retain any Excess
Proceeds
from the liquidation of a Liquidated Mortgage Loan as additional
servicing
compensation pursuant to Section 3.15.
The
Servicer may agree to a modification of any Mortgage Loan at
the
request of the related Mortgagor if (i) the modification is in lieu
of a
refinancing and (ii) the Servicer purchases that Mortgage
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Loan from the Trust Fund as described below. Upon the agreement of
the
Servicer to modify a Mortgage Loan in accordance with the preceding
sentence,
the Servicer shall purchase that Mortgage Loan and all interest of
the Trustee
in that Mortgage Loan shall automatically be deemed transferred and
assigned
to the Servicer and all benefits and burdens of ownership thereof,
including
the right to accrued interest thereon from the date of purchase and
the risk
of default thereon, shall pass to the Servicer. The Servicer shall
promptly
deliver to the Trustee a certification of a Servicing Officer to
the effect
that all requirements of this paragraph have been satisfied with
respect to a
Mortgage Loan to be repurchased pursuant to this paragraph.
The
Servicer shall deposit the Purchase Price for any Mortgage Loan
repurchased pursuant to Section 3.12 in the Certificate Account
pursuant to
Section 3.06 within one Business Day after the purchase of the
Mortgage Loan.
Upon receipt by the Trustee of written notification of any such
deposit signed
by a Servicing Officer, the Trustee shall release to the Servicer
the related
Mortgage File and shall execute and deliver such instruments of
transfer or
assignment, in each case without recourse, as shall be necessary to
vest in
the Servicer any Mortgage Loan previously transferred and assigned
pursuant
hereto. The Servicer covenants and agrees to indemnify the Trust
Fund against
any liability for any "prohibited transaction" taxes and any
related interest,
additions, and penalties imposed on the Trust Fund established
hereunder as a
result of any modification of a Mortgage Loan effected pursuant to
this
Section, or any purchase of a Mortgage Loan by the Servicer in
connection with
a modification (but such obligation shall not prevent the Servicer
or any
other appropriate Person from contesting any such tax in
appropriate
proceedings and shall not prevent the Servicer from withholding
payment of
such tax, if permitted by law, pending the outcome of such
proceedings). The
Servicer shall have no right of reimbursement for any amount paid
pursuant to
the foregoing indemnification, except to the extent that the amount
of any
tax, interest, and penalties, together with interest thereon, is
refunded to
the Trust Fund.
Section
3.13 Trustee to Cooperate; Release of Mortgage Files.
Upon the
payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in
a manner
customary for such purposes, the Servicer will immediately notify
the Trustee
by delivering a Request for Release substantially in the form of
Exhibit N.
Upon receipt of the request, the Trustee shall promptly release the
related
Mortgage File to the Servicer, and the Trustee shall at the
Servicer's
direction execute and deliver to the Servicer the request for
reconveyance,
deed of reconveyance, or release or satisfaction of mortgage or
such
instrument releasing the lien of the Mortgage in each case provided
by the
Servicer, together with the Mortgage Note with written evidence
of
cancellation thereon. The Servicer is authorized to cause the
removal from the
registration on the MERS System of such Mortgage and to execute and
deliver,
on behalf of the Trustee and the Certificateholders or any of them,
any and
all instruments of satisfaction or cancellation or of partial or
full release.
Expenses incurred in connection with any instrument of satisfaction
or deed of
reconveyance shall be chargeable to the related Mortgagor.
From time
to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose
collection under
any policy of flood insurance, any fidelity bond or errors or
omissions
policy, or for the purposes of effecting a partial release of any
Mortgaged
Property from the lien of the Mortgage or the making of any
corrections to the
Mortgage Note or the Mortgage or any of the other documents
included in the
Mortgage File, the Trustee shall, upon delivery to the Trustee of a
Request
for Release in the form of Exhibit M signed by a Servicing Officer,
release
the Mortgage File to the Servicer or its designee. Subject to the
further
limitations set forth below, the Servicer shall cause the Mortgage
File or
documents so released to be returned to the Trustee when the need
therefor by
the Servicer no longer exists, unless the Mortgage Loan is
liquidated and the
proceeds thereof are deposited in the Certificate Account, in which
case the
Servicer shall deliver to the Trustee a Request for Release in the
form of
Exhibit N, signed by a Servicing Officer.
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If the
Servicer at any time seeks to initiate a foreclosure proceeding
in respect of any Mortgaged Property as authorized by this
Agreement, the
Servicer shall deliver to the Trustee, for signature, as
appropriate, any
court pleadings, requests for trustee's sale, or other documents
necessary to
effectuate such foreclosure or any legal action brought to obtain
judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to
obtain a
deficiency judgment or to enforce any other remedies or rights
provided by the
Mortgage Note or the Mortgage or otherwise available at law or in
equity.
Section
3.14 Documents, Records and Funds in Possession of the Servicer
to be Held for the Trustee.
The
Servicer shall account fully to the Trustee for any funds it
receives or otherwise collects as Liquidation Proceeds or Insurance
Proceeds
in respect of any Mortgage Loan. All Mortgage Files and funds
collected or
held by, or under the control of, the Servicer in respect of any
Mortgage
Loans, whether from the collection of principal and interest
payments or from
Liquidation Proceeds, including any funds on deposit in the
Certificate
Account, shall be held by the Servicer for and on behalf of the
Trustee and
shall be and remain the sole and exclusive property of the Trustee,
subject to
the applicable provisions of this Agreement. The Servicer also
agrees that it
shall not create, incur or subject any Mortgage File or any funds
that are
deposited in the Certificate Account, the Collection Account,
Distribution
Account, or any Escrow Account, or any funds that otherwise are or
may become
due or payable to the Trustee for the benefit of the
Certificateholders, to
any claim, lien, security interest, judgment, levy, writ of
attachment, or
other encumbrance, or assert by legal action or otherwise any claim
or right
of setoff against any Mortgage File or any funds collected on, or
in
connection with, a Mortgage Loan, except, however, that the
Servicer shall be
entitled to set off against and deduct from any such funds any
amounts that
are properly due and payable to the Servicer under this
Agreement.
Section
3.15 Servicing Compensation.
As
compensation for its activities hereunder, the Servicer may retain
or
withdraw from the Servicing Account, the Collection Account, or
the
Certificate Account the Servicing Fee for each Mortgage Loan for
the related
Distribution Date. Notwithstanding the foregoing, the Servicing Fee
payable to
the Servicer shall be reduced by the lesser of the aggregate of the
Prepayment
Interest Shortfalls with respect to the Distribution Date and the
aggregate
Compensating Interest for the Distribution Date.
The
Servicer may retain or withdraw from the Servicing Account, the
Collection Account, or the Certificate Account the Servicing Fee
for each
Mortgage Loan for the related Distribution Date. If the Servicer
directly
services a Mortgage Loan, the Servicer may retain the Servicing Fee
for its
own account as compensation for performing services.
Additional
servicing compensation in the form of Excess Proceeds,
Prepayment Interest Excess, assumption fees, late payment charges
and all
income net of any losses realized from Permitted Investments shall
be retained
by the Servicer to the extent not required to be deposited in the
Certificate
Account pursuant to Section 3.06. The Servicer shall be required to
pay all
expenses incurred by it in connection with its servicing activities
hereunder
(including the payment of any premiums for hazard insurance, and
any Primary
Insurance Policy and maintenance of the other forms of insurance
coverage
required by this Agreement) and shall not be entitled to
reimbursement
therefor except as specifically provided in this Agreement.
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Section
3.16 Access to Certain Documentation.
The
Servicer shall provide to the OTS and the FDIC and to
comparable
regulatory authorities supervising Holders of Certificates and
Certificate
Owners and the examiners and supervisory agents of the OTS, the
FDIC, and such
other authorities, access to the documentation regarding the
Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Access
shall be
afforded without charge, but only upon reasonable prior written
request and
during normal business hours at the offices designated by the
Servicer.
Nothing in this Section 3.16 shall limit the obligation of the
Servicer to
observ
