EXHIBIT 99.1
The Pooling and Servicing Agreement.
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INDYMAC MBS, INC.
Depositor
INDYMAC BANK, F.S.B.
Seller and Servicer
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee, Swap Trustee and Supplemental Interest Trustee
----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2006
----------------------------------------
INDYMAC INDX MORTGAGE LOAN TRUST
2006-AR35
MORTGAGE PASS-THROUGH CERTIFICATES
Series 2006-AR35
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ARTICLE ONE DEFINITIONS
11
Section 1.01.
Definitions...........................................................................11
Section 1.02. Rules of
Construction.................................................................46
ARTICLE TWO CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
48
Section 2.01. Conveyance of
Mortgage
Loans..........................................................48
Section 2.02. Acceptance by
the Trustee of the Mortgage
Loans.......................................51
Section 2.03. Representations,
Warranties, and Covenants of the Seller and the
Servicer.............53
Section 2.04. Representations
and Warranties of the Depositor as to the Mortgage
Loans..............55
Section 2.05. Delivery of
Opinion of Counsel in Connection with
Substitutions.......................55
Section 2.06. Execution and
Delivery of
Certificates................................................56
Section 2.07. REMIC
Matters.........................................................................56
ARTICLE THREE ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
57
Section 3.01. Servicer to
Service Mortgage
Loans....................................................57
Section 3.02.
[Reserved]............................................................................58
Section 3.03. Rights of the
Depositor and the Trustee in Respect of the
Servicer....................58
Section 3.04.
[Reserved]............................................................................58
Section 3.05. Trustee to Act
as
Servicer............................................................58
Section 3.06. Collection of
Mortgage Loan Payments; Certificate Account; Distribution
Account...............................................................................58
Section 3.07. Collection of
Taxes, Assessments and Similar Items; Escrow
Accounts...................61
Section 3.08. Access to
Certain Documentation and Information Regarding the Mortgage
Loans.................................................................................61
Section 3.09. Permitted
Withdrawals from the Certificate Account and the Distribution
Account...............................................................................62
Section 3.10. Maintenance of
Hazard Insurance; Maintenance of Primary Insurance
Policies..............................................................................63
Section 3.11. Enforcement of
Due-On-Sale Clauses; Assumption
Agreements.............................64
Section 3.12. Realization Upon
Defaulted Mortgage
Loans.............................................65
Section 3.13. Trustee to
Cooperate; Release of Mortgage
Files.......................................67
Section 3.14. Documents,
Records and Funds in Possession of the Servicer to be Held for
the
Trustee...........................................................................68
Section 3.15. Servicing
Compensation................................................................68
Section 3.16. Access to
Certain
Documentation.......................................................69
Section 3.17. Annual Statement
as to
Compliance.....................................................69
Section 3.18. Errors and
Omissions Insurance; Fidelity
Bonds........................................69
Section 3.19. The Swap
Contract and the Corridor
Contract...........................................69
Section 3.20. Notification of
Adjustments...........................................................71
Section 3.21. Prepayment
Charges....................................................................71
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ARTICLE FOUR DISTRIBUTIONS AND ADVANCES BY THE SERVICER
72
Section 4.01.
Advances..............................................................................72
Section 4.02. Priorities of
Distribution............................................................73
Section 4.03.
[Reserved]............................................................................79
Section 4.04.
[Reserved]............................................................................79
Section 4.05. Monthly
Statements to
Certificateholders..............................................79
Section 4.06. Carryover
Reserve
Fund................................................................81
Section 4.07. Determination of
Pass-Through Rates for LIBOR
Certificates............................82
Section 4.08. Swap Trust, Swap
Account, Supplemental Interest Trust and Supplemental
Interest Reserve
Fund.................................................................83
ARTICLE FIVE THE CERTIFICATES
85
Section 5.01. The
Certificates......................................................................85
Section 5.02. Certificate
Register; Registration of Transfer and Exchange of
Certificates..........................................................................85
Section 5.03. Mutilated,
Destroyed, Lost or Stolen
Certificates.....................................90
Section 5.04. Persons Deemed
Owners.................................................................90
Section 5.05. Access to List
of Certificateholders' Names and
Addresses.............................90
Section 5.06. Maintenance of
Office or
Agency.......................................................91
ARTICLE SIX THE DEPOSITOR AND THE SERVICER
92
Section 6.01. Respective
Liabilities of the Depositor and the
Servicer..............................92
Section 6.02. Merger or
Consolidation of the Depositor or the
Servicer..............................92
Section 6.03. Limitation on
Liability of the Depositor, the Seller, the Servicer, and
Others................................................................................92
Section 6.04. Limitation on
Resignation of the
Servicer.............................................93
ARTICLE SEVEN DEFAULT
94
Section 7.01. Events of
Default.....................................................................94
Section 7.02. Trustee to Act;
Appointment of
Successor..............................................95
Section 7.03. Notification to
Certificateholders....................................................96
ARTICLE EIGHT CONCERNING THE TRUSTEE
98
Section 8.01. Duties of the
Trustee.................................................................98
Section 8.02. Certain Matters
Affecting the
Trustee.................................................98
Section 8.03. Trustee Not
Liable for Certificates or Mortgage
Loans................................100
Section 8.04. Trustee May Own
Certificates.........................................................100
Section 8.05. Trustee's Fees
and
Expenses..........................................................100
Section 8.06. Eligibility
Requirements for the
Trustee.............................................101
Section 8.07. Resignation and
Removal of the
Trustee...............................................101
Section 8.08. Successor
Trustee....................................................................102
Section 8.09.
Merger or Consolidation of the
Trustee...............................................103
Section 8.10. Appointment of
Co-Trustee or Separate
Trustee........................................103
Section 8.11. Tax
Matters..........................................................................104
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ARTICLE NINE TERMINATION
108
Section 9.01. Termination upon
Liquidation or Purchase of the Mortgage
Loans.......................108
Section 9.02. Final
Distribution on the
Certificates...............................................109
Section 9.03. Additional
Termination
Requirements..................................................110
Section 9.04. Termination of
the Swap Trust, the Supplemental Interest Trust and the
Corridor
Trust.......................................................................110
ARTICLE TEN MISCELLANEOUS PROVISIONS
111
Section 10.01.
Amendment............................................................................111
Section 10.02. Recordation of
Agreement;
Counterparts...............................................112
Section 10.03. Governing
Law........................................................................113
Section 10.04. Intention of
Parties.................................................................113
Section 10.05. Notices. 113
Section 10.06. Severability of
Provisions...........................................................114
Section 10.07.
Assignment...........................................................................114
Section 10.08. Limitation on Rights
of
Certificateholders...........................................114
Section 10.09. Inspection and Audit
Rights..........................................................115
Section 10.10. Certificates
Nonassessable and Fully
Paid............................................115
Section 10.11. Official
Record......................................................................116
Section 10.12. Protection of
Assets.................................................................116
Section 10.13. Qualifying Special
Purpose
Entity....................................................116
ARTICLE ELEVEN EXCHANGE ACT REPORTING
117
Section 11.01. Filing
Obligations...................................................................117
Section 11.02. Form 10-D
Filings....................................................................117
Section 11.03. Form 8-K
Filings.....................................................................118
Section 11.04. Form 10-K
Filings....................................................................118
Section 11.05. Sarbanes-Oxley
Certification.........................................................119
Section 11.06. Form 15
Filing.......................................................................119
Section 11.07. Report on Assessment
of Compliance and
Attestation...................................119
Section 11.08. Use of
Subcontractors................................................................121
Section 11.09.
Amendments...........................................................................121
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SCHEDULES
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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:
Form of Monthly
Report..................................................................S-IV-1
EXHIBITS
Exhibit A:
Form of Senior
Certificate.................................................................A-1
Exhibit B:
Form of Subordinated
Certificate...........................................................B-1
Exhibit C:
Form of Class A-R
Certificate..............................................................C-1
Exhibit D:
[Reserved].................................................................................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:
[Reserved]...............................................................................G-2-1
Exhibit G-3:
Form of Delay Delivery
Certification.....................................................G-3-1
Exhibit G-4:
[Reserved]...............................................................................G-4-1
Exhibit H-1:
Form of Final Certification of
Trustee...................................................H-1-1
Exhibit H-2:
[Reserved]...............................................................................H-2-1
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-1:
Form of Swap
Contract......................................................................P-1
Exhibit P-2:
Form of Corridor
Contract..................................................................P-2
Exhibit Q
[Reserved].................................................................................Q-1
Exhibit R-1
Form of Performance Certification
(Trustee)................................................R-1
Exhibit S
Form of Servicing Criteria to be Addressed in Assessment
of Compliance
Statement....................................................................S-2
Exhibit T
Form of List of Item 1119
Parties..........................................................T-1
Exhibit U
Form of Sarbanes-Oxley
Certification.......................................................U-1
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THIS
POOLING AND SERVICING AGREEMENT, dated as of November 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"), as swap trustee (in that capacity, the
"Swap Trustee")
and as supplemental interest trustee for the Supplemental Interest
Trustee (in
that capacity, the "Supplemental Interest 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:
PRELIMINARY STATEMENT
The
Depositor is the owner of the Trust Fund that is hereby conveyed
to
the Trustee in return for the Certificates. As provided in this
Agreement, the
Trustee shall elect that the Trust Fund (exclusive of the Swap
Trust, the Swap
Contract, the Swap Account, the Carryover Reserve Fund and any
amounts in
respect of waived Prepayment Charges paid by the Servicer to the
Class P-1 and
Class P-2 Certificates pursuant to the second paragraph of Section
3.21) be
treated for federal income tax purposes as comprising three real
estate
mortgage investment conduits (each, a "REMIC" or, in the
alternative,
"REMIC 1", "REMIC 2" 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.
Each REMIC
2 Interest (other than the Class R-2 Interest) is hereby designated
as a
regular interest in REMIC 2. Each REMIC 1 Interest (other than the
Class R-1
Interest) is hereby designated as a regular interest in REMIC 1.
The Class A-R
represents ownership of the sole class of residual interest in each
REMIC
created under this Agreement. The Master REMIC will hold as assets
the several
classes of uncertificated REMIC 2 Interests (other than the Class
R-2
Interest). REMIC 2 will hold as assets the several classes of
uncertificated
REMIC 1 Interests (other than the Class R-1 Interest). REMIC 1 will
hold as
assets all property of the Trust Fund other than the Swap Trust,
the Swap
Contract, the Swap Account, the Supplemental Interest Trust, the
Supplemental
Interest Reserve Fund and the Carryover Reserve Fund. Each REMIC 1
Interest
(other than the Class R-1 Interest) is hereby designated as a
regular interest
in REMIC 1. 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-1 and Class P-2 Certificates pursuant to the second
paragraph of
Section 3.21 will be treated as paid directly by the Servicer to
the Class P-1
and Class P-2 Certificates and not as paid by or through any REMIC
created
hereunder.
REMIC 1
The REMIC
1 Interests will have the Initial Principal Balances and
Pass-Through Rates as set forth in the following table:
REMIC 1 Interests Initial
Principal Balance(1)
Pass-Through Rate
-----------------
----------------------------
-----------------
Class 1-1A
$ 3,368,747.50
(2)
Class 1-1B
$ 3,368,747.50
(3)
Class 1-2A
$ 4,466,207.50
(2)
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REMIC 1 Interests Initial
Principal Balance(1)
Pass-Through Rate
-----------------
----------------------------
-----------------
Class 1-2B
$ 4,466,207.50
(3)
Class 1-3A
$ 5,564,275.00
(2)
Class 1-3B
$ 5,564,275.00
(3)
Class 1-4A
$ 6,656,758.75
(2)
Class 1-4B
$ 6,656,758.75
(3)
Class 1-5A
$ 7,737,911.25
(2)
Class 1-5B
$ 7,737,911.25
(3)
Class 1-6A
$ 8,798,537.50
(2)
Class 1-6B
$ 8,798,537.50
(3)
Class 1-7A
$ 9,827,076.25
(2)
Class 1-7B
$ 9,827,076.25
(3)
Class 1-8A
$ 10,929,117.50
(2)
Class 1-8B
$ 10,929,117.50
(3)
Class 1-9A
$ 11,721,595.00
(2)
Class 1-9B
$ 11,721,595.00
(3)
Class 1-10A
$ 12,547,456.25
(2)
Class 1-10B
$ 12,547,456.25
(3)
Class 1-11A
$ 13,194,711.25
(2)
Class 1-11B
$ 13,194,711.25
(3)
Class 1-12A
$ 13,443,976.25
(2)
Class 1-12B
$ 13,443,976.25
(3)
Class 1-13A
$ 13,029,672.50
(2)
Class 1-13B
$ 13,029,672.50
(3)
Class 1-14A
$ 12,628,128.75
(2)
Class 1-14B
$ 12,628,128.75
(3)
Class 1-15A
$ 12,238,953.75
(2)
Class 1-15B
$ 12,238,953.75
(3)
Class 1-16A
$ 11,861,770.00
(2)
Class 1-16B
$ 11,861,770.00
(3)
Class 1-17A
$ 11,593,152.50
(2)
Class 1-17B
$ 11,593,152.50
(3)
Class 1-18A
$ 11,138,915.00
(2)
Class 1-18B
$ 11,138,915.00
(3)
Class 1-19A
$ 10,906,010.00
(2)
Class 1-19B
$ 10,906,010.00
(3)
Class 1-20A
$ 10,522,042.50
(2)
Class 1-20B
$ 10,522,042.50
(3)
Class 1-21A
$ 10,534,220.00
(2)
Class 1-21B
$ 10,534,220.00
(3)
Class 1-22A
$ 9,987,640.00
(2)
Class 1-22B
$ 9,987,640.00
(3)
Class 1-23A
$ 9,502,735.00
(2)
Class 1-23B
$ 9,502,735.00
(3)
Class 1-24A
$ 9,410,452.50
(2)
Class 1-24B
$ 9,410,452.50
(3)
2
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REMIC 1 Interests Initial
Principal Balance(1)
Pass-Through Rate
-----------------
----------------------------
-----------------
Class 1-25A
$ 9,000,366.25
(2)
Class 1-25B
$ 9,000,366.25
(3)
Class 1-26A
$ 8,642,382.50
(2)
Class 1-26B
$ 8,642,382.50
(3)
Class 1-27A
$ 8,375,991.25
(2)
Class 1-27B
$ 8,375,991.25
(3)
Class 1-28A
$ 8,117,806.25
(2)
Class 1-28B
$ 8,117,806.25
(3)
Class 1-29A
$ 7,867,577.50
(2)
Class 1-29B
$ 7,867,577.50
(3)
Class 1-30A
$ 7,625,055.00
(2)
Class 1-30B
$ 7,625,055.00
(3)
Class 1-31A
$ 7,601,283.75
(2)
Class 1-31B
$ 7,601,283.75
(3)
Class 1-32A
$ 7,312,298.75
(2)
Class 1-32B
$ 7,312,298.75
(3)
Class 1-33A
$ 7,286,421.25
(2)
Class 1-33B
$ 7,286,421.25
(3)
Class 1-34A
$ 7,471,183.75
(2)
Class 1-34B
$ 7,471,183.75
(3)
Class 1-35A
$ 7,820,412.50
(2)
Class 1-35B
$ 7,820,412.50
(3)
Class 1-36A
$ 11,078,551.25
(2)
Class 1-36B
$ 11,078,551.25
(3)
Class 1-37A
$ 6,006,413.75
(2)
Class 1-37B
$ 6,006,413.75
(3)
Class 1-38A
$ 5,802,386.25
(2)
Class 1-38B
$ 5,802,386.25
(3)
Class 1-39A
$ 5,528,156.25
(2)
Class 1-39B
$ 5,528,156.25
(3)
Class 1-40A
$ 5,411,618.75
(2)
Class 1-40B
$ 5,411,618.75
(3)
Class 1-41A
$ 5,287,016.25
(2)
Class 1-41B
$ 5,287,016.25
(3)
Class 1-42A
$ 5,027,906.25
(2)
Class 1-42B
$ 5,027,906.25
(3)
Class 1-43A
$ 4,872,892.50
(2)
Class 1-43B
$
4,872,892.50
(3)
Class 1-44A
$ 4,773,348.75
(2)
Class 1-44B
$ 4,773,348.75
(3)
Class 1-45A
$ 4,639,280.00
(2)
Class 1-45B
$ 4,639,280.00
(3)
Class 1-46A
$ 4,432,456.25
(2)
Class 1-46B
$ 4,432,456.25
(3)
Class 1-47A
$ 4,295,792.50
(2)
3
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REMIC 1 Interests Initial
Principal Balance(1)
Pass-Through Rate
-----------------
----------------------------
-----------------
Class 1-47B
$ 4,295,792.50
(3)
Class 1-48A
$ 4,211,130.00
(2)
Class 1-48B
$ 4,211,130.00
(3)
Class 1-49A
$ 4,033,497.50
(2)
Class 1-49B
$ 4,033,497.50
(3)
Class 1-50A
$ 3,956,792.50
(2)
Class 1-50B
$ 3,956,792.50
(3)
Class 1-51A
$ 3,863,485.00
(2)
Class 1-51B
$ 3,863,485.00
(3)
Class 1-52A
$ 3,667,942.50
(2)
Class 1-52B
$ 3,667,942.50
(3)
Class 1-53A
$ 3,728,050.00
(2)
Class 1-53B
$ 3,728,050.00
(3)
Class 1-54A
$ 3,908,715.00
(2)
Class 1-54B
$ 3,908,715.00
(3)
Class 1-55A
$
4,045,268.75
(2)
Class 1-55B
$ 4,045,268.75
(3)
Class 1-56A
$ 5,566,522.50
(2)
Class 1-56B
$ 5,566,522.50
(3)
Class 1-57A
$ 5,707,737.50
(2)
Class 1-57B
$ 5,707,737.50
(3)
Class 1-58A
$ 11,619,468.75
(2)
Class 1-58B
$ 11,619,468.75
(3)
Class 1-59A
$ 23,645,558.75
(2)
Class 1-59B
$ 23,645,558.75
(3)
Class 1-60A
$ 41,989,282.50
(2)
Class 1-60B
$ 41,989,282.50
(3)
Class 1-61A
$
462,647.50
(2)
Class 1-61B
$
462,647.50
(3)
Class 1-62A
$
448,378.75
(2)
Class 1-62B
$
448,378.75
(3)
Class 1-63A
$
434,550.00
(2)
Class 1-63B
$
434,550.00
(3)
Class 1-64A
$
421,145.00
(2)
Class 1-64B
$
421,145.00
(3)
Class 1-65A
$
408,156.25
(2)
Class 1-65B
$
408,156.25
(3)
Class 1-66A
$
395,567.50
(2)
Class 1-66B
$
395,567.50
(3)
Class 1-67A
$
383,365.00
(2)
Class 1-67B
$
383,365.00
(3)
Class 1-68A
$
371,540.00
(2)
Class 1-68B
$
371,540.00
(3)
Class 1-69A
$
360,080.00
(2)
Class 1-69B
$
360,080.00
(3)
4
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REMIC 1 Interests Initial
Principal Balance(1)
Pass-Through Rate
-----------------
----------------------------
-----------------
Class 1-70A
$
348,971.25
(2)
Class 1-70B
$
348,971.25
(3)
Class 1-71A
$
338,207.50
(2)
Class 1-71B
$
338,207.50
(3)
Class 1-72A
$
327,773.75
(2)
Class 1-72B
$
327,773.75
(3)
Class 1-73A
$
317,662.50
(2)
Class 1-73B
$
317,662.50
(3)
Class 1-74A
$
307,862.50
(2)
Class 1-74B
$
307,862.50
(3)
Class 1-75A
$
298,365.00
(2)
Class 1-75B
$
298,365.00
(3)
Class 1-76A
$
289,158.75
(2)
Class 1-76B
$
289,158.75
(3)
Class 1-77A
$
280,240.00
(2)
Class 1-77B
$
280,240.00
(3)
Class 1-78A
$
304,933.75
(2)
Class 1-78B
$
304,933.75
(3)
Class 1-79A
$
331,200.00
(2)
Class 1-79B
$
331,200.00
(3)
Class 1-80A
$
298,162.50
(2)
Class 1-80B
$
298,162.50
(3)
Class 1-81A
$
562,820.00
(2)
Class 1-81B
$
562,820.00
(3)
Class 1-82A
$
774,271.25
(2)
Class 1-82B
$
774,271.25
(3)
Class 1-83A
$ 2,973,065.00
(2)
Class 1-83B
$ 2,973,065.00
(3)
Class 1-84A
$ 1,427,765.00
(2)
Class 1-84B
$ 1,427,765.00
(3)
Class 1-Support
(4)
(4)
Class 1-P-1
$100
(5)
Class 1-P-2
$100
(5)
Class R-1
(6)
(6)
-----------------------
(1) Scheduled
principal, Principal Prepayments and Realized Losses will be
allocated
first, to the Class 1-Support Interest and second, among the
other
Classes designated "1-", first, sequentially to the Class
having
the lowest
cardinal number following such designation, in each case until
reduced to
zero, and second, among each class having the same cardinal
number pro
rata between each such class.
(2) Prior to the
Distribution Date in December 2013, a rate equal to twice
the
Weighted Average Adjusted Net Mortgage Rate of the Mortgage
Loans
less
10.10% per annum. On and after the Distribution Date in
December
2013 a
rate equal to the Weighted Average Adjusted Net Mortgage Rate
of
the
Mortgage Loans.
5
<PAGE>
(3) Prior to the
Distribution Date in December 2013, a rate equal to the
lesser of
(i) 10.10% per annum and (ii) twice the Weighted Average
Adjusted
Net Mortgage Rate of the Mortgage Loans. On and after the
Distribution Date in December 2013, a rate equal to the Weighted
Average
Adjusted
Net Mortgage Rate of the Mortgage Loans.
(4) On the
Closing Date and on each Distribution Date, following the
allocation
of Principal Amounts and Realized Losses, the principal
balance in
respect of the Class 1-Support Interest will equal the excess
of the
principal balance of the Mortgage Loans (less $100 on the
Closing
Date) over
the principal balance in respect of the remaining REMIC 1
Interests
other than the Class R-1 Interests. The Class 1-Support
Interest
will accrue interest at a rate equal to the Weighted Average
Adjusted
Net Mortgage Rate.
(5) The Class
1-P-1 and Class 1-P-2 Interests will not be entitled to any
interest,
but will be entitled to 100% of any Prepayment Charges
collected
on the Mortgage Loans. The Class 1-P-1 Interests will be
entitled
to 100% of any Hard Prepayment Charges and the Class 1-P-2
Interests will be
entitled to 100% of any Soft Prepayment Charges paid on
the
Mortgage Loans.
(6) The Class
R-1 Interest is the sole class of residual interest in REMIC 1.
It has no
principal balance and pays no principal or interest.
REMIC 2
The REMIC 2 Interests will have the initial principal balances,
Pass-Through
Rates and corresponding Classes of Certificates as set forth in the
following
table:
Corresponding
Principal Pass-Through
Certificates
REMIC 2 Interests
Balances
Rate
Classes
-----------------
--------
----
-------------
Class 2-1-A-1A
(1)
(2)
Class 1-A-1A
Class 2-1-A-1B
(1)
(2)
Class 1-A-1B
Class 2-2-A-1A
(1)
(2)
Class 2-A-1A
Class 2-2-A-1B
(1)
(2)
Class 2-A-1B
Class 2-2-A-2
(1)
(2)
Class 2-A-2
Class 2-2-A-3A
(1)
(2)
Class 2-A-3A
Class 2-2-A-3B
(1)
(2)
Class 2-A-3B
Class 2-M-1
(1)
(2)
Class M-1
Class 2-M-2
(1)
(2)
Class M-2
Class 2-M-3
(1)
(2)
Class M-3
Class 2-M-4
(1)
(2)
Class M-4
Class 2-M-5
(1)
(2)
Class M-5
Class 2-M-6
(1)
(2)
Class M-6
Class 2-M-7
(1)
(2)
Class M-7
Class 2-Accrual
(1)
(2)
N/A
Class 2-Swap IO
(3)
(3)
N/A
Class 2-P-1
$100
(4)
Class P-1
Class 2-P-2
$100
(4)
Class P-2
Class R-2
(5) (5)
N/A
6
<PAGE>
-----------------------
(1) On each
Distribution Date, Principal Amounts and Realized Losses will
be
allocated
to the REMIC 2 Interests in such a manner that, following such
allocations: (i) the principal balances of the REMIC 2 Interests
(other
than the
Class 2-Accrual, Class 2-Swap IO, Class 2-P-1, Class 2-P-2 and
Class R-2
Interests) will equal 50% of the Certificate Balance of their
Corresponding Certificates for such Distribution Date, (ii) the
Class
2-Accrual
Interest will have a principal balance equal to 50% of the
aggregate
Stated Principal Balance of the Mortgage Loans plus 50% of the
Overcollateralized Amount.
(2) The
Pass-Through Rate will equal the weighted average of the
Pass-Through
Rates of
the REMIC 2 Interests (other than the Class R-1 Interests)
treating
each "B" interest as capped at a rate equal to the product of
(i) 2 and
(ii) LIBOR on each Distribution Date whose cardinal number
preceding
such designation (e.g., -1, -2, -3) is not exceeded by the
ordinal
number of the Distribution Date following the Closing Date
(e.g.,
first,
second, third) for such Distribution Date (the "REMIC Cap").
(3) For each
Distribution Date, the REMIC 2-Swap IO shall be entitled to
receive
from each "B" interest whose cardinal number preceding such
designation (e.g., -1, -2, -3) is not exceeded by the ordinal
number of
the
Distribution Date following the Closing Date (e.g., first,
second,
third) for
such Distribution Date the interest accruing on such interest
in excess
of an amount of interest accruing on such interest's balance at
a rate
equal to the excess of: (a) 10.10% over (b) the product of (i)
2
and (ii)
LIBOR.
(4) The Class
2-P-1 and Class 2-P-2 Interests will not be entitled to any
interest,
but will be entitled to 100% of any Prepayment Charges
collected
on the Mortgage Loans. The Class 2-P-1 Interests will be
entitled
to 100% of any Hard Prepayment Charges and the Class 2-P-2
Interests
will be entitled to 100% of any Soft Prepayment Charges paid on
the
Mortgage Loans.
(5) The Class
R-2 Interest is the sole class of residual interest in REMIC 2.
It has no
principal balance and pays no principal or interest.
The Master REMIC
The
following table sets forth the Class Designation, Initial Class
Certificate Balance, Pass-Through Rate, Minimum Denominations and
Integral
Multiples in excess thereof in respect of the Certificates, each of
which
(other than the Class A-R Certificates) is hereby designated a
regular interest
in the Master REMIC, 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>
Initial Class
Class
Certificate
Pass-Through
Minimum
Integral Multiples in
Designation
Balance
Rate
Denomination
Excess of Minimum
-----------
-------
----
------------
-----------------
<S>
<C>
<C>
<C>
<C>
Class 1-A-1A
$ 346,464,000
Floating (1)
$25,000
$1,000
Class 1-A-1B
$
38,496,000
Floating (1)
$25,000
$1,000
Class 2-A-1A
$ 271,304,000
Floating (1)
$25,000
$1,000
Class 2-A-1B
$
30,144,000
Floating (1)
$25,000
$1,000
Class 2-A-2
$ 101,414,000
Floating (1)
$25,000
$1,000
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Initial Class
Class
Certificate
Pass-Through
Minimum
Integral Multiples in
Designation
Balance
Rate
Denomination
Excess of Minimum
-----------
-------
----
------------
-----------------
<S>
<C>
<C>
<C>
<C>
Class 2-A-3A
$ 180,031,000
Floating (1)
$25,000
$1,000
Class 2-A-3B
$
20,003,000
Floating (1)
$25,000
$1,000
Class A-R
$
100
Floating (2)
$100
N/A
Class M-1
$
14,863,000
Floating (1)
$25,000
$1,000
Class M-2
$
13,270,000
Floating (1)
$25,000
$1,000
Class M-3
$
7,431,000
Floating (1)
$25,000
$1,000
Class M-4
$
6,901,000
Floating (1)
$25,000
$1,000
Class M-5
$
10,616,000
Floating (1)
$25,000
$1,000
Class M-6
$
7,962,000
Floating (1)
$25,000
$1,000
Class M-7
$
8,493,000
Floating (1)
$25,000
$1,000
Class C
(3)
(3)
N/A
N/A
Class P-1
$100.00
(4)
N/A
N/A
Class P-2
$100.00
(5)
N/A
N/A
</TABLE>
(1) The Pass-Through Rate for this Class of Certificates for any
Interest
Accrual Period for any Distribution Date will be a per annum rate
equal to the
least of (i) LIBOR for that Distribution Date plus the Pass-Through
Margin for
that Class and that Interest Accrual Period, (ii) the Net Rate Cap
for that
Distribution Date and (iii) 10.5%. Solely for federal income tax
purposes, all
monies received by: (i) the Senior and Subordinated Certificates in
excess of
the REMIC Cap, will be treated as a paid pursuant to a limited
recourse
interest rate cap contract as provided in Section 8.11.
(2) The Pass-Through Rate for the Class A-R Certificates for the
Interest
Accrual Period related to each Distribution Date will be a per
annum rate equal
to the Weighted Average Adjusted Net Mortgage Rate of the Mortgage
Loans. The
Pass-Through Rate for the Class A-R Certificates for the Interest
Accrual
Period related to the first Distribution Date is 6.537% per annum.
The Class
A-R Certificates will receive interest and principal pursuant to
its ownership
of the Class R-1 Interests.
(3) For federal income tax purposes, the Class C Certificates will
represent
three classes of regular interests issued by the Master REMIC, (i)
a class that
does not accrue interest and has a principal balance equal to
the
Overcollateralized Amount as of the Closing Date, (ii) a class that
is entitled
to receive all interest accruals in respect of the Class 2-Swap IO
Interest,
and (iii) a class that has a notional balance equal to the sum of
the principal
balances of the REMIC 2 Regular Interests (excluding the Class R-2,
Class
2-Swap IO, Class 2-P-1 and Class 2-P-2 Interests), on the
immediately preceding
Distribution Date, and has a pass through rate equal to the excess
of: (a) the
REMIC Cap over (b) the product of 2 and the weighted average of the
pass
through rates in respect of such Classes of REMIC 2 Interests,
subjecting the
Class 2-Accrual Interest to a cap equal to zero.
(4) The Class P-1 Certificates will not be entitled to any
interest, but will
be entitled to 100% of any Hard Prepayment Charges collected on the
Mortgage
Loans. All amounts in respect of waived Hard Prepayment Charges
paid by the
Servicer to the Class P-1 Certificates pursuant to the second
paragraph of
Section 3.21 will be treated as paid directly by the Servicer to
the Class P-1
Certificates and not as paid by or through any REMIC created under
this
Agreement
8
<PAGE>
(5) The Class P-2 Certificates will not be entitled to any
interest, but will
be entitled to 100% of any Soft Prepayment Charges paid on the
Mortgage Loans.
All amounts in respect of waived Soft Prepayment Charges paid by
the Servicer
to the Class P-2 Certificates pursuant to the second paragraph of
Section 3.21
will be treated as paid directly by the Servicer to the Class P-2
Certificates
and not as paid by or through any REMIC created under this
Agreement.
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.
For any
purpose for which the Pass-Through Rates (other than in the
Master REMIC) are calculated, the interest rate on the Mortgage
Loans shall be
appropriately adjusted to account for the difference between the
monthly day
count convention of the Mortgage Loans and the monthly day count
convention of
the regular interests issued by each of the REMICs. For purposes of
calculating
the Pass-Through Rates for each of the interests issued by each
REMIC (other
than the Master REMIC) created hereunder such rates shall be
adjusted to equal
a monthly day count convention based on a 30 day month for each Due
Period and
a 360-day year so that the Mortgage Loans and all regular interests
will be
using the same monthly day count convention.
Set forth below are designations of Classes of Certificates to the
categories
used in this Agreement:
Accretion Directed Certificates.......... None.
Accrual Certificates..................... None.
Book-Entry Certificates.................. All Classes of Certificates
other
than the Physical Certificates.
Class P Certificates..................... Class P-1 and Class P-2
Certificates.
COFI Certificates........................ None.
Components............................... None.
Component Certificates................... None.
Delay Certificates....................... Class A-R Certificates.
ERISA-Restricted Certificates............ The Private Certificates and
Residual Certificates; and
Certificates of any Class that does
not or no longer has a rating of
BBB- or
its equivalent, or better,
from at least one Rating Agency.
LIBOR Certificates....................... The Senior Certificates (other
than
the Class A-R Certificates) and
Subordinated Certificates.
Group 1 Senior Certificates.............. Class 1-A-1A, Class 1-A-1B and
Class A-R Certificates.
Group 1 Certificates..................... Group 1 Senior Certificates and
the
portion of the Subordinated
Certificates related to Loan Group
1.
Group 2 Senior Certificates.............. Class 2-A-1A, Class 2-A-1B,
Class
2-A-2, Class 2-A-3A and Class
2-A-3B Certificates
Group 2 Certificates..................... Group 2 Senior Certificates and
the
portion of the Subordinated
Certificates related to Loan Group
2.
9
<PAGE>
Non-Delay Certificates................... All LIBOR Certificates.
Notional Amount Certificates............. None.
Notional Amount Components............... None.
Offered Certificates..................... All Classes of Certificates
other
than the Private Certificates.
Physical Certificates.................... Class A-R Certificates and
Private
Certificates.
Planned Principal Classes................ None.
Principal Only Certificates.............. None.
Principal Only Components................ None.
Private Certificates..................... Class C and Class P
Certificates.
Rating Agencies.......................... Moody's and S&P.
Regular Certificates..................... All Classes of Certificates
other
than the Class A-R Certificates.
Residual Certificate..................... Class A-R Certificates.
Retained Certificates.................... None.
Senior Certificates...................... All Group 1 and Group 2 Senior
Certificates.
Super Senior Certificates................ Class 1-A-1A, Class 2-A-1A and
Class 2-A-3A Certificates.
Support Certificates..................... Class 1-A-1B, Class 2-A-1B and
Class 2-A-3B Certificates
Subordinated Certificates................ Class M-1, Class M-2, Class
M-3,
Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates.
Targeted Principal Classes............... None.
Targeted Principal Component............. None.
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.
10
<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: A date specified in each Mortgage Note as a date on
which the Mortgage Rate on the related Mortgage Loan is subject to
adjustment.
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.
11
<PAGE>
Amount
Held for Future Distribution: As to any Distribution Date and
the
Mortgage Loans in a Loan Group, the aggregate amount held in the
Certificate
Account at the close of business on the related Determination Date
on account
of (i) Principal Prepayments on the Mortgage Loans in such Loan
Group received
after the last day of the related Prepayment Period and Liquidation
Proceeds
and Subsequent Recoveries relating to the Mortgage Loans in such
Loan Group
received in the month of such Distribution Date and (ii) all
Scheduled Payments
relating to the Mortgage Loans in that Loan Group due after the
related Due
Date.
Applied
Realized Loss Amount: With respect to any Distribution Date and
any Class of LIBOR Certificates, the Realized Losses with respect
to the
Mortgage Loans that are to be applied in reduction of the Class
Certificate
Balance of any such Class of Certificates pursuant to this
Agreement, which, in
the case of the Subordinated Certificates, shall equal the amount,
if any, by
which the aggregate Class Certificate Balance of all LIBOR
Certificates (after
all distributions of principal on such Distribution Date) exceeds
the aggregate
Stated Principal Balance of the Mortgage Loans as of the Due Date
in the month
in which such Distribution Date occurs (after giving effect to
Principal
Prepayments and Liquidation Proceeds allocated to principal and
Subsequent
Recoveries received in the related Prepayment Period). With respect
to the
Senior Certificates in a Senior Certificate Group and any
Distribution Date on
or after the Senior Credit Support Depletion Date, in such Senior
Certificate
Group the amount, if any, by which the aggregate Class Certificate
Balance of
the Senior Certificates in such Senior Certificate Group (after
all
distributions of principal on such Distribution Date) exceeds the
aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan
Group as of
the Due Date in the month in which such Distribution Date occurs
(after giving
effect to Principal Prepayments and Liquidation Proceeds allocated
to principal
and Subsequent Recoveries received in the related Prepayment
Period).
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 Date, 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 Advance, (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: Not applicable.
Bankruptcy
Loss: Not applicable.
Bankruptcy
Loss Coverage Amount: Not applicable.
12
<PAGE>
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 the 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.
Carryover
Reserve Fund: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.06 with a
depository
institution in the name of the Trustee for the benefit of the
Certificateholders and designated "Deutsche Bank National Trust
Company, in
trust for the registered holders of IndyMac INDX Mortgage Loan
Trust 2006-AR35,
Mortgage Pass-Through Certificates, Series 2006-AR35."
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 IndyMac INDX Mortgage Loan Trust
2006-AR35, Mortgage
Pass-Through Certificates, Series 2006-AR35."
Certificate Balance: With respect to any Certificate (other than
the
Class C Certificates) at any date, 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, with respect to
the LIBOR
Certificates, any increase to the Certificate Balance of such
Certificate
pursuant to Section 4.02 due to the receipt of Subsequent
Recoveries and (B)
minus the sum of (i) all distributions of principal previously made
with
respect to that Certificate and (ii) with respect to the LIBOR
Certificates,
any Applied Realized Loss Amounts allocated to such Certificate on
previous
Distribution Dates pursuant to Section 4.02 without
duplication.
Certificate Group: Any of the Group 1 Certificates or the Group
2
Certificates, as the context requires.
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 Registrar: Deutsche Bank National Trust Company and
its
successors and, if a successor trustee is appointed under this
Agreement, the
successor.
Certificate Register: The register maintained pursuant to Section
5.02.
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
13
<PAGE>
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
2-A-1 Allocation Percentage: For any Distribution Date is the
percentage equivalent of a fraction, the numerator of which is the
aggregate
Class Certificate Balance of the Class 2-A-1A and Class 2-A-1B
Certificates and
the denominator of which is the aggregate Class Certificate Balance
of the
Group 2 Senior Certificates.
Class
Certificate Balance: For any Class (other than the Notional
Amount
Certificates) as of any date of determination, the aggregate of the
Certificate
Balances of all Certificates of the Class as of that date.
Class C
Distributable Amount: As defined in the Preliminary Statement.
Closing
Date: November 30, 2006.
Code: The
Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COFI: Not
applicable.
COFI
Certificates: Not applicable.
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.
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.
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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-IN06AZ
(IndyMac MBS, Inc.,
IndyMac INDX Mortgage Loan Trust 2006-AR35, Mortgage Pass-Through
Certificates,
Series 2006-AR35), and which is the address to which notices to
and
correspondence with the Trustee should be directed. The office of
the
Certificate Registrar for purposes of presentment of certificates
for
registration of transfer, exchange or final payment is located at
DB Services
Tennessee, 648 Grassmere Park Road, Nashville, Tennessee
37211-3658, Attention:
Transfer Unit.
Corridor
Counterparty: The Bank of New York.
Corridor Certificates:
The Class 1-A-1A Certificates.
Corridor
Contract: The interest rate corridor agreement between the
Supplemental Interest Trust and the Corridor Counterparty related
to the
Corridor Certificates, a form of which is attached to this
Agreement as Exhibit
P-2.
Covered
Certificates: LIBOR Certificates.
Cumulative
Loss Trigger Event: With respect to a Distribution Date on or
after the Stepdown Date occurs if the aggregate amount of Realized
Losses on
the Mortgage Loans from (and including) the Cut-off Date to (and
including) the
related Due Date (reduced by the aggregate amount of Subsequent
Recoveries
received from the Cut-off Date through the Prepayment Period
related to that
Due Date) exceeds the applicable percentage, for such Distribution
Date, of the
Cut-off Date Pool Principal Balance, as set forth below:
Distribution Date
Percentage
-----------------
----------
December 2008 - November 2009..... 0.30% with respect to December
2008, plus
an additional 1/12th of 0.40% for each
month thereafter through November 2009
December 2009 - November 2010..... 0.70% with respect to December
2009, plus
an additional 1/12th of 0.50% for each
month thereafter through November 2010
December 2010 - November 2011..... 1.20% with respect to December
2010, plus
an additional 1/12th of 0.50% for each
month thereafter through November 2011
December 2011- November 2012...... 1.70% with respect to December
2011, plus
an additional 1/12th of 0.30% for each
month thereafter through November 2012
December 2012 and thereafter...... 2.00%
Current
Interest: With respect to each Class of Offered Certificates
and
each Distribution Date, interest accrued at the applicable
Pass-Through Rate
for the applicable Interest Accrual Period on the Class Certificate
Balance of
that Class, immediately prior to that Distribution Date.
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Cut-off
Date: November 1, 2006.
Cut-off
Date Pool Principal Balance: $1,061,639,887.46.
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-3.
Delay
Delivery Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule for which all or a portion of a related
Mortgage File is
not 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 in each Loan Group, not later
than the Closing Date, and
(B) for
the remaining 30% of the Mortgage Loans in each Loan Group, 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).
Delinquency Trigger Event: With respect to any Distribution Date on
or
after the Stepdown Date, if the Rolling Sixty Day Delinquency Rate
as of the
last day of the immediately preceding month equals or exceeds 40%
of the Senior
Enhancement Percentage for that Distribution Date.
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
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<PAGE>
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.
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.
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.
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 IndyMac
INDX Mortgage
Loan Trust 2006-AR35, Mortgage Pass-Through Certificates, Series
2006-AR35."
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 December 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 (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
17
<PAGE>
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
Cashflow: With respect to any Distribution Date (i) the
Interest
Funds for both Loan Groups remaining after the distribution of
interest to the
Holders of the Certificates for that Distribution Date pursuant to
Section 4.02
(a) and (ii) any Principal Distribution Amount for that
Distribution Date
remaining after distributions of the principal to the Offered
Certificates
pursuant to Section 4.02 (b).
Excess
Loss: Not applicable.
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
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.
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<PAGE>
Extra
Principal Distribution Amount: For any Distribution Date and
Loan
Group, the product of (a) the lesser of (1) the
Overcollateralization
Deficiency Amount and (2) the Excess Cashflow available for payment
pursuant to
Section 4.02 (c)(i) and (b) a fraction, the numerator of which is
the Principal
Remittance Amount for that Loan Group and the denominator of which
is the sum
of the Principal Remittance Amounts for both Loan Groups.
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.
Final
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.
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-AR35,
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: Not applicable.
Fraud Losses: Not
applicable.
Fraud Loss
Coverage Amount: Not applicable.
Fraud Loss
Coverage Termination Date: Not applicable.
Gross
Margin: With respect to each Mortgage Loan, the fixed
percentage
set forth in the related Mortgage Note that is added to the
Mortgage Index on
each Adjustment Date in accordance with the terms of the related
Mortgage Note
used to determine the Mortgage Rate for such Mortgage Loan.
Group 1
Certificates: As specified in the Preliminary Statement.
Group 1 Mortgage
Loan: Any Mortgage Loan in Loan Group 1.
Group 1
Principal Distribution Target Amount: For any Distribution Date
(A) after the Stepdown Date if a Trigger Event is not in effect,
the excess of
(1) the aggregate Class Certificate Balance of the Group 1 Senior
Certificates
immediately prior to such Distribution Date, over (2) the lesser of
(x) 86.10%
of the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 1
as of the
19
<PAGE>
Due Date in the month of that Distribution Date (after giving
effect to
Principal Prepayments received in the related Prepayment Period)
and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 1 as of
the Due Date in the month of that Distribution Date (after giving
effect to
Principal Prepayments received in the related Prepayment Period)
minus 0.40% of
the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 1 as
of the Cut-off Date, and (B) after the Stepdown Date on which a
Trigger Even is
in effect, the Group 1 Principal Distribution Target Amount for the
immediately
preceding Distribution Date.
Group 1
Senior Certificates: As specified in the Preliminary Statement.
Group 1
Senior Principal Distribution Amount: For any Distribution
Date,
the product of (x) the Senior Target Amount and (y) a fraction, the
numerator
of which is the Group 1 Principal Distribution Target Amount and
the
denominator of which is the sum of the Group 1 Principal
Distribution Target
Amount and the Group 2 Principal Distribution Target Amount.
Group 2
Certificates: As specified in the Preliminary Statement.
Group 2
Mortgage Loan: Any Mortgage Loan in Loan Group 2.
Group 2
Principal Distribution Target Amount: For any Distribution Date
(A) after the Stepdown Date if a Trigger Event is not in effect,
the excess of
(1) the aggregate Class Certificate Balance of the Group 2 Senior
Certificates
immediately prior to such Distribution Date, over (2) the lesser of
(x) 86.10%
of the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 2
as of the Due Date in the month of that Distribution Date (after
giving effect
to Principal Prepayments received in the related Prepayment Period)
and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 2 as of
the Due Date in the month of that Distribution Date (after giving
effect to
Principal Prepayments received in the related Prepayment Period)
minus 0.40% of
the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 2 as
of the Cut-off Date, and (B) after the Stepdown Date on which a
Trigger Event
is in effect, the Group 2 Principal Distribution Target Amount for
the
immediately preceding Distribution Date.
Group 2
Senior Certificates: As specified in the Preliminary Statement.
Group 2
Senior Certificates Allocation Method: For any Distribution
Date,
the following allocation: concurrently and on a pro rata basis:
(x) the
Class 2-A-1 Allocation Percentage of any distribution of
principal to the Group 2 Senior Certificates, concurrently to the
Class 2-A-1A
and Class 2-A-1B Certificates, pro rata based on their respective
Class
Certificate Balances, until their respective Class Certificate
Balances are
reduced to zero and
(y) the
Group 2 Senior Sequential Allocation Percentage of any
distribution of principal to the Group 2 Senior Certificates in the
following
priority:
first, to the Class 2-A-2 Certificates, until its Class
Certificate
Balance is reduced to zero; and
second, concurrently, to the Class 2-A-3A and Class 2-A-3B
Certificates, pro rata based on their respective class Certificate
Balances,
until their respective Class Certificate Balances are reduced to
zero.
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<PAGE>
Group 2
Senior Principal Distribution Amount: For any Distribution
Date,
the product of (x) the Senior Target Amount and (y) a fraction, the
numerator
of which is the Group 2 Principal Distribution Target Amount and
the
denominator of which is the sum of the Group 1 Principal
Distribution Target
Amount and the Group 2 Principal Distribution Target Amount.
Group 2
Senior Sequential Allocation Percentage: For any Distribution
Date, the percentage equivalent of a fraction, the numerator of
which is (x)
the aggregate Class Certificate Balance of the Class 2-A-2, Class
2-A-3A and
Class 2-A-3B Certificates immediately prior to such Distribution
Date and the
denominator of which is the aggregate Class Certificate Balance of
the Group 2
Senior Certificates immediately prior to such Distribution
Date.
Hard
Prepayment Charges: 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 Hard
Prepayment
Charges with respect to each applicable Mortgage Loan so held by
the Trust Fund
being identified in the Mortgage Loan Schedule.
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: Not applicable.
Initial
LIBOR Rate: 5.32% per annum.
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. The Delay Certificates will accrue interest on
the basis of
a 360-day year consisting of twelve 30-day months. With respect to
each Class
of Non-Delay Certificates and any Distribution Date, the period
commencing on
the immediately preceding Distribution Date (or, in the case of the
first
Distribution Date, the Closing Date) and ending on the day
immediately
preceding that Distribution Date. Each Class of Non-Delay
Certificates will
accrue interest on the basis of a 360-day year and the actual
number of days
elapsed during the related Interest Accrual Period.
Interest
Carry Forward Amount: With respect to each Class of LIBOR
Certificates and each Distribution Date, is the excess of (a)
Current Interest
for that Class with respect to prior Distribution Dates, over (b)
the amount
actually distributed to that Class with respect to interest on
prior
Distribution Dates.
Interest
Determination Date: With respect to (a) any Interest Accrual
Period for a Class of 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.
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<PAGE>
Interest
Funds: For any Distribution Date and Loan Group, the Interest
Remittance Amount for that Loan Group minus the Trustee Fee for
that Loan Group
and that Distribution Date.
Interest
Rate: With respect to each REMIC 1 Interest, REMIC 2 Interest
or
Master REMIC Interest, the applicable rate set forth or calculated
in the
manner described in the Preliminary Statement.
Interest
Remittance Amount: For any Distribution Date and Loan Group:
(a) the sum, without duplication, of:
(1) all interest on the Mortgage Loans in that Loan Group due
on the related Due Date and received on or prior to the related
Determination Date, less the Servicing Fees,
(2) all interest on Principal Prepayments on the Mortgage
Loans in that Loan Group, other than Prepayment Interest
Excess,
(3) all Advances in that Loan Group relating to interest,
(4) amounts paid by the Servicer in respect of Compensating
Interest related to the Mortgage Loans in that Loan Group, and
(5) Liquidation Proceeds on the Mortgage Loans in that Loan
Group received during the related Prepayment Period (to the
extent
such Liquidation Proceeds relate to interest), and
minus
(b) all Advances relating to interest and certain expenses
reimbursed since the prior Due Date.
Interest
Settlement Rate: As defined in Section 4.08.
Item 1119
Party: The Depositor, the Seller, the Servicer, the Trustee,
the Swap Counterparty, the Swap Trustee. the Corridor Counterparty,
the
Supplemental Interest Trustee and any other material transaction
party, as
identified in Exhibit T, as updated pursuant to Section 11.04.
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
4.08.
LIBOR
Certificates: As specified in the Preliminary Statement.
LIBOR
Determination Date: For any Interest Accrual Period, the second
London Business Day prior to the commencement of such Interest
Accrual Period.
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<PAGE>
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
Group: Either of Loan Group 1 or Loan Group 2, as applicable.
Loan Group
1: All Mortgage Loans identified as Group 1 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group
2: All Mortgage Loans identified as Group 2 Mortgage Loans on
the Mortgage Loan Schedule.
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.
Maximum
Mortgage Rate: For each Mortgage Loan, the percentage set forth
in the related Mortgage Note as the lifetime maximum Mortgage Rate
to which
such Mortgage Rate may be adjusted.
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.
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<PAGE>
Minimum
Mortgage Rate: For each Mortgage Loan, the percentage set forth
in the related Mortgage Note as the lifetime minimum Mortgage Rate
to which
such Mortgage Rate may be adjusted.
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.
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
Index: One-Year CMT Index, Six-Month LIBOR Index or One-Year
LIBOR Index.
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 by Loan Group:
(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 Gross
Margin in effect as of the Cut-off Date;
24
<PAGE>
(ix) the Maximum
Mortgage Rate in effect as of the Cut-off Date;
(x) the
Adjustment Date in effect as of the Cut-off Date;
(xi) a code indicating
the Mortgage Index and when it is
determined;
(xii) the Loan-to-Value Ratio at origination;
(xiii) a code indicating whether the residential dwelling at
the
time
of origination was represented to be owner-occupied;
(xiv) 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;
(xv) the Mortgage Rate
in effect as of the Cut-off Date;
(xvi) the purpose for the Mortgage Loan;
(xvii) the type of documentation program pursuant to which the
Mortgage Loan was originated;
(xviii) a code indicating whether the Mortgage Loan is a
borrower-paid mortgage insurance loan;
(xix) the Servicing Fee Rate;
(xx) a code indicating
whether the Mortgage Loan is a Lender PMI
Loan;
(xxi) the coverage amount of any mortgage insurance;
(xxii) with respect to the Lender PMI Loans, the interest
premium
charged by the lender;
(xxiii) a code indicating whether the Mortgage Loan is a Delay
Delivery Mortgage Loan;
(xxiv) the Minimum Mortgage Rate in effect as of the Cut-off
Date;
(xxv) a code indicating whether the Mortgage Loan is a MERS
Mortgage Loan; and
(xxvi) the type of Prepayment Charges and the length of time
during
which Prepayment Charges will be imposed on a Mortgage Loan.
The
schedule shall also set forth the total of the amounts
described
under (v) above for all of the Mortgage Loans and for each Loan
Group.
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).
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<PAGE>
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 and
Loan
Group, the amount, if any, by which the aggregate of Prepayment
Interest
Shortfalls for such Loan Group exceeds an amount equal to the sum
of (a) the
Compensating Interest allocable to such Loan Group for such
Distribution Date
and (b) the excess, if any, of the Compensating Interest allocable
to the other
Loan Group for such Distribution Date over the Prepayment Interest
Shortfalls
for such other Loan Group and Distribution Date.
Net Rate
Cap: For each Distribution Date and Classes of LIBOR
Certificates, the excess of:
o
the Weighted Average Adjusted Net Mortgage Rate of the
Mortgage Loans for that Distribution Date, adjusted to an
effective rate reflecting the accrual of interest on the
basis of a 360-day year and the actual number of days that
elapsed in the related Interest Accrual Period,
minus
the Swap Adjustment Rate for such Distribution Date and the
related
Loan Group.
Net Rate
Carryover: For a Class of LIBOR Certificates on any
Distribution
Date, the excess of:
(1) the amount of interest that Class would have accrued for
that
Distribution Date had the Pass-Through Rate for that Class and
the
related
Interest Accrual Period not been calculated based on the lesser
of Net
Rate Cap and 10.5% per annum, over
(2) the amount of interest that Class accrued on that
Distribution
Date based
on the Net Rate Cap,
plus the unpaid portion of any excess from prior Distribution Dates
(and
interest accrued thereon at the then applicable Pass-Through Rate,
without
giving effect to the Net Rate Cap or the maximum rate of 10.5% per
annum).
Net Swap
Payment: With respect to the Swap Contract, any Distribution
Date and payment from the Swap Trust to the Swap Counterparty, the
excess, if
any, of the "Fixed Amounts" (as defined in the Swap Contract) with
respect to
such Distribution Date over the "Floating Amounts" (as defined in
the Swap
Contract) with respect to such Distribution Date. With respect to
the Swap
Contract, any Distribution Date and payment by the Swap
Counterparty to the
Swap Trust, the excess, if any, of the "Floating Amounts" with
respect to such
Distribution Date over the "Fixed Amounts" with respect to such
Distribution
Date.
Non-Delay
Certificates: As specified in the Preliminary Statement.
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<PAGE>
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: Not applicable.
Notional
Amount Certificates: As specified in the Preliminary Statement.
Notional
Amount Components: As specified in the Preliminary Statement.
OC Floor:
An amount equal to 0.40% of the Cut-off Date Pool Principal
Balance.
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 or
(iii) in the
case of any other Person, signed by an authorized officer of such
Person.
One-Year CMT Index:
The weekly average yield on United States Treasury
securities adjusted to a constant maturity of one year as published
by the
Federal Reserve Board in Statistical Release H.15(519) and most
recently
available as of a day specified in the related Mortgage Note.
One-Year
LIBOR Index: The average of the London interbank offered rates
for one-year U.S. dollar deposits in the London market, generally
as set forth
in either The Wall Street Journal or some other source generally
accepted in
the residential mortgage loan origination business and specified in
the related
Mortgage Note, or, if such rate ceases to be published in The Wall
Street
Journal or becomes unavailable for any reason, then based upon a
new index
selected by the servicer, based on comparable information, in each
case, as
most recently announced as of either 45 days prior to, or the first
Business
Day of the month immediately preceding the month of, such
Adjustment Date.
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.
Optional
Termination Date: As defined in Section 9.01.
Original
Mortgage Loan: The Mortgage Loan refinanced in connection with
the origination of a Refinance Loan.
OTS: The Office
of Thrift Supervision.
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<PAGE>
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.
Overcollateralization Deficiency Amount: For any Distribution Date
equals
the amount, if any, by which the Overcollateralization Target
Amount exceeds
the Overcollateralized Amount on that Distribution Date (after
giving effect to
distributions of the Principal Remittance Amount for each Loan
Group on that
Distribution Date).
Overcollateralization Target Amount: With respect to any
Distribution
Date, the OC Floor.
Overcollateralized Amount: For any Distribution Date is the amount,
if
any, by which (x) the Pool Principal Balance as of the Due Date in
the month of
that Distribution Date (after giving effect to Principal
Prepayments, the
principal portion of any Liquidation Proceeds and any Subsequent
Recoveries
received in the related Prepayment Period) exceeds (y) the
aggregate Class
Certificate Balance of the Offered Certificates (after giving
effect to
distributions of the Principal Distribution Amount (excluding the
Extra
Principal Distribution Amount) on that Distribution Date).
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 Margin: With respect to the Interest Accrual Period
for any
Distribution Date and Class of LIBOR Certificates, the per annum
rate indicated
in the following table:
Class of LIBOR Certificates
Pass-Through Margin
---------------------------
-------------------
(1)
(2)
--------
--------
Class 1-A-1A................................ 0.180%
0.360%
Class 1-A-1B................................ 0.230%
0.460%
Class 2-A-1A................................ 0.170%
0.340%
Class 2-A-1B................................ 0.230%
0.460%
Class 2-A-2................................. 0.100%
0.200%
Class 2-A-3A................................ 0.200%
0.400%
Class 2-A-3B................................ 0.230%
0.460%
Class M-1................................... 0.300%
0.450%
Class M-2................................... 0.320%
0.480%
Class M-3................................... 0.340%
0.510%
Class M-4................................... 0.410%
0.615%
Class M-5................................... 0.500%
0.750%
Class M-6................................... 0.950%
1.425%
Class M-7................................... 1.500%
2.250%
28
<PAGE>
-----------------------
(1) For the
Interest Accrual Period related to any Distribution Date
occurring
on or prior to the first possible Optional Termination Date.
(2) For the
Interest Accrual Period related to any Distribution Date
occurring
after the first possible Optional Termination Date.
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. With
respect to the
Class C, Class P and Class A-R Certificates, the portion of the
Class evidenced
thereby, expressed as a percentage, as stated on the face of such
Certificate.
Performance Certification: As defined in Section 11.05.
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;
29
<PAGE>
(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 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 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,
30
<PAGE>
(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 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.
Plan: An
"employee benefit plan" as defined in section 3(3) of ERISA
that
is subject to Title I of ERISA, a "plan" as defined in section 4975
of the Code
that is subject to section 4975 of the Code, or any Person
investing on behalf
of or with plan assets (as defined in 29 CFR ss.2510.3-101 or
otherwise under
ERISA) of such an employee benefit plan or plan.
Planned
Balance: Not applicable.
Planned
Principal Classes: As specified in the Preliminary Statement.
Pool
Principal Balance: The aggregate Stated Principal Balances of
the
Mortgage Loans.
Prepayment
Charge: A Hard Prepayment Charge or Soft Prepayment Charge, as
the context may require.
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 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.
31
<PAGE>
Prepayment
Shift Percentage: Not applicable.
Primary
Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal
Balance Schedules: Not applicable.
Principal
Distribution Amount: With respect to each Distribution Date and
Loan Group, an amount equal to (A) the sum of (1) the Principal
Remittance
Amount for that Distribution Date and Loan Group, less any portion
of such
amount used to cover any payment due to the Swap Counterparty under
the Swap
Contract with respect to that Distribution Date and (2) the Extra
Principal
Distribution Amount for that Distribution Date and Loan Group.
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.
Principal
Remittance Amount: For any Distribution Date and either Loan
Group, an amount equal to:
(a) the sum,
without duplication, of:
(1) all principal collected or advanced on the Mortgage Loans
in that Loan Group with respect to the related Due Date,
(2) Principal Prepayments on the Mortgage Loans in that Loan
Group collected during the related Prepayment Period,
(3) the Stated Principal Balance of each Mortgage Loan in
that Loan Group that was repurchased by the Seller or purchased
by
the Servicer with respect to that Distribution Date (other than
Mortgage Loans repurchased due to a modification of the
Mortgage
Loan),
(4) any Substitution Adjustment Amounts in respect of the
Mortgage Loans in that Loan Group, and
(5) all liquidation proceeds (to the extent such liquidation
proceeds related to principal) in respect of the Mortgage Loans
in
that Loan Group and all Subsequent Recoveries received during
the
related Prepayment Period in respect of the Mortgage Loans in
that
Loan Group
32
<PAGE>
minus
(b) all non-recoverable Advances relating to principal on the
Mortgage
Loans in that Loan Group and certain expenses reimbursed since
the prior
Due Date.
Private
Certificates: As specified in the Preliminary Statement.
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 November 29, 2006,
relating to the Offered Certificates, and any supplement to the
Prospectus
Supplement.
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, 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
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<PAGE>
(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 which has become the 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 LIBOR Certificates as long
as they are
Book-Entry Certificates, the Business Day immediately prior to
such
Distribution Date.
Reference
Bank: As defined in Section 4.08.
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.
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.
34
<PAGE>
Reportable
Event: Any event required to be reported on Form 8-K, and in
any event, the following:
(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, the Swap Trustee, the Supplemental Interest
Trustee, the
Corridor Counterparty, the Swap Counterparty, 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
Insurance Policy: For any Mortgage Loan, any insurance policy
that is required to be maintained from time to time under this
Agreement.
35
<PAGE>
Residual
Certificates: As specified in the Preliminary Statement.
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).
Rolling
Sixty Day Delinquency Rate: With respect to any Distribution
Date, an amount equal to the average of the Sixty Day Delinquency
Rates for
each that Distribution Date and the two immediately preceding
Distribution
Dates.
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.
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: As specified in the Preliminary Statement.
Senior
Certificates: As specified in the Preliminary Statement.
Senior
Credit Support Depletion Date: The point in time at which the
aggregate Class Certificate Balance of the Subordinated
Certificates and the
Class C Certificates equals zero.
36
<PAGE>
Senior
Enhancement Percentage: With respect to a Distribution Date on
or
after the Stepdown Date a fraction (expressed as a percentage):
(1) the numerator of which is sum of the aggregate Class
Certificate Balance of the Subordinated Certificates and the
Overcollateralized Amount (which, for purposes of this definition
only,
shall not
be less than zero) and
(2) the denominator of which is the Pool Principal Balance as
of
the Due
Date in the prior month (after giving effect to Principal
Prepayments in the Prepayment Period related to that prior Due
Date).
Senior
Principal Distribution Amount: For any Distribution Date, an
amount equal to the amount, if any, by which (x) the aggregate
Class
Certificate Balance of the Senior Certificates immediately prior to
that
Distribution Date exceeds (y) the Senior Target Amount.
Senior
Target Amount: For any Distribution Date, (x) after the
Stepdown
Date and if a Trigger Event is not in effect, an amount equal to
the lesser of
(a) the product of (1) 86.10% and (2) the Pool Principal Balance as
of the Due
Date in the month of that Distribution Date (after giving effect to
Principal
Prepayments received in the related Prepayment Period) and (b) the
amount, if
any, by which (1) the Pool Principal Balance as of the Due Date in
the month of
that Distribution Date (after giving effect to Principal
Prepayments received
in the related Prepayment Period) exceeds (2) the OC Floor, and (y)
for any
Distribution Date after the Stepdown Date on which a Trigger Event
is in
effect, the Senior Target Amount for the immediately preceding
Distribution
Date.
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
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
or master servicing duties shall be treated as Servicing
Advances.
Servicing
Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB.
37
<PAGE>
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, 0.375% per annum.
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.
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: Not applicable.
Six-Month
LIBOR Index: The average of the London interbank offered rates
for six month U.S. dollar deposits in the London market, generally
as set forth
in either The Wall Street Journal or some other source generally
accepted in
the residential mortgage loan origination business and specified in
the related
Mortgage Note or, if such rate ceases to be published in The Wall
Street
Journal or becomes unavailable for any reason, then based upon a
new index
selected by the Servicer, based on comparable information, in each
case, as
most recently announced as of either 45 days prior to, or the first
Business
Day of the month immediately preceding the month of, such
Adjustment Date.
Sixty-Day
Delinquency Rate: With respect to any Distribution Date on or
after the Stepdown Date, a fraction, expressed as a percentage, the
numerator
of which is the aggregate Stated Principal Balance of all Mortgage
Loans 60 or
more days delinquent as of the close of business on the last day of
the
calendar month preceding such Distribution Date (including Mortgage
Loans in
foreclosure, bankruptcy and REO Properties) and the denominator of
which is the
aggregate Stated Principal Balance for such Distribution Date of
the Mortgage
Loans as of the related Due Date (after giving effect to Principal
Prepayments,
the principal portion of any Liquidation Proceeds and any
Subsequent Recoveries
received in the related Prepayment Period).
Soft
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 other than as
a result of
selling the Mortgaged Property, the Soft Prepayment Charges with
respect to
each applicable Mortgage Loan so held by the Trust Fund being
identified in the
Mortgage Loan Schedule.
Special
Hazard Coverage Termination Date: Not applicable.
Special
Hazard Loss: Not applicable.
Special
Hazard Loss Coverage Amount: Not applicable.
Special
Hazard Mortgage Loan: Not applicable.
Startup
Day: The Closing Date.
38
<PAGE>
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 any Principal
Prepayments
received through the last day of the related Prepayment Period, in
each case,
with respect to such Mortgage Loan.
Stepdown
Date: The earlier to occur of (1) the first Distribution Date
after the Distribution Date on which the aggregate Class
Certificate Balance of
the Senior Certificates is reduced to zero and (2) the later to
occur of (x)
the Distribution Date in December 2009 and (y) the first
Distribution Date on
which the fraction, expressed as a percentage, the numerator of
which is the
sum of aggregate Class Certificate Balance of the Subordinated
Certificates and
the Overcollateralized Amount, if any, and the denominator of which
is the Pool
Principal Balance as of the Due Date in the prior month (after
giving effect to
Principal Prepayments in the Prepayment Period related to that
prior Due Date)
exceeds or equals 13.90%.
Stepdown
Target Subordination Percentage: For any Class of Subordinated
Certificates, the respective percentages indicated in the following
table:
Stepdown Target
Subordination Percentage
------------------------
Class M-1........................
11.10%
Class M-2........................
8.60%
Class M-3........................
7.20%
Class M-4........................
5.90%
Class M-5........................
3.90%
Class M-6........................
2.40%
Class M-7........................
0.80%
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 Class Principal Distribution Target Amount: For any
Class of
Subordinated Certificates and Distribution Date will equal the
excess of:
(1) the
sum of: (a) the aggregate Class Certificate Balance of the
Senior
Certificates (after taking into account the distribution of the
Senior
Principal Distribution Amount for that Distribution Date), (b) the
aggregate
Class Certificate Balance of any Class(es) of Subordinated
Certificates that
are senior to the subject Class (in each case, after taking into
account
distribution of the Subordinated Class Principal Distribution
Target Amount(s)
for such more senior Class(es) of Certificates for such
Distribution Date), and
(c) the Class Certificate Balance of the subject Class of
Subordinated
Certificates immediately prior to such Distribution Date over
39
<PAGE>
(2) the
lesser of (a) the product of (x) 100% minus the applicable
Stepdown Target Subordination Percentage for the subject Class of
Certificates
and (y) the Pool Principal Balance for that Distribution Date and
(b) the Pool
Principal Balance for that Distribution Date minus the OC
Floor;
provided, however, that if such Class of Subordinated Certificates
is the only
Class of Subordinated Certificates outstanding on such Distribution
Date, that
Class will be entitled to receive the entire remaining Principal
Distribution
Amount until its Class Certificate Balance is reduced to zero.
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 Maximum Mortgage Rate not more than 1% per annum higher than
and not lower than the Maximum Mortgage Rate of the Deleted
Mortgage Loan,
(iv) have
the same Mortgage Index and interval between Adjustment Dates
as the Deleted Mortgage Loan and a Gross Margin not more than 1%
per annum
higher than, and not lower than that of the Deleted Mortgage
Loan;
(vi) have
a Loan-to-Value Ratio no higher than that of the Deleted
Mortgage Loan;
(vii) have
a remaining term to maturity no greater than (and not more
than one year less than) that of the Deleted Mortgage Loan;
(viii) not
be a Cooperative Loan unless the Deleted Mortgage Loan was a
Cooperative Loan; and
(ix)
comply with each representation and warranty in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Supplemental Interest Reserve Fund: The separate Eligible Account
created
and maintained by the Supplemental Interest Trustee pursuant to
Section 3.06(f)
in the name of the Supplemental Interest Trustee for the benefit of
the Holders
of the Class 1-A-1A Certificates and designated "Deutsche Bank
National Trust
Company in trust for the registered Holders of IndyMac INDX
Mortgage Loan Trust
2006-AR35, Mortgage Pass-Through Certificates, Series 2006-AR35,
Class 1-A-1A.
Funds in the Supplemental Interest Reserve Fund shall be held in
trust for the
Holders of the Class 1-A-1A Certificates
40
<PAGE>
for the uses and purposes set forth in this Agreement. The
Supplemental
Interest Reserve Fund will not be an asset of any REMIC.
Supplemental Interest Trust: The trust fund established pursuant
to
Section 4.08(b).
Supplemental Interest Trustee: Deutsche Bank National Trust
Company, not
in its individual capacity, but solely in its capacity as trustee
for the
benefit of the Holders of the Corridor Certificates under this
Agreement, and
any successor thereto, and any corporation or national banking
association
resulting from or surviving any consolidation or merger to which it
or its
successors may be a party and any successor trustee as may from
time to time be
serving as successor trustee under this Agreement.
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.
Swap
Account: The separate Eligible Account created and initially
maintained by the Swap Trustee pursuant to Section 4.08.
Swap
Adjustment Rate: For each Distribution Date and Loan Group, a
fraction, (A) the numerator of which is the sum of (a) the Net Swap
Payment
payable to the Swap Counterparty under the Swap Contract with
respect to such
Distribution Date times a fraction, the numerator of which is 360
and the
denominator of which is the actual number of days in the related
Interest
Accrual Period and (b) any Swap Termination Payment payable to the
Swap
Counterparty under the Swap Contract for such Distribution Date
(other than a
Swap Termination Payment due to a Swap Counterparty Trigger Event),
and (B) the
denominator of which is the aggregate Stated Principal Balance of
the Mortgage
Loans in that Loan Group as of the Due Date in the prior calendar
month (after
giving effect to Principal Prepayments, the principal portion of
Liquidation
Proceeds and any Subsequent Recoveries received in the Prepayment
Period
related to that prior Due Date).
Swap
Allocation Percentage: For each Distribution Date and Loan Group
is
a fraction, expressed as a percentage, (A) the numerator of which
is the
Principal Remittance Amount for that Distribution Date and Loan
Group and (B)
the denominator of which is the aggregate Principal Remittance
Amount for that
Loan Group and Distribution Date.
Swap
Certificates: The LIBOR Certificates.
Swap
Contract: With respect to the LIBOR Certificates, the
transaction
evidenced by the related Confirmation, a form of which is attached
to this
Agreement as Exhibit P-1.
Swap
Contract Termination Date: The Distribution Date in November
2013.
Swap
Counterparty: The Bank of New York.
Swap
Counterparty Trigger Event: A Swap Termination Payment that is
triggered upon (i) an "Event of Default" under the Swap Contract
with respect
to which the Swap Counterparty is the sole `Defaulting Party" (as
defined in
the Swap Contract) or (ii) a "Termination Event" or "Additional
Termination
Event" under the Swap Contract with respect to which the Swap
Counterparty is
the sole "Affected Party" (as defined in the Swap Contract).
Swap
Report: The report to be delivered by the Determination Date
prior
to each Distribution Date by the Swap Counterparty to the Swap
Trustee
containing the amount of any Net Swap Payment
41
<PAGE>
payable by the Swap Trust or the Swap Counterparty to the other
party, as the
case may be, with respect to the Swap Contract for that
Distribution Date.
Swap
Trustee: Deutsche Bank National Trust Company, not in its
individual
capacity, but solely in its capacity as trustee of the Swap Trust
for the
benefit of the Holders of the LIBOR Certificates under this
Agreement, and any
successor thereto, and any corporation or national banking
association
resulting from or surviving any consolidation or merger to which it
or its
successors may be a party and any successor trustee as may from
time to time be
serving as successor trustee hereunder.
42
<PAGE>
Swap
Table: The table set forth below:
Month of Distribution
Swap Contract
Date
Notional Balance ($)
----------------------
--------------------
December 2006..
4,229,568.00
January 2007...
4,202,618.02
February 2007..
4,166,888.36
March 2007.....
4,122,374.16
April 2007.....
4,069,120.09
May 2007.......
4,007,216.80
June 2007......
3,936,828.50
July 2007......
3,858,211.89
August 2007....
3,770,778.95
September 2007.
3,677,006.19
October 2007...
3,576,626.54
November 2007..
3,471,068.85
December 2007..
3,363,517.04
January 2008...
3,259,279.66
February 2008..
3,158,254.63
March 2008.....
3,060,343.00
April 2008.....
2,965,448.84
May 2008.......
2,872,703.62
June 2008......
2,783,592.30
July 2008......
2,696,344.22
August 2008....
2,612,167.88
September 2008.
2,527,894.12
October 2008...
2,447,993.00
November 2008..
2,371,971.12
December 2008..
2,296,687.50
January 2009...
2,224,684.57
February 2009..
2,155,545.51
March 2009.....
2,088,537.58
April 2009.....
2,023,595.13
May 2009.......
1,960,654.51
June 2009......
1,899,654.07
July 2009......
1,838,843.80
August 2009....
1,780,345.41
September 2009.
1,722,054.04
October 2009...
1,662,284.57
November 2009..
1,599,721.27
December 2009..
1,511,092.86
January 2010...
1,463,041.55
February 2010..
1,416,622.46
March 2010.....
1,372,397.21
April 2010.....
1,329,104.26
May 2010.......
1,286,808.13
June 2010......
1,246,584.88
July 2010......
1,207,601.74
August 2010....
1,169,414.95
September 2010.
1,132,300.71
October 2010...
1,096,841.06
November 2010..
1,062,474.72
December 2010..
1,028,785.68
January 2011...
996,517.70
February 2011..
964,863.36
March 2011.....
933,955.48
43
<PAGE>
Month of Distribution
Swap Contract
Date
Notional Balance ($)
----------------------
--------------------
April 2011.....
904,611.94
May 2011.......
874,787.54
June 2011......
843,517.82
July 2011......
811,155.67
August 2011....
766,623.49
September 2011.
720,961.59
October 2011...
628,005.84
November 2011..
438,841.37
December 2011..
102,927.11
January 2012...
99,225.93
February 2012..
95,638.90
March 2012.....
92,162.50
April 2012.....
88,793.34
May 2012.......
85,528.09
June 2012......
82,363.55
July 2012......
79,296.63
August 2012....
76,324.31
September 2012.
73,443.67
October 2012...
70,651.90
November 2012..
67,946.24
December 2012..
65,324.05
January 20123
62,782.75
February 2013..
60,319.85
March 2013.....
57,932.93
April 2013.....
55,619.66
May 2013.......
53,377.74
June 2013......
50,938.27
July 2013......
48,288.67
August 2013....
45,903.37
September 2013.
41,400.81
October 2013...
35,206.64
November 2013..
11,422.12
December 2013 and
thereafter.....
0.00
Swap
Termination Payment : The payment payable to either party under
a
Swap Contract due to an early termination of such Swap
Contract.
Swap
Trust: The trust fund established by Section 4.08.
Swap
Trustee: Deutsche Bank National Trust Company, not in its
individual
capacity, but solely in its capacity as trustee for the benefit of
the Holders
of the LIBOR Certificates under this Agreement, and any successor
thereto, and
any corporation or national banking association resulting from or
surviving any
consolidation or merger to which it or its successors may be a
party and any
successor trustee as may from time to time be servicing as
successor trustee
under this Agreement.
Targeted
Balance: Not applicable.
Targeted
Principal Classes: As specified in the Preliminary Statement.
44
<PAGE>
Transaction Documents: This Agreement, the Swap Contract, the
Corridor
Contract 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.
Trigger Event:
With respect to a Distribution Date on or after the
Stepdown Date either a Delinquency Trigger Event is in effect with
respect to
that Distribution Date or a Cumulative Loss Trigger Event is in
effect with
respect to that Distribution Date.
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, the Carryover
Reserve Fund 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; and
(v) 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 as of the Due Date in the month preceding the month
of such
Distribution Date (after giving effect to Principal Prepayments in
the
Prepayment Period related to that prior Due Date).
Trustee
Fee Rate: 0.0020% 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.
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.
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<PAGE>
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;
(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.
Unpaid
Realized Loss Amount: For any Class of LIBOR Certificates, (x)
the
portion of the aggregate Applied Realized Loss Amount previously
allocated to
that Class remaining unpaid from prior Distribution Dates minus (y)
any
increase in the Class Certificate Balance of that Class due to the
allocation
of Subsequent Recoveries to the Class Certificate Balance of that
Class.
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
the Holders of
the Class A-R Certificates and (b) the remaining Voting Rights
shall be
allocated among Holders of the remaining Classes of Certificates in
proportion
to the Certificate Balances of the respective Certificates on that
date.
Weighted
Average Adjusted Net Mortgage Rate: For any Distribution Date,
the average of the Adjusted Net Mortgage Rate of each Mortgage
Loan, weighted
on the basis of its Stated Principal Balance as of the Due Date in
the prior
month (after giving effect to Principal Prepayments in the
Prepayment Period
related to such prior Due Date).
Withdrawal
Date: The 18th day of each month, or if such day is not a
Business Day, the next preceding Business Day.
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,
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<PAGE>
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 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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<PAGE>
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. On
the Closing Date the Depositor shall also deposit or shall cause to
be
deposited $1,000 into the Carryover Reserve Fund and $200 into the
Certificate
Account.
(b) The
Depositor, concurrently with the execution and delivery of this
Agreement, hereby (i) 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. The Depositor hereby directs the Swap Trustee
to execute
the Swap Contract, and the Supplemental Interest Trustee to execute
the
Corridor Contract.
(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
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Mortgage
Loan, the original Mortgage, noting the presence of the MIN of
the
Mortgage Loans 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 a 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 sold by the Seller to
the Depositor
have been assigned by the Seller to the Trustee in accordance with
this
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<PAGE>
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 (including Puerto
Rico) under
the laws of which, as evidenced by an Opinion of Counsel delivered
by the
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<PAGE>
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-3, 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-1, 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, if 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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<PAGE>
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.
The
obligation of the Seller to substitute for or to purchase any
Mortgage Loan that does not meet the requirements of Section 2.01
shall
constitute the sole remedy respecting the defect available to the
Trustee, the
Depositor, and any Certificateholder against the Seller.
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. Any breach of representations and warranties under clauses
(28) and
(39) of Schedule III shall be deemed to affect materially and
adversely the
interests of the Certificateholders in the affected Mortgage Loans.
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, if 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.
53
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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 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.
The Seller
assigns to the Depositor and the Depositor assigns to the
Trustee all rights the Seller might have under contracts with third
parties
relating to early payment defaults on the Mortgage Loans (the "EPD
Rights") and
the Servicer assumes any related duties as part of its servicing
obligations.
Consistent with the Servicing Standard, the Servicer shall attempt
to enforce
the EPD Rights. If the Servicer's enforcement of the EPD Rights
obligates the
Servicer to sell a Mortgage Loan to a third party, the Servicer
shall
repurchase the Mortgage Loan at the Purchase Price and sell the
Mortgage Loan
to the third party. Additionally, if any Mortgagor fails to make
the first
payment due to the Trust Fund, and such Mortgagor has not made such
payment by
February 1, 2007, the Servicer will repurchase the Mortgage Loan at
the
Purchase Price prior to the Distribution Date in February 2007 (any
Mortgage
Loans repurchased pursuant to this sentence, the "EPD Loans"). The
Seller or
the Servicer shall deposit into the Certificate Account (x) all
amounts
received in connection with the enforcement of EPD Rights, not
exceeding the
Purchase Price, with respect to any Mortgage Loan and the Purchase
Price for
any EPD
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<PAGE>
Loans. Any amounts received by the Servicer with respect to a
Mortgage Loan in
excess of the Purchase Price shall be retained by the Servicer as
additional
servicing compensation. The Trustee, upon receipt of certification
from the
Servicer of the deposit of the Purchase Price in connection with a
repurchase
of a Mortgage Loan and a Request for Release from the Servicer,
shall release
or cause to be released to the purchaser of that Mortgage Loan the
related
Mortgage File and shall execute and deliver such instruments of
transfer or
assignment prepared by the purchaser of that Mortgage Loan, in each
case
without recourse, as shall be necessary to vest in the purchaser of
that
Mortgage Loan any Mortgage Loan released pursuant to this Section
and the
purchaser of that Mortgage Loan shall succeed to all of the
Trustee's right,
title and interest in and to such Mortgage Loan and all security
and documents
related thereto. Such assignment shall be an assignment outright
and not for
security. The purchaser of that Mortgage Loan shall thereupon own
that Mortgage
Loan and all security and documents, free of any further obligation
to the
Trustee or the Certificateholders with respect thereto.
Section
2.04. Representations and Warranties of the Depositor as to the
Mortgage Loans.
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.
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 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.
55
<PAGE>
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.
56
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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 action
arising out of the origination of the Mortgage Loans.
57
<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), 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; 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 3.21, 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 delinquent or defaulted
Mortgage Loan,
the Servicer may, consistent with the Servicing
58
<PAGE>
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)
[reserved].
(c)
[reserved].
(d) The
Servicer shall establish and maintain a Certificate Account
into
which the Servicer shall deposit on a daily basis (1) within two
Business Days
of receipt (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;
59
<PAGE>
(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 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
60
<PAGE>
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) 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
61
<PAGE>
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.
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 master 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 no recoverable from the Mortgagor
and (c)
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;
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(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 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
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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 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.
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.
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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,
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
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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.
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
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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 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.
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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.
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 sub
