EXHIBIT 99.1
------------
The Pooling and Servicing Agreement.
<PAGE>
Execution Copy
================================================================================
INDYMAC MBS, INC.
Depositor
INDYMAC BANK, F.S.B.
Seller and Servicer
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2007
----------------------------------------
INDYMAC INDX MORTGAGE LOAN TRUST
2007-AR1
MORTGAGE PASS-THROUGH CERTIFICATES
Series 2007-AR1
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE ONE
DEFINITIONS...........................................................................................................9
<S>
<C>
<C>
Section 1.01
Definitions........................................................................................9
Section 1.02
Rules of
Construction.............................................................................40
ARTICLE TWO CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES.........................................................42
Section 2.01
Conveyance of Mortgage
Loans......................................................................42
Section 2.02
Acceptance by the Trustee of the Mortgage
Loans...................................................45
Section 2.03
Representations, Warranties, and Covenants of the Seller and the
Servicer.........................47
Section 2.04
Representations and Warranties of the Depositor as to the Mortgage
Loans..........................49
Section 2.05
Delivery of Opinion of Counsel in Connection with
Substitutions...................................49
Section 2.06
Execution and Delivery of
Certificates............................................................50
Section 2.07
REMIC
Matters.....................................................................................50
ARTICLE THREE ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS.....................................................................51
Section 3.01
Servicer to Service Mortgage
Loans................................................................51
Section 3.02
[Reserved]........................................................................................52
Section 3.03
Rights of the Depositor and the Trustee in Respect of the
Servicer................................52
Section 3.04
[Reserved]........................................................................................52
Section 3.05
Trustee to Act as
Servicer........................................................................52
Section 3.06
Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account...................52
Section 3.07
Collection of Taxes, Assessments and Similar Items; Escrow
Accounts...............................55
Section 3.08
Access to Certain Documentation and Information Regarding the
Mortgage Loans......................55
Section 3.09
Permitted Withdrawals from the Certificate Account and the
Distribution Account...................56
Section 3.10
Maintenance of Hazard Insurance; Maintenance of Primary Insurance
Policies........................57
Section 3.11
Enforcement of Due-On-Sale Clauses; Assumption
Agreements.........................................58
Section 3.12
Realization Upon Defaulted Mortgage
Loans.........................................................59
Section 3.13
Trustee to Cooperate; Release of Mortgage
Files...................................................61
Section 3.14
Documents, Records and Funds in Possession of the Servicer to be
Held for the Trustee.............62
Section 3.15
Servicing
Compensation............................................................................62
Section 3.16
Access to Certain
Documentation...................................................................63
Section 3.17
Annual Statement as to
Compliance.................................................................63
Section 3.18
Errors and Omissions Insurance; Fidelity
Bonds....................................................63
Section 3.19
Notification of
Adjustments.......................................................................63
Section 3.20 Prepayment
Charges................................................................................64
i
<PAGE>
ARTICLE FOUR DISTRIBUTIONS AND ADVANCES BY THE
SERVICER..........................................................................65
Section 4.01
Advances..........................................................................................65
Section 4.02
Priorities of
Distribution........................................................................66
Section 4.03
Cross-Collateralization; Adjustments to Available
Funds...........................................69
Section 4.04
[Reserved]........................................................................................70
Section 4.05
Allocation of Realized
Losses.....................................................................70
Section 4.06
Monthly Statements to
Certificateholders..........................................................71
ARTICLE FIVE THE
CERTIFICATES....................................................................................................75
Section 5.01
The
Certificates..................................................................................75
Section 5.02
Certificate Register; Registration of Transfer and Exchange of
Certificates.......................75
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates.................................................79
Section 5.04
Persons Deemed
Owners.............................................................................79
Section 5.05
Access to List of Certificateholders' Names and
Addresses.........................................79
Section 5.06
Maintenance of Office or
Agency...................................................................80
ARTICLE SIX THE DEPOSITOR AND THE
SERVICER.......................................................................................81
Section 6.01
Respective Liabilities of the Depositor and the
Servicer..........................................81
Section 6.02
Merger or Consolidation of the Depositor or the
Servicer..........................................81
Section 6.03
Limitation on Liability of the Depositor, the Seller, the Servicer,
and Others....................81
Section 6.04
Limitation on Resignation of the
Servicer.........................................................82
ARTICLE SEVEN
DEFAULT............................................................................................................83
Section 7.01
Events of
Default.................................................................................83
Section 7.02
Trustee to Act; Appointment of
Successor..........................................................84
Section 7.03
Notification to
Certificateholders................................................................85
ARTICLE EIGHT CONCERNING THE
TRUSTEE.............................................................................................87
Section 8.01
Duties of the
Trustee.............................................................................87
Section 8.02
Certain Matters Affecting the
Trustee.............................................................87
Section 8.03
Trustee Not Liable for Certificates or Mortgage
Loans.............................................89
Section 8.04
Trustee May Own
Certificates......................................................................89
Section 8.05
Trustee's Fees and
Expenses.......................................................................89
Section 8.06
Eligibility Requirements for the
Trustee..........................................................90
Section 8.07
Resignation and Removal of the
Trustee............................................................90
Section 8.08
Successor
Trustee.................................................................................91
Section 8.09
Merger or Consolidation of the
Trustee............................................................92
Section 8.10
Appointment of Co-Trustee or Separate
Trustee.....................................................92
Section 8.11
Tax
Matters.......................................................................................93
ARTICLE NINE
TERMINATION.........................................................................................................96
Section 9.01
Termination upon Liquidation or Purchase of the Mortgage
Loans....................................96
Section 9.02
Final Distribution on the
Certificates............................................................97
ii
<PAGE>
Section 9.03
Additional Termination
Requirements...............................................................98
ARTICLE TEN MISCELLANEOUS
PROVISIONS.............................................................................................99
Section 10.01
Amendment.........................................................................................99
Section 10.02
Recordation of Agreement;
Counterparts...........................................................100
Section 10.03
Governing
Law....................................................................................101
Section 10.04
Intention of
Parties.............................................................................101
Section 10.05
Notices..........................................................................................101
Section 10.06
Severability of
Provisions.......................................................................102
Section 10.07
Assignment.......................................................................................102
Section 10.08
Limitation on Rights of
Certificateholders.......................................................102
Section 10.09
Inspection and Audit
Rights......................................................................103
Section 10.10
Certificates Nonassessable and Fully
Paid........................................................103
Section 10.11
Official
Record..................................................................................103
Section 10.12
Protection of
Assets.............................................................................104
Section 10.13
Qualifying Special Purpose
Entity................................................................104
ARTICLE ELEVEN EXCHANGE ACT
REPORTING...........................................................................................104
Section 11.01
Filing
Obligations...............................................................................104
Section 11.02 Form
10-D
Filings................................................................................104
Section 11.03 Form
8-K
Filings.................................................................................105
Section 11.04 Form
10-K
Filings................................................................................106
Section 11.05
Sarbanes-Oxley
Certification.....................................................................108
Section 11.06 Form
15
Filing...................................................................................108
Section 11.07
Report on Assessment of Compliance and
Attestation...............................................109
Section 11.08 Use
of
Subcontractors............................................................................110
Section 11.09
Amendments.......................................................................................110
iii
<PAGE>
SCHEDULES
Schedule I:
Mortgage Loan
Schedule....................................................................................S-I-1
Schedule II:
Representations and Warranties of the
Seller/Servicer....................................................S-II-1
Schedule III:
Representations and Warranties as to the Mortgage
Loans.................................................S-III-1
Schedule IV:
Reserved.................................................................................................S-IV-1
Schedule V:
Form of Monthly
Report....................................................................................S-V-1
EXHIBITS
Exhibit A:
Form of Senior Certificate (excluding Notional Amount
Certificates).........................................A-1
Exhibit B:
Form of Subordinated
Certificate............................................................................B-1
Exhibit C:
Form of Class A-R
Certificate...............................................................................C-1
Exhibit D:
Form of Notional Amount
Certificate.........................................................................D-1
Exhibit E
Form of Reverse of
Certificates.............................................................................E-1
Exhibit F:
Form of Class P
Certificates................................................................................F-1
Exhibit G-1: Form
of Initial Certification of Trustee
.................................................................G-1-1
Exhibit G-2: Form
of Delay Delivery
Certification......................................................................G-2-1
Exhibit H:
Form of Final Certification of
Trustee......................................................................H-1
Exhibit I:
Form of Transfer
Affidavit..................................................................................I-1
Exhibit J:
Form of Transferor
Certificate..............................................................................J-1
Exhibit K:
Form of Investment Letter (Non-Rule
144A)...................................................................K-1
Exhibit L:
Form of Rule 144A
Letter....................................................................................L-1
Exhibit M:
Form of Request for Release (for
Trustee)...................................................................M-1
Exhibit N:
Request for Release of
Documents............................................................................N-1
Exhibit O-1: Form
of Certification To Be Provided By The Depositor With Form
10-K........................................O-1
Exhibit O-2: Form
of Trustee's Officer's
Certificate.....................................................................O-2
Exhibit P:
[Reserved]..................................................................................................P-1
iv
<PAGE>
Exhibit Q:
Reporting
Responsibility....................................................................................Q-1
Exhibit R:
Form of Performance Certification
(Trustee).................................................................R-1
Exhibit S:
Form of Servicing Criteria To Be Addressed in Assessment
of Compliance
Statement.................................................................................S-1
Exhibit T:
List of Item 1119
Parties...................................................................................T-1
Exhibit U:
Form of Sarbanes-Oxley Certification (Replacement of
Servicer)..............................................U-1
</TABLE>
v
<PAGE>
THIS
POOLING AND SERVICING AGREEMENT, dated as of February 1, 2007,
among
INDYMAC MBS, INC., a
Delaware corporation,
as depositor (the "Depositor"),
IndyMac Bank, F.S.B.
("IndyMac"),
a federal savings bank, as seller (in
that
capacity, the "Seller") and as servicer (in that capacity, the
"Servicer"), and
Deutsche Bank National Trust Company, a national banking
association, as trustee
(the "Trustee"),
W I T N E S S E T H T H A T
In consideration
of the mutual agreements set forth in this Agreement, the
parties agree as follows:
P R E L I M I N A R Y S T A T E M E N T
The
Depositor is the owner of the Trust Fund
that is hereby
conveyed to
the Trustee in return for the Certificates. As provided in this Agreement,
the
Trustee shall elect that the Trust Fund (exclusive of any amounts in
respect of
waived Prepayment
Charges paid by the Servicer to the Class
P-1 and Class P-2
Certificates, as
applicable, pursuant
to the second paragraph of Section 3.20)
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.
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. 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 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 3.20 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 under this
Agreement.
REMIC 1
The REMIC
1 Regular Interests
will have the initial
principal balance,
Pass-Through Rates and
corresponding Loan
Groups as set forth in the following
table:
<TABLE>
<CAPTION>
Initial Principal
Balance or
Pass-Through
Corresponding
REMIC 1 Interests
Notional Amount Rate
Loan Group
-----------------
------
----
----------
<S>
<C>
<C>
<C>
A-1 (0.9% of the
Assumed Balance of Loan Group 1) (1)
(2)
1
B-1 (0.1% of the
Assumed Balance of Loan Group 1) (1)
(2)
1
C-1 (Excess of Loan
Group 1)
(1)
(2)
1
A-2 (0.9% of the
Assumed Balance of Loan Group 2) (1)
(2)
2
B-2 (0.1% of the
Assumed Balance of Loan Group 2) (1)
(2)
2
C-2 (Excess of Loan
Group 2)
(1)
(2)
2
1
<PAGE>
A-3 (0.9% of the
Assumed Balance of Loan Group 3) (1)
(2)
3
B-3 (0.1% of the
Assumed Balance of Loan Group 3) (1)
(2)
3
C-3 (Excess of Loan
Group 3)..
(1)
(2)
3
1-P-1
$100
(3)
N/A
1-P-2
$100
(3)
N/A
1-$100
$100
(4)
N/A
R-1
(5)
(5)
N/A
</TABLE>
---------------
(1) Each Class A Interest will have a principal balance initially
equal to 0.9%
of the Assumed Balance of its corresponding Loan Group. Each Class
B Interest
will have a principal balance initially equal to 0.1% of the the
Assumed Balance
of its corresponding Loan Group. The initial principal balance of
each Class C
Interest will equal the excess of the initial aggregate principal
balance of its
corresponding Loan Group over the initial aggregate principal
balances of the
Class A and Class B Interests (and of the Class 1-$100 Interest, in
the case of
the Class C-1 Interest) corresponding to such Loan Group.
(2) The Weighted Average Adjusted Net Mortgage Rate of the
corresponding Loan
Group.
(3) The Class 1-P-1 and Class 1-P-2 Interests will not bear
interest. The Class
1-P-1 Interests will be entitled to 100% of any Hard Prepayment
Charges paid on
the Mortgage Loans. The Class 1-P-2 Interests will be entitled to
100% of any
Soft Prepayment Charges paid on the Mortgage Loans.
(4) The Weighted Average Adjusted Net Mortgage Rate of Loan Group
1.
(5) 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.
On each
Distribution
Date, the Available
Funds shall be distributed with
respect to the REMIC 1 Interests in the following manner:
(1) Interest is to be distributed with respect to each REMIC 1
Interest
according to the formulas described above;
(2) Principal
Amounts and Realized
Losses will be
allocated to make the Class
1-P and Class 1-$100 balance equal to the principal balances of the Class P and
Class A-R Certificates, respectively, for such Distribution
Date.
(3) If Cross-Over Situation does not exist with respect to any
Class of
Interests, then Principal Amounts and Realized Losses arising with
respect to
each Loan Group will be allocated: first to cause the Loan Group's
corresponding
Class A and Class B to equal, respectively, 0.9% of the Assumed
Balance and 0.1%
of the Assumed Balance; and second to the Loan Group's
corresponding Class C
Interest;
(4) If a Cross-Over Situation exists with respect to the Class A
and Class B
Interests then:
(a) if the
Calculation
Rate in respect of the outstanding Class A and
Class
B Interests is less than the Subordinate Pass-Through Rate,
Principal
Relocation
Payments will be made proportionately to the
outstanding Class
A Interests prior to any other distributions of
principal
from each such Loan Group; and
2
<PAGE>
(b) if the Calculation Rate in respect of the outstanding Class A
and
Class B Interests is greater than the Subordinate Pass-Through
Rate,
Principal Relocation Payments will be made proportionately to
the
outstanding Class B Interests prior to any other distributions
of
principal from each such Loan Group.
In case of either (a) or (b), Principal Relocation Payments will be
made so as
to cause the Calculation Rate in respect of the outstanding Class A
and Class B
Interests to equal the Subordinate Pass-Through Rate. With respect
to each Loan
Group, if (and to the extent that) the sum of (a) the principal
payments
comprising the Principal Amount received during the Due Period and
(b) the
Realized Losses on the Mortgage Loans in that Loan Group, are
insufficient to
make the necessary reductions of principal on the Class A and Class
B Interests,
then interest will be added to the Loan Group's other REMIC 1
Interests that are
not receiving Principal Relocation Payments, in proportion to their
principal
balances.
(c) Unless otherwise required to achieve the Calculation Rate,
the
outstanding aggregate Class A and Class B Interests for all
Loan
Groups will not be reduced below 1% of the excess of (i) the
aggregate Stated Principal Balances of the Mortgage Loans as of
the
end of any Due Period (reduced by any Principal Prepayments
received
after the Due Period that are to be distributed on the
Distribution
Date related to the Due Period)over (ii) the Certificate Balance
of
the Senior Certificates (excluding the Class A-R Certificates)
for
all Certificate Groups as of the related Distribution Date
(after
taking into account distributions of principal on such
Distribution
Date).
If (and to the extent that) the limitation in paragraph (c)
prevents the
distribution of principal to the Class A and Class B Interests of a
Loan Group,
and if the Loan Group's Class C Interest has already been reduced
to zero, then
the excess principal from that Loan Group will be paid to the Class
C Interests
of the other Loan Group, the aggregate Class A and Class B
Interests of which
are less than 1% of the Assumed Balance. If the Mortgage Loans in
the Loan Group
of the Class C Interest that receives such payment has a Weighted
Average
Adjusted Net Mortgage Rate below the Weighted Average Adjusted Net
Mortgage Rate
of the Loan Group making the payment, then the payment will be
treated by the
REMIC 1 as a Realized Loss. Conversely, if the Loan Group of the
Class C
Interest that receives such payment has a Weighted Average Adjusted
Net Mortgage
Rate above the Weighted Average Adjusted Net Mortgage Rate of the
Loan Group
making the payment, then the payment will be treated by the REMIC 1
as a
reimbursement for prior Realized Losses.
REMIC 2
The REMIC 2 Regular Interests will have the initial principal
balance, Pass-Through Rates and corresponding Loan Groups as set
forth in the
following table:
Initial Principal Pass-Through Corresponding Class of
REMIC 2 Interests
Balance
Rate
Certificates
-----------------
-------
-----
------------
Class
2-1-A-1
(1)
Variable(2)
Class 1-A-1, 1-A-X
Class
2-1-A-2
(1)
Variable(2)
Class 1-A-2
Class
2-2-A-1
(1)
Variable(3)
Class 2-A-1
Class
2-2-A-2
(1)
Variable(3)
Class 2-A-2
Class
2-3-A-1
(1)
Variable(4)
Class 3-A-1
Class 2-3-A-2
(1)
Variable(4)
Class 3-A-2
Class
2-$100 (1)
(2)
Class A-R
Class 2-B-1 (1)
Variable(5)
Class B-1
Class 2-B-2 (1)
Variable(5)
Class B-2
Class 2-B-3 (1)
Variable(5)
Class B-3
Class 2-B-4 (1)
Variable(5)
Class B-4
3
<PAGE>
Class 2-B-5 (1)
Variable(5)
Class B-5
Class 2-B-6 (1)
Variable(5)
Class B-6
Class 2-P-1 $100
(6)
Class P-1
Class 2-P-2 $100
(6)
Class P-2
Class R-2
(7)
(7)
N/A
(1) On each Distribution Date, Realized Losses and payments of
principal will be
allocated to each
REMIC 2 Regular Interest in the same amounts as they are
allocated to their
Corresponding Class of Certificates (other than any Class
of Notional Amount
Certificates, if applicable).
(2) These Interests will bear interest during each Interest Accrual
Period for
any Distribution Date
at a per annum rate equal to the Weighted Average
Adjusted Net Mortgage
Rate of the Group 1 Mortgage Loans as of that
Distribution Date.
(3) These Interests will bear interest during each Interest Accrual
Period for
any Distribution Date
at a per annum rate equal the Weighted Average Adjusted
Net Mortgage Rate of
the Group 2 Mortgage Loans as of that Distribution Date.
(4) These Interests will bear interest during each Interest Accrual
Period for
any Distribution Date
at a per annum rate equal the Weighted Average Adjusted
Net Mortgage Rate of
the Group 3 Mortgage Loans as of that Distribution Date.
(5) The Pass-Through Rate for each such Class for each Interest
Accrual Period
for any Distribution
Date will be a per annum rate equal to the Calculation
Rate.
(6) The Class 2-P-1 and Class 2-P-2 Interests will not bear
interest. The Class
2-P-1 Interests will
be entitled to 100% of any Prepayment Charges paid on the
Class P-1
Certificates. The Class 2-P-2 Interests will be entitled to 100%
of
any Prepayment Charges
paid on the Class P-2 Certificates.
(7) 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 characteristics of the Certificates,
together with the minimum denominations and integral multiples in
excess thereof
in which such Classes
shall be issuable
(except that one
Certificate of
each
Class of Certificates may be issued in a different amount):
<TABLE>
<CAPTION>
=========================== ============================
===================== =======================
==========================
Initial Class Certificate
Pass-Through
Integral Multiples in
Class
Designation
Balance
Rate
Minimum Denomination
Excess of Minimum
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
<S>
<C>
<C>
<C>
<C>
Class 1-A-1
$
300,000,000
Variable(1)
$
25,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class 1-A-2
$
14,142,000
Variable(2)
$
25,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class 1-A-X
(3)
Variable (4)
$
25,000 (5)
$1,000 (5)
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class 2-A-1
$
177,507,000
Variable(6) $
25,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class 2-A-2
$
16,780,000
Variable(6)
$
25,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class 3-A-1
$
136,767,000
Variable(7)
$
25,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class 3-A-2
$
12,929,000
Variable(7)
$ 25,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class A-R
$
100
(2)
$
100
N/A
=========================== ============================
===================== =======================
==========================
4
<PAGE>
=========================== ============================
===================== =======================
==========================
Class B-1
$
20,734,000
Variable(8)
$
25,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class B-2
$
13,584,000
Variable(8)
$
25,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class B-3
$
8,222,000
Variable(8)
$
25,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class B-4
$
6,077,000
Variable(8)
$ 100,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class B-5
$
5,005,000
Variable(8)
$ 100,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class B-6
$
3,217,786
Variable(8)
$ 100,000
$1,000
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class P-1
$
100.00
0%(9)
$
100
N/A
--------------------------- ----------------------------
--------------------- -----------------------
--------------------------
Class P-2
$
100.00
0%(10)
$
100
N/A
=========================== ============================
===================== =======================
==========================
</TABLE>
(1) The Pass-Through Rate for the Class 1-A-1 Certificates for the
Interest
Accrual Period related
to any Distribution Date (A) up to and including the
Distribution Date in
January 2012 will equal the lesser of (x) 6.13048% per
annum and (y) the
Weighted Average Net Mortgage Rate of the Group 1 Mortgage
Loans and (B) any
Distribution Date thereafter ,will be a per annum rate equal
to the Weighted
Average Net Mortgage Rate of the Group 1 Mortgage Loans. The
Pass-Through Rate for
the Class 1-A-1 Certificates for the Interest Accrual
Period related to the
first Distribution Date is 6.13048% per annum.
(2) The Pass-Through Rate for the Class 1-A-2 and Class A-R
Certificates for the
Interest Accrual
Period related to each Distribution Date will equal the
Weighted Average Net
Mortgage Rate of the Group 1 Mortgage Loans. The
Pass-Through Rate for
the Class 1-A-2 and Class A-R Certificates for the
Interest Accrual
Period related to the first Distribution Date is 6.22546% per
annum.
(3) The Class 1-A-X Certificates will be Notional Amount
Certificates, will have
no Class Certificate
Balance, will pay no principal and will be entitled to
distributions of
interest on its Notional Amount (initially $300,000,000)
(4) The Pass-Through Rate for the Class 1-A-X Certificates for the
Interest
Accrual Period related
to any Distribution Date (x) up to and including the
Distribution Date in
January 2012, will be the Weighted Average Net Mortgage
Rate of the Group 1
Mortgage Loans minus the Pass-Through Rate for the Class
1-A-1 Certificates,
but not less than 0.00%, and (y) any Distribution Date
thereafter, will be
0.00%. The Pass-Through Rate for the Class 1-A-X
Certificates for the
Interest Accrual Period related to the first Distribution
Date is 0.09498% per
annum.
(5) Minimum denomination is based on the Notional Amount of the
Class.
(6) The Pass-Through Rate for the Class 2-A-1 and Class 2-A-2
Certificates for
the Interest Accrual
Period related to each Distribution Date will equal the
Weighted Average Net
Mortgage Rate of the Group 2 Mortgage Loans. The
Pass-Through Rate for
the Class 2-A-1 and Class 2-A-2 Certificates for the
Interest Accrual
Period related to the first Distribution Date is 5.72705% per
annum.
(7) The Pass-Through Rate for the Class 3-A-1 and Class 3-A-2
Certificates for
the Interest Accrual
Period related to each Distribution Date will equal the
Weighted Average Net
Mortgage Rate of the Group 3 Mortgage Loans. The
Pass-Through Rate for
the Class 3-A-1 and Class 3-A-2 Certificates for the
Interest Accrual
Period related to the first Distribution Date is 6.00694% per
annum.
(8) The Pass-Through Rate for each Class of Subordinated
Certificates for each
Interest Accrual
Period for any Distribution Date will be a per annum rate
equal to the
Subordinate Pass-Through Rate. The Pass-Through Rate for the
Subordinated
Certificates for the Interest Accrual Period related to the
first
Distribution Date is
6.02862% per annum. For federal income tax purposes, the
Pass-Through Rate for
each Class of Subordinated Certificates will be the
Calculation Rate.
5
<PAGE>
(9) 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 3.20 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.
(10) 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 3.20
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 is 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 REMIC 1 and
the Master REMIC
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:
<TABLE>
<CAPTION>
<S>
<C>
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.................................................
All
interest-bearing Classes of Certificates other than any
Non-Delay Certificates.
ERISA-Restricted Certificates,.....................................
The
Residual Certificates and the Private Certificates;
the Retained Certificates until they have been the
subject of an ERISA-Qualifying Underwriting; and
Certificates that cease to have a rating of BBB- (or
its equivalent), or better, from at least one Rating
Agency.
6
<PAGE>
Group 1 Senior Certificates........................................
Class 1-A-1, Class 1-A-2, Class 1-A-X 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-1 and Class 2-A-2 Certificates.
Group 2 Certificates...............................................
Group 2 Senior Certificates and the portion of the
Subordinated Certificates related to Loan Group 2.
Group 3 Senior Certificates........................................
Class 3-A-1 and Class 3-A-2 Certificates.
Group 3 Certificates...............................................
Group 3 Senior Certificates and the portion of the
Subordinated Certificates related to Loan Group 3.
LIBOR Certificates.................................................
None.
Non-Delay Certificates.............................................
LIBOR Certificates.
Notional Amount Certificates.......................................
Class 1-A-X Certificates.
Notional Amount Components.........................................
None.
Offered Certificates...............................................
All
Classes of Certificates other than the Private
Certificates.
Physical Certificates..............................................
Class A-R Certificates and the Private Certificates.
Planned Principal Classes..........................................
None.
Principal Only Certificates........................................
None.
Private Certificates...............................................
Class P-1, Class P-2, Class B-4, Class B-5 and Class B-6
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.
7
<PAGE>
Senior Certificates................................................
Class 1-A-1, Class 1-A-2, Class 1-A-X, Class 2-A-1, Class
2-A-2, Class 3-A-1, Class 3-A-2 and Class A-R Certificates.
Senior Certificate Group...........................................
The
Group 1 Senior Certificates, the Group 2 Senior
Certificates and the Group 3 Senior Certificates, as
applicable.
Subordinated Certificates..........................................
Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates.
Targeted Principal Classes.........................................
None.
Targeted Principal Component.......................................
None.
</TABLE>
With
respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions
in this
Agreement relating solely to such designations shall be of no force
or effect,
and any calculations in this Agreement incorporating references to
such
designations shall be interpreted without reference to such
designations and
amounts. Defined terms and provisions in this Agreement relating to
statistical
rating agencies not designated above as Rating Agencies shall be of
no force or
effect.
8
<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:
As to a Loan Group, 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 in
such Loan Group
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.
Aggregate
Subordinated Percentage: With respect to any Distribution Date,
the fraction, expressed as a percentage, the numerator of which is
equal to the
aggregate Class Certificate Balance of
9
<PAGE>
the Subordinated Certificates immediately prior to such
Distribution Date and
the denominator of which is the aggregate Stated Principal Balance
of all the
Mortgage Loans as of the Due Date in the month preceding the month
of such
Distribution Date (after giving effect to Principal Prepayments
received in the
Prepayment Period related to that prior Due Date).
Agreement:
This Pooling and Servicing Agreement and all amendments and
supplements.
Allocable
Share: As to any Distribution Date and Class of Certificates,
the ratio that the amount calculated with respect to such
Distribution Date (A)
with respect to the Senior Certificates of the related Senior
Certificate Group,
pursuant to clause (i) of the definition of Class Optimal Interest
Distribution
Amount (without giving effect to any reduction of such amount
pursuant to
Section 4.02 (d)) and (B) with respect to the Subordinated
Certificates,
pursuant to the definition of Assumed Interest Amount or after the
second Senior
Termination Date pursuant to clause (i) of the definition of Class
Optimal
Interest Distribution Amount (without giving effect to any
reduction of such
amount pursuant to Section 4.02(d)) bears to the amount calculated
with respect
to such Distribution Date for each Class of Certificates pursuant
to clause (i)
of the definition of Class Optimal Interest Distribution Amount
(without giving
effect to any reduction of such amount pursuant to Section 4.02(d))
or the
definition of Assumed Interest Amount for such Loan Group and
Class, as
applicable.
Amount
Available for Senior Principal: As to any Distribution Date and
Loan Group, the related Available Funds for such Distribution Date,
reduced by
the aggregate amount distributable (or allocable to the Accrual
Amount, if
applicable) on such Distribution Date in respect of interest on the
related
Senior Certificates pursuant to Section 4.02(a)(1)(i), Section
4.02(a)(2)(i) and
Section 4.02(a)(3)(i).
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 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.
Applicable
Credit Support Percentage: As defined in Section 4.02(e).
Appraised
Value: With respect to any Mortgage Loan, the Appraised Value
of
the related Mortgaged Property shall be: (i) with respect to a
Mortgage Loan
other than a Refinance Loan, the lesser of (a) the value of the
Mortgaged
Property based upon the appraisal made at the time of the
origination of such
Mortgage Loan and (b) the sales price of the Mortgaged Property at
the time of
the origination of such Mortgage Loan; (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.
Assumed
Balance: With respect to any Distribution Date, Class of
Subordinated Certificates and Loan Group, a pro rata amount for
each such Class
(based on their respective Class Certificate Balances) in such Loan
Group equal
to the product of the Subordinated Percentage for such Loan Group
as of such
Distribution Date and the aggregate Stated Principal Balance of
each Mortgage
Loan in such Loan Group as of the Due Date occurring in the month
preceding the
month of such Distribution Date (after giving effect to Principal
Prepayments
received in the Prepayment Period related to such prior Due
Date).
Assumed
Interest Amount: With respect to any Distribution Date, any
Class
of Subordinated Certificates and any Loan Group, one month's
interest accrued
during the related Interest Accrual Period at the Pass-Through Rate
on the
related Assumed Balance immediately prior to that Distribution
Date.
10
<PAGE>
Available
Funds: As to any Distribution Date and the Mortgage Loans in a
Loan Group, 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 with respect to the Mortgage Loans in that
Loan Group, 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) -
(iii),
inclusive, of Section 3.09(b), (b) the amount of the related
Advance, (c) in
connection with Defective Mortgage Loans in such Loan Group, as
applicable, the
aggregate of the Purchase Prices and Substitution Adjustment
Amounts deposited
on the related Distribution Account Deposit Date, and (d) any
amount deposited
on the related Distribution Account Deposit Date pursuant to
Section 3.10. The
Holders of the Class P Certificates will be entitled to all
Prepayment Charges
received on the Mortgage Loans and such amounts will not be
available for
distribution to the Holders of any other Class of Certificates.
Bankruptcy
Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Bankruptcy
Coverage Termination Date: The point in time at which the
Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy
Loss: With respect to any Mortgage Loan, a Deficient Valuation
or Debt Service Reduction; provided, however, that a Bankruptcy
Loss shall not
be deemed a Bankruptcy Loss under this Agreement so long as the
Servicer has
notified the Trustee in writing that the Servicer is diligently
pursuing any
remedies that may exist in connection with the related Mortgage
Loan and either
(A) the related Mortgage Loan is not in default with regard to
payments due
under the Mortgage Loan or (B) delinquent payments of principal and
interest
under the related Mortgage Loan and any related escrow payments in
respect of
such Mortgage Loan are being advanced on a current basis by the
Servicer, in
either case without giving effect to any Debt Service Reduction or
Deficient
Valuation..
Bankruptcy
Loss Coverage Amount: As of any date of determination, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy
Loss Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses
allocated to
the Certificates since the Cut-off Date and (ii) any permissible
reductions in
the Bankruptcy Loss Coverage Amount as evidenced by a letter of
each Rating
Agency to the Trustee to the effect that any such reduction will
not result in a
downgrading, qualification or withdrawal of the then current
ratings assigned to
the Classes of Certificates rated by it.
Blanket
Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.
Book-Entry
Certificates: As specified in the Preliminary Statement.
Business
Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day
on which banking institutions in the City of New York, New York,
the State of
California or the city in which the Corporate Trust Office of the
Trustee is
located are authorized or obligated by law or executive order to be
closed.
Calculation Rate: For each Distribution Date, the product of (i) 10
and
(ii) the weighted average pass-through rate of the outstanding
Class A and Class
B Interests, treating each of the Class A Interests as having an
Interest Rate
of 0.00%.
Cap
Counterparty: Not applicable.
Certificate: Any one of the certificates issued by the Trust Fund
and
executed by the Trustee in substantially the forms attached as
exhibits.
11
<PAGE>
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 2007-AR1,
Mortgage
Pass-Through Certificates, Series 2007-AR1."
Certificate Balance: With respect to any Certificate (other than
a
Notional Amount Certificate) at any date of determination, the
maximum dollar
amount of principal to which the Holder thereof is then entitled
under this
Agreement, such amount being equal to the Denomination thereof (A)
plus any
increase in the Certificate Balance of such Certificate pursuant to
Section 4.02
due to the receipt of Subsequent Recoveries on the Mortgage Loans
in a Loan
Group, (B) minus the sum of (i) all distributions of principal
previously made
with respect thereto and (ii) all Realized Losses allocated to that
Certificate
and, in the case of any Subordinated Certificates, all other
reductions in
Certificate Balance previously allocated to that Certificate
pursuant to Section
4.05 and (C) in the case of any Class of Accrual Certificates, plus
the Accrual
Amount added to the Class Certificate Balance of such Class prior
to such date.
The Notional Amount Certificates have no Certificate Balances.
Certificate Group: Any of the Group 1, Group 2 and Group 3, 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 Register: The register maintained pursuant to Section
5.02.
Certificate Registrar: Deutsche Bank National Trust Company and
its
successors and, if a successor certificate registrar is appointed
under this
Agreement, the successor.
Certificateholder or Holder: The person in whose name a Certificate
is
registered in the Certificate Register, except that, solely for the
purpose of
giving any consent pursuant to this Agreement, any Certificate
registered in the
name of the Depositor or any affiliate of the Depositor is not
Outstanding and
the Percentage Interest evidenced thereby shall not be taken into
account in
determining whether the requisite amount of Percentage Interests
necessary to
effect a consent has been obtained, except that if the Depositor or
its
affiliates own 100% of the Percentage Interests evidenced by a
Class of
Certificates, the Certificates shall be Outstanding for purposes of
any
provision of this Agreement requiring the consent of the Holders of
Certificates
of a particular Class as a condition to the taking of any action.
The Trustee is
entitled to rely conclusively on a certification of the Depositor
or any
affiliate of the Depositor in determining which Certificates are
registered in
the name of an affiliate of the Depositor.
Certification Party: As defined in Section 11.05.
Certifying
Person: As defined in Section 11.05.
Class: All
Certificates bearing the same class designation as set forth in
the Preliminary Statement.
Class A
Interest: Each of the Class A-1, Class A-2 and Class A-3
Interests.
Class B
Interest: Each of the Class B-1, Class B-2 and Class B-3
Interests.
12
<PAGE>
Class C
Interest: Each of the Class C-1, Class C-2 and Class C-3
Interests.
Class
Certificate Balance: For any Class as of any date of
determination,
the aggregate of the Certificate Balances of all Certificates of
the Class as of
that date.
Class
Interest Shortfall: As to any Distribution Date and Class, the
amount by which the amount described in clause (i) of the
definition of Class
Optimal Interest Distribution Amount for such Class exceeds the
amount of
interest actually distributed on such Class on such Distribution
Date pursuant
to such clause (i).
Class
Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest-bearing Class, the sum of (i) one
month's
interest accrued during the related Interest Accrual Period at the
Pass-Through
Rate for such Class on the related Class Certificate Balance
immediately prior
to such Distribution Date, subject to reduction pursuant to Section
4.02(d), and
(ii) any Class Unpaid Interest Amounts for such Class.
Class
Subordination Percentage: With respect to any Distribution Date
and
each Class of Subordinated Certificates, the fraction (expressed as
a
percentage) the numerator of which is the Class Certificate Balance
of such
Class of Subordinated Certificates immediately prior to such
Distribution Date
and the denominator of which is the aggregate Class Certificate
Balance of all
Classes of Certificates immediately prior to such Distribution
Date.
Class
Unpaid Interest Amounts: As to any Distribution Date and Class
of
interest-bearing Certificates, the amount by which the aggregate
Class Interest
Shortfalls for such Class on prior Distribution Dates exceeds the
amount
distributed on such Class on prior Distribution Dates pursuant to
clause (ii) of
the definition of Class Optimal Interest Distribution Amount.
Closing
Date: February 27, 2007.
CMT Index:
Not applicable.
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.
Components: Not applicable.
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.
13
<PAGE>
Cooperative Property: The real property and improvements owned by
the
Cooperative Corporation, including the allocation of individual
dwelling units
to the holders of the Co-op Shares of the Cooperative
Corporation.
Cooperative Unit: A single family dwelling located in a
Cooperative
Property.
Corporate
Trust Office: The designated office of the Trustee in the State
of California at which at any particular time its corporate trust
business with
respect to this Agreement is administered, which office at the date
of the
execution of this Agreement is located at 1761 East St. Andrew
Place, Santa Ana,
California 92705, Attn: Trust Administration- IN07A1 (IndyMac MBS,
Inc., IndyMac
INDX Mortgage Loan Trust 2007-AR1, Mortgage Pass-Through
Certificates, Series
2007-AR1), 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.
Cross-over
Situation: For any Distribution Date and for any Loan Group
(after taking into account principal distributions on such
Distribution Date) a
Cross-Over Situation exists with respect to the Class A and Class B
Interests of
the Loan Group if such Interests in the aggregate are less than 1%
of the
Assumed Balance of the related Loan Group.
Cut-off
Date: February 1, 2007.
Cut-off
Date Pool Principal Balance: $ 714,964,886.25.
Cut-off
Date Principal Balance: As to any Mortgage Loan, its Stated
Principal Balance as of the close of business on the Cut-off
Date.
Debt
Service Reduction: For any Mortgage Loan, a reduction by a court
of
competent jurisdiction in a proceeding under the Bankruptcy Code in
the
Scheduled Payment for the Mortgage Loan that became final and
non-appealable,
except a reduction resulting from a Deficient Valuation or a
reduction that
results in a permanent forgiveness of principal.
Defective
Mortgage Loan: Any Mortgage Loan that is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deficient
Valuation: For any Mortgage Loan, a valuation by a court of
competent jurisdiction of the Mortgaged Property in an amount less
than the then
outstanding indebtedness under the Mortgage Loan, or any reduction
in the amount
of principal to be paid in connection with any Scheduled Payment
that results in
a permanent forgiveness of principal, which valuation or reduction
results from
an order of the court that is final and non-appealable in a
proceeding under the
Bankruptcy Code.
Definitive
Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 5.02(e).
Delay
Certificates: As specified in the Preliminary Statement.
Delay
Delivery Certification: A certification substantially in the form
of
Exhibit G-2.
Delay
Delivery Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule for which none of a related Mortgage File,
or neither the
Mortgage Note, nor a lost note
14
<PAGE>
affidavit for a lost Mortgage Note, has been delivered to the
Trustee by the
Closing Date. The Depositor shall deliver the Mortgage Files to the
Trustee:
(A) for at
least 70% of the Mortgage Loans 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).
Delinquent: A Mortgage Loan is "Delinquent" if any monthly payment
due on
a Due Date is not made by the close of business on the next
scheduled Due Date
for such Mortgage Loan. A Mortgage Loan is "30 days Delinquent" if
such monthly
payment has not been received by the close of business on the
corresponding day
of the month immediately succeeding the month in which such monthly
payment was
due. The determination of whether a Mortgage Loan is "60 days
Delinquent", "90
days Delinquent", etc. shall be made in a like manner.
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
2007-AR1, Mortgage Pass-Through Certificates, Series 2007-AR1."
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.
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Distribution Date: The 25th day of each calendar month, or if that
day is
not a Business Day, the next Business Day, commencing in March
2007.
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 accounts are insured by the FDIC (to the limits
established by the
FDIC) and the uninsured deposits in which accounts are otherwise
secured such
that, as evidenced by an Opinion of Counsel delivered to the
Trustee and to each
Rating Agency, the Certificateholders have a claim with respect to
the funds in
such account or a perfected first priority security interest
against any
collateral (which shall be limited to Permitted Investments)
securing such funds
that is superior to claims of any other depositors or creditors of
the
depository institution or trust company in which such account is
maintained, or
(iii) a
trust account or accounts maintained with (a) the trust
department
of a federal or state chartered depository institution or (b) a
trust company,
acting in its fiduciary capacity, or
(iv) any
other account acceptable to each Rating Agency.
Eligible Accounts may bear interest, and may include, if otherwise
qualified
under this definition, accounts maintained with the Trustee.
ERISA: The
Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
the
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow
Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.07(a).
Event of
Default: As defined in Section 7.01.
Excess
Loss: The amount of any (i) Fraud Loss on the Mortgage Loans
realized after the Fraud Loss Coverage Termination Date, (ii)
Special Hazard
Loss on the Mortgage Loans realized after the
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Special Hazard Coverage Termination Date or (iii) Bankruptcy Loss
on the
Mortgage Loans realized after the Bankruptcy Coverage Termination
Date.
Excess
Proceeds: For any Liquidated Mortgage Loan, the excess of
(a) all
Liquidation Proceeds from the Mortgage Loan received in the
calendar month in which the Mortgage Loan became a Liquidated
Mortgage Loan, net
of any amounts previously reimbursed to the Servicer as
Nonrecoverable Advances
with respect to the Mortgage Loan pursuant to Section 3.09(a)(iii),
over
(b) the
sum of (i) the unpaid principal balance of the Liquidated
Mortgage
Loan as of the Due Date in the month in which the Mortgage Loan
became a
Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage
Rate from
the Due Date for which interest was last paid or advanced (and not
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
Servicing
Fee Rate and (b) the Trustee Fee Rate.
FDIC: The
Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The
Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under
Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Fitch:
Fitch, Inc., or any successor thereto. If Fitch is designated as
a
Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the
address for notices to Fitch shall be Fitch, Inc., One State Street
Plaza, New
York, NY 10004, Attention: MBS Monitoring - IndyMac INDX 2007-AR1,
or any other
address Fitch furnishes to the Depositor and the Servicer.
FNMA: The
Federal National Mortgage Association, a federally chartered
and
privately owned corporation organized and existing under the
Federal National
Mortgage Association Charter Act, or any successor thereto.
Form 10-D
Disclosure Item: With respect to any Person, any material
litigation or governmental proceedings pending against such Person,
or against
any of the Trust Fund, the Depositor, the Trustee or the Servicer,
if such
Person has actual knowledge thereof.
Form 10-K
Disclosure Item: With respect to any Person, (a) Form 10-D
Disclosure Item, and (b) any affiliations or relationships between
such Person
and any Item 1119 Party.
Fraud
Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred.
Fraud Loss
Coverage Amount: As of the Closing Date, $21,448,947, subject
to reduction from time to time, by the amount of Fraud Losses
allocated to the
Certificates. In addition, on each anniversary
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of the Cut-off Date, the Fraud Loss Coverage Amount will be reduced
as follows:
(a) on the first, second, third and fourth anniversaries of the
Cut-off Date, to
an amount equal to the lesser of (i) 2.00% of the then current
Stated Principal
Balance of the Mortgage Loans in the case of the first anniversary
and 1.00% of
the then-current Stated Principal Balance of the Mortgage Loans in
the case of
the second, third and fourth such anniversaries and (ii) the excess
of the Fraud
Loss Coverage Amount as of the preceding anniversary of the Cut-off
Date over
the cumulative amount of Fraud Losses allocated to the Certificates
since such
preceding anniversary; and (b) on the fifth anniversary of the
Cut-off Date, to
zero.
Fraud Loss
Coverage Termination Date: The point in time at which the Fraud
Loss Coverage Amount is reduced to zero.
Fraud
Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty
or
misrepresentation in connection with the related Mortgage Loan,
including a loss
by reason of the denial of coverage under any related Primary
Insurance Policy
because of such fraud, dishonesty or misrepresentation.
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
Senior Certificates: As specified in the Preliminary Statement.
Group 2
Certificates: As specified in the Preliminary Statement.
Group 2
Mortgage Loan: Any Mortgage Loan in Loan Group 2.
Group 2
Senior Certificates: As specified in the Preliminary Statement.
Group 3
Certificates: As specified in the Preliminary Statement.
Group 3
Mortgage Loan: Any Mortgage Loan in Loan Group 3.
Group 3
Senior Certificates: As specified in the Preliminary Statement.
Hard
Prepayment Charges: As to a Mortgage Loan, any charge payable by
a
Mortgagor in connection with certain partial Principal Prepayments
and all
Principal 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.
Hedged
Certificates: Not applicable.
Index: Not
applicable.
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: $320,496.
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Initial
LIBOR Rate: Not applicable.
Insurance
Policy: For any Mortgage Loan included in the Trust Fund, any
insurance policy, including all riders and endorsements thereto in
effect,
including any replacement policy or policies for any Insurance
Policies.
Insurance
Proceeds: Proceeds paid by an insurer pursuant to any Insurance
Policy, in each case other than any amount included in such
Insurance Proceeds
in respect of Insured Expenses.
Insured
Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest
Accrual Period: With respect to each Class of Delay
Certificates
and any Distribution Date, the calendar month prior to the month of
such
Distribution Date. All Classes of Certificates will accrue interest
on the basis
of a 360-day year consisting of twelve 30-day months.
Interest
Determination Date: With respect to (a) any Interest Accrual
Period for any LIBOR Certificates and (b) any Interest Accrual
Period for the
COFI Certificates for which the applicable Index is LIBOR, the
second Business
Day prior to the first day of such Interest Accrual Period.
Interest
Rate: With respect to each REMIC 1 Interest, the applicable
rate
set forth or calculated in the manner described in the Preliminary
Statement.
Interest
Settlement Rate: As defined in Section 4.08.
Item 1119
Party: The Depositor, the Seller, the Servicer, the Trustee and
any other material transaction party, as identified in Exhibit T
hereto, as
updated pursuant to Section 11.04.
Latest
Possible Maturity Date: The Distribution Date, determined as of
the
Closing Date, following the third anniversary of the later of: (i)
the scheduled
maturity date of the Mortgage Loan having the latest scheduled
maturity date as
of the Cut-off Date, and (ii) the latest possible maturity of any
Substitute
Mortgage Loan that may be substituted for any Mortgage Loan
pursuant to this
Agreement.
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
Determination Date: For any Interest Accrual Period, the second
London Business Day prior to the commencement of such Interest
Accrual Period.
Limited
Exchange Act Reporting Obligations: The obligations of the
Servicer under Section 3.17(b), Section 6.02 and Section 6.04 with
respect to
notice and information to be provided to the Depositor and Article
11 (except
Section 11.07(a)(i) and (ii)).
Liquidated
Mortgage Loan: For any Distribution Date, a defaulted Mortgage
Loan (including any REO Property) that was liquidated in the
calendar month
preceding the month of the Distribution
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<PAGE>
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: Any of Loan Group 1, Loan Group 2 or Loan Group 3, 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 Group
3: All Mortgage Loans identified as Group 3 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.
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.
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<PAGE>
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;
(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;
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<PAGE>
(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;
and
(xxv) a code
indicating whether the Mortgage Loan is a MERS Mortgage
Loan.
The schedule shall also set forth the total of the amounts
described under (v)
above for all of the Mortgage Loans 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).
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.
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<PAGE>
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 by which the aggregate of the Prepayment Interest
Shortfalls
for such Loan Group and such Distribution Date 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 Groups for such Distribution Date over
the
Prepayment Interest Shortfalls for such other Loan Groups and
Distribution Date.
Non-Delay
Certificates: As specified in the Preliminary Statement.
Nonrecoverable
Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer, that, in the good faith
judgment of the
Servicer, will not be ultimately recoverable by the Servicer from
the related
Mortgagor, related Liquidation Proceeds or otherwise.
Notice of
Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the
Certificates
shall be made only upon presentation and surrender thereof.
Notional
Amount: With respect to the Class 1-A-X Certificates for the
Interest Accrual Period for any Distribution Date (x) up to and
including the
Distribution Date in January 2012, the Class Certificate Balance of
the Class
1-A-1 Certificates immediately prior to that Distribution Date, and
(y) after
the Distribution Date in January 2012, zero.
Notional
Amount Certificates: As specified in the Preliminary Statement.
Notional
Amount Components: As specified in the Preliminary Statement.
Offered
Certificates: As specified in the Preliminary Statement.
Officer's
Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing
Director, a
Vice President (however denominated), an Assistant Vice President,
the
Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant
Secretaries of the Depositor or the Servicer, or (ii) if provided
for in this
Agreement, signed by a Servicing Officer, as the case may be, and
delivered to
the Depositor and the Trustee as required by this Agreement 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(591) 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.
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<PAGE>
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
Applicable Credit Support Percentage: With respect to each of
the
following Classes of Subordinated Certificates, the corresponding
percentage
described below:
Class B-1............................................ 7.95%
Class B-2............................................ 5.05%
Class B-3............................................ 3.15%
Class B-4............................................ 2.00%
Class B-5............................................ 1.15%
Class B-6............................................ 0.45%
Original
Mortgage Loan: The Mortgage Loan refinanced in connection with
the origination of a Refinance Loan.
Original
Subordinated Principal Balance: On or prior to the second
Senior
Termination Date, the Subordinated Percentage of the aggregate
Stated Principal
Balance of the Mortgage Loans in the related Loan Group, in each
case as of the
Cut-off Date; or if such date is after the second Senior
Termination Date, the
aggregate Class Certificate Balance of the Subordinated
Certificates as of the
Closing Date.
OTS: The
Office of Thrift Supervision.
Outside
Reference Date: Not applicable.
Outstanding: For the Certificates as of any date of determination,
all
Certificates theretofore executed and authenticated under this
Agreement except:
(i) Certificates
theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in
exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee
pursuant
to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a
Stated Principal Balance greater than zero that was not the subject
of a
Principal Prepayment in Full before the Due Date or during the
related
Prepayment Period and that did not become a Liquidated Mortgage
Loan before the
Due Date.
Overcollateralized Group: As defined in Section 4.03.
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Ownership
Interest: As to any Residual Certificate, any ownership
interest
in the Certificate including any interest in the Certificate as its
Holder and
any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: For each Class of Certificates, the per annum
rate set
forth or calculated in the manner described in the Preliminary
Statement.
Percentage
Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the
related Class, the
percentage interest being set forth on its face or equal to the
percentage
obtained by dividing the Denomination of the Certificate by the
aggregate of the
Denominations of all Certificates of the same Class.
Performance Certification: As defined in Section 11.05.
Permitted
Investments: At any time, any of the following:
(i)
obligations of the United States or any agency thereof backed by
the
full faith and credit of the United States;
(ii)
general obligations of or obligations guaranteed by any state of
the
United States or the District of Columbia receiving the highest
long-term debt
rating of each Rating Agency, or any lower rating that will not
result in the
downgrading, qualification or withdrawal of the ratings then
assigned to the
Certificates by the Rating Agencies, as evidenced by a signed
writing delivered
by each Rating Agency;
(iii)
commercial or finance company paper that is then receiving the
highest commercial or finance company paper rating of each Rating
Agency, or any
lower rating that will not result in the downgrading, qualification
or
withdrawal of the ratings then assigned to the Certificates by the
Rating
Agencies , as evidenced by a signed writing delivered by each
Rating Agency;
(iv)
certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated
under the laws of the United States or of any state thereof and
subject to
supervision and examination by federal or state banking
authorities, provided
that the commercial paper or long-term unsecured debt obligations
of the
depository institution or trust company (or in the case of the
principal
depository institution in a holding company system, the commercial
paper or
long-term unsecured debt obligations of the holding company, but
only if Moody's
is not a Rating Agency) are then rated one of the two highest
long-term and the
highest short-term ratings of each Rating Agency for the
securities, or any
lower rating that will not result in the downgrading, qualification
or
withdrawal of the ratings then assigned to the Certificates by the
Rating
Agencies, as evidenced by a signed writing delivered by each Rating
Agency;
(v) demand
or time deposits or certificates of deposit issued by any bank
or trust company or savings institution to the extent that the
deposits are
fully insured by the FDIC;
(vi)
guaranteed reinvestment agreements issued by any bank,
insurance
company, or other corporation acceptable to the Rating Agencies at
the time of
the issuance of the agreements, as evidenced by a signed writing
delivered by
each Rating Agency;
(vii)
repurchase obligations with respect to any security described
in
clauses (i) and (ii) above, in either case entered into with a
depository
institution or trust company (acting as principal) described in
clause (iv)
above; provided that such repurchase obligation would be accounted
for as a
financing arrangement under generally accepted accounting
principles;
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(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 of
in accordance
with Financial Accounting Standard 140, paragraph 35c(6) in effect
as of the
Closing Date.
Permitted
Transferee: Any person other than
(i) the
United States, any State or political subdivision thereof, or
any
agency or instrumentality of any of the foregoing,
(ii) a
foreign government, International Organization, or any agency
or
instrumentality of either of the foregoing,
(iii) an
organization (except certain farmers' cooperatives described in
section 521 of the Code) that is exempt from tax imposed by Chapter
1 of the
Code (including the tax imposed by section 511 of the Code on
unrelated business
taxable income) on any excess inclusions (as defined in section
860E(c)(1) of
the Code) with respect to any Residual Certificate,
(iv) a
rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code,
(v) an
"electing large partnership" as defined in section 775 of the
Code,
(vi) a
Person that is not a U.S. Person, and
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(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.
Planned
Balance: Not applicable.
Planned
Principal Classes: As specified in the Preliminary Statement.
Pool
Stated Principal Balance: The aggregate Stated Principal Balance
of
the Mortgage Loans.
Prepayment
Charge: As to a Mortgage Loan, any charge payable by a
Mortgagor in connection with certain partial prepayments and all
prepayments in
full made within the related Prepayment Charge Period, the
Prepayment Charges
with respect to each applicable Mortgage Loan so held by the Trust
Fund being
identified in the Mortgage Loan Schedule.
Prepayment
Charge Period: As to any Mortgage Loan, the period of time
during which a Prepayment Charge may be imposed.
Prepayment
Interest Excess: As to any Principal Prepayment received by the
Servicer on a Mortgage Loan from the first day through the
fifteenth day of any
calendar month other than the month of the Cut-off Date, all
amounts paid by the
related Mortgagor in respect of interest on such Principal
Prepayment. All
Prepayment Interest Excess shall be retained by the Servicer as
additional
servicing compensation.
Prepayment
Interest Shortfall: As to any Distribution Date, Mortgage Loan
and Principal Prepayment received on or after the sixteenth day of
the month
preceding the month of such Distribution 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.
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
Amount: As to any Distribution Date and each Loan Group, the
sum
of (a) all monthly payments of principal due on each Mortgage Loan
in that Loan
Group on the related Due Date, (b) the principal portion of the
Purchase Price
of each Mortgage Loan in that Loan Group that was repurchased by
the Seller
pursuant to this Agreement as of such Distribution Date, excluding
any Mortgage
Loan that
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was purchased by the Servicer as provided in Section 3.12, (c) the
Substitution
Adjustment Amount in connection with any Deleted Mortgage Loan in
that Loan
Group received with respect to such Distribution Date, (d) any
Insurance
Proceeds or Liquidation Proceeds allocable to recoveries of
principal of
Mortgage Loans in that Loan Group that are not yet Liquidated
Mortgage Loans
received during the calendar month preceding the month of such
Distribution
Date, (e) with respect to each Mortgage Loan in that Loan Group
that became a
Liquidated Mortgage Loan during the calendar month preceding the
month of such
Distribution Date, the amount of Liquidation Proceeds allocable to
principal
received with respect to such Mortgage Loan, (f) all partial and
full Principal
Prepayments on the Mortgage Loans in that Loan Group received
during the related
Prepayment Period, and (g) any Subsequent Recoveries with respect
to the
Mortgage Loans in that Loan Group received during the calendar
month preceding
the month of such Distribution Date.
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 by the Servicer 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
Relocation Payment: A payment from any Loan Group to REMIC 1
Interests other than those of their corresponding Loan Group as
provided in the
Preliminary Statement. Principal Relocation Payments shall be made
of principal
allocations comprising the Principal Amount from a Loan Group.
Private
Certificates: As specified in the Preliminary Statement.
Pro Rata
Share: As to any Distribution Date and any Class of
Subordinated
Certificates, the portion of the Subordinated Principal
Distribution Amount
allocable to such Class, equal to the product of the Subordinated
Principal
Distribution Amount on such Distribution Date and a fraction, the
numerator of
which is the related Class Certificate Balance thereof and the
denominator of
which is the aggregate Class Certificate Balance of the
Subordinated
Certificates, in each case immediately prior to such Distribution
Date.
Proprietary Lease: For any Cooperative Unit, a lease or
occupancy
agreement between a Cooperative Corporation and a holder of related
Co-op
Shares.
Prospectus
Supplement: The Prospectus Supplement dated February 27, 2007,
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,
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(ii)
accrued and unpaid interest on the Mortgage Loan at the
applicable
Mortgage Rate (or at the applicable Adjusted Mortgage Rate if (x)
the purchaser
is the Servicer or (y) if the purchaser is the Seller and the
Seller is the
Servicer) from the date through which interest was last paid by the
Mortgagor to
the Due Date in the month in which the Purchase Price is to be
distributed to
Certificateholders, net of any unreimbursed Advances made by the
Servicer on the
Mortgage Loan, and
(iii) any
costs and damages incurred by the Trust Fund in connection with
any violation by the Mortgage Loan of any predatory or abusive
lending law.
If the
Mortgage Loan is purchased pursuant to Section 3.12, the
interest
component of the Purchase Price shall be computed (i) on the basis
of the
applicable Adjusted Mortgage Rate before giving effect to the
related
modification and (ii) from the date to which interest was last paid
to the date
on which the Mortgage Loan is assigned to the Servicer pursuant to
Section 3.12.
Qualified
Insurer: A mortgage guaranty insurance company duly qualified
as
such under the laws of the state of its principal place of business
and each
state having jurisdiction over the insurer in connection with the
insurance
policy issued by the insurer, duly authorized and licensed in such
states to
transact a mortgage guaranty insurance business in such states and
to write the
insurance provided by the insurance policy issued by it, approved
as a FNMA- or
FHLMC-approved mortgage insurer or having a claims paying ability
rating of at
least "AA" or equivalent rating by a nationally recognized
statistical rating
organization. Any replacement insurer with respect to a Mortgage
Loan must have
at least as high a claims paying ability rating as the insurer it
replaces had
on the Closing Date.
Rating
Agency: Each of the Rating Agencies specified in the
Preliminary
Statement. If any of them or a successor is no longer in existence,
"Rating
Agency" shall be the nationally recognized statistical rating
organization, or
other comparable Person, designated by the Depositor and identified
as a "Rating
Agency" in the Underwriters' Exemption, notice of which designation
shall be
given to the Trustee. References to a given rating or rating
category of a
Rating Agency means the rating category without giving effect to
any modifiers.
Realized
Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of
the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated
Principal
Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus
(ii) interest at the Adjusted Net Mortgage Rate from the Due Date
as to which
interest was last paid or advanced (and not reimbursed) to
Certificateholders up
to the Due Date in the month in which Liquidation Proceeds are
required to be
distributed on the Stated Principal Balance of such Liquidated
Mortgage Loan
from time to time, minus (iii) the Liquidation Proceeds, if any,
received during
the month in which such liquidation occurred, to the extent applied
as
recoveries of interest at the Adjusted Net Mortgage Rate and to
principal of the
Liquidated Mortgage Loan. With respect to each Mortgage Loan which
has become
the subject of a Deficient Valuation, if the principal amount due
under the
related Mortgage Note has been reduced, the difference between the
principal
balance of the Mortgage Loan outstanding immediately prior to such
Deficient
Valuation and the principal balance of the Mortgage Loan as reduced
by the
Deficient Valuation. With respect to each Mortgage Loan that has
become the
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.
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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, the close of
business
on the last Business Day of the month preceding the month of that
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.
Relief Act
Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount
of interest
collectible thereon for the most recently ended calendar month as a
result of
the application of the Relief Act or any similar state or local
laws, the
amount, if any, by which (i) interest collectible on such Mortgage
Loan for the
most recently ended calendar month is less than (ii) interest
accrued thereon
for such month pursuant to the Mortgage Note.
REMIC: A
"real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC
Provisions: Provisions of the federal income tax law relating
to
real estate mortgage investment conduits, which appear at sections
860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
regulations promulgated thereunder, as the foregoing may be in
effect from time
to time as well as provisions of applicable state laws.
REO
Property: A Mortgaged Property acquired by the Trust Fund
through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
Reportable
Event: Any event required to be reported on Form 8-K, and in
any event, the following:
(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);
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<PAGE>
(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 Cap 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.
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).
SAIF: The
Savings Association Insurance Fund, or any successor thereto.
Sarbanes-Oxley
Certification: As defined in Section 11.05.
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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 date on which the Class
Certificate Balance of each Class of Subordinated Certificates has
been reduced
to zero.
Senior
Percentage: As to any Senior Certificate Group and Distribution
Date, the percentage equivalent of a fraction the numerator of
which is the
aggregate Class Certificate Balance of the Senior Certificates of
such Senior
Certificate Group immediately before the Distribution Date and the
denominator
of which is the aggregate Stated Principal Balance of the Mortgage
Loans in the
related Loan Group as of the Due Date occurring in the month prior
to the month
of that Distribution Date (after giving effect to Principal
Prepayments received
on the related Mortgage Loans in the Prepayment Period related to
such prior Due
Date); provided, however, that on any Distribution Date after the
second Senior
Termination Date, the Senior Percentage for the Senior Certificates
of the
remaining Senior Certificate Group is the percentage equivalent of
a fraction,
the numerator of which is the aggregate Class Certificate Balance
of the Senior
Certificates of such remaining Senior Certificate Group immediately
prior to
such Distribution Date and the denominator is the aggregate Class
Certificate
Balance of all Classes of Certificates immediately prior to that
Distribution
Date.
Senior
Prepayment Percentage: As to a Senior Certificate Group and any
Distribution Date during the seven years beginning on the first
Distribution
Date, 100%. The related Senior Prepayment Percentage for any
Distribution Date
occurring on or after the seventh anniversary of the first
Distribution Date
will, except as provided in this Agreement, be as follows: for any
Distribution
Date in the first year thereafter, the related Senior Percentage
plus 70% of the
related Subordinated Percentage for such Distribution Date; for any
Distribution
Date in the second year thereafter, the related Senior Percentage
plus 60% of
the related Subordinated Percentage for such Distribution Date; for
any
Distribution Date in
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the third year thereafter, the related Senior Percentage plus 40%
of the related
Subordinated Percentage for such Distribution Date; for any
Distribution Date in
the fourth year thereafter, the related Senior Percentage plus 20%
of the
related Subordinated Percentage for such Distribution Date; and for
any
Distribution Date thereafter, the related Senior Percentage for
such
Distribution Date (unless on any Distribution Date the Senior
Percentage of a
Senior Certificate Group exceeds the initial Senior Percentage for
such Senior
Certificate Group in which case the Senior Prepayment Percentage
for each Senior
Certificate Group for such Distribution Date will once again equal
100%).
Notwithstanding the foregoing, no decrease in any Senior Prepayment
Percentage
will occur unless both Senior Step Down Conditions are satisfied
with respect to
all of the Mortgage Loans.
Notwithstanding the preceding paragraphs, if (x) on or before
the
Distribution Date in February 2010, the Aggregate Subordinated
Percentage is at
least 200% of the Aggregate Subordinated Percentage as of the
Closing Date, the
delinquency test set forth in the definition of Senior Step Down
Conditions is
satisfied and cumulative Realized Losses do not exceed 20% of the
aggregate
Class Certificate Balance of the Subordinated Certificates as of
the Closing
Date, the Senior Prepayment Percentage for each Senior Certificate
Group will
equal the related Senior Percentage for that Distribution Date plus
50% of an
amount equal to 100% minus the related Senior Percentage for that
Distribution
Date and (y) after the Distribution Date in February 2010, the
Aggregate
Subordinated Percentage is at least 200% of the Aggregate
Subordinated
Percentage as of the Closing Date, the delinquency test set forth
in the
definition of Senior Step Down Conditions is satisfied and
cumulative Realized
Losses do not exceed 30% of the aggregate Class Certificate Balance
of the
Subordinated Certificates as of the Closing Date, the Senior
Prepayment
Percentage for each Senior Certificate Group will equal the related
Senior
Percentage.
Senior
Principal Distribution Amount: As to any Distribution Date and
any
Loan Group, the sum of (i) the related Senior Percentage of all
amounts
described in clauses (a) through (d) of the definition of Principal
Amount for
that Loan Group and such Distribution Date, (ii) with respect to
any Mortgage
Loan that became a Liquidated Mortgage Loan during the calendar
month preceding
the month of such Distribution Date, the lesser of (x) the related
Senior
Percentage of the Stated Principal Balance of such Mortgage Loan
and (y) either
(A) if no Excess Losses were sustained on the Liquidated Mortgage
Loan during
the preceding calendar month, the related Senior Prepayment
Percentage of the
amount of the Liquidation Proceeds allocable to principal received
on the
Mortgage Loan or (B) if an Excess Loss was sustained with respect
to such
Liquidated Mortgage Loan during such preceding calendar month, the
Senior
Percentage of the amount of the Liquidation Proceeds allocable to
principal
received with respect to such Mortgage Loan, and (iii) the sum of
(x) the Senior
Prepayment Percentage of the amounts described in clause (f) of the
definition
of Principal Amount for that Loan Group and such Distribution Date,
and (y) the
applicable Senior Prepayment Percentage of any Subsequent
Recoveries described
in clause (g) of the definition of Principal Amount for that Loan
Group and such
Distribution Date; provided, however, that if a Bankruptcy Loss
that is an
Excess Loss is sustained with respect to a Mortgage Loan in that
Loan Group that
is not a Liquidated Mortgage Loan, the Senior Principal
Distribution Amount will
be reduced on the related Distribution Date by the Senior
Percentage of the
applicable principal portion of such Bankruptcy Loss; provided
further, however,
on any Distribution Date after the second Senior Termination Date,
the Senior
Principal Distribution Amount for the remaining Senior Certificate
Group will be
calculated pursuant to the above formula based on all the Mortgage
Loans in the
Mortgage Pool, as opposed to the Mortgage Loans in the related Loan
Group.
Senior
Step Down Conditions: As to any Distribution Date: (i) the
aggregate Stated Principal Balance of all the Mortgage Loans 60
days or more
Delinquent (averaged over the preceding six month period)
(including any
Mortgage Loans subject to foreclosure proceedings, REO Property
(regardless of
whether that Mortgage Loan is 60 days or more Delinquent) and
Mortgage Loans the
Mortgagors of which are in bankruptcy), as a percentage (a) if such
date is on
or prior to second Senior Termination Date, the Subordinated
Percentage for that
Loan Group of the aggregate Stated Principal Balance of the
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Mortgage Loans in that Loan Group, or (b) if such date is after the
second
Senior Termination Date, the aggregate Class Certificate Balance of
the
Subordinated Certificates immediately prior to such Distribution
Date, does not
equal or exceed 50%, and (ii) cumulative Realized Losses do not
exceed: (a)
commencing with the Distribution Date on the seventh anniversary of
the first
Distribution Date, 30% of the Original Subordinated Principal
Balance, (b)
commencing with the Distribution Date on the eighth anniversary of
the first
Distribution Date, 35% of the Original Subordinated Principal
Balance, (c)
commencing with the Distribution Date on the ninth anniversary of
the first
Distribution Date, 40% of the Original Subordinated Principal
Balance, (d)
commencing with the Distribution Date on the tenth anniversary of
the first
Distribution Date, 45% of the Original Subordinated Principal
Balance, and (e)
commencing with the Distribution Date on the eleventh anniversary
of the first
Distribution Date and thereafter, 50% of the Original Subordinated
Principal
Balance.
Senior
Termination Date: For each Senior Certificate Group, the
Distribution Date on which the aggregate Class Certificate Balance
of the
related Classes of Senior Certificates has been reduced to
zero.
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 that 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.
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 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), 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%.
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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.
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.
Soft
Prepayment Charges: As to a Mortgage Loan, any charge payable by
a
Mortgagor in connection with certain partial Principal Prepayments
and all
Principal 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: The point in time at which
the
Special Hazard Loss Coverage Amount is reduced to zero.
Special
Hazard Loss: Any Realized Loss suffered by a Mortgaged Property
on
account of direct physical loss, but not including (i) any loss of
a type
covered by a hazard insurance policy or a flood insurance policy
required to be
maintained with respect to such Mortgaged Property pursuant to
Section 3.10 to
the extent of the amount of such loss covered thereby, or (ii) any
loss caused
by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of the
Trustee, the Servicer or any of their agents or employees (without
regard
to
any portion of the loss not covered by any errors and omissions
policy);
(c) errors in design, faulty workmanship or faulty materials,
unless
the
collapse of the property or a part thereof ensues and then only for
the
ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive
or
chemical contamination, all whether controlled or uncontrolled,
and
whether such loss be direct or indirect, proximate or remote or be
in whole
or
in part caused by, contributed to or aggravated by a peril covered
by
the
definition of the term "Special Hazard Loss";
(e) hostile or warlike action in time of peace and war,
including
action in hindering, combating or defending against an actual,
impending or
expected attack:
1. by any government or sovereign power, de jure or de facto,
or by any authority maintaining or using military, naval or air
forces; or
2. by military, naval or air forces; or
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3. by an agent of any such government, power, authority or
forces;
(f) any weapon of war employing nuclear fission, fusion or
other
radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped power
or
action
taken by governmental authority in hindering, combating or
defending
against such an occurrence, seizure or destruction under
quarantine
or customs regulations, confiscation by order of any government
or public
authority, or risks of contraband or illegal transportation or
trade.
Special
Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $7,149,649. With respect to any Distribution
Date after the
first Distribution Date, the lesser of (a) the greatest of (i) 1%
of the
aggregate of the principal balances of the Mortgage Loans, (ii)
twice the
principal balance of the largest Mortgage Loan and (iii) the
aggregate of the
principal balances of all Mortgage Loans secured by Mortgaged
Properties located
in the single California postal zip code area having the highest
aggregate
principal balance of any such zip code area and (b) the Special
Hazard Loss
Coverage Amount as of the Closing Date less the amount, if any, of
Special
Hazard Losses allocated to the Certificates since the Closing Date.
All
principal balances for the purpose of this definition will be
calculated as of
the first day of the calendar month preceding the month of such
Distribution
Date after giving effect to Scheduled Payments on the Mortgage
Loans then due,
whether or not paid.
Special
Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.
Startup
Day: The Closing Date.
Stated
Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid
principal balance of such Mortgage Loan as of such Due Date, as
specified in the
amortization schedule at the time relating thereto (before any
adjustment to
such amortization schedule by reason of any moratorium or similar
waiver or
grace period) after giving effect to the sum of: (i) the payment of
principal
due on such Due Date and irrespective of any delinquency in payment
by the
related Mortgagor and (ii) any Liquidation Proceeds allocable to
principal
received in the prior calendar month and Principal Prepayments
received through
the last day of the Prepayment Period in which the Due Date occurs,
in each case
with respect to such Mortgage Loan.
Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing (as "servicing" is commonly
understood by
participants in the mortgage-backed securities market) of Mortgage
Loans but
performs one or more discrete functions identified in Item 1122(d)
of Regulation
AB with respect to the Mortgage Loans under the direction or
authority of the
Servicer or the Trustee, as the case may be.
Subordinate Pass-Through Rate: As to any Class of Subordinated
Certificates and the Interest Accrual Period for any Distribution
Date, a per
annum rate equal to (a) the sum of the following for each Loan
Group: the
product of (x) the Assumed Balance for each Loan Group immediately
prior to that
Distribution Date and (y) the Weighted Average Adjusted Net
Mortgage Rate of the
Mortgage Loans in that Loan Group divided by (b) the aggregate
Class Certificate
Balance of the Subordinated Certificates immediately prior to that
Distribution
Date.
Subordinated Certificates: As specified in the Preliminary
Statement.
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<PAGE>
Subordinated Percentage: As to any Distribution Date on or prior to
the
second Senior Termination Date and any Loan Group, 100% minus the
Senior
Percentage for the Senior Certificate Group relating to such Loan
Group for such
Distribution Date. As to any Distribution Date after the second
Senior
Termination Date, 100% minus the Senior Percentage for such
Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution Date and
Loan
Group, 100% minus the related Senior Prepayment Percentage for such
Distribution
Date.
Subordinated Principal Distribution Amount: As to any Distribution
Date
and Loan Group, the sum of the following with respect to each Loan
Group: (i)
the Subordinated Percentage of all amounts described in clauses (a)
through (d)
of the definition of Principal Amount with respect to such Loan
Group and such
Distribution Date, (ii) with respect to any Mortgage Loan in the
related Loan
Group that became a Liquidated Mortgage Loan during the calendar
month preceding
the month of such Distribution Date, the amount of Liquidation
Proceeds
allocable to principal received with respect thereto remaining
after application
thereof pursuant to clause (ii) of the definition of Senior
Principal
Distribution Amount for that Loan Group, up to the related
Subordinated
Percentage of the Stated Principal Balance of such Mortgage Loan
and (iii) the
sum of the Subordinated Prepayment Percentage of the amounts
described in
clauses (f) and (g) of the definition of Principal Amount with
respect to that
Loan Group for such Distribution Date; provided, however, that on
any
Distribution Date after the second Senior Termination Date, the
Subordinated
Principal Distribution Amount will not be calculated by Loan Group
but will
equal the amount calculated pursuant to the formula set forth above
based on the
applicable Subordinated Percentage and Subordinated Prepayment
Percentage for
the Subordinated Certificates for such Distribution Date with
respect to all of
the Mortgage Loans as opposed to the Mortgage Loans only in the
related Loan
Group.
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, provided that any such Substitute Mortgage Loan with a
remaining term to maturity greater than that of the Deleted
Mortgage
Loan may not exceed 5% of the Cut-off Date Pool Principal
Balance;
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(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.
Suspension
Notification: Notification to the Commission of the suspension
of the Trust Fund's obligation to file reports pursuant to Section
15(d) of the
Exchange Act.
Targeted
Balance: Not applicable.
Targeted
Principal Classes: As specified in the Preliminary Statement.
Transaction Documents: This Agreement and any other document or
agreement
entered into in connection with the Trust Fund, the Certificates or
the Mortgage
Loans.
Transfer:
Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer
Payment Made: As defined in Section 4.03.
Transfer
Payment Received: As defined in Section 4.03.
Trust
Fund: The corpus of the trust created under this Agreement
consisting of
(i) the
Mortgage Loans and all interest and principal received on them
after the Cut-off Date, other than amounts due on the Mortgage
Loans by the
Cut-off Date;
(ii) the
Certificate Account, the Distribution Account and all amounts
deposited therein pursuant to this Agreement (including amounts
received from
the Seller on the Closing Date that will be deposited by the
Trustee in the
Certificate Account pursuant to Section 2.01);
(iii)
property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure, or otherwise;
(iv) the
right to collect any amounts under any mortgage insurance
policies covering any Mortgage Loan and any collections received
under any
mortgage insurance policies covering any Mortgage Loan;
(v) 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).
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<PAGE>
Trustee
Fee Rate: 0.0045% per annum.
The terms
"United States," "State," and "International Organization" have
the meanings in section 7701 of the Code or successor provisions. A
corporation
will not be treated as an instrumentality of the United States or
of any State
or political subdivision thereof for these purposes if all of its
activities are
subject to tax and, with the exception of the Federal Home Loan
Mortgage
Corporation, a majority of its board of directors is not selected
by such
government unit.
UCC: The
Uniform Commercial Code for the State of New York.
Undercollateralized Group: As defined in Section 4.03.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41,
67 Fed.
Reg. 54487 (2002) (or any successor thereto), or any substantially
similar
administrative exemption granted by the U.S. Department of
Labor
United
States Person or U.S. Person:
(i) A
citizen or resident of the United States;
(ii) a
corporation (or entity treated as a corporation for tax
purposes)
created or organized in the United States or under the laws of the
United States
or of any state thereof, including, for this purpose, the District
of Columbia;
(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.
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 Holder of the Class
A-R
Certificates, (b) 1% of all Voting Rights shall be allocated to the
Holder of
the Class 1-A-X Certificates and (c) the remaining Voting Rights
shall be
allocated among Holders of the remaining Classes of Offered
Certificates in
proportion to the Certificate Balances of the respective
Certificates on the
date.
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<PAGE>
Weighted
Average Adjusted Net Mortgage Rate: For any Distribution Date
and
Loan Group, the average of the Adjusted Net Mortgage Rate of each
Mortgage Loan
in that Loan Group, 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).
Weighted
Average Initial Adjustment Date: Not applicable.
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,
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
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<PAGE>
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. Also on the
Closing Date
the Depositor shall deposit $200 into the Certificate Account for
the benefit of
the Class P-1 and Class P-2 Certificates.
(b) The
Depositor, concurrently with the execution and delivery of this
Agreement, hereby transfers to the Trustee for the benefit of
the
Certificateholders, without recourse, all the interest of the
Depositor in the
Trust Fund, together with the Depositor's right to require the
Seller to cure
any breach of a representation or warranty made in this Agreement
by the Seller
or to repurchase or substitute for any affected Mortgage Loan in
accordance with
this Agreement.
(c) In
connection with the transfer and assignment of each Mortgage
Loan,
the Depositor has delivered (or, in the case of the Delay Delivery
Mortgage
Loans, will deliver to the Trustee within the time periods
specified in the
definition of Delay Delivery Mortgage Loans), for the benefit of
the
Certificateholders the following documents or instruments with
respect to each
Mortgage Loan so assigned:
(i) The original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the
order of _______________ ______________without recourse," with
all
intervening endorsements showing a complete chain of
endorsement
from the originator to the Person endorsing the Mortgage Note
(each
endorsement being sufficient to transfer all interest of the
party
so endorsing, as noteholder or assignee thereof, in that
Mortgage
Note) or a lost note affidavit for any Lost Mortgage Note from
the
Seller stating that the original Mortgage Note was lost or
destroyed, together with a copy of the Mortgage Note.
(ii) Except as provided below and for each Mortgage Loan that
is not a MERS Mortgage Loan, the original recorded Mortgage or
a
copy of such Mortgage certified by the Seller as being a true
and
complete copy of the Mortgage (or, in the case of a Mortgage
for
which the related Mortgaged Property is located in the
Commonwealth
of Puerto Rico, a true copy of the Mortgage certified as such by
the
applicable notary) and in the case of each MERS Mortgage 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
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<PAGE>
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).
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
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.
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<PAGE>
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 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.
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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)
Notwithstanding the foregoing, however, for administrative
convenience
and facilitation of servicing and to reduce closing costs, the
assignments of
Mortgage shall not be required to be submitted for recording
(except with
respect to any Mortgage Loan located in Maryland) unless such
failure to record
would, as certified to the Trustee in writing by the Servicer,
result in a
withdrawal or a downgrading by any Rating Agency of the rating on
any Class of
Certificates; provided, however, that each assignment of Mortgage
shall be
submitted for recording by the Seller (at the direction of the
Servicer) in
the manner described above, at no expense to the Trust Fund or the
Trustee,
upon the earliest to occur of: (i) reasonable direction by the
Holders of
Certificates entitled to at least 25% of the Voting Rights, (ii)
the
occurrence of a bankruptcy, insolvency or foreclosure relating to
the Seller,
(iii) the occurrence of a servicing transfer as described in
Section 7.02
hereof and (iv) if the Seller is not the Servicer and with respect
to any one
assignment or Mortgage, the occurrence of a bankruptcy, insolvency
or
foreclosure relating to the Mortgagor under the related
Mortgage.
Notwithstanding the foregoing, if the Servicer is unable to pay the
cost of
recording the assignments of Mortgage, such expense shall be paid
by the
Trustee and shall be reimbursable out of the Distribution
Account.
(e) The
Seller agrees to treat the transfer of the Mortgage Loans to
the
Depositor as a sale for all tax, accounting, and regulatory
purposes.
(f) The
Trust Fund does not intend to acquire or hold any Mortgage Loan
that would violate the representations made by the Seller set forth
in clause
(27) of Schedule III.
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.
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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.
By the
thirtieth day after the Closing Date (or if that day is not a
Business Day, the succeeding Business Day), the Trustee shall
deliver to the
Depositor, the Servicer, and the Seller a Delay Delivery
Certification with
respect to the Mortgage Loans substantially in the form of Exhibit
G-2, with any
applicable exceptions noted thereon.
By the
ninetieth day after the Closing Date (or if that day is not a
Business Day, the succeeding Business Day), the Trustee shall
deliver to the
Depositor, the Servicer and the Seller a Final Certification with
respect to the
Mortgage Loans in the form of Exhibit H, with any applicable
exceptions noted
thereon.
If, in the
course of its review, the Trustee finds any document
constituting a part of a Mortgage File that does not meet the
requirements of
Section 2.01, the Trustee shall list such as an exception in the
Final
Certification. The Trustee shall not make any determination as to
whether (i)
any endorsement is sufficient to transfer all interest of the party
so
endorsing, as noteholder or assignee thereof, in that Mortgage Note
or (ii) any
assignment is in recordable form or is sufficient to effect the
assignment of
and transfer to the assignee thereof under the mortgage to which
the assignment
relates. The Seller shall promptly correct any defect that
materially and
adversely affects the interests of the Certificateholders within 90
days from
the date it was so notified of the defect and, if the Seller does
not correct
the defect within that period, the Seller shall either (a)
substitute for the
related Mortgage Loan a Substitute Mortgage Loan, which
substitution shall be
accomplished in the pursuant Section 2.03, or (b) purchase the
Mortgage Loan at
its Purchase Price from the Trustee within 90 days from the date
the Seller was
notified of the defect in writing.
If a
substitution or purchase of a Mortgage Loan pursuant to this
provision is required because of a delay in delivery of any
documents by the
appropriate recording office, or there is a dispute between either
the Servicer
or the Seller and the Trustee over the location or status of the
recorded
document, then the substitution or purchase shall occur within 720
days from the
Closing Date. In no other case may a substitution or purchase occur
more than
540 days from the Closing Date.
Any
substitution shall not be effected before the delivery to the
Trustee
of the Opinion of Counsel, if required by Section 2.05, and any
substitution
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.
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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
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
(27) and
(32) 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
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will be retained by the Seller on the next succeeding Distribution
Date. For the
month of substitution, distributions to Certificateholders will
include the
monthly payment due on any Deleted Mortgage Loan for such month and
thereafter
the Seller shall be entitled to retain all amounts received in
respect of such
Deleted Mortgage Loan.
The
Servicer shall amend the Mortgage Loan Schedule for the benefit of
the
Certificateholders to reflect the removal of the Deleted Mortgage
Loan and the
substitution of the Substitute Mortgage Loans and the Servicer
shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon the
substitution, the
Substitute Mortgage Loans shall be subject to this Agreement in all
respects,
and the Seller shall be deemed to have made with respect to the
Substitute
Mortgage Loans, as of the date of 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 and shall not be waived by the
Depositor.
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 ("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
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third party, provided however, in no case shall the Servicer be
obligated to
repurchase a Mortgage Loan on account of EPD Rights unless and
until the
Servicer shall have previously received repurchase payment from a
third party.
The Servicer shall deposit into the Certificate Account all amounts
received in
connection with the enforcement of EPD Rights, not exceeding the
Purchase Price,
with respect to any Mortgage Loan. Any amounts received by the
Servicer with
respect 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
File Release
from the Servicer, shall release or cause to be released to the
purchaser of
such Mortgage Loan the related Mortgage File and shall execute and
deliver such
instruments of transfer or assignment prepared by the purchaser of
such Mortgage
Loan, in each case without recourse, as shall be necessary to vest
in the
purchaser of such Mortgage Loan any Mortgage Loan released pursuant
hereto and
the purchaser of such Mortgage Loan shall succeed to all the
Trustee's right,
title and interest in and to such Mortgage Loan and all security
and documents
related thereto. Such assignment shall be an assignment outright
and not for
security. The purchaser of such Mortgage Loan shall thereupon own
such Mortgage
Loan, and all security and documents, free of any further
obligation to the
Trustee or the Certificateholders with respect thereto.
Section
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
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same terms and conditions, as it would a Mortgage Loan repurchased
for breach of
a representation or warranty contained in Section 2.03.
Section
2.06 Execution and Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the
Trust
Fund and, concurrently with such transfer and assignment, has
executed and
delivered to or upon the order of the Depositor, the Certificates
in authorized
denominations evidencing directly or indirectly the entire
ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise
the rights
referred to above for the benefit of all present and future Holders
of the
Certificates.
Section
2.07 REMIC Matters.
The
Preliminary Statement sets forth the designations and "latest
possible
maturity date" for federal income tax purposes of all interests
created under
this Agreement. The "Startup Day" for purposes of the REMIC
Provisions shall be
the Closing Date. Each REMIC's fiscal year shall be the calendar
year.
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ARTICLE THREE
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section
3.01 Servicer to Service Mortgage Loans.
For and on
behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in accordance with this Agreement
and the
Servicing Standard.
The
Servicer shall not make or permit any modification, waiver, or
amendment of any term of any Mortgage Loan that would cause any
REMIC created
under this Agreement to fail to qualify as a REMIC or result in the
imposition
of any tax under section 860F(a) or section 860G(d) of the
Code.
Without
limiting the generality of the foregoing, the Servicer, in its
own
name or in the name of the Depositor and the Trustee, is hereby
authorized and
empowered by the Depositor and the Trustee, when the Servicer
believes it
appropriate in its reasonable judgment, to execute and deliver, on
behalf of the
Trustee, the Depositor, the Certificateholders, or any of them, any
instruments
of satisfaction or cancellation, or of partial or full release or
discharge, and
all other comparable instruments, with respect to the Mortgage
Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the
Depositor or
the Trustee any documents requiring execution and delivery by
either or both of
them appropriate to enable the Servicer to service and administer
the Mortgage
Loans to the extent that the Servicer is not permitted to execute
and deliver
such documents pursuant to the preceding sentence. Upon receipt of
the
documents, the Depositor or the Trustee shall execute the documents
and deliver
them to the Servicer.
The Servicer
further is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name, when
the Servicer
believes it appropriate in its best judgment to register any
Mortgage Loan on
the MERS(R) System, or cause the removal from the registration of
any Mortgage
Loan on the MERS(R) System, to execute and deliver, on behalf of
the Trustee and
the Certificateholders or any of them, any and all instruments of
assignment and
other comparable instruments with respect to such assignment or
re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee
and its
successors and assigns.
In
accordance with and to the extent of the Servicing Standard,
the
Servicer shall advance funds necessary to effect the payment of
taxes and
assessments on the Mortgaged Properties, which advances shall be
reimbursable in
the first instance from related collections from the Mortgagors
pursuant to
Section 3.07, and further as provided in Section 3.09. The costs
incurred by the
Servicer in effecting the timely payments of taxes and assessments
on the
Mortgaged Properties and related insurance premiums shall not, for
the purpose
of calculating monthly distributions to the Certificateholders, be
added to the
Stated Principal Balances of the related Mortgage Loans,
notwithstanding that
the Mortgage Loans so permit.
Nothing in
this Agreement to the contrary shall limit the Servicer from
undertaking any legal action that it may deem appropriate with
respect to the
Mortgage Loans including, without limitation, any rights or causes
of action
arising out of the origination of the Mortgage Loans.
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Section
3.02 [Reserved].
Section
3.03 Rights of the Depositor and the Trustee in Respect of the
Servicer.
The
Depositor may, but is not obligated to, enforce the obligations of
the
Servicer under this Agreement and may, but is not obligated to,
perform, or
cause a designee to perform, any defaulted obligation of the
Servicer under this
Agreement and in connection with any such defaulted obligation to
exercise the
related rights of the Servicer under this Agreement; provided that
the Servicer
shall not be relieved of any of its obligations under this
Agreement by virtue
of such performance by the Depositor or its designee. Neither the
Trustee nor
the Depositor shall have any responsibility or liability for any
action or
failure to act by the Servicer nor shall the Trustee or the
Depositor be
obligated to supervise the performance of the Servicer under this
Agreement or
otherwise.
Section
3.04 [Reserved].
Section
3.05 Trustee to Act as Servicer.
If the
Servicer for any reason is no longer the Servicer under this
Agreement (including because of the occurrence or existence of an
Event of
Default or termination by the Depositor), the Trustee or its
successor shall
assume all of the rights and obligations of the Servicer under this
Agreement
arising thereafter (except that the Trustee shall not be
(i) liable for losses of the Servicer pursuant to Section 3.10
or
any acts
or omissions of the predecessor Servicer hereunder,
(ii) obligated to make Advances if it is prohibited from doing so
by
applicable
law,
(iii) obligated to effectuate repurchases or substitutions of
Mortgage
Loans hereunder, including repurchases or substitutions
pursuant
to Section
2.02 or 2.03,
(iv) responsible for expenses of the Servicer pursuant to
Section
2.03,
or
(v) deemed to have made any representations and warranties of
the
Servicer
hereunder). Any assumption shall be subject to Section 7.02.
Notwithstanding anything else in this Agreement to the contrary, in
no
event shall the Trustee be liable for any servicing fee or for any
differential
in the amount of the Servicing Fee paid under this Agreement and
the amount
necessary to induce any successor Servicer to act as successor
Servicer under
this Agreement and the transactions provided for in this
Agreement.
Section
3.06 Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account.
(a) In
accordance with and to the extent of the Servicing Standard,
the
Servicer shall make reasonable efforts in accordance with the
customary and
usual standards of practice of prudent mortgage servicers to
collect all
payments called for under the Mortgage Loans to the extent the
procedures are
consistent with this Agreement and any related Required Insurance
Policy.
Consistent with the foregoing, the Servicer may in its discretion
(i) waive any
late payment charge or, subject to Section 3.20, any Prepayment
Charge in
connection with the prepayment of a Mortgage Loan and (ii) extend
the due dates
for payments due on a Delinquent Mortgage Loan for a period not
greater than 125
days. In connection with a seriously delinquent or defaulted
Mortgage Loan, the
Servicer may, consistent with the Servicing
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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 (i) 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
Prepayment Interest Excess and 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;
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(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 than
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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) The
Servicer shall give notice to the Trustee, the Seller, each
Rating
Agency and the Depositor of any proposed change of the location of
the
Certificate Account not later than 30 days and not more than 45
days prior to
any change of this Agreement. The Trustee shall give notice to the
Servicer, the
Seller, each Rating Agency and the Depositor of any proposed change
of the
location of the Distribution Account not later than 30 days and not
more than 45
days prior to any change of this Agreement.
Section
3.07 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
(a) To the
extent required by the related Mortgage Note and not violative
of current law, the Servicer shall establish and maintain one or
more accounts
(each, an "Escrow Account") and deposit and retain therein all
collections from
the Mortgagors (or advances) for the payment of taxes, assessments,
hazard
insurance premiums or comparable items for the account of the
Mortgagors.
Nothing herein shall require the Servicer to compel a Mortgagor to
establish an
Escrow Account in violation of applicable law.
(b)
Withdrawals of amounts so collected from the Escrow Accounts may
be
made only to effect timely payment of taxes, assessments, hazard
insurance
premiums, condominium or PUD association dues, or comparable items,
to reimburse
(without duplication) the Servicer out of related collections for
any payments
made pursuant to Section 3.01 (with respect to taxes and
assessments and
insurance premiums) and Section 3.10 (with respect to hazard
insurance), to
refund to any Mortgagors any sums determined to be overages, to pay
interest, if
required by law or the related Mortgage or Mortgage Note, to
Mortgagors on
balances in the Escrow Account or to clear and terminate the Escrow
Account at
the termination of this Agreement in accordance with Section 9.01.
The Escrow
Accounts shall not be a part of the Trust Fund.
(c) The
Servicer shall advance any payments referred to in Section
3.07(a)
that are not timely paid by the Mortgagors or advanced by the
Servicer on the
date when the tax, premium or other cost for which such payment is
intended is
due, but the Servicer shall be required so to advance only to the
extent that
such advances, in the good faith judgment of the Servicer, will be
recoverable
by the Servicer out of Insurance Proceeds, Liquidation Proceeds or
otherwise.
Section
3.08 Access to Certain Documentation and Information Regarding
the
Mortgage Loans.
The
Servicer shall afford the Depositor and the Trustee reasonable
access
to all records and documentation regarding the Mortgage Loans and
all accounts,
insurance information and other matters relating to this Agreement,
such access
being afforded without charge, but only upon reasonable request and
during
normal business hours at the office designated by the Servicer.
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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 servicing compensation,
earnings
on or investment income with respect to funds in or credited to
the
Certificate Account;
(ii) to reimburse the Servicer or successor Servicer for the
unreimbursed Advances made by it, such right of reimbursement
pursuant to
this
subclause (ii) being limited to amounts received on the
Mortgage
Loans in
respect of which the Advance was made;
(iii) to reimburse the Servicer or successor Servicer for any
Nonrecoverable Advance previously made by it;
(iv) to reimburse the Servicer for Insured Expenses from the
related
Insurance
Proceeds;
(v) to reimburse the Servicer for (a) unreimbursed Servicing
Advances,
the Servicer's right to reimbursement pursuant to this clause
(a) with
respect to any Mortgage Loan being limited to amounts received
on
the
Mortgage Loans that represent late recoveries of the payments
for
which the
advances were made pursuant to Section 3.01 or Section 3.07,
(b)
unreimbursed Servicing Advances made in respect of a Mortgage Loan
for
which such
Servicing Advances are not recoverable from the Mortgagor and
(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;
(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
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<PAGE>
(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 third paragraph of
Section 8.11). In
addition, the Trustee may from time to time make withdrawals from
the
Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution
Date;
(ii) to withdraw and return to the Servicer any amount deposited
in
the
Distribution Account and not required to be deposited therein;
and
(iii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01.
Section
3.10 Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.
(a) The
Servicer shall maintain, for each Mortgage Loan, hazard
insurance
with extended coverage in an amount that is at least equal to the
lesser of
(i) the
maximum insurable value of the improvements securing the
Mortgage
Loan and
(ii) the
greater of (y) the outstanding principal balance of the
Mortgage
Loan and (z) an amount such that the proceeds of the policy are
sufficient to
prevent the Mortgagor or the mortgagee from becoming a
co-insurer.
Each
policy of standard hazard insurance shall contain, or have an
accompanying endorsement that contains, a standard mortgagee
clause. Any amounts
collected under the policies (other than the amounts to be applied
to the
restoration or repair of the related Mortgaged Property or amounts
released to
the Mortgagor in accordance with the Servicer's normal servicing
procedures)
shall be deposited in the Certificate Account. Any cost incurred in
maintaining
any insurance shall not, for the purpose of calculating monthly
distributions to
the Certificateholders or remittances to the Trustee for their
benefit, be added
to the principal balance of the Mortgage Loan, notwithstanding that
the Mortgage
Loan so permits. Such costs shall be recoverable by the Servicer
out of late
payments by the related Mortgagor or out of Liquidation Proceeds to
the extent
permitted by Section 3.09. No earthquake or other additional
insurance is to be
required of any Mortgagor or maintained on property acquired in
respect of a
Mortgage other than pursuant to any applicable laws and regulations
in force
that require additional insurance. If the Mortgaged Property is
located at the
time of origination of the Mortgage Loan in a federally designated
special flood
hazard area and the area is participating in the national flood
insurance
program, the Servicer shall maintain flood insurance for the
Mortgage Loan. The
flood insurance shall be in an amount equal to the least of (i) the
original
principal balance of the related Mortgage Loan, (ii) the
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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.
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
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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 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
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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
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
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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.
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
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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 subject any Mortgage File or any funds that are deposited
in the
Certificate Account, Distribution Account, or any Escrow Account,
or any funds
that otherwise are or may become due or payable to the Trustee for
the benefit
of the Certificateholders, to any claim, lien, security interest,
judgment,
levy, writ of attachment, or other encumbrance, or assert by legal
action or
otherwise any claim or right of setoff against any Mortgage File or
any funds
collected on, or in connection with, a Mortgage Loan, except,
however, that the
Servicer shall be entitled to set off against and deduct from any
such funds any
amounts that are properly due and payable to the Servicer under
this Agreement.
Section
3.15 Servicing Compensation.
The
Servicer may retain or withdraw from the Certificate Account
the
Servicing Fee for each Mortgage Loan for the related Distribution
Date. If the
Servicer directly services a Mortgage Loan, the Servicer may retain
the
Servicing Fee for its own account as compensation for performing
services.
Notwithstanding the foregoing, the Servicing Fee payable to the
Servicer shall
be reduced by the lesser of the aggregate of the Prepayment
Interest Shortfalls
with respect to the Distribution Date and the aggregate
Compensating Interest
for the Distribution Date.
Additional
servicing compensation in the form of Excess Proceeds,
Prepayment Interest Excess, assumption fees, late payment charges
and all income
net of any losses realized from Permitted Investments shall be
retained by the
Servicer to the extent not required to be deposited in the
Certificate Account
pursuant to Section 3.06. The Servicer shall be required to pay all
expenses
incurred by it in connection with its servicing activities
hereunder (including
the payment of any premiums for hazard insurance, and any Primary
Insurance
Policy and maintenance of the other forms of insurance coverage
required by this
Agreement) and shall not be entitled to reimbursement therefor
except as
specifically provided in this Agreement.
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Section 3.16
Access to Certain Documentation.
The
Servicer shall provide to the OTS and the FDIC and to
comparable
regulatory authorities supervising Holders of Certificates and
Certificate
Owners and the examiners and supervisory agents of the OTS, the
FDIC, and such
other authorities, access to the documentation regarding the
Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Access
shall be
afforded without charge, but only upon reasonable prior written
request and
during normal business hours at the offices designated by the
Servicer. Nothing
in this Section 3.16 shall limit the obligation of the Servicer to
observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors
and the failure of the Servicer to provide access as provided in
this Section
3.16 as a result of such obligation shall not constitute a breach
of this
Section 3.16.
Section
3.17 Annual Statement as to Compliance.
(a) By
March 15 of each year, commencing with 2008, the Servicer shall
deliver to the Trustee via electronic mail
(DBSEC.Notifications@db.com) and the
Depositor an Officer's Certificate signed by two Servicing Officers
stating, as
to each signer thereof, that (i) a review of the activities of the
Servicer
during the preceding calendar year (or applicable portion thereof)
and of the
performance of the Servicer under this Agreement has been made
under such
officer's supervision, and (ii) to the best of such officer's
knowledge, based
on the review, the Servicer has fulfilled all its obligations under
this
Agreement, in all material respects throughout the year (or
applicable portion
thereof), or, if there has been a failure to fulfill any obligation
in any
material respect, specifying each failure known to the officer and
the nature
and status thereof.
(b)
[Reserved].
(c) Copies
of such statement shall be provided by the Trustee to any
Certificateholder or Certificate Owner upon request at the
Servicer's expense,
provided such statement is delivered by the Servicer to the
Trustee.
Section
3.18 Errors and Omissions Insurance; Fidelity Bonds.
The
Servicer shall obtain and maintain in force (a) policies of
insurance
covering errors and omissions in the performance of its obligations
as Servicer
hereunder and (b) a fidelity bond covering its officers, employees,
and agents.
Each policy and bond shall, together, comply with the requirements
from time to
time of FNMA or FHLMC for persons performing servicing for mortgage
loans
purchased by FNMA or FHLMC. If any policy or bond ceases to be in
effect, the
Servicer shall obtain a comparable replacement policy or bond from
an insurer or
issuer meeting the above requirements as of the date of the
replacement.
Section
3.19 Notification of Adjustments.
On each
Adjustment Date, the Servicer shall make interest rate
adjustments
for each Mortgage Loan in compliance with the requirements of the
related
Mortgage and Mortgage Note and applicable regulations. The Servicer
shall
execute and deliver the notices required by each Mortgage and
Mortgage Note and
applicable regulations regarding interest rate adjustments. The
Servicer also
shall provide timely notification to the Trustee of all applicable
data and
information regarding such interest rate adjustments and the
Servicer's methods
of implementing such interest rate adjustments. Upon the discovery
by the
Servicer or the Trustee that the Servicer has failed to adjust or
has
incorrectly adjusted a Mortgage Rate or a monthly payment pursuant
to the terms
of the related Mortgage Note and Mortgage, the Servicer shall
immediately
deposit in the Certificate Account from its own funds the amount of
any
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loss caused thereby without reimbursement therefor; provided,
however, the
Servicer shall not be liable with respect to any interest rate
adjustments made
by any servicer prior to the Servicer.
Section
3.20 Prepayment Charges.
(a) The
Servicer will not waive any part of any Prepayment Charge
unless
the waiver relates to a default or a reasonably foreseeable
default, the
Prepayment Charge would cause an undue hardship to the related
borrower, the
Mortgaged Property is sold by the Mortgagor, the collection of any
Prepayment
Charge would violate any relevant law or regulation or the waiving
of the
Prepayment Charge would otherwise benefit the Trust Fund and it is
expected that
the waiver would maximize recovery of total proceeds taking into
account the
value of the Prepayment Charge and related Mortgage Loan and doing
so is
standard and customary in servicing similar Mortgage Loans
(including any waiver
of a Prepayment Charge in connection with a refinancing of a
Mortgage Loan that
is related to a default or a reasonably foreseeable default). The
Servicer will
not waive a Prepayment Charge in connection with a refinancing of a
Mortgage
Loan that is not related to a default or a reasonably foreseeable
default.
(b) If a
Prepayment Charge is waived other than as permitted by the
prior
paragraph, then the Servicer is required to pay the amount of such
waived
Prepayment Charge, for the benefit of the Holders of the Class P-1
and Class P-2
Certificates, by depositing such amount into the Distribution
Account from its
own funds, without any right of reimbursement therefor, together
with and at the
time that the amount prepaid on the related Mortgage Loan is
required to be
deposited into the Distribution Account.
(c) The
Seller represents and warrants to the Depositor and the
Trustee,
as of the Closing Date, that the information in the Prepayment
Charge Schedule
(including the attached prepayment charge summary) is complete and
accurate in
all material respects at the dates as of which the information is
furnished and
each Prepayment Charge is permissible and enforceable in accordance
with its
terms under applicable state law, except as the enforceability
thereof is
limited due to acceleration in connection with a foreclosure or
other
involuntary payment.
(d) Upon
discovery by the Servicer or a Responsible Officer of the
Trustee
of a breach of the foregoing clause (c) that materially and
adversely affects
the right of the Holders of the Class P-1 and Class P-2
Certificates to any
Prepayment Charge, the party discovering the breach shall give
prompt written
notice to the other parties. Within 60 days of the earlier of
discovery by the
Servicer or receipt of notice by the Servicer of breach, the
Servicer shall cure
the breach in all material respects or shall pay into the
Certificate Account
the amount of the Prepayment Charge that would otherwise be due
from the
Mortgagor, less any amount representing such Prepayment Charge
previously
collected and paid by the Servicer into the Certificate
Account.
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ARTICLE FOUR
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
Section
4.01 Advances.
(a) The
Servicer shall determine on or before each Servicer Advance
Date
whether it is required to make an Advance pursuant to the
definition thereof. If
the Servicer determines it is required to make an Advance, it
shall, on or
before the Servicer Advance Date, either (i) deposit into the
Certificate
Account an amount equal to the Advance or (ii) make an appropriate
entry in its
records relating to the Certificate Account that any Amount Held
for Future
Distribution has been used by the Servicer in discharge of its
obligation to
make any such Advance. Any funds so applied shall be replaced by
the Servicer by
deposit in the Certificate Account no later than the close of
business on the
next Servicer Advance Date. The Servicer shall be entitled to be
reimbursed from
the Certificate Account for all Advances of its own funds made
pursuant to this
Section 4.01 as provided in Section 3.09. The obligation to make
Advances with
respect to any Mortgage Loan shall continue if such Mortgage Loan
has been
foreclosed or otherwise terminated and the Mortgaged Property has
not been
liquidated. The Servicer shall inform the Trustee of the amount of
the Advance
to be made on each Servicer Advance Date no later than the second
Business Day
before the related Distribution Date.
(b) If the
Servicer determines that it will be unable to comply with its
obligation to make the Advances as and when described in the second
sentence of
Section 4.01(a), it shall use its best efforts to give written
notice thereof to
the Trustee (each such notice an "Advance Notice"; and such notice
may be given
by telecopy), not later than 3:00 P.M., New York time, on the
Business Day
immediately preceding the related Servicer Advance Date, specifying
the amount
that it will be unable to deposit (each such amount an "Advance
Deficiency") and
certifying that such Advance Deficiency constitutes an Advance
hereunder and is
not a Nonrecoverable Advance. If the Trustee receives a Trustee
Advance Notice
on or before 3:00 P.M., New York time on a Servicer Advance Date,
the Trustee is
entitled to immediately terminate the Servicer under Section 7.01,
and shall,
not later than 3:00 P.M., New York time, on the related
Distribution Date,
deposit in the Distribution Account an amount equal to the Advance
Deficiency
identified in such Trustee Advance Notice unless it is prohibited
from so doing
by applicable law. Notwithstanding the foregoing, the Trustee shall
not be
required to make such deposit if the Trustee shall have received
written
notification from the Servicer that the Servicer has deposited or
caused to be
deposited in the Certificate Account an amount equal to such
Advance Deficiency
by 3:00 P.M. New York time on the related Distribution Date. If the
Trustee has
not terminated the Servicer, the Servicer shall reimburse the
Trustee for the
amount of any Advance (including interest at the Prime Rate on the
day of such
reimbursement published in The Wall Street Journal) on such amount,
made by the
Trustee pursuant to this Section 4.01(b) not later than the second
day following
the related Servicer Advance Date. In the event that the Servicer
does not
reimburse the Trustee in accordance with the requirements of the
preceding
sentence, the Trustee shall immediately (a) terminate all of the
rights and
obligations of the Servicer under this Agreement in accordance with
Section 7.01
and (b) subject to the limitations set forth in Section 3.05,
assume all of the
rights and obligations of the Servicer hereunder.
(c) The
Servicer shall, not later than the close of business on the
Business Day immediately preceding each Servicer Advance Date,
deliver to the
Trustee a report (in form and substance reasonably satisfactory to
the Trustee)
that indicates (i) the Mortgage Loans with respect to which the
Servicer has
determined that the related Scheduled Payments should be advanced
and (ii) the
amount of the related Scheduled Payments. The Servicer shall
deliver to the
Trustee on the related Servicer Advance Date an Officer's
Certificate of a
Servicing Officer indicating the amount of any proposed Advance
determined by
the Servicer to be a Nonrecoverable Advance.
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Section
4.02 Priorities of Distribution.
(a) (1
