EXHIBIT 99.1
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5
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INDYMAC MBS, INC.
Depositor
INDYMAC BANK, F.S.B.
Seller and Master Servicer
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2005
----------------------------------------
INDYMAC INDX MORTGAGE LOAN TRUST
2005-AR10
MORTGAGE PASS-THROUGH CERTIFICATES
Series 2005-AR10
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TABLE OF CONTENTS
Page
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ARTICLE ONE
DEFINITIONS...........................................................................................6
Section 1.01
Definitions............................................................................6
Section 1.02 Rules of
Construction.................................................................33
ARTICLE TWO CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND
WARRANTIES.........................................36
Section 2.01 Conveyance
of Mortgage
Loans..........................................................36
Section 2.02 Acceptance
by the Trustee of the Mortgage
Loans.......................................39
Section 2.03
Representations, Warranties, and Covenants of the Seller and the
Master
Servicer..............................................................................41
Section 2.04
Representations and Warranties of the Depositor as to the Mortgage
Loans..............42
Section 2.05 Delivery
of Opinion of Counsel in Connection with
Substitutions.......................43
Section 2.06 Execution and Delivery of
Certificates................................................43
Section 2.07 REMIC
Matters.........................................................................43
ARTICLE THREE ADMINISTRATION AND SERVICING
OF MORTGAGE
LOANS.....................................................44
Section 3.01 Master
Servicer to Service Mortgage
Loans.............................................44
Section 3.02
Subservicing; Enforcement of the Obligations of
Subservicers..........................44
Section 3.03 Rights of
the Depositor and the Trustee in Respect of the Master
Servicer.............45
Section 3.04 No
Contractual Relationship Between Subservicers and the
Trustee......................45
Section 3.05 Trustee to
Act as Master
Servicer.....................................................45
Section 3.06 Collection
of Mortgage Loan Payments; Servicing Accounts; Collection
Account;
Certificate Account; Distribution
Account.............................................46
Section 3.07 Collection
of Taxes, Assessments and Similar Items; Escrow
Accounts...................49
Section 3.08 Access to
Certain Documentation and Information Regarding the Mortgage
Loans..........50
Section 3.09 Permitted
Withdrawals from the Certificate Account and the Distribution
Account...............................................................................50
Section 3.10
Maintenance of Hazard Insurance; Maintenance of Primary Insurance
Policies............51
Section 3.11
Enforcement of Due-On-Sale Clauses; Assumption
Agreements.............................53
Section 3.12
Realization Upon Defaulted Mortgage
Loans.............................................54
Section 3.13 Trustee to
Cooperate; Release of Mortgage
Files.......................................56
Section 3.14 Documents,
Records and Funds in Possession of the Master Servicer to be
Held
for the
Trustee.......................................................................56
Section 3.15 Servicing
Compensation................................................................57
Section 3.16 Access to
Certain
Documentation.......................................................57
Section 3.17 Annual
Statement as to
Compliance.....................................................58
Section 3.18 Annual
Independent Public Accountants' Servicing Statement; Financial
Statements............................................................................58
Section 3.19 Errors and
Omissions Insurance; Fidelity
Bonds........................................58
Section 3.20
Notification of
Adjustments...........................................................58
i
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Section 3.21 Prepayment
Charges....................................................................59
ARTICLE FOUR DISTRIBUTIONS AND ADVANCES BY
THE MASTER
SERVICER...................................................60
Section 4.01
Advances..............................................................................60
Section 4.02 Priorities
of
Distribution............................................................61
Section 4.03
[Reserved]............................................................................64
Section 4.04 Allocation
of Net Deferred
Interest...................................................64
Section 4.05 Allocation
of Realized
Losses.........................................................64
Section 4.06 Monthly
Statements to
Certificateholders..............................................65
Section 4.07 Carryover
Shortfall Reserve
Fund......................................................67
Section 4.08
Determination of Pass-Through Rates for LIBOR
Certificates............................68
ARTICLE FIVE THE
CERTIFICATES....................................................................................70
Section 5.01 The
Certificates......................................................................70
Section 5.02
Certificate Register; Registration of Transfer and Exchange of
Certificates...........70
Section 5.03 Mutilated,
Destroyed, Lost or Stolen
Certificates.....................................74
Section 5.04 Persons
Deemed
Owners.................................................................74
Section 5.05 Access to
List of Certificateholders' Names and
Addresses.............................74
Section 5.06
Maintenance of Office or
Agency.......................................................75
ARTICLE SIX THE DEPOSITOR AND THE MASTER
SERVICER................................................................76
Section 6.01 Respective
Liabilities of the Depositor and the Master
Servicer.......................76
Section 6.02 Merger or
Consolidation of the Depositor or the Master
Servicer.......................76
Section 6.03 Limitation
on Liability of the Depositor, the Seller, the Master Servicer,
and
Others................................................................................76
Section 6.04 Limitation
on Resignation of the Master
Servicer......................................77
ARTICLE SEVEN
DEFAULT............................................................................................78
Section 7.01 Events of
Default.....................................................................78
Section 7.02 Trustee to
Act; Appointment of
Successor..............................................79
Section
7.03
Notification to
Certificateholders....................................................80
ARTICLE EIGHT CONCERNING THE
TRUSTEE.............................................................................81
Section 8.01 Duties of
the
Trustee.................................................................81
Section 8.02 Certain
Matters Affecting the
Trustee.................................................81
Section 8.03 Trustee
Not Liable for Certificates or Mortgage
Loans.................................83
Section 8.04 Trustee
May Own
Certificates..........................................................83
Section 8.05 Trustee's
Fees and
Expenses...........................................................83
Section 8.06
Eligibility Requirements for the
Trustee..............................................84
Section 8.07
Resignation and Removal of the
Trustee................................................84
Section 8.08 Successor
Trustee.....................................................................85
Section 8.09 Merger or
Consolidation of the
Trustee................................................85
Section 8.10
Appointment of Co-Trustee or Separate
Trustee.........................................86
Section 8.11 Tax
Matters...........................................................................87
Section 8.12 Periodic
Filings......................................................................89
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ARTICLE NINE
TERMINATION.........................................................................................91
Section 9.01
Termination upon Liquidation or Purchase of the Mortgage
Loans........................91
Section 9.02 Final
Distribution on the
Certificates................................................91
Section 9.03
Additional
Termination
Requirements...................................................93
ARTICLE TEN MISCELLANEOUS
PROVISIONS.............................................................................94
Section 10.01
Amendment.............................................................................94
Section 10.02 Recordation of
Agreement;
Counterparts................................................95
Section 10.03 Governing
Law.........................................................................96
Section 10.04 Intention of
Parties..................................................................96
Section 10.05
Notices...............................................................................96
Section 10.06 Severability of
Provisions............................................................97
Section 10.07
Assignment............................................................................97
Section 10.08 Limitation on
Rights of
Certificateholders............................................97
Section 10.09 Inspection and
Audit
Rights...........................................................98
Section 10.10 Certificates
Nonassessable and Fully
Paid.............................................98
Section 10.11 Official
Record.......................................................................98
Section 10.12 Protection of
Assets..................................................................99
Section 10.13 Qualifying
Special Purpose
Entity.....................................................99
iii
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SCHEDULES
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Schedule I:
Mortgage Loan
Schedule...................................................................S-I-1
Schedule II:
Representations and Warranties of the Seller/Master
Servicer............................S-II-1
Schedule III:
Representations and Warranties as to the Mortgage
Loans................................S-III-1
Schedule IV:
Form of Monthly
Report..................................................................S-IV-1
EXHIBITS
Exhibit A:
Form of Senior Certificate (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:
[Reserved].................................................................................F-1
Exhibit G-1:
Form of Initial Certification of
Trustee.................................................G-1-1
Exhibit G-2:
[Reserved]...............................................................................G-2-1
Exhibit G-3:
Form of Delay Delivery
Certification.....................................................G-3-1
Exhibit G-4:
[Reserved]...............................................................................G-4-1
Exhibit H-1:
Form of Final Certification of
Trustee...................................................H-1-1
Exhibit H-2:
[Reserved]...............................................................................H-2-1
Exhibit I:
Form of Transfer
Affidavit.................................................................I-1
Exhibit J:
Form of Transferor
Certificate.............................................................J-1
Exhibit K:
Form of Investment Letter (Non-Rule
144A)..................................................K-1
Exhibit L:
Form of Rule 144A
Letter...................................................................L-1
Exhibit M:
Form of Request for Release (for
Trustee)..................................................M-1
Exhibit N:
Request for Release of
Documents...........................................................N-1
Exhibit O:
Form of Trustee
Certification..............................................................O-1
iv
</TABLE>
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of May 1, 2005,
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 master
servicer (in that capacity, the "Master
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:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed
to the Trustee in return for the
Certificates. As provided in this Agreement,
the Trustee shall elect that the Trust Fund
(other than the Carryover
Shortfall Reserve Fund) be treated for
federal income tax purposes as
comprising two real estate mortgage
investment conduits (each, a "REMIC" or,
in the alternative, "REMIC 1" 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
1 Interests (other than the Class
R-2 Interest). REMIC 1 will hold as assets
all property of the Trust Fund
(other than the Carryover Shortfall Reserve
Fund). Each REMIC 1 Interest
(other than the Class R-1 Interest) is
hereby designated as a regular interest
in REMIC 1. The latest possible maturity
date of all REMIC regular interests
created in this Agreement shall be the
Latest Possible Maturity Date.
REMIC 1
The REMIC 1 Interests will have the initial
principal balances and
Pass-Through Rates as set forth in the
following table:
<TABLE>
<CAPTION>
Pass-
Initial Class
Through
REMIC 1 Interests
Certificate Balances(1)
Rate
Corresponding Certificates Classes
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<C>
<C>
1-A-1
(1)
(2)
A-1
1-A-2
(1)
(2)
A-2
1-A-3
(1)
(2)
A-3
1-B-1
(1)
(2)
B-1
1-B-2
(1)
(2)
B-2
1-B-3
(1)
(2)
B-3
1-B-4
(1)
(2)
B-4
1-B-5
(1)
(2)
B-5
1-B-6
(1)
(2)
B-6
1-B-7
(1)
(2)
B-7
1-B-8
(1)
(2)
B-8
1-B-9
(1)
(2)
B-9
1-B-10
(1)
(2)
B-10
1-Accrual
(1)
(2)
N/A
R-1
(3)
(3)
N/A
</TABLE>
1
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(1) On each Distribution Date, Principal
Amounts, Net Deferred Interest and
Realized Losses will be allocated to the
REMIC 1 Interests in such a manner
that, following such allocations: (i) the
principal balances of the REMIC 1
Interests (other than the Class 1-Accrual
Interest) will equal 50% of the
Certificate Balance of their Corresponding
Certificates for such Distribution
Date, and (iv) the Class 1-Accrual Interest
will have a principal balance
equal to 50% of the aggregate of the Stated
Principal Balances of the Mortgage
Loans (excluding any Net Deferred Interest)
plus 100% of all Net Deferred
Interest in respect of the Mortgage
Loans.
(2) The Weighted Average Adjusted Net
Mortgage Rate.
(3) The Class R-2 Interest is the sole
class of residual interest in REMIC 2.
It has no principal balance and pays no
principal or interest.
The Master REMIC
The following table sets forth the Class Designation, Initial
Class
Certificate Balance, Pass-Through Rate,
Minimum Denominations and Integral
Multiples in excess thereof in respect of
the Certificates, each of which
(other than the Class A-R Certificates) is
hereby designated a regular
interest in the Master REMIC, in which such
Classes shall be issuable (except
that one Certificate of each Class of
Certificates may be issued in a
different amount):
<TABLE>
<CAPTION>
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Initial Class Pass-Through
Minimum Integral
Multiples in
Class Designation Certificate Balance
Rate
Denomination Excess of
Minimum
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<C>
Class A-1
$556,513,900.00 Variable(1)
$
25,000
$1,000
Class A-2
$231,880,000.00 Variable(1)
$
25,000
$1,000
Class A-3
$139,128,000.00 Variable(1)
$
25,000
$1,000
Class A-X
Notional(2)
Variable(3) $ 25,000(4)
$1,000(4)
Class A-R
$100.00
Variable(5)
$ 100
N/A
Class B-1
$30,082,000.00 Variable(1)
$
25,000
$1,000
Class B-2
$11,030,000.00 Variable(1)
$
25,000
$1,000
Class B-3
$3,008,000.00 Variable(1)
$
25,000
$1,000
Class B-4
$8,022,000.00 Variable(1)
$
25,000
$1,000
Class B-5
$5,013,000.00
Variable(1)
$
25,000
$1,000
Class B-6
$2,006,000.00 Variable(1)
$
25,000
$1,000
Class B-7
$2,005,000.00 Variable(1)
$
25,000
$1,000
Class B-8
$4,513,000.00 Variable(1)
$ 100,000
$1,000
Class B-9
$6,016,000.00 Variable(1)
$ 100,000
$1,000
Class B-10
$3,510,016.37 Variable(1)
$ 100,000
$1,000
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</TABLE>
1. The Pass-Through Rate for
this Class of Certificates for any Interest
Accrual Period
for any Distribution Date will be a per annum rate equal
to the lesser of
(i) LIBOR plus the applicable Pass-Through Margin and
(ii) the Net WAC
Cap for that Distribution Date. Solely for federal
income tax
purposes, the Pass-Through Rate on the first Distribution Date
will equal the
fixed rate produced by the sum of LIBOR and the applicable
Pass-Through
Margin for such Distribution Date.
2
<PAGE>
2. The Class A-X Certificates
will be Notional Amount Certificates and will
bear interest on
their Notional Amount, which will be $1,002,727,016 for
the initial
Interest Accrual Period. The Class A-X Certificates will also
consist of a
principal-only Component with a Component Principal Balance
initially equal
to zero.
3. The Pass-Through Rate for
the Class A-X Certificates for any Interest
Accrual Period
for any Distribution Date will be the excess, if any, of
(i) the Weighted
Average Adjusted Net Mortgage Rate of the Mortgage Loans
over (ii) the
product of (a) the weighted average Pass-Through Rate on
the Certificates
(other than the Class A-X Certificates) (with the
Pass-Through
Rate of each Class of LIBOR Certificates for each applicable
Interest Accrual
Period multiplied by a fraction, the numerator of which
is the number of
days in the related Interest Accrual Period and the
denominator of
which is 30) and (b) a fraction, the numerator of which is
the aggregate
Class Certificate Balance of the Certificates (other than
the Class A-X
Certificates) immediately prior to such Distribution Date
and the
denominator of which is the aggregate Stated Principal Balance
of
the Mortgage
Loans as of the Due Date in the prior month (after giving
effect to
Principal Prepayments in the Prepayment Period related to that
prior Due Date).
For federal income tax purposes, the Pass-Through Rate
for the Class
A-X Certificates will equal the product of 2 and the
weighted average
of the Pass-Through Rates of the REMIC 1 Interests
(other than the
Class R-1 Interests), subjecting the Class 1-Accrual
Interest to a
cap equal to zero and the other such REMIC 1 Interests to a
cap equal to the
Pass-Through Rate in respect of the Corresponding
Certificate
Classes.
4. Minimum denomination is
based on the Notional Amount of such Class.
5. The Pass-Through Rate for
the Class A-R Certificates for any Interest
Accrual Period
for any Distribution Date will be the Weighted Average
Adjusted Net
Mortgage Rate of the Group 1 Mortgage Loans for that
Distribution
Date. The Class A-R Certificates shall represent the sole
class of
residual interest in the Master REMIC.
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 are calculated,
the
interest rate on the Mortgage Loans shall
be appropriately adjusted to account
for the difference between the monthly day
count convention of the Mortgage
Loans and the monthly day count convention
of the regular interests issued by
each of the REMICs. For purposes of
calculating the Pass-Through Rates for
each of the interests issued by each REMIC
(other than the Master REMIC)
created hereunder such rates shall be
adjusted to equal a monthly day count
convention based on a 30 day month for each
Due Period and a 360-day year so
that the Mortgage Loans and all regular
interests will be using the same
monthly day count convention.
Set forth below are designations of Classes
of Certificates to the categories
used in this Agreement:
<TABLE>
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Accretion Directed
Certificates.......................... None.
Accrual
Certificates..................................... None.
Book-Entry
Certificates.................................. All Classes of
Certificates other than the Physical
Certificates.
3
</TABLE>
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<TABLE>
<CAPTION>
<S>
<C>
COFI
Certificates........................................ None.
Components...............................................
Class A-X IO and Class A-X PO Components
Component
Certificates................................... Class A-X
Certificates.
Delay
Certificates....................................... The Class A-R
and Class A-X Certificates.
ERISA-Restricted
Certificates............................ The Residual
Certificates and the Private
Certificates; and Certificates of any Class that
ceases to satisfy the rating requirements of the
Underwriter's Exemption.
LIBOR
Certificates....................................... Class A-1, Class
A-2, Class A-3, Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5, Class B-6,
Class B-7, Class B-8, Class B-9 and Class B-10
Certificates.
Non-Delay
Certificates................................... LIBOR
Certificates.
Notional Amount
Certificates............................. Class A-X
Certificates.
Notional Amount
Components............................... Class A-X IO
Component.
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.
Principal Only
Components................................ Class A-X PO
Component.
Private
Certificates..................................... Class B-8, Class
B-9 and Class B-10 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.
Senior
Certificates...................................... Class A-1, Class
A-2, Class A-3, Class A-X and Class
A-R Certificates.
Subordinated
Certificates................................ Class B-1, Class
B-2, Class B-3, Class B-4,
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
Class B-5, Class B-6, Class B-7, Class B-8, Class
B-9 and Class B-10 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.
5
<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: With respect to any Accrual Certificates and
any
Distribution Date prior to the Accrual
Termination Date, the amount allocable
to interest on such Class of Accrual
Certificates with respect to such
Distribution Date pursuant to Section
4.02(a)(i).
Accrual Certificates:
As specified in the Preliminary Statement.
Accrual Termination Date: Not applicable.
Accrued Interest Amount: Not applicable.
Adjusted Cap Rate: The Class A-X Adjusted Cap Rate, Senior
Adjusted
Cap Rate or Subordinated Adjusted Cap Rate,
as applicable.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any time,
the
per annum rate equal to the Mortgage Rate
less the Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and any
Distribution Date, the per annum rate equal
to the Mortgage Rate of that
Mortgage Loan (as of the Due Date in the
month preceding the month in which
such Distribution Date occurs) less the
Expense Fee Rate for that Mortgage
Loan.
Adjustment Date: A date specified in each Mortgage Note as a date
on
which the Mortgage Rate on the related
Mortgage Loan is subject to adjustment.
Advance: The payment required to be made by the Master Servicer
with
respect to any Distribution Date pursuant
to Section 4.01, the amount of any
such payment being equal to the aggregate
of payments of principal and
interest (net of the Servicing Fee) on the
Mortgage Loans that were due during
the related Due Period and not received as
of the close of business on the
related Determination Date, together with
an amount equivalent to interest on
each REO Property, net of any net income
from such REO Property, less the
aggregate amount of any such delinquent
payments that the Master 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
6
<PAGE>
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 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 in the
Prepayment Period related to that prior
Due Date).
Agreement: This Pooling and Servicing Agreement and all
amendments
and supplements.
Amount Held for Future Distribution: As to any Distribution Date,
the
aggregate amount held in the Certificate
Account at the close of business on
the related Determination Date on account
of (i) Principal Prepayments
received after the last day of the related
Prepayment Period and Liquidation
Proceeds and Subsequent Recoveries received
in the month of such Distribution
Date and (ii) all Scheduled Payments due
after the related Due Date.
Applicable Credit Support Percentage: As defined in Section 4.02(e).
Appraised Value: With respect to any Mortgage Loan, the
Appraised
Value of the related Mortgaged Property
shall be: (i) with respect to a
Mortgage Loan other than a Refinance Loan,
the lesser of (a) the value of the
Mortgaged Property based upon the appraisal
made at the time of the
origination of such Mortgage Loan and (b)
the sales price of the Mortgaged
Property at the time of the origination of
such Mortgage Loan; and (ii) with
respect to a Refinance Loan, the value of
the Mortgaged Property based upon
the appraisal made at the time of the
origination of such Refinance Loan.
Available Funds: As to any Distribution Date, the sum of (a)
the
aggregate amount held in the Certificate
Account at the close of business on
the related Determination Date, including
any Subsequent Recoveries, net of
the Amount Held for Future Distribution,
net of Prepayment Charges and net of
amounts permitted to be withdrawn from the
Certificate Account pursuant to
clauses (i) - (viii), inclusive, of Section
3.09(a) and amounts permitted to
be withdrawn from the Distribution Account
pursuant to clauses (i) - (ii),
inclusive, of Section 3.09(b), (b) the
amount of the related Advance, (c) in
connection with Defective Mortgage Loans,
the aggregate of the Purchase Prices
and Substitution Adjustment Amounts
deposited on the related Distribution
Account Deposit Date, and (d) any amount
deposited on the related Distribution
Account Deposit Date pursuant to Section
3.10. The Holders of the Class A-X
Certificates will be entitled to all
Prepayment Charges received on the
Mortgage Loans and such amounts will not be
available for distribution to the
Holders of any other Class of
Certificates.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978,
as
amended.
Bankruptcy Coverage Termination Date: Not applicable.
Bankruptcy Loss: Not
applicable.
Bankruptcy Loss Coverage Amount: Not applicable.
Blanket Mortgage: The mortgage or mortgages encumbering a
Cooperative
Property.
7
<PAGE>
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.
Carryover Shortfall Amount: For the LIBOR Certificates and any
Distribution Date, the sum of:
(i) the
excess, if any, of the amount of interest to which such
Class would have been entitled to if the Pass-Through Rate
for such Class were calculated without regard to the Net WAC
Cap, over the actual amount of interest to which such Class
is entitled for such Distribution Date (in each case prior
to any reduction for Net Deferred Interest);
(ii)
any excess described in clause (i) above remaining unpaid
from prior Distribution Dates; and
(iii)
interest
for the applicable Interest Accrual Period on the
amount described in clause (ii) above based on the
Pass-Through Rate for the applicable Class of Certificates,
determined without regard to the Net WAC Cap.
Carryover Shortfall Reserve Fund: A fund created as part of the
Trust
Fund pursuant to Section 4.07 of this
Agreement but which is not an asset of
any of the REMICs.
Certificate: Any one of the certificates issued by the Trust Fund
and
executed by the Trustee in substantially
the forms attached as exhibits.
Certificate Account: The separate Eligible Account or Accounts
created and maintained by the Master
Servicer pursuant to Section 3.06(d) with
a depository institution in the name of the
Master 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 2005-AR10, Mortgage Pass-Through
Certificates, Series 2005-AR10."
Certificate Balance: With respect to any Certificate (other than
the
Notional Amount Certificates) at any date,
the maximum dollar amount of
principal to which the Holder thereof is
then entitled under this Agreement,
such amount being equal to the Denomination
thereof (A) plus any increases in
the Certificate Balance of such Certificate
pursuant to Section 4.02 due to
the receipt of Subsequent Recoveries, (B)
minus the sum of (i) all
distributions of principal previously made
with respect thereto and (ii) all
Realized Losses allocated to that
Certificate and, in the case of any
Subordinated Certificates, all other
reductions in Certificate Balance
previously allocated to that Certificate
pursuant to Section 4.05 and (C) in
the case of any Class of Accrual
Certificates, plus the Accrual Amount added
to the Class Certificate Balance of such
Class prior to such date, plus the
amount of Net Deferred Interest allocated
to such Class of Certificates
pursuant to Section 4.04 prior to the date
of determination. With respect to
the Class A-X Certificates at any date, the
Component Principal Balance of the
Class A-X PO Component as reduced by the
sum of (x) all amounts actually
distributed in respect of principal of such
Component on all prior
Distribution Dates and (y) all Realized
Losses allocated to such Component
prior to the date of determination, plus
any increases in the Component
Principal Balance of such Component
pursuant to Section 4.02 due to the
receipt of Subsequent Recoveries, plus the
amount of Net Deferred Interest
allocated to such Components prior to the
date of determination as set forth
in Section 4.04.
8
<PAGE>
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 Master Servicer, as
applicable.
Certificate Register: The register maintained pursuant to
Section
5.02.
Certificateholder or Holder: The person in whose name a
Certificate
is registered in the Certificate Register,
except that, solely for the purpose
of giving any consent pursuant to this
Agreement, any Certificate registered
in the name of the Depositor or any
affiliate of the Depositor is not
Outstanding and the Percentage Interest
evidenced thereby shall not be taken
into account in determining whether the
requisite amount of Percentage
Interests necessary to effect a consent has
been obtained, except that if the
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.
Class: All Certificates bearing the same class designation as
set
forth in the Preliminary Statement.
Class A-X IO Component: The interest-only component of the Class
A-X
Certificates.
Class A-X Adjusted Cap Rate: For the Class A-X IO Component for
any
Distribution Date, the excess, if any, of
(i) the Weighted Average Adjusted
Net Mortgage Rate of the Mortgage Loans
minus (1) the product of (a) the Net
Deferred Interest for the Mortgage Loans
for such Distribution Date, and (b)
12, divided by (2) the aggregate Stated
Principal Balance of the Mortgage
Loans 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) over (ii)
the product of (1) the weighted average
rate at which interest would have
accrued on the Classes of Certificates
(other than the Class A-X Certificates)
if the Pass-Through Rates for such Classes
were limited by the applicable
Adjusted Cap Rate rather than the Net WAC
Cap, adjusted for the related
Interest Accrual Period, and (2) a
fraction, the numerator of which is the
aggregate Class Certificate Balance of the
Certificates (other than the Class
A-X Certificates) immediately prior to such
Distribution Date and the
denominator of which is the aggregate
Stated Principal Balance of the Mortgage
Loans as of the Due Date in the prior month
(after giving effect to Principal
Prepayments in the Prepayment Period
related to that prior Due Date).
Class A-X PO Component: The principal-only component of the Class
A-X
Certificates.
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
interest-bearing 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) interest accrued
during the related Interest Accrual Period
at the Pass-Through Rate for such
Class, on the related Class Certificate
Balance or Notional Amount, as
applicable,
9
<PAGE>
immediately prior to such Distribution
Date, subject to reduction pursuant to
Section 4.02(d) reduced by any Net Deferred
Interest on the related Mortgage
Loans allocated to such Class of
Certificates, as described in Section 4.04
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 of the Class Certificate
Balances 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: May 6, 2005.
CMT Index: Not
applicable.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
COFI: Not
applicable.
COFI Certificates: Not
applicable.
Collection Account: As defined in Section 3.06(c).
Commission: The United
States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, 0.125%
multiplied
by one-twelfth multiplied by the aggregate
Stated Principal Balance of the
Mortgage Loans as of the first day of the
prior month.
Component Principal Balance: As of any date of determination,
the
Class A-X PO Component Principal Balance on
such date. The Class A-X PO
Component will have a Component Principal
Balance (initially, zero) equal to
(i) the aggregate Net Deferred Interest
allocated to such Component prior to
the date of determination pursuant to
Section 4.04 minus (ii) all amounts
actually distributed as principal of such
Component and all Realized Losses
applied in reduction of principal of such
Component prior to such date of
determination, plus, any increases in the
Class A-X PO Component Principal
Balance pursuant to Section 4.02 due to the
receipt of Subsequent Recoveries.
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.
10
<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:
Mortgage Administration-IN05AA
(IndyMac MBS, Inc., IndyMac INDX Mortgage
Loan Trust 2005-AR10, Mortgage
Pass-Through Certificates, Series
2005-AR10), and which is the address to
which notices to and correspondence with
the Trustee should be directed.
Cross-over Situation:
Not applicable.
Cut-off
Date: May 1, 2005.
Cut-off Date Pool Principal Balance: $1,002,727,016.
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.
Deferred Interest: With respect to each Mortgage Loan and each
related Due Date, the excess, if any, of
the amount of interest accrued on
such Mortgage Loan from the preceding Due
Date to such Due Date over the
monthly payment due or received for such
Due Date.
Deficient Valuation: For any Mortgage Loan, a valuation by a court
of
competent jurisdiction of the Mortgaged
Property in an amount less than the
then outstanding indebtedness under the
Mortgage Loan, or any reduction in the
amount of principal to be paid in
connection with any Scheduled Payment that
results in a permanent forgiveness of
principal, which valuation or reduction
results from an order of the court that is
final and non-appealable in a
proceeding under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical
Certificate and any Certificate issued in
lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As
specified in the Preliminary Statement.
Delay Delivery Certification: A certification substantially in
the
form of Exhibit G-3.
Delay Delivery Mortgage Loans: The Mortgage Loans identified on
the
Mortgage Loan Schedule for which all or a
portion of a related Mortgage File
is not delivered to the Trustee by the
Closing Date. The Depositor shall
deliver the Mortgage Files to the
Trustee:
11
<PAGE>
(A) for at least 70% of the Mortgage Loans, not later than the
Closing Date and
(B) for the remaining 30% of the Mortgage Loans, not later than
five
Business Days following the Closing
Date.
To the extent that the Seller is in possession of any Mortgage
File
for any Delay Delivery Mortgage Loan, until
delivery of the Mortgage File to
the Trustee as provided in Section 2.01,
the Seller shall hold the files as
Master 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 2005-AR10, Mortgage
Pass-Through Certificates, Series
2005-AR10." Funds in the Distribution
Account shall be held in trust for the
Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:30
P.M. Pacific time on the Business Day
preceding the Distribution Date.
Distribution Date: The 25th day of each calendar month after
the
initial issuance of the Certificates, or if
that day is not a Business Day,
the next Business Day, commencing in June
2005.
12
<PAGE>
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.
Eligible Account: Any of
(i) an account 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 the holding company, but
only if Moody's is not a Rating
Agency) have the highest short-term ratings
of each Rating Agency at the time
any amounts are held on deposit therein,
or
(ii) [reserved], or
(iii) a trust account or accounts maintained with the trust
department of a federal or state chartered
depository institution or 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: Not
applicable.
Excess Proceeds: For
any Liquidated Mortgage Loan, the excess of
(a) all Liquidation Proceeds from the Mortgage Loan received in
the
calendar month in which the Mortgage Loan
became a Liquidated Mortgage Loan,
net of any amounts previously reimbursed to
the Master 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.
13
<PAGE>
Exchange Act: The
Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, the sum of (a) the
related Servicing Fee Rate and (b) the
Trustee Fee Rate.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States
created and existing under Title III of
the Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is
designated
as a Rating Agency in the Preliminary
Statement, for purposes of Section
10.05(b) the address for notices to Fitch
shall be Fitch, Inc., One State
Street Plaza, New York, NY 10004,
Attention: MBS Monitoring - IndyMac
2005-AR10, or any other address Fitch
furnishes to the Depositor and the
Master 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.
Fraud Loan: Not
applicable.
Fraud Losses: Not
applicable.
Fraud Loss Coverage Amount: Not applicable.
Fraud Loss Coverage Termination Date: 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: Not applicable.
Initial LIBOR Rate: 3.089% per annum.
Insurance Policy: For any Mortgage Loan included in the Trust
Fund,
any insurance policy, including all riders
and endorsements thereto in effect,
including any replacement policy or
policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than
any amount included in such
Insurance Proceeds in respect of Insured
Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
any
other insurance policy with respect to the
Mortgage Loans.
Interest Accrual Period: With respect to each Class of Delay
Certificates and any Distribution Date, the
calendar month prior to the month
of such Distribution Date. With respect to
each Class of Subordinated
Certificates and any Distribution Date, the
period commencing on the 25th day
of the month preceding the month in which
such Distribution Date occurs (or,
in the case of the first Distribution Date,
the Closing Date) and ending on
the 24th day of the month in which such
Distribution Date occurs. The Delay
Certificates and the Subordinated
Certificates will accrue interest on the
basis of a 360-day year consisting of
twelve 30-day months. With respect to
the Class A-1, Class A-2 and Class A-3
Certificates
14
<PAGE>
and any Distribution Date, the period
commencing on the immediately preceding
Distribution Date (or, in the case of the
first Distribution Date, the Closing
Date) and ending on the day immediately
preceding that Distribution Date. The
Class A-1, Class A-2 and Class A-3
Certificates will accrue interest on the
basis of a 360-day year and the actual
number of days elapsed during the
related Interest Accrual Period.
Interest Determination Date: With respect to (a) any Interest
Accrual
Period for a Class of LIBOR Certificates
and (b) any Interest Accrual Period
for the COFI Certificates for which the
applicable Index is LIBOR, the second
Business Day prior to the first day of such
Interest Accrual Period.
Interest Rate: With respect to each REMIC 1 Interest, REMIC 2
Interest or Master REMIC Interest, the
applicable rate set forth or calculated
in the manner described in the Preliminary
Statement.
Interest Settlement Rate: As defined in Section 4.08.
Last Scheduled Distribution Date: The Distribution Date in the
month
immediately following the month of the
latest scheduled maturity date for any
of the Mortgage Loans.
Latest Possible Maturity Date: The Distribution Date following
the
third anniversary of the scheduled maturity
date of the Mortgage Loan having
the latest scheduled maturity date as of
the Cut-off Date.
Lender PMI Loans: Mortgage Loans with respect to which the
lender
rather than the borrower acquired the
primary mortgage guaranty insurance and
charged the related borrower an interest
premium.
LIBOR: The London interbank offered rate for one month United
States
dollar deposits calculated in the manner
described in Section 4.08.
LIBOR Determination Date: For any Interest Accrual Period, the
second
London Business Day prior to the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: For any Distribution Date, a
defaulted
Mortgage Loan (including any REO Property)
that was liquidated in the calendar
month preceding the month of the
Distribution Date and as to which the Master
Servicer has certified (in accordance with
this Agreement) that it has
received all amounts it expects to receive
in connection with the liquidation
of the Mortgage Loan, including the final
disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds
regardless of when received, received in
connection with the partial or
complete liquidation of defaulted Mortgage
Loans, whether through trustee's
sale, foreclosure sale, or otherwise or
amounts received in connection with
any condemnation or partial release of a
Mortgaged Property, and any other
proceeds received in connection with an REO
Property, less the sum of related
unreimbursed Servicing Fees, Servicing
Advances, and Advances.
Loan-to-Value Ratio: For any Mortgage Loan and as of any date
of
determination, is the fraction whose
numerator is the original principal
balance of the related Mortgage Loan at
that date of determination and whose
denominator is the Appraised Value of the
related Mortgaged Property.
London Business Day: Any day on which dealings in deposits of
United
States dollars are transacted in the London
interbank market.
15
<PAGE>
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.
Master Servicer: IndyMac Bank, F.S.B., a federal savings bank,
and
its successors and assigns, in its capacity
as master servicer under this
Agreement.
Master Servicer Advance Date: As to any Distribution Date, 12:30
P.M.
Pacific time on the Business Day preceding
the Distribution Date.
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.
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
Master Servicer.
Mortgage: The mortgage, deed of trust, or other instrument creating
a
first lien on an estate in fee simple or
leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan
and any additional documents
delivered to the Trustee to be added to the
Mortgage File pursuant to this
Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
assigned
to the Trustee pursuant to this Agreement,
as from time to time are held as a
part of the Trust Fund (including any REO
Property), the Mortgage Loans so
held being identified on the Mortgage Loan
Schedule, notwithstanding
foreclosure or other acquisition of title
of the related Mortgaged Property.
16
<PAGE>
Mortgage Loan Schedule: As of any date, the list set forth in
Schedule I of Mortgage Loans included in
the Trust Fund on that date. The
Mortgage Loan Schedule shall be prepared by
the Seller and shall set forth the
following information with respect to each
Mortgage Loan:
(i) the loan
number;
(ii)
the street address of
the Mortgaged Property,
including the zip code;
(iii) the
maturity date;
(iv)
the original principal balance;
(v) the
Cut-off Date Principal Balance;
(vi)
the first payment date of the Mortgage Loan;
(vii) the
Scheduled Payment in effect as of the Cut-off
Date;
(viii) the 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 first
Payment Adjustment Date after the Cut-off
Date;
(xi)
a code indicating when the Mortgage Index 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;
17
<PAGE>
(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; and
(xxiv) a code
indicating whether the Mortgage Loan is a
MERS Mortgage Loan.
The schedule shall also set forth the total
of the amounts described under (v)
above for all of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
the
indebtedness of a Mortgagor under a
Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note
from time to time (net of the interest
premium for any Lender PMI Loan).
Mortgaged Property: The underlying property securing a Mortgage
Loan,
which, with respect to a Cooperative Loan,
is the related Co-op Shares and
Proprietary Lease.
Mortgagor: The
obligors on a Mortgage Note.
MTA: The twelve-month average of the monthly yields on U.S.
Treasury
Securities adjusted to a constant maturity
of one year as published by the
Federal Reserve Board in Statistical
Release H. 15(519) calculated in the
manner described in Section 4.09.
National Cost of Funds Index: The National Monthly Median Cost
of
Funds Ratio to SAIF-Insured Institutions
published by the OTS.
Net Deferred Interest: With respect to each Distribution Date,
the
excess, if any, of the amount of Deferred
Interest that accrued on the
Mortgage Loans from the preceding Due Date
to the Due Date in the month of
such Distribution Date, over any Principal
Prepayment Amount for the Mortgage
Loans during the related Prepayment
Period.
Net Interest Shortfall: With respect to any Distribution Date,
an
amount equal to any Net Prepayment Interest
Shortfalls for that Distribution
Date and the amount of interest that would
otherwise have been received with
respect to any Mortgage Loan that was the
subject of a Relief Act Reduction.
Net Prepayment Interest Shortfall: As to any Distribution Date,
the
amount, if any, by which the aggregate of
Prepayment Interest Shortfalls
exceeds the Compensating Interest for such
Distribution Date.
Net Prepayments: As to any Distribution Date, the amount equal to
the
excess, if any, of the (i) Principal
Prepayment Amount over (ii) the aggregate
amount of Deferred Interest accrued on the
Mortgage Loans from the preceding
Due Date to the Due Date related to that
Distribution Date.
Net WAC Cap: For any Distribution Date, the Weighted Average
Adjusted
Net Mortgage Rate of the Mortgage Loans for
that Distribution Date.
Non-Delay Certificates: As specified in the Preliminary
Statement.
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<PAGE>
Nonrecoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Master Servicer,
that, in the good faith judgment
of the Master Servicer, will not be
ultimately recoverable by the Master
Servicer from the related Mortgagor,
related Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant
to
Section 9.02 to the effect that final
distribution on any of the Certificates
shall be made only upon presentation and
surrender thereof.
Notional Amount: With respect to the Class A-X Certificates and
immediately prior to any Distribution Date,
the aggregate of the Stated
Principal Balances of the Mortgage Loans as
of the Due Date in the prior month
after giving effect to Principal
Prepayments in the Prepayment Period related
to that prior Due Date.
Notional Amount Certificates: As specified in the Preliminary
Statement.
Notional Amount Component: 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 Master
Servicer, or (ii) if provided for
in this Agreement, signed by a Servicing
Officer, as the case may be, and
delivered to the Depositor and the Trustee
as required by this Agreement.
Opinion of Counsel: For the interpretation or application of
the
REMIC Provisions, a written opinion of
counsel who (i) is in fact independent
of the Depositor and the Master Servicer,
(ii) does not have any direct
financial interest in the Depositor or the
Master Servicer or in any affiliate
of either, and (iii) is not connected with
the Depositor or the Master
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 Master 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, as of the
Closing Date:
Class B-1.................................... 7.50%
Class B-2.................................... 4.50%
Class B-3.................................... 3.40%
Class B-4.................................... 3.10%
Class B-5.................................... 2.30%
Class B-6.................................... 1.80%
Class B-7.................................... 1.60%
Class B-8.................................... 1.40%
Class B-9.................................... 0.95%
Class B-10................................... 0.35%
19
<PAGE>
Original
Mortgage Loan: The Mortgage Loan refinanced in connection
with the origination of a Refinance
Loan.
Original Subordinated Principal Balance: The aggregate of the
Class
Certificate Balances of the Subordinated
Certificates as of the Closing Date.
OTS: The Office of
Thrift Supervision.
Outside Reference Date: Not applicable.
Outstanding: For the Certificates as of any date of
determination,
all Certificates theretofore executed and
authenticated under this Agreement
except:
(i)
Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii)
Certificates in exchange for which or in lieu of
which other Certificates have been executed and
delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a
Stated Principal Balance greater than zero
that was not the subject of a
Principal Prepayment in Full before the Due
Date or during the related
Prepayment Period and that did not become a
Liquidated Mortgage Loan before
the Due Date.
Overcollateralized Group: Not applicable.
Ownership Interest: As to any Residual Certificate, any
ownership
interest in the Certificate including any
interest in the Certificate as its
Holder and any other interest therein,
whether direct or indirect, legal or
beneficial.
Pass-Through Margin: For each Class of LIBOR Certificates for
the
Interest Accrual Period related to any
Distribution Date, as follows:
(1)
(2)
----------
----------
Class A-1................................ 0.260%
0.520%
Class A-2................................ 0.290%
0.580%
Class A-3................................ 0.340%
0.680%
Class B-1................................ 0.520%
0.780%
Class B-2................................ 0.590%
0.885%
Class B-3................................ 0.650% 0.975%
Class B-4................................ 0.950%
1.425%
Class B-5................................ 1.850%
2.775%
Class B-6 and Class B-7.................. 2.000%
3.000%
Class B-8, Class B-9 and Class B-10...... 2.000%
4.000%
20
<PAGE>
----------
(1) For the Interest Accrual Period for each Distribution Date
occurring on or prior to the Optional Termination Date.
(2) For each other Interest Accrual Period.
Pass-Through Rate: For each Class of Certificates, the per annum
rate
set forth or calculated in the manner
described in the Preliminary Statement.
Payment Adjustment Date: A date specified in each Mortgage Note as
a
date on which the Scheduled Payment for the
related Mortgage Loan is subject
to adjustment.
Payment Cap: For each Mortgage Loan, the percentage limit set
forth
in the related Mortgage Note concerning the
maximum permitted increase in a
monthly payment.
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.
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;
21
<PAGE>
(vi) guaranteed reinvestment agreements issued by any bank,
insurance
company, or other corporation acceptable to
the Rating Agencies at the time of
the issuance of the agreements, as
evidenced by a signed writing delivered by
each Rating Agency;
(vii) repurchase obligations with respect to any security
described
in clauses (i) and (ii) above, in either
case entered into with a depository
institution or trust company (acting as
principal) described in clause (iv)
above; provided that such repurchase
obligation would be accounted for as a
financing arrangement under generally
accepted accounting principles;
(viii)
securities (other than stripped bonds, stripped coupons, or
instruments sold at a purchase price in
excess of 115% of their face amount)
bearing interest or sold at a discount
issued by any corporation incorporated
under the laws of the United States or any
state thereof that, at the time of
the investment, have one of the two highest
ratings of each Rating Agency
(except if the Rating Agency is Moody's the
rating shall be the highest
commercial paper rating of Moody's for the
securities), or any lower rating
that will not result in the downgrading,
qualification or withdrawal of the
ratings then assigned to the Certificates
by the Rating Agencies, as evidenced
by a signed writing delivered by each
Rating Agency and that have a maturity
date occurring no more than 365 days from
their date of issuance;
(ix) units of a taxable money-market portfolio having the
highest
rating assigned by each Rating Agency
(except (i) if Fitch is a Rating Agency
and has not rated the portfolio, the
highest rating assigned by Moody's and
(ii) if S&P is a Rating Agency, "AAAm"
or "AAAM-G" by S&P) and restricted to
obligations issued or guaranteed by the
United States of America or entities
whose obligations are backed by the full
faith and credit of the United States
of America and repurchase agreements
collateralized by such obligations; and
(x) any other investments bearing interest or sold at a
discount
acceptable to each Rating Agency that will
not result in the downgrading,
qualification or withdrawal of the ratings
then assigned to the Certificates
by the Rating Agencies, as evidenced by a
signed writing delivered by each
Rating Agency.
No Permitted Investment may (i) evidence the right to receive
interest-only payments with respect to the
obligations underlying the
instrument, (ii) be sold or disposed of
before its maturity or (iii) be any
obligation of the Seller or any of its
Affiliates. Any Permitted Investment
shall be relatively risk free and no
options or voting rights shall be
exercised with respect to any Permitted
Investment. Any Permitted Investment
shall be sold or disposed 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 cooperative described in
section
1381(a)(2)(C) of the Code,
22
<PAGE>
(v) an "electing large partnership" as defined in section 775 of
the
Code,
(vi) a Person that is not a U.S. Person, and
(vii) any other Person so designated by the Depositor based on
an
Opinion of Counsel that the Transfer of an
Ownership Interest in a Residual
Certificate to the Person may cause any
REMIC created under this Agreement 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 Prepayment
Charge Schedule.
Prepayment Charge Period: As to any Mortgage Loan, the period of
time
during which a Prepayment Charge may be
imposed.
Prepayment Charge Schedule: As of any date, the list of
Prepayment
Charges included in the Trust Fund on that
date (including the prepayment
charge summary attached thereto). The
Prepayment Charge Schedule shall set
forth the following information with
respect to each Prepayment Charge:
o
the Mortgage Loan account number;
o
a code indicating the type of Prepayment Charge;
o
the state of origination in which the related
Mortgage Property is located;
o
the first date on which a monthly payment is or was
due under the related Mortgage Note;
o
the term of the Prepayment Charge;
o
the original principal
amount of the related
Mortgage Loan; and
o
the Cut-off Date Principal Balance of the related
Mortgage Loan.
The Prepayment Charge Schedule shall be amended from time to time
by
the Master Servicer in accordance with this
Agreement.
Prepayment Interest Excess: As to any Principal Prepayment
received
by the Master Servicer on a Mortgage Loan
from the first day through the
fifteenth day of any calendar month
23
<PAGE>
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
Master Servicer as additional master
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, the sum of (a)
all
monthly payments of principal due on each
Mortgage Loan on the related Due
Date, (b) the principal portion of the
Purchase Price of each Mortgage Loan
that was repurchased by the Seller pursuant
to this Agreement as of such
Distribution Date, excluding any Mortgage
Loan that was repurchased due to a
modification of the Mortgage Rate, (c) the
Substitution Adjustment Amount in
connection with any Deleted Mortgage Loan
received with respect to such
Distribution Date, (d) any Insurance
Proceeds or Liquidation Proceeds
allocable to recoveries of principal of
Mortgage Loans that are not yet
Liquidated Mortgage Loans received during
the calendar month preceding the
month of such Distribution Date, (e) with
respect to each Mortgage Loan that
became a Liquidated Mortgage Loan 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 Net
Prepayments on the Mortgage Loans received
during the related Prepayment
Period and (g) any Subsequent Recoveries
with respect to the Mortgage Loans
received during the calendar month
preceding the month of such Distribution
Date.
Principal Balance Schedules: Not applicable.
Principal Deficiency Amount: Not applicable.
Principal Only Certificates: As specified in the Preliminary
Statement.
Principal Only Component: The Class A-X PO Component.
Principal Prepayment: Any payment of principal by a Mortgagor on
a
Mortgage Loan (including the principal
portion of the Purchase Price of any
Mortgage Loan purchased pursuant to Section
3.12) that is received in advance
of its scheduled Due Date and is not
accompanied by an amount representing
scheduled interest due on any date in any
month after the month of prepayment.
The Master Servicer shall apply partial
Principal Prepayments in accordance
with the related Mortgage Note.
Principal Prepayment Amount: As to any Distribution Date, an
amount
equal to the sum of all voluntary Principal
Prepayments on the Mortgage Loans
received during the related Prepayment
Period.
24
<PAGE>
Principal Prepayment in Full: Any Principal Prepayment made by
a
Mortgagor of the entire principal balance
of a Mortgage Loan.
Principal Relocation Payment: Not applicable.
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 of the Class Certificate
Balances 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 May 4,
2005,
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 Master Servicer
pursuant to Section 3.12, the sum of
(i) 100% of the unpaid principal balance of the Mortgage Loan on
the
date of the purchase,
(ii) accrued and unpaid interest on the Mortgage Loan at the
applicable Mortgage Rate (or at the
applicable Adjusted Mortgage Rate if (x)
the purchaser is the Master Servicer or (y)
if the purchaser is the Seller and
the Seller is the Master 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 Master 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 Master 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.
25
<PAGE>
Rating
Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If any of them or a
successor is no longer in
existence, "Rating Agency" shall be the
nationally recognized statistical
rating organization, or other comparable
Person, designated by the Depositor,
notice of which designation shall be given
to the Trustee. References to a
given rating or rating category of a Rating
Agency means the rating category
without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an
amount (not less than zero or more than the
Stated Principal Balance of the
Mortgage Loan) as of the date of such
liquidation, equal to (i) the Stated
Principal Balance of the Liquidated
Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the
Adjusted Net Mortgage Rate from the Due
Date as to which interest was last paid or
advanced (and not reimbursed) to
Certificateholders up to the Due Date in
the month in which Liquidation
Proceeds are required to be distributed on
the Stated Principal Balance of
such Liquidated Mortgage Loan from time to
time, minus (iii) the Liquidation
Proceeds, if any, received during the month
in which such liquidation
occurred, to the extent applied as
recoveries of interest at the Adjusted Net
Mortgage Rate and to principal of the
Liquidated Mortgage Loan. With respect
to each Mortgage Loan that has become the
subject of a Deficient Valuation, if
the principal amount due under the related
Mortgage Note has been reduced, the
difference between the principal balance of
the Mortgage Loan outstanding
immediately prior to such Deficient
Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient
Valuation. With respect to each
Mortgage Loan that has become the 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 Master Servicer receives Subsequent Recoveries
with
respect to any Mortgage Loan, the amount of
the Realized Loss with respect to
that Mortgage Loan will be reduced by such
Subsequent Recoveries.
Recognition Agreement: For any Cooperative Loan, an agreement
between
the Cooperative Corporation and the
originator of the Mortgage Loan that
establishes the rights of the originator in
the Cooperative Property.
Record Date: With respect to any Distribution Date and any
Definitive
Certificate and the Delay Certificates, the
close of business on the last
Business Day of the month preceding the
month of that Distribution Date. With
respect to any Distribution Date and the
LIBOR Certificates as long as they
are Book-Entry Certificates, the Business
Day immediately prior to such
Distribution Date.
Reference
Bank: As defined in
Section 4.08.
Refinance Loan: Any Mortgage Loan the proceeds of which are used
to
refinance an Original Mortgage Loan.
Regular Certificates: As specified in the Preliminary
Statement.
Relief Act: The Servicemembers Civil Relief Act and any similar
state
and local laws.
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, 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.
26
<PAGE>
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.
Request for Release: The Request for Release submitted by the
Master
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.
Required Reserve Fund Deposit: With respect to the Class A-X IO
Component and any Distribution Date, an
amount equal to the lesser of (i) the
amount calculated pursuant to clause (i) of
the definition of Class Optimal
Interest Distribution Amount for the Class
A-X IO Component for such
Distribution Date and (ii) the amount, if
any, required to bring the balance
on deposit in the Carryover Shortfall
Reserve Fund up to an amount equal to
the greater of (a) the aggregate remaining
Carryover Shortfall Amount for such
Distribution Date with respect to the LIBOR
Certificates and (b) $1,000.
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.
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 Master 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.
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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 Adjusted Cap Rate: For the Class A-1, Class A-2 and Class
A-3
Certificates and any Distribution Date, the
Weighted Average Adjusted Net
Mortgage Rate of the Mortgage Loans for
that Distribution Date, minus (A) (1)
the product of (a) the Net Deferred
Interest for such Distribution Date, and
(b) 12, divided by (2) the aggregate Stated
Principal Balance of the Mortgage
Loans 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), and in
the case of the first Interest Accrual
Period only, adjusted for the related
Interest Accrual Period.
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 Distribution Date, the percentage
equivalent of a fraction, the numerator of
which is the aggregate of the Class
Certificate Balances and Component
Principal Balances of each Class of Senior
Certificates immediately before the
Distribution Date and the denominator of
which is the aggregate Stated Principal
Balance of the Mortgage Loans 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 Mortgage
Loans in the Prepayment Period related to
such prior Due Date).
Senior Prepayment Percentage: As to any Distribution Date during
the
ten years beginning on the first
Distribution Date, 100%. The Senior
Prepayment Percentage for any Distribution
Date occurring on or after the
tenth anniversary of the first Distribution
Date will, except as provided in
this Agreement, be as follows: for any
Distribution Date in the first year
thereafter, the Senior Percentage plus 70%
of the Subordinated Percentage for
such Distribution Date; for any
Distribution Date in the second year
thereafter, the Senior Percentage plus 60%
of the related Subordinated
Percentage for such Distribution Date; for
any Distribution Date in the third
year thereafter, the Senior Percentage plus
40% of the Subordinated Percentage
for such Distribution Date; for any
Distribution Date in the fourth year
thereafter, the Senior Percentage plus 20%
of the related Subordinated
Percentage for such Distribution Date; and
for any Distribution Date
thereafter, the Senior Percentage for such
Distribution Date (unless on any
Distribution Date the Senior Percentage
exceeds the initial Senior Percentage
in which case the Senior Prepayment
Percentage for such Distribution Date will
once again equal 100%). Notwithstanding the
foregoing, no decrease in the
Senior Prepayment Percentage will occur
unless both Senior Step Down
Conditions are satisfied with respect to
the Mortgage Loans. Notwithstanding
the foregoing, if (x) on or before the
Distribution Date in May 2008, the
Aggregate Subordinated Percentage is at
least 200% of the Aggregate
Subordinated Percentage as of the Closing
Date, the delinquency test set forth
in clause (i) of the definition of Senior
Step Down Conditions is satisfied
and cumulative Realized Losses do not
exceed 20% of the Original Subordinated
Principal Balance, the Senior Prepayment
Percentage will equal the Senior
Percentage for that Distribution Date plus
50% of the Subordinated Percentage
for that Distribution Date and (y) after
the Distribution Date in May 2008,
the Aggregate Subordinated Percentage is at
least 200% of the Aggregate
Subordinated Percentage as of the Closing
Date, the delinquency test set forth
in clause (i) of the definition of Senior
Step Down Conditions is satisfied
and
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<PAGE>
cumulative Realized Losses do not exceed
30% of the Original Subordinate
Principal Balance, the Senior Prepayment
Percentage will equal the Senior
Percentage for that Distribution Date.
Senior Principal Distribution Amount: As to any Distribution
Date,
the sum of (i) the Senior Percentage of all
amounts described in clauses (a)
through (d) of the definition of Principal
Amount for that 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 Senior Percentage of
the Stated Principal Balance of
such Mortgage Loan and (y) the Senior
Prepayment Percentage of the amount of
the Liquidation Proceeds allocable to
principal received on the Mortgage Loan,
and (iii) the Senior Prepayment Percentage
of the amounts described in clauses
(f) and (g) of the definition of Principal
Amount for such Distribution Date.
Senior Step Down Conditions: As to any Distribution Date: (i)
the
outstanding 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 mortgagers of which are in bankruptcy),
as a percentage of the aggregate
Class Certificate Balance of the
Subordinated Certificates, does not equal or
exceed 50%, and (ii) cumulative Realized
Losses do not exceed: (a) commencing
with the Distribution Date on the tenth
anniversary of the first Distribution
Date, 30% of the Original Subordinated
Principal Balance, (b) commencing with
the Distribution Date on the eleventh
anniversary of the first Distribution
Date, 35% of the Original Subordinated
Principal Balance, (c) commencing with
the Distribution Date on the twelfth
anniversary of the first Distribution
Date, 40% of the Original Subordinated
Principal Balance, (d) commencing with
the Distribution Date on the thirteenth
anniversary of the first Distribution
Date, 45% of the Original Subordinated
Principal Balance, and (e) commencing
with the Distribution Date on the
fourteenth anniversary of the first
Distribution Date and thereafter, 50% of
the Original Subordinated Principal
Balance.
Servicing Account: The separate Eligible Account or Accounts
created
and maintained pursuant to Section
3.06(b).
Servicing Advances: All customary, reasonable, and necessary "out
of
pocket" costs and expenses incurred in the
performance by the Master Servicer
of its servicing obligations, including the
cost of
(a) the preservation, restoration, and protection of a
Mortgaged Property,
(b) expenses reimbursable to the Master 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 Master 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.
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<PAGE>
Servicing Fee: As to each Mortgage Loan and any Distribution
Date,
one month's interest at the applicable
Servicing Fee Rate on the Stated
Principal Balance of the Mortgage Loan, or,
whenever a payment of interest
accompanies a Principal Prepayment in Full
made by the Mortgagor, interest at
the Servicing Fee Rate on the Stated
Principal Balance of the Mortgage Loan
for the period covered by the payment of
interest, subject to reduction as
provided in Section 3.15.
Servicing Fee Rate:
For each Mortgage Loan, 0.375% per annum.
Servicing Officer: Any officer of the Master 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 Master 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
Master Servicer with respect to mortgage
loans comparable to the Mortgage
Loans serviced by the Master Servicer for
itself or others.
Shift Percentage: Not applicable.
Special Hazard Coverage Termination Date: Not applicable.
Special Hazard Loss:
Not applicable.
Special Hazard Loss Coverage Amount: Not applicable.
Special Hazard Mortgage Loan: Not applicable.
Startup Day: The
Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date,
the
unpaid principal balance of such Mortgage
Loan as of such Due Date, as
specified in the amortization schedule at
the time relating thereto (before
any adjustment to such amortization
schedule by reason of any moratorium or
similar waiver or grace period) after
giving effect to the sum of: (i) the
payment of principal due on such Due Date
and irrespective of any delinquency
in payment by the related Mortgagor and
(ii) any Liquidation Proceeds
allocable to principal received in the
prior calendar month and any Principal
Prepayments received through the last day
of the related Prepayment Period, in
each case, with respect to such Mortgage
Loan and increased by any Deferred
Interest added to the principal balance of
that Mortgage Loan on or prior to
such Due Date.
Subordinated Adjusted Cap Rate: For the Subordinated Certificates
for
any Distribution Date, the Weighted Average
Adjusted Net Mortgage Rate of the
Mortgage Loans minus (A) the product of (1)
the Net Deferred Interest for the
Mortgage Loans for such Distribution Date,
and (2) 12, divided by (B) the
aggregate Stated Principal Balance of the
Mortgage Loans 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), as adjusted for the
applicable Interest Accrual Period.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordinated Percentage: As to any Distribution Date, 100% minus
the
related Senior Percentage for such
Distribution Date.
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<PAGE>
Subordinated Prepayment Percentage: For any Distribution Date,
100%
minus the Senior Prepayment Percentage for
such Distribution Date.
Subordinated Principal Distribution Amount: As to any
Distribution
Date and the Subordinated Certificates, the
sum of the following: (i) the
Subordinated Percentage of all amounts
described in clauses (a) through (d) of
the definition of Principal Amount with
respect to 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
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, up to the Subordinated
Percentage of the Stated Principal Balance
of such Mortgage Loan, and (iii)
the Subordinated Prepayment Percentage of
the amounts described in clauses (f)
and (g) of the definition of Principal
Amount with respect to such
Distribution Date.
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
Master Servicer (net of any related
expenses permitted to be reimbursed
pursuant to Section 3.09) specifically
related to such Liquidated Mortgage
Loan.
Subservicer: As
defined in Section 3.02(a).
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 negative amortization limit, payment
adjustment
intervals and recast intervals as that of
the deleted Mortgage Loan;
(v) have the same index and Payment Cap as the deleted Mortgage
Loan
and a Gross Margin not more than 1% per
annum higher than, and not lower than
that of the deleted Mortgage Loan;
(vi) have a Loan-to-Value Ratio no higher than that of the
Deleted
Mortgage Loan;
(vii) have a remaining term to maturity no greater than (and not
more
than one year less than) that of the
Deleted Mortgage Loan;
(viii) not be a Cooperative Loan unless the Deleted Mortgage Loan
was
a Cooperative Loan; and
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<PAGE>
(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.
Transfer: Any direct or indirect transfer or sale of any
Ownership
Interest in a Residual Certificate.
Trust Fund: The corpus of the trust created under this
Agreement
consisting of
(i) the Mortgage Loans and all interest and principal received
on
them after the Cut-off Date, other than
amounts due on the Mortgage Loans by
the Cut-off Date;
(ii) the
Certificate Account, the Distribution Account, the Carryover
Shortfall Reserve Fund and all amounts
deposited therein pursuant to this
Agreement (including amounts received from
the Seller on the Closing Date that
will be deposited by the Trustee in the
Certificate Account pursuant to
Section 2.01);
(iii) property that secured a Mortgage Loan and has been acquired
by
foreclosure, deed-in-lieu of foreclosure,
or otherwise;
(iv) the right to collect any amounts under any mortgage
insurance
policies covering any Mortgage Loan and any
collections received under any
mortgage insurance policies covering any
Mortgage Loan; and
(v) all proceeds of the conversion, voluntary or involuntary, of
any
of the foregoing.
Trustee: Deutsche Bank National Trust Company and its successors
and,
if a successor trustee is appointed under
this Agreement, the successor.
Trustee Fee: The fee payable to the Trustee on each Distribution
Date
for its services as Trustee hereunder, in
an amount equal to one-twelfth of
the Trustee Fee Rate multiplied by the
aggregate Stated Principal Balance of
the Mortgage Loans as of the Due Date in
the month preceding the month of such
Distribution Date (after giving effect to
Principal Prepayments in the
Prepayment Period related to that prior Due
Date).
Trustee Fee Rate:
0.0020% per annum.
The terms "United States," "State," and "International
Organization"
have the meanings in section 7701 of the
Code or successor provisions. A
corporation will not be treated as an
instrumentality of the United States or
of any State or political subdivision
thereof for these purposes if all of its
activities are subject to tax and, with the
exception of the Federal Home Loan
Mortgage Corporation, a majority of its
board of directors is not selected by
such government unit.
UCC: The Uniform
Commercial Code for the State of New York.
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<PAGE>
Undercollateralized Group: Not applicable.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41,
67
Fed. Reg. 54487 (2002) (or any successor
thereto), or any substantially
similar administrative exemption granted by
the U.S. Department of Labor
United States Person or U.S. Person:
(i) A citizen or resident of the United States;
(ii) a corporation (or entity treated as a corporation for tax
purposes) created or organized in the
United States or under the laws of the
United States or of any state thereof,
including, for this purpose, the
District of Columbia;
(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 each Class of
Notional Amount Certificates (the Voting
Rights to be allocated among the
holders of Certificates of each Class in
accordance with their respective
Percentage Interests), (b) 1% of all Voting
Rights shall be allocated to the
Holder of the Class A-R Certificates and
(c) the remaining Voting Rights shall
be allocated among Holders of the remaining
Classes of Offered Certificates
(other than the Class A-R Certificates) in
proportion to the Certificate
Balances of the respective Certificates on
the date.
Weighted Average Adjusted Net Mortgage Rate: For any
Distribution
Date, the average of the Adjusted Net
Mortgage Rate of each Mortgage Loan,
weighted on the basis of its Stated
Principal Balance as of the Due Date in
the prior month (after giving affect to
Principal Prepayments in the
Prepayment Period related to such prior Due
Date).
Withdrawal Date: The 18th day of each month, or if such day is not
a
Business Day, the next preceding Business
Day.
Section 1.02 Rules of Construction.
Except as otherwise expressly provided in this Agreement or
unless
the context clearly requires otherwise
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<PAGE>
(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 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,
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<PAGE>
reorganization, and other similar laws of
general applicability relating to or
affecting creditors' rights and to general
equity principles.
35
<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 $292,050.35 into the Carryover
Shortfall Reserve Fund.
(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. The
Depositor hereby directs the Trustee to
execute the Yield Maintenance
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 each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage (which
may
be included in a blanket assignment or assignments), together
with,
except as provided below, all interim recorded assignments of
such
mortgage (each such assignment, when duly and validly completed,
to
be in recordable form and sufficient to effect the assignment of
and
transfer to the assignee thereof, under the Mortgage to which
the
assignment relates); provided that, if the related Mortgage has
not
been returned from the applicable public recording office, such
assignment of the Mortgage may exclude the information to be
provided
by the recording office; provided, further, that such assignment
of
Mortgage need not be delivered in the case of a Mortgage for
which
the related Mortgaged Property is located in the Commonwealth
of
Puerto Rico;
(iv) The original or copies of each assumption,
modification, written assurance, or substitution agreement.
(v) Except as provided below, the original or duplicate
original lender's title policy and all its riders.
(vi) The originals of the following documents for each
Cooperative Loan:
(A) the Co-op
Shares, together with a stock
power in
blank;
(B) the
executed Security Agreement;
(C) the
executed Proprietary Lease;
(D) the
executed Recognition Agreement;
(E) the
executed UCC-1 financing statement
that has been filed in all places required
to perfect the Seller's interest in the
Co-op Shares and the Proprietary Lease
with evidence of recording on it; and
(F) executed
UCC-3 financing statements or
other appropriate UCC financing statements
required by state law, evidencing a
complete and unbroken line from the
mortgagee to the Trustee with evidence of
recording thereon (or in a form suitable
for recordation). If in connection with
any Mortgage Loan the Depositor cannot
deliver
(a) the
original recorded Mortgage,
(b) all
interim recorded assignments,
or
(c) the
lender's title policy
(together with all its riders).
In addition, in connection with the assignment of any MERS
Mortgage
Loan, the Seller agrees that it will cause,
at the Seller's expense, the
MERS(R) System to indicate that the
Mortgage Loans sold by the Seller to the
Depositor have been assigned by the Seller
to the Trustee in accordance with
this Agreement for the benefit of the
Certificateholders by including (or
deleting, in the case of Mortgage
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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 Master Servicer to,
and the Master Servicer agrees that it will
not, alter the information
referenced in this paragraph with respect
to any Mortgage Loan sold by the
Seller to the Depositor during the term of
this Agreement unless and until
such Mortgage Loan is repurchased in
accordance with the terms of this
Agreement.
In the event that in connection with any Mortgage Loan that is not
a
MERS Mortgage Loan the Depositor cannot
deliver (a) the original recorded
Mortgage, (b) all interim recorded
assignments or (c) the lender's title
policy (together with all riders thereto)
satisfying the requirements of
clause (ii), (iii) or (v) above,
respectively, concurrently with the execution
and delivery of this Agreement because such
document or documents have not
been returned from the applicable public
recording office in the case of
clause (ii) or (iii) above, or because the
title policy has not been delivered
to either the Master 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 Master 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 Master Servicer shall
execute and deliver the required
document to the public recording office. If
a public recording office retains
the original recorded Mortgage or if a
Mortgage is lost after recordation in a
public recording office, the Seller shall
deliver to the Trustee a copy of the
Mortgage certified by the public recording
office to be a true and complete
copy of the original recorded Mortgage.
As promptly as practicable after any transfer of a Mortgage
Loan
under this Agreement, and in any event
within thirty days after the transfer,
the Trustee shall (i) affix the Trustee's
name to each assignment of Mortgage,
as its assignee, and (ii) cause to be
delivered for recording in the
appropriate public office for real property
records the assignments of the
Mortgages to the Trustee, except that, if
the Trustee has not received the
information required to deliver any
assignment of a Mortgage for recording,
the Trustee shall deliver it as soon as
practicable after receipt of the
needed information and in any event within
thirty days.
The Trustee need not record any assignment that relates to a
Mortgage
Loan (a) the Mortgaged Property and
Mortgage File relating to which are
located in California or (b) in any other
jurisdiction
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(including Puerto Rico) under the laws of
which, as evidenced by an Opinion of
Counsel delivered by the Seller (at the
Seller's expense) to the Trustee,
recording the assignment is not necessary
to protect the Trustee's and the
Certificateholders' interest in the related
Mortgage Loan. The Seller shall
deliver such Opinion of Counsel within 90
days of the Closing Date.
If any Mortgage Loans have been prepaid in full as of the
Closing
Date, the Depositor, in lieu of delivering
the above documents to the Trustee,
will deposit in the Certificate Account the
portion of the prepayment that is
required to be deposited in the Certificate
Account pursuant to Section 3.06.
Notwithstanding anything to the contrary in this Agreement,
within
five Business Days after the Closing Date,
the Seller shall either
(x) deliver to the Trustee the Mortgage File as required
pursuant to this Section 2.01 for each Delay Delivery
Mortgage Loan or
(y) (A) repurchase the Delay Delivery Mortgage Loan or (B)
substitute the Substitute Mortgage Loan for a Delay Delivery
Mortgage Loan, which repurchase or substitution shall be
accomplished in the manner and subject to the conditions in
Section 2.03 (treating each such Delay Delivery Mortgage
Loan as a Deleted Mortgage Loan for purposes of such Section
2.03);
provided, however, that if the Seller fails
to deliver a Mortgage File for any
Delay Delivery Mortgage Loan within the
period specified herein, the Seller
shall use its best reasonable efforts to
effect a substitution, rather than a
repurchase of, such Deleted Mortgage Loan
and provided further that the cure
period provided for in Section 2.02 or in
Section 2.03 shall not apply to the
initial delivery of the Mortgage File for
such Delay Delivery Mortgage Loan,
but rather the Seller shall have five (5)
Business Days to cure such failure
to deliver. At the end of such period, the
Trustee shall send a Delay Delivery
Certification for the Delay Delivery
Mortgage Loans delivered during such
period in accordance with the provisions of
Section 2.02.
(d) The Seller agrees to treat the transfer of the Mortgage Loans
to
the Depositor as a sale for all tax,
accounting, and regulatory purposes.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
The Trustee acknowledges receipt of the documents identified in
the
Initial Certification in the form of
Exhibit G-1, and declares that it holds
and will hold such documents and the other
documents delivered to it
constituting the Mortgage Files for the
Mortgage Loans, and that it holds or
will hold such other assets as are included
in the Trust Fund, in trust for
the exclusive use and benefit of all
present and future Certificateholders.
The Trustee acknowledges that it will maintain possession of
the
related Mortgage Notes in the State of
California, unless otherwise permitted
by the Rating Agencies. The Trustee agrees
to execute and deliver on the
Closing Date to the Depositor, the Master
Servicer and the Seller an Initial
Certification in the form of Exhibit G-1.
Based on its review and examination,
and only as to the documents identified in
such Initial Certification, the
Trustee acknowledges that such documents
appear regular on their face and
relate to such Mortgage Loans. The Trustee
shall be under no duty or
obligation to inspect, review or examine
said documents, instruments,
certificates or other papers to determine
that the same are genuine,
enforceable or appropriate for the
represented purpose or that they have
actually been recorded in the real estate
records or that they are other than
what they purport to be on their face.
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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 Master Servicer, and the
Seller a Delay Delivery Certification
with respect to the Mortgage Loans
substantially in the form of Exhibit G-3,
with any applicable exceptions noted
thereon.
By the ninetieth day after the Closing Date (or if that day is not
a
Business Day, the succeeding Business Day),
the Trustee shall deliver to the
Depositor, the Master Servicer and the
Seller a Final Certification with
respect to the Mortgage Loans in the form
of Exhibit H-1, with any applicable
exceptions noted thereon.
If, in the course of its review, the Trustee finds any document
constituting a part of a Mortgage File that
does not meet the requirements of
Section 2.01, the Trustee shall list such
as an exception in the Final
Certification. The Trustee shall not make
any determination as to whether (i)
any endorsement is sufficient to transfer
all interest of the party so
endorsing, as noteholder or assignee
thereof, in that Mortgage Note or (ii)
any assignment is in recordable form or is
sufficient to effect the assignment
of and transfer to the assignee thereof
under the mortgage to which the
assignment relates. The Seller shall
promptly correct any defect that
materially and adversely affects the
interests of the Certificateholders
within 90 days from the date it was so
notified of the defect and, if the
Seller does not correct the defect within
that period, the Seller shall either
(a) substitute for the related Mortgage
Loan a Substitute Mortgage Loan, which
substitution shall be accomplished in the
pursuant Section 2.03, or (b)
purchase the Mortgage Loan at its Purchase
Price from the Trustee within 90
days from the date the Seller was notified
of the defect in writing.
If a substitution or purchase of a Mortgage Loan pursuant to
this
provision is required because of a delay in
delivery of any documents by the
appropriate recording office, or there is a
dispute between either the Master
Servicer or the Seller and the Trustee over
the location or status of the
recorded document, then the substitution or
purchase shall occur within 720
days from the Closing Date. In no other
case may a substitution or purchase
occur more than 540 days from the Closing
Date.
The Trustee shall
deliver written notice to each Rating Agency within
270 days from the Closing Date indicating
each Mortgage Loan (a) that has not
been returned by the appropriate recording
office or (b) as to which there is
a dispute as to location or status of the
Mortgage Loan. The notice shall be
delivered every 90 days thereafter until
the related Mortgage Loan is returned
to the Trustee. Any substitution pursuant
to (a) above or purchase pursuant to
(b) above shall not be effected before the
delivery to the Trustee of the
Opinion of Counsel required by Section
2.05, and any substitution pursuant to
(a) above shall not be effected before the
additional delivery to the Trustee
of a Request for Release substantially in
the form of Exhibit N. No
substitution is permitted to be made in any
calendar month after the
Determination Date for the month.
The Purchase Price for any Mortgage Loan shall be deposited by
the
Seller in the Certificate Account by the
Distribution Account Deposit Date for
the Distribution Date in the month
following the month of repurchase and, upon
receipt of the deposit and certification
with respect thereto in the form of
Exhibit O, the Trustee shall release the
related Mortgage File to the Seller
and shall execute and deliver at the
Seller's request any instruments of
transfer or assignment prepared by the
Seller, in each case without recourse,
necessary to vest in the Seller, or a
designee, the Trustee's interest in any
Mortgage Loan released pursuant hereto.
If pursuant to the foregoing provisions the Seller repurchases
a
Mortgage Loan that is a MERS Mortgage Loan,
the Master Servicer shall either
(i) cause MERS to execute and deliver an
assignment of the Mortgage in
recordable form to transfer the Mortgage
from MERS to the Seller and shall
cause such Mortgage to be removed from
registration on the MERS(R) System in
accordance with MERS' rules and
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regulations or (ii) cause MERS to designate
on the MERS(R) System the Seller
as the beneficial holder of such Mortgage
Loan.
The Trustee shall retain possession and custody of each Mortgage
File
in accordance with and subject to the terms
and conditions set forth herein.
The Master 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 Master
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 Master Servicer.
(a) IndyMac, in its capacities as Seller and Master Servicer,
makes
the representations and warranties in
Schedule II, and by this reference
incorporated in this Agreement, to the
Depositor and the Trustee, as of the
Closing Date.
(b) The Seller, in its capacity as Seller, makes the
representations
and warranties in Schedule III, and by this
reference incorporated in this
Agreement, to the Depositor and the
Trustee, as of the Closing Date, or if so
specified in Schedule III, as of the
Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of
a
representation or warranty made pursuant to
Section 2.03(b) that materially
and adversely affects the interests of the
Certificateholders in any Mortgage
Loan, the party discovering such breach
shall give prompt notice thereof to
the other parties. The Seller covenants
that within 90 days of the earlier of
its discovery or its receipt of written
notice from any party of a breach of
any representation or warranty made
pursuant to Section 2.03(b) which
materially and adversely affects the
interests of the Certificateholders in
any Mortgage Loan, it shall cure such
breach in all material respects, and if
such breach is not so cured, shall, (i) if
the 90-day period expires before
the second anniversary of the Closing Date,
remove the Mortgage Loan (a
"Deleted Mortgage Loan") from the Trust
Fund and substitute in its place a
Substitute Mortgage Loan, in accordance
with this Section 2.03; or (ii)
repurchase the affected Mortgage Loan or
Mortgage Loans from the Trustee at
the Purchase Price in the manner set forth
below. Any substitution pursuant to
(i) above shall not be effected before the
delivery to the Trustee of the
Opinion of Counsel required by Section 2.05
and a Request for Release
substantially in the form of Exhibit N, and
the Mortgage File for any
Substitute Mortgage Loan. The Seller shall
promptly reimburse the Master
Servicer and the Trustee for any expenses
reasonably incurred by the Master
Servicer or the Trustee in respect of
enforcing the remedies for the breach.
With respect to any Substitute Mortgage Loan or Loans, the
Seller
shall deliver to the Trustee for the
benefit of the Certificateholders the
Mortgage Note, the Mortgage, the related
assignment of the Mortgage, and such
other documents and agreements as are
required by Section 2.01, with the
Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01.
No substitution is permitted to be made in
any calendar month after the
Determination Date for such month.
Scheduled Payments due with respect to
Substitute Mortgage Loans in the month of
substitution shall not be part of
the Trust Fund and will be retained by the
Seller on the next succeeding
Distribution Date. For the month of
substitution, distributions to
Certificateholders will include the monthly
payment due on any Deleted
Mortgage Loan for such month and thereafter
the Seller shall be entitled to
retain all amounts received in respect of
such Deleted Mortgage Loan.
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The Master 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
Master 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 Master 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 and interest
thereon (the "Substitution Adjustment
Amount") plus, if the Seller is not the
Master Servicer, an amount equal to the
aggregate of any unreimbursed Advances
and Servicer Advances with respect to such
Deleted Mortgage Loans shall be
deposited into the Certificate Account by
the Seller by the Distribution
Account Deposit Date for the Distribution
Date in the month succeeding the
calendar month during which the related
Mortgage Loan became required to be
purchased or replaced hereunder. If the
Seller repurchases a Mortgage Loan,
the Purchase Price therefor shall be
deposited in the Certificate Account
pursuant to Section 3.06 by the
Distribution Account Deposit Date for the
Distribution Date in the month following
the month during which the Seller
became obligated hereunder to repurchase or
replace the Mortgage Loan and upon
such deposit of the Purchase Price and
receipt of a Request for Release in the
form of Exhibit N, the Trustee shall
release the related Mortgage File held
for the benefit of the Certificateholders
to such Person, and the Trustee
shall execute and deliver at such Person's
direction such instruments of
transfer or assignment prepared by such
Person, in each case without recourse,
as shall be necessary to transfer title
from the Trustee. The obligation under
this Agreement of any Person to cure,
repurchase, or replace any Mortgage Loan
as to which a breach has occurred and is
continuing shall constitute the sole
remedy against the Person respecting the
breach available to
Certificateholders, the Depositor, or the
Trustee on their behalf.
The representations and warranties made pursuant to this Section
2.03
shall survive delivery of the respective
Mortgage Files to the Trustee for the
benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor as
to
the Mortgage Loans.
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.
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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 Master
Servicer
or the Trustee that any Mortgage Loan does
not constitute a "qualified
mortgage" within the meaning of section
860G(a)(3) of the Code, the party
discovering such fact shall promptly (and
in any event within five Business
Days of discovery) give written notice
thereof to the other parties. In
connection therewith, the Trustee shall
require the Seller, at the Seller's
option, to either (i) substitute, if the
conditions in Section 2.03(c) with
respect to substitutions are satisfied, a
Substitute Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase
the affected Mortgage Loan within
90 days of such discovery in the same
manner as it would a Mortgage Loan for a
breach of representation or warranty made
pursuant to Section 2.03. The
Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant
hereto in the same manner, and on the same
terms and conditions, as it would a
Mortgage Loan repurchased for breach of a
representation or warranty contained
in Section 2.03.
Section 2.06 Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the
Trust Fund and, concurrently with such
transfer and assignment, has executed
and delivered to or upon the order of the
Depositor, the Certificates in
authorized denominations evidencing
directly or indirectly the entire
ownership of the Trust Fund. The Trustee
agrees to hold the Trust Fund and
exercise the rights referred to above for
the benefit of all present and
future Holders of the Certificates.
Section 2.07 REMIC Matters.
The Preliminary Statement sets forth the designations and
"latest
possible maturity date" for federal income
tax purposes of all interests
created under this Agreement. The "Startup
Day" for purposes of the REMIC
Provisions shall be the Closing Date. Each
REMIC's fiscal year shall be the
calendar year.
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ARTICLE Three
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master
Servicer
shall service and administer the Mortgage
Loans in accordance with this
Agreement and the Servicing Standard.
The Master 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 Master
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
Master 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 Master 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
Master Servicer to service and administer
the Mortgage Loans to the extent
that the Master 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 Master Servicer.
The Master Servicer further is authorized and empowered by the
Trustee, on behalf of the
Certificateholders and the Trustee, in its own name
or in the name of the Subservicer, when the
Master Servicer or the
Subservicer, as the case may be, 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
Master 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 Master 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.
Section 3.02 Subservicing; Enforcement of the Obligations of
Subservicers.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer pursuant to
a subservicing agreement (a
"Subservicer"). The subservicing
arrangement and the related subservicing
agreement must provide for the servicing of
the Mortgage Loans in a manner
consistent with the servicing arrangements
contemplated hereunder. Unless the
context otherwise requires, references in
this Agreement to actions taken or
to be taken by the Master Servicer in
servicing the Mortgage Loans
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include actions taken or to be taken by a
Subservicer on behalf of the Master
Servicer. Notwithstanding anything in any
subservicing agreement or this
Agreement relating to agreements or
arrangements between the Master Servicer
and a Subservicer or references to actions
taken through a Subservicer or
otherwise, the Master Servicer shall remain
obligated and liable to the
Trustee and Certificateholders for the
servicing and administration of the
Mortgage Loans in accordance with this
Agreement without diminution of its
obligation or liability by virtue of the
subservicing agreements or
arrangements or by virtue of
indemnification from the Subservicer and to the
same extent and under the same terms as if
the Master Servicer alone were
servicing and administering the Mortgage
Loans. All actions of each
Subservicer performed pursuant to the
related subservicing agreement shall be
performed as agent of the Master Servicer
with the same effect as if performed
directly by the Master Servicer.
(b) For
purposes of this Agreement, the Master Servicer shall be
deemed to have received any collections,
recoveries, or payments with respect
to the Mortgage Loans that are received by
the Subservicer regardless of
whether the payments are remitted by the
Subservicer to the Master Servicer.
Section 3.03 Rights of the Depositor and the Trustee in Respect
of
the Master Servicer.
The Depositor may, but is not obligated to, enforce the
obligations
of the Master Servicer under this Agreement
and may, but is not obligated to,
perform, or cause a designee to perform,
any defaulted obligation of the
Master Servicer under this Agreement and in
connection with any such defaulted
obligation to exercise the related rights
of the Master Servicer under this
Agreement; provided that the Master
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 Master
Servicer nor shall the Trustee or the
Depositor be obligated to supervise the
performance of the Master Servicer under
this Agreement or otherwise.
Section 3.04 No Contractual Relationship Between Subservicers and
the
Trustee.
Any subservicing arrangement that may be entered into and any
other
transactions or services relating to the
Mortgage Loans involving a
Subservicer in its capacity as such and not
as an originator shall be deemed
to be solely between the Subservicer and
the Master Servicer alone, and the
Trustee and Certificateholders shall not be
deemed parties thereto and shall
have no claims, rights, obligations,
duties, or liabilities with respect to
the Subservicer in its capacity as such
except as set forth in Section 3.05.
Section 3.05 Trustee to Act as Master Servicer.
If the Master Servicer for any reason is no longer the Master
Servicer under this Agreement (including
because of the occurrence or
existence of an Event of Default), the
Trustee or its successor shall assume
all of the rights and obligations of the
Master Servicer under this Agreement
arising thereafter (except that the Trustee
shall not be
(i) liable for losses of the Master Servicer pursuant to
Section 3.10 or any acts or omissions of the predecessor Master
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 Master Servicer
pursuant to Section 2.03, or
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(v) deemed to have made any representations and warranties
of the Master Servicer hereunder). Any assumption shall be subject
to
Section 7.02.
Every subservicing agreement entered into by the Master
Servicer
shall contain a provision giving the
successor Master Servicer the option to
terminate the agreement if a successor
Master Servicer is appointed.
If the Master Servicer is no longer the Master Servicer for any
reason (including because the occurrence or
existence of any Event of
Default), the Trustee (or any other
successor Master Servicer) may, at its
option, succeed to any rights and
obligations of the Master Servicer under any
subservicing agreement in accordance with
its terms. The Trustee (or any other
successor Master Servicer) shall not incur
any liability or have any
obligations in its capacity as successor
Master Servicer under a subservicing
agreement arising before the date of
succession unless it expressly elects to
succeed to the rights and obligations of
the Master Servicer thereunder; and
the Master Servicer shall not thereby be
relieved of any liability or
obligations under the subservicing
agreement arising before the date of
succession.
The Master Servicer shall, upon request of the Trustee, but at
the
expense of the Master Servicer, deliver to
the assuming party all documents
and records relating to each subservicing
agreement and the Mortgage Loans
then being serviced thereunder and an
accounting of amounts collected held by
it and otherwise use its best efforts to
effect the orderly and efficient
transfer of the subservicing agreement to
the assuming party.
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 Master Servicer to act as
successor Master Servicer under this
Agreement and the transactions provided
for in this Agreement.
Section 3.06 Collection of Mortgage Loan Payments; Servicing
Accounts; Collection Account; Certificate
Account; Distribution Account.
(a) In accordance with and to the extent of the Servicing
Standard,
the Master 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 Master Servicer may in
its discretion (i) waive any late payment
charge or, subject to Section 3.21,
any Prepayment Charge in connection with
the prepayment of a Mortgage Loan and
(ii) extend the due dates for payments due
on a Delinquent Mortgage Loan for a
period not greater than 125 days. In
connection with a seriously delinquent or
defaulted Mortgage Loan, the Master
Servicer may, consistent with the
Servicing Standard, waive, modify or vary
any term of that Mortgage Loan
(including modifications that change the
Mortgage Rate, forgive the payment of
principal or interest or extend the final
maturity date of that Mortgage Loan
), accept payment from the related
Mortgagor of an amount less than the Stated
Principal Balance in final satisfaction of
that Mortgage Loan, or consent to
the postponement of strict compliance with
any such term or otherwise grant
indulgence to any Mortgagor if in the
Master 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 Master 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
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Principal Balance of the Mortgage Loans),
the Master 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 Master
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 Master Servicer shall not
be required to institute or join
in litigation with respect to collection of
any payment (whether under a
Mortgage, Mortgage Note, 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 Master
Servicer shall not have the discretion to
sell any Delinquent or defaulted
Mortgage Loan.
(b) The Master Servicer shall establish and maintain (or, if a
Mortgage Loan is subserviced by another
Person, cause the related Subservicer
to establish and maintain) one or more
Servicing Accounts (the "Servicing
Account") into which the Master Servicer
shall deposit on a daily basis within
one Business Day of receipt, the following
payments and collections received
by it or remitted by any Subservicer in
respect of Mortgage Loans after the
Cut-off Date (other than in respect of
principal and interest due on the
Mortgage Loans by the Cut-off Date):
(i) all payments on account of principal on the Mortgage
Loans, including
Principal Prepayments;
(ii) all payments on account of interest on the Mortgage
Loans, net of the related Servicing Fee; and
(iii) all Insurance Proceeds, Subsequent Recoveries and
Liquidation
Proceeds, other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to
the
Mortgagor in accordance with the Master Servicer's normal
servicing
procedures.
By the Withdrawal Date in each calendar month, the Master
Servicer
shall (a) withdraw from the Servicing
Account all amounts on deposit therein
pursuant to clauses (i) and (ii) above
(other than amounts attributable to a
Principal Prepayment in Full) and (b)
deposit such amounts in the Collection
Account.
By the Business Day in each calendar month following the deposit
in
the Servicing Account of amounts on deposit
therein pursuant to clause (iii)
above or pursuant to any Principal
Prepayment in Full, the Master Servicer
shall (a) withdraw such amounts from the
Servicing Account and (b) deposit
such amounts in the Collection Account.
(c) The Master Servicer shall establish and maintain a
Collection
Account (the "Collection Account") into
which the Master Servicer shall
deposit, as and when required by paragraph
(b) of this Section 3.06, all
amounts required to be deposited into the
Collection Account pursuant to that
paragraph. The Collection Account shall be
an Eligible Account held for the
benefit of the Certificateholders.
(d) The Master Servicer shall establish and maintain a
Certificate
Account into which the Master Servicer
shall deposit on a daily basis (i)
within one Business Day of deposit in the
Collection Account (in the case of
items (i) through (iii) below) and (2)
within one Business Day of receipt (in
the case of all other items), except as
otherwise specified herein, the
following payments and collections received
by it or remitted by any
Subservicer 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:
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(i) all payments
on account of principal on the Mortgage
Loans, including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage
Loans, net of the Servicing Fee;
(iii) all Insurance Proceeds, Subsequent Recoveries and
Liquidation Proceeds, other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to
the
Mortgagor in accordance with the Master Servicer's normal
servicing
procedures;
(iv) any amount required to be deposited by the Master
Servicer pursuant to Section 3.06(f) in connection with any losses
on
Permitted Investments;
(v) any amounts required to be deposited by the Master
Servicer pursuant to Sections 3.10 and 3.12;
(vi) all Purchase Prices from the Master Servicer or Seller
and all Substitution Adjustment Amounts;
(vii) all Advances made by the Master 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 Master 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 Master
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 Master Servicer. If
the Master 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 Master 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 Master Servicer to
the Trustee pursuant to Section 3.09(a);
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(ii) any amount deposited by the Master 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 Master 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 Master Servicer.
(f) Each institution at which the Certificate Account is
maintained
shall invest the funds in such account as
directed in writing by the Master
Servicer in Permitted Investments, which
shall mature not later than the
second Business Day preceding the related
Distribution Account Deposit Date
(except that if the Permitted Investment is
an obligation of the institution
that maintains the account, then the
Permitted Investment shall mature not
later than the Business Day preceding the
Distribution Account Deposit Date)
and which shall not be sold or disposed of
before its maturity. The funds in
the Distribution Account shall remain
uninvested. All such Permitted
Investments shall be made in the name of
the Trustee, for the benefit of the
Certificateholders. All income realized
from any such investment of funds on
deposit in the Certificate Account shall be
for the benefit of the Master
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
Master Servicer in the Certificate Account.
The Trustee shall not be liable
for the amount of any loss incurred in
respect of any investment or lack of
investment of funds held in the Certificate
Account and made in accordance
with this Section 3.06.
(g) [Reserved].
(h) The Master 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 Master
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 Master
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 Master 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 Master
Servicer out of related
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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 Master Servicer shall advance any payments referred to
in
Section 3.07(a) that are not timely paid by
the Mortgagors or advanced by the
Master Servicer on the date when the tax,
premium or other cost for which such
payment is intended is due, but the Master
Servicer shall be required so to
advance only to the extent that such
advances, in the good faith judgment of
the Master Servicer, will be recoverable by
the Master Servicer out of
Insurance Proceeds, Liquidation Proceeds or
otherwise.
Section 3.08 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Master 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 Master Servicer.
Upon reasonable advance notice in writing, the Master 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
Master Servicer shall be entitled to be
reimbursed by each such Certificateholder
or Certificate Owner for actual
expenses incurred by the Master Servicer in
providing the reports and access.
Section 3.09 Permitted Withdrawals from the Certificate Account
and
the Distribution Account.
(a) The Master 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 Master Servicer or the related subservicer
(to the extent not previously retained) the servicing compensation
to
which it is entitled pursuant to Section 3.15, and to pay to
the
Master Servicer, as additional master servicing compensation,
earnings on or investment income with respect to funds in or
credited
to the Certificate Account;
(ii) to reimburse the Master Servicer or successor Master
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 Master Servicer or successor Master
Servicer for any Nonrecoverable Advance previously made by it;
(iv) to reimburse the Master Servicer for Insured Expenses
from the related Insurance Proceeds;
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(v) to reimburse the Master Servicer for (a) unreimbursed
Servicing Advances, the Master 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 and (b) for unpaid Servicing Fees
as
provided in Section 3.12;
(vi) to pay to the purchaser, with respect to each Mortgage
Loan or property acquired in respect of such Mortgage Loan that
has
been purchased pursuant to Section 2.02, 2.03, or 3.12, all
amounts
received thereon after the date of such purchase;
(vii) to reimburse the Seller, the Master Servicer, or the
Depositor for expenses incurred by any of them and reimbursable
pursuant to Section 6.03;
(viii) to withdraw any amount deposited in the Certificate
Account and not required to be deposited in the Certificate
Account;
(ix) by the Distribution Account Deposit Date, to withdraw
(1) the Available Funds and the Trustee Fee for the
Distribution
Date, to the extent on deposit, and (2) the Prepayment Charges
on
deposit, and remit such amount to the Trustee for deposit in
the
Distribution Account; and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01.
The Master 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 Master Servicer shall
deliver to the Trustee an Officer's
Certificate of a Servicing Officer
indicating the amount of any previous
Advance determined by the Master Servicer
to be a Nonrecoverable Advance and
identifying the related Mortgage Loans and
their respective portions of the
Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account
for distributions to Certificateholders in
the manner specified in this
Agreement (and to withhold from the amounts
so withdrawn the amount of any
taxes that it is authorized to withhold
pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may
from time to time make withdrawals
from the Distribution Account for the
following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution Date;
(ii) to withdraw and return to the Master 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 Master Servicer shall maintain, for each Mortgage Loan,
hazard insurance with extended coverage in
an amount that is at least equal to
the lesser of
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(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 Master 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 Master 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 Master Servicer shall maintain
flood insurance for the Mortgage
Loan. The flood insurance shall be in an
amount equal to the least of (i) the
original principal balance of the related
Mortgage Loan, (ii) the replacement
value of the improvements that are part of
the Mortgaged Property, and (iii)
the maximum amount of flood insurance
available for the related Mortgaged
Property under the national flood insurance
program.
If the Master 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 Master 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
Master Servicer of the Mortgage Loans, the
Master 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 Master 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 Master
Servicer, would have been covered
thereunder. The Master 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
Master Servicer need not maintain any
Primary Insurance Policy if maintaining the
Primary Insurance Policy is
prohibited by applicable law. The Master
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 Master Servicer from
the related liquidation proceeds.
In connection with its activities as Master Servicer of the
Mortgage
Loans, the Master 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
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defaulted Mortgage Loans. Any amounts
collected by the Master Servicer under
any Primary Insurance Policies shall be
deposited in the Certificate Account
or the Collection Account (as
applicable).
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11, when any
property subject to a Mortgage has been
conveyed by the Mortgagor, the Master
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 Master 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 Master 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 Master
Servicer is authorized, subject to Section
3.11(b), to take or enter into an
assumption and modification agreement from
or with the person to whom the
property has been or is about to be
conveyed, pursuant to which the person
becomes liable under the Mortgage Note and,
unless prohibited by applicable
state law, the Mortgagor remains liable
thereon. The Mortgage Loan must
continue to be covered (if so covered
before the Master Servicer enters into
the agreement) by the applicable Required
Insurance Policies.
The Master 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 Master
Servicer shall not be deemed to be
in default under this Section 3.11 because
of any transfer or assumption that
the Master Servicer reasonably believes it
is restricted by law from
preventing, for any reason whatsoever.
(b) Subject to the Master 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 Master
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 Master 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 Master Servicer shall deliver an
Officer's Certificate signed by a
Servicing Officer stating that the
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requirements of this subsection have been
met in connection with such
Officer's Certificate. The Master 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 Master Servicer will retain any
fee collected by it for entering
into an assumption or substitution of
liability agreement as additional master
servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans.
The Master 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 Master Servicer shall
follow the Servicing Standard and
shall follow the requirements of the
insurer under any Required Insurance
Policy. The Master Servicer shall not be
required to expend its own funds in
connection with any foreclosure or towards
the restoration of any property
unless it determin
