The Pooling and Servicing Agreement
EXHIBIT
4.1
INDYMAC MBS,
INC.
Depositor
INDYMAC BANK, F.S.B.
Seller
and Servicer
DEUTSCHE BANK NATIONAL
TRUST COMPANY
Trustee
________________________________________
POOLING
AND SERVICING AGREEMENT
Dated
as
of July 1, 2007
________________________________________
RESIDENTIAL ASSET SECURITIZATION TRUST
2007-A9
MORTGAGE PASS-THROUGH CERTIFICATES
Series
2007-I
TABLE
OF CONTENTS
Page
ARTICLE
ONE DEFINITIONS
|
6
|
|
Section
1.01
|
Definitions.
|
6
|
Section
1.02
|
Rules
of Construction.
|
36
|
ARTICLE
TWO CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
|
38
|
|
Section
2.01
|
Conveyance
of Mortgage Loans.
|
38
|
Section
2.02
|
Acceptance
by the Trustee of the Mortgage Loans.
|
41
|
Section
2.03
|
Representations,
Warranties, and Covenants of the Seller and the Servicer.
|
43
|
Section
2.04
|
Representations
and Warranties of the Depositor as to the Mortgage Loans.
|
45
|
Section
2.05
|
Delivery
of Opinion of Counsel in Connection with Substitutions.
|
45
|
Section
2.06
|
Execution
and Delivery of Certificates.
|
45
|
Section
2.07
|
REMIC
Matters.
|
46
|
ARTICLE
THREE ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
|
47
|
|
Section
3.01
|
Servicer
to Service Mortgage Loans.
|
47
|
Section
3.02
|
[Reserved].
|
48
|
Section
3.03
|
Rights
of the Depositor and the Trustee in Respect of the
Servicer.
|
48
|
Section
3.04
|
[Reserved].
|
48
|
Section
3.05
|
Trustee
to Act as Servicer.
|
48
|
Section
3.06
|
Collection
of Mortgage Loan Payments; Certificate Account; Distribution
Account.
|
48
|
Section
3.07
|
Collection
of Taxes, Assessments and Similar Items; Escrow Accounts.
|
51
|
Section
3.08
|
Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
|
52
|
Section
3.09
|
Permitted
Withdrawals from the Certificate Account and the Distribution
Account.
|
52
|
Section
3.10
|
Maintenance
of Hazard Insurance; Maintenance of Primary Insurance
Policies.
|
54
|
Section
3.11
|
Enforcement
of Due-On-Sale Clauses; Assumption Agreements.
|
55
|
Section
3.12
|
Realization
Upon Defaulted Mortgage Loans.
|
56
|
Section
3.13
|
Trustee
to Cooperate; Release of Mortgage Files.
|
58
|
Section
3.14
|
Documents,
Records and Funds in Possession of the Servicer to be Held for
the
Trustee.
|
58
|
Section
3.15
|
Servicing
Compensation.
|
59
|
Section
3.16
|
Access
to Certain Documentation.
|
59
|
Section
3.17
|
Annual
Statement as to Compliance.
|
59
|
Section
3.18
|
Errors
and Omissions Insurance; Fidelity Bonds.
|
60
|
Section
3.19
|
[Reserved].
|
60
|
Section
3.20
|
Prepayment
Charges.
|
60
|
Section
3.21
|
Late
Payment Fees.
|
61
|
i
ARTICLE
FOUR DISTRIBUTIONS AND ADVANCES BY THE SERVICER
|
63
|
|
Section
4.01
|
Advances.
|
63
|
Section
4.02
|
Priorities
of Distribution.
|
63
|
Section
4.03
|
[Reserved].
|
67
|
Section
4.04
|
[Reserved].
|
67
|
Section
4.05
|
Allocation
of Realized Losses.
|
67
|
Section
4.06
|
Monthly
Statements to Certificateholders.
|
68
|
Section
4.07
|
[Reserved].
|
72
|
Section
4.08
|
[Reserved].
|
72
|
Section
4.09
|
Determination
of Pass-Through Rates for LIBOR Certificates.
|
72
|
ARTICLE
FIVE THE CERTIFICATES
|
77
|
|
Section
5.01
|
The
Certificates.
|
77
|
Section
5.02
|
Certificate
Register; Registration of Transfer and Exchange of
Certificates.
|
77
|
Section
5.03
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
78
|
Section
5.04
|
Persons
Deemed Owners.
|
78
|
Section
5.05
|
Access
to List of Certificateholders’ Names and Addresses.
|
84
|
Section
5.06
|
Maintenance
of Office or Agency.
|
84
|
ARTICLE
SIX THE DEPOSITOR AND THE SERVICER
|
84
|
|
Section
6.01
|
Respective
Liabilities of the Depositor and the Servicer.
|
84
|
Section
6.02
|
Merger
or Consolidation of the Depositor or the Servicer.
|
84
|
Section
6.03
|
Limitation
on Liability of the Depositor, the Seller, the Servicer, and
Others.
|
84
|
Section
6.04
|
Limitation
on Resignation of the Servicer.
|
84
|
ARTICLE
SEVEN DEFAULT
|
84
|
|
Section
7.01
|
Events
of Default.
|
84
|
Section
7.02
|
Trustee
to Act; Appointment of Successor.
|
84
|
Section
7.03
|
Notification
to Certificateholders.
|
86
|
ARTICLE
EIGHT CONCERNING THE TRUSTEE
|
86
|
|
Section
8.01
|
Duties
of the Trustee.
|
86
|
Section
8.02
|
Certain
Matters Affecting the Trustee.
|
86
|
Section
8.03
|
Trustee
Not Liable for Certificates or Mortgage Loans.
|
90
|
Section
8.04
|
Trustee
May Own Certificates.
|
90
|
Section
8.05
|
Trustee’s
Fees and Expenses.
|
90
|
Section
8.06
|
Eligibility
Requirements for the Trustee.
|
90
|
Section
8.07
|
Resignation
and Removal of the Trustee.
|
90
|
Section
8.08
|
Successor
Trustee.
|
90
|
Section
8.09
|
Merger
or Consolidation of the Trustee.
|
93
|
Section
8.10
|
Appointment
of Co-Trustee or Separate Trustee.
|
93
|
Section
8.11
|
Tax
Matters.
|
93
|
ARTICLE
NINE TERMINATION
|
96
|
|
ii
Section
9.01
|
Termination
upon Liquidation or Purchase of the Mortgage Loans.
|
96
|
Section
9.02
|
Final
Distribution on the Certificates.
|
96
|
Section
9.03
|
Additional
Termination Requirements.
|
98
|
ARTICLE
TEN MISCELLANEOUS PROVISIONS
|
98
|
|
Section
10.01
|
Amendment.
|
98
|
Section
10.02
|
Recordation
of Agreement; Counterparts.
|
99
|
Section
10.03
|
Governing
Law.
|
100
|
Section
10.04
|
Intention
of Parties.
|
100
|
Section
10.05
|
Notices.
|
100
|
Section
10.06
|
Severability
of Provisions.
|
101
|
Section
10.07
|
Assignment.
|
101
|
Section
10.08
|
Limitation
on Rights of Certificateholders.
|
101
|
Section
10.09
|
Inspection
and Audit Rights.
|
102
|
Section
10.10
|
Certificates
Nonassessable and Fully Paid.
|
102
|
Section
10.11
|
Official
Record.
|
102
|
Section
10.12
|
Protection
of Assets.
|
104
|
Section
10.13
|
Qualifying
Special Purpose Entity.
|
104
|
ARTICLE
ELEVEN EXCHANGE ACT REPORTING
|
104
|
|
Section
11.01
|
Filing
Obligations.
|
104
|
Section
11.02
|
Form
10-D Filings.
|
104
|
Section
11.03
|
Form
8-K Filings.
|
109
|
Section
11.04
|
Form
10-K Filings.
|
109
|
Section
11.05
|
Xxxxxxxx-Xxxxx
Certification.
|
109
|
Section
11.06
|
Form
15 Filing.
|
109
|
Section
11.07
|
Report
on Assessment of Compliance and Attestation.
|
109
|
Section
11.08
|
Use
of Subcontractors.
|
110
|
Section
11.09
|
Amendments.
|
110
|
iii
SCHEDULES
|
||
Schedule
I:
|
Mortgage
Loan Schedule
|
S-I-1
|
Schedule
II:
|
Representations
and Warranties of the Seller/Servicer
|
S-II-1
|
Schedule
III:
|
Representations
and Warranties as to the Mortgage Loans
|
S-III-1
|
Schedule
IV:
|
[Reserved]
|
S-IV-1
|
Schedule
V:
|
Form
of Monthly Report
|
S-V-1
|
EXHIBITS
|
||
Exhibit
A:
|
Form
of Senior Certificate (other than the Notional Amount
Certificates)
|
A-1
|
Exhibit
B:
|
Form
of Subordinated Certificate
|
B-1
|
Exhibit
C:
|
Form
of Class A-R Certificate
|
C-1
|
Exhibit
D:
|
Form
of Notional Amount Certificate
|
D-1
|
Exhibit
E:
|
Form
of Reverse of Certificates
|
E-1
|
Exhibit
F-1:
|
Form
of Class P Certificates
|
F-1-1
|
Exhibit
F-2:
|
Form
of Class L Certificates
|
F-2-1
|
Exhibit
G-1:
|
Form
of Initial Certification of Trustee
|
G-1-1
|
Exhibit
G-2:
|
Form
of Delay Delivery Certification
|
G-2-1
|
Exhibit
H:
|
Form
of Final Certification of Trustee
|
H-1
|
Exhibit
I:
|
Form
of Transfer Affidavit
|
I-1
|
Exhibit
J:
|
Form
of Transferor Certificate
|
J-1
|
Exhibit
K:
|
Form
of Investment Letter (Non-Rule 144A)
|
K-1
|
Exhibit
L:
|
Form
of Rule 000X Xxxxxx
|
X-0
|
Xxxxxxx
M:
|
Form
of Request for Release (for Trustee)
|
M-1
|
Exhibit
N:
|
Request
for Release of Documents
|
N-1
|
Exhibit
O-1:
|
Form
of Certificate to be Provided by the Depositor with Form
10-K
|
X-0-0
|
Xxxxxxx
X-0:
|
Form
of Trustee’s Officer’s Certificate
|
O-2-1
|
iv
Exhibit
P:
|
[Reserved]
|
P-1
|
Exhibit
Q
|
Reporting
Responsibility
|
Q-1
|
Exhibit
R:
|
Form
of Performance Certification (Trustee)
|
R-1
|
Exhibit
S:
|
Form
of Servicing Criteria to Be Addressed in Assessment of
Compliance
Statement
|
S-1
|
Exhibit
T:
|
Form
of List of Item 1119 Parties
|
T-1
|
Exhibit
U:
|
Form
of Xxxxxxxx-Xxxxx Certification (Replacement of Servicer)
|
U-1
|
V
This
Pooling And Servicing Agreement, dated as of July 1, 2007, among IndyMac
MBS,
Inc., a Delaware corporation, as depositor (the
“Depositor”), IndyMac Bank,
F.S.B. (“IndyMac”), a federal savings bank,
as seller (in that capacity, the “Seller”) and as
servicer (in that capacity, the “Servicer”), and
Deutsche Bank National Trust Company, a national banking association, as
trustee
(the “Trustee”),
W I
T N E S S E T H T
H
A T
In
consideration of the mutual agreements set forth in this Agreement, the parties
agree as follows:
P
R
E L I M I N A R Y
S T
A T E M
E N T
The
Depositor is the owner of the Trust Fund that is hereby conveyed to the Trustee
in return for the Certificates. The Trust Fund (exclusive of any
amounts in respect of waived Prepayment Charges paid by the Servicer to the
Class P Certificates pursuant to Section 3.20(b) and any amounts in respect
of
waived Late Payment Fees paid by the Servicer to the Class L Certificates
pursuant to Section 3.21(b)) for federal income tax purposes will consist
of 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 and
Class L Certificates, 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
described in this Agreement. The Master REMIC will hold as assets the
several classes of uncertificated REMIC 1 Interests (other than the Class
R-1
Interest). REMIC 1 will hold as assets all property of the Trust Fund
(exclusive of any amounts in respect of waived Prepayment Charges paid by
the
Servicer to the Class P Certificates pursuant to Section 3.20(b) and any
amounts
in respect of waived Late Payment Fees paid by the Servicer to the Class
L
Certificates pursuant to Section 3.21(b)). For federal income tax
purposes, each Certificate (other than the Class A-R and Class L Certificates)
is hereby designated as a regular interest in the Master REMIC. The
latest possible maturity date of all REMIC regular interests created in this
Agreement shall be the Latest Possible Maturity Date. All amounts in
respect of waived Prepayment Charges paid by the Servicer to the Class P
Certificates pursuant to Section 3.20(b) will be treated as paid directly
by the
Servicer to the Class P Certificates and not as paid by or through any REMIC
under this Agreement. All amounts in respect of waived Late Payment
Fees paid by the Servicer to the Class L Certificates will be treated as
paid
directly by the Servicer to the Class L Certificates pursuant to Section
3.21(b)
and not as paid by or through any REMIC created under this Agreement or by
or
through the Grantor Trust described in this Agreement.
REMIC
1
The
REMIC
1 Regular Interests will have the initial principal balance, Pass-Through
Rates
and corresponding Loan Groups as set forth in the following table:
REMIC
1 Interests
|
Initial
Principal Balance
|
Pass-Through
Rate
|
Corresponding
Class of Certificates
|
Class 1-A-1
|
(1)
|
7.00%
|
Class A-1
|
Class
1-A-3
|
(1)
|
6.25%
|
Class A-3
|
Class 1-A-4
|
(1)
|
6.25%
|
Class A-4
|
Class 1-A-5
|
(1)
|
6.25%
|
Class A-5
|
Class 1-A-6
|
(1)
|
6.25%
|
Class A-6
|
Class 1-A-7
|
(1)
|
6.25%
|
Class A-7
|
Class 1-A-8
|
(1)
|
6.50%
|
Class A-8
|
Class
1-PO
|
(1)
|
0.00%
|
Class
PO
|
1
REMIC
1 Interests
|
Initial
Principal Balance
|
Pass-Through
Rate
|
Corresponding
Class of Certificates
|
Class 1-A-X
|
(2)
|
(2)
|
Class A-X
|
Class 1-B-1
|
(1)
|
6.50%
|
Class B-1
|
Class 1-B-2
|
(1)
|
6.50%
|
Class B-2
|
Class 1-B-3
|
(1)
|
6.50%
|
Class B-3
|
Class
1-B-4
|
(1)
|
6.50%
|
Class
B-4
|
Class
1-B-5
|
(1)
|
6.50%
|
Class
B-5
|
Class
1-B-6
|
(1)
|
6.50%
|
Class
B-6
|
Class
1-P
|
$100
|
(3)
|
Class
P
|
Class
R-1
|
(4)
|
(4)
|
N/A
|
(1)
|
On
each Distribution Date, Realized Losses and payments of principal
will be
allocated to each REMIC 1 Regular Interest in the same amounts
as they are
allocated in the aggregate to their Corresponding Class or Classes
of
Certificates. The Initial Principal Balance of each REMIC 1 Class
will equal the initial balance of the Corresponding Class or Classes
of
Certificates on the Closing Date.
|
(2)
|
These
Interests will have a notional balance equal to the aggregate principal
balance of the Non-Discount Mortgage Loans and bear interest during
each
Accrual Period for any Distribution Date at a per annum rate equal
to the
excess of the Weighted Average Adjusted Net Mortgage over the Required
Coupon as of that Distribution
Date.
|
(3)
|
The
Class 1-P Interests will not bear interest, but will be entitled
to 100%
of any Prepayment Charges paid on the Class P
Certificates.
|
(4)
|
The
Class R-1 Interest is the sole class of residual interest in REMIC
1. It has no principal balance and pays no principal or
interest.
|
The
Master REMIC
The
following table sets forth characteristics of the Certificates, together
with
the minimum denominations and integral multiples in excess thereof in which
such
Classes shall be issuable (except that one Certificate of each Class of
Certificates may be issued in a different amount):
Class
Designation
|
Initial
Class Certificate Balance or Notional Amount
|
Pass-Through
Rate
|
Minimum
Denomination
|
Integral
Multiples in Excess of Minimum
|
||||||||||||
Class
A-1
|
$ |
84,603,000
|
Floating
(1)
|
$ |
25,000
|
$ |
1,000
|
|||||||||
Class
A-2
|
$ | 84,603,000 | (2) |
Floating
(3)
|
$ | 25,000 | (4) | $ | 1,000 | (4) | ||||||
Class
A-3
|
$ |
16,921,000
|
6.25 | % | $ |
25,000
|
$ |
1,000
|
||||||||
Class
A-4
|
$ |
35,688,000
|
6.25 | % | $ |
25,000
|
$ |
1,000
|
||||||||
Class
A-5
|
$ |
35,687,000
|
6.25 | % | $ |
25,000
|
$ |
1,000
|
||||||||
Class
A-6
|
$ |
71,375,000
|
6.25 | % | $ |
25,000
|
$ |
1,000
|
||||||||
Class
A-7
|
$ |
9,535,000
|
6.25 | % | $ |
25,000
|
$ |
1,000
|
||||||||
Class
A-8
|
$ |
28,200,900
|
6.50 | % | $ |
25,000
|
$ |
1,000
|
||||||||
Class
PO
|
$ |
2,726,392
|
N/A
|
(5) | $ |
100,000
|
$ |
1,000
|
||||||||
Class
A-X
|
$ | 15,678,946(2) | 7.00 | % | $ | 100,000 | (4) | $ | 1,000 | (4) | ||||||
Class
A-R
|
$ |
100
|
6.50 | % | $ |
100
|
N/A
|
2
Class
Designation
|
Initial
Class Certificate Balance or Notional Amount
|
Pass-Through
Rate
|
Minimum
Denomination
|
Integral
Multiples in Excess of Minimum
|
Class
B-1
|
$ |
8,902,000
|
6.50 | % | $ |
100,000
|
$ |
1,000
|
||||||||
Class
B-2
|
$ |
4,452,000
|
6.50 | % | $ |
100,000
|
$ |
1,000
|
||||||||
Class
B-3
|
$ |
3,377,000
|
6.50 | % | $ |
100,000
|
$ |
1,000
|
||||||||
Class
B-4
|
$ |
2,149,000
|
6.50 | % | $ |
100,000
|
$ |
1,000
|
||||||||
Class
B-5
|
$ |
1,842,000
|
6.50 | % | $ |
100,000
|
$ |
1,000
|
||||||||
Class
B-6
|
$ |
1,535,280.22
|
6.50 | % | $ |
100,000
|
$ |
1,000
|
||||||||
Class
P
|
$ |
100
|
N/A
|
(6) | $ |
100
|
N/A
|
|||||||||
Class
L
|
N/A
|
N/A
|
(7) | (7 | ) | (7 | ) |
(1)
|
The
Pass-Through Rate for the Class A-1 Certificates for the Interest
Accrual
Period for each Distribution Date will be a per annum rate equal
to the
lesser of (i) LIBOR plus 0.55% and (ii) 7.00%. The Pass-Through
Rate for the Class A-1 Certificates during the initial Interest
Accrual
Period is 5.87% per annum.
|
(2)
|
This
Class of Certificates will be Notional Amount Certificates, will
have no
Class Certificate Balance and will bear interest on its Notional
Amount.
|
(3)
|
The
Pass-Through Rate for the Class A-2 Certificates for the Interest
Accrual
Period for each Distribution Date will be a per annum rate equal
to 6.45%
minus LIBOR, subject to a maximum of 6.45% and a minimum of
0.00%. The Pass-Through Rate for the Class A-2 Certificates
during the initial Interest Accrual Period is 1.13% per
annum.
|
(4)
|
Denomination
is based on Notional Amount.
|
(5)
|
The
Class PO Certificates are Principal Only Certificates and are not
entitled
to receive distributions of
interest.
|
(6)
|
The
Class P Certificates will not be entitled to any interest, but
will be
entitled to 100% of any Prepayment Charges on the Mortgage
Loans. For federal income tax purposes, all amounts in respect
of waived Prepayment Charges paid by the Servicer to the Class
P
Certificates pursuant to Section 3.20(b) will be treated as paid
directly
by the Servicer to the Class P Certificates and not as paid by
or through
any REMIC created hereunder. The Class P Certificates shall be
issued as a single certificate.
|
(7)
|
The
Class L Certificates will not evidence an interest in any REMIC
and will
not be entitled to any interest but will be entitled to 100% of
the Late
Payment Fees collected. For federal income tax purposes, the
Trustee will treat Late Payment Fees as beneficially owned by the
Holder
of the Class L Certificates and shall treat such portion of the
Trust Fund
as an interest in a “trust” within the meaning of Treasury regulations
section 301.7701-4(a) (the “Grantor
Trust”). The Class L Certificates shall be issued
as a single certificate.
|
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.
Set
forth
below are designations of Classes of Certificates to the categories used
herein:
Accretion
Directed
Certificates
|
None.
|
3
Accrual
Certificates
|
None.
|
Book-Entry
Certificates
|
All
Classes of Certificates other than the Physical
Certificates.
|
COFI
Certificates
|
None.
|
Delay
Certificates
|
All
interest-bearing Classes of Certificates other than any Non-Delay
Certificates.
|
ERISA-Restricted
Certificates
|
The
Residual Certificates and the Private Certificates; the Retained
Certificates (other than the Private Certificates) until they have
been
the subject of an ERISA-Qualifying Underwriting; and Certificates
of any
Class that ceases to have a rating of BBB- (or its equivalent)
or better
from at least one Rating Agency.
|
LIBOR
Certificates
|
Class
A-1 and Class A-2 Certificates.
|
Non-Delay
Certificates
|
LIBOR
Certificates.
|
Notional
Amount
Certificates
|
Class
A-2 and Class A-X Certificates
|
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
|
Class
PO Certificates.
|
Private
Certificates
|
Class
B-4, Class B-5, Class B-6, Class P and Class L
Certificates.
|
Rating
Agencies
|
Fitch
and S&P.
|
Regular
Certificates
|
All
Classes of Certificates other than the Class A-R
Certificates.
|
Residual
Certificate
|
Class
A-R Certificates.
|
Retained
Certificates
|
Class
PO, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class
B-6,
Class P and Class L Certificates.
|
4
Senior
Certificates
|
Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-5, Class
A-6,
Class A-7, Class A-8, Class A-X, Class PO and Class A-R
Certificates
|
Subordinated
Certificates
|
Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates.
|
Targeted
Principal
Classes
|
None.
|
Targeted
Principal
Component
|
None.
|
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
ARTICLE
ONE
DEFINITIONS
Section
1.01 Definitions.
Unless
the context requires a different meaning, capitalized terms are used in this
Agreement as defined below.
Accretion
Directed Certificates: As specified in the Preliminary
Statement.
Accretion
Direction Rule: Not applicable.
Accrual
Amount: Not applicable.
Accrual
Certificates: As specified in the Preliminary
Statement.
Accrual
Termination Date: Not applicable.
Additional
Designated Information: As defined in Section
11.02.
Adjusted
Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Servicing Fee
Rate.
Adjusted
Net Mortgage Rate: As to each Mortgage Loan and any
Distribution Date, the per annum rate equal to the Mortgage Rate of that
Mortgage Loan (as of the Due Date in the month preceding the month in which
such
Distribution Date occurs) less the Expense Fee Rate for that Mortgage
Loan.
Advance: The
payment required to be made by the Servicer with respect to any Distribution
Date pursuant to Section 4.01, the amount of any such payment being equal
to the
aggregate of payments of principal and interest (net of the Servicing Fee)
on
the Mortgage Loans that were due during the related Due Period and not received
as of the close of business on the related Determination Date, together with
an
amount equivalent to interest on each REO Property, net of any net income
from
such REO Property, less the aggregate amount of any such delinquent
payments that the Servicer has determined would constitute a Nonrecoverable
Advance if advanced.
Advance
Notice: As defined in Section 4.01(b).
Advance
Deficiency: As defined in Section 4.01(b).
Affiliate: With
respect to any Person, any other Person controlling, controlled or under
common
control with such Person. For purposes of this definition, “control”
means the power to direct the management and policies of a Person, directly
or
indirectly, whether through ownership of voting securities, by contract,
or
otherwise and “controlling” and “controlled” shall have meanings correlative to
the foregoing. Affiliates also include any entities consolidated with
the requirements of generally accepted accounting principles.
Aggregate
Planned Balance: Not applicable.
Agreement: This
Pooling and Servicing Agreement and all amendments and supplements.
6
Allocable
Share: As to any Distribution Date and any Mortgage
Loan (i) [reserved]; (ii) with respect to the Class PO Certificates, zero
and
(iii) with respect to each other Class of Certificates the product of (a)
the
lesser of (I) the ratio that the Required Coupon bears to such Adjusted Net
Mortgage Rate of such Mortgage Loan and (II) one, multiplied by (b) the ratio
that the amount calculated with respect to such Distribution Date for such
Class, pursuant to clause (i) of the definition of Class Optimal Interest
Distribution Amount (without giving effect to any reduction of such amount
pursuant to Section 4.02(d)) bears to the aggregate amount calculated with
respect to such Distribution Date for each such Class of Certificates pursuant
to clause (i) of the definition of Class Optimal Interest Distribution Amount
(without giving effect to any reduction of such amounts pursuant to Section
4.02(d)).
Amount
Available for Senior Principal: As to any Distribution
Date, the Available Funds for such Distribution Date, reduced by the aggregate
amount distributable (or allocable to the Accrual Amount, if applicable)
on such
Distribution Date in respect of interest on the Senior Certificates pursuant
to
Section 4.02(a)(1)(iii).
Amount
Held for Future Distribution: As to any Distribution
Date, the aggregate amount held in the Certificate Account at the close of
business on the related Determination Date on account of (i) Principal
Prepayments received after the last day of the related Prepayment Period
and
Liquidation Proceeds and Subsequent Recoveries received in the month of such
Distribution Date and (ii) all Scheduled Payments due after the related Due
Date.
Applicable
Credit Support Percentage: As defined in Section
4.02(e).
Appraised
Value: With respect to any Mortgage Loan, the Appraised
Value of the related Mortgaged Property shall be: (i) with respect to a Mortgage
Loan other than a Refinance Loan, the lesser of (a) the value of the Mortgaged
Property based upon the appraisal made at the time of the origination of
such
Mortgage Loan and (b) the sales price of the Mortgaged Property at the time
of
the origination of such Mortgage Loan; and (ii) with respect to a Refinance
Loan, the value of the Mortgaged Property based upon the appraisal made at
the
time of the origination of such Refinance Loan.
Available
Funds: As to any Distribution 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,
the
$100 held in trust for the Class P Certificates and Late Payment Fees 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 P Certificates will be entitled to all
Prepayment Charges received on the Mortgage Loans and the Holders of the
Class L
Certificates will be entitled to all Late Payment Fees received on the Mortgage
Loans and such amounts will not be available for distribution to the Holders
of
any other Class of Certificates.
Bankruptcy
Code: The United States Bankruptcy Reform Act of 1978,
as amended.
Bankruptcy
Coverage Termination Date: The point in time at which
the Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy
Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction; provided, however, that a Bankruptcy
Loss
shall not be deemed a Bankruptcy Loss under this
7
Agreement
so long as the Servicer has notified the Trustee in writing that the Servicer
is
diligently pursuing any remedies that may exist in connection with the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default
with
regard to payments due under the Mortgage Loan or (B) delinquent payments
of
principal and interest under the related Mortgage Loan and any related escrow
payments in respect of such Mortgage Loan are being advanced on a current
basis
by the Servicer, in either case without giving effect to any Debt Service
Reduction or Deficient Valuation.
Bankruptcy
Loss Coverage Amount: As of any date of determination,
the Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Loss
Coverage Amount as reduced by (i) the aggregate amount of Bankruptcy Losses
allocated to the Certificates since the Cut-off Date and (ii) any permissible
reductions in the Bankruptcy Loss Coverage Amount as evidenced by a letter
of
each Rating Agency to the Trustee to the effect that any such reduction will
not
result in a downgrading, qualification or withdrawal of the then current
ratings
assigned to the Classes of Certificates rated by it.
Blanket
Mortgage: The mortgage or mortgages encumbering a
Cooperative Property.
Book-Entry
Certificates: As specified in the Preliminary
Statement.
Business
Day: Any day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in the City of New York, New York,
the
State of California or the city in which the Corporate Trust Office of the
Trustee is located (excluding the city where the Certificate Registrar is
located) are authorized or obligated by law or executive order to be
closed.
Cap
Counterparty: Not applicable.
Certificate: Any
one of the certificates issued by the Trust Fund and executed by the Trustee
in
substantially the forms attached as exhibits.
Certificate
Account: The separate Eligible Account or Accounts
created and maintained by the Servicer pursuant to Section 3.06(d) with a
depository institution in the name of the Servicer for the benefit of the
Trustee on behalf of Certificateholders and designated “IndyMac Bank, F.S.B., in
trust for the registered holders of Residential Asset Securitization Trust
2007-A9, Mortgage Pass-Through Certificates, Series 2007-I.”
Certificate
Balance: With respect to any Certificate (other than
the Notional Amount Certificates) at any date of determination, the maximum
dollar amount of principal to which the Holder thereof is then entitled under
this Agreement, such amount being equal to the Denomination thereof (A) plus
any increase in the Certificate Balance of such Certificate pursuant
to
Section 4.02 due to the receipt of Subsequent Recoveries, (B) minus the
sum of (i) all distributions of principal previously made with respect thereto
and (ii) all Realized Losses allocated to that Certificate and, in the case
of
any Subordinated Certificates, all other reductions in Certificate Balance
previously allocated to that Certificate pursuant to Section 4.05 and (C)
in the
case of any Class of Accrual Certificates, plus the Accrual Amount added
to the Class Certificate Balance of such Class prior to such
date. The Notional Amount Certificates and the Class L Certificates
do not have Certificate Balances.
Certificate
Group: Not applicable.
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
8
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.
Certificate
Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of the Book-Entry Certificate. For
the purposes of this Agreement, in order for a Certificate Owner to enforce
any
of its rights under this Agreement, it shall first have to provide evidence
of
its beneficial ownership interest in a Certificate that is reasonably
satisfactory to the Trustee, the Depositor and/or the Servicer, as
applicable.
Certificate
Register: The register maintained pursuant to Section
5.02.
Certificate
Registrar: Deutsche Bank National Trust Company and its
successors and, if a successor certificate registrar is appointed under this
Agreement, the successor.
Certification
Party: As defined in Section 11.05.
Certifying
Person: As defined in Section 11.05.
Class: All
Certificates bearing the same class designation as set forth in the Preliminary
Statement.
Class
A-8 Percentage: For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Class Certificate Balance of the Class A-8 and Class A-R Certificates
immediately prior to such Distribution Date, and the denominator of which
is the
aggregate Class Certificate Balance of the Senior Certificates (other than
the
Class PO Certificates and the Notional Amount Certificates) immediately prior
to
that Distribution Date.
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 Class, the sum of (i) one month’s interest accrued
during the related Interest Accrual Period at the Pass-Through Rate for such
Class, on the related Class Certificate Balance or Notional Amount, as
applicable, immediately prior to such Distribution Date, subject to reduction
pursuant to Section 4.02(d), and (ii) any Class Unpaid Interest Amounts for
such
Class. All Classes of Certificates will accrue interest on the basis
of a 360-day year consisting of twelve 30-day months.
Class
PO Deferred Amount: As to any Distribution Date, the
aggregate of the applicable PO Percentage of each Realized Loss, other than
any
Excess Loss, on a Discount Mortgage Loan to be allocated to the Class PO
Certificates on such Distribution Date on or prior to the Senior Credit Support
Depletion Date or previously allocated to that Class PO Certificates and
not yet
paid to the Holders of the Class PO Certificates.
9
Class
Subordination Percentage: With respect to any
Distribution Date and each Class of Subordinated Certificates, the fraction
(expressed as a percentage) the numerator of which is the Class Certificate
Balance of such Class of Subordinated Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate Class
Certificate Balance of all Classes of Certificates immediately prior to such
Distribution Date.
Class
Unpaid Interest Amounts: As to any Distribution Date
and Class of interest-bearing Certificates, the amount by which the aggregate
Class Interest Shortfalls for such Class on prior Distribution Dates exceeds
the
amount distributed on such Class on prior Distribution Dates pursuant to
clause
(ii) of the definition of Class Optimal Interest Distribution
Amount.
Closing
Date: July 26, 2007.
Code:
The Internal Revenue Code of 1986, including any successor or amendatory
provisions.
COFI: Not
applicable.
COFI
Certificates: Not applicable.
Combined
Percentage: For any Distribution Date, 100% minus the
Class A-8 Percentage for that Distribution Date.
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
Balance: Not applicable.
Component
Certificates: As specified in the Preliminary
Statement.
Component
Notional Amount: Not applicable.
Components: As
specified in the Preliminary Statement.
Co-op
Shares: Shares issued by a Cooperative
Corporation.
Cooperative
Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and that governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation
under
section 216 of the Code.
Cooperative
Loan: Any Mortgage Loan secured by Co-op Shares and a
Proprietary Lease.
Cooperative
Property: The real property and improvements owned by
the Cooperative Corporation, including the allocation of individual dwelling
units to the holders of the Co-op Shares of the Cooperative
Corporation.
Cooperative
Unit: A single family dwelling located in a Cooperative
Property.
Corporate
Trust Office: The designated office of the Trustee in
the State of California at which at any particular time its corporate trust
business with respect to this Agreement is administered, which
10
office
at
the date of the execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attn: Mortgage Administration-IN0709
(IndyMac MBS, Inc., Residential Asset Securitization Trust 2007-A9, Mortgage
Pass-Through Certificates, Series 2007-I), and which is the address to which
notices to and correspondence with the Trustee should be
directed. With respect to the Certificate Registrar, the designated
office for presentment and surrender of Certificates for registration of
transfer, exchange or final payment thereof is located at DB Services Tennessee,
000 Xxxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000-0000, Attention:
Transfer Unit.
Corridor
Contract: Not applicable.
Corridor
Contract Termination Date: Not applicable.
Cross-over
Situation: Not applicable.
Cut-off
Date: July 1, 2007.
Cut-off
Date Pool Principal
Balance: $306,993,672.94.
Cut-off
Date Principal Balance: As to any Mortgage Loan, its
Stated Principal Balance as of the close of business on the Cut-off
Date.
Debt
Service Reduction: For any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy
Code
in the Scheduled Payment for the Mortgage Loan that became final and
non-appealable, except a reduction resulting from a Deficient Valuation or
a
reduction that results in a permanent forgiveness of principal.
Defective
Mortgage Loan: Any Mortgage Loan that is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deficient
Valuation: For any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less
than
the then outstanding indebtedness under the Mortgage Loan, or any reduction
in
the amount of principal to be paid in connection with any Scheduled Payment
that
results in a permanent forgiveness of principal, which valuation or reduction
results from an order of the court that is final and non-appealable in a
proceeding under the Bankruptcy Code.
Definitive
Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay
Certificates: As specified in the Preliminary
Statement.
Delay
Delivery Certification: A certification substantially
in the form of Exhibit G-2.
Delay
Delivery Mortgage Loans: The Mortgage Loans identified
on the Mortgage Loan Schedule for which none of a related Mortgage File or
neither the Mortgage Note nor a lost note affidavit for a lost Mortgage Note
has
been delivered to the Trustee by the Closing Date. The Depositor
shall deliver the Mortgage Files to the Trustee:
(A) for
at least 70% of the Mortgage Loans, not later than the Closing Date,
and
(B) for
the remaining 30% of the Mortgage Loans, not later than five Business Days
following the Closing Date.
11
To
the
extent that the Seller is in possession of any Mortgage File for any Delay
Delivery Mortgage Loan, until delivery of the Mortgage File to the Trustee
as
provided in Section 2.01, the Seller shall hold the files as Servicer, as
agent
and in trust for the Trustee.
Deleted
Mortgage Loan: As defined in Section
2.03(c).
Delinquent: A
Mortgage Loan is “Delinquent” if any monthly payment due on a Due Date is not
made by the close of business on the day immediately preceding 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 last day of 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.
Derivative
Notional Balance: Not applicable.
Determination
Date: As to any Distribution Date, the 15th
day of each month
or if that day is not a Business Day the next Business Day.
Discount
Mortgage Loan: Any Mortgage Loan with an Adjusted Net
Mortgage Rate that is less than the Required Coupon.
Distribution
Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.06(e) in the name of the
Trustee
for the benefit of the Certificateholders and designated “Deutsche Bank National
Trust Company in trust for registered holders of Residential Asset
Securitization Trust 2007-A9, Mortgage Pass-Through Certificates, Series
2007-I.” 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 August
2007.
Due
Date: For any Mortgage Loan and Distribution Date, the
first day of the month in which such Distribution Date occurs.
12
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.
XXXXX: The
Commission’s Electronic Data Gathering, Analysis and Retrieval
system.
Eligible
Account: Any of
(i) an
account or accounts maintained with a federal or state chartered depository
institution or trust company the short-term unsecured debt obligations of
which
(or, in the case of a depository institution or trust company that is the
principal subsidiary of a holding company, the debt obligations of either
such
holding company or the depository institution or trust company, whichever
are
rated higher) have (x) if Xxxxx’x is a Rating Agency at the time amounts are
held on deposit therein, the highest short-term ratings of Moody's (which
shall
be Prime-1), (y) if Fitch is a Rating Agency at the time any amounts are
held on
deposit therein, the highest short-term rating of Fitch (which shall be F1
for
funds held for less than 30 days, and F1+ for funds held for longer than
30 days
and less than 365 days) and (z) if S&P is a Rating Agency at the time any
amounts are held on deposit therein, a short-term rating of at least A-2,
for
funds held no longer than 30 days, and, if funds will be held longer than
30
days and less than 365 days, a short-term rating of at least A-1+,
or
(ii) if
either of Moody’s or Fitch is a Rating Agency, an account or accounts in a
depository institution or trust company in which such accounts are insured
by
the FDIC (to the limits established by the FDIC) and the uninsured deposits
in
which accounts are otherwise secured such that, as evidenced by an Opinion
of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account
or a
perfected first priority security interest against any collateral (which
shall
be limited to Permitted Investments) securing such funds that is superior
to
claims of any other depositors or creditors of the depository institution
or
trust company in which such account is maintained (it being understood that
any
account permitted by this clause (ii) shall not be an Eligible Account in
connection with a rating provided by S&P of any Class of Certificates),
or
(iii) a
trust account or accounts maintained with (a) the trust department of a federal
or state chartered depository institution or (b) a trust company, acting
in its
fiduciary capacity or
(iv) any
other account acceptable to each Rating Agency.
Eligible
Accounts may bear interest, and may include, if otherwise qualified under
this
definition, accounts maintained with the Trustee.
ERISA: The
Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying
Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of the
Underwriter’s Exemption.
ERISA-Restricted
Certificate: As specified in the Preliminary
Statement.
Escrow
Account: The Eligible Account or Accounts established
and maintained pursuant to Section 3.07(a).
Event
of Default: As defined in Section 7.01.
13
Excess
Loss: The amount of any (i) Fraud Loss on the Mortgage
Loans realized after the Fraud Loss Coverage Termination Date, (ii) Special
Hazard Loss on the Mortgage Loans realized after the Special Hazard Coverage
Termination Date or (iii) Bankruptcy Loss on the Mortgage Loans realized
after
the Bankruptcy Coverage Termination Date.
Excess
Proceeds: For any Liquidated Mortgage Loan, the excess
of
(a) all
Liquidation Proceeds from the Mortgage Loan received in the calendar month
in
which the Mortgage Loan became a Liquidated Mortgage Loan, net of any amounts
previously reimbursed to the Servicer as Nonrecoverable Advances with respect
to
the Mortgage Loan pursuant to Section 3.09(a)(iii), over
(b) the
sum of (i) the unpaid principal balance of the Liquidated Mortgage Loan as
of
the Due Date in the month in which the Mortgage Loan became a Liquidated
Mortgage Loan plus (ii) accrued interest at the Mortgage Rate from the Due
Date
for which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date applicable to the Distribution Date
following the calendar month during which the liquidation occurred.
Exchange
Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
Exchange
Act Reports: Any reports on Form 10-D, Form 8-K and
Form 10-K required to be filed by the Depositor with respect to the Trust
Fund
under the Exchange Act.
Expense
Fee Rate: As to each Mortgage Loan, the sum of (a) the
related Servicing Fee Rate and (b) the Trustee Fee Rate.
FDIC: The
Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC:
The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III
of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Fitch: Fitch,
Inc., or any successor thereto. If Fitch is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Fitch shall be Fitch, Inc., Xxx Xxxxx Xxxxxx Xxxxx,
Xxx
Xxxx, XX 00000, Attention: MBS Monitoring - IndyMac 2007-I, or any other
address
Fitch furnishes to the Depositor and the Servicer.
FNMA: The
Federal National Mortgage Association, a federally chartered and privately
owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
Form
10-D Disclosure Item: With respect to any Person, any
material litigation or governmental proceedings pending against such Person,
or
against any of the Trust Fund, the Depositor, the Trustee or the Servicer,
if
such Person has actual knowledge thereof.
Form
10-K Disclosure Item: With respect to any Person, (a)
Form 10-D Disclosure Item, and (b) any affiliations or relationships between
such Person and any Item 1119 Party.
Fraud
Loan: A Liquidated Mortgage Loan as to which a Fraud
Loss has occurred.
14
Fraud
Loss Coverage Amount: As of the Closing Date,
$6,139,873.46, subject to reduction from time to time, by the amount of Fraud
Losses allocated to the Certificates. In addition, on each
anniversary of the Cut-off Date, the Fraud Loss Coverage Amount will be reduced
as follows: (a) on the first, second, third and fourth anniversaries of the
Cut-off Date, to an amount equal to the lesser of (i) 1% of the then current
Stated Principal Balance of the Mortgage Loans in the case of the first,
second,
third and fourth such anniversaries and (ii) the excess of the Fraud Loss
Coverage Amount as of the preceding anniversary of the Cut-off Date over
the
cumulative amount of Fraud Losses allocated to the Certificates since such
preceding anniversary; and (b) on the fifth anniversary of the Cut-off Date,
to
zero.
Fraud
Loss Coverage Termination Date: The point in time at
which the Fraud Loss Coverage Amount is reduced to zero.
Fraud
Losses: Realized Losses on Mortgage Loans as to which a
loss is sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including
a loss
by reason of the denial of coverage under any related Primary Insurance Policy
because of such fraud, dishonesty or misrepresentation.
Grantor
Trust: As specified in the Preliminary
Statement.
Indirect
Participant: A broker, dealer, bank, or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial
Bankruptcy Loss Coverage
Amount: $100,000.00.
Initial
Component Balance: As specified in the Preliminary
Statement.
Initial
LIBOR Rate: 5.32% per annum.
Insurance
Policy: For any Mortgage Loan included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto
in
effect, including any replacement policy or policies for any Insurance
Policies.
Insurance
Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
Insured
Expenses: Expenses covered by an Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.
Interest
Accrual Period: With respect to each Class of Delay
Certificates and any Distribution Date, the calendar month prior to the month
of
such Distribution Date. With respect to each Class of Non-Delay
Certificates and any Distribution Date, the one-month period commencing on
the
25th day of
the
month preceding the month in which such Distribution Date occurs and ending
on
the 24th day of
the month in which such Distribution Date occurs. All Classes of
Certificates will accrue interest on the basis of a 360-day year consisting
of
twelve 30-day months.
Interest
Determination Date: With respect to (a) any Interest
Accrual Period for any LIBOR Certificates and (b) any Interest Accrual Period
for the COFI Certificates for which the applicable Index is LIBOR, the second
Business Day prior to the first day of such Interest Accrual
Period.
Interest
Settlement Rate: As defined in Section
4.09.
15
Item
1119 Party: The Depositor, the Seller, the Servicer, the Trustee,
the Cap Counterparty and any other material transaction party, as identified
in
Exhibit T, as updated pursuant to Section 11.04.
Late
Payment Fee: As to a Mortgage Loan, any fees assessable
by the related mortgagee in connection with the late payment of a Scheduled
Payment due after the Cut-off Date.
Latest
Possible Maturity Date: The Distribution Date,
calculated on the Closing Date, following the third anniversary of the later
of
(i) the scheduled maturity date of the Mortgage Loan having the latest scheduled
maturity date as of the Cut-off Date, and (ii) the latest possible maturity
of
any Substitute Mortgage Loan that may be substituted for any Mortgage Loan
pursuant to this Agreement.
Lender
PMI Loans: Mortgage Loans with respect to which the
lender rather than the borrower acquired the primary mortgage guaranty insurance
and charged the related borrower an interest premium.
LIBOR: The
London interbank offered rate for one month United States dollar deposits
calculated in the manner described in Section 4.09.
LIBOR
Determination Date: For any Interest Accrual Period, the second
London Business Day prior to the commencement of such Interest Accrual
Period.
Limited
Exchange Act Reporting Obligations: The obligations of the
Servicer under Section 3.17(b), Section 6.02 and Section 6.04 with respect
to
notice and information to be provided to the Depositor and Article 11 (except
Section 11.07(a)(i) and (ii)).
Liquidated
Mortgage Loan: For any Distribution Date, a defaulted
Mortgage Loan (including any REO Property) that was liquidated in the calendar
month preceding the month of the Distribution Date and as to which the Servicer
has certified (in accordance with this Agreement) that it has received all
amounts it expects to receive in connection with the liquidation of the Mortgage
Loan, including the final disposition of an REO Property.
Liquidation
Proceeds: Amounts, including Insurance Proceeds
regardless of when received, received in connection with the partial or complete
liquidation of defaulted Mortgage Loans, whether through trustee’s sale,
foreclosure sale, or otherwise or amounts received in connection with any
condemnation or partial release of a Mortgaged Property, and any other proceeds
received in connection with an REO Property, less the sum of related
unreimbursed Servicing Fees, Servicing Advances, and Advances.
Loan
Group: Not applicable.
Loan-to-Value
Ratio: For any Mortgage Loan and as of any date of
determination, is the fraction whose numerator is the original principal
balance
of the related Mortgage Loan at that date of determination and whose denominator
is the Appraised Value of the related Mortgaged Property.
London
Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank
market.
Lost
Mortgage Note: Any Mortgage Note the original of which
was permanently lost or destroyed and has not been replaced.
Maintenance: For
any Cooperative Unit, the rent paid by the Mortgagor to the Cooperative
Corporation pursuant to the Proprietary Lease.
16
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® System.
MERS®
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.
Monthly
Statement: The statement delivered to the
Certificateholders pursuant to Section 4.06.
Moody’s: Xxxxx’x
Investors Service, Inc., or any successor thereto. If Xxxxx’x 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 Xxxxx’x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Loan Monitoring Group, or any other address that Moody’s furnishes
to the Depositor and the Servicer.
Mortgage: The
mortgage, deed of trust, or other instrument creating a first lien on an
estate
in fee simple or leasehold interest in real property securing a Mortgage
Note.
Mortgage
File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage
Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to this Agreement, as from time to time
are
held as a part of the Trust Fund (including any REO Property), the Mortgage
Loans so held being identified on the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged
Property.
Mortgage
Loan Schedule: As of any date, the list set forth in
Schedule I of Mortgage Loans included in the Trust Fund on that
date. The Mortgage Loan Schedule shall be prepared by the Seller and
shall set forth the following information with respect to each Mortgage
Loan:
|
(i)
|
the
loan number;
|
|
(ii)
|
the
street address of the Mortgaged Property, including the zip
code;
|
|
(iii)
|
the
maturity date;
|
|
(iv)
|
the
original principal balance;
|
|
(v)
|
the
Cut-off Date Principal Balance;
|
|
(vi)
|
the
first payment date of the Mortgage
Loan;
|
|
(vii)
|
the
Scheduled Payment in effect as of the Cut-off
Date;
|
|
(viii)
|
the
Loan-to-Value Ratio at origination;
|
17
|
(ix)
|
a
code indicating whether the residential dwelling at the time of
origination was represented to be
owner-occupied;
|
|
(x)
|
a
code indicating whether the residential dwelling is either (a)
a detached
single family dwelling, (b) a dwelling in a PUD, (c) a condominium
unit,
(d) a two- to four-unit residential property, or (e) a Cooperative
Unit;
|
|
(xi)
|
the
Mortgage Rate;
|
|
(xii)
|
the
purpose for the Mortgage Loan;
|
|
(xiii)
|
the
type of documentation program pursuant to which the Mortgage Loan
was
originated;
|
|
(xiv)
|
a
code indicating whether the Mortgage Loan is a borrower-paid mortgage
insurance loan;
|
|
(xv)
|
the
Servicing Fee Rate;
|
|
(xvi)
|
a
code indicating whether the Mortgage Loan is a Lender PMI
Loan;
|
(xvii)
|
the
coverage amount of any mortgage
insurance;
|
(xviii)
|
with
respect to the Lender PMI Loans, the interest premium charged by
the
lender;
|
|
(xix)
|
a
code indicating whether the Mortgage Loan is a Delay Delivery Mortgage
Loan;
|
|
(xx)
|
a
code indicating whether the Mortgage Loan is subject to a buydown
agreement;
|
|
(xxi)
|
a
code indicating whether the Mortgage Loan is a MERS Mortgage Loan;
and
|
|
(xxii)
|
the
type of Prepayment Charge and the Prepayment Charge
Period.
|
The
schedule shall also set forth the total of the amounts described under (v)
above
for all of the Mortgage Loans.
Mortgage
Note: The original executed note or other evidence of
the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage
Rate: The annual rate of interest borne by a Mortgage
Note from time to time (net of the interest premium for any Lender PMI
Loan).
Mortgaged
Property: The underlying property securing a Mortgage
Loan, which, with respect to a Cooperative Loan, is the related Co-op Shares
and
Proprietary Lease.
Mortgagor: The
obligors on a Mortgage Note.
National
Cost of Funds Index: The National Monthly Median Cost
of Funds Ratio to SAIF-Insured Institutions published by the OTS.
18
Net
Prepayment Interest Shortfall: As to any Distribution
Date, the amount, if any, by which the aggregate of the Prepayment Interest
Shortfalls for such Distribution Date exceeds the Compensating Interest for
such
Distribution Date.
Non-Delay
Certificates: As specified in the Preliminary
Statement.
Non-Discount
Mortgage Loan: Any Mortgage Loan with an Adjusted Net
Mortgage Rate that is greater than or equal to the Required Coupon.
Non-PO
Formula Principal Amount: As to any Distribution Date,
the sum of (i) the applicable Non-PO Percentage of (a) all monthly payments
of
principal due on each Mortgage Loan on the related Due Date, (b) the principal
portion of the purchase price of each Mortgage Loan that was repurchased
by the
Seller pursuant to this Agreement as of such Distribution Date, excluding
any
Mortgage Loan that was repurchased pursuant to Section 3.12, (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, and (f)
all
partial and full Principal Prepayments received during the related Prepayment
Period and (ii) (A) any Subsequent Recoveries received during the calendar
month
preceding the month of such Distribution Date, or (B) with respect to Subsequent
Recoveries attributable to a Discount Mortgage Loan that incurred (1) an
Excess
Loss or (2) a Realized Loss after the Senior Credit Support Depletion Date,
the
Non-PO Percentage of any Subsequent Recoveries received during the calendar
month preceding the month of such Distribution Date.
Non-PO
Percentage: As to any Discount Mortgage Loan, a
fraction (expressed as a percentage) the numerator of which is the Adjusted
Net
Mortgage Rate of such Discount Mortgage Loan and the denominator of which
is the
Required Coupon. As to any Non-Discount Mortgage Loan,
100%.
Nonrecoverable
Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer, that, in the good faith judgment of
the
Servicer, will not be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Notice
of Final Distribution: The notice to be provided
pursuant to Section 9.02 to the effect that final distribution on any of
the
Certificates shall be made only upon presentation and surrender
thereof.
Notional
Amount: With respect to the Interest Accrual Period for
any Distribution Date and the Class A-X Certificates, an amount equal to
the
product of (i) a fraction, the numerator of which is the excess of (a) the
weighted average of the Adjusted Net Mortgage Rates of the Non-Discount Mortgage
Loans, weighted on the basis of their respective Stated Principal Balances
as of
the first day of the related Due Period (after giving effect to Principal
Prepayments received in the Prepayment Period ending during that Due Period)
over (b) 6.50%, and the denominator of which is 7.00% and (ii) the aggregate
Stated Principal Balance of the Non-Discount Mortgage Loans as of the first
day
of the related Due Period (after giving effect to Principal Prepayments received
in the Prepayment Period ending during that Due Period). With respect
to the Class A-2 Certificates and the Interest Accrual Period for any
Distribution Date, the Class Certificate Balance of the Class A-1 Certificates
immediately prior to that Distribution Date.
Notional
Amount Certificates: As specified in the Preliminary
Statement.
19
Offered
Certificates: As specified in the Preliminary
Statement.
Officer’s
Certificate: A certificate (i) signed by the Chairman
of the Board, the Vice Chairman of the Board, the President, a Managing
Director, a Vice President (however denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Servicer, (ii) if provided for in this
Agreement, signed by a Servicing Officer, as the case may be, and delivered
to
the Depositor and the Trustee as required by this Agreement or (iii) in the
case
of any other Person, signed by an authorized officer of such
Person.
Opinion
of Counsel: For the interpretation or application of
the REMIC Provisions, a written opinion of counsel who (i) is in fact
independent of the Depositor and the Servicer, (ii) does not have any direct
financial interest in the Depositor or the Servicer or in any affiliate of
either, and (iii) is not connected with the Depositor or the Servicer as
an
officer, employee, promoter, underwriter, trustee, partner, director, or
person
performing similar functions. Otherwise, a written opinion of counsel
who may be counsel for the Depositor or the Servicer, including in-house
counsel, reasonably acceptable to the Trustee.
Original
Applicable Credit Support Percentage: With respect to
each of the following Classes of Subordinated Certificates, the corresponding
percentage described below:
Class B-1
|
7.25%
|
||
Class B-2
|
4.35%
|
||
Class B-3
|
2.90%
|
||
Class B-4
|
1.80%
|
||
Class B-5
|
1.10%
|
||
Class B-6
|
0.50%
|
||
Original
Mortgage Loan: The Mortgage Loan refinanced in
connection with the origination of a Refinance Loan.
Original
Subordinated Principal Balance: The aggregate Class
Certificate Balance of the Subordinated Certificates as of the Closing
Date.
OTS: The
Office of Thrift Supervision.
Outside
Reference Date: Not applicable.
Outstanding:
For the Certificates as of any date of determination, all Certificates
theretofore executed and authenticated under this Agreement except:
|
(i)
|
Certificates
theretofore canceled by the Trustee or delivered to the Trustee
for
cancellation; and
|
|
(ii)
|
Certificates
in exchange for which or in lieu of which other Certificates have
been
executed and delivered by the Trustee pursuant to this
Agreement.
|
Outstanding
Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero that was not the subject of
a
Principal Prepayment in Full before the Due Date or during the related
Prepayment Period and that did not become a Liquidated Mortgage Loan before
the
Due Date.
20
Overcollateralized
Group: Not applicable.
Ownership
Interest: As to any Residual Certificate, any ownership interest
in the Certificate including any interest in the Certificate as its Holder
and
any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through
Rate: For each interest-bearing Class of Certificates,
the per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
Percentage
Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, the percentage interest being set forth on its face or equal to the
percentage obtained by dividing the Denomination of the Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Performance
Certification: As defined in Section
11.05.
Permitted
Investments: At any time, any of the
following:
(i) obligations
of the United States or any agency thereof backed by the full faith and credit
of the United States;
(ii) general
obligations of or obligations guaranteed by any state of the United States
or
the District of Columbia receiving the highest long-term debt rating of each
Rating Agency, or any lower rating that will not result in the downgrading,
qualification or withdrawal of the ratings then assigned to the Certificates
by
the Rating Agencies, as evidenced by a signed writing delivered by each Rating
Agency;
(iii) commercial
or finance company paper that is then receiving the highest commercial or
finance company paper rating of each Rating Agency, or any lower rating that
will not result in the downgrading, qualification or withdrawal of the ratings
then assigned to the Certificates by the Rating Agencies , as evidenced by
a
signed writing delivered by each Rating Agency;
(iv) certificates
of deposit, demand or time deposits, or bankers’ acceptances issued by any
depository institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision and examination
by federal or state banking authorities, provided that the commercial paper
or
long-term unsecured debt obligations of the depository institution or trust
company (or in the case of the principal depository institution in a holding
company system, the commercial paper or long-term unsecured debt obligations
of
the holding company, but only if Xxxxx’x is not a Rating Agency) are then rated
one of the two highest long-term and the highest short-term ratings of each
Rating Agency for the securities, or any lower rating that will not result
in
the downgrading, qualification or withdrawal of the ratings then assigned
to the
Certificates by the Rating Agencies, as evidenced by a signed writing delivered
by each Rating Agency;
(v) demand
or time deposits or certificates of deposit issued by any bank or trust company
or savings institution to the extent that the deposits are fully insured
by the
FDIC;
(vi) guaranteed
reinvestment agreements issued by any bank, insurance company, or other
corporation acceptable to the Rating Agencies at the time of the issuance
of the
agreements, as evidenced by a signed writing delivered by each Rating
Agency;
21
(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 cooperatives described in section 1381(a)(2)(C)
of
the Code,
(v) an
“electing large partnership” as defined in section 775 of the Code,
22
(vi) a
Person that is not a U.S. Person, and
(vii) any
other Person so designated by the Depositor based on an Opinion of Counsel
that
the Transfer of an Ownership Interest in a Residual Certificate to the Person
may cause any REMIC created hereunder to fail to qualify as a REMIC at any
time
that the Certificates are outstanding.
Person:
Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization, or government, or any agency or political
subdivision thereof.
Physical
Certificates: As specified in the Preliminary
Statement.
Planned
Balance: Not applicable.
Planned
Principal Classes: As specified in the Preliminary
Statement.
PO
Formula Principal Amount: As to any Distribution Date
and the Class PO Certificates, the sum of (i) the sum of the applicable PO
Percentage of (a) the principal portion of each Scheduled Payment (without
giving effect, prior to the Bankruptcy Coverage Termination Date, to any
reductions thereof caused by any Debt Service Reductions or Deficient
Valuations) due on each Mortgage Loan on the related Due Date, (b) the Stated
Principal Balance of each Mortgage Loan that was repurchased by the Seller
or
the Servicer pursuant to this Agreement as of such Distribution Date, excluding
any Mortgage Loan that was repurchased pursuant to Section 3.12, (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 during
the
calendar month preceding the month of such Distribution Date, and (f) all
Principal Prepayments with respect to the Mortgage Loans received during
the
related Prepayment Period, and (ii) with respect to Subsequent Recoveries
attributable to a Discount Mortgage Loan that incurred (1) an Excess Loss
or (2)
a Realized Loss after the Senior Credit Support Depletion Date, the PO
Percentage of any Subsequent Recoveries received during the calendar month
preceding the month of such Distribution Date.
PO
Percentage: With respect to any Discount Mortgage Loan,
a fraction (expressed as a percentage) the numerator of which is the excess
of
the Required Coupon over the Adjusted Net Mortgage Rate of such Discount
Mortgage Loan and the denominator of which is such Required
Coupon. As to any Non-Discount Mortgage Loan, 0%.
Pool
Stated Principal Balance: The aggregate Stated
Principal Balance of the Mortgage Loans.
Prepayment
Assumption: The prepayment model used in the Prospectus
Supplement.
Prepayment
Charge: As to a Mortgage Loan, any charge payable by a
Mortgagor in connection with certain partial prepayments and all prepayments
in
full made within the related Prepayment Charge Period, the Prepayment Charges
with respect to each applicable Mortgage Loan so held by the Trust Fund being
identified in the Mortgage Loan Schedule.
Prepayment
Charge Period: As to any Mortgage Loan, the period of
time during which a Prepayment Charge may be imposed.
23
Prepayment
Interest Excess: As to any Principal Prepayment
received by the Servicer on a Mortgage Loan from the first day through the
fifteenth day of any calendar month other than the month of the
Cut-off Date, all amounts paid by the related Mortgagor in respect of interest
on such Principal Prepayment. All Prepayment Interest Excess shall be
retained by the Servicer as additional servicing compensation.
Prepayment
Interest Shortfall: As to any Distribution Date,
Mortgage Loan and Principal Prepayment received on or after the sixteenth
day of
the month preceding the month of such Distribution Date (or, in the case
of the
first Distribution Date, on or after the Cut-off Date) and on or before the
last
day of the month preceding the month of such Distribution Date, the amount,
if
any, by which one month’s interest at the related Mortgage Rate, net of the
Servicing Fee Rate, on such Principal Prepayment exceeds the amount of interest
paid in connection with such Principal Prepayment.
Prepayment
Period: As to any Distribution Date and related Due Date, the
period from and including the 16th day of the month immediately prior to
the
month of such Distribution Date (or, in the case of the first Distribution
Date,
from the Cut-off Date) and to and including the 15th day of the month of
such
Distribution Date.
Prepayment
Shift Percentage: For any Distribution Date occurring
during the five years beginning on the first Distribution Date,
0%. For any Distribution Date occurring on or after the fifth
anniversary of the first Distribution Date as follows: for any
Distribution Date in the first year thereafter, 30%; for any Distribution
Date
in the second year thereafter, 40%; for any Distribution Date in the third
year
thereafter, 60%; for any Distribution Date in the fourth year thereafter,
80%;
and for any Distribution Date thereafter, 100%.
Primary
Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal
Balance Schedule: Not applicable.
Principal
Only Certificates: As specified in the Preliminary
Statement.
Principal
Prepayment: Any payment of principal by a Mortgagor on
a Mortgage Loan (including the principal portion of the Purchase Price of
any
Mortgage Loan purchased pursuant to Section 3.12) that is received in advance
of
its scheduled Due Date and is not accompanied by an amount representing
scheduled interest due on any date in any month after the month of
prepayment. The Servicer shall apply partial Principal Prepayments in
accordance with the related Mortgage Note.
Principal
Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Priority
Amount: For any Distribution Date, the sum of (i) the
product of (A) the Scheduled Principal Distribution Amount, (B) the Priority
Percentage and (C) the Shift Percentage and (ii) the product of (A) the
Unscheduled Principal Distribution Amount, (B) the Priority Percentage and
(C)
the Prepayment Shift Percentage.
Priority
Percentage: For any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the Class Certificate
Balance of the Class A-3 Certificates immediately prior to that Distribution
Date, and the denominator of which is the aggregate Class Certificate Balance
of
all Classes of Certificates (other than the Class PO Certificates and the
Notional Amount Certificates) immediately prior to that Distribution
Date.
24
Private
Certificates: As specified in the Preliminary
Statement.
Pro
Rata Share: As to any Distribution Date and any Class
of Subordinated Certificates, the portion of the Subordinated Principal
Distribution Amount allocable to such Class, equal to the product of the
Subordinated Principal Distribution Amount on such Distribution Date and
a
fraction, the numerator of which is the related Class Certificate Balance
thereof and the denominator of which is the aggregate Class Certificate Balance
of the Subordinated Certificates, in each case immediately prior to such
Distribution Date.
Proprietary
Lease: For any Cooperative Unit, a lease or occupancy
agreement between a Cooperative Corporation and a holder of related Co-op
Shares.
Prospectus
Supplement: The Prospectus Supplement dated July 26,
2007, relating to the Offered Certificates.
PUD: Planned
Unit Development.
Purchase
Price: For any Mortgage Loan required to be purchased
by the Seller pursuant to Section 2.02 or 2.03 or purchased by the Servicer
pursuant to Section 3.12, the sum of
(i) 100%
of the unpaid principal balance of the Mortgage Loan on the date of the
purchase,
(ii) accrued
and unpaid interest on the Mortgage Loan at the applicable Mortgage Rate
(or at
the applicable Adjusted Mortgage Rate if (x) the purchaser is the Servicer
or
(y) if the purchaser is the Seller and the Seller is the Servicer) from the
date
through which interest was last paid by the Mortgagor to the Due Date in
the
month in which the Purchase Price is to be distributed to Certificateholders,
net of any unreimbursed Advances made by the Servicer on the Mortgage Loan,
and
(iii) any
costs and damages incurred by the Trust Fund in connection with any violation
by
the Mortgage Loan of any predatory or abusive lending law.
If
the
Mortgage Loan is purchased pursuant to Section 3.12, the interest component
of
the Purchase Price shall be computed (i) on the basis of the applicable Adjusted
Mortgage Rate before giving effect to the related modification and (ii) from
the
date to which interest was last paid to the date on which the Mortgage Loan
is
assigned to the Servicer pursuant to Section 3.12.
Qualified
Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over the insurer in connection with the
insurance policy issued by the insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states
and to
write the insurance provided by the insurance policy issued by it, approved
as a
FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least “AA” or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect
to a Mortgage Loan must have at least as high a claims paying ability rating
as
the insurer it replaces had on the Closing Date.
Rating
Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If any of them or a successor is no longer in
existence, “Rating Agency” shall be the nationally recognized statistical rating
organization, or other comparable Person, identified as a “Rating Agency” under
the Underwriter’s Exemption, and 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.
25
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 Servicer receives Subsequent Recoveries with respect to any Mortgage
Loan, the amount of the Realized Loss with respect to that Mortgage Loan
will be
reduced by such Subsequent Recoveries.
Recognition
Agreement: For any Cooperative Loan, an agreement
between the Cooperative Corporation and the originator of the Mortgage Loan
that
establishes the rights of the originator in the Cooperative
Property.
Record
Date: With respect to any Distribution Date and any
Definitive Certificate and the Delay Certificates, the close of business
on the
last Business Day of the month preceding the month of that Distribution
Date. With respect to any Distribution Date and the Non-Delay
Certificates as long as they are Book-Entry Certificates, the Business Day
immediately prior to such Distribution Date.
Reference
Bank: As defined in Section 4.09.
Refinance
Loan: Any Mortgage Loan the proceeds of which are used
to refinance an Original Mortgage Loan.
Regular
Certificates: As specified in the Preliminary
Statement.
Regulation
AB: Subpart 229.1100 – Asset Backed Securities
(Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time
to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or
by the staff of the Commission, or as may be provided by the Commission or
its
staff from time to time.
Relief
Act: The Servicemembers Civil Relief Act.
Relief
Act Reductions: With respect to any Distribution Date
and any Mortgage Loan as to which there has been a reduction in the amount
of
interest collectible thereon for the most recently ended calendar month as a
result of the application of the Relief Act or any similar state or local
laws,
the amount, if any, by which (i) interest collectible on such Mortgage Loan
for
the most recently ended calendar month is less than (ii) interest accrued
thereon for such month pursuant to the Mortgage Note.
26
REMIC: A
“real estate mortgage investment conduit” within the meaning of section 860D of
the Code.
REMIC
Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may
be in
effect from time to time as well as provisions of applicable state
laws.
REO
Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Reportable
Event: Any event required to be reported on Form 8-K,
and in any event, the following:
(a) entry
into a definitive agreement related to the Trust Fund, the Certificates or
the
Mortgage Loans, or an amendment to a Transaction Document, even if the Depositor
is not a party to such agreement (e.g., a servicing agreement with a servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(b) termination
of a Transaction Document (other than by expiration of the agreement on its
stated termination date or as a result of all parties completing their
obligations under such agreement), even if the Depositor is not a party to
such
agreement (e.g., a servicing agreement with a servicer contemplated by Item
1108(a)(3) of Regulation AB);
(c) with
respect to the Servicer only, if the Servicer becomes aware of any bankruptcy
or
receivership with respect to the Seller, the Depositor, the Servicer, the
Trustee, the Cap Counterparty, any enhancement or support provider contemplated
by Items 1114(b) or 1115 of Regulation AB, or any other material party
contemplated by Item 1101(d)(1) of Regulation AB;
(d) with
respect to the Trustee, the Servicer and the Depositor only, the occurrence
of
an early amortization, performance trigger or other event, including an Event
of
Default under this Agreement;
(e) any
amendment to this Agreement;
(f) the
resignation, removal, replacement, substitution of the Servicer or the
Trustee;
(g) with
respect to the Servicer only, if the Servicer becomes aware that (i) any
material enhancement or support specified in Item 1114(a)(1) through (3)
of
Regulation AB or Item 1115 of Regulation AB that was previously applicable
regarding one or more Classes of the Certificates has terminated other than
by
expiration of the contract on its stated termination date or as a result
of all
parties completing their obligations under such agreement; (ii) any material
enhancement specified in Item 1114(a)(1) through (3) of Regulation AB or
Item
1115 of Regulation AB has been added with respect to one or more Classes
of the
Certificates; or (iii) any existing material enhancement or support specified
in
Item 1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB
with
respect to one or more Classes of the Certificates has been materially amended
or modified; and
(h) with
respect to the Trustee, the Servicer and the Depositor only, a required
distribution to Holders of the Certificates is not made as of the required
Distribution Date under this Agreement.
27
Reporting
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.
Reporting
Subcontractor: With respect to the Servicer or the Trustee, any
Subcontractor determined by such Person pursuant to Section 11.08(b) to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB. References to a Reporting Subcontractor shall refer
only to the Subcontractor of such Person and shall not refer to Subcontractors
generally.
Request
for Release: The Request for Release submitted by the Servicer to
the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required
Coupon: 6.50% per annum.
Required
Insurance Policy: For any Mortgage Loan, any insurance
policy that is required to be maintained from time to time under this
Agreement.
Residual
Certificates: As specified in the Preliminary
Statement.
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).
Reuters
Page LIBOR01: The display page currently so designated
as the “LIBOR01” page on Reuters (or any page replacing that page on that
service for the purpose of displaying comparable rates or prices).
SAIF: The
Savings Association Insurance Fund, or any successor thereto.
Xxxxxxxx-Xxxxx
Certification: As defined in Section
11.05.
S&P: Standard
& Poor’s, a division of The XxXxxx-Xxxx 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 XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance Monitoring,
or any other address that S&P furnishes to the Depositor and the
Servicer.
Scheduled
Balance: Not
applicable.
Scheduled
Classes: As specified in the Preliminary
Statement.
Scheduled
Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount
of
the monthly payment due on such Mortgage Loan.
28
Scheduled
Principal Distribution Amount: For any Distribution
Date, an amount equal to the Senior Percentage of the Non-PO Percentage of
all
amounts described in subclauses (a) through (d) of clause (i) of the definition
of Non-PO Formula Principal Amount for such Distribution Date; provided,
however, that if a Bankruptcy Loss that is an Excess Loss is sustained with
respect to a Mortgage Loan that is not a Liquidated Mortgage Loan, the Scheduled
Principal Distribution Amount will be reduced on the related Distribution
Date
by the Non-PO Percentage of the principal portion of such Bankruptcy
Loss.
Securities
Act: The Securities Act of 1933, as amended.
Security
Agreement: For any Cooperative Loan, the agreement
between the owner of the related Co-op Shares and the originator of the related
Mortgage Note that defines the security interest in the Co-op
Shares and the related Proprietary Lease.
Seller: IndyMac
Bank, F.S.B., a federal savings bank, and its successors and assigns, in
its
capacity as seller of the Mortgage Loans to the Depositor.
Senior
Certificate Group: As specified in the Preliminary
Statement.
Senior
Certificates: As specified in the Preliminary
Statement.
Senior
Credit Support Depletion Date: The date on which the
Class Certificate Balance of each Class of Subordinated Certificates has
been
reduced to zero.
Senior
Liquidation Amount: For any Distribution Date and for
each Mortgage Loan that became a Liquidated Mortgage Loan during the calendar
month preceding the month of the Distribution Date, the lesser of (a) the
Senior
Percentage of the applicable Non-PO Percentage of the Stated Principal Balance
of the Mortgage Loan and (b) either (x) if an Excess Loss was not sustained
on
the Liquidated Mortgage Loan during the preceding calendar month, the Senior
Prepayment Percentage of the Non-PO Percentage of the amount of the Liquidation
Proceeds allocable to principal received on the Mortgage Loan or (y) if an
Excess Loss was sustained on the Liquidated Mortgage Loan during the preceding
calendar month, the Senior Percentage of the applicable Non-PO Percentage
of the
amount of the Liquidation Proceeds allocable to principal received on the
Mortgage Loan.
Senior
Percentage: As to any Distribution Date, the percentage
equivalent of a fraction, not greater than 100%, the numerator of which is
the
aggregate Class Certificate Balance of the Senior Certificates (other than
the
Class PO Certificates and the Notional Amount Certificates) immediately before
the Distribution Date and the denominator of which is the aggregate Class
Certificate Balance of the Certificates (other than the Class PO Certificates
and the Notional Amount Certificates) immediately before the Distribution
Date.
Senior
Prepayment Percentage: As to any Distribution Date
during the five years beginning on the first Distribution Date,
100%. The Senior Prepayment Percentage for any Distribution Date
occurring on or after the fifth anniversary of the first Distribution Date
will,
except as provided in this Agreement, be as follows: for any Distribution
Date
in the first year thereafter, the Senior Percentage plus 70% of the Subordinated
Percentage for such Distribution Date; for any Distribution Date in the second
year thereafter, the Senior Percentage plus 60% of the Subordinated Percentage
for such Distribution Date; for any Distribution Date in the third year
thereafter, the Senior Percentage plus 40% of the Subordinated Percentage
for
such Distribution Date; for any Distribution Date in the fourth year thereafter,
the Senior Percentage plus 20% of the Subordinated Percentage for such
Distribution Date; and for any Distribution Date thereafter, the Senior
Percentage for such Distribution Date (unless on any Distribution Date the
Senior Percentage exceeds the initial Senior Percentage, in which case the
Senior Prepayment Percentage
29
for
such
Distribution Date will once again equal 100%). Notwithstanding the
foregoing, no decrease in the Senior Prepayment Percentage will occur unless
both Senior Step Down Conditions are satisfied.
Senior
Principal Distribution Amount: As to any Distribution
Date, the sum of (i) the Senior Percentage of the Non-PO Percentage of all
amounts described in subclauses (a) through (d) of clause (i) of the definition
of Non-PO Formula Principal Amount for such Distribution Date, (ii) for
each Mortgage Loan that became a Liquidated Mortgage Loan during the calendar
month preceding the month of the Distribution Date, the lesser of (a) the
Senior
Percentage of the applicable Non-PO Percentage of the Stated Principal Balance
of the Mortgage Loan and (b) either (x) if an Excess Loss was not sustained
on
the Liquidated Mortgage Loan during the preceding calendar month, the Senior
Prepayment Percentage of the applicable Non-PO Percentage of the amount of
the
Liquidation Proceeds allocable to principal received on the Mortgage Loan
or (y)
if an Excess Loss was sustained on the Liquidated Mortgage Loan during the
preceding calendar month, the Senior Percentage of the applicable Non-PO
Percentage of the amount of the Liquidation Proceeds allocable to principal
received on the Mortgage Loan, (iii) the Senior Prepayment Percentage of
the
applicable Non-PO Percentage of the amounts described in subclause (f) of
clause
(i) of the definition of Non-PO Formula Principal Amount for such Distribution
Date, and (iv) the Senior Prepayment Percentage of any Subsequent Recoveries
described in clause (ii) of the definition of Non-PO Formula Principal Amount
for such Distribution Date; provided, however, that if a Bankruptcy Loss
that is
an Excess Loss is sustained with respect to a Mortgage Loan that is not a
Liquidated Mortgage Loan, the Senior Principal Distribution Amount will be
reduced on the related Distribution Date by the Senior Percentage of the
applicable Non-PO Percentage of the principal portion of such Bankruptcy
Loss.
Senior
Step Down Conditions: As to any Distribution Date:
(i) the aggregate Stated Principal Balance of all Mortgage Loans delinquent
60 days or more (averaged over the preceding six month period) (including
any
Mortgage Loans in foreclosure proceedings, REO Property and Mortgage Loans
the
Mortgagors of which are in bankruptcy), as a percentage of the aggregate
Class
Certificate Balance of the Subordinated Certificates, does not equal or exceed
50%, and (ii) cumulative Realized Losses do not exceed: (a) commencing with
the Distribution Date on the fifth anniversary of the first Distribution
Date,
30% of the Original Subordinated Principal Balance, (b) commencing with the
Distribution Date on the sixth anniversary of the first Distribution Date,
35%
of the Original Subordinated Principal Balance, (c) commencing with the
Distribution Date on the seventh anniversary of the first Distribution Date,
40%
of the Original Subordinated Principal Balance, (d) commencing with the
Distribution Date on the eighth anniversary of the first Distribution Date,
45%
of the Original Subordinated Principal Balance, and (e) commencing with the
Distribution Date on the ninth anniversary of the first Distribution Date,
50%
of the Original Subordinated Principal Balance
Senior
Termination Date: Not applicable.
Servicer: IndyMac
Bank, F.S.B., a federal savings bank, and its successors and assigns, in
its
capacity as servicer under this Agreement.
Servicer
Advance Date: As to any Distribution Date, 12:30
P.M. Pacific time on the Business Day preceding that Distribution
Date.
Servicing
Advances: All customary, reasonable, and necessary “out
of pocket” costs and expenses incurred in the performance by the Servicer of its
servicing obligations, including the cost of
(a) the
preservation, restoration, and protection of a Mortgaged Property,
30
(b) expenses
reimbursable to the Servicer pursuant to Section 3.12 and any enforcement
or
judicial proceedings, including foreclosures,
(c) the
maintenance and liquidation of any REO Property,
(d) compliance
with the obligations under Section 3.10; and
(e) reasonable
compensation to the Servicer or its affiliates for acting as broker in
connection with the sale of foreclosed Mortgaged Properties and for performing
certain default management and other similar services (including appraisal
services) in connection with the servicing of defaulted Mortgage
Loans. For purposes of this clause (e), only costs and expenses
incurred in connection with the performance of activities generally considered
to be outside the scope of customary servicing or master servicing duties
shall
be treated as Servicing Advances.
Servicing
Criteria: The “servicing criteria” set forth in Item
1122(d) of Regulation AB.
Servicing
Fee: As to each Mortgage Loan and any Distribution
Date, one month’s interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the Mortgage Loan as of the Due Date in the month preceding
the month of such Distribution Date or, whenever a payment of interest
accompanies a Principal Prepayment in Full made by the Mortgagor, interest
at
the Servicing Fee Rate on the Stated Principal Balance of the Mortgage Loan
for
the period covered by the payment of interest, subject to reduction as provided
in Section 3.15.
Servicing
Fee Rate: For each Mortgage Loan, the per annum rate
specified on the Mortgage Loan Schedule.
Servicing
Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished
to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement,
as
the list may from time to time be amended.
Servicing
Standard: That degree of skill and care exercised by the Servicer
with respect to mortgage loans comparable to the Mortgage Loans serviced
by the
Servicer for itself or others.
Shift
Percentage: For any Distribution Date occurring during
the five years beginning on the first Distribution Date, 0%. For any
Distribution Date thereafter, 100%.
Special
Hazard Coverage Termination Date: The point in time at
which the Special Hazard Loss Coverage Amount is reduced to zero.
Special
Hazard Loss: Any Realized Loss suffered by a Mortgaged
Property on account of direct physical loss, but not including (i) any loss
of a
type covered by a hazard insurance policy or a flood insurance policy required
to be maintained with respect to such Mortgaged Property pursuant to Section
3.10 to the extent of the amount of such loss covered thereby, or (ii) any
loss
caused by or resulting from:
(a) normal
wear and tear;
(b) fraud,
conversion or other dishonest act on the part of the Trustee, the Servicer
or
any of their agents or employees (without regard to any portion of the loss
not
covered by any errors and omissions policy);
31
(c) errors
in design, faulty workmanship or faulty materials, unless the collapse of
the
property or a part thereof ensues and then only for the ensuing
loss;
(d) nuclear
or chemical reaction or nuclear radiation or radioactive or chemical
contamination, all whether controlled or uncontrolled, and whether such loss
be
direct or indirect, proximate or remote or be in whole or in part caused
by,
contributed to or aggravated by a peril covered by the definition of the
term
“Special Hazard Loss”;
(e) hostile
or warlike action in time of peace and war, including action in hindering,
combating or defending against an actual, impending or expected
attack:
1. by
any government or sovereign power, dejure or
defacto, or by any authority maintaining or using
military, naval
or air forces; or
2. by
military, naval or air forces; or
3. by
an agent of any such government, power, authority or forces;
(f) any
weapon of war employing nuclear fission, fusion or other radioactive force,
whether in time of peace or war; or
(g) insurrection,
rebellion, revolution, civil war, usurped power or action taken by governmental
authority in hindering, combating or defending against such an occurrence,
seizure or destruction under quarantine or customs regulations, confiscation
by
order of any government or public authority, or risks of contraband or illegal
transportation or trade.
Special
Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $5,750,000.00. With respect to any Distribution
Date after the first Distribution Date, the lesser of (a) the greatest of
(i) 1%
of the aggregate of the principal balances of the Mortgage Loans, (ii) twice
the
principal balance of the largest Mortgage Loan and (iii) the aggregate of
the
principal balances of all Mortgage Loans secured by Mortgaged Properties
located
in the single California postal zip code area having the highest aggregate
principal balance of any such zip code area and (b) the Special Hazard Loss
Coverage Amount as of the Closing Date less the amount, if any, of Special
Hazard Losses allocated to the Certificates since the Closing
Date. All principal balances for the purpose of this definition will
be calculated as of the first day of the calendar month preceding the month
of
such Distribution Date after giving effect to Scheduled Payments on the Mortgage
Loans then due, whether or not paid.
Special
Hazard Mortgage Loan: A Liquidated Mortgage Loan as to
which a Special Hazard Loss has occurred.
Startup
Day: The Closing Date.
Stated
Principal Balance: As to any Mortgage Loan and Due
Date, the unpaid principal balance of such Mortgage Loan as of such Due Date,
as
specified in the amortization schedule at the time relating thereto (before
any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period) after giving effect to the sum of: (i) the payment
of
principal due on such Due Date and irrespective of any delinquency in payment
by
the related Mortgagor and (ii) any Liquidation Proceeds allocable to principal
received in the prior calendar month and Principal Prepayments received through
the last day of the Prepayment Period in which the Due Date occurs, in each
case
with respect to such Mortgage Loan.
32
Subcontractor: Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or
more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
the Mortgage Loans under the direction or authority of the Servicer or the
Trustee, as the case may be.
Subordinated
Certificates: As specified in the Preliminary
Statement.
Subordinated
Percentage: As to any Distribution Date, 100% minus the
Senior Percentage for such Distribution Date.
Subordinated
Prepayment Percentage: As to any Distribution Date,
100% minus the Senior Prepayment Percentage for such Distribution
Date.
Subordinated
Principal Distribution Amount: As
to any Distribution
Date, the sum of the following: (i) the Subordinated Percentage of the
applicable Non-PO Percentage of all amounts described in subclauses (a)
through (d) of clause (i) of the definition of Non-PO Formula Principal Amount
with respect to such Distribution Date, (ii) for each Mortgage Loan that
became a Liquidated Mortgage Loan during the calendar month preceding the
month
of the Distribution Date, the applicable Non-PO Percentage of the portion
of the
Liquidation Proceeds allocable to principal received on the Mortgage Loan,
after
application of the amounts pursuant to clause (ii) of the definition of Senior
Principal Distribution Amount, up to the Subordinated Percentage of the
applicable Non-PO Percentage of the Stated Principal Balance of the Mortgage
Loan, and (iii) the Subordinated Prepayment Percentage of the applicable
Non-PO Percentage of the amounts described in subclause (f) of clause (i)
and in clause (ii) of the definition of Non-PO Formula Principal Amount with
respect to such Distribution Date, reduced by the amount of any payments
in
respect of Class PO Deferred Amounts for such Distribution Date.
Subsequent
Recoveries: As to any Distribution Date, with respect
to a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior
calendar month, unexpected amounts received by the Servicer (net of any related
expenses permitted to be reimbursed pursuant to Section 3.09) specifically
related to such Liquidated Mortgage Loan.
Substitute
Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan that must, on the date of substitution,
as
confirmed in a Request for Release, substantially in the form of Exhibit
M,
(i) have
a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and
not
more than 10% less than, the Stated Principal Balance of the Deleted Mortgage
Loan (unless the amount of any shortfall is deposited by the Seller in the
Certificate Account and held for distribution to the Certificateholders on
the
related Distribution Date);
(ii) have
a Mortgage Rate no lower than and not more than 1% per annum higher than
the
Deleted Mortgage Loan;
(iii) have
a Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan;
(iv) have
a remaining term to maturity not more than one year greater than (and not
more
than one year less than) that of the Deleted Mortgage Loan, provided that
Substitute Mortgage Loan with a remaining term to maturity greater than that
of
the Deleted Mortgage Loan may not exceed 5% of the Cut-off Date Pool Principal
Balance;
33
(v) not
be a Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative
Loan;
and
(vi) comply
with each representation and warranty in Section 2.03.
Substitution
Adjustment Amount: As defined in Section
2.03.
Supplemental
Interest Reserve Fund: Not applicable.
Supplemental
Interest Trust: Not applicable.
Supplemental
Interest Trustee: Not applicable.
Suspension
Notification: Notification to the Commission of the suspension of
the Trust Fund’s obligation to file reports pursuant to Section 15(d) of the
Exchange Act.
Targeted
Balance: Not applicable.
Targeted
Principal Classes: As specified in the Preliminary
Statement.
Transaction
Documents: This Agreement and any other document or
agreement entered into in connection with the Trust Fund, the Certificates
or
the Mortgage Loans.
Transfer:
Any direct or indirect transfer or sale of any Ownership Interest in a Residual
Certificate.
Transfer
Payment Made: Not applicable.
Transfer
Payment Received: Not applicable.
Trust
Fund: The corpus of the trust created under this
Agreement consisting of
(i) the
Mortgage Loans and all interest and principal received on them after the
Cut-off
Date, other than amounts due on the Mortgage Loans by the Cut-off
Date;
(ii) the
Certificate Account, the Distribution Account and all amounts deposited therein
pursuant to this Agreement (including amounts received from the Depositor
on the
Closing Date that will be deposited by the Servicer in the Certificate Account
pursuant to Section 2.01);
(iii) property
that secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu
of foreclosure, or otherwise;
(iv) the
right to collect any amounts under any mortgage insurance policies covering
any
Mortgage Loan and any collections received under any mortgage insurance policies
covering any Mortgage Loan;
(v) [reserved];
and
(vi) all
proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trustee: Deutsche
Bank National Trust Company and its successors and, if a successor trustee
is
appointed under this Agreement, the successor.
34
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: 0.0085% per annum.
The
terms
“United States,” “State,” and
“International Organization” have the meanings in
section 7701
of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject
to
tax and, with the exception of the Federal Home Loan Mortgage Corporation,
a
majority of its board of directors is not selected by such government
unit.
UCC: The
Uniform Commercial Code for the State of New York.
Undercollateralized
Group: Not applicable.
Underwriter’s
Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002) (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of
Labor.
United
States Person or U.S. Person:
(i) A
citizen or resident of the United States;
(ii) a
corporation (or entity treated as a corporation for tax purposes) created
or
organized in the United States or under the laws of the United States or
of any
state thereof, including, for this purpose, the District of
Columbia;
(iii) a
partnership (or entity treated as a partnership for tax purposes) organized
in
the United States or under the laws of the United States or of any state
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations);
(iv) an
estate whose income is includible in gross income for United States income
tax
purposes regardless of its source; or
(v) a
trust, if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S. Persons
have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to
the extent provided in Treasury regulations, certain trusts in existence
on
August 20, 1996, and treated as U.S. Persons before that date, may elect
to
continue to be U.S. Persons.
Unscheduled
Principal Distribution Amount: For any Distribution Date, the sum
of (i) the sum of (A) the Senior Liquidation Amount and (B) the amount set
forth
under clause (ii) of the definition of Subordinated Principal Distribution
Amount, (ii) the Non-PO Percentage of the sum of the amounts set forth under
subclause (f) of clause (i) of the definition of Non-PO Formula Principal
Amount
for such Distribution Date and (iii) any Subsequent Recoveries described
in
clause (ii) of the definition of Non-PO Formula Principal Amount for that
Distribution Date.
35
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 Senior and Subordinated
Certificates in proportion to the Certificate Balances of the respective
Certificates on the date.
Yield
Supplement Amount: Not applicable.
Section
1.02 Rules
of Construction.
Except
as
otherwise expressly provided in this Agreement or unless the context clearly
requires otherwise
(a) References
to designated articles, sections, subsections, exhibits, and other subdivisions
of this Agreement, such as “Section 6.12 (a),” refer to the designated article,
section, subsection, exhibit, or other subdivision of this Agreement as a
whole
and to all subdivisions of the designated article, section, subsection, exhibit,
or other subdivision. The words “herein,” “hereof,” “hereto,”
“hereunder,” and other words of similar import refer to this Agreement as a
whole and not to any particular article, section, exhibit, or other subdivision
of this Agreement.
(b) Any
term that relates to a document or a statute, rule, or regulation includes
any
amendments, modifications, supplements, or any other changes that may have
occurred since 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,
36
but
when
the calculation of the excess of one thing over another results in zero or
a
negative number, the calculation is disregarded and an “excess” does not
exist. Portions of things may be expressed as fractions or
percentages interchangeably.
(f) All
accounting terms used in an accounting context and not otherwise defined,
and
accounting terms partly defined in this Agreement, to the extent not completely
defined, shall be construed in accordance with generally accepted accounting
principles. To the extent that the definitions of accounting terms in
this Agreement are inconsistent with their meanings under generally accepted
accounting principles, the definitions contained in this Agreement shall
control. Capitalized terms used in this Agreement without definition
that are defined in the Uniform Commercial Code are used in this Agreement
as
defined in the Uniform Commercial Code.
(g) In
the computation of a period of time from a specified date to a later specified
date or an open-ended period, the words “from” and “beginning” mean “from and
including,” the word “after” means “from but excluding,” the words “to” and
“until” mean “to but excluding,” and the word “through” means “to and
including.” Likewise, in setting deadlines or other periods, “by” means “by.”
The words “preceding,” “following,” and words of similar import, mean
immediately preceding or following. References to a month or a year
refer to calendar months and calendar years.
(h) Any
reference to the enforceability of any agreement against a party means that
it
is enforceable, subject as to enforcement against the party, to applicable
bankruptcy, insolvency, reorganization, and other similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles.
37
ARTICLE
TWO
CONVEYANCE OF
MORTGAGE LOANS; REPRESENTATIONS
AND
WARRANTIES
Section
2.01 Conveyance
of Mortgage Loans.
(a) The
Seller, concurrently with the execution and delivery of this Agreement, hereby
transfers to the Depositor, without recourse, all the interest of the Seller
in
each Mortgage Loan, including all interest and principal received or receivable
by the Seller on each Mortgage Loan after the Cut-off Date and all interest
and
principal payments on each Mortgage Loan received before the Cut-off Date
for
installments of interest and principal due after the Cut-off Date but not
including payments of principal and interest due by the Cut-off Date. By
the
Closing Date, the Seller shall deliver to the Depositor or, at the Depositor's
direction, to the Trustee or other designee of the Depositor, the Mortgage
File
for each Mortgage Loan listed in the Mortgage Loan Schedule (except
that, in the case of Mortgage Loans that are Delay Delivery Mortgage Loans,
such
delivery may take place within five Business Days of the Closing Date) as
of the
Closing Date. The delivery of the Mortgage Files shall be made
against payment by the Depositor of the purchase price, previously agreed
to by
the Seller and Depositor, for the Mortgage Loans. With respect to any
Mortgage Loan that does not have a first payment date on or before the Due
Date
in the month of the first Distribution Date, the Seller shall deposit into
the
Distribution Account on the first Distribution Account Deposit Date an amount
equal to one month’s interest at the related Adjusted Mortgage Rate on the
Cut-off Date Principal Balance of such Mortgage Loan. On the Closing Date
the
Depositor shall deposit $100 into the Certificate Account for the benefit
of the
Class P Certificates.
(b) The
Depositor, concurrently with the execution and delivery of this Agreement,
hereby transfers to the Trustee for the benefit of the Certificateholders,
without recourse, all the interest of the Depositor in the Trust Fund, together
with the Depositor’s right to require the Seller to cure any breach of a
representation or warranty made in this Agreement by the Seller or to repurchase
or substitute for any affected Mortgage Loan in accordance with this
Agreement.
(c) In
connection with the transfer and assignment of each Mortgage Loan, the Depositor
has delivered (or, in the case of the Delay Delivery Mortgage Loans, will
deliver to the Trustee within the time periods specified in the definition
of
Delay Delivery Mortgage Loans), for the benefit of the Certificateholders
the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(i) The
original Mortgage Note, endorsed by manual or facsimile signature in blank
in
the following form: “Pay to the order of _______________ ______________without
recourse,” with all intervening endorsements showing a complete chain of
endorsement from the originator to the Person endorsing the Mortgage Note
(each
endorsement being sufficient to transfer all interest of the party so endorsing,
as noteholder or assignee thereof, in that Mortgage Note) or a lost note
affidavit for any Lost Mortgage Note from the Seller stating that the original
Mortgage Note was lost or destroyed, together with a copy of the Mortgage
Note;
(ii) Except
as provided below and for each Mortgage Loan that is not a MERS Mortgage
Loan,
the original recorded Mortgage or a copy of such Mortgage certified by the
Seller as being a true and complete copy of the Mortgage (or, in the case
of a
Mortgage for which the related Mortgaged Property is located in the Commonwealth
of Puerto Rico, a true copy of the Mortgage certified as such by the applicable
notary) and in the case of each MERS Mortgage Loan, the original Mortgage,
noting the presence of the MIN of the Mortgage Loan and either
38
language
indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a
MOM
Loan or if the Mortgage Loan was not a MOM Loan at origination, the original
Mortgage and the assignment thereof to MERS, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;
(iii) In
the case of a Mortgage Loan that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage (which may be included in a blanket assignment
or
assignments), together with, except as provided below, all interim recorded
assignments of the mortgage (each assignment, when duly and validly completed,
to be in recordable form and sufficient to effect the assignment of and transfer
to its assignee of the Mortgage to which the assignment relates). If
the related Mortgage has not been returned from the applicable public recording
office, the assignment of the Mortgage may exclude the information to be
provided by the recording office. The assignment of Mortgage need not
be delivered in the case of a Mortgage for which the related Mortgage Property
is located in the Commonwealth of Puerto Rico;
(iv) The
original or copies of each assumption, modification, written assurance, or
substitution agreement;
(v) Except
as provided below, the original or duplicate original lender’s title policy and
all its riders;
(vi) The
originals of the following documents for each Cooperative Loan:
|
(A)
|
the
Co-op Shares, together with a stock power in
blank;
|
|
(B)
|
the
executed Security Agreement;
|
|
(C)
|
the
executed Proprietary Lease;
|
|
(D)
|
the
executed Recognition Agreement;
|
|
(E)
|
the
executed UCC-1 financing statement that has been filed in all places
required to perfect the Seller’s interest in the Co-op Shares and the
Proprietary Lease with evidence of recording on it;
and
|
|
(F)
|
executed
UCC-3 financing statements or other appropriate UCC financing statements
required by state law, evidencing a complete and unbroken line
from the
mortgagee to the Trustee with evidence of recording thereon (or
in a form
suitable for recordation).
|
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® System to
indicate that the Mortgage Loans sold by the Seller to the Depositor have
been
assigned by the Seller to the Trustee in accordance with this Agreement for
the
benefit of the Certificateholders by including (or deleting, in the case
of
Mortgage Loans that are repurchased in accordance with this Agreement) in
such
computer files the information required by the MERS® System to identify the
series of the Certificates issued in connection with such Mortgage
Loans. The Seller further agrees that it will not, and will not
permit the Servicer to, and the Servicer agrees that it will not, alter the
information referenced in this paragraph with respect to any Mortgage Loan
sold
by the Seller to the Depositor during the term of this Agreement unless and
until such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
39
In
the
event that in connection with any Mortgage Loan that is not a MERS Mortgage
Loan
the Depositor cannot deliver (a) the original recorded Mortgage, (b) all
interim
recorded assignments or (c) the lender’s title policy (together with all riders
thereto) satisfying the requirements of clause (ii), (iii) or (v) above,
respectively, concurrently with the execution and delivery of this Agreement
because such document or documents have not been returned from the applicable
public recording office in the case of clause (ii) or (iii) above, or because
the title policy has not been delivered to either the Servicer or the Depositor
by the applicable title insurer in the case of clause (v) above, then the
Depositor shall promptly deliver to the Trustee, in the case of clause (ii)
or
(iii) above, the original Mortgage or the interim assignment, as the case
may
be, with evidence of recording indicated on when it is received from the
public
recording office, or a copy of it, certified, if appropriate, by the relevant
recording office and in the case of clause (v) above, the original or a copy
of
a written commitment or interim binder or preliminary report of title issued
by
the title insurance or escrow company, with the original or duplicate copy
thereof to be delivered to the Trustee upon receipt thereof. The
delivery of the original Mortgage Loan and each interim assignment or a copy
of
them, certified, if appropriate, by the relevant recording office, shall
not be
made later than one year following the Closing Date, or, in the case of clause
(v) above, later than 120 days following the Closing Date. If the
Depositor is unable to deliver each Mortgage by that date and each interim
assignment because any documents have not been returned by the appropriate
recording office, or, in the case of each interim assignment, because the
related Mortgage has not been returned by the appropriate recording office,
the
Depositor shall deliver the documents to the Trustee as promptly as possible
upon their receipt and, in any event, within 720 days following the Closing
Date.
The
Depositor shall forward to the Trustee (a) from time to time additional original
documents evidencing an assumption or modification of a Mortgage Loan and
(b)
any other documents required to be delivered by the Depositor or the Servicer
to
the Trustee. If the original Mortgage is not delivered and in
connection with the payment in full of the related Mortgage Loan the public
recording office requires the presentation of a “lost instruments affidavit and
indemnity” or any equivalent document, because only a copy of the Mortgage can
be delivered with the instrument of satisfaction or reconveyance, the Servicer
shall execute and deliver the required document to the public recording
office. If a public recording office retains the original recorded
Mortgage or if a Mortgage is lost after recordation in a public recording
office, the Seller shall deliver to the Trustee a copy of the Mortgage certified
by the public recording office to be a true and complete copy of the original
recorded Mortgage.
As
promptly as practicable after any transfer of a Mortgage Loan under this
Agreement, and in any event within thirty days after the transfer, the Trustee
shall (i) affix the Trustee’s name to each assignment of Mortgage, as its
assignee, and (ii) cause to be delivered for recording in the appropriate
public
office for real property records the assignments of the Mortgages to the
Trustee, except that, if the Trustee has not received the information required
to deliver any assignment of a Mortgage for recording, the Trustee shall
deliver
it as soon as practicable after receipt of the needed information and in
any
event within thirty days.
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
40
(y) (A)
repurchase the Delay Delivery Mortgage Loan or (B) substitute the Substitute
Mortgage Loan for a Delay Delivery Mortgage Loan, which repurchase or
substitution shall be accomplished in the manner and subject to the conditions
in Section 2.03 (treating each such Delay Delivery Mortgage Loan as a Deleted
Mortgage Loan for purposes of such Section 2.03);
provided,
however, that if the Seller fails to deliver a Mortgage File for any
Delay Delivery Mortgage Loan within the period specified herein, the Seller
shall use its best reasonable efforts to effect a substitution, rather than
a
repurchase of, such Deleted Mortgage Loan and provided further that the cure
period provided for in Section 2.02 or in Section 2.03 shall not apply to
the
initial delivery of the Mortgage File for such Delay Delivery Mortgage Loan,
but
rather the Seller shall have five (5) Business Days to cure such failure
to
deliver. At the end of such period, the Trustee shall send a Delay
Delivery Certification for the Delay Delivery Mortgage Loans delivered during
such period in accordance with the provisions of Section 2.02.
(d) Notwithstanding
the foregoing, however, the assignments of Mortgage shall not be required
to be
submitted for recording (except with respect to any Mortgage Loan secured
by
Mortgaged Property located in Maryland) unless such failure to record would,
as
certified to the Trustee in writing by the Servicer, result in a withdrawal
or a
downgrading by any Rating Agency of the rating on any Class of Certificates;
provided, however, that each assignment of Mortgage shall be submitted for
recording by the Seller (at the direction of the Servicer) in the manner
described above, at no expense to the Trust Fund or the Trustee, upon the
earliest to occur of: (i) reasonable direction by the Holders of Certificates
entitled to at least 25% of the Voting Rights, (ii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Seller, (iii) the
occurrence of a servicing transfer as described in Section 7.02 and (iv)
if the
Seller is not the Servicer and with respect to any one assignment or Mortgage,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage. Notwithstanding the foregoing,
if the Seller is unable to pay the cost of recording the assignments of
Mortgage, such expense shall be paid by the Trustee and shall be reimbursable
out of the Distribution Account.
(e) The
Seller agrees to treat the transfer of the Mortgage Loans to the Depositor
as a
sale for all tax, accounting, and regulatory purposes.
(f) The
Trust Fund does not intend to acquire or hold any Mortgage Loan that would
violate the representations made by the Seller set forth in clause (28) of
Schedule III.
Section
2.02 Acceptance by the Trustee of the
Mortgage Loans.
The
Trustee acknowledges receipt of the documents identified in the Initial
Certification in the form of Exhibit G-1, and declares that it holds and
will
hold such documents and the other documents delivered to it constituting
the
Mortgage Files for the Mortgage Loans, and that it holds or will hold such
other
assets as are included in the Trust Fund, in trust for the exclusive use
and
benefit of all present and future Certificateholders.
The
Trustee acknowledges that it will maintain possession of the related Mortgage
Notes in the State of California, unless otherwise permitted by the Rating
Agencies. The Trustee agrees to execute and deliver on the Closing
Date to the Depositor, the Servicer and the Seller an Initial Certification
in
the form of Exhibit G-1. Based on its review and examination, and
only as to the documents identified in such Initial Certification, the Trustee
acknowledges that such documents appear regular on their face and relate
to such
Mortgage Loans. The Trustee shall be under no duty or obligation to
inspect, review or
41
examine
said documents, instruments, certificates or other papers to determine that
the
same are genuine, enforceable or appropriate for the represented purpose
or that
they have actually been recorded in the real estate records or that they
are
other than what they purport to be on their face.
By
the
thirtieth day after the Closing Date (or if that day is not a Business Day,
the
succeeding Business Day), the Trustee shall deliver to the Depositor, the
Servicer, and the Seller a Delay Delivery Certification with respect to the
Mortgage Loans substantially in the form of Exhibit G-2, with any applicable
exceptions noted thereon.
By
the
ninetieth day after the Closing Date (or if that day is not a Business Day,
the
succeeding Business Day), the Trustee shall deliver to the Depositor, the
Servicer and the Seller a Final Certification with respect to the Mortgage
Loans
in the form of Exhibit H, with any applicable exceptions noted
thereon.
If,
in
the course of its review, the Trustee finds any document constituting a part
of
a Mortgage File that does not meet the requirements of Section 2.01, the
Trustee
shall list such as an exception in the Final Certification. The
Trustee shall not make any determination as to whether (i) any endorsement
is
sufficient to transfer all interest of the party so endorsing, as noteholder
or
assignee thereof, in that Mortgage Note or (ii) any assignment is in recordable
form or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates. The
Seller shall promptly correct any defect that materially and adversely affects
the interests of the Certificateholders within 90 days from the date it was
so
notified of the defect and, if the Seller does not correct the defect within
that period, the Seller shall either (a) substitute for the related Mortgage
Loan a Substitute Mortgage Loan, which substitution shall be accomplished
in the
pursuant Section 2.03, or (b) purchase the Mortgage Loan at its Purchase
Price
from the Trustee within 90 days from the date the Seller was notified of
the
defect in writing.
If
a
substitution or purchase of a Mortgage Loan pursuant to this provision is
required because of a delay in delivery of any documents by the appropriate
recording office, or there is a dispute between either the Servicer or the
Seller and the Trustee over the location or status of the recorded document,
then the substitution or purchase shall occur within 720 days from the Closing
Date. In no other case may a substitution or purchase occur more than
540 days from the Closing Date. Any substitution shall not be
effected before the delivery to the Trustee of the Opinion of Counsel, if
required by Section 2.05, and any substitution shall not be effected before
the
additional delivery to the Trustee of a Request for Release substantially
in the
form of Exhibit N. No substitution is permitted to be made in any
calendar month after the Determination Date for the month.
The
Purchase Price for any Mortgage Loan shall be deposited by the Seller in
the
Certificate Account by the Distribution Account Deposit Date for the
Distribution Date in the month following the month of repurchase and, upon
receipt of the deposit and certification with respect thereto in the form
of
Exhibit N, the Trustee shall release the related Mortgage File to the Seller
and
shall execute and deliver at the Seller’s request any instruments of transfer or
assignment prepared by the Seller, in each case without recourse, necessary
to
vest in the Seller, or a designee, the Trustee’s interest in any Mortgage Loan
released pursuant hereto.
If
pursuant to the foregoing provisions the Seller repurchases a Mortgage Loan
that
is a MERS Mortgage Loan, the Servicer shall either (i) cause MERS to execute
and
deliver an assignment of the Mortgage in recordable form to transfer the
Mortgage from MERS to the Seller and shall cause such Mortgage to be removed
from registration on the MERS® System in accordance with MERS’ rules and
regulations or (ii) cause MERS to designate on the MERS® System the Seller as
the beneficial holder of such Mortgage Loan.
42
The
Trustee shall retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions set forth herein. The
Servicer shall promptly deliver to the Trustee, upon the execution or receipt
thereof, the originals of any other documents or instruments constituting
the
Mortgage File that come into the possession of the Servicer from time to
time.
The
obligation of the Seller to substitute for or to purchase any Mortgage Loan
that
does not meet the requirements of Section 2.01 shall constitute the sole
remedy
respecting the defect available to the Trustee, the Depositor, and any
Certificateholder against the Seller.
Section
2.03 Representations, Warranties,
and Covenants of the Seller and the Servicer.
(a) IndyMac,
in its capacities as Seller and Servicer, makes the representations and
warranties in Schedule II, and by this reference incorporated in this Agreement,
to the Depositor and the Trustee, as of the Closing Date.
(b) The
Seller, in its capacity as Seller, makes the representations and warranties
in
Schedule III, and by this reference incorporated in this Agreement, to the
Depositor and the Trustee, as of the Closing Date, or if so specified in
Schedule III, as of the Cut-off Date.
(c) Upon
discovery by any of the parties hereto of a breach of a representation or
warranty made pursuant to Section 2.03(b) that materially and adversely affects
the interests of the Certificateholders in any Mortgage Loan, the party
discovering such breach shall give prompt notice thereof to the other
parties. Any breach of the representations or warranties made
pursuant to clauses (28) and (33) of Schedule III shall be deemed to materially
and adversely affect the interests of the Certificateholders in the related
Mortgage Loan. The Seller covenants that within 90 days of the
earlier of its discovery or its receipt of written notice from any party
of a
breach of any representation or warranty made pursuant to Section 2.03(b)
which
materially and adversely affects the interests of the Certificateholders
in any
Mortgage Loan, it shall cure such breach in all material respects, and if
such
breach is not so cured, shall, (i) if the 90-day period expires before the
second anniversary of the Closing Date, remove the Mortgage Loan (a
“Deleted Mortgage Loan”) from the Trust Fund and
substitute in its place a Substitute Mortgage Loan, in accordance with this
Section 2.03; or (ii) repurchase the affected Mortgage Loan or Mortgage Loans
from the Trustee at the Purchase Price in the manner set forth
below. Any substitution pursuant to (i) above shall not be effected
before the delivery to the Trustee of the Opinion of Counsel required by
Section
2.05, and a Request for Release substantially in the form of Exhibit N, and
the
Mortgage File for any Substitute Mortgage Loan. The Seller shall
promptly reimburse the Servicer and the Trustee for any expenses reasonably
incurred by the Servicer or the Trustee in respect of enforcing the remedies
for
the breach.
With
respect to any Substitute Mortgage Loan or Loans, the Seller shall deliver
to
the Trustee for the benefit of the Certificateholders the Mortgage Note,
the
Mortgage, the related assignment of the Mortgage, and such other documents
and
agreements as are required by Section 2.01, with the Mortgage Note endorsed
and
the Mortgage assigned as required by Section 2.01. No substitution is
permitted to be made in any calendar month after the Determination Date for
such
month. Scheduled Payments due with respect to Substitute Mortgage
Loans in the month of substitution shall not be part of the Trust Fund and
will
be retained by the Seller on the next succeeding Distribution
Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain
all
amounts received in respect of such Deleted Mortgage Loan.
The
Servicer shall amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of the Deleted Mortgage Loan and
the
substitution of the Substitute Mortgage Loans
43
and
the
Servicer shall deliver the amended Mortgage Loan Schedule to the
Trustee. Upon the substitution, the Substitute Mortgage Loans shall
be subject to this Agreement in all respects, and the Seller shall be deemed
to
have made with respect to the Substitute Mortgage Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(b) with respect to the Mortgage Loan. Upon any substitution and
the deposit to the Certificate Account of the amount required to be deposited
therein in connection with the substitution as described in the following
paragraph, the Trustee shall release the Mortgage File held for the benefit
of
the Certificateholders relating to the Deleted Mortgage Loan to the Seller
and
shall execute and deliver at the Seller’s direction such instruments of transfer
or assignment prepared by the Seller, in each case without recourse, as shall
be
necessary to vest title in the Seller, or its designee, the Trustee’s interest
in any Deleted Mortgage Loan substituted for pursuant to this Section
2.03.
For
any
month in which the Seller substitutes one or more Substitute Mortgage Loans
for
one or more Deleted Mortgage Loans, the Servicer will determine the amount
(if
any) by which the aggregate principal balance of all such Substitute Mortgage
Loans as of the date of substitution is less than the aggregate Stated Principal
Balance of all such Deleted Mortgage Loans (after application of the scheduled
principal portion of the monthly payments due in the month of
substitution). The amount of such shortage (the
“Substitution Adjustment Amount”) plus, if the Seller
is not the Servicer, an amount equal to the aggregate of any unreimbursed
Advances and Servicer Advances with respect to such Deleted Mortgage Loans
shall
be deposited into the Certificate Account by the Seller by the Distribution
Account Deposit Date for the Distribution Date in the month succeeding the
calendar month during which the related Mortgage Loan became required to
be
purchased or replaced hereunder. If the Seller repurchases a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.06 by the Distribution Account Deposit Date for the
Distribution Date in the month following the month during which the Seller
became obligated hereunder to repurchase or replace the Mortgage Loan and
upon
such deposit of the Purchase Price and receipt of a Request for Release in
the
form of Exhibit N, the Trustee shall release the related Mortgage File held
for
the benefit of the Certificateholders to such Person, and the Trustee shall
execute and deliver at such Person’s direction such instruments of transfer or
assignment prepared by such Person, in each case without recourse, as shall
be
necessary to transfer title from the Trustee. The obligation under
this Agreement of any Person to cure, repurchase, or replace any Mortgage
Loan
as to which a breach has occurred and is continuing shall constitute the
sole
remedy against the Person respecting the breach available to Certificateholders,
the Depositor, or the Trustee on their behalf.
The
representations and warranties made pursuant to this Section 2.03 shall survive
delivery of the respective Mortgage Files to the Trustee for the benefit
of the
Certificateholders and shall not be waived by the Depositor.
The
Seller assigns to the Depositor and the Depositor assigns to the Trustee
all
rights the Seller might have under contracts with third parties relating
to
early payment defaults on the Mortgage Loans (“EPD
Rights”) and the Servicer assumes any related duties as part of
its servicing obligations. Consistent with the Servicing Standard,
the Servicer shall attempt to enforce the EPD Rights. If the
Servicer’s enforcement of the EPD Rights obligates the Servicer to sell a
Mortgage Loan to a third party, the Servicer shall repurchase the Mortgage
Loan
at the Purchase Price and sell the Mortgage Loan to the third party, provided
however, in no case shall the Servicer be obligated to repurchase a Mortgage
Loan on account of EPD Rights unless and until the Servicer shall have
previously received repurchase payment from a third party. The
Servicer shall deposit into the Certificate Account all amounts received
in
connection with the enforcement of EPD Rights, not exceeding the Purchase
Price,
with respect to any Mortgage Loan. Any amounts received by the
Servicer with respect a Mortgage Loan in excess of the Purchase Price shall
be
retained by the Servicer as additional servicing compensation. The Trustee,
upon
receipt of certification from the Servicer of the deposit of the Purchase
Price
in connection with a
44
repurchase
of a Mortgage Loan and a Request for Release from the Servicer, shall release
or
cause to be released to the purchaser of such Mortgage Loan the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment
prepared by the purchaser of such Mortgage Loan, in each case without recourse,
as shall be necessary to vest in the purchaser of such Mortgage Loan any
Mortgage Loan released pursuant hereto and the purchaser of such Mortgage
Loan
shall succeed to all the Trustee’s right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such
assignment shall be an assignment outright and not for security. The
purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and
all
security and documents, free of any further obligation to the Trustee or
the
Certificateholders with respect thereto.
Section
2.04 Representations and
Warranties of the Depositor as to the Mortgage Loans.
(a) The
Depositor represents and warrants to the Trustee with respect to each Mortgage
Loan as of the date of this Agreement or such other date set forth in this
Agreement that as of the Closing Date, and following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the Mortgage
Loans and the Mortgage Notes were subject to no offsets, defenses, or
counterclaims.
(b) The
representations and warranties in this Section 2.04 shall survive delivery
of
the Mortgage Files to the Trustee. Upon discovery by the Depositor or
the Trustee of any breach of any of the representations and warranties in
this
Section that materially and adversely affects the interest of the
Certificateholders, the party discovering the breach shall give prompt written
notice to the others and to each Rating Agency.
Section
2.05 Delivery of Opinion of
Counsel in Connection with Substitutions.
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.
Upon
discovery by the Depositor, the Seller, the Servicer or the Trustee that
any
Mortgage Loan does not constitute a “qualified mortgage” within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within five Business Days of discovery) give written notice
thereof to the other parties. In connection therewith, the Trustee
shall require the Seller, at the Seller’s option, to either (i) substitute, if
the conditions in Section 2.03(c) with respect to substitutions are satisfied,
a
Substitute Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase
the
affected Mortgage Loan within 90 days of such discovery in the same manner
as it
would a Mortgage Loan for a breach of representation or warranty made pursuant
to Section 2.03. The Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the
same
terms and conditions, as it would a Mortgage Loan repurchased for breach
of a
representation or warranty contained in Section 2.03.
Section
2.06 Execution and Delivery
of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the Trust Fund
and,
concurrently with such transfer and assignment, has executed and delivered
to or
upon the order of the Depositor, the Certificates in authorized denominations
evidencing directly or indirectly the entire ownership of the
45
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.
46
ARTICLE
THREE
ADMINISTRATION AND
SERVICING
OF MORTGAGE LOANS
Section
3.01 Servicer to Service Mortgage
Loans.
For
and
on behalf of the Certificateholders, the Servicer shall service and administer
the Mortgage Loans in accordance with this Agreement and the Servicing
Standard.
The
Servicer shall not make or permit any modification, waiver, or amendment
of any
term of any Mortgage Loan that would cause any REMIC created under this
Agreement to fail to qualify as a REMIC or result in the imposition of any
tax
under section 860F(a) or section 860G(d) of the Code.
Without
limiting the generality of the foregoing, the Servicer, in its own name or
in
the name of the Depositor and the Trustee, is hereby authorized and empowered
by
the Depositor and the Trustee, when the Servicer believes it appropriate
in its
reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders, or any of them, any instruments of
satisfaction or cancellation, or of partial or full release or discharge,
and
all other comparable instruments, with respect to the Mortgage Loans, and
with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the
Depositor or the Trustee any documents requiring execution and delivery by
either or both of them appropriate to enable the Servicer to service and
administer the Mortgage Loans to the extent that the Servicer is not permitted
to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of the documents, the Depositor or the Trustee
shall execute the documents and deliver them to the Servicer.
The
Servicer further is authorized and empowered by the Trustee, on behalf of
the
Certificateholders and the Trustee, in its own name, when the Servicer believes
it appropriate in its best judgment to register any Mortgage Loan on the
MERS®
System, or cause the removal from the registration of any Mortgage Loan on
the
MERS® System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment
and
other comparable instruments with respect to such assignment or re-recording
of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns.
In
accordance with and to the extent of the Servicing Standard, the Servicer
shall
advance funds necessary to effect the payment of taxes and assessments on
the
Mortgaged Properties, which advances shall be reimbursable in the first instance
from related collections from the Mortgagors pursuant to Section 3.07, and
further as provided in Section 3.09. The costs incurred by the
Servicer in effecting the timely payments of taxes and assessments on the
Mortgaged Properties and related insurance premiums shall not, for the purpose
of calculating monthly distributions to the Certificateholders, be added
to the
Stated Principal Balances of the related Mortgage Loans, notwithstanding
that
the Mortgage Loans so permit.
Nothing
in this Agreement to the contrary shall limit the Servicer from undertaking
any
legal action that it may deem appropriate with respect to the Mortgage Loans
including, without limitation, any rights or causes of action arising out
of the
origination of the Mortgage Loans.
47
Section
3.02 [Reserved].
Section
3.03 Rights of the Depositor and
the Trustee in Respect of the Servicer.
The
Depositor may, but is not obligated to, enforce the obligations of the Servicer
under this Agreement and may, but is not obligated to, perform, or cause
a
designee to perform, any defaulted obligation of the Servicer under this
Agreement and in connection with any such defaulted obligation to exercise
the
related rights of the Servicer under this Agreement; provided that the Servicer
shall not be relieved of any of its obligations under this Agreement by virtue
of such performance by the Depositor or its designee. Neither the
Trustee nor the Depositor shall have any responsibility or liability for
any
action or failure to act by the Servicer nor shall the Trustee or the Depositor
be obligated to supervise the performance of the Servicer under this Agreement
or otherwise.
Section
3.04 [Reserved].
Section
3.05 Trustee to Act as
Servicer.
If
the
Servicer for any reason is no longer the Servicer under this Agreement
(including because of the occurrence or existence of an Event of Default
or
termination by the Depositor), the Trustee or its successor shall assume
all of
the rights and obligations of the Servicer under this Agreement arising
thereafter (except that the Trustee shall not be
(i) liable
for losses of the Servicer pursuant to Section 3.10 or any acts or omissions
of
the predecessor Servicer hereunder,
(ii) obligated
to make Advances if it is prohibited from doing so by applicable
law,
(iii) obligated
to effectuate repurchases or substitutions of Mortgage Loans hereunder,
including repurchases or substitutions pursuant to Section 2.02 or
2.03,
(iv) responsible
for expenses of the Servicer pursuant to Section 2.03, or
(v) deemed
to have made any representations and warranties of the Servicer
hereunder). Any assumption shall be subject to Section
7.02.
Notwithstanding
anything else in this Agreement to the contrary, in no event shall the Trustee
be liable for any servicing fee or for any differential in the amount of
the
Servicing Fee paid under this Agreement and the amount necessary to induce
any
successor Servicer to act as successor Servicer under this Agreement and
the
transactions provided for in this Agreement.
Section
3.06 Collection of Mortgage Loan
Payments; Certificate Account; Distribution Account.
(a) In
accordance with and to the extent of the Servicing Standard, the Servicer
shall
make reasonable efforts in accordance with the customary and usual standards
of
practice of prudent mortgage servicers to collect all payments called for
under
the Mortgage Loans to the extent the procedures are consistent with this
Agreement and any related Required Insurance Policy. Consistent with
the foregoing, the Servicer may in its discretion (i) subject to Section
3.21,
waive any Late Payment Fee or, to the extent provided in Section 3.20, waive
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
48
days. In
connection with a Mortgage Loan that is in default, or with respect to which
default is reasonably foreseeable, the Servicer may, consistent with the
Servicing Standard, waive, modify or vary any term of that Mortgage Loan
(including modifications that change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of that
Mortgage Loan ), accept payment from the related Mortgagor of an amount less
than the Stated Principal Balance in final satisfaction of that Mortgage
Loan,
or consent to the postponement of strict compliance with any such term or
otherwise grant indulgence to any Mortgagor if in the Servicer’s determination
such waiver, modification, postponement or indulgence is not materially adverse
to the interests of the Certificateholders (taking into account any estimated
loss that might result absent such action) and is expected to minimize the
loss
on such Mortgage Loan; provided, however, the Servicer shall not initiate
new
lending to such Mortgagor through the Trust and cannot, except as provided
in
the immediately succeeding sentence, extend the maturity of any Mortgage
Loan
past the date on which the final payment is due on the latest maturing Mortgage
Loan as of the Cut-off Date. With respect to no more than 5% of the
Mortgage Loans (measured by aggregate Cut-off Date Principal Balance of the
Mortgage Loans), the Servicer may extend the maturity of a Mortgage Loan
past
the date on which the final payment is due on the latest maturing Mortgage
Loan
as of the Cut-off Date, but in no event more than one year past such date.
In
the event of any such arrangement, the Servicer shall make Advances on the
related Mortgage Loan in accordance with Section 4.01 during the scheduled
period in accordance with the amortization schedule of the Mortgage Loan
without
modification thereof because of the arrangements. The Servicer shall
not be required to institute or join in litigation with respect to collection
of
any payment (whether under a Mortgage, Mortgage Note, or otherwise or against
any public or governmental authority with respect to a taking or condemnation)
if it reasonably believes that enforcing the provision of the Mortgage or
other
instrument pursuant to which the payment is required is prohibited by applicable
law. The Servicer shall not have the discretion to sell any
Delinquent or defaulted Mortgage Loan.
(b) [Reserved].
(c) [Reserved].
(d) The
Servicer shall establish and maintain a Certificate Account into which the
Servicer shall deposit within two Business Days of receipt or as otherwise
specified in this Agreement, the following payments and collections received
by
it in respect of Mortgage Loans after the Cut-off Date (other than in respect
of
principal and interest due on the Mortgage Loans by the Cut-off Date) and
the
following amounts required to be deposited hereunder:
(i) all
payments on account of principal on the Mortgage Loans, including Principal
Prepayments;
(ii) all
payments on account of interest on the Mortgage Loans, net of the Prepayment
Interest Excess and the Servicing Fee;
(iii) all
Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds, other
than
proceeds to be applied to the restoration or repair of the Mortgaged Property
or
released to the Mortgagor in accordance with the Servicer’s normal servicing
procedures;
(iv) any
amount required to be deposited by the Servicer pursuant to Section 3.06(f)
in
connection with any losses on Permitted Investments;
49
(v) any
amounts required to be deposited by the Servicer pursuant to Sections 3.10
and
3.12;
(vi) all
Purchase Prices from the Servicer or Seller and all Substitution Adjustment
Amounts;
(vii) all
Advances made by the Servicer pursuant to Section 4.01;
(viii) any
other amounts required to be deposited under this Agreement; and
(ix) all
Prepayment Charges collected and amounts payable by the Servicer for the
waiver
of such amounts.
In
addition, with respect to any Mortgage Loan that is subject to a buydown
agreement, on each Due Date for the Mortgage Loan, in addition to the monthly
payment remitted by the Mortgagor, the Servicer shall cause funds to be
deposited into the Certificate Account in an amount required to cause an
amount
of interest to be paid with respect to the Mortgage Loan equal to the amount
of
interest that has accrued on the Mortgage Loan from the preceding Due Date
at
the Mortgage Rate net of the Servicing Fee Rate on that date.
The
foregoing requirements for remittance by the Servicer to the Certificate
Account
shall be exclusive, it being understood and agreed that, without limiting
the
generality of the foregoing, payments in the nature of assumption fees, if
collected, need not be remitted by the Servicer. If the Servicer
remits any amount not required to be remitted, it may at any time withdraw
that
amount from the Certificate Account, any provision in this Agreement to the
contrary notwithstanding. The withdrawal or direction may be
accomplished by delivering written notice of it to the Trustee or any other
institution maintaining the Certificate Account that describes the amounts
deposited in error in the Certificate Account. The Servicer shall
maintain adequate records with respect to all withdrawals made pursuant to
this
Section 3.06. All funds deposited in the Certificate Account shall be
held in trust for the Certificateholders until withdrawn in accordance with
Section 3.09.
(e) The
Trustee shall establish and maintain the Distribution Account on behalf of
the
Certificateholders. The Trustee shall, promptly upon receipt, deposit
in the Distribution Account and retain in the Distribution Account the
following:
(i) the
aggregate amount remitted by the Servicer to the Trustee pursuant to Section
3.09(a);
(ii) any
amount deposited by the Servicer pursuant to Section 3.06(f) in connection
with
any losses on Permitted Investments; and
(iii) any
other amounts deposited under this Agreement that are required to be deposited
in the Distribution Account.
If
the
Servicer remits any amount not required to be remitted, it may at any time
direct the Trustee in writing to withdraw that amount from the Distribution
Account, any provision in this Agreement to the contrary
notwithstanding. The direction may be accomplished by delivering an
Officer’s Certificate to the Trustee that describes the amounts deposited in
error in the Distribution Account. All funds deposited in the
Distribution Account shall be held by the Trustee in trust for the
Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with
50
Section
3.09. In no event shall the Trustee incur liability for withdrawals
from the Distribution Account at the direction of the Servicer.
(f) Each
institution at which the Certificate Account is maintained shall invest the
funds in such account as directed in writing by the Servicer in Permitted
Investments, which shall mature not later than the second Business Day preceding
the related Distribution Account Deposit Date (except that if the Permitted
Investment is an obligation of the institution that maintains the account,
then
the Permitted Investment shall mature not later than the Business Day preceding
the Distribution Account Deposit Date) and which shall not be sold or disposed
of before its maturity. The funds in the Distribution Account shall
remain uninvested. All such Permitted Investments shall be made in
the name of the Trustee, for the benefit of the
Certificateholders. All income realized from any such investment of
funds on deposit in the Certificate Account shall be for the benefit of the
Servicer as servicing compensation and shall be remitted to it monthly as
provided in this Agreement. The amount of any realized losses on
Permitted Investments in the Certificate Account shall promptly be deposited
by
the Servicer in the Certificate Account. The Trustee shall not be
liable for the amount of any loss incurred in respect of any investment or
lack
of investment of funds held in the Certificate Account and made in accordance
with this Section 3.06.
(g) [reserved].
(h) [reserved].
(i) The
Servicer shall give notice to the Trustee, the Seller, each Rating Agency
and
the Depositor of any proposed change of the location of the Certificate Account
not later than 30 days and not more than 45 days prior to any change of this
Agreement. The Trustee shall give notice to the Servicer, the Seller,
each Rating Agency and the Depositor of any proposed change of the location
of
the Distribution Account not later than 30 days and not more than 45 days
prior
to any change of this Agreement.
(j) Upon
a downgrade in the rating of an institution at which an Eligible Account
is held
below the required ratings set forth in the definition of Eligible Account,
within 30 days of such downgrade, such account will be transferred to an
account
meeting the requirements of the definition of Eligible Account; provided,
however, that this transfer requirement may be waived by the applicable Rating
Agency.
Section
3.07 Collection of Taxes,
Assessments and Similar Items; Escrow Accounts.
(a) To
the extent required by the related Mortgage Note and not violative of current
law, the Servicer shall establish and maintain one or more accounts (each,
an
“Escrow Account”) and deposit and retain therein all
collections from the Mortgagors (or advances) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account
of
the Mortgagors. Nothing herein shall require the Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable
law.
(b) Withdrawals
of amounts so collected from the Escrow Accounts may be made only to effect
timely payment of taxes, assessments, hazard insurance premiums, condominium
or
PUD association dues, or comparable items, to reimburse (without duplication)
the Servicer out of related collections for any payments made pursuant to
Section 3.01 (with respect to taxes and assessments and insurance premiums)
and
Section 3.10 (with respect to hazard insurance), to refund to any Mortgagors
any
sums determined to be overages, to pay interest, if required by law
51
or
the related Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow
Account or to clear and terminate the Escrow Account at the termination of
this
Agreement in accordance with Section 9.01. The Escrow Accounts shall
not be a part of the Trust Fund.
(c) The
Servicer shall advance any payments referred to in Section 3.07(a) that are
not
timely paid by the Mortgagors or advanced by the Servicer on the date when
the
tax, premium or other cost for which such payment is intended is due, but
the
Servicer shall be required so to advance only to the extent that such advances,
in the good faith judgment of the Servicer, will be recoverable by the Servicer
out of Insurance Proceeds, Liquidation Proceeds or otherwise.
Section
3.08 Access to Certain
Documentation and Information Regarding the Mortgage
Loans.
The
Servicer shall afford the Depositor and the Trustee reasonable access to
all
records and documentation regarding the Mortgage Loans and all accounts,
insurance information and other matters relating to this Agreement, such
access
being afforded without charge, but only upon reasonable request and during
normal business hours at the office designated by the Servicer.
Upon
reasonable advance notice in writing, the Servicer will provide to each
Certificateholder or Certificate Owner that is a savings and loan association,
bank, or insurance company certain reports and reasonable access to information
and documentation regarding the Mortgage Loans sufficient to permit the
Certificateholder or Certificate Owner to comply with applicable regulations
of
the OTS or other regulatory authorities with respect to investment in the
Certificates. The Servicer shall be entitled to be reimbursed by each
such Certificateholder or Certificate Owner for actual expenses incurred
by the
Servicer in providing the reports and access.
Section
3.09 Permitted Withdrawals from
the Certificate Account and the Distribution Account.
(a) The
Servicer may (and, in the case of clause (ix) below, shall) from time to
time
make withdrawals from the Certificate Account for the following
purposes:
(i) to
pay to the Servicer (to the extent not previously retained) the servicing
compensation to which it is entitled pursuant to Section 3.15, and to pay
to the
Servicer, as additional servicing compensation, earnings on or investment
income
with respect to funds in or credited to the Certificate Account;
(ii) to
reimburse the Servicer or successor Servicer for the unreimbursed Advances
made
by it, such right of reimbursement pursuant to this subclause (ii) being
limited
to amounts received on the Mortgage Loans in respect of which the Advance
was
made;
(iii) to
reimburse the Servicer or successor Servicer for any Nonrecoverable Advance
previously made by it;
(iv) to
reimburse the Servicer for Insured Expenses from the related Insurance
Proceeds;
(v) to
reimburse the Servicer for (a) unreimbursed Servicing Advances, the Servicer’s
right to reimbursement pursuant to this clause (a) with respect to any Mortgage
Loan being limited to amounts received on the Mortgage Loans that represent
late
recoveries of the payments for which the advances were made pursuant to Section
3.01 or Section 3.07, (b)
52
unreimbursed
Servicing Advances made in respect of a Mortgage Loan for which such Servicing
Advances are not recoverable from the Mortgagor and (c) for unpaid Servicing
Fees as provided in Section 3.12;
(vi) to
pay to the purchaser, with respect to each Mortgage Loan or property acquired
in
respect of such Mortgage Loan that has been purchased pursuant to Section
2.02,
2.03, or 3.12, all amounts received thereon after the date of such
purchase;
(vii) to
reimburse the Seller, the Servicer, or the Depositor for expenses incurred
by
any of them and reimbursable pursuant to Section 6.03;
(viii) to
withdraw any amount deposited in the Certificate Account and not required
to be
deposited in the Certificate Account;
(ix) by
the Distribution Account Deposit Date, to withdraw (1) the Available Funds
and
Trustee Fee for the Distribution Date, to the extent on deposit, (2) the
Prepayment Charges on deposit and (3) the $100 held in trust for the Class
P
Certificates, and remit such amount to the Trustee for deposit in the
Distribution Account; and
(x) to
clear and terminate the Certificate Account upon termination of this Agreement
pursuant to Section 9.01.
The
Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by
Mortgage Loan basis, to justify any withdrawal from the Certificate Account
pursuant to subclauses (i), (ii), (iv), (v), and (vi). Before making
any withdrawal from the Certificate Account pursuant to subclause (iii),
the
Servicer shall deliver to the Trustee an Officer’s Certificate of a Servicing
Officer indicating the amount of any previous Advance determined by the Servicer
to be a Nonrecoverable Advance and identifying the related Mortgage Loans
and
their respective portions of the Nonrecoverable Advance.
In
addition to the amounts remitted to the Trustee by the Servicer from the
Certificate Account, by the Distribution Account Deposit Date, the Servicer
shall remit all Late Payment Fees assessable and not waived pursuant to Section
3.21(a) to the Trustee for deposit into the Distribution Account.
(b) The
Trustee shall withdraw funds from the Distribution Account for distributions
to
Certificateholders in the manner specified in this Agreement (and to withhold
from the amounts so withdrawn the amount of any taxes that it is authorized
to
withhold pursuant to the third paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to
pay to itself the Trustee Fee for the related Distribution Date;
(ii) to
withdraw and return to the Servicer any amount deposited in the Distribution
Account and not required to be deposited therein; and
(iii) to
clear and terminate the Distribution Account upon termination of the Agreement
pursuant to Section 9.01.
53
Section
3.10 Maintenance of Hazard
Insurance; Maintenance of Primary Insurance Policies.
(a) The
Servicer shall maintain, for each Mortgage Loan, hazard insurance with extended
coverage in an amount that is at least equal to the lesser of
(i) the
maximum insurable value of the improvements securing the Mortgage Loan
and
(ii) the
greater of (y) the outstanding principal balance of the Mortgage Loan and
(z) an
amount such that the proceeds of the policy are sufficient to prevent the
Mortgagor or the mortgagee from becoming a co-insurer.
Each
policy of standard hazard insurance shall contain, or have an accompanying
endorsement that contains, a standard mortgagee clause. Any amounts
collected under the policies (other than the amounts to be applied to the
restoration or repair of the related Mortgaged Property or amounts released
to
the Mortgagor in accordance with the Servicer’s normal servicing procedures)
shall be deposited in the Certificate Account. Any cost incurred in
maintaining any insurance shall not, for the purpose of calculating monthly
distributions to the Certificateholders or remittances to the Trustee for
their
benefit, be added to the principal balance of the Mortgage Loan, notwithstanding
that the Mortgage Loan so permits. Such costs shall be recoverable by
the Servicer out of late payments (other than Late Payment Fees) by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section
3.09. No earthquake or other additional insurance is to be required
of any Mortgagor or maintained on property acquired in respect of a Mortgage
other than pursuant to any applicable laws and regulations in force that
require
additional insurance. If the Mortgaged Property is located at the
time of origination of the Mortgage Loan in a federally designated special
flood
hazard area and the area is participating in the national flood insurance
program, the Servicer shall maintain flood insurance for the Mortgage
Loan. The flood insurance shall be in an amount equal to the least of
(i) the original principal balance of the related Mortgage Loan, (ii) the
replacement value of the improvements that are part of the Mortgaged Property,
and (iii) the maximum amount of flood insurance available for the related
Mortgaged Property under the national flood insurance program.
If
the
Servicer obtains and maintains a blanket policy insuring against hazard losses
on all of the Mortgage Loans, it shall have satisfied its obligations in
the
first sentence of this Section 3.10. The policy may contain a
deductible clause on terms substantially equivalent to those commercially
available and maintained by comparable servicers. If the policy
contains a deductible clause and a policy complying with the first sentence
of
this Section 3.10 has not been maintained on the related Mortgaged Property,
and
if a loss that would have been covered by the required policy occurs, the
Servicer shall deposit in the Certificate Account, without any right of
reimbursement, the amount not otherwise payable under the blanket policy
because
of the deductible clause. In connection with its activities as
Servicer of the Mortgage Loans, the Servicer agrees to present, on behalf
of
itself, the Depositor, and the Trustee for the benefit of the
Certificateholders, claims under any blanket policy.
(b) The
Servicer shall not take any action that would result in non-coverage under
any
applicable Primary Insurance Policy of any loss that, but for the actions
of the
Servicer, would have been covered thereunder. The Servicer shall not
cancel or refuse to renew any Primary Insurance Policy that is in effect
at the
date of the initial issuance of the Certificates and is required to be kept
in
force hereunder unless the replacement Primary Insurance Policy for the canceled
or non-renewed policy is maintained with a Qualified Insurer. The
Servicer need not maintain any Primary Insurance Policy if maintaining the
Primary Insurance Policy is prohibited by applicable law. The
Servicer agrees, to the extent permitted by applicable law, to
effect
54
the
timely payment of the premiums on each Primary Insurance Policy, and any
costs
not otherwise recoverable shall be recoverable by the Servicer from the related
liquidation proceeds.
In
connection with its activities as Servicer of the Mortgage Loans, the Servicer
agrees to present, on behalf of itself, the Trustee and the Certificateholders,
claims to the insurer under any Primary Insurance Policies and, in this regard,
to take any reasonable action in accordance with the Servicing Standard
necessary to permit recovery under any Primary Insurance Policies respecting
defaulted Mortgage Loans. Any amounts collected by the Servicer under
any Primary Insurance Policies shall be deposited in the Certificate
Account.
Section
3.11 Enforcement of Due-On-Sale
Clauses; Assumption Agreements.
(a) Except
as otherwise provided in this Section 3.11, when any property subject to
a
Mortgage has been conveyed by the Mortgagor, the Servicer shall to the extent
that it has knowledge of the conveyance and in accordance with the Servicing
Standard, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that enforcement will not adversely affect
or jeopardize coverage under any Required Insurance
Policy. Notwithstanding the foregoing, the Servicer is not required
to exercise these rights with respect to a Mortgage Loan if the Person to
whom
the related Mortgaged Property has been conveyed or is proposed to be conveyed
satisfies the conditions contained in the Mortgage Note and Mortgage related
thereto and the consent of the mortgagee under the Mortgage Note or Mortgage
is
not otherwise so required under the Mortgage Note or Mortgage as a condition
to
the transfer.
If
(i)
the Servicer is prohibited by law from enforcing any due-on-sale clause,
(ii)
coverage under any Required Insurance Policy would be adversely affected,
(iii)
the Mortgage Note does not include a due-on-sale clause, or (iv) nonenforcement
is otherwise permitted hereunder, the Servicer is authorized, subject to
Section
3.11(b), to take or enter into an assumption and modification agreement from
or
with the person to whom the property has been or is about to be conveyed,
pursuant to which the person becomes liable under the Mortgage Note and,
unless
prohibited by applicable state law, the Mortgagor remains liable
thereon. The Mortgage Loan must continue to be covered (if so covered
before the Servicer enters into the agreement) by the applicable Required
Insurance Policies.
The
Servicer, subject to Section 3.11(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with the Person, pursuant to which the
original Mortgagor is released from liability and the Person is substituted
as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding
the foregoing, the Servicer shall not be deemed to be in default under this
Section 3.11 because of any transfer or assumption that the Servicer reasonably
believes it is restricted by law from preventing, for any reason
whatsoever.
(b) Subject
to the Servicer’s duty to enforce any due-on-sale clause to the extent set forth
in Section 3.11(a), in any case in which a Mortgaged Property has been conveyed
to a Person by a Mortgagor, and the Person is to enter into an assumption
agreement or modification agreement or supplement to the Mortgage Note or
Mortgage that requires the signature of the Trustee, or if an instrument
of
release signed by the Trustee is required releasing the Mortgagor from liability
on the Mortgage Loan, the Servicer shall prepare and deliver to the Trustee
for
signature and shall direct the Trustee, in writing, to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed,
and
the modification agreement or supplement to the Mortgage Note or Mortgage
or
other instruments appropriate to carry out the terms of the Mortgage Note
or
Mortgage or otherwise to comply with any applicable laws
55
regarding
assumptions or the transfer of the Mortgaged Property to the
Person. In connection with any such assumption, no material term of
the Mortgage Note may be changed.
In
addition, the substitute Mortgagor and the Mortgaged Property must be acceptable
to the Servicer in accordance with its underwriting standards as then in
effect. Together with each substitution, assumption, or other
agreement or instrument delivered to the Trustee for execution by it, the
Servicer shall deliver an Officer’s Certificate signed by a Servicing Officer
stating that the requirements of this subsection have been met in connection
with such Officer’s Certificate. The Servicer shall notify the
Trustee that any substitution or assumption agreement has been completed
by
forwarding to the Trustee the original of the substitution or assumption
agreement, which in the case of the original shall be added to the related
Mortgage File and shall, for all purposes, be considered a part of the Mortgage
File to the same extent as all other documents and instruments constituting
a
part of the Mortgage File. The Servicer will retain any fee collected
by it for entering into an assumption or substitution of liability agreement
as
additional servicing compensation.
Section
3.12 Realization Upon
Defaulted Mortgage Loans.
The
Servicer shall use reasonable efforts in accordance with the Servicing Standard
to foreclose on or otherwise comparably convert the ownership of assets securing
such of the Mortgage Loans as come into and continue in default and as to
which
no satisfactory arrangements can be made for collection of delinquent
payments. In connection with the foreclosure or other conversion, the
Servicer shall follow the Servicing Standard and shall follow the requirements
of the insurer under any Required Insurance Policy. The Servicer
shall not be required to expend its own funds in connection with any foreclosure
or towards the restoration of any property unless it determines (i) that
the
restoration or foreclosure will increase the proceeds of liquidation of the
Mortgage Loan after reimbursement to itself of restoration expenses and (ii)
that restoration expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from
the
Certificate Account). The Servicer shall be responsible for all other
costs and expenses incurred by it in any foreclosure proceedings. The
Servicer is entitled to reimbursement of such costs and expenses from the
liquidation proceeds with respect to the related Mortgaged Property, as provided
in the definition of Liquidation Proceeds. If the Servicer has
knowledge that a Mortgaged Property that the Servicer is contemplating acquiring
in foreclosure or by deed in lieu of foreclosure is located within a one
mile
radius of any site listed in the Expenditure Plan for the Hazardous Substance
Clean Up Bond Act of 1984 or other site with environmental or hazardous waste
risks known to the Servicer, the Servicer will, before acquiring the Mortgaged
Property, consider the risks and only take action in accordance with its
established environmental review procedures.
With
respect to any REO Property, the deed or certificate of sale shall be taken
in
the name of the Trustee for the benefit of the Certificateholders, or its
nominee, on behalf of the Certificateholders. The Trustee’s name
shall be placed on the title to the REO Property solely as the Trustee hereunder
and not in its individual capacity. The Servicer shall ensure that
the title to the REO Property references the Pooling and Servicing Agreement
and
the Trustee’s capacity hereunder. Pursuant to its efforts to sell the
REO Property, the Servicer shall either itself or through an agent selected
by
the Servicer protect and conserve the REO Property in accordance with the
Servicing Standard.
The
Servicer shall perform the tax reporting and withholding required by sections
1445 and 6050J of the Code with respect to foreclosures and abandonments,
the
tax reporting required by section 6050H of the Code with respect to the receipt
of mortgage interest from individuals and, if required by section 6050P of
the
Code with respect to the cancellation of indebtedness by certain financial
entities, by preparing any required tax and information returns, in the form
required.
56
If
the
Trust Fund acquires any Mortgaged Property as aforesaid or otherwise in
connection with a default or imminent default on a Mortgage Loan, the REO
Property shall only be held temporarily, shall be actively marketed for sale,
and the Servicer shall dispose of the Mortgaged Property as soon as practicable,
and in any case before the end of the third calendar year following the calendar
year in which the Trust Fund acquires the property. Notwithstanding
any other provision of this Agreement, no Mortgaged Property acquired by
the
Trust Fund shall be rented (or allowed to continue to be rented) or otherwise
used for the production of income by or on behalf of the Trust
Fund.
The
decision of the Servicer to foreclose on a defaulted Mortgage Loan shall
be
subject to a determination by the Servicer that the proceeds of the foreclosure
would exceed the costs and expenses of bringing a foreclosure
proceeding. The proceeds received from the maintenance of any REO
Properties, net of reimbursement to the Servicer for costs incurred (including
any property or other taxes) in connection with maintenance of the REO
Properties and net of unreimbursed Servicing Fees, Advances, and Servicing
Advances, shall be applied to the payment of principal of and interest on
the
related defaulted Mortgage Loans (with interest accruing as though the Mortgage
Loans were still current and adjustments, if applicable, to the Mortgage
Rate
were being made in accordance with the Mortgage Note) and all such proceeds
shall be deemed, for all purposes in this Agreement, to be payments on account
of principal and interest on the related Mortgage Notes and shall be deposited
into the Certificate Account. To the extent the net proceeds received
during any calendar month exceeds the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan for the calendar month, the excess shall be considered to be
a
partial prepayment of principal of the related Mortgage Loan.
The
proceeds from any liquidation of a Mortgage Loan, as well as any proceeds
from
an REO Property, will be applied in the following order of priority: first,
to
reimburse the Servicer for any related unreimbursed Servicing Advances or
Servicing Fees or for any related unreimbursed Advances, as applicable; second,
to reimburse the Servicer, as applicable, and to reimburse the Certificate
Account for any Nonrecoverable Advances (or portions thereof) that were
previously withdrawn by the Servicer pursuant to Section 3.09(a)(iii) that
related to the Mortgage Loan; third, to accrued and unpaid interest (to the
extent no Advance has been made for such amount or any such Advance has been
reimbursed) on the Mortgage Loan or related REO Property, at the Adjusted
Net
Mortgage Rate to the Due Date occurring in the month in which such amounts
are
required to be distributed; and fourth, as a recovery of principal of the
Mortgage Loan. The Servicer will retain any Excess Proceeds from the
liquidation of a Liquidated Mortgage Loan as additional servicing compensation
pursuant to Section 3.15.
The
Servicer may agree to a modification of any Mortgage Loan at the request
of the
related Mortgagor if (i) the modification is in lieu of a refinancing and
(ii)
the Servicer purchases that Mortgage Loan from the Trust Fund as described
below. Upon the agreement of the Servicer to modify a Mortgage Loan
in accordance with the preceding sentence, the Servicer shall purchase that
Mortgage Loan and all interest of the Trustee in that Mortgage Loan shall
automatically be deemed transferred and assigned to the Servicer and all
benefits and burdens of ownership thereof, including the right to accrued
interest thereon from the date of purchase and the risk of default thereon,
shall pass to the Servicer. The Servicer shall promptly deliver to
the Trustee a certification of a Servicing Officer to the effect that all
requirements of this paragraph have been satisfied with respect to a Mortgage
Loan to be repurchased pursuant to this paragraph.
The
Servicer shall deposit the Purchase Price for any Mortgage Loan repurchased
pursuant to Section 3.12 in the Certificate Account pursuant to Section 3.06
within one Business Day after the purchase of the Mortgage Loan. Upon
receipt by the Trustee of written notification of any such deposit signed
by a
Servicing Officer, the Trustee shall release to the Servicer the related
Mortgage File and shall execute and deliver such instruments of transfer
or
assignment, in each case without recourse, as shall be
57
necessary
to vest in the Servicer any Mortgage Loan previously transferred and assigned
pursuant hereto. The Servicer covenants and agrees to indemnify the
Trust Fund against any liability for any “prohibited transaction” taxes and any
related interest, additions, and penalties imposed on the Trust Fund established
hereunder as a result of any modification of a Mortgage Loan effected pursuant
to this Section, or any purchase of a Mortgage Loan by the Servicer in
connection with a modification (but such obligation shall not prevent the
Servicer or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Servicer from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The Servicer shall have no right of reimbursement for
any amount paid pursuant to the foregoing indemnification, except to the
extent
that the amount of any tax, interest, and penalties, together with interest
thereon, is refunded to the Trust Fund.
Section
3.13 Trustee to Cooperate;
Release of Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary
for
such purposes, the Servicer will immediately notify the Trustee by delivering
a
Request for Release substantially in the form of Exhibit N. Upon
receipt of the request, the Trustee shall promptly release the related Mortgage
File to the Servicer, and the Trustee shall at the Servicer’s direction execute
and deliver to the Servicer the request for reconveyance, deed of reconveyance,
or release or satisfaction of mortgage or such instrument releasing the lien
of
the Mortgage in each case provided by the Servicer, together with the Mortgage
Note with written evidence of cancellation thereon. The Servicer is
authorized to cause the removal from the registration on the MERS System
of such
Mortgage and to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of satisfaction
or
cancellation or of partial or full release. Expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall
be
chargeable to the related Mortgagor.
From
time
to time and as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose collection under any policy of
flood
insurance, any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of
the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Trustee
shall,
upon delivery to the Trustee of a Request for Release in the form of Exhibit
M
signed by a Servicing Officer, release the Mortgage File to the Servicer
or its
designee. Subject to the further limitations set forth below, the
Servicer shall cause the Mortgage File or documents so released to be returned
to the Trustee when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan is liquidated and the proceeds thereof are deposited in
the
Certificate Account, in which case the Servicer shall deliver to the Trustee
a
Request for Release in the form of Exhibit N, signed by a Servicing
Officer.
If
the
Servicer at any time seeks to initiate a foreclosure proceeding in respect
of
any Mortgaged Property as authorized by this Agreement, the Servicer shall
deliver to the Trustee, for signature, as appropriate, any court pleadings,
requests for trustee’s sale, or other documents necessary to effectuate such
foreclosure or any legal action brought to obtain judgment against the Mortgagor
on the Mortgage Note or the Mortgage or to obtain a deficiency judgment or
to
enforce any other remedies or rights provided by the Mortgage Note or the
Mortgage or otherwise available at law or in equity.
Section
3.14 Documents, Records and Funds
in Possession of the Servicer to be Held for the
Trustee.
The
Servicer shall account fully to the Trustee for any funds it receives or
otherwise collects as Liquidation Proceeds or Insurance Proceeds in respect
of
any Mortgage Loan. All Mortgage Files and funds collected or held by,
or under the control of, the Servicer in respect of any Mortgage
Loans,
58
whether
from the collection of principal and interest payments or from Liquidation
Proceeds, including any funds on deposit in the Certificate Account, shall
be
held by the Servicer for and on behalf of the Trustee and shall be and remain
the sole and exclusive property of the Trustee, subject to the applicable
provisions of this Agreement. The Servicer also agrees that it shall
not create, incur or subject any Mortgage File or any funds that are deposited
in the Certificate Account, Distribution Account, or any Escrow Account,
or any
funds that otherwise are or may become due or payable to the Trustee for
the
benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment, or other encumbrance, or assert by legal
action or otherwise any claim or right of setoff against any Mortgage File
or
any funds collected on, or in connection with, a Mortgage Loan, except, however,
that the Servicer shall be entitled to set off against and deduct from any
such
funds any amounts that are properly due and payable to the Servicer under
this
Agreement.
Section
3.15 Servicing
Compensation.
The
Servicer may retain or withdraw from the Certificate Account the Servicing
Fee
for each Mortgage Loan for the related Distribution Date. If the
Servicer directly services a Mortgage Loan, the Servicer may retain the
Servicing Fee for its own account as compensation for performing
services. Notwithstanding the foregoing, the Servicing Fee payable to
the Servicer shall be reduced by the lesser of the aggregate of the Prepayment
Interest Shortfalls with respect to the Distribution Date and the aggregate
Compensating Interest for the Distribution Date.
Additional
servicing compensation in the form of Excess Proceeds, Prepayment Interest
Excess, assumption fees and all income net of any losses realized from Permitted
Investments shall be retained by the Servicer to the extent not required
to be
deposited in the Certificate Account pursuant to Section 3.06. The
Servicer shall be required to pay all expenses incurred by it in connection
with
its servicing activities hereunder (including the payment of any premiums
for
hazard insurance, and any Primary Insurance Policy and maintenance of the
other
forms of insurance coverage required by this Agreement) and shall not be
entitled to reimbursement therefor except as specifically provided in this
Agreement.
Section
3.16 Access to Certain
Documentation.
The
Servicer shall provide to the OTS and the FDIC and to comparable regulatory
authorities supervising Holders of Certificates and Certificate Owners and
the
examiners and supervisory agents of the OTS, the FDIC, and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Access shall be
afforded without charge, but only upon reasonable prior written request and
during normal business hours at the offices designated by the
Servicer. Nothing in this Section 3.16 shall limit the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access
as
provided in this Section 3.16 as a result of such obligation shall not
constitute a breach of this Section 3.16.
Section
3.17 Annual Statement as to
Compliance.
(a) By
March 15 of each year, commencing with 2008, the Servicer shall deliver to
the
Trustee via electronic mail (XXXXX.Xxxxxxxxxxxxx@xx.xxx) and the
Depositor an Officer’s Certificate signed by two Servicing Officers stating, as
to each signer thereof, that (i) a review of the activities of the Servicer
during the preceding calendar year (or applicable portion thereof) and of
the
performance of the Servicer under this Agreement has been made under such
officer’s supervision, and (ii) to the best of such officer’s knowledge, based
on the review, the Servicer has fulfilled all its obligations under this
Agreement, in all material respects throughout the year
59
(or
applicable portion thereof), or, if there has been a failure to fulfill any
obligation in any material respect, specifying each failure known to the
officer
and the nature and status thereof.
(b) [Reserved].
(c) Copies
of such statement shall be provided by the Trustee to any Certificateholder
or
Certificate Owner upon request at the Servicer’s expense, provided such
statement is delivered by the Servicer to the Trustee.
Section
3.18 Errors and Omissions
Insurance; Fidelity Bonds.
The
Servicer shall obtain and maintain in force (a) policies of insurance covering
errors and omissions in the performance of its obligations as Servicer hereunder
and (b) a fidelity bond covering its officers, employees, and
agents. Each policy and bond shall, together, comply with the
requirements from time to time of FNMA or FHLMC for persons performing servicing
for mortgage loans purchased by FNMA or FHLMC. If any policy or bond
ceases to be in effect, the Servicer shall obtain a comparable replacement
policy or bond from an insurer or issuer meeting the above requirements as
of
the date of the replacement.
Section
3.19 [Reserved].
Section
3.20 Prepayment
Charges.
(a) The
Servicer will not waive any part of any Prepayment Charge unless the waiver
relates to a default or a reasonably foreseeable default, the Prepayment
Charge
would cause an undue hardship to the related borrower, the Mortgaged Property
is
sold by the Mortgagor, the collection of any Prepayment Charge would violate
any
relevant law or regulation or the waiving of the Prepayment Charge would
otherwise benefit the Trust Fund and it is expected that the waiver would
maximize recovery of total proceeds taking into account the value of the
Prepayment Charge and related Mortgage Loan and doing so is standard and
customary in servicing similar Mortgage Loans (including any waiver of a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that
is
related to a default or a reasonably foreseeable default). The
Servicer will not waive a Prepayment Charge in connection with a refinancing
of
a Mortgage Loan that is not related to a default or a reasonably foreseeable
default.
(b) If
a Prepayment Charge is waived other than as permitted by the prior paragraph,
then the Servicer is required to pay the amount of such waived Prepayment
Charge, for the benefit of the Holders of the Class P Certificates, by
depositing such amount into the Distribution Account from its own funds,
without
any right of reimbursement therefor, together with and at the time that the
amount prepaid on the related Mortgage Loan is required to be deposited into
the
Distribution Account.
(c) Upon
discovery by the Servicer or a Responsible Officer of the Trustee (provided,
however, that the Trustee shall have no obligation to conduct an independent
investigation or inquiry in relation thereto) of a breach of
the representations or warranties made pursuant to clause (37) of Schedule
III that materially and adversely affects the right of the Holders of the
Class
P Certificates to any Prepayment Charge, the party discovering the breach
shall
give prompt written notice to the other parties. Within 60 days of
the earlier of discovery by the Servicer or receipt of notice by the Servicer
of
breach, the Servicer shall cure the breach in all material respects or shall
pay
into the Certificate Account the amount of the Prepayment Charge that would
otherwise be due from the Mortgagor, less any amount representing such
Prepayment Charge previously collected and paid by the Servicer into the
Certificate Account.
60
Section
3.21 Late Payment
Fees.
(a) The
Servicer shall not waive any part of any Late Payment Fee unless (i) the
collection of any Late Payment Fee would violate any relevant law or regulation
or (ii) the waiving of the Late Payment Fee would otherwise benefit the Trust
Fund and it is expected that the waiver would maximize recovery of total
proceeds, taking into account the value of the Late Payment Fee and related
Mortgage Loan and doing so is standard and customary in servicing similar
Mortgage Loans (including the waiver of a Late Payment Fee in connection
with a
refinancing of a Mortgage Loan that is related to a default or reasonably
foreseeable default).
(b) If
the covenant made by the Servicer in clause (a) above is breached, the Servicer
must pay into the Certificate Account prior to the Distribution Account Deposit
Date following the end of the related Prepayment Period the amount of the
waived
Late Payment Fee.
(c) The
Servicer shall remit Late Payment Fees assessable and not waived pursuant
to
clause (a) above in accordance with Section 3.09.
61
ARTICLE
FOUR
DISTRIBUTIONS
AND ADVANCES
BY
THE SERVICER
Section
4.01 Advances.
(a) The
Servicer shall determine on or before each Servicer Advance Date whether
it is
required to make an Advance pursuant to the definition thereof. If
the Servicer determines it is required to make an Advance, it shall, on or
before the Servicer Advance Date, either (i) deposit into the Certificate
Account an amount equal to the Advance or (ii) make an appropriate entry
in its
records relating to the Certificate Account that any Amount Held for Future
Distribution has been used by the Servicer in discharge of its obligation
to
make any such Advance. Any funds so applied shall be replaced by the
Servicer by deposit in the Certificate Account no later than the close of
business on the next Servicer Advance Date. The Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of
its
own funds made pursuant to this Section 4.01 as provided in Section
3.09. The obligation to make Advances with respect to any Mortgage
Loan shall continue if such Mortgage Loan has been foreclosed or otherwise
terminated and the Mortgaged Property has not been liquidated. The
Servicer shall inform the Trustee of the amount of the Advance to be made
on
each Servicer Advance Date no later than the second Business Day before the
related Distribution Date.
(b) If
the Servicer determines that it will be unable to comply with its obligation
to
make the Advances as and when described in the second sentence of Section
4.01(a), it shall use its best efforts to give written notice thereof to
the
Trustee (each such notice an “Advance Notice”; and
such notice may be given by telecopy), not later than 3:00 P.M., New York
time,
on the Business Day immediately preceding the related Servicer Advance Date,
specifying the amount that it will be unable to deposit (each such amount
an
“Advance Deficiency”) and certifying that such Advance
Deficiency constitutes an Advance hereunder and is not a Nonrecoverable
Advance. If the Trustee receives a Trustee Advance Notice on or
before 3:00 P.M., New York time on a Servicer Advance Date, the Trustee is
entitled to immediately terminate the Servicer under Section 7.01, and shall,
not later than 3:00 P.M., New York time, on the related Distribution Date,
deposit in the Distribution Account an amount equal to the Advance Deficiency
identified in such Trustee Advance Notice unless it is prohibited from so
doing
by applicable law. Notwithstanding the foregoing, the Trustee shall
not be required to make such deposit if the Trustee shall have received written
notification from the Servicer that the Servicer has deposited or caused
to be
deposited in the Certificate Account an amount equal to such Advance Deficiency
by 3:00 P.M. New York time on the related Distribution Date. If the
Trustee has not terminated the Servicer, the Servicer shall reimburse the
Trustee for the amount of any Advance (including interest at the Prime Rate
on
the day of such reimbursement published in The Wall Street Journal) on
such amount, made by the Trustee pursuant to this Section 4.01(b) not later
than
the second day following the related Servicer Advance Date. In the
event that the Servicer does not reimburse the Trustee in accordance with
the
requirements of the preceding sentence, the Trustee shall immediately (a)
terminate all of the rights and obligations of the Servicer under this Agreement
in accordance with Section 7.01 and (b) subject to the limitations set forth
in
Section 3.05, assume all of the rights and obligations of the Servicer
hereunder.
(c) The
Servicer shall, not later than the close of business on the Business Day
immediately preceding each Servicer Advance Date, deliver to the Trustee
a
report (in form and substance reasonably satisfactory to the Trustee) that
indicates (i) the Mortgage Loans with respect to which the Servicer has
determined that the related Scheduled Payments should be
62
advanced
and (ii) the amount of the related Scheduled Payments. The Servicer
shall deliver to the Trustee on the related Servicer Advance Date an Officer’s
Certificate of a Servicing Officer indicating the amount of any proposed
Advance
determined by the Servicer to be a Nonrecoverable Advance.
Section
4.02 Priorities of
Distribution.
(a) (1)
On each Distribution Date, the Trustee shall withdraw any Available Funds
from
the Distribution Account and apply such funds to distributions on the Senior
Certificates in the following priority, in each case, to the extent of Available
Funds remaining:
(i) concurrently,
to each interest-bearing Class of Senior Certificates, an amount allocable
to
interest equal to the related Class Optimal Interest Distribution Amount,
any
shortfall being allocated among such Classes in proportion to the amount
of the
Class Optimal Interest Distribution Amount that would have been distributed
in
the absence of such shortfall; provided that prior to the Accrual Termination
Date, the Accrual Amount shall be distributed as provided in Section
4.02(a)(1)(ii);
(ii) [reserved];
(iii) concurrently,
to the Classes of Senior Certificates as follows:
|
(A)
|
to
the Class PO Certificates the PO Formula Principal Amount until
its Class
Certificate Balance is reduced to zero;
and
|
|
(B)
|
the
Non-PO Formula Principal Amount up to the amount of the Senior
Principal
Distribution Amount for such Distribution Date, concurrently as
follows:
|
A. the
Class A-8 Percentage, sequentially, to the Class A-R and Class A-7 Certificates,
in that order, until their respective Class Certificate Balances are reduced
to
zero; and
B. concurrently,
the Combined Percentage to the following Classes of Certificates, pro rata,
based on (x) the Class Certificate Balance of the Class A-1 Certificates
and (y)
the aggregate Class Certificate Balance of the Class A-3, Class A-4, Class
A-5,
Class A-6 and Class A-7 Certificates:
(x)
to
the Class A-1 Certificates until its Class Certificate Balance is reduced
to
zero and
(y)
to
the following Classes of Certificates in the following priority:
(1)
to
the Class A-3 Certificates, the Priority Amount, until its Class Certificate
Balance is reduced to zero;
(2)
concurrently, to the following Classes of Certificates, pro rata, based on
(x)
the Class Certificate Balance of the Class A-6 Certificates and (y) the
aggregate Class Certificate Balance of the Class A-4 and Class A-5
Certificates:
63
(x)
to
the Class A-6 Certificates until its Class Certificate Balance is reduced
to
zero and
(y)
sequentially:
(i)
up to
$480,000 for each Distribution Date, to the Class A-4 Certificates until
its
Class Certificate Balance is reduced to zero;
(ii)
to
the Class A-5 Certificates until its Class Certificate Balance is reduced
to
zero; and
(iii)
to
the Class A-4 Certificates until its Class Certificate Balance is reduced
to
zero;
(3)
to
the Class A-7 Certificates, until its Class Certificate Balance is reduced
to
zero; and
(4)
to
the Class A-3 Certificates, without regard to the Priority Amount, until
its
Class Certificate Balance is reduced to zero.
(iv) to
the Class PO Certificates, any Class PO Deferred Amount, up to an amount
not to
exceed the amount calculated pursuant to the definition of Subordinated
Principal Distribution Amount actually received or advanced for such
Distribution Date (with such amount to be allocated first from amounts
calculated pursuant to (i) and (ii) and then (iii) of the definition of
Subordinated Principal Distribution Amount;
(2) On
each Distribution Date, Available Funds remaining after making the distributions
described in Section 4.02(a)(1) will be distributed to the Subordinated
Certificates and the Class A-R Certificates, subject to paragraph 4.02(e)
below,
in the following order of priority:
|
(A)
|
to
the Class B-1 Certificates, an amount allocable to interest equal
to the
Class Optimal Interest Distribution Amount for such Class for such
Distribution Date;
|
|
(B)
|
to
the Class B-1 Certificates, an amount allocable to principal equal
to its
Pro Rata Share for such Distribution Date until the Class Certificate
Balance thereof is reduced to zero;
|
|
(C)
|
to
the Class B-2 Certificates, an amount allocable to interest equal
to the
Class Optimal Interest Distribution Amount for such Class for such
Distribution Date;
|
|
(D)
|
to
the Class B-2 Certificates, an amount allocable to principal equal
to its
Pro Rata Share for such Distribution Date until the Class Certificate
Balance thereof is reduced to zero;
|
|
(E)
|
to
the Class B-3 Certificates, an amount allocable to interest equal
to the
Class Optimal Interest Distribution Amount for such Class for such
Distribution Date;
|
64
|
(F)
|
to
the Class B-3 Certificates, an amount allocable to principal equal
to its
Pro Rata Share for such Distribution Date until the Class Certificate
Balance thereof is reduced to zero;
|
|
(G)
|
to
the Class B-4 Certificates, an amount allocable to interest equal
to the
Class Optimal Interest Distribution Amount for such Class for such
Distribution Date;
|
|
(H)
|
to
the Class B-4 Certificates, an amount allocable to principal equal
to its
Pro Rata Share for such Distribution Date until the Class Certificate
Balance thereof is reduced to zero;
|
|
(I)
|
to
the Class B-5 Certificates, an amount allocable to interest equal
to the
Class Optimal Interest Distribution Amount for such Class for such
Distribution Date;
|
|
(J)
|
to
the Class B-5 Certificates, an amount allocable to principal equal
to its
Pro Rata Share for such Distribution Date until the Class Certificate
Balance thereof is reduced to zero;
|
|
(K)
|
to
the Class B-6 Certificates, an amount allocable to interest equal
to the
Class Optimal Interest Distribution Amount for such Class for such
Distribution Date; and
|
|
(L)
|
to
the Class B-6 Certificates, an amount allocable to principal equal
to its
Pro Rata Share for such Distribution Date until the Class Certificate
Balance thereof is reduced to zero;
|
(3) to
the Class A-R Certificates, any remaining funds.
On
each
Distribution Date, all amounts representing Prepayment Charges received during
the related Prepayment Period (and amounts paid by the Servicer for waiving
them) will be distributed to the holders of the Class P
Certificates. On the Distribution Date immediately following the
expiration of the latest Prepayment Charge Period of the Mortgage Loans,
the
$100 held in trust for the Class P Certificates will be distributed to the
Class
P Certificates. On each Distribution Date, all amounts representing
Late Payment Fees assessable during the related Prepayment Period (and amounts
paid by the Servicer for waiving them less any such amounts not deposited
into
the Distribution Account by the preceding Distribution Account Deposit date
plus
any such amounts deposited into the Distribution Account with respect to
prior
Prepayment Periods) will be distributed to the Holders of the Class L
Certificates.
On
any
Distribution Date, amounts distributed in respect of Class PO Deferred Amounts
will not reduce the Class Certificate Balance of the Class PO
Certificates.
On
any
Distribution Date, to the extent the Amount Available for Senior Principal
is
insufficient to make the full distribution required to be made pursuant to
Section 4.02(a)(1)(iii), (A) the amount distributable on the Class PO
Certificates in respect of principal shall be equal to the product of (1)
the
Amount Available for Senior Principal and (2) a fraction, the numerator of
which
is the PO Formula Principal Amount and the denominator of which is the sum
of
such PO Formula Principal Amount and the Senior Principal Distribution Amount
and (B) the amount distributable on the Senior Certificates other than the
Class
PO Certificates, in respect of principal shall be equal to the product of
(1)
such Amount Available for Senior Principal and (2) a fraction, the numerator
of
which is the Senior Principal
65
Distribution
Amount and the denominator of which is the sum of such Senior Principal
Distribution Amount and the PO Formula Principal Amount.
(b) On
each Distribution Date prior to and including the Accrual Termination Date,
the
Accrual Amount for such Distribution Date shall not (except as provided in
the
second to last sentence in this paragraph) be distributed as interest with
respect to the Class of Accrual Certificates, but shall instead be added
to the
Class Certificate Balance of such Class on the related Distribution
Date. With respect to any Distribution Date prior to and including
the Accrual Termination Date on which principal payments on
the Class of Accrual Certificates are distributed pursuant to
Section 4.02(a)(1)(ii), the related Accrual Amount shall be deemed to have
been
added on such Distribution Date to the Class Certificate Balance (and
included in the amount distributable on the related Classes of Accretion
Directed Certificates pursuant to Section 4.02(a)(1)(ii) for such Distribution
Date) and the related distribution thereon shall be deemed to have been applied
concurrently towards the reduction of all or a portion of the amount so added
and, to the extent of any excess, towards the reduction of the
Class Certificate Balance of such Class of Accrual Certificates
immediately prior to such Distribution Date. Notwithstanding any such
distribution, each such Class shall continue to be a Class of Accrual
Certificates on each subsequent Distribution Date until the Accrual Termination
Date.
(c) On
each Distribution Date on or after the Senior Credit Support Depletion Date,
notwithstanding the allocation and priority set forth in Section
4.02(a)(1)(iii)(B), the Non-PO Formula Principal Amount up to the amount
of the
Senior Principal Distribution Amount for such Distribution Date will be
distributed concurrently, as principal, of the Classes of Senior Certificates
(other than the Notional Amount Certificates and the Class PO Certificates),
pro
rata, on the basis of their respective Class Certificate Balances, until
the
Class Certificate Balances thereof are reduced to zero.
(d) On
each Distribution Date, the amount referred to in clause (i) of the definition
of Class Optimal Interest Distribution Amount for each Class of Certificates
for
such Distribution Date shall be reduced by (i) the related Class’ pro rata share
of Net Prepayment Interest Shortfalls based on the related Class Optimal
Interest Distribution Amount, without taking into account such Net Prepayment
Interest Shortfalls and (ii) the related Class’ Allocable Share of (A) after the
Special Hazard Coverage Termination Date, with respect to each Mortgage Loan
(or, after the Senior Credit Support Depletion Date, any Mortgage Loan) that
became a Special Hazard Mortgage Loan during the calendar month preceding
the
month of such Distribution Date, the excess of one month’s interest at the
Adjusted Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan
as of the Due Date in such month over the amount of Liquidation Proceeds
applied
as interest on such Mortgage Loan with respect to such month, (B) after the
Bankruptcy Coverage Termination Date, with respect to each Mortgage Loan
(or,
after the Senior Credit Support Depletion Date, any Mortgage Loan) that became
subject to a Bankruptcy Loss during the calendar month preceding the month
of
such Distribution Date, the interest portion of the related Debt Service
Reduction or Deficient Valuation, (C) each Relief Act Reduction for the Mortgage
Loans (or, after the Senior Credit Support Depletion Date, any Mortgage Loan)
incurred during the calendar month preceding the month of such Distribution
Date
and (D) after the Fraud Loss Coverage Termination Date, (or, after the Senior
Credit Support Depletion Date, any Mortgage Loan) that became a Fraud Loan
during the calendar month preceding the month of such Distribution Date,
the
excess of one month’s interest at the Adjusted Net Mortgage Rate on the Stated
Principal Balance of such Mortgage Loan as of the Due Date in such month
over
the amount of Liquidation Proceeds applied as interest on such Mortgage Loan
with respect to such month.
66
(e) Notwithstanding
the priority and allocation contained in Section 4.02(a), if, with respect
to
any Class of Subordinated Certificates, on any Distribution Date the sum
of the
related Class Subordination Percentages of such Class and of all Classes
of
Subordinated Certificates that have a higher numerical Class designation
than
such Class (the “Applicable Credit Support
Percentage”) is less than the Original Applicable Credit Support
Percentage for such Class, no distribution of Principal Prepayments on the
Mortgage Loans will be made to any such Classes (the “Restricted
Classes”) and the amount of such Principal Prepayments otherwise
distributable to the Restricted Classes shall be distributed to the Classes
of
Subordinated Certificates having lower numerical Class designations than
such
Class, pro rata, based on their respective Class Certificate Balances
immediately prior to such Distribution Date and shall be distributed in the
sequential order set forth in Section 4.02(a)(2). Notwithstanding the
foregoing, the Class of Subordinated Certificates then outstanding with the
lowest numerical class designation shall not be a Restricted Class.
(f) If
the amount of a Realized Loss on a Mortgage Loan has been reduced by application
of Subsequent Recoveries with respect to such Mortgage Loan, the amount of
such
Subsequent Recoveries will be applied sequentially, in the order of payment
priority, to increase the Class Certificate Balance of each related Class
of
Certificates to which Realized Losses have been allocated, but in each case
by
not more than the amount of Realized Losses previously allocated to that
Class
of Certificates pursuant to Section 4.05. Holders of such
Certificates will not be entitled to any payment in respect of the Class
Optimal
Interest Distribution Amount on the amount of such increases for any Interest
Accrual Period preceding the Distribution Date on which such increase
occurs. Any such increases shall be applied to the Certificate
Balance of each Certificate, of such Class in accordance with its respective
Percentage Interest.
Section
4.03 [Reserved].
Section
4.04 [Reserved].
Section
4.05 Allocation of Realized
Losses.
(a) On
each Distribution Date, the Trustee shall allocate, based on information
delivered by the Servicer, the total amount of Realized Losses, including
Excess
Losses, with respect to such Distribution Date. Realized Losses with
respect to any Distribution Date shall be allocated as follows:
(i) the
applicable PO Percentage of any Realized Loss, including any Excess Loss,
shall
be allocated to the Class PO Certificates until its Class Certificate Balance
is
reduced to zero; and
(ii) (A)
the applicable Non-PO Percentage of any Realized Loss (other than any Excess
Loss) shall be allocated first to the Subordinated Certificates in reverse
order
of their respective numerical Class designations (beginning with the Class
of
Subordinated Certificates then outstanding with the highest numerical Class
designation) until the respective Class Certificate Balance of each such
Class
is reduced to zero, and second to the Class A-8 Certificates, until its Class
Certificate Balance is reduced to zero, and third, to the Classes of Senior
Certificates (other than the Notional Amount Certificates and the Class A-8
and
Class PO Certificates), pro rata on the basis of their respective Class
Certificate Balances, in each case immediately prior to the related Distribution
Date, until their respective Class Certificate Balances are reduced to zero;
and
67
(B)
the applicable Non-PO Percentage of any Excess Losses on the Mortgage Loans
shall be allocated to the Classes of Senior Certificates (other than the
Class
PO Certificates and Notional Amount Certificates) and the Classes of
Subordinated Certificates then outstanding, pro rata, on the basis of
their respective Class Certificate Balances, in each case immediately prior
to
such Distribution Date and until the respective Class Certificate Balances
thereof have been reduced to zero.
(b) The
Class Certificate Balance of the Class of Subordinated Certificates then
outstanding with the highest numerical Class designation shall be reduced
on
each Distribution Date by the sum of (i) the amount of any payments on the
Class
PO Certificates in respect of Class PO Deferred Amounts and (ii) the amount,
if
any, by which the aggregate Class Certificate Balance of all outstanding
Classes
of Certificates (after giving effect to the distribution of principal and
the
allocation of Realized Losses and Class PO Deferred Amounts on such Distribution
Date) exceeds the aggregate Stated Principal Balance of the Mortgage Loans
for
the following Distribution Date.
(c) Any
Realized Loss allocated to a Class of Certificates or any reduction in the
Class
Certificate Balance of a Class of Certificates pursuant to Section 4.05(b)
shall
be allocated among the Certificates of such Class in proportion to their
respective Certificate Balances.
(d) Any
allocation of Realized Losses to a Certificate or any reduction in the
Certificate Balance of a Certificate pursuant to Section 4.05(b) shall be
accomplished by reducing the Certificate Balance thereof immediately following
the distributions made on the related Distribution Date in accordance with
the
definition of Certificate Balance.
(e) Realized
Losses shall not be allocated to the Class P and Class L
Certificates.
Section
4.06 Monthly Statements to
Certificateholders.
(a) Not
later than each Distribution Date, the Trustee shall prepare and make available
on its website at xxxxx://xxx.xxx.xx.xxx/xxxx to each Certificateholder,
the
Servicer and the Depositor a statement for the related distribution
of:
(i) the
applicable Record Dates, Interest Accrual Periods and Determination Dates
for
calculating distributions for the Distribution Date;
(ii) the
amount of funds received from the Servicer for the Distribution Date separately
identifying amounts received in respect of the Mortgage Loans and the amount
of
Advances included in the distribution on the Distribution Date;
(iii) the
Servicing Fee and the amounts of any additional servicing compensation received
by the Servicer attributable to penalties, fees, Excess Proceeds or other
similar charges or fees and items with respect to the Distribution Date,
and,
with respect to Lender PMI Loans, the interest premium charged the related
borrower for primary mortgage guaranty insurance;
(iv) the
Trustee Fee for the Distribution Date;
(v) the
aggregate amount of expenses paid from amounts on deposit in the Distribution
Account;
68
(vi) the
aggregate amount on deposit in the Distribution Account as of the beginning
and
end of the related Due Period;
(vii) the
amount of the distribution allocable to principal, separately identifying
the
aggregate amount of any Principal Prepayments and Liquidation Proceeds included
therein;
(viii) the
amount of the distribution allocable to interest, any Class Unpaid Interest
Amounts included in the distribution and any remaining Class Unpaid Interest
Amounts after giving effect to the distribution;
(ix) if
the distribution to the Holders of any Class of Certificates is less than
the
full amount that would be distributable to them if sufficient funds were
available, the amount of the shortfall and the allocation of the shortfall
between principal and interest;
(x) the
aggregate amount of Realized Losses incurred and Subsequent Recoveries, if
any,
received during the preceding calendar month and aggregate Realized Losses
through the Distribution Date;
(xi) the
Class Certificate Balance or Notional Amount of each Class of Certificates
before and after giving effect to the distribution of principal on the
Distribution Date;
(xii) the
Pass-Through Rate for each Class of Certificates with respect to the
Distribution Date;
(xiii) the
LIBOR rate applicable for that Distribution Date;
(xiv) the
number of Mortgage Loans and the aggregate Stated Principal Balance of the
Mortgage Loans as the first day of the related Due Period and the last day
of
the related Due Period;
(xv) as
of the last day of the related Due Period:
|
(A)
|
the
weighted average Mortgage Rate of the Mortgage Loans,
and
|
|
(B)
|
the
weighted average remaining term to maturity of the Mortgage
Loans;
|
(xvi) the
number and aggregate outstanding Stated Principal Balance of the Mortgage
Loans
as of the end of the preceding calendar month:
|
(A)
|
delinquent
(exclusive of Mortgage Loans in foreclosure) (1) 30 to 59 days,
(2) 60 to
89 days and (3) 90 or more days and
|
|
(B)
|
in
foreclosure and delinquent (1) 30 to 59 days, (2) 60 to 89 days
and (3) 90
or more days,
|
in
each
case as of the close of business on the last day of the calendar month preceding
the Distribution Date;
(xvii) for
each of the preceding 12 calendar months, or all calendar months since the
Cut-off Date, whichever is less, the aggregate dollar amount of the Scheduled
Payments (A) due on all Outstanding Mortgage Loans on the Due Date in each
such
month and (B) delinquent sixty (60) days or more on the Due Date in each
such
month;
69
(xviii) with
respect to any Mortgage Loan that became an REO Property during the preceding
calendar month, the loan number and Stated Principal Balance of the Mortgage
Loan as of the close of business on the Determination Date preceding the
Distribution Date;
(xix) the
total number and principal balance of any REO Properties (and market value,
if
available) as of the close of business on the Determination Date preceding
the
Distribution Date;
(xx) the
aggregate amount of Principal Prepayments received during the related Prepayment
Period and the number of Mortgage Loans subject to such Principal
Prepayments;
(xxi) the
amount of Advances included in the distribution on the Distribution Date
and the
aggregate amount of Advances outstanding as of the close of business on the
Determination Date;
(xxii) the
aggregate amount of Advances reimbursed during the related Due Period, the
general source of funds for such reimbursements and the aggregate amount
of
Advances outstanding as of the close of business on the Determination
Date;
(xxiii) the
aggregate amount of Servicing Advances reimbursed during the related Due
Period,
the general source of funds for such reimbursements and the aggregate amount
of
Servicing Advances outstanding as of the close of business on the Determination
Date;
(xxiv) the
aggregate number and outstanding Stated Principal Balance of Mortgage Loans
repurchased during the related Due Period due to material breaches of
representations and warranties regarding such Mortgage Loans;
(xxv) the
Senior Prepayment Percentage and Subordinated Prepayment Percentage for the
Distribution Date;
(xxvi) the
Senior Percentage and Subordinated Percentage for the Distribution
Date;
(xxvii) the
Special Hazard Loss Coverage Amount, the Fraud Loss Coverage Amount and the
Bankruptcy Loss Coverage Amount, in each case as of the related Determination
Dates;
(xxviii) Prepayment
Charges collected or waived by the Servicer;
(xxix) Late
Payment Fees collected or waived by the Servicer;
(xxx) the
aggregate Stated Principal Balance of the Mortgage Loans that became Liquidated
Mortgage Loans in the prior month and since the Cut-off Date (in each case
immediately prior to the Stated Principal Balance being reduced to
zero);
(xxxi) [reserved];
(xxxii) the
Stated Principal Balance of any Mortgage Loan that has been repurchased by
the
Servicer in accordance with Section 2.02, 2.03 or 3.12; and
(xxxiii) the
Stated Principal Balance of any Substitute Mortgage Loan provided by the
Seller
and the Stated Principal Balance of any Mortgage Loan that has been replaced
by
a Substitute Mortgage Loan in accordance with Section 2.03.
70
The
Trustee’s responsibility for disbursing the above information to the
Certificateholders is limited to the availability, timeliness and accuracy
of
the information derived from the Servicer.
By
the
Reporting Date, the Servicer shall provide to the Trustee in electronic form
the
information needed to determine the distributions to be made pursuant to
Section
4.02 and any other information on which the Servicer and the Trustee mutually
agree.
(b) On
or before the fifth Business Day following the end of each Prepayment Period
(but in no event later than the third Business Day prior to the related
Distribution Date), the Servicer shall deliver to the Trustee (which delivery
may be by electronic data transmission) a report in substantially the form
set
forth as Schedule V.
(c) Within
a reasonable period of time after the end of each calendar year, the Trustee
shall cause to be furnished to each Person who at any time during the calendar
year was a Certificateholder, a statement containing the information set
forth
in clauses (a)(v) and (a)(vi) of this Section 4.06 aggregated for such calendar
year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code
as
from time to time in effect.
Section
4.07 [Reserved].
Section
4.08 [Reserved].
Section
4.09 Determination of
Pass-Through Rates for LIBOR Certificates.
On
each
LIBOR Determination Date so long as the LIBOR Certificates are outstanding,
the
Trustee will determine LIBOR on the basis of the British Bankers’ Association
(“BBA”) “Interest Settlement Rate” for one-month
deposits in U.S. dollars as found on Reuters Page LIBOR01 as of 11:00 a.m.
London time on each LIBOR Determination Date.
(a) If
LIBOR cannot be determined as provided in the first paragraph of this Section
4.09, the Trustee shall either (i) request each Reference Bank to inform
the
Trustee of the quotation offered by its principal London office for making
one-month United States dollar deposits in leading banks in the London interbank
market, as of 11:00 a.m. (London time) on such LIBOR Determination Date or
(ii)
in lieu of making any such request, rely on such Reference Bank quotations
that
appear at such time on the Reuters Page LIBOR01 (as defined in the International
Swap Dealers Association Inc. Code of Standard Wording, Assumptions and
Provisions for Swaps, 1986 Edition), to the extent available.
(b) LIBOR
for the next Interest Accrual Period for a Class of LIBOR Certificates will
be
established by the Trustee on each LIBOR Determination Date as
follows:
(i) If
on any LIBOR Determination Date two or more Reference Banks provide such
offered
quotations, LIBOR for the next Interest Accrual Period for a Class of
LIBOR Certificates shall be the arithmetic mean of such offered quotations
(rounding such arithmetic mean upwards if necessary to the nearest whole
multiple of 1/32%).
(ii) If
on any LIBOR Determination Date only one or none of the Reference Banks provides
such offered quotations, LIBOR for the next Interest Accrual Period for a
Class
of
71
LIBOR
Certificates shall be whichever is the higher of (i) LIBOR as determined
on the
previous LIBOR Determination Date or (ii) the Reserve Interest
Rate. The “Reserve Interest Rate” shall be the rate per annum which
the Trustee determines to be either (i) the arithmetic mean (rounded upwards
if
necessary to the nearest whole multiple of 1/32%) of the one-month United
States
dollar lending rates that New York City banks selected by the Trustee are
quoting, on the relevant LIBOR Determination Date, to the principal London
offices of at least two of the Reference Banks to which such quotations are,
in
the opinion of the Trustee, being so made, or (ii) in the event that the
Trustee
can determine no such arithmetic mean, the lowest one-month United States
dollar
lending rate which New York City banks selected by the Trustee are
quoting on such LIBOR Determination Date to leading European banks.
(iii) If
on any LIBOR Determination Date the Trustee is required but is unable to
determine the Reserve Interest Rate in the manner provided in paragraph (b)
above, LIBOR shall be LIBOR as determined on the preceding LIBOR Determination
Date, or, in the case of the first LIBOR Determination Date, the Initial
LIBOR
Rate.
(c) Until
all of the LIBOR Certificates are paid in full, the Trustee will at all times
retain at least four Reference Banks for the purpose of determining LIBOR
with
respect to each LIBOR Determination Date. The Servicer initially
shall designate the Reference Banks. Each “Reference Bank” shall be a
leading bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Trustee and shall have an established place of business
in
London. If any such Reference Bank should be unwilling or unable to
act as such or if the Servicer should terminate its appointment as Reference
Bank, the Trustee shall promptly appoint or cause to be appointed another
Reference Bank. The Trustee shall have no liability or responsibility
to any Person for (i) the selection of any Reference Bank for purposes of
determining LIBOR or (ii) any inability to retain at least four Reference
Banks
which is caused by circumstances beyond its reasonable control.
(d) The
Pass-Through Rate for each Class of LIBOR Certificates for each related Interest
Accrual Period shall be determined by the Trustee on each LIBOR Determination
Date so long as the LIBOR Certificates are outstanding on the basis of LIBOR
and
the respective formulae appearing in footnotes corresponding to the LIBOR
Certificates in the table relating to the Certificates in the Preliminary
Statement.
(e) In
determining LIBOR, any Pass-Through Rate for the LIBOR Certificates, any
Interest Settlement Rate, or any Reserve Interest Rate, the Trustee may
conclusively rely and shall be protected in relying upon the offered quotations
(whether written, oral or on the Dow Xxxxx Markets) from the BBA designated
banks, the Reference Banks or the New York City banks as to LIBOR, the Interest
Settlement Rate or the Reserve Interest Rate, as appropriate, in effect from
time to time. The Trustee shall not have any liability or
responsibility to any Person for (i) the Trustee’s selection of New York City
banks for purposes of determining any Reserve Interest Rate or (ii) its
inability, following a good-faith reasonable effort, to obtain such quotations
from, the BBA designated banks, the Reference Banks or the New York City
banks
or to determine such arithmetic mean, all as provided for in this Section
4.09.
(f) The
establishment of LIBOR and each Pass-Through Rate for the LIBOR Certificates
by
the Trustee shall (in the absence of manifest error) be final, conclusive
and
binding upon each Holder of a Certificate and the Trustee.
72
(g) The
Pass-Through Rate for the Interest Accrual Period for the first Distribution
Date for each Class of LIBOR Certificates is set forth in the applicable
footnote under the heading “Master REMIC” in the Preliminary
Statement.
73
ARTICLE
FIVE
THE CERTIFICATES
Section
5.01 The
Certificates.
The
Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in
the minimum denominations, integral multiples of $1,000 in excess thereof
(except that one Certificate in each Class may be issued in a different amount
which must exceed the applicable minimum denomination) and aggregate
denominations per Class set forth in the Preliminary Statement.
Subject
to Section 9.02 respecting the final distribution on the Certificates, on
each
Distribution Date the Trustee shall make distributions to each Certificateholder
of record on the preceding Record Date either (x) by wire transfer in
immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if such Holder has so notified
the Trustee at least five Business Days before the related Record Date or
(y) by
check mailed by first class mail to such Certificateholder at the address
of
such holder appearing in the Certificate Register.
The
Trustee shall execute the Certificates by the manual or facsimile signature
of
an authorized officer. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time such signatures were affixed,
authorized to sign on behalf of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to be so
authorized before the countersignature and delivery of any such Certificates
or
did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be
valid
for any purpose, unless countersigned by the Trustee by manual signature,
and
such countersignature upon any Certificate shall be conclusive evidence,
and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their
countersignature. On the Closing Date, the Trustee shall countersign
the Certificates to be issued at the direction of the Depositor, or any
affiliate thereof.
The
Depositor shall provide the Trustee, on a continuous basis with an adequate
inventory of Certificates to facilitate transfers.
Section
5.02 Certificate Register;
Registration of Transfer and Exchange of
Certificates.
(a) The
Trustee shall maintain, in accordance with Section 5.06, a Certificate Register
for the Trust Fund in which, subject to subsections (b) and (c) below and
to
such reasonable regulations as it may prescribe, the Trustee shall provide
for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of transfer of
any Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the
same
Class and aggregate Percentage Interest.
At
the
option of a Certificateholder, Certificates may be exchanged for other
Certificates of the same Class in authorized denominations and evidencing
the
same aggregate Percentage Interest upon surrender of the Certificates to
be
exchanged at the office or agency of the Trustee. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making
the
exchange is entitled to receive. A written instrument of transfer in
form satisfactory to the Trustee duly executed by the holder of a Certificate
or
his attorney duly
74
authorized
in writing shall accompany every Certificate presented or surrendered for
registration of transfer or exchange.
No
service charge to the Certificateholders shall be made for any registration
of
transfer or exchange of Certificates, but payment of a sum sufficient to
cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates may be required.
All
Certificates surrendered for registration of transfer or exchange shall be
cancelled and subsequently destroyed by the Trustee in accordance with the
Trustee’s customary procedures.
(b) No
transfer of a Private Certificate shall be made unless such transfer is made
pursuant to an effective registration statement under the Securities Act
and any
applicable state securities laws or is exempt from the registration requirements
under the Securities Act and such state securities laws. If a
transfer is to be made in reliance on an exemption from the Securities Act
and
such state securities laws, to assure compliance with the Securities Act
and
such state securities laws, the Certificateholder desiring to effect such
transfer and such Certificateholder’s prospective transferee shall each certify
to the Trustee in writing the facts surrounding the transfer in substantially
the form set forth in Exhibit J (the “Transferor
Certificate”) and deliver to the Trustee either (i) a letter in
substantially the form of either Exhibit K (the “Investment
Letter”) or Exhibit L (the “Rule 144A
Letter”) or (ii) at the expense of the transferor, an Opinion of
Counsel that the transfer may be made without registration under the Securities
Act. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by that Holder,
information regarding the related Certificates and the Mortgage Loans and
any
other information necessary to satisfy the condition to eligibility in Rule
144A(d)(4) for transfer of the Certificate without registration thereof under
the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Servicer shall cooperate with the Depositor
in providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans, and other matters regarding the Trust Fund
as
the Depositor reasonably requests to meet its obligation under the preceding
sentence. Each Holder of a Private Certificate desiring to effect a
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor,
the Seller, and the Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal
and
state laws.
No
transfer of an ERISA-Restricted Certificate shall be made unless the Trustee
shall have received either (i) a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Trustee
(if the Certificate is a Private Certificate, the requirement is satisfied
only
by the Trustee’s receipt of a representation letter from the transferee
substantially in the form of Exhibit K or Exhibit L, and if the Certificate
is a
Residual Certificate, the requirement is satisfied only by the Trustee’s receipt
of a representation letter from the transferee substantially in the form
of
Exhibit I), to the effect that (x) the transferee is not an employee benefit
plan or arrangement subject to section 406 of ERISA or a plan subject to
section
4975 of the Code, or a person acting on behalf of any such plan or arrangement
or using the assets of any such plan or arrangement to effect the transfer,
or
(y) if the ERISA-Restricted Certificate has been the subject of an
ERISA-Qualifying Underwriting, a representation that the transferee is an
insurance company that is purchasing such Certificate with funds contained
in an
“insurance company general account” (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 (“PTCE
95-60”) and that the purchase and holding of such Certificate
satisfy the requirements for exemptive relief under Sections I and III of
PTCE
95-60, or (ii) in the case of any ERISA-Restricted Certificate presented
for
registration in the name of an employee benefit plan subject to ERISA, or
a plan
or arrangement subject to section 4975 of the Code (or comparable provisions
of
any subsequent enactments), or a trustee of any such plan or any other
person
75
acting
on
behalf of any such plan or arrangement or using such plan’s or arrangement’s
assets, an Opinion of Counsel satisfactory to the Trustee, which Opinion
of
Counsel shall not be an expense of the Trustee, the Servicer or the Trust
Fund,
addressed to the Trustee and the Servicer, to the effect that the purchase
and
holding of such ERISA-Restricted Certificate will not result in a non-exempt
prohibited transaction under ERISA or section 4975 of the Code and will not
subject the Trustee or the Servicer to any obligation in addition to those
expressly undertaken in this Agreement or to any liability. For
purposes of the preceding sentence, with respect to an ERISA-Restricted
Certificate that is not a Residual Certificate, if the appropriate
representation letter or Opinion of Counsel referred to in the preceding
sentence is not furnished, the representation in clause (i) above shall be
deemed to have been made to the Trustee by the transferee’s (including an
initial acquirer’s) acceptance of the ERISA-Restricted
Certificates. If the representation is violated, or any attempt is
made to transfer to a plan or arrangement subject to section 406 of ERISA
or a
plan subject to section 4975 of the Code, or a person acting on behalf of
any
such plan or arrangement or using the assets of any such plan or arrangement,
without the Opinion of Counsel described above, the attempted transfer or
acquisition shall be void.
To
the
extent permitted under applicable law (including ERISA), the Trustee shall
be
under no liability to any Person for any registration of transfer of any
ERISA-Restricted Certificate that is in fact not permitted by this Section
5.02(b) or for making any payments due on such Certificate to the Holder
thereof
or taking any other action with respect to such Holder under this Agreement
so
long as the transfer was registered by the Trustee in accordance with the
foregoing requirements.
(c) Each
Person who has or who acquires any Ownership Interest in a Residual Certificate
shall be deemed by the acceptance or acquisition of such Ownership Interest
to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
(i) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall be a Permitted Transferee and shall promptly notify the Trustee of
any
change or impending change in its status as a Permitted Transferee.
(ii) No
Ownership Interest in a Residual Certificate may be registered on the Closing
Date or thereafter transferred, and the Trustee shall not register the Transfer
of any Residual Certificate unless, in addition to the certificates required
to
be delivered to the Trustee under subparagraph (b) above, the Trustee shall
have
been furnished with an affidavit (a “Transfer
Affidavit”) of the initial owner or the proposed transferee in the
form of Exhibit I.
(iii) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall agree (A) to obtain a Transfer Affidavit from any other Person to whom
such Person attempts to Transfer its Ownership Interest in a Residual
Certificate, (B) to obtain a Transfer Affidavit from any Person for whom
such
Person is acting as nominee, trustee or agent in connection with any Transfer
of
a Residual Certificate and (C) not to Transfer its Ownership Interest in
a
Residual Certificate or to cause the Transfer of an Ownership Interest in
a
Residual Certificate to any other Person if it has actual knowledge that
such
Person is not a Permitted Transferee.
(iv) Any
attempted or purported Transfer of any Ownership Interest in a Residual
Certificate in violation of this Section 5.02(c) shall be absolutely null
and
void and shall vest no rights in the purported Transferee. If any
purported transferee shall become a Holder of a Residual Certificate in
violation of this Section 5.02(c), then the last preceding Permitted Transferee
shall be restored to all rights as Holder thereof retroactive to the date
of
registration of Transfer of such Residual Certificate. The Trustee
shall be under no liability to any Person for
76
any
registration of Transfer of a Residual Certificate that is in fact not permitted
by Section 5.02(b) and this Section 5.02(c) or for making any payments due
on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under this Agreement so long as the Transfer was registered
after
receipt of the related Transfer Affidavit, Transferor Certificate and either
the
Rule 144A Letter or the Investment Letter. The Trustee shall be
entitled but not obligated to recover from any Holder of a Residual Certificate
that was in fact not a Permitted Transferee at the time it became a Holder
or,
at such subsequent time as it became other than a Permitted Transferee, all
payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of such
Certificate.
(v) The
Depositor shall use its best efforts to make available, upon receipt of written
request from the Trustee, all information necessary to compute any tax imposed
under section 860E(e) of the Code as a result of a Transfer of an Ownership
Interest in a Residual Certificate to any Holder who is not a Permitted
Transferee.
The
restrictions on Transfers of a Residual Certificate set forth in this Section
5.02(c) shall cease to apply (and the applicable portions of the legend on
a
Residual Certificate may be deleted) with respect to Transfers occurring
after
delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
shall
not be an expense of the Trust Fund, the Trustee, the Seller or the Servicer,
to
the effect that the elimination of such restrictions will not cause any REMIC
created under this Agreement to fail to qualify as a REMIC at any time that
the
Certificates are outstanding or result in the imposition of any tax on the
Trust
Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Residual Certificate hereby consents
to
any amendment of this Agreement which, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Residual Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and
(b)
to provide for a means to compel the Transfer of a Residual Certificate which
is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The
preparation and delivery of all certificates and opinions referred to above
in
this Section 5.02 in connection with transfer shall be at the expense of
the
parties to such transfers.
(e) Except
as provided below, the Book-Entry Certificates shall at all times remain
registered in the name of the Depository or its nominee and at all times:
(i)
registration of the Certificates may not be transferred by the Trustee except
to
another Depository; (ii) the Depository shall maintain book-entry records
with
respect to the Certificate Owners and with respect to ownership and transfers
of
such Book-Entry Certificates; (iii) ownership and transfers of registration
of
the Book-Entry Certificates on the books of the Depository shall be governed
by
applicable rules established by the Depository; (iv) the Depository may collect
its usual and customary fees, charges and expenses from its Depository
Participants; (v) the Trustee shall deal with the Depository, Depository
Participants and Indirect Participants as representatives of the Certificate
Owners of the Book-Entry Certificates for purposes of exercising the rights
of
holders under this Agreement, and requests and directions for and votes of
such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Trustee may rely and
shall
be fully protected in relying upon information furnished by the Depository
with
respect to its Depository Participants and furnished by the Depository
Participants with respect to Indirect Participants and persons shown on the
books of such Indirect Participants as direct or indirect Certificate
Owners.
77
All
transfers by Certificate Owners of Book-Entry Certificates shall be made
in
accordance with the procedures established by the Depository Participant
or
brokerage firm representing the Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
it
represents or of brokerage firms for which it acts as agent in accordance
with
the Depository’s normal procedures.
If
(x)
(i) the Depository or the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable
to locate a qualified successor or (y) after the occurrence of an Event of
Default, Certificate Owners representing at least 51% of the Certificate
Balance
of the Book-Entry Certificates together advise the Trustee and the Depository
through the Depository Participants in writing that the continuation of a
book-entry system through the Depository is no longer in the best interests
of
the Certificate Owners, the Trustee shall notify all Certificate Owners,
through
the Depository, of the occurrence of any such event and of the availability
of
definitive, fully-registered Certificates (the “Definitive Certificates”) to
Certificate Owners requesting the same. Upon surrender to the Trustee
of the related Class of Certificates by the Depository, accompanied by the
instructions from the Depository for registration, the Trustee shall issue
the
Definitive Certificates. Neither the Servicer, the Depositor nor the
Trustee shall be liable for any delay in delivery of such instruction and
each
may conclusively rely on, and shall be protected in relying on, such
instructions. The Servicer shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee,
to
the extent applicable with respect to such Definitive Certificates and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder; provided that the Trustee shall not by virtue
of
its assumption of such obligations become liable to any party for any act
or
failure to act of the Depository.
Section
5.03 Mutilated, Destroyed, Lost
or Stolen Certificates.
If
(a)
any mutilated Certificate is surrendered to the Trustee, or (b) the Trustee
receives evidence to its satisfaction of the destruction, loss, or theft
of any
Certificate and the Servicer and the Trustee receive the security or indemnity
required by them to hold each of them harmless, then, in the absence of notice
to the Trustee that the Certificate has been acquired by a Protected Purchaser,
and if the requirements of Section 8-406 of the UCC are met and subject to
Section 8-405 of the UCC, the Trustee shall execute, countersign, and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost, or stolen
Certificate, a new Certificate of like Class, tenor, and Percentage
Interest. In connection with the issuance of any new Certificate
under this Section 5.03, the Trustee may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen, or
destroyed Certificate is found at any time.
Section
5.04 Persons Deemed
Owners.
The
Servicer, the Trustee, and any agent of the Servicer or the Trustee may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Servicer,
the
Trustee nor any agent of the Servicer or the Trustee shall be affected by
any
notice to the contrary.